These Three Cities Are Facing a Climate Change Real Estate Bubble and People are Avoiding Real Estate Here
Aside from being in a great area, your zip code is now more expensive because of climate change. It’s getting harder and harder to buy a house because of rising sea levels, wildfires, and other extreme weather events.
Climate change and affordable housing are two different problems, but they are linked. If you look at a new study from Realtor.com, it says that by 2024, nearly 44.8% of homes in the US, worth a total of nearly $22 trillion, will be at least somewhat at risk from flood, wind, wildfire, heat, or air quality.
It is important to understand how climate change affects real estate for safety reasons and because it has a big effect on housing prices. Here are some places where you shouldn’t buy a house because of climate change.
Los Angeles
California has had a lot of wildfires lately. In fact, there have been so many that some insurance companies are either pulling their coverage or raising rates by a lot.
“In 2024, about 5.5% of homes in the US, worth $3.0 trillion, are at severe or extreme risk of fire damage. California is home to nearly 39.1% of these high-risk homes, worth $1.7 trillion,” per Realtor.com. “There are the most homes in Los Angeles, California, that are at a severe or extreme risk of fire.”
Miami
Miami is a beach city famous for its beautiful homes, lively nightlife, and great beaches. However, getting a home there can be risky. Realtor.com says the city has the most homes worth the most that are at serious or extreme risk of heat, wind, and flooding.
Some of the extra costs of living in Miami are better HVAC and energy-efficient systems, as well as more insurance because of the risk of hurricanes. Kin Insurance says that the Insurance Information Institute found that Floridians pay about three times the national average for home insurance, or more than $4,000.
New Orleans
It can be risky to buy a home in New Orleans, even though it is a beautiful city with lots of fun things to do and delicious food. As it sinks, the Big Easy is more likely to flood since it was built just above sea level. There isn’t a lot of equipment to help, and the city can have more flooding problems during hurricane season.
Realtor.com says that New Orleans, Louisiana has the highest share of property value that is at risk due to flooding, while Miami, Florida has the highest total value of homes that are at serious or extreme risk of flooding.
Conclusion
According to U.S. News & World Report, these high-risk hazards are causing homeowners’ insurance rates to go up and their property taxes to skyrocket. There will also be less demand for waterfront homes, and the total cost of having a home will go up.
Because of this, some people are moving. “Roughly 8% of U.S. residents likely to move within the next year are doing so because they’re worried about how climate change will affect their current area,” a Redfin study found. “On the other hand, 22% of those moving for a lower cost of living.”