Sales of high-flood-risk homes rose 18.6% year over year in the first quarter 2021-09-08
Gulf Coast Real Estate Update
September 8th, 2021
Demand for
high flood risk homes
2x that of
low flood risk homes
Sales of high-flood-risk homes rose 18.6% year over year in the first quarter—about double the 9.6% gain in sales of low-flood-risk homes.
While flood risk is intensifying in many parts of the country, it doesn’t seem to be a deal breaker for a lot of homebuyers. Places with high flood risk are also often home to large concentrations of retirees, many of whom don’t see climate change as a threat they need to worry about in their lifetime. Florida is a prime example.
Low flood risk homes are more likely to fetch more than their owners ask for.
While home prices and sales growth are both higher for high-risk homes, homes with low flood risk are more likely to fetch more than their owners ask for. In the first quarter, 47.2% of low-flood-risk homes went for more than they were listed for, compared with 37.4% of high-flood-risk homes.
Properties with low flood risk typically cost less than properties with high flood risk because they’re less likely to be on the beach with waterfront views. Low-Risk properties are more affordable, they face more competition, which means buyers are more likely to bid up the prices.
Source: redfin news
Mortgage Rates Stay Flat
Economic growth and the acceleration in inflation have moderated in the last month, giving the markets comfort and leading to a stabilization in mortgage rates. Heading into the fall, home purchase demand is stable, home sales remain firm and above pre-pandemic levels, and inventory of unsold homes is tight but improving modestly. These factors will allow for home price pressures to ease over the remainder of the year.
