In recent years, natural disasters have wreaked havoc across large areas of the United States, causing devastation from hurricanes, wildfires, floods, and other calamities that have led to loss of lives and destruction, forcing millions to flee their homes.
Over the long term, these disasters have had impacts on the real estate market, such as exacerbating housing shortages, increasing insurance costs, and rising rents.
Many attribute the various disasters making headlines to climate change. Other factors include population migration to high-risk areas prone to floods and wildfires. Regardless of the reasons, the frequency and severity of natural disasters seem to be escalating.
The emotional and financial impacts of destruction brought by hurricanes, droughts, strong winds, and wildfires affect individuals and families on multiple levels.
The initial effects of disasters often involve a sharp decline in local property prices, as there are not many potential buyers in the market at that time. For example, during Hurricane “Irma” in 2017, home sales in Florida dropped by 50%.
After a disaster strikes, market confidence is usually immediately shaken, requiring time for the market to stabilize. However, there are always bottom-feeders hovering in damaged areas, looking to acquire properties at lower prices.
More homebuyers are now seriously considering the risk of natural disasters when choosing a location for their homes.
Let’s explore how these unpredictable disasters typically impact the real estate market post-occurrence.
When disasters force people to evacuate their homes, displaced residents suddenly become part of the overall housing demand. They start looking for new locations and housing to replace their lost homes, leading to an overall increase in property prices.
Furthermore, in disaster-affected areas, investments in rebuilding homes and infrastructure over time affect overall property prices. After Hurricane Charley in 2024, property prices in Fort Myers, Florida, rose by a third within a year.
In Los Angeles, fires have destroyed or damaged over 12,000 buildings, including 6,000 homes. This disaster exacerbated the already serious housing shortage in the area.
The exacerbation of housing shortages will have a dual impact on property prices and rents, as displaced individuals seek shelter. Despite anti-price gouging laws, reports show rent prices have increased by 50% to 70%.
In most cases, residents of Los Angeles choose to relocate to other cities to avoid the impact of housing shortages on property prices. Popular destinations include areas like Las Vegas and Phoenix.
Displaced residents suddenly seeking housing, along with large populations moving to safer and more affordable areas, bring about significant changes in the overall housing market landscape after major disasters.
High insurance premiums and deductibles in disaster-prone areas affect the housing affordability and homeownership rates locally. Concerned about the impact of disasters without insurance coverage, people strongly advocate for policies that can prevent losses.
Nationwide, the average home insurance premium increased by 6% in 2024, reaching around $2,522 by the end of the year. States considered disaster-prone, such as California, Florida, Texas, and Louisiana, are experiencing the highest rate hikes.
Due to wildfires, some insurance companies in California raised premiums by as much as 34% last year. Similarly, Florida also saw significant premium hikes.
In high-risk areas, non-renewals and cancellations of policies are increasing, making it more difficult for homeowners to maintain their insurance coverage.
The California Department of Insurance recently passed new regulations, allowing for higher premium rates in disaster-prone areas to enable homeowners to purchase higher insurance coverage. Other states are following suit in this trend.
With rule changes, approximately 9 million homeowners in California may feel the recent impacts of wildfires. Specific homeowners affected may face additional charges from California FAIR, the state government insurance company offering specific coverage to uninsured homeowners.
For many homeowners, this undoubtedly poses a challenging situation. However, by comparing costs from different insurance companies, utilizing discounts, and making home improvements to mitigate risks, costs can be managed better.
The emotional trauma caused by natural disasters has far-reaching effects on individuals and the community. The sudden and unpredictable nature of natural disasters often brings significant emotional stress and pressure to those involved. People may grieve for the loss of homes and possessions, items often holding deep emotional significance.
This is not just a fleeting stress-inducing event. The pain of losing a home can lead to intense and long-lasting negative impacts on both physical and mental health.
Feelings of anxiety for the future, fear of facing more unknown disasters, and shattered security can leave individuals feeling vulnerable. Both mental and physical health may be affected as a result.
At this point, sharing unpleasant experiences, community support, helping other disaster victims, and seeking professional counseling become crucial.
Without assistance, individuals may feel isolated due to overwhelming emotions, leading to feelings of despair and potentially falling into depression. Seeking help, itself a way to take control of the situation, along with maintaining a positive attitude, can bring a sense of belonging and purpose.
Returning to the housing market, apart from cost and safety considerations, another reason for post-disaster migration is psychological: to move away from places filled with painful memories.
Whether choosing to stay and rebuild or relocate and settle elsewhere, it is important to address and resolve the impact this experience has had on you. Seek help when necessary.
So, what’s next?
Mental health experts, community resources, and social support networks can aid in addressing practical needs and emotional healing. Where can you turn for help?
The Federal Emergency Management Agency (FEMA) offers various services to disaster survivors, including case management, counseling, and financial aid.
The American Red Cross provides emergency shelters, food, and medical care.
In Los Angeles, 211LA collaborates with Airbnb to offer free temporary shelters for those displaced after disasters.
Many local organizations, such as YMCA, provide temporary shelters, showers, and basic facilities to the public.
Other international, national, and local organizations like Global Giving, Project Hope, and the California Community Foundation offer assistance, including financial support.
Local governments provide specific programs and services as per the situation. Check what resources are available in your area.
Recovery will be a gradual process following unimaginable disasters. After a natural disaster, the health and safety of families should be especially prioritized.
Here are some guidelines for post-disaster response and beginning the recovery process:
– Check for any injuries in the vicinity. If necessary, contact emergency services. Do not attempt to move seriously injured individuals unless there is an immediate risk of further harm or death.
– Assist neighbors, especially the elderly, disabled individuals, and children.
– Communicate: Inform family and friends of your safety via phone, text, or social media.
– Follow designated evacuation routes if authorities recommend evacuation.
– Protect your health. Avoid overexertion. Wash hands frequently while handling debris and wear protective gear to prevent health hazards.
– Inspect for structural damage, gas leaks, power issues, thermal insulation materials, or other hazards. Watch out for downed power lines, washed-out roads, contaminated water sources, and broken glass.
– Stay informed, listen to local notifications and emergency broadcasts, and get the latest updates and instructions.
– Contact your insurance company and document damaged items with photos or videos for insurance claims. Keep records of repair or cleaning expenses.
– Stay updated on news to understand the progress of rescue and recovery efforts.
The Epoch Times © 2025. This article is for general information purposes only and represents the author’s views and opinions. It does not constitute any recommendation or solicitation. The Epoch Times does not offer investment, tax, legal, financial planning, real estate planning, or other personal financial advice. The Epoch Times does not guarantee the accuracy or timeliness of the article content.