Although the COVID-19 pandemic has been the top concern for millions of Americans over the past year, that's not the only trouble on their minds.
New findings from real estate broker Redfin shows that the impact of climate change on housing values is worrying them, too. In fact, the company found that more than 1 in 5 (21%) of Americans regard the increased frequency or intensity of natural disasters, extreme temperatures, rising sea levels or a combination of the three as the reasons for diminishing property values in their area.
Here's what else Redfin learned from its survey.
Opinions vary on the effect climate change has on property values
As time goes on, Redfin expects climate change to have a larger negative impact on homeowners.
"As storms, wildfires and rising sea levels render more areas undesirable in the coming years, housing values in those areas will decline," said Daryl Fairweather, the real estate company's chief economist, in a statement. "This means a growing number of homeowners will see a major source of wealth — their home equity — wiped away."
However, over a third (35%) of Americans haven't made the connection between climate change and decreasing home values. Redfin discovered that when asked whether climate risks would hurt local home values:
- 23% of respondents expected them to drop in the next five years
- 12% expected them to drop in the next five to 10 years
- 35% believed they wouldn't be affected at all
Out of the respondents who believed local home values were already being impacted by climate-related natural disasters, a few differences cropped up between demographics.
Younger respondents and city-dwellers were more likely to agree with the statement, for example, in part because of their personal beliefs on climate change. Meanwhile, residents in the Midwest were least likely to agree compared to other regions of the U.S. Perhaps this is because the region has not experienced the alarming increase in natural disasters as other parts of the country have.
Americans sinking thousands in climate-related home protections
Redfin also found that almost 6 in 10 (59%) of all U.S. homeowners have invested in changes to protect their families and homes against climate-related dangers, such as fireproofing, property clearing and more.
While 20% of respondents reported spending up to $5,000 to defend their home against natural disasters, 35% paid $5,000 or more to do so — with the most common amount spent ranging between $5,000 and $9,999.
The kinds of risks homeowners planned for varied as well, with a list of climate-related dangers that included:
- Extreme temperatures (20%)
- Flooding (20%)
- Earthquakes (16%)
- Tornadoes (15%)
- Hurricanes and other major tropical storms (13%)
- Severe snowstorms (10%)
For additional protection, 65% of homeowners carried a home insurance policy that covered some kind of natural disaster, including:
- Flooding (33%)
- Tornadoes (29%)
- Earthquakes (22%)
- Hurricanes and other major tropical storms (19%)
- Wildfires (15%)
But with natural disasters happening more frequently and with greater severity — many may remember the West Coast wildfires of last year or the Texas freeze in February 2021 — insurance prices are increasing as well.
A ValuePenguin overview of flood insurance rates highlighted an average premium increase of 11.3% after April 2020. Similarly, 45% of the homeowners in Redfin's survey carrying policies that protected them from natural disasters also reported an increase in premiums over the past year.
Methodology: In conjunction with Lucid, Redfin conducted a survey of 2,000 American consumers between Feb. 25 and Mar. 1, 2021.