Hurricane season has officially begun, and with COVID-19 impacting everyone's lives, CoreLogic looked into how the pandemic will affect this year's hurricane season. CoreLogic identified the top 15 metros at risk of storm surge, including single- and multifamily residences, accounting for 68.8% of total reconstruction cost value of homes at risk of storm surge on the Gulf and Atlantic coasts in the United States.
Three metros that rank high on the list - Miami, New York City and New Orleans - will be experiencing an increasing rate of mortgage nonpayment as a result of the financial ramifications of the pandemic. This raises additional concerns for response and recovery amidst the economic uncertainty in the season ahead.
“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 Dr. Frank Nothaft, Chief Economist at CoreLogic.
More than 7 million properties face the risk of destruction from a storm surge this season, according to CoreLogic’s Storm Surge Report—a potential of $1.7 trillion in reconstruction costs for single-family homes and $95 billion for multi-family residences.
These figures assume total destruction of all properties facing the threat of a storm surge in the worst-case scenario of a Category 5 hurricane in their area.
The National Oceanic and Atmospheric Administration (NOAA) says this hurricane season has a 60% chance of being “above-normal.”
NOAA predicts between 13 and 19 named storms, between six and 10 hurricanes, and between three and six major hurricanes this year.
“As Americans focus their attention on a safe and healthy reopening of our country, it remains critically important that we also remember to make the necessary preparations for the upcoming hurricane season,” said Secretary of Commerce Wilbur Ross, in an NOAA press release.
CoreLogic specifically examines the property risks of potential storm surges in coastal communities across the nation because storm surges are often a major contributor to the property damage and displacement of residents during a hurricane.
“While most people associate hurricanes with the wind, it is important to expect and prepare for the inevitable flooding since that is often responsible for considerable damage,” said Thomas Jeffery, Ph.D., Principal of Science and Analytics at CoreLogic.