Gulf Coast Residential Property Damage Exposure from Hurricane Isaac Projected to be $27 Billion

According to new data released today by CoreLogic, there is potentially over $27 billion in exposure to residential property damage from storm surge flooding as Tropical Storm Isaac makes its way across the Atlantic Ocean along a projected path toward the Gulf Coast.

"Based on current forecasts, Tropical Storm Isaac is predicted to strengthen into a Category 1 hurricane and become the first hurricane to impact the United States this year," said Dr. Howard Botts, vice president and director of database development for CoreLogic Spatial Solutions.

Dr. Howard Botts

"Though the forecasted path is constantly changing, at this point, Isaac seems to be poised to strike the Gulf Coast early Wednesday. Major metro areas that could potentially feel the impact of hurricane-driven storm surge include New Orleans, La.; Baton Rouge, La.; Biloxi, Miss.; Mobile, Ala.; Pensacola, Fla. and Tallahassee, Fla., depending on where the storm makes landfall."

The data shows nearly 210,000 total residential properties valued at more than $27.7 billion in seven major metro areas along the Gulf Coast could be at risk for storm-surge related flooding, assuming the storm hits as a Category 1 hurricane. The number of residential properties in each metro area and their respective potential exposure to damage are as follows:



Hurricane-driven storm-surge flooding can cause significant property damage when high winds, forward movement of the storm and low pressure causes water to amass in front of the storm, pushing a powerful rush over land when the hurricane moves on shore. 
The CoreLogic analysis measures damage from storm surge and does not include potential damage from wind and rain associated with hurricanes. 

Christophe Harbour Introduces New Fractional Product

Christophe Harbour, St. Kitts

By most measures, the overall U.S. real estate market is clearly rebounding from its recessionary lows of 2007-08. One aspect of the market still trying to regain its firm footing, however, is the upscale fractional real estate market.

Earlier this year, fractional resort consultant Richard Ragatz of Ragatz Associates reported said North American fractional real estate developments increased sales 4 percent in 2011 to $552 million from $530 million the previous year.  The positive news was part of Ragatz's annual state of the industry report shared at the firm's annual Ragatz Fractional & Resort Real Estate Conference held in Arizona.

At the  time, Ragatz said: "While this (2011 sales) increase is nominal, we also learned that a significant number of developers said that sales were better during the second half of 2011 than in the first half, giving the impression that the bleeding has finally stopped and that we may be turning the corner."

Ragatz is expected to have an industry update next week when he speaks at Interval International's annual Vacation Ownership Investment Conference in Orlando. In the meantime, one organization that remains bullish on the concept of luxury fractional real estate is Kiawah Development Partners.

That partly explains why Kiawah Partners' newest multi-billion master-planned resort-style community in St. Kitts, Christophe Harbour, just announced a fractional real estate component called Windswept Residence Club. The new club homes, located in Bassetterre, St. Kitts, is a collection of nine newly developed turnkey villas, three of which are now available for fractional ownership purchase.

Perhaps the most notable feature of these latest additions to Christophe Harbour's real estate offering on the southeastern peninsula of St. Kitts is the eligibility for citizenship which is included with the purchase of a Windswept Residence Club membership.

Located within the exclusive enclave of Sandy Bank Bay, each private Windswept residence has been designed for maximum enjoyment of harbor and ocean views. In addition to St. Kitts citizenship, purchasing a fractional interest of these villas offers spacious indoor and outdoor living areas, as well as concierge, maintenance and housekeeping services and property management provided by Christophe Harbour.

Hong Kong Apartment Prices Going Through the Roof

A 6,755-square-foot apartment at Hong Kong's luxurious 12-unit Opus has been sold for HK$430 million (U.S. $55 million). That is $8,130 per square foot. The price makes the apartment Asia's most expensive flat on a per square foot basis, and the second-most costly in the world after London's One Hyde Park, according to Eva Lee, head of Hong Kong and China property research at UBS.

The average price of a standard-sized 600 square-foot apartment is about HK$4.5 million ($580,135 U.S.)  In 2 1/2 years, property prices have increased 85 per cent.

Hong Kongers' median monthly incomes increased 15 per cent to HK$20,200 last year, from HK$17,500 in 2009.

Li Xueying Asia News Network (MCT) reports Government data show the price index began climbing from the first quarter of 2009. It barreled past the previous 1997 peak, and every quarter since last year has registered new highs.

MCT notes one way of measuring affordability is the price-to-income ratio. Hong Kong weighs in at 18.6. This means a household has to save 18.6 years of its annual income without consumption to buy a standard flat.

By contrast, a four-room Build-to-Order HDB flat in Bukit Panjang takes the average Singapore household three years to pay off, while a resale five-room flat in Ang Mo Kio takes 7.3 years.

MCT states analysts estimate Hong Kong apartment prices have to fall by 19 per cent to 30 per cent before the "sandwich class" earning between HK$20,000 and HK$30,000 can enter the market.

Among the 10 points in Chief Executive Leung Chun Ying's recent proposal are that the government will speed up the approval process of presale consent for private flats; sell public flats meant for rental; and re- zone government institution or community (GIC) sites for homes.

MCT states Hong Kong analysts estimate about 150,000 housing units, private and public, will enter the market in the next five years.

Based on population trends, Lee says Hong Kong needs 25,000 flats a year. With the under-supply of 5,000 flats a year from 2003 to 2009, she estimates 185,000 units will be needed by 2017.

But a closer look at the measures shows it is unlikely that all the promised 150,000 units will materialize, and even if they do, it will take awhile, MCT states.

U.S. Hotel Industry to See Modest Gains in 2013, Says Revised STR Forecast

According to the latest U.S. hotel forecast by STR during the 2012 Hotel Data Conference last week, the U.S. hotel industry is expected to see modest gains for year-end 2012 and in 2013,

For 2012, the industry is expected to record a 2.1-percent increase in occupancy to 61.2 percent, an average-daily-rate gain of 4.4 percent to US$106.15 and a revenue-per-available-room increase of 6.5 percent to US$65.01.

Supply and demand are expected to end the year with increases of 0.5 percent and 2.6 percent, respectively.

"Record levels of demand for hotel rooms persist," said Amanda Hite, president of STR. "However, it is clear to us that roomnight demand will stabilize with modest growth likely for the remainder of 2012 and into 2013. The developing story line is that industry-wide RevPARs will be driven by rate growth over the next two to three years. We anticipate room rates to reach 2008 levels, not factoring for inflation."

In 2013, STR predicts occupancy to be virtually flat with a 0.3-percent increase to 61.4 percent, ADR to rise 4.6 percent to US$111.01 and RevPAR to grow 4.9 percent to US$68.17.

Supply and demand are forecast to end 2013 with increases of 0.9 percent and 1.2 percent, respectively.