Hurricane risk is reshaping property markets far beyond Florida’s traditional storm zones, creating liquidity traps for homeowners in Virginia, the Carolinas and Gulf Coast communities where insurance costs and climate concerns are driving down home values and buyer demand, according to a new Cotality analysis.
The hurricane threat is no longer confined to Florida’s coastline. Communities from Virginia Beach to Charleston and Wilmington now face significant storm surge and wind damage risks that are fundamentally altering local real estate dynamics, according to the report.
Cotality data reveals that more than 656,000 homes in Charleston, Wilmington and Virginia Beach face moderate or greater storm surge risk if a major hurricane makes direct landfall. Virginia Beach properties stayed on the market 32% longer in 2025 compared to early 2024, while Wilmington homes lingered 19% longer during the same period.
The scope extends far beyond these three cities. Nationally, Cotality identified 33.1 million residential properties spanning from Texas to Maine with a combined reconstruction cost value of $11.7 trillion at moderate or greater risk of sustaining hurricane-force wind damage. Florida leads with 8.2 million at-risk homes worth $2.3 trillion, followed by Texas with 4.8 million homes valued at $1.4 trillion.
For storm surge flooding specifically, 6.4 million properties face moderate or greater risk, representing $2.2 trillion in reconstruction costs, according to Cotality. Beyond Florida’s 2.4 million vulnerable properties, Louisiana, New York and New Jersey each have hundreds of thousands of homes at risk of storm surge flooding.
“Buyers are factoring environmental risk factors into their decisions in ways we haven’t seen before,” said Selma Hepp, Cotality chief economist. “They’re pricing in insurance premiums, future storms, and the potential for resale challenges. That’s reshaping demand in coastal markets, even in areas with minimal storm history.”
Financial Consequences Create New Challenges
The expanding risk profile creates cascading financial pressures for homeowners and communities. Properties in Miami’s 100-year flood zones have seen value reductions of 9% to 18% per square foot, though these discounts are often offset by skyrocketing insurance premiums—when coverage remains available.
In high-risk states like Florida and Texas, some insurers have gone bankrupt or exited markets entirely, forcing homeowners toward state-backed insurance programs or leaving them without adequate coverage, the report noted. Since mortgages require insurance, coverage gaps lock out buyers who cannot pay cash, dramatically shrinking potential buyer pools.
Rising insurance costs particularly affect young and middle-income buyers, who find themselves priced out as premiums push monthly housing costs beyond affordability thresholds. This demographic shift weakens community ties as local families are replaced by investors or second-home owners.
Within Florida, more than 500,000 residents relocated between 2019 and 2023 to cheaper inland markets like Tampa, Jacksonville and Orlando. More telling, 48% of mortgage applications from Floridians leaving the state target five neighboring states: Georgia (15%), North Carolina (10%), Texas (8%), Tennessee (8%) and South Carolina (7%).
However, this migration creates new problems, according to Cotality. Many Florida residents seeking safety in the Carolinas are moving to areas that also face substantial hurricane risk, the report noted, potentially leaving them vulnerable in communities where building codes and emergency planning haven’t adapted to intensifying storms.
Infrastructure Failures Amplify Risk
Hurricane damage extends far beyond coastal areas, with inland communities facing severe infrastructure disruptions that devastate local economies and property values. Hurricane Helene’s impact on Asheville, North Carolina, exemplifies these broader risks—the storm catastrophically damaged the city’s water system, washed out roads and bridges, and effectively isolated the area despite its inland location.
Similar patterns occur in Florida, where Hurricane Ian brought devastating floods to Arcadia, located 50 miles inland from the Gulf Coast. The Peace River overflow submerged major roadways and overwhelmed sewage systems, disrupting water access and sanitation for extended periods.
These infrastructure failures create vicious cycles: businesses close, employees miss work, recovery costs escalate, and mass departures slash local tax revenues. Weakened municipal budgets struggle to rebuild and improve resilience, driving out more residents and further draining financial resources.
“When homeowners underestimate risk, they’re less likely to invest in resilience,” said Howard Botts, chief scientist at Cotality. “That’s a serious problem in places where codes haven’t caught up to environmental realities.”
Policy Changes Threaten Progress
Recent policy shifts may undermine resilience efforts. The Federal Emergency Management Agency stopped enforcing the Federal Flood Risk Management Standard on March 25, 2025, potentially weakening national flood risk mitigation for federally funded construction projects.
“This rollback comes as flooding—especially in coastal states like Florida—grows more frequent and severe due to environmental factors and urban development,” said Chay Halbert, principal of public policy and industry relations at Cotality. “Expanding development in flood-prone areas without maintaining or enhancing protection standards increases environmental and financial burdens for future generations.”
Despite these challenges, solutions exist. Urban planners increasingly use flood risk scores to guide zoning decisions and infrastructure investments. Florida’s strict building codes have reduced storm damage compared to other coastal regions, demonstrating resilience’s protective value.
View the full report here.