Verisk released its 360Value® Quarterly Cost Update on reconstruction costs for the fourth quarter of 2017. The report offers an overview of current reconstruction cost trends at the national and state/provincial level for the United States and Canada.
At the U.S. national level, reconstruction costs spiked in the wake of Hurricanes Harvey and Irma scouring the Gulf Coast. Since October 2016, overall reconstruction costs increased 4.8 percent in the United States, the largest rate of increase since early 2015. Since July 2017, reconstruction costs increased 1.5 percent in the United States, holding steady with the rate of increase from the second to third quarters.
Texas hit hard
Hurricanes Harvey and Irma are driving up reconstruction costs. Texas had an average annual increase of 6.3 percent, jumping from a state rank of 12th a quarter ago to third-highest in the nation. Meanwhile, Florida leaped from 27th to second, with an average annual increase of 6.9 percent.
Overall from October 2016 to October 2017, rates of change increased for each state over the last quarter. Eighteen states showed increases of 5 percent or higher, and six states had increases of 6 percent or more: Colorado, Florida, Tennessee, Texas, Utah, and Washington. Alabama, Arkansas, Illinois, Indiana, Massachusetts, Mississippi, Nebraska, Oklahoma, Pennsylvania, Vermont, and Virginia were the slowest-growing states in terms of overall cost increases, at less than 4 percent.
Costs also rise in Canadian provinces
In Canada, at the national level, reconstruction costs increased at a faster rate—4.3 percent—from October 2016 to October 2017. Repeating the performance of the July-to-July period, all ten provinces experienced reconstruction cost increases, led by a 6.4 percent spike in British Columbia.
During the third quarter of 2017, reconstruction costs rose 0.9 percent, half the increase recorded in the second quarter.
About 360Value Quarterly Cost Updates
360Value Quarterly Cost Updates provide current, localized, and detailed cost data on reconstruction labor and building materials—information that’s essential for creating reliable, component-based replacement cost estimates. The reports feature detailed graphics that make the information easy to understand and use. You get information on six key types of materials and six top labor categories.