A Look at Real Estate and Demand Surge Following Natural Disasters

Demand surge — the sudden increase in the cost of materials, labor or services resulting from increased demand following a natural disaster — has been difficult to gauge. But according to CoreLogic, better tools to track storms, combined with more retailers and better supplier logistics, are helping to counteract that surge, and ensure more materials are available.

For example, when Hurricane Harvey entered the Gulf of Mexico in 2017, Houston retailers stocked 10 times the regular inventory of drywall within weeks of the storms’ dissipation. This eliminated that normal materials backlog that typically takes place following a natural disaster.

Other factors CoreLogic pointed out include:

• Demand surge can increase costs from 15%-30%, and typically can last up to 12 months.

• Demand surge can impact one or several skilled trades, and correlates with the level of unemployment or capacity of the local workforce.

• Demand surge can be exacerbated by local regulatory constraints.

Pictured: A damaged home from Hurricane Harvey

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