Climate Change Hot Topic At National Association Of Real Estate Editors Conference

Photo: Coastal flooding during storms is an ongoing issue that will continue to impact properties in towns such as Hampton, New Hampshire.  By KIMBERLEY HAAS The economic impact of climate change was the opening topic of discussion at the National Association of Real Estate Editors conference on Tuesday. John Rogers, chief innovation officer at CoreLogic, started his presentation by saying with advances in technology and artificial intelligence, they can better measure and model the effects of climate change. Rogers said that in 2023, extreme weather and natural disasters caused $92.9 billion in property damages across the country. That only counts the 28 natural disasters that caused over $1 billion in losses, according to CoreLogic’s data. Since 2019, there have been…

No Day At The Beach: Coastal Homes Are At Risk From Flooding

By CHUCK GREEN In upcoming decades, U.S. homeowners in areas along coastlines could be up the proverbial creek. Sea level rise, along with changing storm patterns, could result in flooding that severely damages homes in many coastal areas. Especially vulnerable, according to estimates, are the Gulf of Mexico, Florida, the Carolinas, and the Washington, DC, area. In 2018, the Union of Concerned Scientists hoisted warning flags when it released an interactive map that showed the estimated number of homes at risk for chronic flooding in the coming decades due to sea level rise. That year, the group reported that burgeoning sea level rise – fueled mainly by climate change – was projected to exacerbate tidal flooding in the country. Within…

RCM President Talks About Climate Risks, Costs

By KIMBERLEY HAAS The president of Rutledge Claims Management says the hazard insurance industry faces critical challenges in properly assessing and pricing climate risks, which directly impacts the vulnerability of mortgages. Aubrey Gilmore has over 15 years of experience in hazard claims, mortgage servicing, and insurance claims. She was recently promoted from chief operations officer to president at RCM, which is headquartered in San Diego, California, and handles hazard insurance claims management for mortgage servicers and investors. Gilmore said mortgage defaults become more prevalent when properties are not adequately insured against climate-related hazards such as wildfires, floods, and hurricanes. This poses a substantial risk to lenders, especially government-backed ones. “The potential surge in foreclosures and financial losses underscores the urgent…

Americans Factoring Climate Fears Into Homebuying Decisions

As floods, fires, and devastation become commonplace in areas with high climate impact, more Americans than ever are factoring disasters into their homebuying decisions. A majority of buyers in every region of the U.S. consider at least one climate risk when home shopping, according to a new report from Zillow. Americans living in the West are the most likely to say climate fears are “very or extremely” impactful on their purchase decisions, with Northeastern buyers in second place. Southern and Midwestern shoppers are less concerned, though two-thirds report that disaster risk affects their searches at least somewhat. Millennial and Gen Z buyers are the most likely to worry about global warming’s impact on their new homes. They also make up…

Homeowners Face Rising Insurance Rates In 2023

Homeowners are in for more financial stress in 2023 as insurance rates are set to rise. Experts at Insurify, a virtual insurance company, predict that home insurance rates will rise 9% in 2023, from $1,636 to $1,784. That’s on top of last year’s 7% jump. Repairs are more expensive thanks to increased material costs. Just as auto rates are impacted by inflation, home insurance rates follow market trends for materials and labor. “The same inflationary pressures that are driving up your grocery bill are now driving up your homeowner insurance rates,” Colleen Finn, managing director of home product management at Plymouth Rock, a Boston-based insurer, said. “It is costing more and taking longer to repair your home, increasing the average…

More Than Half Of New Homes Face Climate-Related Damage

More than half of U.S. homes built in the last ten years face risk from climate change, a huge jump from previous decades, Redfin reported. Redfin analyzed climate-risk scores from ClimateCheck and county records on homes built since 1900 to determine how many homes have a higher risk of climate-related damage. Fifty-five percent of homes are at risk for fires, while 45% are in drought-prone areas. This is a massive increase from the first half of the 20th century when only 14% of homes were in high fire risk areas and 37% faced droughts. New homes are also more vulnerable to heat and floods– almost 100% of homes built in the last two years see increased heat risk– but fire…

American Buyers Are Flocking To Regions With High Climate Risk For Homes

Americans are paying top dollar to live in areas prone to devastating environmental disasters, with home prices soaring in these locations. A new report from real estate publication Home Bay found that home prices are increasing at a higher rate than the national median in the areas most impacted by climate change. Home sales prices are up 167% in metros within states that have had at least 50 Federal Emergency Management Agency (FEMA) disaster declarations since 2012. By comparison, the national median increase is only 113%. FEMA ranks California, Texas, Florida, Louisiana, and North Carolina as the states with the highest risk for homeowners– that is, the states that are most likely to have disasters that threaten buildings, people, and…

Natural Disasters Caused $56B In Property Damage In 2021

More than 14.5 million single- and multifamily homes were impacted by natural disasters in 2021, causing an estimated $56.92 billion in property damage, according to CoreLogic’s 2021 Climate Change Catastrophe report. The report analyzed thirteen “major hazard events” of 2021– including hurricanes, tornados, wildfires, and winter storms– and 120 million residential structures in the U.S. The findings show significant damage to residential properties and increased economic instability in impacted areas. For example, damage from Hurricane Ida in Houma, Louisiana, resulted in delinquency rates rising from 7.4% before the storm to 13.3% the following month. “By leveraging granular data for the increasing frequency and severity of catastrophes, we are able to see that more than 14.5 million homes were impacted to…

SitusAMC: Insurance Premium Hikes Coming As Natural Disasters Intensify

Both homeowners and lenders may be underestimating the rising cost of insurance following a growing number of natural disasters, according to a SitusAMC white paper titled “Weathering the Storm: Burgeoning Insurance Costs for Real Estate.” The paper found that natural disasters have impacted residential property nationwide, not just in areas with highly publicized disasters such as California and Florida. The states with the most natural disasters were Texas (where winter storms accounted for 40% in total insurance market losses in 2021), Virginia, and South Dakota. As the number of disasters rises and their severity intensifies, insurance companies will face more risk, leading to higher insurance premiums and reductions in coverage for property owners. “The growing number of climate events has…

Homebuyers Increasingly Worried About Natural Disasters

More than half of respondents to a Realtor.com survey said they considered natural disasters when deciding where to live. Millennials and Gen Z were particularly wary of potential disasters when choosing a home. Disaster fears have grown over the last five years, with 47% of homeowners becoming more concerned over time. Of current homeowners, 62% expressed fears about the threat of natural disasters to their homes. The most concerned demographics were recent buyers, Millennials, Gen X, and urban homeowners. These groups also reported the most growth in their fears over the last five years. Baby Boomers, the Silent Generation, and rural homeowners weren’t as worried overall; half said they weren’t concerned at all. More than half of Millennial and Gen…