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How Climate Change Affects the Real Estate Market


Climate change has a massive impact on the real estate market. Whether through changes in local climate conditions and weather patterns or through more high-risk areas that are difficult to sell because of climate concerns, climate change significantly affects how buyers view properties for sale in their area.

Climate change is a real and tangible thing. It affects everyone, all industries and businesses, and the environment as a whole. It might not seem evident at first, but even the real estate market is not safe from nature’s wrath.

With climate change comes unprecedented changes in weather patterns that have an impact on what we experience year-round. 

Climate Change and the Real Estate Market

Climate change brings about sudden and unprecedented changes to the usual weather patterns around a particular area. These changes can be as small as sudden rain showers and thunderstorms in a localized area, to as big as a massive drought at a time of the year that’s supposed to be wet and rainy.

Faith Based Events

There are many different ways that climate change can affect both homeowners and the housing market. Here are some of the consequences brought about by climate change on the real estate market.

Creation of High-Risk Areas

Houses are especially vulnerable to climate change. They’re built in areas with relatively stable climate patterns, which means they can’t always handle the rapid changes brought about by climate change.

When buyers start looking for homes in a particular area, one of their biggest concerns is how well suited it is to climate conditions and patterns. As a result, buyers often avoid high-risk areas as they prefer to take their chances with other, more climate-stable sites.

One such notable high-risk area is South Florida, where climate change is most experienced and noticeable. The entire state is only, on average, six feet above sea level, which makes it especially vulnerable to rising sea levels brought about by climate change.

Lower Property Values

When climate change affects the housing market, it’s usually in one way or another. One of its most significant effects is property values, which can increase or decrease depending on how climate conditions affect a specific area.

Since climate change causes more unpredictable weather patterns and climate changes around an area, this also leads to higher incidences of natural disasters like floods and storms. These events are often accompanied by massive destruction that not only damages properties but leaves them completely unusable afterward.

When these homes get damaged beyond repair due to climate-induced natural disasters, their value decreases even further until they’re sold at a meager price or simply taken off the market altogether.

Higher Property Insurance

As the risk of an area towards natural disasters increases, so too does property insurance. As a result, insurance companies will require homeowners in high-risk areas to pay a higher cost for their properties to be insured. 

It has been shown time and again that insurance prices in areas that are prone to hurricanes, wildfires, landslides, and other natural disasters, are usually twice or sometimes even thrice as much as the cost compared to areas with lower risk.

Expert Opinions

Dino DiNenna from HiltonHead Realty and Andy Mandel from RE/MAX Advisors view high-risk properties as more costly in the long run despite being relatively cheaper than other properties. This is because of higher insurance costs caused by the higher risk of natural disasters in the area.

According to Patrick O’Sullivan from getMULTIfamily, a high-risk property can still be a worthy investment if you play your cards right and consult actual professional real estate agents of the risks you’re willing to take by purchasing high-risk properties.

Microclimates can also put properties at high risk, according to Jordan Scarpino from Oakwyn Realty. These types of properties are prone to sudden changing weather patterns over a small area of land.