The increasing menace of climate change has become a fact impossible to ignore in real estate markets nationwide, even in New Jersey, where worries over flooding, bad weather and growingly expensive insurance gradually have an effect on the estimation of house values. Home prices are rising faster in areas with less climate-change risk compared to areas with more risks, according to a new report from Redfin-a trend likely to signal a lasting shift in buyer preferences and market dynamics.
The Numbers Tell a Story
For the first time since 2010, home values in low-risk areas are appreciating faster than homes in high-risk areas. Across the United States, homes in areas at low risk for extreme heat saw a 7% year-over-year price increase, outpacing a 6.3% rise in heat-prone areas. The same held true for flood and wildfire risk, as properties in low-risk zones led value gains.
That makes these findings especially pertinent to New Jersey, where such climate risks as coastal flooding are already on the books. Take shore communities: for years a centerpiece of the state’s real estate market, rising sea levels and stronger storms are now making would-be buyers rethink the long-term viability of owning property there.
Buyer Behavior Shifting
A report from Redfin illustrates just how much climate change influences homebuying decisions. “With climate catastrophes happening more frequently and destructively, many people have decided they don’t want to live in risky areas,” said Redfin Senior Economist Elijah de la Campa. The increasingly expensive insurance and the likelihood of damage in high-risk zones have made previously attractive locations either less desirable or even prohibitively expensive.
In fact, a 2023 study by Zillow found 80% of surveyed buyers now consider a home’s climate risks-driving factors such as flooding, wildfires, and hurricanes-when making their decision. Meanwhile, with continued buyer interest shifting toward inland communities-even if this involves sacrificing some or all of the proximity to the coasts-in New Jersey, for example, such inland properties present less exposure to hazards.
Economic and Policy Implications
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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