July 24, 2018  //  BY Team DataTree

Dear Lenders: Positive Signs It Might Be Time to Re-Invest in a Neighborhood Formerly Affected by a Natural Disaster

Over the course of its history, the United States has experienced its share of natural disasters. In just the past few decades, the nation has endured plenty of tragedies brought on by Mother Nature; the San Francisco earthquake in 1989, Hurricane Katrina in 2005 and, most recently, Hurricane Harvey in 2017. In addition to earthquakes and hurricanes, a number of regions have suffered major damage from other natural disasters like wildfires and tornadoes.

As a mortgage lender, you have probably noticed how natural disasters can have a devastating impact on the value of affected homes and businesses. But while homes that are literally underwater are not good investments, there comes a time when these once-devastated areas bounce back and become decent places to buy a home. With this in mind, let’s examine a number of signs that indicate an area is on the rebound following a natural disaster.

Booting the Looting: Crime Rates Drop

You have probably seen the footage on the news at some point: people looting stores that have been flooded by hurricane rains. Crime can rise in areas after natural disasters, including theft, vandalism and assault. These situations can cause a city’s crime rate to spike post-hurricane or tornado, but will eventually fall again as a neighborhood recovers. In general, a lowered crime rate is a good sign that a region is rebounding from a disaster. If business owners are back at work, their buildings are much less vulnerable to looters.

On the Road Again: Infrastructure Returns to Normal

After a natural disaster, it is not uncommon for entire roadways and/or bridges to be wiped out. Residents must often take alternate routes to get out of their neighborhoods and get to work. While a state’s Department of Transportation will do what they can to repair the damage, it does take time. Seeing new highways, roads and bridges after a natural disaster is definitely a clear indication that the worst is in the past, and that the area is recovering nicely.

Get on the Bus, Gus: Public Transit Returns

Another sign that a city is moving past a natural disaster is the return of, and increase in, public transit routes. When roads are flooded and/or wiped out, buses and trains cannot operate as usual. As an area dries out after a hurricane or rebuilds following a massive wildfire — and people move back in — public transit routes will be reinstated and more options will potentially be added.

Back from the Depths: Home Prices Rising

Another key sign that a neighborhood is coming back to life following a natural disaster is in its home valuations. While homes filled with mold, fire damage and other issues would not be appealing to buyers — and would probably be torn down in many cases — as a region recovers, home values will begin to shoot up again. For investors who are wondering where to get a house valuation report, DataTree is the answer; we deliver mortgage insight, document retrieval, property data and other information for any portion of the mortgage life cycle. This information can be highly useful in determining if a neighborhood’s homes are once again selling for decent prices.

If I Had a Hammer: Hardware Stores Open

There are a number of specific businesses that indicate a neighborhood is recovering nicely after a natural disaster. A great example of this is hardware stores. Homeowners who are busy rebuilding their houses and business owners who are making needed repairs need everything that hardware stores offer. People who have never considered opening a hardware store may be inspired to do so after a hurricane hits their town, since they can be a good source of the materials people need for recovery. Google "home improvement" and "hardware stores" for a specific area and see what pops up — if you spot new and re-opening businesses, it’s a clear sign the area is rebounding.

Inspiring Creativity: Artists Move Back In

Natural disasters can impact art galleries, museums and other cultural locations. When a city has been destroyed by a flood or fire, the artists may move out of the area to reach safety. As the neighborhoods are rebuilt and museums and other cultural attractions reopen, artists tend to flock back to the area. If you notice signs that galleries are coming back and artsy events are taking place again, this is a definite indication that a city is returning to its former glory.

In Time, Recovery Does Happen

When homes are filled with 10 feet of brown flood water, streets are rivers and stores are closed, it can be hard to imagine that any town can bounce back. But clearly, neighborhoods do act as the mythical Phoenix, rising from the ashes. By keeping a close eye on the aforementioned signs and working with DataTree for needed property information, mortgage lenders and others can determine if it’s time to reinvest in a once-damaged area.



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