Mortgage

Homes with a excessive danger of flooding see worth and gross sales will increase within the first quarter

Rising sea levels are not stopping buyers from getting hold of seaside homes.

As work flexibility gives consumers wider housing options, homes in high-risk flood-risk areas sold at a record 13.6% premium over those in low-risk areas in the first quarter of 2021, according to Redfin. That premium increased from 10.1% annually and from 7.2% two years ago. High-risk properties rose to an average sale price of $ 402,010 for the quarter versus $ 353,783 for their low-risk counterparts.

The sales volume of residential properties with flood risk also shot up by 18.6% annually in the first quarter of the year, almost doubling the annual growth rate of 9.6% for low-risk houses.

While climate change puts off nearly three-quarters of borrowers in their search, it isn't a deal breaker enough for buyers who want their dream home on the water.

"This may be because buyers are unaware that they are buying a home in a floodplain or simply do not see it as an imminent threat," Redfin senior economist Sheharyar Bokhari said in the report. “Locations with a high risk of flooding often have a large number of retirees, many of whom do not see climate change as a threat that they will have to worry about for the rest of their lives. Florida is an example. "

Despite growing populations in coastal regions, the risks associated with real estate in these areas continue to increase. Approximately 8 million households on the Atlantic and Gulf coasts are currently at risk of storm surge, adding up to an estimated $ 1.9 trillion in water damage reconstruction costs, according to a recently released CoreLogic report. Those numbers rose from $ 7.4 million to $ 1.8 trillion in 2020.

Due to a larger number of potential buyers, more low-risk homes were sold above the offer price in the opening quarter of 2021. A share of 47.2% achieved more than the list prices compared to 37.4% of the high-risk properties. That relationship has lasted at least since the first quarter of 2013, though the gap between the two varied over time.

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