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Sun. Jul 14th, 2024

Don’t buy a house in these 3 cities facing a ‘climate change real estate bubble’

By Vaseline May26,2024

smartboy10 / Getty Images

smartboy10 / Getty Images

Besides a prime location, there’s another reason why your zip code is costing you more lately: climate change. With rising sea levels, raging wildfires and other increasing extreme weather events, it has become much more difficult to afford a home.

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Although affordable housing and climate change are considered separate issues, they are intertwined. According to a new report from Realtor.com, “by 2024, nearly 44.8% of homes in the United States, worth a total of nearly $22.0 trillion, will face at least one type of severe or extreme climate risk due to floods, wind, wildfires, heat or air quality.” As a result of these high-risk hazards, homeowners will be hit with higher insurance premiums and skyrocketing property taxes, less demand for waterfront properties and the overall cost of owning a home will rise, US News & World Report reports.

As a result, some people move. “About 8% of US residents likely to move within a year are doing so because they are concerned about the impact of climate change on their previous area, compared to 22% who are moving because of a lower cost of living,” said according to a study by Redfin. .

Understanding how climate change affects real estate is critical to safety and its costly impact on housing costs. Here are cities where you can avoid buying a home that faces climate change.

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1. Los Angeles

California is no stranger to wildfires, and they are so widespread in the state that several insurance companies are no longer providing coverage or are significantly increasing rates.

“By 2024, approximately 5.5% of homes (valued at $3.0 trillion) in the United States will be at serious or extreme risk of fire damage, and nearly 39.1% of these homes will be at high risk ( worth $1.7 trillion) is located in California,” Realtor.com reported. “Los Angeles, California has the highest total value of homes at serious or extreme risk of fire.”

2. Miami

The coastal city is known for its great beaches, vibrant nightlife and beautiful homes, but buying real estate in Miami can be risky. According to Realtor.com, the city has the highest total value of homes with severe or extreme heat, wind and flood risks.

Additional living expenses in Miami include HVAC and energy efficiency system improvements and additional insurance due to hurricane risks. “The Insurance Information Institute found that Floridians pay an average of more than $4,000 per year for their home insurance – about three times the national average,” according to Kin Insurance.

3. New Orleans

Although New Orleans is a beautiful city full of interesting culture, good times and great food, it can be a risky place to buy real estate. The Big Easy is prone to flooding because it was built just above sea level and is sinking. There is not much supporting infrastructure and hurricane season can cause more flooding in the city.

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“Miami, Florida has the highest total value of homes at serious or extreme risk of flooding, while New Orleans, Louisiana tops the rankings for the share of property values ​​at risk,” according to Realtor.com.

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This article originally appeared on GOBankingRates.com: Don’t Buy a Home in These 3 Cities Facing a ‘Climate Change Real Estate Bubble’

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