A couple of decades ago, climate change and real estate weren’t likely to be linked in people’s minds. But for modern homebuyers, the potential for climate hazards can’t be ignored when deciding where to put down roots.
Homeownership is not only the largest investment most people make, but a primary means for generating and passing down wealth. As such, it’s important to protect that investment from environmental factors.
Would you keep a Babe Ruth-signed baseball on the patio and hope the dog doesn’t find it? No, you’d keep it in a glass case on the mantle to protect it as it increases in value.
The same concept applies to buying a house. But for people who haven’t experienced the direct impacts of climate change on real estate, it can be easy to underestimate the risks it poses — or not consider them at all as you choose your ideal location for buying a home.
But some careful thought upfront can make a world of difference in the return on investment your home brings.
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The short answer is yes. Or, in the words of Dr. Kristina Dahl, senior climate scientist with the Union of Concerned Scientists: “Absolutely yes.”
Dahl said that for a long time, we’ve been assuming that the climate and weather risks homebuyers will face in a given area are similar to those that the particular location has experienced in the past. But that’s no longer the case.
“As we continue to warm the planet, we’re seeing weather being pushed to greater and greater extremes,” Dahl said. “And so we need to be taking that rise in extreme weather into account as we’re thinking about where we’re going to be living in the next decade, two decades, or three decades, if we’re taking out a 30-year mortgage.”
As we all know, 2020 was an unprecedented year in many regards. Climate change was one of them.
According to the Aspen Institute, in 2020, Americans experienced:
- 30 named storms in a prolonged hurricane season, the most on record. (We even ran out of letters in the alphabet to name them after.)
- 22 climate-related disasters that caused at least $1 billion in damage each, also the most on record
- $50 billion in natural disaster damages in September 2020 alone — more than the total cost for all of 2019
- 100,000 people forced from their homes by wildfires
A 2021 CoreLogic report found that nearly a third of the U.S. housing stock — some 35 million homes — are at high-risk of natural disasters. And according to CoreLogic chief economist Frank Northaft, “nearly every property in the U.S. has exposure to peril risk.”
Climate change shouldn’t deter homebuyers from entering the market — just like having a dog shouldn’t deter a collector from buying that Babe Ruth-signed baseball. But climate change risks should be part of your decision-making equation about where to live, and how you protect your home.
“Just like we look into a neighborhood’s job opportunities or educational opportunities, we also need to start considering the kinds of climate-related risks we’re going to be facing,” Dahl said. “Those, too, will have implications for your physical, mental, and financial safety over the lifetime of owning that home.”
Between wildfires, flooding, heat waves, hurricanes, melting permafrost, and carbon emissions, climate change affects the entire U.S. Climate risk mitigation for homebuyers comes down to understanding your purchase area and how much risk you’re willing to live with.
“There is no one area of the country that is going to be climate-proof,” Dahl said. “To one degree or another, everywhere we’re going to see some impacts of climate change. It’s more a matter of understanding how severe those risks will be, what your tolerance for them will be.”
Dahl, for instance, grew up in the Midwest and spent most of her time outside during the moderate summers. So the idea of living in an area where it’s too hot to spend time outside is something she wouldn’t choose to do.
Homebuyers considering a coastal purchase must weigh similar considerations. Homeowners in places such as California and Oregon contend with the risk of annual wildfires, while those drawn to the beaches of the East Coast may be dealing with regular hurricanes and flooding.
Hurricanes present a risk for most of the states bordered by the Atlantic, but destinations such as Miami, and other coastal cities in Florida, can come under threat several times a year. Combined with rising seas, some of the most attractive destinations in the U.S. also have the highest potential for climate hazards.
Deciding where to buy in the climate change era requires homebuyers to make long-term predictions about the suitability of their homes. Will summers be too hot to stand in some Southern states in a few years? Will floods become so frequent, you’ll need to move sooner than expected? How long will you be willing to live on the brink of a wildfire evacuation?
That’s not to say that high-risk areas should be off your homebuying list entirely. Choosing where to buy a home can be a complex decision, and climate hazards represent only one aspect.
However, it’s crucial to understand the financial and physical risks associated with an area before you decide to buy a home there.
