The median price of a home in an area that’s at risk of a natural disaster such as Hurricane Florence has increased by an average of 40 percent over the last ten years, according to new data from ATTOM Data Solutions.
The housing industry analysis firm said that compares to an average price increase of just 24 percent for homes in areas that aren’t deemed to be at risk of natural disasters, which include earthquakes, floods, hail, hurricane storm surges, tornadoes, and wildfires.
“While combined natural disaster risk has not seemed to hobble home price appreciation over the past decade, the story is much different for some individual hazard risks—namely flood, hurricane storm surge, and wildfire risk,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Home price appreciation in the overall U.S. housing market was double the rate of appreciation in cities with the highest flood risk and triple the rate of appreciation in cities with the highest hurricane storm surge risk over the past 10 years. The broader market has also outperformed appreciation in cities with the highest wildfire risk during the last decade, although the gap is much narrower.”
The appreciation means that buyers pay on average, a 1 percent premium on the estimated market value of homes in at-risk areas.
On the other hand, homes in cities with the lowest natural disaster risk sold at an average 3.7 percent discount below estimated market value, according to the report. The exception was in cities that have the highest risks of flooding and hurricane storm surge. Homes in flood-prone areas sold at an average 2.4 percent discount, while properties in areas affected by storm surge sold for a 1.4 percent discount.
The cities that are at the highest risk for natural disasters, according to the report, are Oklahoma City; San Diego; Clearlake, Calif.; San Jose, Calif.; Madera, Calif.; Riverside-San Bernardino, Calif.; Bakersfield, Calif.; Houston; Santa Cruz, Calif.; and Huntsville, Ala. If you live in these areas and other cities that are prone to extreme weather conditions, you may want to invest in impact doors and windows to protect your home.
On the other hand, the counties with the lowest risks for a natural disaster are Milwaukee; Muskegon, Mich.; Cleveland; Kenosha, Wis.; and Rochester, N.Y.