Will Hurricane Irma’s near miss sink Miami real estate prices?

After a nerve-racking week of waiting and watching, South Florida was spared the worst of Hurricane Irma’s 185 mph winds.

It’s too soon to tell if Irma will have any substantial impact on South Florida real estate. Empirical evidence will take a few months to show whether the storm scared away potential buyers in significant numbers

But the images of the storm’s destruction beamed around the world could have a chilling effect on the local real estate market, which relies heavily on foreign and out-of-town investors, according to real estate experts. Home and condo cash purchases account for 20 percent of all Miami-Dade real estate transactions — double the national average.

“We have an affiliate based in Paris who promotes sales in Miami for us,” said George Jalil, president of Real Living First Service Realty in Miami. “She called us to find out what was going on over here because the press in Europe were devastated, saying Miami had been completely destroyed. That kind of news gathers speed.”

But some analysts think that Irma could prove to be a boon to the stagnant luxury market, scaring sellers into lowering their asking prices to move pricey properties before another major hurricane threatens the region.

 “You can go back and look at what happened with Hurricanes Rita, Wilma and Katrina,” said Ron Shuffield, CEO and president of EWM Realty International. “We had three hurricanes in one year, and those storms were similar to this Irma — disruptive but not destructive. The storm interrupted everybody’s activities for a couple of weeks. But this is going to encourage many of our high-end sellers to further evaluate their pricing. We still have more pent-up demand for luxury real estate than ever. People still look at Miami as a place to have second or third homes.”

Although at least 42 Floridians died as a result of Irma, everyday life is getting back to normal for most South Florida residents.

Home and condo prices keep rising

For the real estate industry, the question is whether the market will follow. According to the August home sales report released by the Miami Association of Realtors on Wednesday, the number of mid-market single-family home sales (priced between $300,000-$600,000) jumped 9.5 percent over the same period last year, from 462 to 506 sales. Mid-market condo sales (from $200,000-$600,000) went up 9.8 percent, from 509 to 559.

But year over year, the county’s total number of residential transactions — including single-family homes and condos — went down 9.7 percent, from 2,389 to 2,158.

Coral Gables Realtor Christopher Zoller, the 2017 chairman of the Miami Association of Realtors board, said the August figures were incomplete, due to disruptions caused by Hurricane Irma.

“Miami-Dade September housing statistics will also be impacted as some area closings will be delayed due to power outages and minor damage from the storm is repaired,” he said. “Nevertheless, August data shows a continued rise in mid-market home sales.”

In Broward, sales of single-family homes went down 8.1 percent in August over the same month last year, from 1,658 to 1,524, according to the Realtors of Palm Beaches and Greater Fort Lauderdale. Condo sales also fell 10.6 percent, from 1,522 to 1,360.

But year-over-year median sales prices in both counties continued to climb.

Courtesy of: Rene Rodriguez and The Miami Herald