Five Ways A Natural Disaster Can Affect Real Estate

cold-front-warm-front-hurricane-felix-76969There is no denying that a natural disaster can be more than just physically devastating. It is an entity that can ruin lives in a matter of seconds, and sometimes, people still don’t see it coming. Granted, not every natural disaster has fatal consequences, but it has consequences nonetheless. For example, it can heavily influence the Real Estate Market

Once the shock fades, and you take stock of what is left, the physical damage needs to be assessed. And the first place you start is with your home or business. Now the question becomes, how extensive are the consequences regarding your property?

Here are 5 ways a natural disaster can affect real estate.

1. Foundation And Structural Integrity

The most obvious place to start would be the possible damage to the foundation and structure. Depending on the type of natural disaster that strikes, quite a lot of unseen problems can stay behind.

For example, a massive earthquake can completely shift and break the foundation, while bringing down everything built on top of it. With floods, the amount of water damage alone can force a homeowner to rebuild from scratch. Tornados do more than just rip off the roof, and what about tropical storms?

If the house or business is still standing after the natural disaster hits, proper inspections need to be carried out. Thus, all these things are going to influence the value and popularity of the property.

2. It Can Devalue A Neighborhood

A natural disaster doesn’t just affect one or two houses. It can take a whole city if the magnitude is big enough. And for the most part, complete neighborhoods become victims to the power of nature. Now, what happens to that neighborhood afterward?

Assuming only half of the residents have proper insurance to start rebuilding, and the other half abandons the mess altogether simply because their finance doesn’t allow them other options, it will drastically influence the real estate in the whole area.

3. A Hit To The Immediate Economy – Influencing Real Estate

Just like homes can suffer incredible damage, businesses run the same risk. And not all pexels-photo-325288businesses are properly insured against certain things. So, for the businesses that don’t close down, the grueling process of rebuilding starts. This also means the doors to their business will remain closed until it gets in shape again, significantly reducing the local economy and devaluing the properties around it.

4. The Area Can Get Stigmatized

If a certain area begins to develop a reputation for natural disasters, it’s never good for property owners. Home buyers will only consider investing if the real estate prices are ridiculously low, and even then they remain cautious.

The fact of the matter is that a negative stigma won’t just affect the real estate, but it can stop a whole neighborhood from seeing any type of development.

5. New Development

Speaking of new development, it is the one consequence of a natural disaster some individuals are going to see as an opportunity. As mentioned in the previous point, desperate property owners who cannot rebuild are practically going to give it away, making room for new developers.

These developers can either open a shopping mall, build more houses, or do whatever they seem fit with the property. So, in essence, their opportunistic approach can bring a neighborhood back into good standing, and in some cases, it can save a big part of a devastated city.

A Natural Disaster Affects Everything About Real Estate

When it comes down to it, there are more than just 5 ways a natural disaster can affect real estate. And the above-mentioned ways are just the ones that most likely come to mind first.

Not only is a natural disaster going to make lives complicated and so much harder, but it will influence the real estate as well – if the disaster is damaging enough.

And the best way you can prepare for a situation like this is to get proper insurance on your home and vacation home. Make sure it covers natural disasters, and that you won’t be left with consequences you are not ready to face financially. Even though you can’t stop a natural disaster, it won’t hurt to be prepared.

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s