There is no question that climate change is already having an effect on housing markets and property values. The sheer magnitude of what’s coming, though, probably hasn’t quite hit home. A report released on Monday from a climate research firm called First Street puts a number on it: $1.47 trillion in lost value, by 2055.
The overall value of residential property in the US is something like $50 trillion; that means we’re looking at a three percent drop in its value, and some region-specific disruptions that will be earth-shaking. The First Street report says that home insurance costs have already gone up dramatically, rising from around eight percent of mortgage payments in 2013 to more like 20 percent or more in 2022. Sun Belt states including Florida, Texas, and California have already been seeing the worst of it, absorbing over 40 percent of natural disaster costs over the last 45 years. Drilling down to the city level, the biggest home insurance spikes can be found in Miami, Jacksonville, Tampa, New Orleans, and Sacramento.
And while it may be sharpest in those sorts of places, very little of the country will be spared. By 2055, the report found, 84 percent of all census tracts, representing just over 70,000 neighborhoods, “may experience some form of negative property value impacts from climate risk.” By that year, 55 million Americans will move to less climate-risky areas, the researchers project.
“These findings underscore a fundamental shift in how Americans must now think about housing and community investment,” the report authors wrote. “As this reality reshapes patterns of development and migration across the country, it will challenge long-held assumptions about where and how Americans choose to live.”
Clearly, climate-related risks are an existential crisis for the housing market and the country’s economy. On another, totally unrelated note, the new EPA administrator is potentially firing 1,000 people who work on climate change.
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