Why are at-risk counties increasing in population?
The likely answer comes down to demand -- sort of. Concerned residents who worry about decreasing property value and more expensive property insurance to cover the disasters are leaving the area. But new buyers, those who are hedging their bets and accounting for the additional cost, continue to come in. This is particularly true for the Sun Belt region, which is experiencing record demand for a number of reasons, including more favorable year-round weather, lower income or property taxes, job opportunities, or more affordable housing and cost of living. In their minds, the reward outweighs the risk.
How does this migration impact real estate investors?
Intense heat, drought, fire, flood, and storms doesn't sound like the ideal investing scenario, but when the risk is taken into account, it may just present you with an enticing opportunity. Heat appears to be the least intimidating factor to consider, which certainly makes sense investment- wise.
Buildings can be incredibly energy-efficient nowadays, and aside from a brownout, air conditioning can go a long way to making a high-heat area fairly comfortable. Next in line is drought. While it may hinder the picture-perfect suburban lawn, food and pretty much anything else impacted by drought can easily be brought in to compensate. If you're looking for a less-desirable but still perfectly livable scenario, these two would fit the bill. Look for homes that are priced to sell, and factor in additional costs like improved insulation or xeriscaping so that the pros outweigh the cons.
As with any investment decision, research and consideration of personal goals, financing, and experience will come into play here. If you are risk-averse, nearing retirement, or are only investing in a single property, these high-risk counties may not be a good fit for you. But if you can stomach the additional factors, then it could present a solid entry point into a real estate market that will still cash flow for you regardless of the "what ifs."