Blog Real Estate Best Practices How Agents Cope With Natural Disasters Affecting Farming

How Agents Cope With Natural Disasters Affecting Farming

It’s easy to hear about natural disasters and assume that they won’t ever affect you. Like with many events, you might think those things only happen elsewhere. But unfortunately, the data tells a different story. Experts say the intensity and frequency of disaster weather events are increasing and will continue to do so. Hurricanes Milton and Helene are unfortunate reminders about natural disasters’ potential impact – especially in areas that aren’t traditionally affected. 

As you’ve no doubt seen on the news, natural disasters can wreak havoc wherever they occur, affecting not just the physical structures but also the economic stability of a community. Property owners and real estate professionals face unique risks, and agents who use proper farming techniques must be educated and prepared. This article explores the multifaceted impact of natural disasters on real estate farming. 

Key Takeaways: 

• Science tells us that we can expect continued unprecedented weather events. Agents who understand this climate and the resources available in their area are more valuable.  

• Natural disasters have short-term and long-term impacts on properties. Some of the effects are immediate, but it’s essential to consider what will happen to properties and the overall market months and years down the road (and we cover this here). 
• Agents can offer truly insightful advice from a unique real estate angle. Farming is dependent on becoming an expert in a niche market, and by providing valuable information to the people in these areas, you can build credibility and trust. 

The Impact of Natural Disasters on Real Estate Farming

Natural disasters such as hurricanes, floods, wildfires, and droughts can significantly alter the housing landscape, particularly in rural agricultural areas. Property values may plummet, and the overall appeal of the area can diminish, leading to a ripple effect on local businesses and services. 

If you’re an agent who depends on real estate farming as part of your overall strategy, you will face some particular concerns. Some of the ways your farming efforts might be impacted include: 

• Dealing with perceptions – Natural disasters can alter buyer attitudes of an area. If a neighborhood has recently experienced flooding, fires, or earthquakes, potential buyers may be hesitant to invest there, fearing future disasters. This can reduce demand and, consequently, property values.
• Adjusting strategy to account for property damage – Homes and properties may be damaged or destroyed during natural disasters. Real estate agents must adjust their marketing strategies to account for the availability of properties. They may need to focus on areas that are less affected or highlight properties with repairs and renovations.
• Insurance and financing challenges – After a disaster, insurance rates may rise, and lenders may be more cautious about approving mortgages in affected areas. This can limit the pool of potential buyers and complicate financing for properties, making it harder for agents to close deals.
• Changed community sentiment – The emotional impact of a disaster can create a reluctance among residents to engage in real estate transactions. Agents may need to adopt a more sensitive approach in their marketing efforts, focusing on community rebuilding and resilience. Taking a “we’re all in this together” attitude is more likely to be met with support than immediately pointing out money-making opportunities. 
• Regulatory changes – Local governments may implement new regulations or zoning laws in response to disasters, affecting property values and development potential. Agents must stay informed about these changes to provide accurate information to clients. It’s essential to check in on new regulations, zoning changes, or red-tape procedures that buyers and sellers may need to deal with. Being able to provide accurate and transparent advice in these areas will prove valuable. 
• Marketing shifts – Agents will likely need to shift their marketing focus to include disaster preparedness and recovery information. This could involve providing resources for potential buyers regarding the area’s resilience to future disasters and any community support available. Rather than shift away from marketing to a certain zip code altogether, consider offering additional services that will be relevant during community rebuilding. 
• Networking and community involvement – For a while, there will likely be limited opportunities for traditional networking or social events. That being said, agents can benefit from being actively involved in community recovery efforts, as this can enhance their reputation and visibility. Building relationships with local organizations can help agents establish trust and credibility within the affected communities. Of course, it’s important to do this with an authentic spirit. Otherwise, you risk appearing to take advantage of the situation.

Overall, real estate agents must be adaptable and responsive to the changing dynamics brought about by natural disasters to effectively market properties and serve their clients. This is much easier to do when you’ve created back-up and contingency plans and have become well-informed on topics that are relevant to natural disasters, like new zoning laws or short-term rental options. 

How Natural Disasters Affect Property Values

The immediate aftermath of a natural disaster often sees a decrease in property values, as potential buyers perceive higher risks associated with purchasing in affected areas. The depreciation can be attributed to visible damage, increased insurance costs, and the fear of future disasters. Over time, however, as recovery efforts are implemented and communities rebuild, property values may stabilize or even recover, depending on the effectiveness of these measures.

Short-term vs. Long-term Impact on Properties

The short-term impact of natural disasters is often stark, with immediate financial losses and property devaluation. However, the long-term impact can be more complex, influenced by factors such as rebuilding efforts, government assistance, and changes in building or housing practices. In some cases, markets may even improve their resilience and infrastructure post-disaster, leading to enhanced property values in the long run.

Here are the potential impacts that agents need to understand. 

Short-Term Impacts

• Increased Insurance Claims – Following a disaster, homeowners often file numerous insurance claims for property damage, material losses, or physical harm, leading to immediate financial strain.
• Decreased Supply of Housing – Disasters can make homes uninhabitable, reducing the available housing stock in the area, which can temporarily inflate property values in unaffected regions (especially those that are relatively nearby). 
• Immediate Decline in Property Values – As buyers perceive higher risks associated with purchasing in affected areas, property values can drop sharply, reflecting concerns about future disasters.
• Loss of Income – For business owners or people who operate in the market, they may not be able to do business as usual. This will lead to immediate income losses and concerns about how to move forward. 
• Increased Costs for Recovery – Homeowners may face significant short-term expenses for repairs, cleanup, and recovery efforts, impacting their financial stability and property values.

