Climate change in the US

43% of U.S. homes are at high risk of natural disaster

More people are being displaced from their homes each year

Market Watch,

3 September, 2015

Four hurricanes are currently brewing in the Pacific and Atlantic. Wildfires have ravaged more than 8 million acres in the U.S. in 2015 alone. And in just the first two weeks of May this year,nearly 150 tornadoes touched down in the U.S.

Many American homeowners might still be surprised at the risk their home faces of getting hit by a natural disaster in the near future. A report released on Thursday by real estate research firmRealtyTrac found that 43% of U.S. homes and condos — that’s a total of 35.8 million homes — are at a high risk or very high risk of at least one type of natural disaster. The report examined 2,318 counties nationwide and assigned each a score of natural disaster risk score from 0 to 300 based on their risk of wildfire, hurricane, flood, tornado and earthquake; the higher the score the higher the risk of natural нdisaster. 

Map key: Counties in green are very low risk, yellow are low risk, orange are moderate risk, pink are high risk and red are very high risk

If it seems like we’re getting hit by more natural disasters these days, it’s not your imagination: A study published in the New England Journal of Medicine found that there were three times as many natural disasters from 2000 through 2009 as there were from 1980 through 1989, of which nearly 80% were due to climate-related issues.

Furthermore, “during recent decades, the scale of disasters has expanded owing to increased rates of urbanization, deforestation, and environmental degradation and to intensifying climate variables such as higher temperatures, extreme precipitation, and more violent wind and water storms,” the study authors note.

The impacts of this trend are devastating people’s lives — and their homes: “Since 2008, an average of 26.4 million people per year have been displaced from their homes by disasters brought on by natural hazards,” a report from the Internal Displacement Monitoring Centre, an independent, non-governmental humanitarian organization studying displacement, reveals. “This is the equivalent to one person being displaced every second.”

That’s unlikely to change anytime soon. The report notes that “the trend over decades is on the rise,” meaning that more people are displaced from their homes now than in previous decades. By one estimate, twice as many people are displaced from their homes because of natural disasters than were in the 1970s.

The states with the most homes in high or very high risk-counties, according to the latest RealtyTrac report, include California (8.4 million homes at high risk), Florida (6.7 million), New York (2.4 million), New Jersey (2.3 million) and North Carolina (2.3 million). The cities with the most homes in high risk counties are not surprisingly (due to their large number of homes): New York (3.5 million homes at high risk), Los Angeles (2.5 million), Miami (1.9 million), Houston (1.2 million), and Riverside-San Bernardino in Southern California (1.1 million).

Buying a home in a high-risk natural disaster area is, of course, risky in that your home may be more likely to get damaged or destroyed than one in a low-risk area. It may also be a bad financial move even if you’re heavily insured: “In lower risk natural disaster markets, home price appreciation is steadier and larger over the last 10 years,” says Daren Blomquist, the vice president of RealtyTrac.

Home sales prices in counties with a low risk and very low risk for natural disasters increased an average of 6.6% and 9.5%, respectively, between 2005 and 2015. Meanwhile, home sales prices in counties with a high risk and very high risk for natural disasters decreased 2.5% and 6.4%, on average, over that period.

However, home values in high risk areas tend to be higher than in low risk areas, and over the last three years, home price appreciation has been stronger in higher risk counties than in lower ones. (Blomquist thinks these markets may, in general, be more volatile than other markets – which could explain their recent fast appreciation – as they are often “more well-known, sexier markets,” which tend to “attract more speculative buyers and investors who will jump on the buying bandwagon when the market hits bottom.”) And of course, many people have to live where their jobs are — disaster-risk area or not — so they just need to make sure they’re properly insured.