Here Is What Climate Change Does to Real Estate

Heat waves, rising sea levels, fire, and drought risks are all believed to be some of the effects of climate change, but it goes far beyond that, as well. On a financial level, real estate prices are impacted dramatically in areas where climate change “believers” reside. Meanwhile, they are higher in other areas (the ones that “deniers” call home). Which side is correct, and who benefits the most financially?

Cheaper Real Estate Is Found in “Believer” Neighborhoods

A study conducted by the UBC Sauder School of Business found that buyers may end up paying much more for a home in an area that is considered to be a climate change “denier” neighborhood. After taking a variety of variables into consideration, the researchers found that homes that are projected to be underwater in the future but located in “denier” neighborhoods sell for about 7% more than homes in “believer” areas.

Can Climate Change and Real Estate Prices Be Predicted?

Risk calculation is a considerable part of the real estate business. The problem with climate change predictions is that they rely on growth projections that have no similar past for basis. Ultimately, it comes down to what people choose to believe. As a result, prices in areas that are prone to the effects of climate change will continue to drop for “believers” and become buying opportunities for “deniers.”

How Climate Change Affects Your Real Estate Investment

No matter which side you are on in the climate change debate, there are multiple ways to take advantage of the real estate market. For example, buying beachfront land in neighborhoods where climate change “believers” are a high percentage may prove to be a bad decision, as home prices may continue to drop. However, if you are a climate change “denier,” then this is a golden opportunity to snatch up premium waterfront land at a cheap rate.

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