Real Estate Marketing & Beyond
Redfin Chief Executive Glenn Kelman has said buyers looking for affordable homes are increasingly “marching into the jaws of destruction” by ignoring the threat of climate change.
Scientists say human-induced climate change is resulting in more intense wildfires as well as the increased ferocity of hurricanes and floods, which all pose severe risks to homes in the U.S.
But buyers in vulnerable areas do not seem to be that worried of the risks, driven instead by the affordability of homes in disaster-prone areas.
“The buyers themselves are driven by affordability, and the most affordable places in America are the places that are at the most risk of being affected by climate change,” Kelman told CNBC. “They’re going to be flooded by hurricanes. They’re going to be affected by wildfires.”
The Redfin CEO highlighted data that shows the majority of Americans who’re migrating in the present day are moving to Florida and the Southeast, which are not only flood-prone but also an “incredible heat risk” due to rising temperatures.
Buyers are also moving to areas such as Phoenix, Las Vegas and Utah, which experts say are also at risk of climate change. Kelman said a recent analysis by Redfin labeled a third of homes in Utah as a “high fire risk.”
“I think this idea that climate change is going to be factored into how people think about housing, it hasn’t happened yet,” he told CNBC. “The only people who have figured out are the people who have to calculate the cost of insuring these properties.”
Kelman warned that homeowners in high risk areas will find it increasingly difficult to obtain home insurance. Not only that, but lenders will grow wary of financing such homes too, he said, because they understand their investment is at risk.
Kelman’s comments come at a time when multiple regions in the U.S. are grappling with natural disasters. Louisiana and other states face a massive clean up following the destruction wreaked by Hurricane Ida. Meanwhile in California, thousands of firefighters have been mobilized to tackle the massive Caldor and Dixie wildfires. Thousands of homeowners in both Louisiana and California have been forced to evacuate their homes.
