Natural disasters are expected to lead to lower home prices in Florida, Texas, and California next year, according to a new report from Redfin.
The report says that these states, which are often hit by hurricanes, wildfires, and other disasters, may see a dip in home prices, especially in Florida’s coastal areas and parts of Texas that are prone to hurricanes.
California, dealing with wildfires, could also see more affordable homes for buyers.
In Florida, the report points out that hurricanes like Helene and Milton made many people think twice about living in hurricane-prone areas.
As a result, more homeowners are looking to leave, and fewer people are moving into the state.
Insurance costs, property taxes, and HOA fees are rising, making it harder for many to afford homes.
The report warns that only the wealthy might be able to afford homes on Florida’s coast because of the high insurance costs and expensive rebuilding efforts after a disaster.
In Texas, home prices are already beginning to fall, and experts believe the trend will continue.
Rising mortgage rates have made it harder for many Americans to buy homes, and these rates are expected to stay around 7 percent.
Despite this, home prices in states like Texas, Florida, and California could decline as the market normalizes.
Texas has more land available for new homes, which could help lower prices.
However, these areas may be at risk from natural disasters like tornadoes and wildfires.
In California, wildfires continue to threaten properties, making the real estate market there less stable.
Experts also warn that insurance companies may raise their prices or stop covering high-risk areas altogether, making it harder for homeowners to afford coverage.
This could make home values in disaster-prone areas fall even further.
However, some experts believe the impact on home prices might not be huge.
Alan Chang, a title and escrow expert, thinks there will still be demand for homes in these areas, especially from cash buyers, even with the challenges of insurance costs and natural disasters.
Overall, while natural disasters could impact the housing market in Florida, Texas, and California, the national market is expected to grow.
Redfin predicts that U.S. home prices will rise by 4 percent in 2025, and home sales will increase by up to 9 percent despite high mortgage rates.