The Cape Coral – Fort Myers metropolitan area experienced the highest annual HPI appreciation of 41.3% in Q1 2022. This region is highly desired by those seeking a warm climate and beautiful sandy beaches. Unfortunately, Hurricane Ian, a Category 4 storm, struck in September 2022, causing extensive damage to over 30,000 homes in the Fort Myers area. As a result, numerous residents were compelled to vacate their homes and are now confronted with the challenging process of reconstruction or renovation. Additionally, many lacked flood insurance and lack the financial means to initiate the rebuilding process.
Previous research has indicated that housing markets in areas impacted by hurricanes tend to exhibit higher appreciation rates than the national average post-storm. Prior to the hurricane’s impact, the Cape Coral – Fort Myers metropolitan area stood out as one of the most robust growth markets, boasting a year-over-year HPI appreciation of 36.6% in Q2 2022, surpassing the state of Florida’s 29.2% and the US’s 17.3%. However, in Q3 2022, the HPI appreciation in Cape Coral – Fort Myers fell below Florida’s rate of 21.8%. While Q2 2023 saw a slight depreciation in Cape Coral’s HPI (-0.12%), there are signs of recovery in its housing market. The jump in home prices has not yet happened in this region, but we can expect it with some lag.
Since the hurricane, existing homeowners who faced home damage are finding it difficult to rebuild. This is creating an attractive opportunity for investors to purchase damaged homes with the intention of renovating and reselling them at a higher value. Prospective homebuyers are anticipating the introduction of new homes designed to withstand hurricane-related risks, yet these newer properties will likely come with a higher price tag. Despite the hurricane risk, individuals seeking warmer climates are undeterred, as the likelihood of a hurricane striking the same area remains low. The region continues to experience robust new home construction, with data on approved permits revealing that 12,217 housing units were authorized in the Cape Coral metro area from January to November 2023, boasting an estimated value of $2.58 billion. Among these, 7,936 permits were for single-family homes, valued at an estimated $1.79 billion.
Given the extensive destruction caused by the hurricane, the process of rebuilding will undoubtedly take time. Looking ahead, the housing market in Cape Coral – Fort Myers is poised to experience heightened demand, consequently driving up property prices.
