An aerial view of the lakefront residential community on Mercer Island, Washington State, nestled between the downtown districts of Bellevue and Seattle.

Demand for properties along the water is expected to decrease as the likelihood of climate-related damage grows. (Getty Images)

In January, the Federal Emergency Management Agency announced that they would be updating New York City's flood maps as a result of rising sea levels and shifting climate change forecasts. After all, in New York City, it's been estimated that approximately 80 percent of the property owners who have experienced flood damage since the maps were last updated in 1983 didn't have flood insurance.

If you live in an area that has been plagued by floods, fires or beach erosion, or if you are concerned because 2014 to 2017 were the warmest years on record, you may be asking yourself: "How will climate change impact my home's value?"

[Read: 3 Financial Steps to Take After a Natural Disaster.]

While it's impossible to predict the future, the consequences of rising temperatures and sea levels and increasing flood-prone areas could result in adjusted home values. Below are climate change projections and factors that will likely significantly alter property values, according to experts.

1. Demand will decrease for waterfront homes. So far, there hasn't been a reason for homeowners in beach areas to panic, but in 2015 a study from the University of North Carolina Wilmington found that oceanfront property values could drop across beachfront property in the United States if federal subsidies were eliminated. For instance, in New Jersey, it would fall up to 34 percent.

Bruce Ailion, a realtor and attorney with Re/Max Town & Country, in Alpharetta, Georgia, says he's looked for several years for Gulf-front property. Last year, he was close to settling on an oceanfront duplex in Puerto Rico for only $210,000. He reluctantly decided to not buy it.

A month later, Hurricane Maria ravaged Puerto Rico. "If we had gone ahead [and closed on the property], we might only have an empty lot and a mortgage," Ailion says. Ailion suspects that he isn't the only one who has backed out of buying beachfront property because of worries about climate change. "It's very serious. Serious enough to keep me, and perhaps hundreds of thousands, out of the market," he says.

That said, home prices fluctuate, depending on the region, among other factors. The entire East Coast has been impacted by hurricanes over the last few years, with last year's Hurricane Harvey, Irma and Maria, as well as other disasters like Hurricane Matthew, Hermine, Arthur and, of course, Superstorm Sandy. However, Paul Grover, a real estate agent and co-founder of the real estate company Robert Paul Properties, says that in Massachusetts coastal communities "there's an increased awareness of the effects that climate change can have on a property, but overall it has not impacted home values."

Grover adds that homeowners do often discuss the possibilities of climate-related damage with their real estate agents, however. "While buyers have certainly become more mindful of characteristics such as elevation and vegetation that can prevent erosion, waterfront markets remain strong throughout the state," he says.

[See: 9 Ways to Reduce Your Insurance Costs.]

2. If your home's value declines, your insurance may go up. Assuming extreme weather patterns continue, it seems inevitable that premiums will continue to climb.

"I sell insurance in Marin County, California, a county that has both super expensive homes and has recently seen the FEMA maps change," says Scott Johnson, a manager and principle broker agent of Marindependent Insurance Services LLC in Mill Valley, California.

He says many of his clients were in zones that FEMA considered safe from flooding that are now in zones that FEMA considers risky, which caused a sharp spike in insurance rates.

Homeowners are angry, Johnson says. While he doesn't know for sure why insurance has gone up in the area, Johnson says he has his suspicions. "Part of the problem is that river and water systems in this county have changed, part of the problem is that the county and state have failed to keep up with the issue and part of the issue is higher and lower king tides [the highest naturally occurring tides], and potentially more extreme weather systems," he says. "We had an atmospheric river system that came through this county about four or five years ago that dropped over 20 inches of rain in 24 hours. It was not a hurricane, just a storm," he adds.



3. You could see higher property taxes. A 2014 study by the Union of Concerned Scientists suggests that by 2045, some cities, like Atlantic City and Cape May, New Jersey, can expect to see tidal flooding 240 times or more per year.

Many government officials say that if some communities are routinely swamped, residents will naturally move away. So theoretically, if you live in an area of the country that routinely sees flooding and has fewer residents and thus a smaller tax base, you could see your property taxes climb significantly. After all, somebody has to pay for your community's infrastructure.

And you don't have to be near the coast to see your property values lowered due to climate change. A 2017 study from The Ohio State University estimated that due to excessive algae, a result of warmer weather, Ohio homeowners who live near Buckeye Lake and Grand Lake saw their combined property values decrease by $152 million from 2009 to 2015.

4. Some property values will go up. There are always going to be winners and losers in a fickle real estate market as climate change continues to take a toll on property values. That's why Lou Nimkoff, president of the Orlando Regional Realtor Association, predicts that his city, as far as home values go, will likely soar, even as the effects of climate change continue to batter beachfront properties in Florida.

[See: 8 Potential Headaches to Be Aware of Before Becoming a Homeowner.]

"Rising sea levels [and] increasing hurricane intensity could very well drive those vacation homebuyers who would normally prefer a beachfront property toward inland destinations," he says. "While Miami and Orlando are the top two markets for vacation homes in Florida, if Miami's international buyers turn their attention away from the southern beaches and instead toward Orlando, we will experience a truly massive increase in demand and competition for homes," he adds.

Still, while that's all well and good now, it may only be a matter of time until Orlando is affected next.


