El Niño’s impact on the 2026 hurricane season

Transcript:  

Howard Botts:

That is where we're seeing more and more risk coming from these major flood events we're having, whether they're hurricane caused or just major precipitation events. And as you suggested from hurricane alone, the number is over 900,000 people at risk that aren't insured for flooding. And we see that across both the Atlantic and Gulf coastal areas. And that is a huge problem that most people don't realize.

Maiclaire Bolton Smith:

Welcome to Beyond the Buildings by Cotality. I am your host Maiclaire Bolton Smith, and I'm just as curious as you are about everything that happens in the property industry. On this podcast, we satisfy our collective curiosity, explore questions from every angle and look beyond the obvious. With every conversation, we illuminate what is possible. Every year, hurricane season dominates the attention of coastal communities from the Gulf to the Eastern seaboard. But as we head into the 2026 Atlantic hurricane season, there's a different set of expectations. Thanks to El Nino this year, storm season may look a little calmer, but that doesn't mean the risk has disappeared. According to total's latest hurricane risk report, over 32 million homes are currently facing moderate or greater risk of hurricane damage, but inland communities also have their own risk. Our report found that nearly a million homeowners face significant flood exposure and many have no insurance coverage. Since they sit outside of a designated flood zone, that amount of risk could have enormous financial implications. So today we're joined by Cotality’s Chief Scientist, Dr. Howard Botts, to break down the 2026 Hurricane Forecast, expose the structural vulnerabilities of our communities and explain why post-disaster recovery is a race where time is literally money. Howard, welcome back to Beyond the Buildings.

Howard Botts:

Always a pleasure. Maiclaire. I love our conversations.

Maiclaire Bolton Smith:

So do I.

Allie Barefoot:

Before we get too far in this episode, here's a friendly reminder about how to see what's coming up next in the property market. To make it easy, we curate the latest insight and analysis for you online, find us using the handle @Cotality on all of our social media channels. But now let's get back to the show.

Maiclaire Bolton Smith:

As we both know, hurricane season for 2026 is officially here, so I wanted to just have you on to set the scene. So Cotality, recent hurricane risk report found over 32 million homes are at moderate, moderate or greater risk of hurricane damage. That's a big number. So what does it really mean? What does hurricane risk look like across the us?

Howard Botts:

Yeah, that is an eye popping number, and that would assume that hurricanes were striking along the entire Atlantic and Gulf coastal areas. And obviously in any single year, hurricanes impact different areas along the coast. And I think what we're looking at in the 2026 hurricane season is one of slightly lower hurricane risk, but it doesn't mean there is no risk. The numbers are just slightly decreased from what we would see in a typical year. There's still a very strong chance that a major category three, four or five will strike somewhere in the us. And that variability is basically, if we look at it at a state level, Florida always ends up as being the number one likelihood. There's a 74% chance it's estimated that one will hit Florida 46 in Texas, 40 in North Carolina, 40 in Louisiana. Those are always the, it seems like the top destination for hurricanes. But in an El Nino year, things change slightly because we have winds being pushed more southerly, which often means that hurricanes can start to be generated on the northern side of that jet stream. And so there are possibilities of hurricane striking much further north. And the worst case scenario would be another Hurricane Sandy, where we see a storm moving right up Long Island sound pushing tremendous amount of storm surge onto Connecticut, New York, New Jersey areas.

So low risk doesn't mean that we're free and clear here, and by no means are El Nino events an impenetrable barrier to the formation of hurricanes.

Allie Barefoot:

Another thing redefining property value is environmental risk. The shift into El Nino may mean fewer Atlantic hurricanes, but it masks a deeper reality. Our baseline for property risk has fundamentally changed, shifting the threat from coastal winds to inland flooding and extreme heat. At Cotality, we've been tracking these changes from the ground up to find the risks hiding in plain sight from over 900,000 properties, vulnerable to rainfall, flooding outside mandatory flood zones, to trillions in storm surge exposure. At every step, our insights return to the same principle. True resilience isn't just about weathering the next storm, it's about building a housing market that can withstand it. Find out more in our 2026 hurricane report, Cotality.com/insights.

