Hurricane Milton Storm Surge Tests Florida's Housing Market

Using Ian as a test case, we're still recovering. South Florida, that is, is still recovering. Southwest Florida from Ian. This appears to be less in scope, so we're probably still looking at several months before we've completely gotten rid of Hurricane Milton. Talk to us about just, I don't know, you think about owning real estate in Florida. Boy, that is not for the faint of heart here, because talk to us just about, I don't know, insurance and how folks down there just keep rebuilding and rebuilding. Are there lessons learned down there? Well, many, many folks predict that these hurricanes are going to end the growth in Florida, and they've been on record for 150-plus years, going back over 100 years. I think there's over 30 Category 3s or higher that have struck the state. Dire predictions have been made in the past, and they never come about, and it's because the demand to live in Florida just keeps increasing. Nice, solid economy, good weather, sans hurricanes, warm in the winter, air conditioning works in the summer, strong business climate. People are coming to Florida, and this is not going to stop them. What about the prices of those particular houses, though? Because what we can't argue is that insurance companies are dumping Florida, right? There's going to be local insurance companies. There are many stories of people's insurance premiums just rising really fast, which means it's hard then to sell the house at the same time. Maybe it's more expensive then to buy a house. Does this need to settle out? It does, and this has been an issue in Florida for quite some time now. It's slowly getting better. Some legislation was brought about in terms of limiting liability exposure off of certain types of damages, and that you had to be timely in filing your claims. Slowly, slowly taking effect, but home insurance is going to be an issue in Florida for years to come. The state does have an insurer of last resort, and that's the Citizens Group. If you're there in Florida, you're very familiar with Citizens. So yes, it's a problem. It's something they'll work through. The reinsurance rates have gone down this year for Florida. That was really good news. Probably will not be again. So in other words, the people insuring the insurance companies, their rates had went down in end of 23. They'll probably be back up end of this year now due to the two storms combined. All right, let's zoom out a little bit from Florida and just talk about affordability, housing affordability or lack thereof in this country. Can you just give us a sense of how do we got to this place we are now where it really seems to be a real stretch for so many Americans, housing affordability? Sure. So if I had to pick one item that was the most influential in this or the proximate cause of unaffordable housing at this point in time was post the last housing crash, circa 2007 and 2008, depending on where you were in the country, the markets turned down, real estate markets all over the country turned down. They bottomed about 12. But during that period of time, we lost thousands of small builders. Today, we mostly have large publicly owned developers. It's hard to keep pace. We've just lost so many builders. The difference between a builder and a developer quite often is maybe the scale. So we have fewer but much, much larger developers, but we still need those mom and pop builders that build those 50 plus or minus homes a year. And they just they left the market or they were forced out or they were forced into bankruptcy, and they have not come back into the marketplace.