Market Analysis

Climate Risk and Real Estate: New Investment Considerations

Evaluate climate risk impact on real estate investments, from flood zones to wildfire areas, and strategies for risk mitigation.

Climate change is no longer a future threat—it's a present reality affecting property values, insurance costs, and investment returns. Savvy investors integrate climate risk into every decision.

Flood Risk Rising

100-year floodplains now flood every 25-30 years in many areas. FEMA maps lag current risk by 10-20 years. Properties in flood zones face 50-70% higher insurance costs. Resale values decline 10-15% as buyers account for risk.

Wildfire Exposure Expands

15 million U.S. homes face significant wildfire risk. Insurance becoming unavailable or unaffordable in high-risk areas. California, Colorado, and Pacific Northwest seeing largest impacts.

Investment Strategies

Use climate risk modeling tools (First Street Foundation, Climate Check) before acquisitions. Avoid properties in 100-year floodplains or extreme fire zones. Budget 20-30% higher insurance costs in moderate-risk areas. Consider climate-resilient markets: Great Lakes, Pacific Northwest valleys, inland Northeast.

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