MReport May 2021

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M R EP O RT | 11 MDWELL Full study and methodology at A significant percentage of American homeowners believe that an increase in natural disasters including wildfires, storms, extreme temperatures, and rising sea levels—as they relate to home values—warrant serious concern and preventative actions. Economists say such apprehension is legitimate. "Climate change is posing an increasingly large risk to homeowners. As storms, wildfires, and rising sea levels render more areas undesirable in the coming years, housing values in those areas will decline. This means a growing number of homeowners will see a major source of wealth—their home equity—wiped away," Daryl Fairweather, Redfin's Chief Economist, said. "We may also see folks in at-risk areas choose to rent instead of own to avoid getting stuck with devalued properties." Recent research conducted by Redfin's team revealed that while 35% of 2,000 who responded to their survey said, "no," they do not believe climate change will negatively impact the value of their homes, 21% said it already has had that negative impact. Twenty-three percent believe climate-related disaster will impact their homes in the next five years. Another 20% think that a negative impact will occur within the next 20 years. Meanwhile, natural disaster premiums also are rising. About 65% of surveyed homeowners have a home insurance policy covering some type of natural disaster, according to the study's authors. Flooding is the most common threat for which homeowners pos- sess insurance, with 33% of respondents indicating they have policies to protect against this risk. Next come tornadoes (29%), earthquakes (22%), hurricanes or other major tropical storms (19%), and wildfires (15%). Redfin Survey: Redfin Survey: Do you believe that the increasing frequency or intensity of natural disaster, extreme temperatures, or rising sea levels will negatively impact home values in your area? If so, when? 21 % It is already negatively impacting home values 23 % Yes, in the next five years 12 % Yes, in the next 5-10 years 5 % Yes, in the next 10-20 years 3 % Yes, in 20 or more years 35 % No Weather Changes, Natural Disasters, and Home Values Many homeowners believe an increase in storms, extreme temperatures, wildfires, and rising sea levels warrant serious concern—an economist weighs in on the validity of such apprehensions.

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