The most affordable places in the country are the places most at-risk of climate change.
Affordability At the Top Of Homebuyers Agendas, Not Climate Change
Affordability has been at the top of most homebuyers’ agendas for a while now.
Unfortunately, affordability in terms of home prices and living costs mean nothing in the face of climate change.
Buyers “Keep Marching into Jaws of Destruction”
According to Glenn Kelman, the CEO of Redfin, homebuyers consider affordability, not the ravages of climate change, when they think about where to buy a home.
Kelman said in an interview on CNBC’s Closing Bell, “The most affordable places in America are the places that are at the most risk of being affected by climate change…the buyers just keep marching into the jaws of destruction.”
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Most Popular Moving Destinations Are Most At-Risk Locations
Kelman said, “If you look at where people are moving, it’s to Florida and the Southeast, which is especially flood prone and also has just incredible heat risk as temperatures rise. And they’re also moving to places like Phoenix, Las Vegas and Utah.”
Homebuyers, Kelman noted in this interview, will be flooded by hurricanes and their homes will be burned by wildfires.
Among the dozen wildfires currently burning in California alone, the Caldor Fire has been active for over three weeks and is still only 40% contained. Already this now-considered second worst wildfire in the state’s history has burned over 340 square miles, 965 buildings and damaged 76 more buildings. Countless more homes and businesses have been destroyed as this wildfire continues raging.
Phoenix, now the fifth-largest city in the US and long known for its heat, is only becoming more uninhabitable due to extreme heat. And Utah’s population increased +18% between 2010 and 2020, according to the US Census Bureau. Redfin found that one-third of homes in Utah face “high fire risk.
Just take a look at the damage wielded by Hurricane Ida after it “weakened” into a tropical storm last week in Louisiana, Mississippi, Maryland, New Jersey and New York. Loss of life due to Ida is now approaching a total 100 while search and rescue crews continue searching for “missing” residents.
It’s still too soon to make any kind of realistic property damage estimates as regions and neighborhoods are still underwater in the southeast and east. All we know anecdotally is that thousands of people lost everything they had to Ida.
As of midweek last week, nearly 850,000 utility customers in Louisiana remained without power, according to the state’s Public Service Commission.
Insurance Actuaries Only People Who Have a Clue about Climate Change Impacts
Kelman said, “…the only people who have figured out (the costs of climate change) are the (actuaries), the people who have to calculate the cost of insuring these properties.”
Kelman predicted that it will become increasingly difficult to get flood and/or fire insurance on properties in high-risk areas. Kelman also predicts “…it’s going to be harder to get a loan for these properties because the lenders are going to see the writing on the wall, that this collateral is at risk.”
Extreme Weather Just the Beginning
According to climate scientist Andrew Dressler, the extreme weather we’re seeing across the country could pale in comparison to future weather.
Dressler said, “We look at cities on the coast like Miami, Houston, and now, New York, and you think, can those people live in those places for a century? If not, at what point are we going to have to relocate those people?”
Thanks to Redfin and CNBC.
