Cotality has revealed some alarming statistics about hurricane risks facing homes across the United States. The property data provider, which was previously known as CoreLogic, has identified over 33.1 million residential properties from Texas to Maine. These homes have a combined reconstruction cost of $11.7 trillion and are considered at least at moderate risk of damage from hurricane-force winds.
In addition, Cotality reports that 6.4 million of these properties, worth $2.2 trillion, are at moderate or greater risk from storm surge flooding. Maiclaire Bolton-Smith, a vice president at Cotality, emphasized that the effects of hurricanes are becoming more widespread. This shift is not just about the areas typically known for hurricanes; the risks are spreading further inland and affecting regions that were once considered safer.
As the risk of wind and flood damage increases, many homeowners are facing challenges with insurance. Cotality’s report highlights that rising insurance costs can lead to "liquidity traps." This means properties might lose value and linger longer on the market. For example, homes in flood zones in Miami have seen value drops of up to 18% per square foot. Unfortunately, even if buyers find a lower price, they often face high insurance costs, making the overall purchase less appealing.
This trend isn’t limited to Florida, Texas, and Louisiana, where hurricane risks are well-known. Cotality has also observed migration patterns, with people moving from Florida to the Carolinas and other areas. While this may seem like a solution, it could strain infrastructure in these new locations, even if they are thought to be safer.
Cotality warns that hurricanes often cause flooding that overwhelms infrastructure, disrupting essential services like electricity and clean water for extended periods. They also noted that some crucial funding programs from the Federal Emergency Management Agency (FEMA) have recently been discontinued, which could further complicate recovery efforts.
As these risks grow, homeowners and potential buyers must stay informed about the changing landscape of hurricane risks and insurance availability.