When it comes to disasters, how does it affect the whole real estate market? Is there a difference in the effect of manmade or natural disasters on the market? Are those said effects temporarily or for a lifetime?
How Both Manmade and Natural Disasters Affects The Real Estate Market
When it comes to both kinds of disasters, both manmade and natural, the effects of those on the real estate market as a whole are usually destructive in nature. According to RealEstate by Boston.com & Globe.com, any kind of disaster can be destructive and catastrophic for those who are affected by it. Properties that are damaged throughout the whole disaster is usually severely affected negatively, mostly resulting in the total loss or severe damages that will cost hundreds of thousands of dollars.
One notable example of that is the Columbia Gas Explosions that happened on the 13th of September, 2018. The said disaster resulted in many real estate properties being severely damaged, or in some cases, totally destroyed. It heavily affected the location of Merrimack Valley, which resulted in 120 fires that destroyed five housing properties in the end.
No thanks to the multiple numbers of fires, the locations of North Andover, Lawrence, and Andover were heavily affected by it. Unfortunately, the said disaster took the life of one male teenager living in Lawrence, and the family of the said teenager is still healing their wounds from the sudden loss that happened three years ago now.
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The disaster started from faulty and overpressurized gas lines that leaked and eventually exploded, causing the tragedy. Now, to prevent the repeating of the said disaster, many gas service lines are being checked thoroughly and ensure that all of those pipes within the previously mentioned areas. Additional measures were taken, such as turning off both the electric and gas services in the affected areas after the disaster.
Now, when it comes to natural disasters, it can even bring much bigger devastation to an area that it affects. Natural ones like flooding, earthquakes, typhoons, hurricanes, wildfires, and tornados can bring ultimate destruction to the areas it will pass through. Having insurance claims for one's home after a natural disaster struck them can be a difficult task to do so, moreover when it comes the time to sell the said property in the future.
Even if the property is not damaged by a natural disaster, homeowners and investors will have to a hard time selling that property that stands in a location that has been heavily affected by a natural disaster.
Negative Side Effects of Disasters
According to CoreLogic, there are several unwanted side effects to many real estate properties that are mostly are negative in nature. Those negative side effects that both homeowners and real estate investors should look out for are listed below:
- The delinquency rates for a real estate property jumps high up after any kind of disaster.
- Both the rent and prices of various real estate properties (especially housing) dramatically increase up after a disaster struck.
ALSO READ: When Home Disaster Strikes, Strike back!
