Climate change is affecting many facets of modern society, but many people aren't aware of how much of an effect it has on the real estate market. For many different reasons, shifts in local climate cause people to move around the country. Here are some things to understand about climate change and its effects on real estate.
Risk aversion is one factor that affects long term buying decisions. Climate change is set to raise sea levels several feet over the next decade, and many buyers are taking this as a sign not to buy houses in low-lying, coastal areas.
Natural disasters that have occurred around the country, such as recent hurricanes in New Orleans and New Jersey, have forced residents to take a look at their area's emergency preparedness. Some buyers are beginning to avoid areas without a clear disaster preparation plan; when the city isn't prepared to contain a disaster, homeowners take the heat in terms of major home damage.
Climate change also affects buying decisions when it shifts the local climate. Even a few degrees of temperature change can make an area more or less desirable, depending on homebuyers' preferences. Since temperature shifts can be forecasted over the long term, buyers can use this information to choose the best permanent location.
Climate change can subtly affect the growth and decline of an area when people use weather patterns to choose real estate. Areas with increased good weather and decreasing natural disasters may become hotspots, while those experiencing poor climate will become less targeted. As people begin moving into certain areas and the population booms, more and more businesses are attracted to these areas. More residents will rush into the booming areas to fill open job positions. This intensifies the drain on areas whose populations are decreasing. Businesses begin to shut down in these unpopular areas and this drives people out of the area. So population patterns are somewhat self-enforcing, and the trends might continue for many years to come.
Opportunities for Buyers
Homebuyers can take advantage of the buying trends created by climate change shifts. By buying early, you can get into an ideal location before the crowd drives up prices. You'll be able to protect your home investment by choosing a location that is less prone to disaster. If you are concerned about the future resale value of your house, be mindful of whether your hometown is up-and-coming or on the decline.
Aside from following the news, a great real estate agent can help you plan for natural disaster and pick a location that will be perfect for you over the long term. No matter what location you choose, being aware of climate change in your area can help you prepare to be a successful homeowner.Share