2017 was one of the most destructive years on record according to the National Oceanic and Atmospheric Administration booking over 306.2 billion dollars of damage.
With over 16 separate billion dollar events, the housing market was not business as usual across the U.S. A recent study by realtor.com revealed that storm affected areas saw a delay in — or disruption to — an estimated 18 to 32 percent of home sales in the month of the disaster.
Any delay in the construction industry usually spells disaster but builder and contracting marketers should focus on making lemonade in 2018 from last year lemons.
There were 16 weather and climate disaster events with losses exceeding $1 billion each across the United States during 2017. Resulting in the deaths of 362 people, these natural disasters include 1 drought event, 2 flooding events, 1 freeze event, 8 severe storm events, 3 tropical cyclone events, and 1 wildfire event.
According to Javier Vivas, director of economic research for realtor.com, “...when an event hits, what does it look like with online searches for homes? We found that it did hinder sales and demand in those local markets. About one in four sales were delayed or disrupted.” These findings are based on “expected sales or page views, anticipated sales or page views for the month if no disaster occurred. Estimates are based on previous month’s actuals and account for seasonality.”
This isn’t a new finding.
Hurricane Katrina, responsible for killing more than 1,800 people when it struck the Gulf Coast in 2005, displaced about 750,000 households. Four years following the disaster, homes sold in New Orleans were found to have dropped 23 percent from May 2008 to May 2009 according to the Daily Real Estate News.
As waters rise, one might ask why coastal real estate prices stay afloat. It seems no matter the cost of insurance, we just can’t stay away from disaster prone real estate.
Let's take a closer look at Houston, Texas. Hurricane Harvey pummeled Houston and left many homes with flood damage in 2017. Just two weeks after Hurricane Harvey made landfall in Texas, Redfin data analysts and real estate agents saw home buyer and seller activity rebound. Looking ahead to 2018, the Houston Texas real estate market is poised for growth. According to Bloomberg “prices and rents are expected to rise given the sudden housing shortage. Out-of-state investors have even started to swoop in to acquire damaged homes to repair and sell or rent.”
When a natural disaster may spell doomsday for some, these short-term catastrophes spell pay-day for others. In Houston’s case, the storm caused an existing real-estate shortage in an already hot market. Job growth continues to climb, creating more economic opportunity.
Natural disasters coupled with economic factors can have disastrous effects to a local economy - or they can present the perfect environmental circumstances for marketing construction services.
What once was built often now requires demo or repair. This is the perfect opportunity to position contractor services to service disaster affected areas. Beyond excavation and tree removal, other ancillary services such as storage facilities see a boost in business. In fact, the self-storage industry is one of the fastest growing segments of the commercial real estate industry, covering the U.S. more than three times the size of Manhattan in storage units.
Contractor marketing can extend beyond the obvious tree removal and roof repairs. These life-changing events can also spurn growth in the remodeling industry.
Responsible for positioning your contractor marketing for this rosy outlook? First take the tactical approach.
When the wind howls and the waters rise, the short term losses may feel devastating. Real estate inventory shrinks and the economic vitality of an area comes to a grinding halt. But remember, not all is lost. Wherever there is loss, opportunity also arises and given the right conditions your construction business may be ideally positioned to capitalize on the calm after the storm.