Perhaps you think that you don’t live in an area impacted by Harvey, Irma, Maria or the wildfires. Do you? Are you sure? Countrywide 11.9 million residential renovation and remodeling projects were projected to take place in 2017. There were 1.1 million new homes projected to be built and sold in 2017. That was before the storms and fires. Let’s take a look at some new statistics and you may rethink whether these catastrophes have affected your area.
Post-hurricane, Houston alone will add a fresh 200,000+ homes that need flood renovations, in addition to businesses and factories that are also in need of repairs or rebuilding. It seems like almost every home and hotel in the Caribbean paradises from St. Maarten to Puerto Rico will need some repair. The Florida Keys were impacted from one end to the other. The wine region of northern California was severely burned. The number of damaged or destroyed structures is on pace to match the annual output for new homes and to increase by more than 10% the already-planned renovations.
Our hearts go out to those folks who have lost loved ones, homes and belongings, including many irreplaceable mementos, as a result of flood waters, wind, pounding surf and fire. As we view the images of damage and destruction on our screens, we’re also inspired by those stories of first responders and volunteers putting themselves in harm’s way to help others.
As those touched by these events rebuild their lives and homes, that activity can impact those who were nowhere near their paths.
“Before the events there was already pressure on prices, so this will add to that pressure.”
There is water and flood damage from Texas to Florida, Georgia and South Carolina, and winds that tore through roofs. The waters will recede, trees will be picked up and power restored. We are starting to get a better idea of the overall damage. It will take a few months to get through the initial debris removal and assessment. Claims adjusters will visit, scope out the work necessary and contractors will submit bids. All of this will take some time as these resources are spread thin.
We are often asked what we expect will happen with building and rebuilding costs moving forward. Will there be a spike in costs as a result of imbalances between demand and supply? Will the extent of the damage significantly increase replacement cost calculations? How much and for how long? Well, for the first couple of months there will be no impact as recovery is just getting started. Then over the next 6 to 18 months we expect to see an increase in costs.
The economic conditions, new home market and demand for contractors that existed before the events were already putting pressure on prices, so this will add to that pressure. Even a small boost in the anticipated construction activity impacts the home and commercial supply chain across the US. Similar to past catastrophes, we do expect costs to increase across residential, commercial and farm properties.
We wish those affected the smoothest and speediest recovery possible.