Total value of U.S. residential property at risk exceeds $700 billion
CoreLogic (NYSE: CLGX), a leading provider of information, analytics and business services, today released its annual Storm Surge Report detailing exposure of single-family homes to storm-surge damage within several predefined geographic areas in the United States. The 2012 CoreLogic Storm Surge Report provides the first-ever property-level analysis of residential property risk along the Atlantic and Gulf Coasts broken down by region and by individual state, in addition to a snapshot of risk within previously reported major metro areas.
This year’s report indicates that just over four million homes in the U.S. along the Atlantic and Gulf Coasts are at risk of hurricane-driven storm-surge damage, with more than $700 billion in total property exposure. In the Atlantic Coast region alone, there are approximately 2.2 million homes at risk, valued at more than $500 billion. Total exposure along the Gulf Coast is nearly $200 billion, with just under 1.8 million homes at risk for potential storm-surge damage.
“Though more frequently impacted states like Florida, Texas and Louisiana get the most attention when it comes to hurricane vulnerability and destruction, Hurricane Irene made it very clear last summer that hurricane risk is not confined to the southern parts of the country,” said Dr. Howard Botts, vice president and director of database development for CoreLogic Spatial Solutions. “That’s why we felt it was important this year to highlight storm-surge risk in a brand new way to establish a better understanding of exposure throughout the states that are most at risk of a direct hurricane hit. As we got a glimpse of during Irene, our 2012 report shows even a Category 1 storm could cause property damage in the billions along the northeastern Atlantic Coast and force major metropolitan areas to shut down or evacuate.”
CoreLogic generated the Storm Surge Report using the company’s extensive database of parcels to identify the properties that fall within the perimeter of each category of the storm-surge inundation polygon. A parcel is the individual property associated with an address, and is the most granular way to analyze properties exposed to natural hazards. To determine residential exposure value, the proprietary CoreLogic storm-surge model was paired with the company’s industry-leading database of residential valuations for structures at the parcel level. CoreLogic identified every property contained within each category of the storm surge polygon and matched the structure valuation for each residence. Valuations for individual geographic areas were then totaled by hurricane category. The final results depict the value of the total residential properties as of April 2012 exposed to each potential storm surge event.
A full list of all Core Based Statistical Areas (CBSAs) at risk for storm-surge damage, as well as the top ten zip code areas at risk associated with each CBSA, is available at http://www.corelogic.com/about-us/researchtrends/2012-storm-surge-cbsa-fact-tables.aspx. Maps detailing storm surge risk are also available for all CBSAs upon request.
CoreLogic developed the Storm Surge Report to enhance understanding of the additional risk that storm surge poses to homes located in areas prone to tropical storms. Storm surge is triggered primarily by the high winds and low pressure associated with hurricanes, which cause water to amass inside a storm as it moves across the ocean before releasing as a powerful rush overland when the hurricane moves onshore. In addition to the property damage and potential lives lost to flooding, the speed and force associated with storm-surge waves can significantly increase geographic and economic impact in hurricane disaster areas.
“The data we compile is useful for insurance providers and financial services companies, to help them better understand potential exposure to damage for homes—particularly those that do not fall into designated FEMA Special Flood Hazard Areas,” said Botts. “Homeowners who live outside of high risk flood zones are not required to carry flood insurance under the National Flood Insurance Program (NFIP), and may not be fully aware of the risk storm surge poses to their home or property. When a storm strikes the coast, storm-surge flooding can inundate homes far inland and cause significant losses from powerful surge waters, damaging debris and standing water left behind.”
According to the 2012 report, Florida tops the list of states with the highest total number of properties at risk of being impacted by the effects of storm-surge risk at approximately 1.4 million homes and with the highest total potential exposure to damage at more than $188 billion. Louisiana ranks second in total properties at risk with nearly 500,000, while New York is second in total value of coastal properties possibly exposed at $111 billion. Differences in the rankings between the total number of properties and total property value at risk are due to varying levels of home values, trends in primary residence versus, vacation homes, and population density between the states throughout the Atlantic and Gulf regions.
At the metro-level, cities examined in the analysis include New York, N.Y.; Virginia Beach, Va.; Miami, Fla.; New Orleans, La.; Tampa, Fla.; Boston, Mass.; Houston, Texas; Cape Coral, Fla.; Jacksonville, Fla.; Charleston, N.C.; Bradenton, Fla.; Philadelphia, Pa.; Mobile, Ala. and Corpus Christi, Texas. According to the U.S. Census Bureau, two of the top five and five of the top 20 most densely populated cities in the U.S. are located along either the Gulf or Atlantic Coast. The report reveals that the 10 cities with the highest total potential exposure to storm-surge damage represent more than two million properties, with total property value at risk exceeding $420 billion. The New York City metropolitan area, which encompasses northern New Jersey and Long Island as well, contains both the highest total number of properties as well as the highest financial exposure of properties at risk, with estimated values at more than $168 billion.
“The summer of 2011 gave us some startling insight into the damage that even a weak storm can cause in the New York City metro area,” said Botts. “Hurricane Irene was downgraded to a tropical storm as it passed through New Jersey and New York City, but the impact of the storm was still estimated at as much as $6 billion. Economic losses mounted swiftly as businesses shuttered, the New York City mass transit system came to a sudden halt and emergency response teams were called into action to prepare for the worst.”
Important to note is that the total properties and structural values included in the CoreLogic analysis are based on all homes that could potentially be damaged from hurricane-driven storm surge, and are not meant to infer that a single storm or storms in a specific hurricane season will result in these damage totals.
This is the third annual CoreLogic Storm Surge Report. The report complements the Federal Emergency Management Agency (FEMA) flood zone information to provide a comprehensive picture of potential damage exposure at the property level, as many properties located outside designated flood zones are still at risk for storm-surge damage.
To request storm surge data for a particular zip code, CBSA or county not detailed in the report, or for a complete copy of the 2012 CoreLogic Storm Surge Report, visit http://www.corelogic.com/about-us/researchtrends/2012-storm-surge-report.aspx.
CoreLogic (NYSE: CLGX) is a leading provider of consumer, financial and property information, analytics and services to business and government. The Company combines public, contributory and proprietary data to develop predictive decision analytics and provide business services that bring dynamic insight and transparency to the markets it serves. CoreLogic has built one of the largest and most comprehensive U.S. real estate, mortgage application, fraud, and loan performance databases and is a recognized leading provider of mortgage and automotive credit reporting, property tax, valuation, flood determination, and geospatial analytics and services. More than one million users rely on CoreLogic to assess risk, support underwriting, investment and marketing decisions, prevent fraud, and improve business performance in their daily operations. The Company, headquartered in Santa Ana, Calif., has approximately 5,000 employees globally. For more information visit www.corelogic.com.