Real Estate

Hurricane Matthew could inflict $200 billion in damage to coastal homes

$200B coastal home damage possible
$200B coastal home damage possible

About 11 million Floridians are in the path of Hurricane Matthew, which is now expected to come ashore as a deadly Category 4 storm.

Many of those people will evacuate their homes — as nearly 954,000 are at risk of major storm surge damage, according to CoreLogic. Those homes have a reconstruction value of just more than $189 billion. Add Georgia and South Carolina to the mix, and it rises to more than $200 billion.

This CoreLogic analysis measures the damage just from water. It does not assess additional damage from wind, which will be sustained in some areas at 125 mph. The worst of the damage will likely be where the storm makes direct landfall, which is now predicted to be Daytona Beach, Florida. Close to 97,000 homes with a reconstruction value of $19.4 billion are in danger of storm surge flooding.

Workers install window shutters at an oceanfront home in anticipation of Hurricane Matthew in Garden City Beach, S.C., U.S. Oct. 5, 2016.
Randall Hill | Reuters

The numbers are considerably higher today than they were when Hurricane Andrew hit in 1992.

Florida was the epicenter for the housing boom and bust in the early 2000s. Building permits, a strong measure of construction, were filed for more than 138,000 single-family homes in Florida's east coast counties just from 2005 to 2008, according to John Burns Real Estate Consulting.

While home construction ground to a halt in 2009, it rebounded strongly afterward and permits for another 81,000 were filed through 2015. Thousands of condominium units went up as well, but those tend to be in towers that are less susceptible to storm surge damage.

While New Orleans spent billions of dollars upgrading its levy systems since Hurricane Katrina's devastating blow, Florida has done little to safeguard its coast. Towers continue to rise right by Miami's Biscayne Bay, and Floridians seem unfazed by potential storm damage.

"You have tremendous cost associated with any engineering to reduce the risk," said Tom Jeffery, senior hazard scientist at CoreLogic. "This is the first big storm to come through in a long time. It's hard to promote mitigation when you don't see these storms come through frequently."

Georgia will also take the brunt of the storm surge, but its coastline is a lot shorter, so fewer homes are at risk. At a Category 4 level, about 138,000 could see storm surge damage, with a reconstruction cost of approximately $30 billion.

The storm is now expected to weaken before it gets to South Carolina. At a Category 2 storm level, 124,000 homes are at risk of flood damage, with a collective reconstruction cost of $32.4 billion.

— CNBC data reporter Nicholas Wells contributed to this report.