Long-Term Impacts

• Changes in Market Perception – Over time, the perception of risk in affected areas may change, leading to either gradual recovery or sustained declines in property values based on the effectiveness of recovery efforts.
• Infrastructure Improvements – Post-disaster rebuilding often includes upgrades to infrastructure (e.g., better drainage systems, stronger buildings), which can enhance property values in the long run.
• Insurance Premium Increases – Ongoing higher insurance premiums due to perceived risk can deter potential buyers, negatively impacting long-term property values.
• Population Decline – If the disaster leads to a significant outmigration from affected areas, the long-term demand for housing can decrease, resulting in lower property values.
• Government Incentives and Support – Long-term government programs aimed at revitalizing affected areas can help restore property values over time.
• Environmental Changes – Changes in land use or environmental conditions following a disaster can alter home-buying patterns, affecting long-term property values.

These impacts illustrate the complex dynamics that natural disasters introduce in an area, highlighting the importance of effective recovery and risk management strategies.

Farming Efforts Day-to-Day Following Disaster

In the aftermath of a disaster, ongoing support for your local market is essential. Agents can assist in connecting people with resources such as financial aid, counseling services, and community support programs. 

Whereas your previous marketing efforts were focused on helping local sellers promote their properties, your strategy may shift to helping them find resources for repairing their homes as quickly as possible to get on the market again. Or, buyers that were previously seeking the area may now have cold feet, and it’s your job to reach out and assure them of the robust revitalization efforts happening in the area and help them see how the neighborhood will come back better than ever. 

By actively engaging with affected buyers and sellers, agents can help them navigate the recovery process and rebuild their operations. There are some specific areas where agents can be especially valuable, and it’s worth marketing this expertise: 

• Assessment of Property Damage –  Agents can help homeowners evaluate the extent of damage to their properties, providing guidance on what repairs are necessary and connecting them with reliable contractors. Help them to prioritize projects that will get the home market-ready again. 
• Navigating Insurance Claims – Agents can assist clients in understanding their insurance policies, helping them file claims accurately and promptly to ensure they receive the compensation they need for repairs and recovery. Research options and make recommendations for which avenues they should pursue. 
• Providing Market Insights – By offering updated market analyses, agents can inform homeowners about property values in the aftermath of a disaster, guiding decisions on whether to sell, hold, or invest in repairs. In particular, you should be armed with analyses for nearby neighborhoods or other areas that people might be interested in exploring. 
• Connecting with Resources – Agents can serve as a valuable resource for connecting clients with local support services, including government assistance programs, non-profit organizations, and community resources that provide financial aid and recovery support. You may want to create a special section on your website highlighting local organizations and phone numbers. 
• Advising on Temporary Housing – For clients whose homes are uninhabitable, agents can help find temporary housing solutions, whether through rental properties or assistance programs that provide shelter. This is another area that you may want to add to your website for easy exploration. 
• Promoting Community Engagement – Agents can organize or promote community meetings and workshops focused on recovery efforts, helping homeowners stay informed and connected with their neighbors. 
• Supporting Long-Term Recovery Plans – Agents can guide homeowners through the process of developing long-term recovery plans, including strategies for rebuilding, improving home resilience, and mitigating future risks. If you have a bit of extra time to spend on thought leadership, consider putting together a downloadable pdf document that has resources such as a post-disaster checklist and other necessary paperwork. 
• Facilitating Property Sales or Rentals – If homeowners choose to sell due to extensive damage or financial strain, agents can assist in listing properties and marketing them effectively in a changing market. Make sure potential sellers know that you are experienced in this area and can help them navigate the process. 
• Educating on Risk Mitigation – Agents can provide information on best practices for risk mitigation, such as home improvements and landscaping changes that may reduce vulnerability to future disasters. This would be great content for video marketing or other support materials. 
• Emotional Support and Counseling – Beyond practical assistance, agents can offer emotional support by being a listening ear and providing reassurance during a challenging time, helping clients navigate the stress of recovery. You can always offer to grab a cup of coffee with someone just to listen – they’re unlikely to forget your kindness. 

Through these actions, real estate agents can significantly contribute to the recovery efforts of individuals and communities affected by natural disasters, helping them rebuild and regain stability.

Support Programs for Affected Homeowners

Numerous support programs exist to aid homeowners affected by natural disasters. These may include government grants, low-interest loans, and non-profit initiatives aimed at providing immediate relief. Agents can play a pivotal role in helping clients access these resources, ensuring they have the support needed to recover and thrive in the long term. Research your area to see what resources are available and how to access them so that you can share that valuable information within your market. As mentioned, if you have this information documented in a resource you can share with people, they will find it very valuable. 

In conclusion, while natural disasters pose significant challenges to any housing market, the support and guidance of real estate agents can make a substantial difference. With their expertise, agents can help buyers or sellers navigate the complexities of property value changes, market trends, and recovery strategies, ultimately fostering resilience in the face of adversity.