CoreLogic: 6.9M Homes Face Hurricane Storm Surge Damage Risk, $1.6T in Potential Reconstruction Costs

June 1, 2018

More than 6.9 million homes along the Atlantic and Gulf Coasts are at potential risk of damage from hurricane storm surge inundation with a total reconstruction cost value (RCV) of more than $1.6 trillion (Table 1), according to CoreLogic, a global property information, analytics and data-enabled solutions provider.

The 2018 CoreLogic Storm Surge Report analysis examines risk from hurricane-driven storm surge for homes along the Atlantic and Gulf coastlines across 19 states, as well as for 86 metro areas. Homes are categorized by five risk levels: Low (homes affected only by a Category 5 storm), Moderate (homes affected by Category 4 and 5 storms), High (homes affected by Category 3, 4 and 5 storms), Very High (homes affected by Category 2, 3, 4 and 5 storms) and Extreme (homes affected by Category 1-5 storms). RCV figures represent the cost to completely rebuild a property in case of damage – including labor and materials by geographic location – assuming the worst-case scenario at 100-percent destruction.

“While industry predictions for this year’s storm season indicate average activity levels, associated storm surge risk remains an important consideration for residential and commercial properties in the 19 states analyzed,” said Dr. Tom Jeffery, senior hazard scientist at CoreLogic. “Depending on the location of a storm’s landfall and that area’s population density and reconstruction costs, lower Category storms can cause just as much damage as storms in higher categories.”

Regionally, the Atlantic Coast has more than 3.9 million homes at risk of storm surge with an RCV of more than $1 trillion (Table 2), an increase of around $30 billion compared to 2017. The Gulf Coast has more than 3 million homes at risk with over $609 billion in potential exposure to total destruction damage, with over $16 billion increase compared to 2017. Areas with less coastal exposure but with lower elevations that extend inland tend to have more total homes at risk because the surge water can travel farther inland. Additionally, due to market conditions and previous storm surge damage, construction costs can increase despite having a lower number of at-risk homes compared to other states or Core-Based Statistical Areas (CBSAs).

At the state level, Florida has the most coastal exposure and has the most susceptibility to storm surge flooding of the 19 states analyzed, with more than 2.7 million at-risk homes across the five risk categories (Table 3). Louisiana ranks second with over 817,000 at-risk homes, Texas ranks third with more than 543,000 at-risk homes, and New Jersey ranks fourth with over 471,000 at-risk homes. Since the number of homes at risk strongly correlates with the accompanying RCV, Florida also has the highest RCV at over $552 billion (Table 4). Notably, New York ranks second in RCV with over $190 billion, despite its fifth-place ranking in number of homes at risk, due to the density of the residential population near the coast and higher construction costs in this state. Louisiana and New Jersey are also near the top of the list for RCV, with Louisiana totaling more than $186 billion and New Jersey totaling over $146 billion. Texas sits in fifth place for RCV, at more than $103 billion.

Due to the concentration of residences in and around large metro areas, 15 CBSAs account for 67.2 percent of the 6.9 million total at-risk homes and 68.2 percent of the total $1.6 trillion RCV (Table 5). This reinforces the idea that the location of future storms will be integral to understanding the potential for catastrophic damage. A low-intensity storm in a densely populated, residential urban area can do significantly more damage than a higher-intensity hurricane along a sparsely inhabited coastline. The Miami metro area, which includes Fort Lauderdale and West Palm Beach, has the most homes at risk, totaling over 788,000 with an RCV of more than $156 billion. By comparison, the New York metro area has slightly fewer homes at risk at just over 726,000, but a significantly higher RCV totaling more than $277 billion, a 5 percent increase compared to 2017.

Note: The numbers in Tables 1-4 are cumulative, increasing in value from extreme to low. This is based on the explanation that Category 5 storms are low risk because they are least likely to occur, but will cause more storm surge flooding inland than higher-risk, lower Category storms.

