Ahead of the 2020 hurricane season, property information and analytics provider CoreLogic has estimated that 7.4 million US homes could be at risk of storm surge and possible mandatory evacuation.
Together, these homes have an estimated reconstruction cost value (RCV) of $1.8 million, according to analysts.
But with the Atlantic hurricane season set to officially start of June 1, many states are still under stay-at-home orders or strict social distancing guidelines, causing economic stress on housing and forcing communities to develop new measures to recover from natural catastrophes.
Additionally, the unemployment rate exceeded 14% in April 2020, and cities at high risk of storm surge damage also face risk of mortgage delinquencies.
For example, Miami, New York and New Orleans reported mortgage delinquency rates of 5.1%, 4.7% and 6%, respectively, in February. This was well above the average US rate of 3.6% and two months ahead of the spike in unemployment.
“If a hurricane causes significant storm surge damage during a time when mortgage delinquencies are already high, this could result in additional losses for homeowners, lenders and insurers – and ultimately, delay economic recovery for impacted communities,” said Frank Nothaft, Chief Economist at CoreLogic.
“Storm surge has historically been the deadliest and most destructive hazard we deal with,” added Thomas Jeffery, Principal, Science and Analytics at CoreLogic.
“Now, with hurricane preparedness and response logistics potentially compounded by the pandemic, it has never been more important to pay attention to storm warnings and prepare for the possibility of hurricanes making landfall this year along the Gulf and Atlantic coasts.”
As part of its analysis, CoreLogic looked at the top 15 metropolitan areas with the greatest number homes at risk for storm surge, which together accounted for 68.8% of the total RCV.
It found that the New York metro area has the greatest risk of storm surge with over 834,600 homes at risk and the highest total RCV at over $334 billion.
After this was the Miami, Florida metro area (including Miami, Fort Lauderdale and West Palm Beach), which had more than 834,500 homes at risk and an RCV of $166 billion.
At a state level, Florida, Louisiana, New York and Texas were founded to have the greatest number of homes at risk of storm surge.