Buyers are looking for homes with low flood risk, new study says

The acceleration of climate change has affected people’s decisions when it comes to buying a home. Rising sea levels and flood risks push homebuyers away from coastal areas, changing the geography of where Americans choose to settle. 

When presented with flood-risk information, a growing number of buyers prefer to make offers on homes with a lower flood risk, according to the new study from Redfin. Between October 2020 and January 2021, Redfin conducted a three-month trial involving 17 million users, half of which had access to property flood-risk scores and half of which did not.

Those users who were able to access flood-risk data moved from looking at the listings with an 8.5 score (severe or extreme flooding risk) to bidding on homes with moderate risk. By contrast, the control group, which was not presented with flood-risk data, bid on homes facing significant flooding danger. 

“As more house hunters become aware of climate risk, homes in endangered areas will likely receive fewer offers, causing home values to fall,” said Redfin Chief Economist Daryl Fairweather. “At the same time, we may see prices in lower-risk, inland areas rise as more Americans move there to avoid flooding.”

Potential homebuyers in Cape Coral, FL, Houston, and Baton Rouge, LA, clicked through the flood-risk section more often than others. Other Florida metros, including North Port, Tampa, and Jacksonville, also saw a growing number of users who prefer to access flood-risk information before making a final decision.

All of these metros face flood risk. Another Redfin report found that since the start of the pandemic, Tampa, Cape Coral, and North Port have been especially popular among homebuyers looking to relocate closer to nature. Over the past two years, purchases of second homes that face a high flood, storm, and heat risk went up 40 percent, according to the real estate brokerage. 

Resources:

“Homebuyers With Access to Flood-Risk Data Bid on Lower-Risk Homes,”  by  Lily Katz, Daryl Fairweather and Sebastian Sandoval-Olascoaga (Redfin, 2022)

“More Homebuyers Have Flocked to Climate Risky Areas, Despite Intensifying Natural Disasters,” (Redfin, 2022) 

“Scores of Pandemic Homebuyers Purchased Vacation Homes With High Natural-Disaster Risk,” by  Lily Katz and Sheharyar Bokhari (Redfin, 2022)

“Flood-risk data shifted homebuyers’ searches, bids,” by Holden Walter-Warner (The Real Deal, 2022)