Homes in Wildfire, Flood-Prone Areas Appreciate Slower

Prices for homes in historically fire-prone areas have appreciated at a slower rate than those without risks, according to an analysis by realtor.com released Monday.

So far in 2020, prices for homes at risk of wildfires have increased 2.9% year-over-year, compared to a 5.2% rise for homes without wildfire risks, the data from realtor.com shows.

Over a five-year period, the gap averaged three percentage points. Between 2014 and 2019, the prices of homes in California within a one-mile radius of historical fire perimeters increased 32%, compared to 35% for other homes in the same county, according to the report.

For homes located in coastal areas that are at risk of flood, prices also increased slower than those without risk.

Over the past five years, sale prices per square foot for homes with severe or extreme risk of flooding in 78 coastal counties that had hurricane-related disaster declarations rose 25%, compared to 30% for homes with a minimal or low risk, according to the report.

“As the impacts of climate change and worsening natural disasters become more well-known, it’s natural for home shoppers to take these factors into account when deciding the purchase price of a home,” Danielle Hale, chief economist at realtor.com, said in the report.

Additionally, the impact of flood risk on home prices is getting more pronounced over time. In 2014, 33 of the 78 counties studied saw slower price growth for high-risk homes, while in 2019, this was true of 40 counties.

The trend was most pronounced in Delaware, Florida, Massachusetts and Maryland, according to the report.

Mansion Global is owned by Dow Jones. Both Dow Jones and realtor.com are owned by News Corp.

Source: realtor.com