More Buyers, Sellers Factor in Climate Change

SEATTLE – Nearly two-thirds (62%) of U.S. residents who plan to buy or sell a home in the next year hesitate to move to an area known for natural disasters – extreme temperatures and/or rising sea levels – according to a report from Redfin. The share is higher among younger generations, high-earners, Democrats and people living in the Northeast:

• 71% of Gen Z respondents hesitate to move to one of those high-risk areas compared to 52% of baby boomers.
• 69% of respondents who identified as Democrat would be hesitant compared with 58% of Republicans.
• 68% of respondents in the Northeast were likely to express hesitance compared to 59% of those in the South.

While a majority of respondents expressed skepticism about moving to risky areas, however, a lot of people still move there. That concern about risk is often offset by relatively affordable homes and/or access to warm weather and the outdoors.

Cape Coral, North Port and Tampa – three Florida metros impacted by Hurricane Ian – consistently rank on Redfin’s list of top migration destinations, based on a comparison of “number who want to move there” vs. “how many want to move out.”

“One of the main questions I get from buyers is, ‘Where can I move that’s close to the beach but not in a flood zone?’,” says Isabel Arias-Squires, a Redfin real estate agent in Fort Myers. “The answer is nowhere. If you’re not in a flood zone this year, you may be in a couple of years from now … This is Florida – hurricanes and flooding come with the territory. Homebuyers should always purchase flood insurance and invest in impact windows if they can.”

Arias-Squires is working with one out-of-state buyer who was under contract to purchase a second home sight-unseen in Cape Coral when Hurricane Ian made landfall. While the home only sustained minor damage, the buyer decided to back out – but then changed their mind because they didn’t want to lose their escrow deposit and realized they could make good money as a landlord.

“Demand for rentals is surging because so many people were displaced by the storm and need a place to live,” says Arias-Squires. “There’s one home in Cape Coral that’s asking $7,500 a month, which is almost unheard of. My out-of-state buyer plans to rent their new home out for six months and then make it their second home. They’ve still never seen it in person.”

While places most endangered by natural disasters remain popular with many homebuyers, that could shift as young people who grew up learning about climate change become a larger force in the housing market, says Redfin Chief Economist Daryl Fairweather. “The harsh reality is that most areas face at least some climate risk. House hunters should do their research to get a sense of where their families and finances will be safest. That might mean avoiding cities that in a decade could be underwater or have no water at all.”

Climate Risk as a Factor in Decisions to Relocate

• 40% of respondents who plan to buy or sell a home in the next year said that risk of natural disasters, extreme temperatures and/or rising sea levels played a role in their decision to move.
• More than half making at least $100,000 a year said that risk played a role in their decision to relocate in the next year compared to less than 40% of those making under $100,000.
• 66% said climate change impacted their home search in at least one way. The most common impact was to consider homes that included certain features (17%) and that it impacted their homebuying budget (17%).
• 15% of buyers and sellers said climate change caused them to search in a different area.
• 15% said it changed their search timeline.

These results are according to a survey commissioned by Redfin in August 2022 of roughly 1,000 respondents who said they intend to buy or sell a home in the following 12 months.

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