As seen in The Daily Camera
Steve Altermatt of RE/MAX of Boulder was curious to know how September’s flood would affect the Boulder County real estate market. With 28 years of industry experience and 25 years as South Boulder’s #1 Realtor, Steve analyzed the affect past natural disasters have had on real estate markets throughout the country; the results were quite surprising.
Of the ten areas studied, nine experienced natural disasters and one—Westchester County, NY— was impacted by a terrorist attack; something Altermatt describes as a psychological disaster. The ten disaster areas studied were Joplin, MO (2011 tornado), Grand Forks, ND (1997 Flood), Westchester County, NY (9/11 Terrorist Attack), San Diego County, CA (2007 Wildfires), San Francisco & Oakland, CA (1989 earthquake), Colorado Springs, CO (2012 wildfires), Baton Rouge, LA (2005 Hurricane Katrina), Fargo, ND & Moorhead, MN (1997 Flood), Memphis, TN (2011 Flood) and Staten Island, NY (2012 Hurricane Sandy).
It was found that 67% of the markets experienced an increase in the number of home sales the quarter of a disaster, while 89% experienced an increase in the number of home sales one year after the disaster. On average, the number of homes sold in each market increased by an average of 22% the year after a disaster occurred. It was found that 90% of the markets experienced higher than average appreciation the year after a disaster, the San Francisco Bay Area being the only market studied that experienced depreciation the year following a disaster. The median sale price was down 8.2% after the earthquake in the San Francisco Bay Area. On average, median home prices were found to be up by 15% in disaster areas, compared to the national average of 4.4%.
Altermatt acknowledges the data he collected could be skewed by the quarter in which the disaster occurred due to the seasonal adjustments markets typically experience, as well as the nature of the disaster. The nature of the ten disasters studied were varied; some experienced localized devastation, while some saw widespread devastation, and others were more of a psychological type devastation.
So what does this mean for the post-flood Colorado housing market? Our market typically experiences a drop in sales and listing inventory during the fourth quarter, something that is proving to be true in 2013. Boulder County is currently experiencing the lowest number of listings in twenty five years. With this low inventory, a population on the rise and with home appreciation at the highest it’s been in ten years, the Boulder County housing market seems poised for a great year in 2014.