USA Real Estate Faces Flood Risk
The number of properties in the United States in danger of flooding this year is 70% higher than government data estimates, with at-risk hot spots in Houston, New York, Los Angeles and Chicago. The higher risk identified could have implications for property values as well as insurance rates, muni
Published -
Jun 30, 2020 4:33 AM
The number of properties in the United States in danger of flooding this year is 70% higher than government data estimates, with at-risk hot spots in Houston, New York, Los Angeles and Chicago. The higher risk identified could have implications for property values as well as insurance rates, municipal bonds and mortgage-backed securities, according to investors and researchers at First Street Foundation. This could change the calculus on whether a given property is resalable, or what price you sell it at. The data, which covers the contiguous United States, found that around 14.6 million properties, or 10.3%, are at a substantial risk of flooding this year versus the 8.7 million mapped by the Federal Emergency Management Agency Los Angeles, Chicago, Houston, New York and Cape Coral, Florida top First Street’s list of cities with the most number of properties at risk. At the state level, Florida, Texas, California, New York and Pennsylvania have the most to lose. Florida and Texas also top FEMA’s list, but with significantly fewer properties estimated to be at risk. Commercial mortgage-backed securities (CMBS), investments that pool loans for office buildings, hotels, shopping centers and more, are among the securities most exposed to flood risk because of the concentration of cities on the U.S. coasts. Nearly 20% of all U.S. commercial real estate value is located in Houston, Miami and New York, according to CoStar data, each of which has been hit by hurricanes in the last decade.
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