Dive Brief:
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Hurricane Matthew, which brought strong winds and storm surges to the East Coast earlier this month, is expected to have caused up to $10 billion in property damage, according to Goldman Sachs.
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In the past 30 years, annual spending on disaster-related renovations has averaged $7 billion.
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Home repair requests were more than double the usual in areas hit by the storm, Bloomberg reported. In a tight labor market, that could mean delays in service and high costs to boot.
Dive Insight:
The effects of a major natural disaster like Hurricane Matthew are typically felt in waves. First, rounds of repairs and general maintenance occur to ensure the safety of buildings and public spaces. Then, as properties are assessed and insurance payouts are made, larger-scale remodeling and rebuilding projects get underway.
The building industry’s current skilled-labor shortage could impact the speed and cost of such projects this time around. Construction companies nationwide say a lack of qualified workers is keeping their payrolls low. Job openings in construction are at a 10-year high, according to the Associated General Contractors of America, but construction employment grew in only 61% of 358 metros year-over-year in August 2016, the smallest share of metros posting gains in three years.
Among the metros where construction payrolls are growing is Orlando-Kissimmee-Sanford, FL, up 11% year-over-year, and Atlanta-Sandy Springs-Roswell, GA, up 7% for the period.
Hurricane Matthew hit Florida — in addition to Georgia and the Carolinas — amid a building boom in that state’s panhandle. In Florida alone, nearly 1 million homes valuing $189 billion were at risk of damage from storm surges, CoreLogic reported, with the Florida metros of Daytona Beach, Melbourne, Miami and Jacksonville particularly at risk.
Led by Orlando in the top spot, the Florida metros of Jacksonville, Tampa and Miami all ranked in the top 12 of real estate consulting firm RCLCO’s recent ranking of the top 25 for-sale housing markets, citing high in-migration as a driver of that growth.
