We know from multiple sources that 2014 – 2017 were the warmest years on record. Surely, our changing climate is and will continue to impact everything in our daily lives all over the earth but, will it affect our local home values?
Already, New York City property owners who recently experienced flood damage know what it means to not have flood insurance despite newly drawn FEMA maps indicating high flood risk. 80% of those property owners didn’t have flood insurance and they are stuck with staggeringly high repair and remediation costs.
According to experts, here are some residual climate change factors that could alter property values:
- Demand to decrease prices for waterfront properties. A 2015 study by the University of North Carolina in Wilmington indicated that home values could drop across all beachfront property in the US if federal subsidies were eliminated. The study pointed to a drop of 34% in New Jersey alone. Though sale values in Massachusetts have not yet been affected, Paul Grover, agent and co-founder of Robert Paul Properties in MA, said “There’s an increased awareness of the effects that climate change can have…buyers are more mindful of things such as property elevations and vegetation that can prevent erosion.
- As home values decline, insurance may increase. Scott Johnson, manager and principle broker agent of Marindependent Insurance Services, LLC in Mill Valley, CA, said, “Many of our clients live in zones that FEMA once dubbed as ‘safe’ are now dubbed as ‘risky.’ Those clients are experiencing a spike in rates…part of the problem is the river and water systems in the county have changed; part of the problem is that county and state agencies have failed to keep up with the issue and; part of the problem is higher and lower tides along with potentially more extreme weather systems.”
- Could see higher property taxes – A 2014 study by the Union of Concerned Citizens indicates that by 2045, Atlantic City and Cape May, NH can expect flooding 240 x or more. As we increasingly know, when communities are routinely swamped, residents move. The fewer residents there are, the smaller that area’s tax base and the higher tax rate of those residents who choose to stay in the swamped area. Additionally, another study done by Ohio State University just this last year indicated that excessive algae, one direct effect of climate change, has already impacted home values in Buckeye Lake and Grand Lake to the tune of -$152M between 2009 – 2015.
- Some property vales will go up due to climate change. Lou Nimkoff, president of the Orlando Regional Realtor Association, predicts that beachfront property values in Florida will continue to drop but that inland properties values will jump. “While Miami and Orlando are the top two markets for vacation homes in Florida, if Miami’s international buyers turn their attention away from the southern beaches and instead towards Orlando, we will experience a truly massive increase in demand and competition for homes.”