Hurricanes Could Endanger 33M U.S. Properties This Year

CoreLogic released its 2023 Hurricane Risk Report today, which also happens to be the start of the Atlantic hurricane season. The numbers quoted are large: potential danger for 33 million U.S. homes, with $11.6 trillion total reconstruction cost at risk.

But the details are far more nuanced, with the company noting, “The numbers contained in this report are an analysis of the building stock that has a high probability of sustaining damage from a hurricane if one were to make a direct landfall. These numbers do not represent the potential loss from an individual hurricane or the accumulated impact of an entire season’s hurricane activity.”

Using data analysis, the CoreLogic identified 32 million single-family residences and a million more multifamily ones. The company then calculated estimated reconstruction total costs for residences “at moderate or greater risk of sustaining damage from hurricane-force winds.”

But the data wasn’t flat. Instead, it was broken out by risk level: moderate or greater, high or greater, very high or greater, and extreme (the Saffir-Simpson categorization of 1 through 5). Damage was also broken out by type, whether flooding from storm surge or rain, or hurricane winds.

“Approximately 7.8 million of these homes, with a combined [reconstruction cost value, or RCV] of $2.6 trillion, have direct or indirect coastal exposure – making them susceptible to storm surge flooding,” the report said.

Some metro areas are more at risk. New York has 4.3 million housing units with a reconstruction cost value of $2.4 trillion.

“Other major metro areas with substantial hurricane wind risk are the Houston-Woodlands-Sugar Land and Miami-Ft. Lauderdale-Pompano Beach areas with 2.1 million SFRs and MFRs, each, with a combined RCV of $649.8 billion and $585.0 billion respectively.” Philadelphia and Washington, D.C. metro areas are numbers four and five at top risk.

For storm surge danger, the top five are New York-Newark-Jersey City (788,261 homes at risk, $406.4 billion estimated RCV); Miami-Ft. Lauderdale-Pompano Beach (746,602 homes, $211.4 billion); Tampa-St. Petersburg-Clearwater (540,411, $145.4 billion); New Orleans-Metairie (405,975, $127.0 billion); and Virginia Beach-Norfolk-Newport News (399,326, $122.7 billion).

Large segments of each of these areas at risk will also be commercial real estate, although the report doesn’t address them. However, CRE owners and operators in these areas should consider the possibility that they, too, would be in danger and should review insurance and mitigation efforts. Even though the National Oceanic and Atmospheric Administration predicts a “near-normal 2023 Atlantic hurricane season,” a normal storm can cause water and/or wind damage and possibly disrupt operations of owners or tenants.