The Real Deal New York

Climate change already hitting home prices

Price growth in low-risk areas outpaces those prone to natural disasters
June 18, 2018 08:00AM

Hurricane Sandy in New York City (Credit: Wikimedia Commons)

The risk of climate change appears to be having an impact on housing prices.

Average home prices in areas that face low risks of flooding, hurricanes and wildfires outpaced areas that had a greater risk of climate change between 2007 and 2017, according to figures from Attom Data Solutions reported by Bloomberg.

Average home prices in areas at high risk were worth less last year than they were a decade earlier, Attom’s figures show.

Daren Blomquist, Attom Data’s senior vice president for communications, said natural disaster risk is not the only factor consumers look at when buying a home.

But he said the data gives “some evidence real estate consumers are responding to natural disaster risk, albeit somewhat erratically.”

Some home buyers, though, have to weigh the risk of facing a natural disaster and the amenities those areas provide. Home values in areas like Key Biscayne, Florida and Aromas, California were both higher in 2017 than they were in 2007. The areas are at risk of flood and wildfires, respectively, but also offer natural beauty that buyers could be attracted to.

“It’s probably very likely that people are starting to have a greater awareness of disaster risk,” said Carolyn Kousky, director for policy research for the Risk Management and Decision Processes Center at the Wharton School. “The tricky part is that some of the riskiest areas are also such high amenities.”

The data, however, suggest rising prices in high-risk areas are becoming the exception to the rule, and another string of natural disasters may speed the process up.

In late 2016, The Real Deal took a look at how New York City landlords are struggling to adjust to climate change. [Bloomberg] – Rich Bockmann