The social, environmental, demographic, and economic damages from Hurricane Helene and Hurricane Milton are immense. The most acute economic impacts are likely to be felt in the near term, as the repercussions of the storms weigh heavily on the localities most effected, but over the longer run, rebuilding efforts and an influx of government aid should help bring about a recovery, and Orion is hereto help.

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That said,the hurricanes hit wide swaths of the region not accustomed to dealing withstorms of such magnitude. The substantial public assistance already announcedis an encouraging sign that the restoration process has already begun, howeverthe potential out-migration of residents, businesses and investment capitalcasts a high degree of uncertainty on the timetable for recovery. What canOrion’s broker’s clients clients expect, not only from these but future firesand earthquakes and floods?

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To put things in perspective, according to CoreLogic, Hurricane Helene likely resulted in between $30.5 billion and $47.5 billion in losses from property damage and business interruption. Up to $17.5 billion of this range amounts to damage to insured properties; the remaining $30 billion of damage represents uninsured losses. CoreLogic's initial estimates for Hurricane Milton suggest that total wind and flood loss could amount to between $21 billion and $34 billion.

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The economic costs of natural disasters depend on a great many of factors such as population and infrastructure density, insurance coverage, size of government aid, and these verity and type of natural disaster. Fortunately, the Asheville, North Carolina and Tampa and Sarasota, Florida metro areas and their surrounding counties bore the brunt of the storms but are on strong economic footing. Unemployment rates are near historic lows, for example.

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Common patterns emerge when looking at past cases. In the near-term, natural disasters destroy property, infrastructure and wealth, but usually only derail economic activity temporarily. For several days, many areas that endure fire, flooding, wind damage, or earthquakes see extended periods of power outages. Tourism drops, agriculture industries are disrupted, local infrastructure like road share destroyed, and residential and commercial real estate are damaged. Borrowers in those areas are certainly encouraged to continue to make their mortgage payment.

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If previous disasters are any indication, Americans are resilient, and local economies most impacted are back up and running within a relatively short period of time. Unemployment rates drop employment levels return to their pre-disaster levels within months. Tell your clients that setbacks to housing production are usually transitory.

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In Florida’s case, there are several reasons why Florida’s economy has been relatively resilient to shocks from natural disasters. Since hurricanes are not unusual, the state’s local infrastructure and real estate assets have been either retrofitted or constructed to withstand harsh weather conditions. A high percentage of households also carry flood insurance, which helps lessen the blow when properties are damaged. Florida’s economy has significantly diversified away from tourism and agriculture and has become less susceptible to disruption from weather events.

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After the two recent hurricanes, residents are already replacing damaged vehicles and rebuilding impaired properties, many of these economic measures will likely bounce back over the coming months. But insurance premiums have risen sharply in recent years, in part reflecting the high cost of rebuilding in the wake of the recent hurricanes and are expected to continue. Over time, high insurance costs could pressure affordability in Florida’s real estate sector, diminish population flows and reduce business formation.

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Economic recoveries for the cities and towns in western North Carolina and eastern Tennessee are more uncertain. The region generally has higher poverty rates and lower insurance coverage, which means many households may struggle to absorb the economic shock from Helene. Along similar lines, many residents could be displaced, and there could also be an out-migration of higher-income residents who are able to relocate. Population outflows could spark a decline in home values, decrease household wealth and lead to an increase in poverty rates.

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Orion and our AEs want our clients to remember that most regional economies do eventually recover from natural disasters. Recent research suggests the recoveries yield stronger economic growth over the long run as less-productive local assets are replaced by more-productive assets. There could be a “build back better” effect where updated infrastructure and government aid ultimately leads to higher income and employment growth. Strong employment and population grow the quips states to better absorb disaster shocks while simultaneously helping to attract new investment capital in the aftermath of the storms. We are are resilient people!

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