The pandemic led to scores of Americans relocating to areas with lower costs of living, driven by more companies allowing employees to work remotely. But as recent data shows, the places where people are moving are also the most prone to natural disasters like flooding and wildfires. A new report from Redfin found that 384,000 more people moved in rather than out of the most flood-prone counties in the US in 2021 and 2022, a 103 percent increase from the two previous years. In counties with the highest risk of wildfires, 446,000 more people moved in than moved out over the prior two years, a 51 percent jump from 2019 and 2020. And in counties with the highest heat risk, 629,000 more people moved in rather than moved out, a 17 percent increase. The report cited remote work and record-low mortgage rates during the early pandemic years as a catalyst for the increased migration of Americans from pricey coastal cities to areas like the Sunbelt.
While warmer weather and lower taxes in states like Florida, Texas, and Arizona, drew huge numbers of new residents in recent years, the higher risk of natural disasters could create a lot of problems for new homeowners and renters in these areas. “With natural disasters intensifying and insurers pulling out of disaster-prone areas including Florida and California, Americans may start feeling a greater sense of urgency to mitigate climate dangers—especially if their home’s value is at risk of declining,” said Redfin’s Chief Economist Daryl Fairweather. For the commercial real estate industry, climate change impacts are becoming a bigger part of the conversation when looking at where to invest. Most real estate investments have a 10-year horizon, so worries over the climate change-related impacts in the future may not be as pressing for a lot of investors. But there are projections for the not-too-distant future, as soon as 2030, that could have negative consequences for property owners in places where natural disaster risks are the highest.