Table 1 – Total Number of Homes at Risk Nationally and Estimated Reconstruction Cost Value

Storm Surge Risk Level

(Storm Category)

Total Homes Potentially Affected

Total Estimated

RCV

(U.S. Dollars)

Extreme

(Category 1-5 storm)

806,735

$191,170,832,774

Very High

(Category 2-5 storm)

2,509,236

$608,263,801,243

High

(Category 3-5 storm)

4,557,089

$1,088,338,913,877

Moderate

(Category 4-5 storm)

6,050,936

$1,442,435,751,572

Low

(Category 5 storm)

6,942,499

$1,620,652,870,673

Source: CoreLogic 2018

Table 2 – Residential Property Exposure by Coastal Region

Regional Risk

Atlantic Coast Homes

Atlantic Coast RCV (U.S. Dollars)

Gulf Coast Homes

Gulf Coast RCV (U.S. Dollars)

Extreme

456,688

$122,684,450,321

350,047

$68,486,382,453

Very High

1,438,100

$398,084,569,726

1,071,136

$210,179,231,517

High

2,506,545

$672,405,046,607

2,050,544

$415,933,867,270

Moderate

3,460,837

$916,771,265,997

2,590,099

$525,664,485,575

Low

3,924,023

$1,011,558,178,641

3,018,476

$609,094,692,032

Source: CoreLogic 2018

Table 3 – At Risk Home Totals by State

Rank

State

Extreme

Very High

High

Moderate

Low*

Florida

351,093

1,064,674

1,752,603

2,292,791

2,774,175

Louisiana

72,256

207,442

624,521

747,111

817,480

Texas

39,109

117,558

253,947

384,944

543,847

New Jersey

95,659

278,539

382,065

471,353

N/A

New York

75,238

224,558

347,236

462,380

N/A

Virginia

26,960

94,378

246,824

366,478

409,129

South Carolina

35,934

126,997

209,026

294,239

347,030

North Carolina

32,282

95,286

160,831

210,233

259,718

Massachusetts

11,048

46,558

102,189

157,898

N/A

Georgia

8,887

50,409

105,735

141,518

152,559

Maryland

17,824

60,553

99,056

125,417

N/A

Mississippi

9,261

30,353

60,620

90,010

101,720

Pennsylvania

932

20,815

56,830

83,808

N/A

Connecticut

7,167

28,497

46,618

67,207

N/A

Alabama

6,379

17,306

32,331

44,744

57,973

Delaware

8,901

24,649

40,048

56,418

N/A

Rhode Island

1,876

8,153

17,312

26,484

N/A

Maine

5,645

7,960

11,851

18,150

N/A

New Hampshire

284

4,551

7,446

9,753

N/A

Source: CoreLogic 2018

*The low risk category refers to Category 5 hurricanes, which are not common along the northeastern Atlantic Coast. States in that region are designated as N/A for this category due to the extremely low probability of a Category 5 storm affecting these areas.