Picking the right purchase area starts with research. One helpful resource is the Notre Dame Global Adaptation Initiative (ND-GAIN), which measures climate risk and readiness for more than 270 U.S. cities.
ND-GAIN also plots cities on a matrix (shown below), making it easier to compare their climate vulnerability. Cities in the upper-left quadrant have the highest risk and lowest readiness scores, while cities in the lower-right quadrant have the lowest risk and highest readiness scores.
Another resource is ProPublica and The New York Times Magazine’s list of climate vulnerable counties based on data from the Rhodium Group. This analysis scores counties by their combined climate risk between heat, humidity, farm crop yields, sea level rise, and very large fires.
For heat and drought, Climate Explorer offers projections through the year 2100 for every county in the U.S.
Finally, Flood Factor analyzes and scores more than 142 million U.S. properties for inland and coastal flood risk and has been integrated into real estate listings on Redfin and Realtor.com.
Flood Factor not only shows a property’s current potential for climate hazards from flooding, but it also uses climate modeling to estimate risk several decades into the future. Dahl said it’s best to use this tool to determine whether you need to dive deeper into a property’s or area’s flood risk.
If flooding is a risk to your desired property, the “Know Your Risk” brochure created by the Union of Concerned Scientists has questions to ask locals, real estate professionals, home inspectors, insurance agents — and yourself — before you decide whether to buy.
After getting to know the climate risks in your purchase area, the next step is preparing for potential climate hazards once you’ve bought the home.
Kate Boicourt, Director of NY-NJ Coasts and Watersheds at the Environmental Defense Fund said taking out flood insurance is especially important, even where it’s not required.
“Just get insurance,” Boicourt said. “It’s important to note that flood insurance is not included in most renter and buyer policies. A lot of people don’t know that. You actually have to opt in.”
For federally backed mortgages, flood insurance is required for properties in certain FEMA floodplain zones. However, Boicourt said some of the maps used haven’t been updated since the 1980s and that the FEMA floodplains map does not account for climate change.
“We know the baseline is changing and we don’t have insight at the federal level to incorporate that into insurance,” Boicourt said.
According to Dahl, nearly half of the flooding from major hurricanes in recent years is happening outside of FEMA flood zones. That means you need to do your due diligence on climate risks so you’re not caught without insurance if your area is hit by a major storm or flood.
Insurance premiums are something to take into account when deciding where to buy a home. Your premiums will likely be higher in areas that are frequently hit by storms, fires, and floods. And adding coverage for flood insurance and other contingencies can increase your costs substantially.
Still, it’s increasingly imprudent not to take out additional policies if you know the area has seen severe climate hazards in recent years. Not having the necessary coverage could leave you with thousands or tens of thousands of dollars in repair expenses that you’ll have to pay out of pocket.
In addition to insuring your home from natural disasters, Dahl and Boicourt recommended upgrading your home to make it more climate-resilient.
Here are some tips for getting started:
- Update the HVAC system to keep the home cool during extreme heat and filter out wildfire smoke
- Clear vegetation and keep gutters free of debris to reduce wildfire risk
- Elevate your home and major appliances in coastal areas prone to flooding
- Insulate pipes to prevent them from freezing
In addition to physical upgrades, create plans for dealing with the emergency situations you’re facing.
If a wildfire or flood occurs suddenly, you may have to make split-second decisions to keep yourself and your family safe. Thinking through the worst-case scenario, and having an emergency kit ready, will allow you to move fast when a crisis happens.
“Know your risks, get insurance, and make a plan for if something is going to happen,” Boicourt said. “What would you do 24 or 72 hours out?”
The effects of climate change aren’t pleasant to think about, especially when you’re focused on finding your dream home. No one wants to consider that moving to their favorite city or seaside town could end in heartache a few years down the road.
But ignoring climate risk won’t make it go away. And upfront planning and preparation can go a long way toward keeping your home secure and you and your loved ones safe if climate hazards strike your town.
“Whether or not you have faith in the science that is showing us that climate change is happening, if you’re buying a home you need to be thinking about extreme weather preparedness,” Dahl said. “That will help you today, and next year, and hopefully 20 years into the future when we are projected to experience more extreme weather events.”