$1.5 Trillion In Home Value May Be Destroyed

Antonio Cuellar Pexels

First Street has estimated that $1.47 trillion in home values will be destroyed in the next 30 years because of climate change. The overall picture is that “Valued at $50 trillion, residential real estate is the bedrock of the U.S. economy – nearly double the country’s $27.4 trillion GDP. “

The information comes from a report titled “Property Prices In Peril.”

Study Offers Little Hope

The primary concern of the study was rising home insurance because of the climate crisis, the drop in values of homes in the southwest due to hurricanes, and flooding, climate migration as people leave the most dangerous areas of America, and property devaluation brought on by climate disasters. 

There was a particular focus on the South, “While the Sun Belt region is the most dramatic example of this phenomena, insurance markets responding to the increasing awareness of climate risk are materially changing the calculus behind home ownership and the desirability of entire communities across the country.” The hurricanes that hit the US from Houston to New Orleans to West Florida did over $100 billion in damages. Some homeowners cannot get insurance. People moved to these areas because of warm weather and lower taxes.

Areas That Are Abandoned

The forecast is that 21,750 neighborhoods will be abandoned 30 years from now, and 25,594 neighborhoods would face risk to their growth. 9,063 neighborhoods would decline.

The study paints a more detailed picture of these problems and perhaps the most detailed in decades. But, these problems were brought into high relief by the LA wildfires.

The study’s conclusion, “Residential real estate in the United States stands at a historic turning point.”

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