Maiclaire Bolton Smith:

Yeah, I am so interested in how El Nino will affect the Atlantic hurricane forecast this year, especially in Texas and Florida, because I've heard a lot from the team that it's just been really wet over there, which is very unusual for this time of year. But I want to take a step back because I realized that this year is an anomaly and it's not that Enso is changing patterns permanently and Enso is the El Nino Southern oscillation, but can these cycles affect property risk?

Howard Botts:

Oh, absolutely. And the first thing we need to understand is all of this is created by sort of thermodynamic impacts or heat. And every year, every month seems to be in large part hotter than the previous years. And so I think we're going to see this impact of rapid storm intensification,

Greater impacts from hurricanes continuing well into the future. That said, a typical El Nino, the major effects they have is to change the tropical trade winds and it tends to shift the jet stream further south across the us. And so that in part the start of this has brought you a lot more moisture and we expect greater levels of precipitation across the southern US and certainly we're going to see significant rain events and that will bring greater variability and hot and cold days. Just a couple weeks ago, it was 95 in New York City and snowing in Montana. Interesting. So this variability is here for the long run, but the one thing that we are going to see is this Southernly jet stream basically acts to cut off the tops of hurricanes before they can form. Basically it creates a wind shear and makes it very difficult and does dampen down the numbers. But that taken in totality, we can definitely expect more variability in heat flooding, wildfire risk drought, and severe convective storm during an El Nino. So all of that is because of increased heat in a warming atmosphere.

Maiclaire Bolton Smith:

Yeah. Okay. I want to talk a little here about homeowners because nearly 1 million homeowners might have no idea that their homes could be at risk to a flood from a major storm because frankly, a map told them that they weren't in a flood zone. So when we look at the structural vulnerability, this report points out a massive physical concern, structural elevation. How bad is this gap in structural preparedness between coastal communities and inland communities?

Howard Botts:

Well, I think the major issue we're facing year in and year out in the US is uninsured losses from flood.

Allie Barefoot:

And

Howard Botts:

Whether that's flooded caused by saltwater from a storm surge or heavy downpours, hurricane driven that are some distance from the coast or just very heavy p fluvial or flash flood events. And most homeowners, I think, significantly underestimate the risk. And if you're living in a hundred year flood zone, which represents a 1% annual chance of flooding, you're required by your federally insured mortgage to have flood insurance.

Although that doesn't necessarily mean that you're going to be fully insured if it's a very expensive home. But if you're someone in that flood zone that no longer has a mortgage, you're not required to have it. And if you're outside the flood zone, there's no requirement outside the a hundred year flood zone. And that is where we're seeing more and more risk coming from these major flood events we're having, whether they're hurricane caused or just major precipitation events. And as you suggested from hurricanes alone, the number is over 900,000 people at risk that aren't insured for flooding. And we see that across both the Atlantic and Gulf coastal areas. And that is a huge problem that most people don't realize, and they have the opportunity to buy flood insurance from the federal government at a reduced rate. But most Americans assume either erroneously, they're flood, they're covered by their homeowner's policy, or think that their risk because they're outside that a hundred year flood zone doesn't exist.

Allie Barefoot:

It's that time again, Cotality just dropped new numbers about what's happening in the housing market. Here's what you need to know. The traditional leap from renting to homeownership is fracturing. While US home prices have climbed a staggering 135% over the last 15 years, skyrocketing rental costs are locking aspiring buyers out of the market entirely. Today, rent consumes 39% of the average renter's budget, which is eight percentage points higher than what homeowners pay towards housing. And that's even after rent prices jumped 30% over the last five years alone. And despite the media spotlight on large Wall Street institutions, it's actually small mom and pop investors who are driving the shift. Landlords with fewer than 10 properties bought 20% more homes than they offloaded last year. Even more significant, 40% of these small scale investors hold their properties for a decade or more, allowing them to influence rental rates long-term because price margins are tight for small time landlords, systemic hurdles like high interest rates and rising home insurance premiums are passed directly to tenants. And unfortunately, even when those costs stabilize, the savings are rarely passed back to the renter, leaving them priced into place. To explore the data behind the investor footprint in your local market, go to Cotality.com/insights and that's a sip. See you next time.

