The National Oceanic and Atmospheric Administration (NOAA) predicted a strong El Niño coming, making property owners anxious about their homes and property buyers doubtful. Real estate agents shared their insights on how the housing market will cope up in the said forecast.
Lin He, a real estate investor from Orange County, is not concerned if his house will hold up against El Niño's winter effect. Instead, he fears the forecast El Niño, which may cause heavy rainfall and worse, extreme storms, will last until spring. This means that there is a great possibility of ample delays in construction adding labor, material and carrying costs that may drain his earnings, The Orange County Register reports.
"The rain definitely washes away the profits for investors," He, 48, stated. "It has more impact on investors than homeowners," he added.
The recent forecast causes a sudden rush to make repairs, roofers say. Those roof repairs that have been postponed for years took a month long backups. Flood insurance policies are also on an uphill.
Property sellers often take a break during holiday seasons or until the Super Bowl put a home on the Multiple Listing Service. The predicted strong El Niño that is expected to cause megastorms in Orange County may contribute greatly to the freeze in housing market. But according to some real estate industry watchers, even if the storm will continue until spring, it won't have a significant effect on the Orange County Home Sales this coming 2016.
Property Radar's Economic Research Director, Madeline Schnapp, explained that if El Niño will really occur as bad as it was forecasted, the possible effect on real estate sales will depend on two aspects.
"One, location and whether or not that area is at risk for mudslides and/or flooding, and two, the month with the highest rainfall. If heavy rainfall happens in December and January, then probably the impact on real estate sales and inventory is minimal, given the fact that both of those months are low sales months," Schnapp said.
She further added, "If, on the other hand, rainfall is bad in February, March or April 2016, then there will probably be some impact, as sellers choose to wait for better weather and buyers wait for more inventory."
Jan Null of Golden Gate Weather Services laid out some misconceptions about El Niño.
"El Niño is 'very strong' and already happening. It will continue through the winter of 2015-2016 and if it is similar to other very strong events, California can expect above normal rainfall for the season," Null explained. "But there are no guarantees as this is climatology, not a forecast. And above normal rainfall is also not a guarantee that the drought will end as some of the deficits in some areas exceed more than two full seasons of rainfall."
Steven Thomas, author of ReportsOnHousing.com shared his memory about the previous El Niño. "I remember the 1997-1998 El Niño, and it really did not have a negative effect on the housing market," Thomas said.
"Currently, there is a lot of strength in the housing market with a limited inventory and buyers not having a lot of choices," he explained, adding that the rainy season won't affect the way buyers purchased properties. According to him, people will still buy homes as long as the market price is right.
Andrew Karigan, agent from Teles Properties in Newport Beach, mentioned a positive effect of the weather. "El Niño could be a true test to the durability of homes in an area where we do not normally see extreme weather," said Karigan.
