9 Real Estate Markets Where the Climate Could Impact Your Home Value – AOL

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June 26, 2024 at 1:00 PM
driftlessstudio / iStock.com
driftlessstudio / iStock.com

When buying a home, your first concern might not be the climate, at least for property values and the general cost of living. But it can majorly impact how much your home is worth — both now and in the future.


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Choosing an area with extreme weather conditions, frequent natural disasters, or the ongoing threat of rising sea levels, could affect your home’s value. It could also have an impact on how homes are constructed. This doesn’t necessarily mean your property will lose value, but it could.

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GOBankingRates spoke with several real estate experts about where the climate could impact your home value and how. Here’s what they said:

Flagstaff and Phoenix, Arizona

If you’re buying property in certain parts of Arizona, like Phoenix or Flagstaff, keep the climate in mind.

“Phoenix is located within the Sonoran Desert at a low elevation, meaning that the cities and towns located within the metropolitan area are subject to extreme triple-digit heat during the Valley’s summer and early fall months,” said Melissa Dierks, a Realtor and managing partner at RE/MAX Fine Properties.

“Phoenix’s desert climate influences the construction of homes in this area. They often prioritize cooling systems, pools, and energy efficiencies such as solar panels,” she continued. “Phoenix experiences an estimated 300 days of sunshine each year, making it an excellent location to take advantage of solar energy!”

The climate in Flagstaff is quite a bit different, but there are still things to keep in mind when buying property.

“Northern Arizona communities within Coconino County, like Flagstaff, have warm, temperate summers and snowy alpine winters. Flagstaff is roughly 7,000 ft. above sea level, meaning houses within the city must account for adequate insulation that keeps homes warm during winter. Despite Phoenix and Flagstaff being only two and a half hours apart, the climates are very different,” Dierks said.

“Given Flagstaff’s cooler temperatures and occasional snowfall (which can become full-on blizzards during the winter months due to the mountain location), homes are often constructed with better insulation and heating systems,” she continued. “The homes tend to have thicker walls, double-pane windows and efficient heating sources such as furnaces or fireplaces. Additionally, roofs in Flagstaff are designed to handle the winter conditions of snow, sleet, ice, etc.”

In Flagstaff, many homes incorporate materials that offer better thermal regulation and insulation. In Phoenix, meanwhile, materials tend to be more heat-resistant.

Parts of Wisconsin

“Climate change is an all-encompassing beast that affects real estate. So, if you’re buying real estate, climate change should be at the very top of your priority list,” said Gabe Andrews, Founder at Cash Homebuyers Wisconsin.

In Wisconsin, there have been 50 confirmed weather- and climate-related disasters since 1980, according to the National Centers for Environmental Information. These events, including flooding, droughts, freezing and severe storms, have wrought losses exceeding $1 billion each.

But it’s more than just possible property damages you’ll need to consider.

“Not only does severe weather events such as hurricanes, earthquakes, and floods increase insurance rates, extreme heat that some states experience also increases utility costs,” Andrews said. “Not to mention that construction costs are affected as well because some materials may be sourced from countries or states that are experiencing the effects of climate change, which has the result of increasing property prices.”

Fort Lauderdale and Miami, Florida

Parts of Southern Florida are particularly susceptible to rising sea levels, coastal erosion, flooding, and extreme storms. All of these factors can negatively affect home values — if you’re not prepared.

“Properties in hurricane-prone areas like Florida or the Gulf Coast often face significant depreciation due to the frequent and severe storm damage,” said Scott Friedson, a multi-state licensed public adjuster and CEO of ICRS LLC. “I’ve witnessed properties in these regions lose a substantial percentage of their value post-disaster due to inadequate storm-proofing and high repair costs.”

Jersey City and Hoboken, New Jersey

In some real estate markets in New Jersey, the climate also impacts property values.

“One major issue is rising sea levels and increased flooding risk, especially in areas like Jersey City and Hoboken,” said Daniel Rivera, owner of Proactive Property Management. “Properties in flood-prone zones often see diminished value due to higher insurance premiums and potential water damage.”

But it’s not just that. Severe weather events — like harsh winters or freeze-thaw cycles — can also wreak havoc on both the exterior and the infrastructure of homes in these areas. Fortunately, there are ways to protect your home’s value, like implementing flooding mitigation measures, ensuring proper insulation and investing in energy-efficient upgrades.

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Riverside, California

Any area in California with a high risk of natural disasters, like Riverside, can see an impact on property values.

“Rising temperatures and increased frequency of wildfires are critical concerns here in California,” said Joe Stance, real estate expert with Stance Commercial Real Estate. “Properties in high-risk fire zones often see lower values due to heightened insurance costs and potential future damages.”

Other natural disasters, like earthquakes, can also hike up home insurance prices. Homes that aren’t properly outfitted with earthquake-resistant features can also lose value quickly — and vice versa.

The Gulf Coast

Many Florida real estate markets are located along the Gulf Coast, but these aren’t the only areas where climate plays a key role in property values. According to Josh Dotoli, a real estate expert at Compass Florida, buyers should also be wary when purchasing property in Houston or New Orleans.

“The Gulf Coast is frequently affected by hurricanes and severe storms,” he said. “The high risk of property damage and associated costs can impact [both] home values and buyer interest.”

Other Housing Markets Where Climate Could Affect Home Values

“In the U.S., we’re witnessing significant effects from climate change that threaten the homes of millions of people. One prominent example is extreme heatwaves, primarily affecting the country’s southern regions,” said Tamara Jude, a home warranty expert at This Old House.

The increased frequency — and intensity — of storms in many areas of the country have also resulted in more flooding and wind damage, both of which can cause home damage and affect property values.

“The immediate effects will cause your house price to lower, but so will the knowledge that you’re in a storm-prone area,” said Jude.

According to Jude, certain real estate markets could be more affected by the climate than others.

“Such prevalent storms and heatwaves in the southern states including Texas, Florida and Alabama make them more vulnerable to environmental damage, leading to a decline in house prices,” she said. “States located in Tornado Alley … are more likely to experience severe thunderstorms and tornadoes. States also close to the Gulf of Mexico are susceptible to moisture-laden air masses, which are a key ingredient for storms.”

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This article originally appeared on GOBankingRates.com: 9 Real Estate Markets Where the Climate Could Impact Your Home Value

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