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Hurricane Helene is one of the deadliest hurricanes in the U.S. since 1950—unpacking its impact on the housing market

The vulnerability to a local hurricane-induced correction is greater now than in the past, given how much housing affordability has been stretched over the last four years.

Author

Lance Lambert
October 02, 2024

Today’s newsletter is brought to you by ResiDay!

On Friday, November 8th, in New York City, ResiClub will host ResiDay, bringing together the brightest minds in the housing market. This will be our first-ever one-day conference.

There will be hundreds of influential housing investors, developers, lenders, and brokers who are shaping the future of residential real estate, homebuilding, mortgage lending, and build-to-rent at ResiDay. Several prominent business and real estate journalists will also be there.

The ResiClub team will lead a day of insightful discussions on market trends and strategies impacting the future of the U.S. housing landscape. ​Expect top-tier speakers, ample networking opportunities, and hours of engaging discussions on the future of the U.S. housing market.

Pockets of the U.S. Southeast are reeling after widespread devastation from Hurricane Helene, a Category 4 storm that made landfall on Thursday. Rescue crews are working tirelessly, especially in the hardest-hit areas of western North Carolina.

  • South Carolina: 403,000

  • North Carolina: 303,000

  • Georgia: 295,000

  • Florida: 27,000

  • Virginia: 25,000

  • West Virginia: 6,300

According to CNN, Hurricane Helene’s death toll today moved up to 189.

While it will likely take weeks, if not months, to gain a clearer understanding of Hurricane Helene’s impact on residential real estate, we already know it is the fifth deadliest hurricane since 1950. Only Katrina in 2005, Audrey in 1957, Camille in 1969, and Sandy in 2012 were deadlier, according to the National Oceanic and Atmospheric Administration (NOAA).

The hurricane’s aftermath could further soften some regional pockets of the Southeast. IF Helene’s fallout leads to a wave of damaged resale homes hitting the market, shocks to home insurance rates, and a slowdown in regional migration, it could put downward pressure on local home prices.

The vulnerability to a local hurricane-induced home price correction is greater now than in the past, given how much housing affordability has been stretched over the last four years.

For instance, Hurricane Ian, which struck Southwest Florida in September 2022, left behind thousands of damaged homes, with some getting put up for sale. According to NOAA, Hurricane Ian caused an estimated $112.9 billion in damage, making it the third-costliest U.S. hurricane on record.

While active inventory has risen at an accelerated pace over the past year in Florida, the biggest jumps in active inventory and home price declines have been concentrated in areas hit hardest by Ian, such as Cape Coral, Fort Myers, and Punta Gorda. A ResiClub research article from March 2024 and a research paper by economists at FHFA in May 2024 (see their FL map below) highlight Hurricane Ian as a contributor to the ongoing housing market weakness in Southwest Florida. The vulnerability to a home price correction in places like Punta Gorda and Cape Coral predated Hurricane Ian, given the Pandemic Housing Boom drove local home prices there so far beyond local income fundamentals.

Source: FHFA

IF Hurricane Helene caused damage in regions where 2020-2022 home price growth was particularly excessive and where work-from-home migration has reversed, the likelihood of a housing correction in those areas could increase.

Over the coming months, ResiClub will closely monitor Southeast housing market data to see what impact the hurricane damage and fallout are having.

One more thing… Historically speaking, post-hurricane recovery efforts also often lead to a surge in construction activity as damaged homes are repaired or rebuilt. This can temporarily boost demand for subcontractor labor.

Over the past week, ResiClub PRO members got these 3 additional research articles: