|Homebuyers have a lot to think about. After all, there’s a laundry list of factors, features, and amenities to consider when deciding on a house to buy. Everything from the size of the kitchen to the neighborhood and school district is up for discussion. So it isn’t surprising that homes for sale in areas at high risk of flood or fire might give buyers pause.
But a new analysis from the National Association of Realtors’ consumer website shows exactly how that hesitation affects home prices in those locations. According to the study, homes in high-risk areas show slower price growth than those in areas with less risk. In fact, over the past five years, homes in locations at risk of flooding saw sales prices 5 percent lower than homes in surrounding areas. In locations at risk for fire, prices grew 3 percent slower.
Danielle Hale, the chief economist for the website, says at-risk homes may have a lower price tag but they also come with some additional costs. “When buying a home in a flood or fire-prone area, home shoppers should budget for the added cost of home insurance, mitigation practices, and potential losses, which can add to the total cost of ownership for the home.” (source)