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Rough Water Ahead: How Major Hurricanes Are Expected to Impact the Market

The iServe Blog


Much like Katrina and Sandy, Harvey and Irma are storms that will live on in memory. The destruction wrought by major hurricanes can cause serious issues for those impacted. But what happens after the clouds break? Here's a quick look at how areas devastated by severe natural disasters have recovered in the past and the impact it had on the housing market following the storm.

Rough Water Ahead: How Major Hurricanes Are Expected to Impact the Market

What will happen to the Florida and Houston real estate markets and mortgage market because of Harvey and Irma? With the potential destruction of so many homes, will the market have a supply shortage as people rush to get into undamaged homes and construction crews are tied up in repair work? Will the federal government offer special financing guarantees due to the storms, encouraging sales? Or will it go the other direction with a mass migration out of the area?

These questions are on the minds of people around the country who have seen the devastation in these areas. But to look ahead, we need to start by looking behind, through focusing on the issues that have occurred in previous disaster recovery situations. For the most part, in the short term, there will probably be an increase in the real estate market in the unimpacted area just outside of the regions impacted by the hurricanes. As people work to find what is left of their homes and lives, they'll need a place to land in the meantime. To facilitate this process, they'll stay as close as possible for the moment.

Once the initial cleanup is underway, many homeowners may look at programs such as the 203(h) and 203(k) programs. Both are used for home renovations, with the first being reserved for homes damaged in a declared natural disaster. However, it's not just a blank check. Certain creditworthiness must be established, but because the program deals with disasters, missing documentation can be worked around to a certain extent, thanks to credit reporting.

Some people may choose to sell their properties rather than rebuild or restore them. The trauma of a major disaster can leave too many memories for some, which will leave the housing market in a seller's surplus within a few years of the disaster. This excess means a buyer's market will exist, with former homeowners willing to make a better deal to be done with the process.

Devastating events cause serious impacts on the regional housing market, but recovery takes place at a relatively rapid pace. If you've been affected by a major storm or natural disaster,  we're ready to help you back onto your feet, whether you are looking for a new home in a new location or revitalizing your damaged home. We have a wide range of home loan programs available and experienced loan officers to help you through the process. Please feel free to contact us today for more details.

 

iServe Residential Lending, LLC is not affiliated with or acting on behalf of or at the direction of the FHA, VA or the Federal Government.

Programs, terms and guidelines subject to change without notice. Not all applicants may qualify. All loans subject to underwriter and investor approval. Arizona Mortgage Banker License BK-0920658; Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, License 413-0646; Colorado - Regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee License #19613; Licensed by the New Jersey Department of Banking and Insurance License # 512567; Licensed Mortgage Banker—New York State Department of Financial Services License # B501014; Oregon Mortgage Lending License ML-3238; Licensed by the Virginia State Corporation Commission (Lender License MC-3220),  NMLS # 2914 (www.nmlsconsumeraccess.org). iServe Residential Lending, LLC, 15015 Avenue of Science Suite 250, San Diego, CA 92128 Phone: (858) 486-4169