More Homebuyers Have Flocked to Climate Risky Areas, Despite Intensifying Natural Disasters
August 03 2022 - 8:00AM
Business Wire
Homes with high fire and flood risk sold for a
premium during the pandemic as homebuyers sought out waterfront
properties and fire-prone suburbia
(NASDAQ: RDFN) — Homebuyers have paid a premium for
high-fire-risk and high-flood-risk homes during the pandemic,
according to research from Redfin (redfin.com), the
technology-powered real estate brokerage. This comes as more people
have moved into than out of climate-risky areas in recent years, in
part because they can often get more bang for their buck and gain
better access to nature.
The 50 counties with the largest percentage of homes facing high
fire and flood risk saw their populations increase by an average of
3% and 1.9%, respectively, from 2016 through 2020 due to positive
net migration. In addition, purchases of second homes with high
flood, storm and/or heat risk surged roughly 40% over the past two
years. Regardless of the increase in migration to climate risky
areas, a Redfin survey found that 63% of people who moved during
the pandemic believe climate change is or will be an issue in the
place they now live.
“From devastating floods in Kentucky and Missouri to deadly
fires in California and brutal heat waves across the U.S., it’s
clear that natural disasters are intensifying. Still, people are
moving into risky areas,” said Redfin Chief Economist Daryl
Fairweather. “When people decide where to live, they consider a
whole host of things ahead of climate change, which has potential
implications on their safety, home stability, and finances.”
The median sale price of U.S. homes with high fire risk was
$550,500 in April 2022, compared with $431,300 for homes with low
fire risk. In other words, the typical home with high fire risk
sold for $119,200 (27.6%) more than the typical home with low fire
risk—the largest premium in dollar terms since at least 2017.
Places like fire-prone suburbia saw a surge in homebuyer demand
over the last two years, causing prices to jump. That’s despite
evidence that home prices have in the past recovered more slowly in
fire-prone areas in the wake of disaster.
Similarly, the median sale price of homes with high flood risk
was $402,010 in the first quarter of 2021, compared with $353,783
for homes with low flood risk. That means high-risk homes sold for
a record 13.6% premium—up from a premium of 10.1% in the first
quarter of 2020.
Redfin began displaying climate risk data in 2021 so that
prospective homebuyers can better understand the climate risks for
flood, fire, heat, drought and storm over a 30-year period to any
area in which they're searching for a home.
To read Redfin's climate reporting and analysis, visit:
https://www.redfin.com/news/climate-change/
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
instant home-buying (iBuying), rentals, lending, title insurance,
and renovations services. We sell homes for more money and charge
half the fee. We also run the country's #1 real-estate brokerage
site. Our home-buying customers see homes first with on-demand
tours, and our lending and title services help them close quickly.
Customers selling a home can take an instant cash offer from Redfin
or have our renovations crew fix up their home to sell for top
dollar. Our rentals business empowers millions nationwide to find
apartments and houses for rent. Since launching in 2006, we've
saved customers more than $1 billion in commissions. We serve more
than 100 markets across the U.S. and Canada and employ over 6,000
people.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20220803005269/en/
Redfin Journalist Services: Ally Braun, 206-588-6863
press@redfin.com
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