Hannah Breyley
St. Louis residents are just at the beginning of long road to recovery after the deadly tornado ripped through the city on May 16, leaving 5 dead and impacting thousands more. Marked as the fifth deadliest tornado in St. Louis history, the storm completely blindsided the community with damages estimated over $1 billion. St. Louisans continue to show resilience with countless numbers of emergency responders, utility crews, and volunteers working around the clock to clear debris, restore power, and provide shelter to those displaced. As the city continues to heal, it’s crucial to recognize the impact this event will have on the local real estate market.
Approximately 4,500 buildings were damaged in the tornado’s path, with the most severe and widespread destruction concentrated in north St. Louis. After walking in these neighborhoods this past weekend and speaking with the residents, I was able to get a solid idea of where they stand. It is clear that this storm displaced a large number of families, many of whom have been left with no choice but to seek temporary rentals or alternative living arrangements. These same families are turning to the neighboring communities spared by the storm, which in turn will cause an increase in demand for rentals in those areas. As these families continue to flood into their neighboring communities, it is not unlikely we will see a rise in rental prices.
We can also anticipate a depreciation of property values in the neighborhoods where damage is rampant. The stigma associated with disaster zones can deter potential buyers, leading to delayed home sales or even listings being taken off the market completely. Many will be forced to navigate insurance claims which often become complex and drawn-out. The increase in cost, availability, and urban planning of materials will almost certainly slow down the rebuilding efforts, especially since 2,866 parcels of these buildings are government owned by The Land Reutilization Authority (LRA). The results of these compounding issues will ultimately lead to a decline in property values in the short term.
However, the long-term outlook isn’t all bleak. Natural disasters like this one are known to give the affected regions an economic boost in the long-term. Those same neighboring communities that held strong during the storm might see a rise in property value as the areas are seemingly safer and more structurally sound. Recovery efforts in the damaged areas will create more jobs as the demand for construction, labor, materials, and related services starts to surge. This gives the city the opportunity to rebuild more modern and updated infrastructure, which can benefit economic growth like St. Louis after the 1959 tornado hit.
While this storm already did its harm on the great city of St. Louis, it’s time to look forward and see what the future holds. First, we unite as a community and care for those in need as we wait for government entities, like FEMA, to help fix what’s been broken. Next, we start to rebuild what was lost, even better than before.