A Category 4 storm is on the way. Almost 800,000 homes are in the path of Hurricane Florence, and experts estimate that reconstruction costs could be around $170 billion. Over a million people are set to evacuate along the coast of Virginia and the Carolinas, and no one can be sure whether their homes will still be standing when they return.
Florence is one of the biggest hurricanes to hit the East Coast in decades. It’s also veering farther north in the Atlantic than most major storms. In fact, the storm is on track to be the strongest storm ever to strike that far north. It has targeted vacation spots like Myrtle Beach, SC, and the Outer Banks of North Carolina. Damage is predicted to be on the same level as Irma, Harvey, Sandy, and Katrina.
“This will be a storm that creates and causes massive damage to our country,” FEMA associate administrator Jeff Byard said. “This is not going to be a storm that we recover from in days.”
Storm Surge and Inland Flooding
After a soggy summer, the ground is already saturated throughout much of the Southeast. With torrential rains predicted as far inland as the mountains of North Carolina and West Virginia, we can expect to see major flooding. Up to 25 inches of rain could fall in the worst-affected areas. Rivers will continue to swell even after the rain stops, leading to days or even longer of flooding.
Computer models predict a storm surge of 15 to 20 feet that will render coastal areas uninhabitable for an extended period of time, according to the National Weather Service. Since the bulk of the storm will slam through the Outer Banks, where water is shallow, experts expect it to push a tremendous amount of water in its path.
What It Means for the Real Estate Market
You might expect Hurricane Florence to demolish the housing market, and while that’s true in the short-term, the big picture is more complicated. Hurricanes and other natural disasters cause prices in the housing market to rise, not fall, in the long run. According to a Federal Reserve Bank of Dallas report, prices will rise 3-4% in the three years following a hurricane.
That having been said, the immediate aftermath will see a huge drop in home sales. After Hurricane Wilma made landfall in Florida in 2005, home sales fell by about 50%. However, the negative effect only lingers until the bulk of the damage has been cleaned up and live goes back to normal.