Redfin reports [1] that more than half (58%) of U.S. homeowners have invested in making their homes more resilient to climate threats, based on a survey of roughly 1,000 homeowners commissioned by Redfin in August 2022. The share was higher among Florida homeowners, nearly three-quarters (71%) of whom have spent money to protect their homes from climate risk. While Floridians are more likely than the country as a whole to invest in climate resilience, many are still vulnerable to flooding and storms.
Hurricane Ian, which tore across Florida last month, may turn out to be the costliest storm in state history, as CoreLogic estimates found total flood and wind losses [2] will hit between $41 billion and $70 billion. This estimate includes wind loss, re-evaluated insured and uninsured storm surge loss and newly calculated inland flood loss for residential and commercial properties. Hurricane Ian is the costliest Florida storm since Hurricane Andrew made landfall in 1992.
By risk type, homeowners nationwide are most likely to invest in combating extreme heat, with 26% saying they’ve spent money to make their home more resilient to this risk. Next comes extreme cold (22%), flooding (16%), hurricane/other major tropical storms (14%), poor air quality (13%), and tornadoes (12%). Earthquakes and wildfires both came in at 11%. In Florida, 40% of homeowners have invested in making their homes more resilient to hurricanes or other major tropical storms—nearly triple the national share.
“Americans are shelling out cash to fortify their homes against natural disasters as they increasingly move to at-risk areas despite intensifying climate change. Unfortunately, their investments aren’t always enough—a reality that came into focus when Hurricane Ian destroyed scores of homes, many of which lacked flood insurance,” said Redfin Chief Economist Daryl Fairweather [3]. “Homeowners should be aware that their property value could drop over time if their area becomes uninsurable and/or uninhabitable due to climate change.”
A 2021 Redfin analysis found that more people have been moving into than out of the U.S. counties with the largest share of homes at high risk of natural disasters. Many of these areas are attracting homebuyers because they’re relatively affordable, have lower property taxes and access to nature and sunshine. Cape Coral, North Port and Tampa—three Florida metros hit hard by Hurricane Ian—consistently rank on Redfin’s list of top migration destinations, which is based on how many more Redfin.com users are looking to move in than leave.
In Florida alone, Redfin found that pending home sales fell 58% year-over-year [4] in the Cape Coral, Florida metro area during the four weeks ending October 16 in the aftermath of Hurricane Ian. That total is nearly twice the nationwide decline of 32%. Pending home sales also slumped in the nearby Naples (-52%) and North Port (-51%) metro areas over that same time span. Other Florida metros were impacted by the storm, as sales fell 47% in Miami, 46% in Jacksonville and 43% in West Palm Beach, while sales were down more than 40% in the Deltona, Tampa, and Orlando metros.
“Many of the newer homes are still standing after Hurricane Ian, but even those have damage after getting inundated with nine feet or more of water. But a lot of the old houses are gone,” said Isabel Arias-Squires, a Redfin Agent [5] in Cape Coral, Florida, which was hit hard by Hurricane Ian. “In the past, storms have destroyed fences and roofs in Cape Coral. This time, people lost their entire home.”
One-third (33%) of homeowners have spent $5,000 or more to fortify their homes against climate risk, while roughly one-quarter have spent up to $4,999 and 42% have invested nothing.
“A lot of homeowners may just end up walking away because the cost of rebuilding is too high,” added Arias-Squires. “Let’s say you need a new $20,000 roof and insurance only covers $15,000. You might not have the additional $5,000 out of pocket, and by the time the roofers show up in six months, the total cost of the new roof might have increased to $30,000.”
Thirty-six percent of homeowners have an insurance policy covering flooding, making it the most common climate risk homeowners have coverage for. Next came tornadoes (33%), hurricanes/other major tropical storms (29%), wildfires (24%) and earthquakes (18%).
The share of homeowners with coverage has increased over the last year and a half for most risks. Redfin posed the same question in a February 2021 survey. Hurricanes/other major tropical storms saw the biggest jump; the share of homeowners with coverage rose from 19% to 29%. Wildfires came next, with the share climbing from 15% to 24%.
Click here [1] for more on Redfin’s analysis on investing in climate risk prevention.