The official start of hurricane season was June 1 this year, and in preparation, CoreLogic released a memo on the topic. “This year, nearly 7 million homes are at risk of a hurricane storm surge,” CoreLogic analysts wrote. Their analysis was based on data from 2017 and forecasts from the National Oceanic and Atmospheric Administration (NOAA). It is the same number CoreLogin released last year. NOAA predicted this year’s hurricane season would be “near- or above-normal.”
So what is changing in 2018’s hurricane season? Projected costs. CoreLogic predicted that reconstruction costs in the event of a hurricane will be 6.6. percent higher than the $1.5 trillion estimated for 2017. Investors should note that the final cost tally for 2017 is not yet in. Analysts blamed higher construction, equipment, and labor costs for the increase in projected costs.
Brian Spitz, CEO of Big State Home Buyers, is an expert in flood-prone real estate, said, “Houstonians get nervous every spring because frequent torrential downpours often result in serious flooding in our area. This year, Houston is still recovering from Hurricane Harvey and must already start planning for a new hurricane season.” Spitz has said before that real estate investors are “critical to getting the economy moving again [because they are] equipped to take on the risk,” in disaster scenarios. However, he added, this type of investing comes with its own set of unique due diligence requirements.
One such consideration for both homeowners and real estate investors is the issue of flood insurance and understanding if a home has water damage from a previous flood event. “If records indicate a previous flood [in the home], verify the reason and resulting impact. It is critical real estate investors understand exactly what happened prior to making an offer” rather than making assumptions, Spitz said. “Remember, not every flood has a weather-related cause.”