Dr. Jeremy Porter
Appearances
Today, Explained
Is a house still a good investment?
They were driving up the cost of real estate in the area. So having the information and integrating it into the process of the home buying process, I guess, it does have consequences in terms of potentially giving those that have the means to avoid climate risk the ability to do so. And those that don't have the means are ultimately unable to.
Today, Explained
Is a house still a good investment?
There absolutely is a negative impact to having a high climate risk score. I think we've already seen, even through the integration of the data on one of the sites on Redfin.com, they did an analysis where They exposed half the people that came to the site to the data. They didn't expose the other half of the people to the data.
Today, Explained
Is a house still a good investment?
And the people that were exposed to the data systematically searched for lower risk homes. That means the higher risk homes are staying on the market longer. They have lower list to sale prices or sale to list prices, sorry, on the market. And they are losing property value because of that. Ultimately, that makes its way into the transaction record and depresses the value there.
Today, Explained
Is a house still a good investment?
Yeah, it's an important part of our analysis because a lot of research that exists today basically says, hey, sea level rise is happening on the coast, millions of people are going to move away from the coast. But if you go back and model the data historically and you layer in, to your point, all of this geopolitical information, all of this economic investment information,
Today, Explained
Is a house still a good investment?
really the social, political, and economic drivers of place, why people choose to live where people end up living, those things outweigh climate risk in a lot of cases.
Today, Explained
Is a house still a good investment?
It really is the point at which your standard American feels climate change. I mean, we're seeing that there's more hurricanes. Breaking news, Hurricane Beryl slamming Texas, making landfall just a few hours ago.
Today, Explained
Is a house still a good investment?
We're seeing that there's more extreme precipitation events. What we saw in L.A. is that there's more wildfires, more severe wildfires than we've seen in the past. But the way that it's affecting individuals is that we're seeing more property damage, more people being impacted by these events directly to their properties or to their communities.
Today, Explained
Is a house still a good investment?
Lots of times people live in places like Miami or they live in Houston and they'll say, oh, you know, the weather's always been like this in the area that I'm at. And they'll say, well, what about insurance? And they'll say, well, insurance is killing me.
Today, Explained
Is a house still a good investment?
And lots of times people won't make the connection that the reason insurance is spiking is because there's more damages and there's more payouts from the insurance companies.
Today, Explained
Is a house still a good investment?
I think we're at a point at which we finally have data to help make decisions like this. And I think one of the biggest problems that we've seen so far in the way that climate and real estate are being covered is that climate's driving down the value of home prices. It's sort of reversing the trend that we've had in the US for decades.
Today, Explained
Is a house still a good investment?
you know, a century where the American dream was owning a property and people have aspired to do that. I think what we're seeing, though, is that there's a lot more nuance to the decision making process than simply avoiding homeownership because of climate risk. I don't think people should avoid homeownership. I think it's still a good investment.
Today, Explained
Is a house still a good investment?
I think that there are ways to optimize that process now, though, that do include taking climate into account the same way we've taken other factors into account in the past? How do I, you know, optimize the home buying process so that I'm reducing the risk and maybe I'm buying a home that has, you know, a flood score of a five instead of a flood score of a 10?
Today, Explained
Is a house still a good investment?
The quintessential example in Miami has been sort of this movement from parts of the Miami Beach, sort of coastal region, into an area called Little Haiti that's further inland in Miami-Dade County. It's right along the railroad tracks. It's the high point of Miami-Dade County.
Today, Explained
Is a house still a good investment?
And people on the real estate market at that time were asking their realtors for three bedrooms, two bathrooms, 2,000 square feet, and a certain level of elevation. They wanted to be a certain level above sea level because of tidal flooding and because of increasing sea level tidal flooding events along the coast. And sort of the limestone bedrock in Miami meant there really wasn't anywhere safe.
Today, Explained
Is a house still a good investment?
The water got underground and it rose up through the ground. But high points, places like Little Haiti became much more valuable than they had been prior to this because people were aware of the flooding risk within that market.
Today, Explained
Is a house still a good investment?
Yeah, that Miami example that I gave earlier, it was part of an analysis back in 2017. And the title of the paper that it came out in was called Climate Gentrification. It was people leaving the Miami Beach area. moving into the Little Haiti area, which had been a less desirable area. It was primarily a more vulnerable socioeconomic community, a minority community, and people were moving in.