Hurricane season is upon us. Unfortunately, not only is the 2020 hurricane season predicted to be an active one, but communities will have to face the threat of this disaster while grappling with the impact of COVID-19.
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.
He called storm surges the “deadliest and most destructive hazard we deal with.”
The metros with the greatest number of single-family homes at risk of a storm surge are Miami; New York; Tampa, Florida; New Orleans; and Virginia Beach, Virginia.
The metros with the greatest number of multifamily housing units facing the threat of a storm surge are New York; Miami; Boston; Fort Meyers, Florida; and Tampa, Florida.
It is also important to note that the cost of damage can vary from metro to metro and is not entirely dependent on the number of properties at risk. A lower category storm can cause more costly damage than a higher category storm depending on the density of the homes, CoreLogic explained.
Unfortunately, preparing for hurricane season this year comes with additional challenges because the nation is still facing the COVID-19 pandemic, which has already caused a steep uptick in mortgage delinquencies this spring.
Communities are likely to face a shortage of contractors to install hurricane shutters, and residents may have a difficult time preparing as some essential items are difficult to find in grocery stores during the pandemic.
Communities and individuals have the added complication of addressing social distancing while finding and providing shelter from hurricanes this season. The American Red Cross is calling for communities to shelter people in hotels as a safe option.
Additional complications include the fact that first responders are already “stretched thin in some areas,” and also that many hotels and restaurants are not fully operating yet.
Both the physical and economic recovery may be delayed by the pandemic, according to CoreLogic.
In February, even prior to the spike in unemployment, three of the cities at most risk of storm surge were experiencing heightened mortgage delinquencies. In Miami, the delinquency rate in February was 5.1%. In New York, it was 4.7%, and in New Orleans, the rate was an even higher 6%.
“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, Ph.D., Chief Economist at CoreLogic.
Natural disasters impact investors, service providers, mortgage servicers, government agencies, legal professionals, lenders, property preservation companies, and—most importantly—homeowners. Learn more on how to stay prepared this season at Five Star's 2020 Disaster Preparedness Virtual Symposium.