**While today's blog post is on the impact of hurricane risk to the Charleston real estate market, my thoughts and deepest sympathy are with those who where impacted by Hurricane Florence. If you are looking for ways to help, read this. **
When I first started in the real estate industry, I was terrified of having a closing in September or October for fear that it might be derailed by a storm. But, over the years, I've grown to accept the fact that, as a Realtor working on the Southeast coast, hurricanes--and their impacts to the real estate business--are a fact of life. So, just how does tropical weather impact real estate in Charleston? I can't speak for everyone, but here are some of the impacts I've noticed.
Impact on Prices... Or not?
Anyone who has been watching the Charleston market for any length of time knows that historic downtown prices have been steadily on the rise for the last few years, in spite of a few major flooding events. Except in some rare incidences, I have not seen dropping in prices directly related to flooding; however, we have most certainly seen a slow down in the rate of increasing prices, though whether this is a result of weather risks or other market factors, it is not clear. Make no mistake, though: As of now, prices in historic Charleston continue to rise regardless of flood risks, as homes on the peninsula are a scarce resource.
Deterred buyers... Or not?
Last year after Hurricane Irma, I was out showing property (on a street that had flooded!) one week after the storm. The fact that the street looked relatively normal just a few days after a major weather event showed that while flooding can be a nuisance, things can often get back to normal fairly quickly if you have the resources to expedite a clean up. That said, while some buyers seem undeterred, I have definitely seen an up-tick in buyers looking to avoid flood-prone area in the last couple of years.
More educated buyers (and agents)
Prior to October 2015, Charleston hadn't had a major, wholesale flooding event since Hurricane Hugo in 1989, leading many buyers to underestimate the risk of flooding and many agents to be unaware (or unable to remember) of the history of certain parts of town. Recent flooding events have resulted in a much savvier buyer when it comes to location and home updates to mitigate flood-damage, and agents are, in my experience, more knowledgeable about these issues.
Strengthening the sales pitch for certain homes, and weakening the case for others
Prior to October 2015, it was rare to see any mention of flooding (or lack of flooding) in a property listing description. These days, it's not uncommon to see mention of "high ground" or "no recent flooding" in the description for homes that meet this criterion. Sellers and sellers' agents know that this question is top of mind for buyers and buyers' agents, so they are putting it out there, front and center. By contrast, homes with known flood history (particularly those with first floor flooding, rather than just crawl space inundation), are struggling to sell unless sellers have taken special steps to curb future flood related hassles.
Homeowner fixes to mitigate future flood-hassles
Sellers with homes in flood-prone areas are increasingly taking steps to mitigate future hassles. One of the most common steps is the removal of under-house duct work in favor of mini-split air conditioning units. This is a controversial topic: Some swear by their efficiency and breathe easy (no pun intended) knowing they aren't going to have to deal with flooded ductwork the next time a hurricane blows through. Others find them visually obtrusive and would rather take the risk. Some homeowners have reached a happy medium--keeping traditional HVAC systems but replacing the duct work with waterproof PVC. While forward thinking home updates will not guarantee a home sale, they certainly don't hurt.
Confusion about Flood Zones
I see a lot of confusion about flood zones, and why wouldn't there be confusion? FEMA's flood maps is notoriously difficult to navigate, and there's been talk of new flood maps for Charleston for going on 2+ years (the new maps are still not in effect, BTW). I frequently have buyers tell me that they "don't want to look any any homes in a flood zone." Since technically all homes are "in a flood zone" (some low-moderate, others higher risk), I have to figure out whether someone making this statement actually means (a) they want to avoid areas known to be flood-prone or (b) they want to avoid all high-risk areas as defined by FEMA, regardless of whether or not the area has any known flood history.
Impact to active transactions
In the event that a hurricane hits in the days or weeks prior to a Closing, things can get complicated--A storm could cause damage to a home resulting in extra needed repairs, it could temporarily halt a buyers' ability to get insurance, or it could delay a closing because a law office is closed. Rather than sort through endless "what if" scenarios ahead of time, I've learned that it is best to assess a situation as it unfolds and navigate the transaction accordingly, for my clients' best interest.
With the storm watch going on day 3 (or is it 4? I lost count), those of us who remain in Charleston are feeling a mixture of optimism that we won't get the worst of it and empathy for our neighbors to the north who are currently facing Hurricane Florence head on. All those impacted by the storm in Eastern NC and the Outer Banks are in my thoughts this morning. Meanwhile, impact to Charleston remains yet to be seen. We are expecting rain and wind starting this evening, as well as possible storm surges--particularly around high tides (roughly 1 AM tonight and 1:40 PM tomorrow afternoon). Everyone stay safe and dry.
I've had a few prospective buyers and Charleston newcomers ask me about Charleston real estate terms, geographic locations, and other lingo that I often take for granted as being widely known and understood. To help those of you who may be curious, here are some terms to help you navigate Charleston real estate conversations.
This time, I'm focusing on Downtown terms--in future newsletter, I'll tackle other parts of town! And, feel free to email me with your questions if there's another term you have heard and are wondering about.
That's all for now!
What Charleston real estate terms have you stumped?