- A study found that the climate crisis is set to knock $1.47 trillion off US property values by 2055.
- Some areas are predicted to be hit harder by population declines and rising insurance premiums.
- The steepest impacts on home prices are predicted to be in parts of California and New Jersey.
The effects of the climate crisis will erase $1.47 trillion in home values across the US by 2055, a new study from the research firm First Street found.
Those losses will not be spread equally across the country. In some areas, home price gains may be able to outpace losses, but some places will be harder hit.
First Street estimated that 40% of property-value losses will be concentrated in places it calls “climate abandonment” communities. In these locations — primarily in California’s Central Valley, at risk of wildfire, and coastal New Jersey, at risk of flood and wind damage — a combination of population decline and rising insurance premiums are predicted to drive down home values.
First Street found that 21,750 neighborhoods spread across the US, or 26% of current US Census tracts, qualify as what it calls “climate abandonment” communities.
Recent extreme weather events highlight the staggering cost of natural disasters fueled and worsened by the climate crisis. Last year, back-to-back hurricanes Milton and Helene devastated parts of Florida and the Southeast, with Milton alone causing up to an estimated $28 billion in insured losses. Recent Los Angeles wildfires are expected to total close to $250 billion in total damages.
Over the next several decades, First Street’s researchers predict more extreme weather events will recalibrate the places Americans find safe to call home. When the population dwindles for any reason, home prices are likely to fall due to a lack of demand.
Consider the way Hurricane Sandy affected the Jersey Shore. Many lower-income residents of New Jersey living along the Atlantic coast were unable to rebuild in those areas due to the soaring cost of flood insurance. Amanda Devecka-Rinear founded the New Jersey Organizing Project, a nonprofit to improve disaster recovery funding, after driving around Long Beach Island, located in Ocean County, and seeing rows of abandoned houses.
“People just got pushed out or had to walk away or had to sell their places because they could never cobble together the funding to get back,” Devecka-Rinear told Business Insider in 2022.
Below are Ocean County and four other communities First Street highlighted for their risk of “climate abandonment” and, therefore, property value declines. The percentages for each county are forecasts from First Street from 2025 to the year 2055.