Updated: Damage estimates have been adjusted based on new analysis
Hurricane Michael, currently making its way across the Florida Panhandle, made landfall this morning as a Category 4 storm, having intensified significantly on its path through the Gulf of Mexico. The last-stage acceleration has raised additional concerns over potential loss of life, with the National Weather Service in Tallahassee calling it a “catastrophic event.”
“This is the worst storm that our Florida Panhandle has seen in a century,” Gov. Rick Scott of Florida said, according to the New York Times. “Hurricane Michael is upon us, and now is the time to seek refuge.”
Coming on the heels of Hurricane Florence, which struck the Carolinas in September, Michael hits Florida at a time when extreme weather events are on the rise in the United States. The increase in billion-dollar natural disasters has caused extensive damage to coastal real estate in the United States and strained the national flood insurance program.
As residents of the Gulf Coast attempt to dodge the worst of the storm’s impact—meteorologists predict Michael will have maximum sustained winds of 150 miles per hour—analysts have already predicted this will be a costly reconstruction process for the Panhandle. Meteorologists predict storm surges of up to 13 feet in the relatively flat region, and express concerns of flash flooding above the Panhandle and regions of southeast Alabama and Georgia, which will also be buffeted by rain as the storm moves inland. Up to a foot of rain is predicted.
The latest analysis from CoreLogic, which was released at 1:25 ET today, predicts a total of $2 to$4.5 billion in damages to residential and commercial property, including wind and storm surge. According to an earlier pre-landfall analysis by Realtor.com, hurricane warnings have been issued across an area containing roughly 758,000 households, impacting a region with approximately $160 billion worth of residential property.
“Although the number of homes and people in path of Hurricane Michael are less than Hurricane Florence, this major hurricane will have a tremendous impact on the Gulf Coast/Florida panhandle housing market,” according to Danielle Hale, chief economist for Realtor.com. “Rain and wind could also impede clean up and rebuilding efforts already underway in areas affected by Hurricane Florence and potentially delay the recovery of these markets.”
Commercial property losses from Michael are also expected to be sizable. According to Morningstar Credit Ratings, approximately $1.2 billion of commercial real estate may be at risk.