We estimate that US residential properties exposed to flood risks are overvalued by close to US$200 billion. We discuss where these properties are located, and who stands to lose the most from housing prices that better reflect climate risks.
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Reidmiller, D. R. et al. (eds) Impacts, Risks, and Adaptation in the United States: Fourth National Climate Assessment, Volume II, Report-in-Brief (US Global Change Research Program, 2018). The Fourth National Climate Assessment provides a comprehensive overview of the impacts of climate change on people, communities and economic sectors across the United States.
Wing, O. E. et al. Inequitable patterns of US flood risk in the Anthropocene. Nat. Clim. Change 12, 156–162 (2022). This paper estimates average annual flood losses in the present and under future climate change for the conterminous United States.
Hino, M. & Burke, M. The effect of information about climate risk on property values. Proc. Natl Acad. Sci. USA 118, e2003374118 (2021). This paper measures the effect of information about flood risk on property values in the United States.
Bakkensen, L. A. & Barrage, L. Flood risk belief heterogeneity and coastal home price dynamics. Rev. Financ. Stud. 35, 3666–3706 (2022). This paper shows that heterogeneity in beliefs about climate risk drives variation in coastal home values.
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This is a summary of: Gourevitch, J. D. et al. Unpriced climate risk and the potential consequences of overvaluation in US housing markets. Nat. Clim. Change https://doi.org/10.1038/s41558-023-01594-8 (2023).
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Flood risks are insufficiently priced into housing markets but better pricing would leave some worse off. Nat. Clim. Chang. 13, 216–217 (2023). https://doi.org/10.1038/s41558-023-01598-4