A new report from First Street warns that the US real estate market will suffer a trillion-dollar loss in value due to climate change. As natural disasters and extreme weather events become more common, Americans are moving away from riskier areas and towards those expected to be more resilient. However, this migration won’t be linear, with many people choosing to stay in areas with favorable economic conditions despite high climate risks.
The report categorizes neighborhoods into five categories: “climate abandonment,” “risky growth,” “climate resilient,” “tipping points,” and areas facing little climate risk but losing residents due to lack of opportunities. Risky growth areas, such as major metros in Texas, are projected to see 76% population growth over the next 30 years, while climate abandonment areas will lose 38% of their population.
First Street estimates that property values in risky growth areas will decline by 1.7% on average over the next three decades, with some areas like Tampa, Florida, seeing a 25% decline. Climate abandonment areas will face the biggest losses, averaging 6.2%.
The report also highlights that climate risk is hyperlocal, with people preferring to live in neighborhoods within their city or metro area that offer family-friendly amenities and jobs. This means that cities should be evaluated as having high or low levels of climate risk rather than being declared “climate havens.”
Midwest regions, such as Dane County, Wisconsin, and Franklin County, Ohio, are among the most likely to be resilient over the coming decades. The report notes that increased awareness and access to climate data have contributed to a growing trend of people seeking out safer areas to live.
Source: https://eu.usatoday.com/story/money/personalfinance/real-estate/2025/02/03/climate-change-migrations-lost-property-value/77888167007