So, for family reasons and such, my wife and I have no plans to move from our longtime South Carolina home, but when I opine to the young folk about where they might permanently settle, I often tell them somewhere in central Michigan.
The thinking here is that such a locale would seem fairly immune from the rising risk of climate-related disasters, including sea levels, hurricanes, landslides, and systemic water shortages. Wildfires can be a problem anywhere with foliage, of course, but drought would seem unlikely wedged between the Great Lakes like that. And with a warming climate, the winters probably won’t be quite so cold in the near future.
Of course, our kids aren’t listening to such unsolicited advice, and I’m glad they’re not, truth be told. But there’s new evidence that such thinking is playing into a lot of people’s decisions that it’s not just the pandemic prompting them to look to greener, cooler pastures to invest their time, money, and lives.
That evidence includes a new survey by Redfin (NASDAQ: RDFN) that found that half of respondents who plan to move in the next year said extreme temperatures and/or the increasing frequency or intensity of natural disasters played a role in their decision to relocate.
Climate change making safe spots more competitive and expensive?
"Climate change is making certain parts of the country less desirable to live in," said Daryl Fairweather, the online brokerage’s chief economist, in a news release. "As Americans leave places that are frequently on fire or at risk of going underwater, the destinations that don't face those risks will become increasingly competitive and expensive for homebuyers."
Redfin said in its report that 628 of the 2,000 respondents to its commissioned survey, conducted Feb. 25 to March 1, plan to move in the next year and that about half of that group cited rising heat and natural disasters as part of the reason. Fully 36% said rising sea levels were a factor, Redfin said.
By age, the group most likely to feel that way included the ages of 35 through 44. By far, people ages 55 to 64 were the least likely to move for those reasons. That’s as high as the age cohorts went in this survey, by the way.
Head for the hills! But only if they’re way inland. And non-volcanic.
The report notes that while virtually every part of the country faces some type of climate risk, some areas fare worse than others when it comes to perception of the reality. While hurricanes have been a huge issue on the Gulf and Atlantic coasts, this report targeted the left bank.
For instance, there’s this from Redfin agent Christopher Anderson in Napa, California: "After wildfires destroyed much of Napa in 2017, the community rallied together and rebuilt, but when fires ravaged our area again in 2020, some folks just decided they were done. I had one client whose home burned down in the last fire and only half of it was covered by the insurance company. She relocated to New York."
That’s the kind of area, Redfin said, that 80% of all respondents, not just those moving, wouldn’t consider moving to because of increasing frequency and intensity of natural disasters.
Meanwhile, the region where the smallest proportion of respondents said climate change would factor into a decision to move? The Midwest, at 41%. (That’s where lower Michigan is, I remind you, and it has the bonus of being a big peninsula surrounded by Ohio, Indiana, and water. Lots of non-salt water. And no volcanoes. In fact, it’s pretty flat.)
The Midwest also had the lowest percentage of respondents who cited sea level rise as a factor in their decision to move within the next year, at 29%. Maybe those 29% actually live right along one of the Great Lakes, which are not immune to water-level rise, either.
The Millionacres bottom line
Regardless of how you feel about the politically charged truth and consequences of climate change, enough people take it seriously to be influenced about where they want to live.
Consequently, real estate investors, especially those with a long-term view -- particularly those with a view beyond their own fortunes to those of their heirs -- might want to consider the many locations across the country that would fare better than others in some of these scenarios.
Many of those places are inexpensive, relative to the high-dollar coastal cities, for example, but with fears about climate change, and the ability for so many people to work from wherever they live, those bargains may not last.