Real Estate

Climate Change Plays A Big Role In Home Buyers’ And Sellers’ Decisions To Relocate

Nearly two-thirds (62%) of U.S. residents who plan to buy or sell a home in the next year are hesitant to move to an area at risk of natural disasters, extreme temperatures and/or rising sea levels, according to a survey in August commissioned by technology-powered real estate brokerage Redfin of roughly 1,000 respondents who said they intend to buy or sell a home in the next 12 months. The share is even higher among younger generations, high-earners, Democrats and people living in the Northeast.

Nearly three-quarters (71%) of Gen Z respondents said they would be hesitant to move somewhere at risk of natural disasters, extreme temperatures and/or rising sea levels. That compares with just over half (52%) of Baby Boomers. When it comes to political preference, 69% of respondents who identified as Democrat said they would be hesitant, compared with 58% of Republican respondents. Respondents in the Northeast were most likely to express hesitance, at 68%. That compares with 59% of respondents in the South.

While the lion’s share of respondents expressed skepticism about moving to risky areas, these areas have seen more people move in than out in recent years. That’s partly because they often offer relatively affordable homes and/or access to warm weather and the outdoors. Cape Coral, North Port and Tampa—three Florida metros ravaged by Hurricane Ian—consistently rank on Redfin’s list of top migration destinations, which is based on how many more Redfin.com users are looking to move in than leave.

“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?’ The answer is nowhere. If you’re not in a flood zone this year, you may be in a couple of years from now,” said Isabel Arias-Squires, a Redfin real estate agent in Fort Myers, which was among the areas hardest hit by Hurricane Ian. “This is Florida—hurricanes and flooding come with the territory. Home buyers 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 in the area late last month. While the home only sustained minor damage, the buyers 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. There’s one home in Cape Coral that’s asking $7,500 a month, which is almost unheard of,” Arias-Squires said. “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 the places most endangered by natural disasters are still popular with many home buyers, that could shift as young people who grew up learning about climate change become a larger force in the housing market, said Daryl Fairweather, Redfin’s chief economist.

“The harsh reality is that most areas face at least some climate risk,” she said. “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.”

Redfin.com publishes climate-risk data for nearly every U.S. home, with the exception of rentals, to help house hunters make more informed decisions.

Two in 5 buyers and sellers say climate risk was a factor in their decision to relocate

Two in five (40%) 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. The share was again higher among younger generations, high-earners, Democrats and people living in the Northeast.

More than half of buyers and sellers making at least $100,000 a year said that risk of natural disasters, extreme temperatures and/or rising sea levels played a role in their decision to relocate in the next year. That compares with less than 40% of those making under $100,000.

“Affluent Americans have the means to move away from areas endangered by climate change, while lower-income Americans often can’t afford to make that a priority,” Fairweather said. “The recent surge in housing prices has exacerbated the problem. More house hunters are being forced to prioritize affordability over safety. The good news is people are becoming more educated about climate risks and what they can do to make their existing homes more resilient if relocating isn’t an option. Of course, that comes with costs as well.”

Two-thirds of buyers and sellers say climate change affected their home search

Two-thirds (66%) of respondents who plan to buy or sell a home in the next year said climate change has influenced their home search in at least one way. The most common explanations were that climate change caused respondents to limit their search to homes that include certain features (17%) and that it influenced their home buying budget (17%). Meanwhile, 15% of buyers and sellers said climate change caused them to search in a different part of their area. The same share said it changed their search timeline.