The shift to El Niño this season has the potential to affect hurricane activity in the Atlantic
June 1 marked the beginning of the 2023 hurricane season in the Atlantic. While each year the period from June through November produces a unique roster of storms, the changing climate has resulted in recent storm seasons bringing more severe and more numerous events to the East Coast and the Gulf Coast of the U.S.
Although the season is just beginning, the structural risks to real estate associated with these storms are already under scrutiny. In the 2023 Hurricane Risk Report, CoreLogic® identified more than 32 million single-family residences plus approximately 1 million additional multifamily residences with a combined reconstruction cost value of $11.6 trillion that are at moderate or greater risk of sustaining damage from hurricane-force winds.
Wind is not the only risk associated with hurricanes. Storm surge and inland flooding are also of great concern, especially as climate change pushes the ancillary consequences of hurricanes farther inland.
Research suggests that warmer atmospheric temperatures will permit hurricanes to hold a greater capacity of moisture. When this increased capacity is coupled with the warmer sea temperatures accelerated by La Niña, there is more fuel for these storms to travel inland to areas that were previously shielded from damage.
Hurricane Season 2023
However, the appearance of El Niño in 2023 may temper this trend. The climatic pattern known as La Niña dissipated from the Pacific Basin after a year and a half, and the U.S. has shifted to the El Niño phase of the El-Niño-Southern Oscillation climate pattern.
Traditionally, this means fewer hurricanes in the Atlantic thanks to the weather pattern’s influence on atmospheric stability and vertical wind shear, which impedes the development of these storms.
While the overarching climatic influences are changing, they will not define the 2023 hurricane season. Despite the disappearance of La Niña, the Atlantic remains warm — thanks both to the continuous Atlantic Multi-Decadal Oscillation phenomenon, which the National Oceanic and Atmospheric Association has tracked as being in a warm phase since 1995 — and the persistent effects of climate change.
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Which Property Markets Are at Risk?
The U.S. coastline from Maine to Texas is exposed to hurricane risks, but not all areas are equally vulnerable to these perils, particularly when factoring in future climate change scenarios.
According to an analysis using CoreLogic’s Climate Risk Analytics: Composite Risk Score (CRA), Florida’s Miami-Dade County is forecast to have the highest climate change-related risk, with estimated annual losses of $988 million per year through 2050. Jefferson Parish, Louisiana ranks second, with $476 million in annual losses, followed by Florida’s Palm Beach County, where annual loss estimates are $442 million.
However, the story for 2023’s hurricane season is a bit different. In an analysis of storm surge and wind damage risk in the U.S., researchers at CoreLogic found that more homes in the New York City metropolitan area have a higher risk than the Miami-Fort Lauderdale-Pompano Beach area. This amplified risk in the northern reaches of the Eastern Seaboard does not account for hurricane landfall frequency but rather results from the New York metro area’s higher population density, which translates to more homes closer to the coast.
Nevertheless, the population in Florida is set to grow between now and 2050. Between 2019 and 2022, the Miami metro area experienced the largest inbound gains across the country, with the number of moves to the area increasing by 60%, according to a study from the National Association of Realtors.
The number of people moving to the region has affected housing prices. Florida counties are among the fastest-appreciating U.S. markets, recording some of the highest annual home price growth. The Miami metro recorded a year-over-year home price gain of 13.2% in April 2023, according to the latest CoreLogic Home Price Index report. Nationwide, year-over-year home price growth was 2% during the same period.
Even with the continued popularity of the Southeast, homebuyers should be aware of the natural catastrophe risks associated with moving there.
The Future of Hurricane Season is One of Resilience
Nearly every year, Florida is battered by hurricanes. While not all of these storms make headlines, last year saw the record-setting Hurricane Ian make landfall, which caused between $41 billion and $70 billion in insured and uninsured losses in the U.S.
Other historic storms in the area include Hurricane Andrew, which made landfall on the coast of Florida in 1992 and resulted in $25 billion in economic damages at the time, of which $15 billion was insured. Insured and uninsured losses from 2021’s Hurricane Ida were estimated to be between $27 billion and $40 billion, and Hurricane Irma in 2017 saw estimated insured and uninsured losses of between $42.5 billion and $65 billion, according to CoreLogic data.
As hurricane season blows in, it will pay for homeowners, (re)insurers and communities to bolster their resilience through preparation. The first step is to comprehensively understand current and future hurricane risks to prepare for potential outcomes and fortify communities, increasing resilience.
©2023 CoreLogic, Inc. The CoreLogic® statements and information in this blog post may not be reproduced or used in any form without express written permission. While all the CoreLogic statements and information are believed to be accurate, CoreLogic makes no representation or warranty as to the completeness or accuracy of the statements and information and assumes no responsibility whatsoever for the information and statements or any reliance thereon.
