Flood Crisis Creates Extreme Risk For Miami And New Orleans Real Estate
The “2024 Realtor.com Housing and Climate Risk Report.” was released today. It is an extensive examination of the national real estate market when measured against flood, heat, air quality, wind, and wildfire risks. The study is based on Realtor.com’s single-family, condo, townhome, rowhome, and co-op property data, which assigns a score to each home matched to the most recent Automated Valuation Model (AVM) estimates.
More Flood Danger –Louisiana
Floods –In Tampa
Approximately 6.6% of homes in the US face severe or extreme risk of flood damage, and their total face value is $3.4 trillion. National Flood Insurance Program (NFIP) policyholders can expect an average doubling of premium increase by the decade’s end. NFIP is the leading provider of flood insurance coverage for U.S. residents.
Realtor.com evaluates metro flood risk using two metrics. One measures the total dollar value of properties at risk from severe or extreme flooding in a metro. The other measures the percentage of the value of the homes in the metro at risk.
Insurance Costs
Both insurance costs and the cost of damage will drive down real estate values in the at-risk cities. Zillow data show that particularly for condos, sales prices and home sales have started to drop, in some cases quickly, in Cape Coral, Miami, Tampa, and Jacksonville.
The Realtor.com data show that Miami-Ft Lauderdale is the metro with the highest absolute dollar value of residential real estate at severe or extreme risk, at $324 billion, 25% of the city’s total.
On a percentage, the market with the highest risk is New Orleans. Over 73% of residential properties risk severe or extreme flooding. The metro’s total residential value is $78 billion.
Three of the top five metros with the highest percent risk of flood damage are in Florida. Cape Coral ranks behind New Orleans at 48% (of $87 billion), Northport at 33% (of $71 billion), and Tampa at 27% (of $126 billion).
There is ample evidence that a substantial number of Americans take climate change factors into account when they relocate. Florida and the Gulf Coast, particularly New Orleans, are likely to see a sharp drop in potential residential real estate buyers.
