Climate Change Threatens $1.47 Trillion in US Home Values by 2055
A recent study predicts the climate crisis will lead to a $1.47 trillion loss in US home values by 2055, significantly impacting certain regions like California and New Jersey. Areas identified as “climate abandonment” are expected to face the heaviest losses, driven by factors such as population decline and rising insurance costs. The risks are compounded by recent extreme weather events, necessitating immediate attention and action.
A recent study by First Street forecasts that the climate crisis could diminish US home values by a staggering $1.47 trillion by the year 2055. This decline will not affect all regions uniformly; certain areas will experience more significant drops in property values due to rising insurance costs and population decreases. Primarily, regions in California and New Jersey are expected to face the most severe impacts.
The term “climate abandonment” has been introduced to describe regions susceptible to steep property value losses. These areas, especially in California’s Central Valley, where wildfire risks are prevalent, and coastal towns in New Jersey, vulnerable to flooding and wind damage, are predicted to suffer a majority of the estimated losses. Approximately 40% of property devaluation will occur in these identified communities.
The study uncovered that about 21,750 neighborhoods, representing 26% of all US census tracts, fall under the designation of “climate abandonment” communities. Recent catastrophic weather events, exacerbated by climate change, underscore the immense financial toll of natural disasters. For instance, Hurricanes Milton and Helene caused substantial destruction in Florida, with Milton resulting in damages upwards of $28 billion.
Over the next few decades, further extreme weather phenomena are anticipated to reshape where Americans deem safe for residence. As local populations decline, the resultant lack of demand will invariably lead to decreased home prices. The aftermath of Hurricane Sandy serves as a poignant example, where many residents along the New Jersey coast were forced to abandon their homes due to insurmountable flood insurance costs.
Amanda Devecka-Rinear, the founder of the New Jersey Organizing Project, remarked on the plight of residents: “People just got pushed out or had to walk away…” This encapsulates the growing issue faced by communities across the nation as climate-related challenges escalate.
Five areas in particular have been highlighted for their heightened risk of climate-related declines in property values through 2055:
1. Fresno County, California
– Market impact: -4.6%
– Insurance impact: -9.8%
– Total property value impact: -14.4%
2. Ocean County, New Jersey
– Market impact: -3.3%
– Insurance impact: -1.1%
– Total property value impact: -4.4%
3. Monmouth County, New Jersey
– Market impact: -0.7%
– Insurance impact: -3.6%
– Total property value impact: -4.2%
4. Sacramento County, California
– Market impact: -2.7%
– Insurance impact: -1.6%
– Total property value impact: -4.2%
5. Kern County, California
– Market impact: -1.8%
– Insurance impact: -2.3%
– Total property value impact: -4.1%
This article discusses the dire predictions made by First Street regarding the impact of climate change on property values in the United States. The research reveals that the economic ramifications of climate-related disasters could lead to a significant total loss in home values, particularly in vulnerable regions. It sheds light on how certain communities may face disproportionate effects, emphasizing the urgency for comprehensive disaster recovery and planning efforts.
In conclusion, the potential loss of $1.47 trillion in US home values due to climate change poses a significant threat to various communities, particularly in California and New Jersey. Notably, the emerging phenomenon of “climate abandonment” indicates a pressing need for targeted support and adaptation strategies to mitigate this crisis. As extreme weather events become more frequent, proactive measures must be taken to protect vulnerable neighborhoods from inevitable declines in property values.
Original Source: www.businessinsider.com
