When you’re finally ready to retire, consider climate change when moving


If you’re already of retirement age, moving to Florida might make sense. But if you’re planning your future retirement, you should take climate change into account.

Even if you don’t believe in climate change, mortgage lenders, property and casualty insurers, and other businesses vital to homeownership are preparing for the potential impacts caused by climate change. does not bode well for many of the most popular retirement destinations. , at increased risk from one or more of the five common climate change impacts: wildfires, floods, and coastal inundation.

Meanwhile, areas where retirees have fled for decades, like the Midwest, could become more attractive as climate changes. Even in the South, some communities work better than others. The mountain town of Asheville, North Carolina, which enjoys mild summers due to its high altitude, is already emerging as an early winner in the global warming problem.

As the earth gets hotter and the weather gets more intense, protecting your home becomes more difficult and costly. Real estate research and data company CoreLogic has mapped every structure in the United States and how climate change will affect those buildings by 2050. Not only do we want to find them, we also want their insurability. ”

Future retirees need to prepare for climate change in the same way they prepare their investment portfolios for market downturns. Avoiding locations that are particularly affected by climate change can save a lot of money and hassle. The good news is that there are online tools that people can use to start researching climate risk in the areas they want to live their golden age.

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costly disaster

Economic risks from climate change are increasing. The National Oceanic and Atmospheric Administration (NOAA) said in 2022, the United States will experience at least 10 catastrophes for her eighth straight year, resulting in more than $1 billion in losses. Insurance company Aon said her $52.5 billion insured losses for Hurricane Ian, which hit Florida in September, were her second-highest after Hurricane Katrina.

Climate hazards often stack on top of each other. Extreme heat can cause drought, increasing the risk of wildfires, and rising sea levels cause coastal flooding. Warm air holds more water, making hurricanes more deadly and causing more inland flooding.

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A recent analysis by Adam Kamins, senior director of Moody’s Analytics, found that regions along the Atlantic and Gulf Coasts are at higher risk from acute events such as hurricanes, wildfires and floods, and from chronic events such as extreme heat and sea level rise. Risky, especially in Florida.

Among the top 20 economies at severe risk was Wilmington, North Carolina. Charleston, South Carolina. Savannah, Georgia; Jacksonville, Florida. and in his St. Lucy in Port Florida, Cummins’ research showed. Florida towns such as Orlando, West Palm Beach, and Cape Coral near Fort Myers are “significantly exposed” to both acute and chronic risks.

Several coastal cities in the north are at increased risk of water stress, including excessive heat, sea level rise, drought and floods. They include Wilmington, Delaware. New York City and Long Island.

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On the other hand, the West is getting drier despite its growing population.
Consider Phoenix, which is currently the fifth largest city in the United States. According to Zillow, home prices have risen 70% over the past five years, with the average sale price in February of his $394,870.

As the water supply dries up, it becomes difficult to sustain its growth. The City of Phoenix says the metropolitan area is in his 15th year of drought. Water scarcity will worsen as the Colorado River’s water supply dwindles and the federal government prepares to impose mandatory cuts on users like Arizona.

Even in NOAA’s most optimistic scenario, Phoenix is ​​expected to be hotter and drier. By 2044, there will be approximately 70 days of temperature above 105°C each year, an increase of 23.5 days from 2005.

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Meanwhile, in stormy Florida, home insurance is becoming increasingly difficult. The Florida Department of Insurance Regulation has a rate comparison tool for homeowners. For homes with wind mitigation in Miami-Dade County worth $150,000 built before 2001, 22 companies are offering estimates from $2,651 to $11,007.

“Our homeowners insurance market is pretty crazy,” said Michael Wagner, co-founder and chief operating officer of Omnia Family Wealth, which lives in the Miami-Dade area. there is no.”

Wagner said the Miami area is experiencing more flooding than before. Floods occur in some areas whenever there is a king tide, a higher-than-normal tide that occurs during a particular full moon.

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Property values ​​are skyrocketing in Florida. However, there is also evidence that climate risks are still impacting home sales volumes and prices. A study by Benjamin Keyes, a professor of real estate at the University of Pennsylvania, found that between 2013 and 2018, more than 70 percent of his land was exposed to a six-foot rise in sea levels in Florida’s low-lying regions, where home sales were down. Volume decreased by 20%. Wharton School,.

do your research

Melissa Booth and her husband, Peter Krul, left Sapelo Island, Georgia and moved to Asheville, North Carolina in 2012 after seeing how climate change was changing the barrier islands. . They chose Asheville because of its cool temperatures and abundant water supply. The couple was one of his other newcomers as the city grew 13.4% of his from 2010 to 2020. According to Zillow, home prices have risen 54% over the past five years to an average of $426,000.

Asheville will have record temperatures, but it shouldn’t be as hot as other southern towns. NOAA’s Climate Mapping Tool estimates that in a low-emissions scenario, mountain cities will have an average of 13.6 days above 90 degrees Celsius by 2040, nearly 10 days more than in 2005. increase.

For those looking to escape the heat, moving from the North to the Midwest may be the most affordable option. is expected to exceed 7 days. The city has also seen little increase in drought, wildfire and flood risk, according to NOAA.

In Duluth, which has a smaller population than it did in the 1970s, home prices have risen 44% over the past five years to $237,307 in February, according to Zillow.

People nearing retirement can do their own research to find areas that might do well from a climate perspective as well. can study exposure to current and future common climate hazards. A user can click on a story map like this one on coastal inundation, enter a city or county, and explore the data visualization. NOAA’s CMRA assessment tool allows you to view county climate projections broken down by time frame for the early, mid-, and late 20th century.

Tools provided by property climate risk assessment provider ClimateCheck and the non-profit First Street Foundation apply climate hazards to individual property situations and provide basic recommendations on how to mitigate impacts on property. Offers.

Tips for homebuyers

As a researcher nearing retirement, a few smart choices can make a difference in the resilience of your home. CoreLogic’s Botts says his biggest concern about climate change is flooding, including flash floods from heavy rainfall. He advises homebuyers to compare the height of their homes to the flood zone and look for homes where the ground floor is at least six feet above the flood zone.

Botts noted that even in cities like Houston, which experienced massive flooding after Hurricane Harvey in 2017, there was a great deal of variability.

The Kingwood neighborhood, which experienced the worst of the Harvey floods, is 48 feet above sea level, while Houston Heights remained unflooded at 59 feet.

Older homes have history and charm, while newer homes may have been built on stronger cords, such as making the roof more resilient to high winds.

If you want to know more about a particular property, talk to your local insurance agent about climate change hazards and, if possible, other property owners in the block. Be aware that protecting your investment may pinch a penny. “Insurers are increasingly offering discounts on policies that mitigate losses,” he says.

Please contact editors@barrons.com.

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