Storms make this sleepy Florida town the national leader in falling home prices

In Punta Gorda, Florida, a laid-back fishing town on the state's southwest coast, a hospital that was flooded in the fall from the one-two punch of hurricanes Helene and Milton remains closed indefinitely.

About a mile west, Gilchrist Park was blocked off for weeks after a handful of boats broke loose from their moorings during the storms and washed up in the grass just beyond the Charlotte Harbor seawall. The disarray was enough to prompt some shellshocked and storm-weary homeowners to look to leave — an exodus that has helped home prices fall there more than anywhere else in the United States.

The city of 20,000 residents, known for its breathtaking sunsets over the Peace River, sustained massive water damage from the hurricanes hitting less than two weeks apart in late September and early October. Entire neighborhoods in the city's historic district were flooded, some houses now vacant, a handful with large dumpsters sitting in the driveways.

Residents who have lived here for decades had never seen a storm surge.

"It scared a lot of people," said Leanne Walker, president of the Punta Gorda Realtors Association, from her office on brick-lined Sullivan Street on the edge of downtown.

Across most of the country, home prices are rising, mostly fueled by robust demand outpacing a limited supply. Of the 226 metropolitan areas tracked by the National Association of Realtors, or NAR, nearly nine out of 10 had increases in their median home price during the July-through-September quarter compared to the same time a year earlier.

By contrast, storm-ravaged Charlotte County, Florida, known as the Punta Gorda metropolitan area, led the nation with a 6.5% decline in home prices. The nearby Sarasota metropolitan area had the second-biggest drop at 5.8%, according to NAR. These two regions south of Tampa, once havens for baby boomers easing into sun-splashed retirements, could see more price softening as residents rebuild, recover and cope with hurricane fatigue.

Two years ago, Category 5 Hurricane Ian made landfall south of Punta Gorda near Fort Myers. It caused billions of dollars in damage and threw into further disarray the state's volatile property insurance market. Category 1 Hurricane Debby sideswiped Florida's southwestern coast in August and served as a precursor to the destruction caused by Helene and Milton.

Residents are worn out.

"There's a lot of PTSD around here," said Tommy Macy, a city public works project manager.

Fifty miles up Interstate 75, on the barrier island of Siesta Key, where Milton roared ashore on Oct. 9, fences torn down by the storm remain on the ground, and mattresses and other household items still can be seen strewn on the side of the road. Along the main drag on Ocean Boulevard, a small sign advertises a flooded pool home with gulf access. The seller is asking $699,000 cash. Another sign offers a "teardown special" for $699,900.

Other damaged properties also are expected to be sold at a discount for land value, likely ushering in a wave of pricey redevelopment, said Justin Johnson, managing broker for the Michael Saunders brokerage.

"This is going to change the landscape of the island," he said from his office in a strip shopping plaza. "Unfortunately, the era of the tiny, affordable beach cottage is over."

In Punta Gorda, four blocks from Charlotte Harbor, the Durrance Street duplex that Linda and Stephen Catalino have owned for nine years is uninhabitable.

The couple initially ignored local warnings to evacuate and decided to stay for Category 4 Helene, figuring it would provide only a glancing blow on its way toward a landfall in the Big Bend region of the state. Besides that, their street had never flooded before, they said. In 2022, Hurricane Ian caused only minor tree damage.

But, in the middle of Helene, with sheets of rain unrelenting and ankle-deep water at their front door, the Catalinos, both 68, ended up evacuating. They walked to a nearby church, where they were rescued by their tenants' grandparents.

When the couple returned the next day, their sport utility vehicle was flooded and wouldn't start. The water line on the front of the house was higher than 20 inches, and there were 3 to 4 inches of sewage water throughout the house.

"We didn't know what to think," Linda Catalino, a retired dental hygienist, said over a mahi-mahi sandwich at TT's Tiki Bar on Punta Gorda's Charlotte Harbor. "We were in shock mode."

The Catalinos, who first met as children in upstate New York before reconnecting on Facebook a decade ago, still had power and a dry bed. But their appliances didn't work. They unplugged a smoldering surge strip sitting in water, fired up the gas grill, bought a camp stove and used pumps and fans to dry out the house over the next few days.

Their tenants had friends and family show up with trailers and started moving furniture outside and sucking water out of the house. When they finished, they helped the Catalinos do the same thing.

The couple's church friends mobilized, helping to rip out the damaged portions of drywall and floors, so the Catalinos moved to a nearby hotel on Saturday night, Oct. 5. When they went to sleep, they weren't even aware that menacing Milton was growing into a Category 5 monster and aiming for Florida's west coast.

Two days later, they evacuated to her daughter's apartment in Miami Beach, Florida, and stayed for two weeks. Milton was downgraded before landfall but still hit Siesta Key as a Category 3 storm.

"I was totally traumatized," Linda said. "I had no desire to come back because I knew what I was facing."

While still in Miami Beach, they paid a local contractor $9,600 to pump out 33 inches of water and dehumidify the Punta Gorda house. They returned to a front yard full of furniture and sheetrock, but some of their keepsakes, including an old baker's rack and an antique chest of drawers, had been pilfered by passersby.

They stayed with friends for four weeks and applied to the Hope Florida disaster assistance program that now pays for a room at a nearby Springhill Suites. That's where they've been living since Nov. 15, and they can stay until Feb. 1.

The deluge of recent hurricanes in southwest Florida is reminiscent of 2004, when four hurricanes made landfall in the Sunshine State. The string of storms led to a groundswell of discontent and caused some fed-up residents to move away to less storm-prone areas. But the fallout proved temporary, and Florida remains one of the nation's most sought-after states to live in, even with the occasional threat of hurricanes.

In 1992, Hurricane Andrew battered southern Miami-Dade County with 175 mile per hour winds and wiped out entire neighborhoods. But that led to a statewide building code and one of the biggest building booms in the region’s history, analysts say.

Southwest Florida buyers are "peeking around the door again," said Walker, the Punta Gorda Realtors president. But, she and other agents said some sellers haven't yet accepted the new reality of lower prices.

However, the anguish and price declines in southwest Florida may be only temporary, according to Ken Johnson, a longtime Florida resident and economist and now the Walker family chair of real estate at the University of Mississippi. He said people have been predicting for decades the end of Florida's development pipeline.

"It hasn't happened yet," he said in an interview.

Stephen Catalino, a retired Federal Express courier, said he wouldn't mind repairing the duplex and staying. But his wife said she's had enough.

"I don't want to own in Florida anymore," Linda Catalino said. "This is not the place for middle-class retirees to carry a mortgage. Florida has become unaffordable for less than a wealthy person."

They expect their $5,600 annual flood insurance premium to keep rising. When their tenants moved out after Helene, the Catalinos lost the $1,600 monthly rent that covered almost all of their mortgage. Their lender suspended their mortgage payments as part of a forbearance program for storm-damaged properties, but that's only a short-term solution.

They've set up a campsite in their garage and driveway, have found a two-bedroom rental for $1,200 a month and have listed the duplex for sale at $465,000. They figure the land is more valuable to a buyer, who could demolish the house and replace it with homes on the three separate lots.

"A buyer's market if I ever saw one," Linda Catalino said.

If the duplex doesn't sell by early next year, they may pay to tear it down themselves. Fixing it is still a remote possibility.

"I keep praying for clarity," she said.