Meanwhile, the real estate market in New Jersey faces additional economic factors that amplify the climate concern: growth in insurance premiums for high-risk properties and growing pressure on local governments to invest in projects for climate resilience that protect the most vulnerable areas.
The towns that do nothing will see their tax bases continue to slowly erode as residents and businesses flee to higher ground. In contrast, towns and cities that take active steps to improve flood resilience, upgrade infrastructure, and pursue sustainable development stand to attract a small but leading-edge percentage of buyers who are willing to pay for added security.
A Potential Market Bubble?
Despite these trends, the risky areas’ homes are still outcompeting the low-risk ones when it comes to overall value growth over the past five years. Take a look, for instance, at how real estate in the wildfire-prone area nationwide saw its value increase by 68%, while low-risk locations recorded a 57% increase. But some experts warn this may be a bubble driven by short-term factors, such as the pandemic surge in demand.
New Jersey at a Crossroads
And with climate risks increasingly an important factor in the real estate equation, New Jersey now finds itself at a critical juncture. Because it has so many high-density coastal communities mixed with suburban development, the state can move policy innovation, community engagement, and market incentives that will help push forward on these challenges.
Low climate risk is increasingly becoming more of a necessity than a selling point in shaping real estate for the future of the Garden State, be it for buyers, sellers, or policymakers.
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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