Storm Surge

By Hannah Wallace September 30, 2004

The biggest question in real estate these days is, "How long can this white-hot market last?" Big-name commercial realtors had definite ideas about the state of our market (p. 38) before Hurricane Charley hit, most insisting that demand and prices were not artificially high. If anything, Charley will make prices even higher, as some of Charlotte County's 8,000 businesses relocate to surrounding communities. Some realtors estimate that commercial values in Englewood will double. "We've already had one company contact us about relocation," Kathy Baylis, head of the Sarasota's Economic Development Corporation, said just a few days after the storm.

But Julie Mathis, executive director of the Charlotte County Chamber of Commerce, believes most companies will stay. "We had 15 new members who wrote checks prior to the storm," she says. "We contacted each one to see if they wanted us to return their checks because of the hurricane. Everyone said no."

But even if few choose to relocate to Sarasota or Manatee counties, Charley will raise real estate prices here. Prior to the Aug. 13 storm, the shortage of building supplies was adding $5,000 to $10,000 to the price of a home; now, the Florida Home Builders Association predicts shortages-and prices-will soar.

Builder and developer Pat Neal of Neal Communities says the storm has intensified the short supply of concrete, reinforcing bar, gypsum wallboard and OSB-type lumber. Even worse, labor is scarce as carpenters, electricians and plumbers head to storm-devastated areas. "The storm will have a dramatic temporary effect and a significant effect over the greater term," he says. "It's hard to get a plumber or electrician to the job right now," he says.

But Neal, who doesn't minimize the disastrous human cost, sees some upside to the storm as well. The Woodlands at North Port, the 1,660-acre community he and partner Benderson Development are creating off Toledo Blade Boulevard, is getting increased interest from homebuilders from across the country who recognize there will be even more demand for moderately priced, entry-level homes in the $130,000 to $180,000 range. Already, a major builder wants to renegotiate his price to build in the community. "He wants to pay me more money to be in first place," says Neal.

For more about the sometimes surprising economic effects experts believe the hurricane will have on the region's economy, see our story on page 32.

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