Maiclaire Bolton Smith:

Okay, Howard, one more question. You know that I like to end these with take out your crystal ball. So let's talk about recovery in the report. We have some really interesting data about the financial cost of delaying post-storm cleanup and mitigation. So if a storm hits, time matters, but time really is money here. So can you explain why a homeowner's future depends so much on a speedy recovery process?

Howard Botts:

Absolutely, and we're in a great position here at Cotality because we support the majority of remediation companies across the country,

And we get a lot of reports back as to how time does impact overall cost of remediation. And I think what we've found is for hurricanes in particular, it's water damage. And the longer you wait to remediate against water damage, the greater the dollar losses are. And when you're talking about places like Lake Charles, Louisiana or Houston, they have some of the highest humidity levels in the country. And if you haven't secured your home tarped over holes in the roof or patched up windows that may be broken, that humidity can certainly enter the structure as well as the water inside the house. So keeping water out, drying property out quickly reduces the chance of mildew, structural rot and alternative living expenses, having to have a home that's uninhabitable because of black mold. And we found that if you wait a week to get in there, the cost of remediation goes up about 60%. If you wait three weeks, it can be as high as 200% greater. And so that damage just keeps increasing exponentially.

Allie Barefoot:

So

Howard Botts:

It's really key to get a tarp on that roof right away or to get fans in your house to begin drying it out as quickly as possible.

Allie Barefoot:

Yeah,

Howard Botts:

So to quote you, time is money, and particularly if you're uninsured, that becomes really a critical issue, getting in there quickly and remediating all of these post-storm cleanup needs that you have.

Maiclaire Bolton Smith:

So taking those steps now so that down the line, you've created less work for yourself and hopefully save some money in the process.

Howard Botts:

Right, and absolutely. And have a healthy environment to get in. Often we find people that don't remediate right away and don't have resources are moving into homes that may have black mold, other kinds of things. So obviously there's dollar risk and there's health risk incurred by waiting.

Maiclaire Bolton Smith:

Great. Absolutely. Howard, thank you so much for shedding some light into Cotality 2026 Hurricane Risk Report and taking the time to talk with me today.

Howard Botts:

Oh, it's an absolute pleasure, and hopefully we report no landfall, hurricanes, everybody was healthy and happy and safe, but history doesn't seem to track with that outcome.

Maiclaire Bolton Smith:

I would love to have you back at the end of hurricane season and that we can talk about what we learned in this season. So I look forward to having you back again, Howard, thank you so much for joining me today on Beyond the Buildings, my Cotality. Well,

Howard Botts:

Thank you, Maiclaire. It's always a pleasure to be speaking with you,

Maiclaire Bolton Smith: Well, I know you'll be back again soon, so thank you for listening. I hope you've enjoyed our latest episode. Please remember to leave us a review and let us know your thoughts and subscribe wherever you get your podcast to be notified when new episodes are released. And thanks to the team for helping bring this podcast to life: Producer Jessi Devenyns, editor and sound engineer Romie Aromin, our facts guru Allie Barefoot, and social media duo Sarah Buck and Makaila Brooks. Tune in next time for another conversation that illuminates the ideas that will define the future.

Allie Barefoot: You still there? Well, thanks for sticking around. Are you curious to learn more about our guest today? Dr. Howard Botts is Cotality's Chief Scientist and executive leader of the Science and Analytics team. Dr. Botts leads climate change and natural hazard science, analytics, and geospatial professionals who generate and maintain solutions for the insurance, capital markets, mortgage, banking, and energy industries. With over 30 years of experience in GIS, Dr. Botts is a recognized expert in developing natural hazard risk solutions, and his work has been published extensively. He frequently presents to business and professional organizations on a variety of topics, such as climate change impacts on the real estate ecosystem, natural hazard risk, weather forensics, market potential models, and geographically based market analysis.

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