Amid Hurricane Ian recovery, CoreLogic has updated its final damage estimates showing $41 billion to $70 billion in total flood and wind losses. The estimate includes wind loss, reevaluated insured and uninsured storm surge loss, and newly calculated inland flood loss for residential and commercial properties.
Flood loss from NFIP and private insurance for residential and commercial properties is estimated to be between $8 billion and $18 billion and includes reevaluated storm surge and new estimates for inland flooding. Insured loss represents the amount insurers will pay to cover damages and includes residential homes and commercial properties.
Uninsured flood loss for the area is estimated to be between $10 billion and $17 billion, while wind losses are estimated to be $23 billion to $35 billion. Along Peace River in Arcadia, Florida, inland flooding was extreme, but, because of its Special Flood Hazard Area (SFHA) by FEMA, housing is sparse in the location.
“In many areas the flood extent approximates the SFHA boundaries, a clear indication that SFHA is a useful tool for city planners who wish to understand flood risk and mitigate flood damages,” says Tom Larsen, senior director of hazard and risk management, CoreLogic. “Without constraints in development in the SFHA, flood damages would have skyrocketed. Learning from this riverine flood event will help city planners make better decisions about where residential development makes sense, from standard construction homes to manufactured home communities.”
However, the large wind field and landfall path of the hurricane caused severe wind and coastal storm surge damage along the densely populated coast. “The key reason Hurricane Ian is so economically destructive is due to the massive growth in coastal real estate in Florida,” says Larsen.
“Florida's population has grown 50% since 1992 when Hurricane Andrew hit Miami, with disproportionately more growth in South Florida. The extra costs incurred from the surge in repair needs simultaneous with a fragile economy are headwinds to rapid reconstruction, and we should expect to see resident displacement and housing affordability issues in the state for some time to come.”
Florida had been a primary destination in the great migration trend of 2020 and 2021, according to CoreLogic analysis, due to the state’s lack of income tax and housing with lower cost per square foot than homes in major coastal metros. Additionally, residents’ home equity gains throughout 2022 have been increasing, with homeowners reaching an average equity all-time high of almost $300,000.
According to CoreLogic, more than 66,000 pending mortgage applications worth nearly $22.5 billion are currently in jeopardy from Hurricane Ian damages in Florida, North Carolina, and South Carolina. “Housing markets in Florida will face difficult times as many Florida residents have been impacted by the devastating storm. Initially, we are likely to see an increase in mortgage delinquencies as is typical following catastrophes. Also, rents are likely to jump as households who lost their home seek immediate shelter," says Selma Hepp, interim lead of the office of the chief economist, CoreLogic.
"Longer term, home price growth in hard-hit areas is likely to lag that of the rest of the state and nation as people may opt to move to areas less prone to natural disasters. CoreLogic observed this trend in the Gulf Coast region following Hurricanes Laura, Delta, and Ida."
To support the relief effort, the Florida Home Builders Foundation has established a relief fund designated to providing assistance and support to the hardest-hit communities.