Homebuyers paid a premium for homes at high risk for fire and flooding during the pandemic, according to Redfin research.
The 50 counties with the largest percentage of homes facing high fire risk saw their populations increase by an average of 3 percent from 2016 through 2020 due to migration, Redfin said. Those with the highest percentage of flood risk increased by 1.9 percent. Also, purchases of second homes with high flood, storm and/or heat risk surged roughly 40 percent over the past two years.
Even so, a Redfin survey found that 63 percent of people who moved during the pandemic believe climate change is or will be an issue in their new location.
“From devastating floods in Kentucky and Missouri to deadly fires in California and brutal heat waves across the U.S., it’s clear that natural disasters are intensifying. Still, people are moving into risky areas,” Redfin Chief Economist Daryl Fairweather said in a release. “When people decide where to live, they consider a whole host of things ahead of climate change, which has potential implications on their safety, home stability and finances.”
The median sale price of homes with high fire risk was $550,500 in April 2022, compared with $431,300 for homes with low fire risk, meaning homes with high fire risk sold for 27.6 percent more than the homes with low fire risk, the largest premium since at least 2017.
Similarly, 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. That means high-risk homes sold for a record 13.6 percent premium, up from a premium of 10.1 percent year-over-year.