Homebuyers along the Eastern Seaboard and Gulf Coast might increasingly be throwing caution to the wind.
Climate change is expected to worsen the risk of wind damage that homes in these regions face from storms, according to a recent report from the First Street Foundation, a nonprofit research and technology group, and Arup, a global consulting and engineering firm.
In the next 30 years, about 13.4 million homes that currently aren’t considered in harm’s way will be at risk of tropical cyclone wind damage as more storms become more powerful—and therefore more dangerous—due to climate change, the report stated.
Storms are also expected to expand farther north along the East Coast. Average annual losses are expected to increase from $18.5 billion to $19.9 billion.
“This next generation of hurricane strength will bring unavoidable financial impacts and devastation that have not yet been priced into the market,” First Street CEO Matthew Eby said in a statement.
Most of the risk is centered in Florida, which has one of the hottest real estate markets in the nation, where about 73% of all expected damages in the nation are anticipated to occur. The number of properties that could experience a Category 5 hurricane could rise to 4.1 million over the next three decades as storms make landfall farther north in the state, migrating to areas like Jacksonville, according to the report.
Despite the risks, Florida remains a popular destination. Median home list prices in the Miami metropolitan area, which emerged during the COVID-19 pandemic as a hot spot, were up 19.2% in January year over year, according to Realtor.com® data. In the Panama City metro, prices were up 16.4% year over year, despite the area being devastated by Hurricane Michael, a Category 5 storm, in 2018.
The Florida counties with the largest anticipated average annual losses due to wind damages were Duval, home to Jacksonville; Palm Beach; Pinellas, home to Clearwater; Brevard, home to Palm Bay and Melbourne; and Hillsborough, home to Tampa.
Other parts of the country won’t escape unscathed either. In the Northeast, annual damages are expected to surge 87% over the next 30 years. Meanwhile, along the Gulf Coast, wind speeds are expected to increase up to 248 mph.
Wind damage is generally covered by homeowners insurance, but the ensuing flood damage is often not covered. And homebuyers should note that wind damage caused by hurricanes might not be included in their insurance.
Source: realtor.com