Roughly $17 trillion worth of property analyzed for the study had experienced intense drought in August, up 42 percent from a year earlier when $12 trillion worth of property had experienced it.
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Areas that frequently experience drought are seeing more residents moving in than out as climate change-induced droughts intensify, according to a report released Wednesday.
The report, released by the online brokerage Redfin, analyzed 34 metros where at least half of cities’ homes experienced intense drought in mid-August. Of those 34 areas, 25 (74 percent) had more Redfin users looking to move in than move out.
Only 23 of the 99 cities that Redfin tracked during 2021 saw more than 50 percent of homes experience drought. Of those 23 metros, 16 (70 percent) had net inflows during the second quarter of 2021.
The increase in net inflow comes as housing becomes more expensive than ever, with mortgage rates sitting near six percent and the cost of the average home climbing, leading some homebuyers to look for deals wherever they can find them even it if means shouldering a higher climate risk.
“Many people take climate risk into consideration when deciding where to live, but other factors, like affordability, often take precedence given that rent costs are rising and monthly mortgage payments for homebuyers are up nearly 40% from a year ago,” Redfin economist Sebastian Sandoval-Olascoaga said in a statement. “Drought may also not be scaring people off to the same extent as fires or flooding, which can physically decimate homes. Still, homeowners and buyers should be aware that drought danger could ultimately dent their home’s value if a lack of water forces residents to leave en masse.”
Roughly $17 trillion worth of property (about 25 million properties) analyzed for the study had experienced intense drought in August, up 42 percent from a year earlier when $12 trillion worth of property had experienced it.
The report explains that the increase is partly fueled by the intense rise in housing prices but also where drought-prone properties are located. New York, San Jose and Los Angeles — three of the most expensive housing markets in the country — all experienced drought during August 2022. Cities like Dallas, San Antonio and Sacramento, which have seen prices skyrocket over the last year, were also in the top 10 for intense droughts.
Much of the nation’s drought-prone property is located in the Sun Belt, where property prices have shot up over the past year despite the environmental risks. Of the 13 Sun Belt cities where 100 percent of properties experienced severe, exceptional or extreme drought in August, all but two — Visalia, California and Las Vegas, Nevada — saw more people looking to move in than out during the second quarter, according to the report.
Nevada, a state impacted by extreme drought, passed a law calling for the removal of “nonfunctional” grass by the end of 2026, and another law banning homeowners from having swimming pools larger than 600 feet in an effort to conserve water, which some real estate experts speculate may eventually deter people from moving to the Sun Belt city.
“Homebuyers are expressing concerns about drought, especially now that the shrinking of Lake Mead is all over the news, but drought risk isn’t a dealbreaker for most of my clients,” Las Vegas Redfin agent Lori Garlick said in a statement. “I did have one buyer back out of moving to Vegas because they were worried there wouldn’t be any water in a few years, but they ended up moving to Arizona, which is also endangered by drought.”
