HOUSTON (CW39) – High flood risk homes are selling for nearly $50,000 more than low-risk homes. According to a new report by Redfin, typical home with high flood risk sold for $402,010 in the first quarter and that’s double the premium seen before the pandemic. The median sale price of high flood risk home was $402,010 in the first quarter, compared with $353,783 for homes with low flood risk. That created a record 13.6% premium for high-risk homes. It’s also up from a premium of 10.1% in the first quarter of 2020 and a premium of 7.2% in the first quarter of 2019.
Homes with high flood risk have sold for about 7% more than homes with low flood risk on average since 2013. This is likely because many of them are luxury waterfront properties. Many wealthy homebuyers started eyeing oceanfront or lakefront houses outside of major cities, causing the premium to surge during the coronavirus pandemic.
Americans are buying the beach houses they always dreamed of because they have the flexibility to work from wherever they want. While flood risk is intensifying in many parts of the country, it doesn’t seem to be a deal breaker for a lot of homebuyers. This may be because buyers aren’t aware; they’re purchasing a home in a flood plain or just don’t view it as an immediate danger. Places with high flood risk are also often home to large concentrations of retirees, many of whom don’t see climate change as a threat they need to worry about in their lifetime. Florida is one example.Redfin Senior Economist Sheharyar Bokhari
There’s also stronger growth for home sales in places that are prone to flooding. In fact, sales of high-flood-risk homes rose 18.6% year over year in the first quarter. That’s about double the 9.6% gain in sales of low-flood-risk homes. According to Bokhari, typically properties with low flood risk cost less than properties with high flood risk because they’re less likely to be on the beach with waterfront views. Low-risk properties face more competition since they are more affordable, and buyers are more likely to bid up the prices. For more on Redfins report click this link.