Report: 43% of U.S. Homes Face ‘High’ Natural Disaster Risk

A new report said 43 percent of U.S. homes, with an estimated of market value of $6.6 trillion, are in counties with “high” or “very high” natural hazard risk.  

RealtyTrac, Irvine, Calif., in its annual U.S. Natural Disaster Housing Risk Report, said 35.8 million single-family homes are located in these counties. The report estimated 29 percent of U.S. homes (worth $4.7 trillion) are in high-risk counties for hurricanes; while 13 percent of homes worth an estimated $1.8 trillion are in counties with high wildfire risk.  

“In most cases learning about natural disaster risk will not stop a home sale, but it will help buyers make a better-informed decision about where to buy and also be prepared in terms of appropriate insurance coverage and family contingency plans depending on the type of natural disaster risks most affecting the home they end up purchasing,” said Daren Blomquist, vice president with RealtyTrac.  

RealtyTrac assigned a natural disaster risk score to 2,318 counties nationwide with sufficient home value data available. Based on its score, each county was assigned to one of five risk categories for overall risk of natural disaster: Very High, High, Moderate, Low and Very Low. Similar scoring and ranking was also used to rate risk for each of the five natural disasters individually-hurricane, fire, tornado, flood and earthquake. Each county analyzed was assigned a combined natural disaster risk score from 0 to 300, with 300 representing the most risk (190 was the highest score among all counties). Counties were assigned one of five different categories of risk of natural disaster: Very High Risk (Score of 90 or higher); High Risk (55 to 89 score); Moderate Risk (30 to 54 score); Low (15 to 29 score); and Very Low (0 to 14 score).  

States with the most homes in High risk or Very High risk counties for overall natural disaster risk are California (8.4 million), Florida (6.7 million), New York (2.4 million), New Jersey (2.3 million) and North Carolina (2.3 million). Metro areas with the most homes in High risk or Very High risk counties for overall natural disaster risk are New York (3.5 million), Los Angeles (2.5 million), Miami (1.9 million), Houston (1.2 million), and Riverside-San Bernardino in southern California (1.1 million).  

Homes in Very High risk counties for overall natural disaster risk had an average estimated market value of $170,237, while homes in High risk counties had an average estimated market value of $191,244. The average home value in Very Low risk counties was $151,793, and the average home value in Low risk counties was $154,464.  

The report said although average home values were higher in higher-risk counties, home price appreciation over the past 10 years was stronger in lower-risk counties. Among 551 counties with sufficient historical home price data, home sales prices in counties with a Low risk for natural disasters increased 6.6 percent on average between 2005 and 2015, and home sales prices in counties with a Very Low risk for natural disasters rose 9.5 percent on average during the same time period. Conversely, home sales prices in counties with a High risk for natural disasters decreased 2.5 percent on average over the past 10 years while home sales prices in counties with a Very High risk for natural disasters decreased 6.4 percent on average.  

Other key findings of the survey:  

• States with the most homes in High risk or Very High risk counties for hurricanes are Florida (6.7 million), North Carolina (2.4 million), Virginia (2.0 million), New York (1.9 million) and New Jersey (1.8 million).  
• Metro areas with the most homes in High risk or Very high risk counties for hurricanes are New York (3.0 million), Miami (1.9 million), Washington, D.C. (1.8 million), Boston (1.1 million) and Tampa (953,000).  
• The report said 10.6 million single family homes and condos (13 percent of the 83.4 million total) with a combined estimated market value of $1.8 trillion are in counties with a High Risk or Very High risk for wildfires.  
• States with the most homes in High risk or Very High risk counties for wildfires are California (1.9 million), New York (1.6 million), Florida (1.6 million), North Carolina (1.1 million), and New Jersey (1.1 million).  
• Metro areas with the most homes in High risk or Very High risk counties for wildfires are New York (2.1 million), Riverside-San Bernardino in Southern California (1.1 million), Charlotte, North Carolina (471,905), Columbia, South Carolina (252,155), and Charleston, South Carolina (214,666).