Climate Change may have reached the Housing Market

Although President Donald Trump moderates the importance of climate change, there is evidence that Americans are taking it more seriously, especially when it comes to buying a house. Between 2007 and 2017, the average home prices in areas facing the lowest risk of natural disasters have further surpassed those with the greater risk. Homes in areas that are most open to natural disasters were worth less last year than a decade ago. Attom Data Solutions, a curator of national property data, looked at the annual changes in home prices and sales across 3,397 cities around the country, and then separated those cities into five groups based on their contact to natural disasters. What they discovered indicates that the threats of climate change are beginning to happen. In average, home prices across the cities increased 7.3% between 2007 and 2017, according to Attom Data. Daren Blomquist, Attom Data’s senior vice president for communications states “Natural disaster risk is certainly not the only factor consumers are considering when buying a home.”

The data given by Attom Data propose that the relationship between home prices and climate risk is not always a straight line. This is because home buyers must take the risk of disasters to account while also considering the benefit value of living near a forest or living near water. Carolyn Kousky, director for policy research for the Risk Management and Decision Processes Center at the Wharton School, states “It’s probably very likely that people are starting to have a greater awareness of disaster risk. The tricky part is that some of the riskiest areas are also such high amenities.” For example, in Key Biscayne, Florida, home values were 19% higher in 2017 than in 2007, notwithstanding the area’s flood risk. Homes in Aromas, California, which has a very high wildfire risk, increased 43% in 2017 than in 2007. Both areas offer natural beauty that buyers have concluded is “worth the danger.” Jesse Keenan, a teacher from Harvard University who focuses on the interaction between housing market and climate change, says that the connection between these things are increasing as more Americans live through natural disasters. Asaf Bernstein, a professor at University at Colorado at Boulder who studied the drop-in home prices associated with sea-level rise, stated that there is no surprise that home values would be affected by climate risk. He also states “it’s not a question of if, it’s a question of when.”

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