Homes With High Flood Risk Are Selling for Nearly $50,000 More Than Low-Risk Homes as Pandemic Buyers Chase Waterfront Properties
The median sale price of homes with high flood risk reached $402,010 in Q1 2021, a 13.6% premium over low flood risk homes priced at $353,783. This marks an increase from 10.1% in Q1 2020 and 7.2% in Q1 2019. High-flood-risk homes sold at a growth rate of 18.6%, compared to 9.6% for low-flood-risk homes. Despite rising flood risks, buyers remain undeterred, particularly in markets like Florida. Low-risk homes are more likely to exceed listing prices, indicating competitive market dynamics.
- High flood risk homes sold for a median price of $402,010, indicating robust demand despite risks.
- Sales of high-flood-risk homes increased by 18.6% year-over-year, outpacing low-flood-risk homes' 9.6% growth.
- Buyers may be unaware of purchasing homes in flood zones, leading to potential future financial risks.
- High-flood-risk homes are less likely to exceed their asking prices than low-risk homes (37.4% vs. 47.2%).
SEATTLE, June 9, 2021 /PRNewswire/ -- (NASDAQ: RDFN) — The median sale price of homes with high flood risk was
Since 2013, homes with high flood risk have sold for about
"Americans are buying the beach houses they always dreamed of because they have the flexibility to work from wherever they want," said Redfin Senior Economist Sheharyar Bokhari. "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. This may be because buyers aren't aware they're purchasing a home in a flood plain or just don't view it as an immediate danger. 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 one example."
Redfin and other real estate websites have started sharing property-level flood risk data online to help house hunters determine if the homes they're interested in are located in flood plains and whether they should purchase flood insurance.
Places that are prone to flooding are also seeing stronger growth in home sales. Sales of high-flood-risk homes rose
In Jacksonville, FL, homebuyers often inquire about flood risk, but it virtually never causes them to back out, said local Redfin real estate agent Heather Kruayai. Jacksonville, which is on the Atlantic Ocean and has two waterways running through it, has about 43,000 properties facing high flood risk, according to First Street Foundation's Flood Factor.
"If you buy a home on the water in Florida, flooding is just something that comes with the territory. Most buyers understand that," Kruayai said. "A lot of out-of-state buyers have been moving here during the pandemic and purchasing waterfront properties, but there are also locals who are looking for space to spread out because the city has become so congested. Even if you wanted to negotiate a lower price due to flood risk, you'd have a tough time because we're in such a hot seller's market."
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,
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, Bokhari explained. Because low-risk properties are more affordable, they face more competition, which means buyers are more likely to bid up the prices.
To read the full report, including additional charts and data, please visit:
https://www.redfin.com/news/flood-risk-home-price-premium-Q1-2021
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate broker, instant home-buyer (iBuyer), lender, title insurer, and renovations company. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Since launching in 2006, we've saved customers more than
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.
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SOURCE Redfin
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