Prices Rise Fastest in Disaster-Prone Cities
September 22, 2017
The threat of natural disasters isn’t scaring buyers away from the most vulnerable cities. Home prices are rising twice as fast in areas with the highest risk of natural disasters compared to those with the lowest risk, according to a new study released by real estate data firm ATTOM Data Solutions.
Researchers analyzed more than 22,000 U.S. cities across 3,000 counties, factoring in six natural disaster threats: earthquakes, floods, hail, hurricane storm surge, tornadoes, and wildfires. The median home prices in cities in the top 20th percentile for natural disaster risk have increased an average of 65 percent over the past five years. On the other hand, median prices in cities within the bottom 20th percentile for natural disaster risk increased an average of only 32 percent in the same time period.
“Strong demand for homes in high-risk natural hazard areas has helped to accelerate price appreciation in those areas over the past decade, despite the potential for devastating damage, as evidenced by the recent hurricanes that made landfall in Texas and Florida,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “That strong demand is driven largely by economic fundamentals—primarily the presence of good-paying jobs, although the natural beauty that often comes hand-in-hand with high natural hazard risk in these areas is also attractive to many home buyers.”
But Blomquist adds that data shows more consumers in certain areas beginning to factor natural disaster risk—particularly floods—into their homebuying decisions. “Counter to the national trend, home price appreciation is slower in Florida and Louisiana cities with the highest flood risk than in cities with the lowest flood risk,” he says.
Source: “Home Prices Rising Twice as Fast in U.S. Cities With Highest Natural Hazard Risk Than in Lowest-Risk Cities,” ATTOM Data Solutions (Sept. 19, 2017)
Updated: July 19, 2018