HURRICANES, HOUSING AND THE ECONOMY
Article Provided By: Ted C. Jones, PhD
Chief Economist, Senior Vice President Stewart Title Guaranty Company
For those who live near the East or Gulf Coasts in the U.S. long enough, a hurricane or tropical depression will likely enter your life at some stage. Since I moved to Houston in 1997, the city has experienced three major storms in the Gulf of Mexico: Tropical Depression Allison, Hurricane Ike and the now-infamous Hurricane Harvey.
These events do not just impact people, but also the economy and the demand for real estate. As usual, I invoke the TINSTAANREM axiom – There Is No Such Thing As A National Real Estate Market. Nor is there such a thing as a typical hurricane or tropical depression. Damage can arise from rain, wind and storm surge. Intense hurricanes can be short in duration with just wind damage. Tropical depressions, such as Allison, and Harvey when it was in Houston, can stall and drop enough rain that it must be measured in feet rather than inches.
What should be expected from such storms in terms of jobs and housing sales as a result of the massive damage inflicted by Harvey? And, more broadly, what happens to housing sales both near and long-term in such disasters?Read More