Table 4 – Reconstruction Cost Value of At Risk Homes by State

Rank

State

Extreme

Very High

High

Moderate

Low*

Florida

$68,993,319,371

$214,615,495,959

$353,434,047,211

$458,546,265,943

$552,417,823,248

New York

$29,069,437,198

$92,192,934,548

$142,653,686,948

$190,523,945,573

N/A

Louisiana

$15,058,006,592

$44,361,573,373

$141,431,122,080

$169,398,148,734

$186,089,070,917

New Jersey

$27,210,934,630

$83,140,546,592

$116,378,523,825

$146,074,429,226

N/A

Texas

$6,544,802,706

$20,281,149,088

$46,590,193,249

$73,689,714,628

$103,257,560,067

Virginia

$6,889,209,422

$23,532,519,915

$57,147,551,590

$84,231,366,445

$95,057,016,309

South Carolina

$10,365,743,962

$33,689,536,077

$52,352,428,765

$70,363,340,488

$80,775,388,252

North Carolina

$6,502,998,590

$19,557,292,731

$33,348,232,464

$43,887,698,767

$54,356,018,315

Massachusetts

$2,980,187,240

$13,363,727,998

$29,309,257,327

$46,442,774,460

N/A

Georgia

$2,740,063,841

$13,213,068,236

$24,703,010,004

$31,744,968,374

$33,763,709,156

Maryland

$4,349,256,919

$14,483,853,619

$23,474,382,707

$29,806,926,424

N/A

Connecticut

$2,559,481,204

$9,608,686,921

$15,452,737,215

$22,111,853,493

N/A

Mississippi

$1,977,375,919

$6,157,332,097

$11,913,778,331

$17,373,187,675

$19,557,738,154

Pennsylvania

$216,076,484

$4,664,438,284

$13,120,822,659

$19,444,951,459

N/A

Delaware

$2,635,651,997

$7,021,080,076

$11,463,739,373

$16,078,182,995

N/A

Alabama

$1,203,825,492

$3,124,223,041

$5,789,839,450

$7,962,250,197

$10,139,735,934

Rhode Island

$528,745,488

$2,408,462,659

$5,093,849,517

$7,809,201,093

N/A

Maine

$1,281,230,692

$1,914,444,383

$2,960,376,784

$4,634,377,599

N/A

New Hampshire

$64,485,027

$933,435,646

$1,721,334,378

$2,312,167,999

N/A

Source: CoreLogic 2018

Table 5 – Top 15 Metropolitan Areas for Storm Surge Risk

Rank

Metropolitan Area

Total Homes at Risk of Storm Surge

Total Estimated RCV

(U.S. Dollars)

Miami, FL

788,679

$156,109,638,962

New York, NY

726,048

$277,316,495,768

Tampa, FL

459,082

$79,154,913,706

New Orleans, LA

395,975

$95,278,109,445

Virginia Beach, VA

389,938

$90,904,781,082

Fort Myers, FL

318,950

$63,465,095,946

Houston, TX

284,622

$57,652,653,916

Bradenton, FL

254,535

$49,231,359,219

Naples, FL

186,100

$39,684,021,652

Jacksonville, FL

171,332

$38,495,385,153

Philadelphia, PA

165,300

$41,317,614,113

Charleston, SC

149,900

$37,938,251,071

Myrtle Beach, SC

128,155

$22,792,717,625

Boston, MA

126,263

$34,937,253,340

Beaumont, TX

121,379

$21,026,736,810

Total

4,666,258

1,105,305,027,808

Source: CoreLogic 2018

Methodology

The analysis in the 2018 CoreLogic Storm Surge Report encompasses single-family residential structures less than four stories, including mobile homes, duplexes, manufactured homes and cabins (among other non-traditional home types). This is not an indication that there will be no damage to residential units greater than four stories, as there may be associated wind or debris damage. However, including all high-rise residential units in the analysis would inaccurately skew the actual number of houses at risk, as elevated structures are not as susceptible to damage from surge waters.

Year-over-year changes between the number of homes at risk and the RCV can be the result of several variables, including new home construction, improved public records, enhanced modeling techniques, fluctuation in labor, equipment and material costs – even a potential rise in sea level. For that reason, direct year-over-year comparisons should be warily considered. To estimate the value of property exposure of single-family residences, CoreLogic uses its RCV methodology which estimates the cost to rebuild the home in the event of a total loss and is not to be confused with property market values or new construction cost estimation. Reconstruction cost estimates more accurately reflect the actual cost of damage or destruction of residential buildings that would occur from hurricane-driven storm surge, since they include the cost of materials, equipment and labor needed to rebuild. These estimates also factor in geographical pricing differences (although actual land values are not included in the estimates). The values in this report are based on 100 percent (or “total”), destruction of the residential structure. Depending on the amount of surge water from a given storm, there may be less than 100 percent damage to the residence, which would result in a lower realized RCV.

To evaluate storm surge risk at the local level, CoreLogic uses the designation of Core-Based Statistical Areas (CBSAs), which are often referred to as metropolitan areas (>50,000 people), or micropolitan areas (<50,000 people), as defined by the U.S. Office of Management and Budget. The CBSA represents an urban center and the adjacent regions that are tied to that center socioeconomically. The specific areas identified in this report are named by primary urban center, though each may contain additional urban areas.

Source: CoreLogic

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