U.S. Home Buyers Keep Moving Into Climate-Risqué Areas
Even though Natural Disasters are Increasing
Redfin claims that during and after the epidemic, American purchasers have paid more for homes with a high risk of fire and flooding. This is due to the fact that, in recent years, more people have migrated into climate-risky places than out, in part because they can frequently get more for their money and have better access to nature.
Positive net migration caused population growth in the 50 counties with the highest proportion of dwellings at high risk of fire and flooding from 2016 to 2020, respectively, of 3 percent and 1.9 percent. Additionally, during the past two years, there has been a 40% increase in the number of acquisitions of second houses with a significant flood, storm, and/or heat risk. Despite the rise in migration to climate-vulnerable regions.
“Natural catastrophes are becoming more severe, as evidenced by the devastation caused by disastrous floods in Kentucky and Missouri, fatal fires in California, and extreme heat waves across the United States. People continue to move into dangerous places, “said Daryl Fairweather, chief economist at Redfin. “People think about a wide range of factors when deciding where to reside, including their safety, the security of their homes, and their income, because climate change may have an impact on these things.”
In April 2022, the typical sale price of a home in the United States with a high fire risk was $550,500, compared to $431,300 for properties with a low fire risk. The average home with a high fire risk sold for $119,200 (27.5%) more than the average home with a low fire risk, which is the highest premium in terms of dollars since at least 2017.
Over the past two years, demand from homebuyers has increased, pushing up prices in areas like suburban areas that are prone to fire. In spite of evidence to the contrary, housing prices have historically recovered after disasters in fire-prone areas more slowly.
Similar to this, in the first quarter of 2021, the median sale price of residences with high flood risk was $402,010, as opposed to $353,783 for homes with low flood risk.
In order to help potential homebuyers better understand the climate risks for flood, fire, heat, drought, and storm over a 30-year period in any region in which they’re seeking a property, Redfin started showing climate risk data in 2021.