Scores of Pandemic Homebuyers Purchased Vacation Homes With High Natural-Disaster Risk

Rhea-AI Summary

Redfin reports a significant surge in second home purchases with high climate risks. In 2020-2021, purchases with high flood risk increased by 45%, while those with high storm and heat risks rose by 40% and 39%, respectively. Overall, second home purchases jumped by 37% compared to the previous two years. Despite growing awareness of climate risks, many buyers continue to overlook these concerns, prioritizing location benefits over potential dangers. The report highlights the most common risks facing second homeowners, with high heat risk affecting 94% of recent purchases.

Positive

• Second home purchases surged 37% in 2020-2021 compared to 2018-2019.
• High demand for second homes continues, driven by low mortgage rates and remote work.
• Redfin provides comprehensive climate-risk data for nearly all U.S. homes.

Negative

• Many buyers are unaware of the climate risks associated with their purchases.
• Home values in disaster-prone areas may decline due to increased risk awareness among consumers.

Purchases of second homes with high flood, storm and/or heat risk surged roughly 40% over the past two years

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — In 2020 and 2021, purchases of second homes with high flood risk rose 45% from the prior two-year period (2018-2019), according to a new analysis of ClimateCheck data from Redfin (redfin.com), the technology-powered real estate brokerage. There were also significant increases in purchases of second homes with high storm risk (40%) and high heat risk (39%).

Demand for second homes surged during the pandemic as low mortgage rates, remote work and the desire to escape the city drove up demand for vacation properties. Overall, purchases of second homes were up 37% higher in 2020 and 2021 compared with 2018 and 2019. Demand has since fallen back below pre-pandemic levels as life has returned somewhat to normal, but many Americans now own at-risk second homes, which has implications for the future.

“The threat of climate change isn’t the top concern for a lot of homebuyers, which means they often prioritize factors like warm weather and proximity to the beach over avoiding natural-disaster risk. Second-home owners, in particular, have another place to live if disaster strikes—another reason climate danger may not feel like a pressing issue,” said Redfin Senior Economist Sheharyar Bokhari. “But house hunters should be aware that purchasing in a disaster-prone area not only puts them and their home at risk, but their finances as well. Home values in climate-endangered places may fall in the coming years as consumers learn more about the risks to properties in these areas.”

A recent 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 from natural disasters. That’s partly because some buyers just aren’t aware of the risks. Redfin.com now publishes climate-risk data for nearly every U.S. home, with the exception of rental listings, to help house hunters make more informed decisions.

“House hunters from out of town ask about climate change because they’re very concerned about flooding, but most of them don’t change their minds,” said Miami Redfin agent Cristina Llanos. “They hear horror stories of hurricanes, but generally still move forward. People want to talk about it but it typically doesn’t make or break their decision.”

Heat and Storm Are Most Common Risks Second-Home Buyers Face

Overall, heat is the most common risk facing second-home buyers—nearly all (94%) of second homes purchased in the past two years face high heat risk. Next comes high storm risk, which plagues more than three-quarters (78%) of second homes bought in the past two years, followed by high flood risk (26%), high fire risk (23%) and high drought risk (21%).

Many popular second-home destinations, like Florida and Arizona, face significant heat and/or storm risk. The most popular destinations for homebuyers looking to relocate are Miami, Tampa and Phoenix, which attracted scores of affluent out-of-towners in search of vacation homes during the pandemic.

To read the full report, including charts and methodology, please visit: https://www.redfin.com/news/second-homes-climate-change

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. 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. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220705005157/en/

Redfin Journalist Services:

Ally Braun, 206-588-6863

press@redfin.com

Source: Redfin

FAQ

What was the increase in second home purchases with high flood risk according to Redfin?

Purchases of second homes with high flood risk rose by 45% in 2020 and 2021 compared to 2018-2019.

What climate risks are most common for second home buyers?

94% of second homes purchased in the past two years face high heat risk, with high storm risk affecting 78% and high flood risk affecting 26%.

How has the demand for second homes changed post-pandemic?

Demand for second homes has fallen back below pre-pandemic levels but remains higher than before 2020.

What implications do climate risks have for second home owners?

Second home owners in climate-endangered areas may face declining home values as awareness of risks increases.