Since 2013, homes with high flood risk have sold for about 7% more than homes with low flood risk on average, likely because many of them are luxury waterfront properties. That premium surged during the coronavirus pandemic, when many wealthy homebuyers started eyeing oceanfront or lakefront houses outside of major cities.
"Americans are buying the beach houses they always dreamed of because they have the flexibility to work from wherever they want," said Redfin Senior Economist
Redfin and other real estate websites have started sharing property-level flood risk data online to help house hunters determine if the homes they're interested in are located in flood plains and whether they should purchase flood insurance.
Places that are prone to flooding are also seeing stronger growth in home sales. Sales of high-flood-risk homes rose 18.6% year over year in the first quarter—about double the 9.6% gain in sales of low-flood-risk homes.
"If you buy a home on the water in
While home prices and sales growth are both higher for high-risk homes, homes with low flood risk are more likely to fetch more than their owners ask for. In the first quarter, 47.2% of low-flood-risk homes went for more than they were listed for, compared with 37.4% of high-flood-risk homes. That 9.8-percentage-point gap is the largest on record. Redfin's records date back to 2013.
Properties with low flood risk typically cost less than properties with high flood risk because they're less likely to be on the beach with waterfront views, Bokhari explained. Because low-risk properties are more affordable, they face more competition, which means buyers are more likely to bid up the prices.
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Redfin Journalist Services, Angela Cherry, 913-638-8249, email@example.com