Irma Impact – Tampa Bay and Sarasota/Bradenton
About 2 million homes and businesses lost power in the Tampa Bay area at some point as a result of hurricane Irma. Most were restored by mid to late week. Damage was mostly wind with some low lying areas impacted by flooding. Insurance estimates for loss initially were as high as 90 billion from the storm.
Catastrophe modeling firm AIR Worldwide, a unit of Verisk Analytics , last Monday narrowed its estimate for U.S. insured losses to a range of $20 billion to $40 billion from its $15 billion to $50 billion estimate published on September 9th. “Irma is going to be a very costly event but nowhere near what it threatened to do,” said Sandler O’Neill managing director Paul Newsome, who expects insurers to be able to cover losses with earnings from a quarter to a year. CoreLogic’s estimates were also in that range at $22 – 35 billion.
The big issue will be lumber prices, shingle prices and of course labor. Tampa’s year over year increase in starts was 17% as of June. Our forecast was for an 8 – 15% increase for 2017. If we lose a week or two of activity that could drop the gains into our forecasted range. Tampa lost three weeks of activity in 2016 when it rained almost 30 straight days and some areas saw 25 inches of rain and localized flooding in July/August of 2016.
Sarasota is more dependent upon retirees than Tampa. I don’t expect too much of a long term hit in demand because “boomers” are retiring at a record clip and it has been 90+ years since the Tampa Bay area took a direct hit from a storm and the west coast of Florida had been hurricane free since 2005. Unlike tornados, we can see a hurricane coming well in advance of it hitting. Tampa is at 99% of its 20 year average in starts, while Sarasota is at 119%. Sarasota had seen two consecutive quarters of lower starts compared to the same quarter last year, so it may end 2017 down from 2016 activity but still be well above the long term average.
As far as rebounding, I can tell you that restaurants were packed last week as were grocery stores. September is typically the low point for hotel occupancy statewide, so it will likely get a boost from the storm as hotels were full throughout the I-4 corridor. Too early to tell what impact this will have on tourism going forward.
Photo credit: NOAA
In 2004, Florida suffered through Charlie, Frances, Jeanne and Ivan and starts moved up into 2005, when Katrina and Wilma put an end to that housing cycle. Not sure if one storm will have the same effect as those six did. Of course, we are glad that Jose and Maria did not visit Florida.