As extreme weather and climate disasters become more common, some areas are losing home value fast, while others are thriving.
The term “climate abandonment zones” refers to places where home insurance is getting expensive and people are moving away.
These zones are expected to lose an average of 6.2% in home value by 2055, according to a report by First Street.
Where Home Values Are Falling
Fresno County, CA, is expected to take the biggest hit, with home values dropping by 10.4% in the next 30 years.
Its population could shrink by 46%, and insurance premiums are predicted to rise by 56%. Other hard-hit places include:
- Ocean County, NJ: -33% population
- Monmouth County, NJ: -32% population
- Sacramento County, CA: -28% population
- Jefferson County, AL: -26% population
“These areas are dealing with climate risks that are driving people away,” explains Jeremy Porter, a climate expert at First Street.
In total, about 21,750 neighborhoods, or 26% of U.S. communities, could see fewer residents and higher insurance costs by 2055.
Where Home Values Are Growing
On the bright side, “climate-resilient” zones are thriving. These places have minimal insurance hikes and are attracting more people.
Only 5% of U.S. neighborhoods fall into this category, but they’re expected to see home values rise by 10.8% on average by 2055.
Top Resilient Areas:
- Dane County, WI (Madison): +13.5% home value
- Denver County, CO
- Arapahoe County, CO
- Douglas County, NE
- Johnson County, KS
“Population growth and lower climate risks are keeping these areas stable and attractive,” says Porter.
The ‘Risky-Growth’ Zones
Then there are the “risky-growth” areas. These places are popular despite higher climate risks and insurance costs.
They make up 33% of the country, the biggest group in the study.
While these areas will see a 76% jump in population, home values are expected to drop slightly overall (-1.7%).
Top Risky-Growth Areas (All in Texas):
- Fort Bend County
- Denton County
- Williamson County
- Travis County
- Montgomery County
“These communities have risks, but their social and economic benefits still attract people,” Porter notes.
Related
Financing Real Estate Projects in Opportunity Zones: What You Need to Know
The Trillion-Dollar Climate Risk: Where Will Americans Move As Extreme Weather Hits?
Unlock Tax Savings: 7 Smart Strategies for Investing in Real Estate
The Big Picture: $1.47 Trillion Lost
Climate risks could wipe out $1.47 trillion in U.S. home values by 2055 about 3% of today’s total value.
Some areas will lose a lot, while others might see gains. “It all depends on the property’s location,” says Porter.
Tip for Buyers: If you’re house-hunting, consider climate-resilient areas for better long-term value.