The median sale price of homes with high flood risk was $402,010 in the first quarter, compared with $353,783 for homes with low flood risk, according to a recent Redfin report. High-risk homes sold for a record 13.6 percent premium, up from a 10.1 percent premium in the first quarter of 2020 and a 7.2 percent premium in the first quarter of 2019
The premium surged during the coronavirus pandemic because homebuyers sought oceanfront or lakefront houses outside of major cities, according to Redfin.
“Americans are buying the beach houses they always dreamed of because they have the flexibility to work from wherever they want,” Redfin Senior Economist Sheharyar Bokhari said in a release. “While flood risk is intensifying in many parts of the country, it doesn’t seem to be a deal breaker for a lot of homebuyers. This may be because buyers aren’t aware they’re purchasing a home in a flood plain or just don’t view it as an immediate danger. Places with high flood risk are also often home to large concentrations of retirees, many of whom don’t see climate change as a threat they need to worry about in their lifetime. Florida is one example.”
Places prone to flooding also are seeing stronger growth in home sales. In the first quarter, sales of high-flood-risk homes increased 18.6 percent year-over-year, about double the 9.6 percent gain in sales of low-flood-risk homes.
“If you buy a home on the water in Florida, flooding is just something that comes with the territory. Most buyers understand that,” Redfin Real Estate Agent Heather Kruayai said. “A lot of out-of-state buyers have been moving here during the pandemic and purchasing waterfront properties, but there are also locals who are looking for space to spread out because the city has become so congested. Even if you wanted to negotiate a lower price due to flood risk, you’d have a tough time because we’re in such a hot seller’s market.”