January 2018
FEATURES
Dear EarthTalk: How will climate
change affect real estate values?
– Jeremy Willson, Oxnard, Calif.
It’s not surprising that questions
like these are on readers’ minds to-
day, given the relentless hurricanes
in the Southeast, the devastating
wildfires in California and other
climate-related “Acts of God” bedev-
iling Americans recently.
No doubt, climate change is already
having an effect on real estate values.
Of course, the 40 percent or so of
Americans who live in coastal areas
are at most risk of financial loss, given
rising sea levels and the increase in
intense storms and attendant flood-
ing.
A recent analysis by Attom Data
Solutions found that home sales in
flood-prone areas grew 25 percent
less quickly than in counties not
prone to flooding over the last five
years.
“If sea levels rise as much as climate
scientists predict by the year 2100,
almost 300 U.S. cities would lose at
least half their homes, and 36 U.S.
cities would be completely lost,” said
Krishna Rao, Director of Economic
Product & Research at Zillow.
Across the country, some 1.9 mil-
lion homes—worth some $882 billion
in the aggregate—are at risk of liter-
ally being “underwater” as sea levels
rise in coming decades.
Those states with lots of people
living along their coastlines would be
hardest hit. “More than one in eight
properties in Florida are in an area
expected to be underwater if sea lev-
els rise by six feet, representing more
than $400 billion dollars in current
housing value,” said Rao.
But living away from the coast
doesn’t guarantee your real estate
values won’t be affected by climate
change, given the increase in ex-
tremely warm days across the coun-
try and the extension of the wildfire
season across much of the West.
Verisk, an insurance industry data
analytics provider, reports that more
than two million homes within Cali-
fornia alone are already located in
high risk zones.
“The amount of fire that is projected
to increase in a warmer world is an
increase of anywhere between 100
percent and 600 to 700 percent, and
that’s just with [a one degree Cen-
tigrade increase in global average
temperature],” said Mika Tosca of the
non-profit Union of Concerned Scien-
tists. “And if we’re projected to see six
degrees of warming, you can imagine
what’s going to happen.”
To make matters worse, the insur-
ance system isn’t keeping pace with
the onslaught of climate effects. When
Hurricane Harvey flooded Houston in
The Southwest Portland Post • 7
Sea level rise and coastal flooding could wreak havoc on real estate values for the
40 percent of Americans currently residing in coastal areas.
(Courtesy of Monmouth University)
late August 2017, 85 percent of the vic-
tims didn’t have flood insurance and
had to start all over again financially.
And while fire insurance may be
required as part of owning property,
the economic impacts of increasing
wildfires could be a head shot to the
insurance industry if it doesn’t raise
premiums across the board accord-
ingly. Residential insured losses from
the October California Wine Country
fires alone total upwards of $3 billion.
So even if your home isn’t directly
affected by climate change, your pock-
etbook will be, given that everyone’s
rates will need to go up to pay for an
increasing number of catastrophic
property claims.
Contacts: Attom Data Solutions,
attomdata.com; Zillow, zillow.com;
Verisk, verisk.com; Union of Con-
cerned Scientists, ucsusa.org.
EarthTalk® is produced by Roddy
Scheer & Doug Moss and is a registered
trademark of the nonprofit Earth Action
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