Americans are increasingly factoring natural disaster risk into their home-buying decisions, with homes in low-risk areas increasing in value faster over the past year than those in high-risk areas, according to a recent Redfin analysis. It became clear. This is the first time such a change has occurred in more than a decade.
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Americans are increasingly factoring natural disaster risk into their home-buying decisions, with homes in low-risk areas increasing in value faster over the past year than those in high-risk areas, according to a recent Redfin analysis. It became clear.
This is the first time such a change has occurred in more than a decade.
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Redfin’s analysis is based on climate risk data from First Street and Redfin Estimates for approximately 93 million U.S. residential properties as of June 2024, with June 2023 home prices compared to June 2019 pandemic compared to the previous level. This analysis examines the influence of three key factors. Climate risks such as heat, flooding, and fire affect home values.
Home values in both high- and low-risk areas have increased significantly from pre-pandemic levels. Real estate in areas with a high risk of heatwaves increased by 62.5%, while housing at low risk increased by 53.2%. Similarly, homes in high-flood risk areas rose 60.3%, while low-risk properties rose 58.7%.
In terms of fire risk, high-risk homes saw a 67.8 percent increase, outpacing the 57.2 percent increase in low-risk areas.
But over the past year, a noticeable change has emerged. Across all three climate risk categories: heat, floods, and fire, lower-risk homes are starting to gain value faster than higher-risk homes, a trend last observed in 2010.
The value of homes with low heat risk increased by 7% year-on-year and now totals $17.7 trillion, while high-risk homes increased by 6.3% to $29.7 trillion. The value of homes with low flood risk increased by 6.7% from the previous year to $40.2 trillion, while the value of homes with high flood risk increased by 6% to $7.2 trillion. The value of homes with low fire risk increased by 6.6% year-over-year to a total of $39 trillion, while the value of homes with high fire risk increased by 6.4% to $8.4 trillion.
Currently, 58 million U.S. homes are at risk of extreme heat, 15 million are at high risk of fire, 13 million are at high risk of flooding, and some are at multiple risks. has been.
Elijah de la Campa
Elijah de la Campa, senior economist at Redfin, explained the trend, saying, “The fact that this is happening across different risk types and across countries means that climate change will influence people’s home-buying decisions. “This is one of the best evidences that we are giving.”
“As climate change becomes more frequent and more dire, many people are deciding they no longer want to live in dangerous areas. And as insurance premiums soar, many once affordable “This dangerous field has become prohibitively expensive,” he continued.
“The reality of climate change is becoming reality, and it is causing it. People are putting disaster risk higher on their list of considerations when looking for a home.”
In California, areas at high risk for wildfires experienced larger outflows last year, a reversal from the previous year, according to the Redfin report. Additionally, a recent Redfin study found that 32 percent of young people reconsidered their future life plans after seeing the effects of Hurricane Helen.
Florida and Texas, regions highly susceptible to natural disasters, have seen the slowest home value growth in the country over the past year, contributing to faster appreciation in low-risk properties. This slowdown in growth is likely due to the combined effects of climate risks, rising insurance costs, and rising property taxes.
Email Richelle Hamiel
