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Hurricane Harvey Will Likely Cost $60B To $80B In Damages (Over 200K Homes Damaged)

This is a syndicated repost courtesy of Snake Hole Lounge. To view original, click here. Reposted with permission.

Houston and the nearby towns of Galveston and Corpus Chrisiti on the Gulf of Mexico shore have suffered from hurricanes/tropical storms for a long time. Hurricane Harvey is the worst hurricane/tropical storm to hit the gulf coast in modern times in term of measure rainfall. In fact, 6 of the 10 worst hurricanes/tropical storms have hit Texas while the worst one was Hiki which hit Hawaii in 1950.

In terms of loss of life, the death toll from Harvey had reached at least 18 on Wednesday, according to the Austin American-Statesman newspaper. The New York Times cited Texas authorities as saying they believed Harvey caused at least 30 deaths.

While a terrible tragedy, the Galveston hurricane of 1900 was far worse with a loss of life ranging from 6,000 to 12,000. 

While not hurricane/tropical storm related, there was the Texas City (located between Houston and Galveston) disaster of 1947  when two ships (SS Grandcamp and the High Flyer) carrying ammonium nitrate exploded with deadly force killing at least 581 people and leveling over 1,000 buildings.

Adding to the misery, parts of Harris County (which includes Houston) have dropped between 10 and 12 feet since the 1920s, according to data from the U.S. Geological Survey.  This has made the flooding problem much worse, caused by population growth and real estate development that has resulted in draining the underlying water table.

Houston and the surrounding area is a very high at-risk area because of overpopulation and proximity to the hurricane-prone Gulf of Mexico. Mercifully, Harvey has been downgraded to a tropical storm and is headed inland towards Kentucky.

The storm has brought torrential rain and the collapse of levees, dams and drains. That combination has analysts raising damage estimates by the hour and could easily push the catastrophe above the rank of Superstorm Sandy, the second-costliest weather disaster in U.S. history.

“We’re on the verge of having cascading failures,” said Watson, a Savannah, Georgia-based disaster modeler with Enki Research. “It is conceivable that we could get into the $60 to $80 billion range without that much effort.”

Aside from the loss of life, the loss of property in terms of homes and automobiles is staggering. A huge amount of Harvey’s damage won’t be covered by flood insurance.

When one thinks of the impact on the residential mortgage market (projected spike in early terminations and default), it could be a deadly hurricane is sheer dollar amounts. I await the cost projections from Fannie Mae and Freddie Mac.

CoreLogic projected that more that 200,000 homes in Texas will suffer from storm damage with a potential bill of $40 billion. 

The final bill for Harvey could be even higher.

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