CoreLogic: $65M of residential property at risk from CA wildfires
A 2016 CoreLogic analysis of wildfire risk in the Sonoma and Napa regions of California found that up to 10,000 homes could be destroyed and 200,000 damaged as a result of the ongoing fires there, with rebuilding costs estimated at $65 billion, according to Curbed San Francisco.
CoreLogic used a formula based on housing density, history of wildfires, topography and proximity to potential fuel for the fires to determine a risk score of 1 to 100. A score of 80 or more indicates extreme risk, and a score between 61 and 80 is considered a high risk.
Curbed noted that the CoreLogic projections are a year old and are based on hypotheticals, which translates to a still-uncertain outcome for those in the fire's path. The estimates also don't factor in the destruction of commercial property.
The California wildfires are the latest natural disaster to strike the U.S. and its territories in the last few months.
Hurricane Harvey devastated the Houston area in late August, and Hurricane Irma caused floods and widespread damage in Florida and other parts of the Southeast a few weeks later. Perhaps most destructive was Hurricane Maria, which hit Puerto Rico last month. Three weeks later, just an estimated 16% of the U.S. territory has electrical power.
Damage from these storms is likely to reach into the hundreds of billions. Related insurance claims are expected to reach $100 billion for this year's hurricane season, costing AIG alone $3 billion in the third quarter.
According to CoStar Group, up to 27% of Houston's commercial real estate market — valued at about $55 billion — was damaged by floodwaters. The story isn't much better for homeowners. Some builders in Houston have reported that years-long backlogs of work are forming. CoreLogic estimated Florida's Irma-related losses at up to $65 billion.
The most recent storm to hit the U.S. was Hurricane Nate, which caused an estimated $500 million in damage. It made landfall in the Gulf Coast this past weekend.
Compounding these losses is the reality of the current labor shortage. Typically, when one hurricane-prone region suffers damage from a major storm, contractors from surrounding states travel there to help rebuild.
Current clean-up and construction in the three affected areas of the Southeast will stretch the already-limited workforce, leaving commercial and residential property owners from Texas to Florida potentially waiting years for relief.
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