A new study by research firm First Street predicts that the climate crisis will erase $1.47 trillion in US home values by 2055, with areas like California and New Jersey facing the steepest impacts. The study found that 40% of property-value losses will be concentrated in “climate abandonment” communities, where population decline and rising insurance premiums are driving down home prices.
According to First Street, 21,750 neighborhoods across the US qualify as climate abandonment communities, covering 26% of current US Census tracts. These areas are at risk due to extreme weather events fueled by the climate crisis, such as wildfires in California and coastal flooding in New Jersey.
The study highlights the impact of natural disasters on home prices. For example, Hurricane Sandy led to a surge in flood insurance costs, forcing many lower-income residents to abandon their homes in areas like Long Beach Island, New Jersey. A similar scenario is expected in other climate abandonment communities, where population decline and lack of demand will lead to falling home prices.
The top five areas predicted to be hit hard by the climate crisis include Fresno County, California (-14.4%); Sacramento County, California (-4.2%); Monmouth County, New Jersey (-4.2%); Ocean County, New Jersey (-4.4%); and Kern County, California (-4.1%). These areas are expected to experience significant property value declines due to a combination of population decline and rising insurance premiums.
Source: https://www.businessinsider.com/climate-change-lower-home-prices-property-values-places-hit-hardest-2025-2