Climate Change and Real Estate
Date Published
The impact of climate change on residential real estate is becoming impossible to ignore. In this Climate Change and Real Estate blog, we explore how shifting weather patterns, rising insurance costs, and evolving buyer priorities are reshaping the housing market in 2025.
Rising Insurance Costs
One of the most immediate effects of climate change is the sharp increase in homeowners insurance premiums, especially in coastal regions, wildfire-prone communities, and flood zones. Some areas have seen premiums rise by up to 35% in just two years, and certain insurers are pulling out of high-risk zones altogether. This makes it harder for buyers to secure affordable coverage and can delay or even derail home purchases.
Shifting Property Values
Climate risk is now a critical factor in real estate value. Properties in high-risk areas, such as those vulnerable to wildfires, hurricanes, or flooding, are experiencing slower appreciation, higher vacancy rates, and reduced demand. Meanwhile, safer zones are seeing increased migration, pushing up prices and demand. Eco-friendly upgrades like solar panels and fire-resistant landscaping are becoming more desirable, further influencing property values.
Market Trends and Migration
Recent reports estimate that climate change could erase up to $1.5 trillion in U.S. property value over the next 30 years. Insurance costs are rising faster than mortgage payments, prompting many homeowners to relocate from high-risk areas in the Sun Belt and West to safer regions. By 2055, as many as 84% of U.S. homes could experience some degree of devaluation due to climate-related risks.
Building Resilience
To adapt, homeowners and developers are investing in resilient construction and retrofitting homes to withstand extreme weather. While these upgrades may require upfront investment, they can lead to long-term savings and help maintain property values. States and cities are also being encouraged to promote development in lower-risk areas, giving buyers more options and helping communities adapt to future challenges.
Conclusion
Climate change is no longer a distant concern—it’s a driving force in today’s real estate decisions. As buyers and sellers navigate these new realities, understanding climate risk and investing in resilience are key. The Onward real estate team is here to help you make informed decisions.