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Days after Hurricane Helene devastated Florida and four other states, Compass real-estate agent Alexis Smith-Frady is picking up the pieces in her own home.
More than three feet of water flooded her 1,400-square-foot bungalow in Bradenton, she said, adding that a FEMA inspector who visited deemed it unhabitable.
Now, she's bouncing between hotels until she figures out a more permanent solution.
"We have kind of a two-level house — it's not a two-story, but there are two levels," Smith-Frady told Business Insider. "The top level was spared last year with Idalia, and then this year it got our entire house."
She said she did not have flood insurance for the first 11 years she lived there but now has flood and hazard insurance that costs her about $7,000 a year. By contrast, Smith-Frady added, she owns a cabin in North Carolina where the insurance bill is about $700 a year.
She's not sure whether to repair the existing home or start from scratch.
"If we fix our home, it's going to be a three- to six-month process," Smith-Frady said.
"But if we build, it will probably be closer to 18 months because there's going to be quite a few people trying to do the same thing," she added.
Hurricane Helene caused $30.5 billion to $47.5 billion in wind and flood damage across 16 states, CoreLogic estimated. The real-estate data firm expects the National Flood Insurance Program to provide about $4.5 to $6.5 billion of insurance to homeowners across Florida and the southeastern US — including in parts of Florida that haven't experienced a hurricane like this in a while.
Smith-Frady lives inland, and while her home is on a river and susceptible to flooding, the southwest part of Florida is usually spared significant destruction from hurricanes. The last major hurricane to hit the Tampa Bay area, where Sarasota is, was in 1921.
It's a harsh reality that many Florida homeowners may face the effects of hurricanes or flooding at some point — and they're reminded of it often when their flood or home insurance bill is due. Florida is the most at-risk state for hurricanes, with nearly one out of every three homes — a total of 3 million — susceptible to storm-surge flooding, according to a hurricane risk model by insurance software company Guidewire.
Hurricanes haven't significantly affected Florida home prices, real-estate data experts told Business Insider this week, and the Sunshine State is still one of the most popular states to move to.
However, real-estate agents on the ground are still unsure what will happen next. Increasing chances of natural disasters and flooding coupled with high insurance bills and homes that remain relatively expensive can make homeownership in Florida a pricey — and risky — proposition. A few residents want out, local brokers said, while others are aware of the costs and plan to stay put.
On September 27, the morning after Helene tore through the city of St. Petersburg, real-estate agent Katie Mallah received a call from a client with a recently-listed three-bedroom, two-bathroom home in the Shore Acres neighborhood, a collection of man-made islands.
They asked Mallah to slash the asking price of their house, which had sustained nearly three feet of water damage.
"They wanted to get out," Mallah told Business Insider. "They said, 'We'll demo everything, but we want to price it to just get out. So come up with that number.'"
Courtesy of Katie Mallah
Mallah chopped the listing price by 40%, lowering it from $375,000 to $225,000. Within hours, she said, she was inundated with about 25 calls and 50 text messages from investors interested in tearing down the home and building a new one.
Mallah set a Tuesday deadline for all offers, just five days after the storm.
Part of the seller's rush, Mallah said, was the chilling effect rising insurance premiums are having on this segment of the market. Luxury buyers might be able to brush off the increased cost, she added, but for buyers of homes under $500,000, it's becoming a "deal killer." Mallah's client didn't want to sit around and wait.
Compass agent Heather Cameron is representing a $474,900 home for sale near a canal in Tampa that was also affected by the hurricane.
"It's not a super expensive property, but the owner has spent $60,000 in the last few years on flood insurance, and that home got flooded during the storm," Cameron told BI.
She said that the owners are still waiting to see how much their insurance will cover, but they are considering offering potential buyers a credit that would cover flood insurance for a year.
"That home has been on the market for a little bit," Cameron said. "The price point that it is — with what the flood insurance costs — makes it kind of an affordable house for most buyers in that price range."
Courtesy of Katie Mallah
Floridians face some challenges securing insurance. Major providers like Farmers Insurance and Bankers Insurance have pulled out of the state in recent years, and under new FEMA guidelines premiums in some parts of the state are expected to rise by over 300% in coming years, according to the Miami Herald.
In May 2024, the average cost of flood insurance in Florida was $781 a year, according to personal-finance company NerdWallet. Many homewoners also buy home insurance: The typical Florida household paid over $10,000 for home insurance in 2023, according to data from Insurify, and Capital Economics found those premiums are rising at the fastest rate in 20 years.
Palm Beach agent Holly Meyer Lucas said many homeowners who aren't required to purchase flood insurance choose to go without it.
"So many homeowners have dropped flood insurance or whittled their own insurance down to the absolute minimum," Meyer Lucas told Business Insider.
This creates a particularly thorny situation as flood and wind insurance are often separate policies, Meyer Lucas pointed out. So, if a homeowner lives outside traditional flood zones, they may forgo specific flood protection, but still pay for wind and homeowners insurance. But when they are hit with a historic storm surge like Helene, it becomes difficult to separate what was solely water damage.
"It basically makes the home a total loss if they don't have flood insurance," Meyer Lucas said.
Meyer Lucas anticipates more situations where fed-up Florida homeowners, who may have more equity in their homes than cash to repair, choose to cut their losses and sell as quickly as possible.
"We're going to see a lot of people needing to sell their homes because they can't afford the remediation," she said.
Even with the risks, multiple experts told Business Insider it's hard to say whether real-estate prices will immediately falter in the Sunshine State.
"We have not seen an event, even one like Hurricane Ian, that has had an industry-shifting effect on the real-estate market," Jon Schneyer, the catastrophe response director at data firm CoreLogic, told Business Insider.
It's true that some people may leave. The Wall Street Journal reported that many homeowners in Shore Acres, Florida, a coastal town six miles outside St. Petersburg, want to sell to escape the flooding. And some of the most dire forecasters predict that sell-offs like this could bring down property prices.
Cameron told BI that Shore Acres was known for flooding before Helene, and while she can see more inland properties, which are not in flood zones, increase in price, many people prefer to rebuild or move locally rather than leave the state entirely.
"I think the people really want to live here," she said. "And I think the demand is still going to be very high to live here in Tampa, St. Pete, and Sarasota."
Still, some experts believe risks haven't been properly baked into home prices, resulting in a $50.2 billion overvaluation in Florida's housing market, according to a recent study published in Nature.
"In many parts of the US — and particularly coastal counties, but also in parts of Appalachia as well — housing markets are not efficiently pricing flood risk into home values and that's causing this housing bubble to occur," Jesse Gourevitch, one of the study's authors and an economist at the Environmental Defense Fund, told Business Insider. "In Florida, there's really high flood risk, which I think is broadly understood, but that the cost associated with that flood risk is not being captured in home values."
Instead, there may be "localized downsizings" as certain areas develop a stigma after particularly bad storms, explains Ryan D'Amario, a vice president of personal lines property underwriting at insurance analytics firm Verisk. But predicting exactly when and where an extreme weather event is likely to happen is so "broad and wide" that many homeowners are likely to continue with business as usual.
"The storms are happening so diversely in so many different areas of the state," D'Amario told Business Insider. "The demand will always be present."
Smith-Frady, the real-estate agent whose Bradenton home flooded, said part of living in Florida is understanding the tradeoff between risk and reward.
"We live in a great place — it's wonderful," Smith-Frady said. "We haven't had a storm surge on this part of the Gulf Coast in over 100 years. It's easy for generations to forget that you're susceptible to that. But the reality is that that is the risk that we take by living on the coast."
