Sally has been downgraded to a tropical storm, but that doesn’t mean people in the path of the storm are out of the woods yet. Parts of Georgia, North Carolina, and Virginia could experience significant flooding as Sally slowly churns through. Damage is now being assessed in Alabama and the Florida Panhandle. The storm made landfall near Gulf Shores, Alabama, at 4:45 am CT Wednesday as a category 2 storm with maximum sustained winds of 105 mph. The AP reports:

Sally’s northern eyewall had raked the Gulf Coast with hurricane-force winds and rain from Pensacola Beach, Florida, westward to Dauphin Island, Alabama, for hours before its center finally hit land.

Nearly 400,000 homes and businesses are without power, according to the utility tracker poweroutage.us, as the winds and rain down power lines and flood streets and homes.

The Weather Channel’s Jim Cantore reported that this was the “3rd highest Storm Surge on RECORD here in Pensacola, FL.” It’s higher than Hurricane Katrina. Some areas are reporting as much as 30 inches of rain leading to what is being called “epic flooding.”

Escambia County Sheriff David Morgan commented:

“I think many of us were beating ourselves up first thing this morning because the reports that we had gotten from the National Weather Service etc. led us to believe that while we would certainly have some impact from this storm, it would not be a direct hit on Escambia County, and it certainly wouldn’t have the devastating effects that we’re experiencing right now.”

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The hurricane wiped out a section of the Three Mile Bridge that connects Gulf Breeze, Florida, to Pensacola. And officials warn most other roads in the area are also inaccessible.

The storm caught some people off guard as it shifted east of the original predictions. We spoke with one man in Orange Beach, Alabama who said they barely had 24 hours to prepare for the storm. He decided to ride it out, but at around 4 am his roof came off piece by piece. He ended up riding out the next three hours of the storm in his car. He says his house is a total loss.

Watch more from the CBS Evening News.