7 Things First-Time Homebuyers Wish They'd Known

Buying your first home is an exciting – and often daunting – endeavor.

A real estate agent goes over paperwork with a miniature home model on the table.

(Getty Images)

In addition to setting your budget, comparing neighborhoods and visiting properties, you'll likely also get a crash course in mortgages and home inspections, among other things. According to the National Association of Realtors' 2017 Home Buyer and Seller Generational Trends report, first-time buyers made up 35 percent of all homebuyers, up from 32 percent last year. U.S. News talked to seven first-time buyers from across the country to find out what they wish they'd known before jumping into the real estate market.

Beware of wire transfer scams.

Beware of wire transfer scams.

A frustrated businesswoman works at her desk.

(Getty Images)

Two hours before Shannyn Allan, founder of the blog Frugal Beautiful, was supposed to close on a home in San Antonio, she received a last-minute email with instructions on where to wire her down payment. Turns out, fraudsters had scraped her information from the title company and posed as the company when they emailed her instructions. She later discovered the fraud and spent weeks trying to get the banks to recover the funds so she could close. "I wish the title companies would have let me know what to watch out for with wire fraud, and advised me to do a cashier's check," she says.

Don't skimp on upgrades.

Don't skimp on upgrades.

Backsplash installation

(Getty Images)

After freelance writer Leah Ingram and her husband built their first home in 1999 in New Hope, Pennsylvania, they immediately regretted choosing the smaller model with a lackluster kitchen and bathrooms. "A couple thousand dollars for those upgrades spread over a 30-year mortgage would not have been a hardship," she says. The couple also thought that buying on a cul-de-sac would ensure there were other kids nearby. There weren't, however, and they moved after seven years.

Save extra money for closing costs.

Save extra money for closing costs.

Small model house beside a large pink piggy bank.

(Getty Images)

Christine Cummings and her husband are in the process of buying a home in Somerville, Massachusetts. Cummings, who is VP of marketing at All Set, a mobile app that aims to connect homeowners with lawn service and house cleaning professionals, says she wishes she'd known how much to budget for closing costs. "There are all these little fees here and there adding up to the actual closing date, making the closing costs just a little harder to pay," she says. In addition to a down payment and closing costs, new homeowners should also budget for potential surprises such as a broken air conditioner and other maintenance costs.

Check the sewer line.

Check the sewer line.

Home inspection checking exterior of home being sold. Inspector is using digital tablet to record results.

(Getty Images)

After buying a home in New Jersey in 2003, Kenneth O'Connor, founder of a YouTube channel on saving for college, discovered his single-family home had major sewer problems. "If there are large old trees on the path of the sewer line, you need to make sure the roots are not constricting the pipe and cracking it," he says. It used to be harder to detect sewer problems, but "now [a home inspector] can send a tiny camera down the sewer line to determine if it's safe," he explains, emphasizing the importance of not overlooking this step.

Consider the school district.

Consider the school district.

Male teacher assisting elementary school children in classroom during lesson

(Getty Images)

When Ali Wenzke, founder of The Art of Happy Moving, and her husband bought a townhouse in Chicago, they didn't consider the school district because they didn't have kids yet. "When we sold our home four years later, we had three kids and their educations to consider," she says. "We moved because we needed the space, but we were lucky that we accidentally bought in a great school district." Even if you don't plan on having kids, she recommends investigating the school district for future resale value.

Price out renovations in advance.

Price out renovations in advance.

New bathroom cabinets with granite countertopsBathroom renovation and granite installation

(Getty Images)

After buying her first home in Atlanta, Kali Hawlk, founder of a marketing firm that specializes in working with financial advisors, wishes she'd factored in the cost of upgrading to double-pane windows. "I could never get the temperature downstairs above 65 degrees in winter because the entire back wall of the house was single-pane windows," she says. "I wish I had been aware of how expensive it would be to replace all of the house's single-paned windows with new ones," she explains. She thought upgrading the windows would be a simple fix, but it wound up costing around $10,000.

Look beyond surface details.

Look beyond surface details.

Beautiful Kitchen in Luxury Home with Island and Stainless Steel

(Getty Images)

Fancy fixtures and accent walls are nice, but some flipped homes mask bigger problems. "When we purchased our first home, we found out very quickly that aesthetically pleasing did not mean physically sound," says Dan Mackin, host of the Ditching 9 to 5 podcast. "Your inspector can't find things underneath the walls. Just because a flipped home is pretty doesn't always mean it's [of] better quality," Mackin says. His first home (a flip in Colorado) had so many problems, he moved out two years later and earned his real estate license so he could help others avoid the same issues.

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Tags: home insurance, home prices, global warming, real estate, new home sales, existing home sales, pending home sales


Geoff Williams has been a contributor to U.S. News and World Report since 2013, writing about a variety of personal finance topics, from insurance and spending strategies to small business and tax-filing tips.

Williams got his start working in entertainment reporting in 1993, as an associate editor at "BOP," a teen entertainment magazine, and freelancing for publications, including Entertainment Weekly. He later moved to Ohio and worked for several years as a part-time features reporter at The Cincinnati Post and continued freelancing. His articles have been featured in outlets such as Life magazine, Ladies’ Home Journal, Cincinnati Magazine and Ohio Magazine.

For the past 15 years, Williams has specialized in personal finance and small business issues. His articles on personal finance and business have appeared in CNNMoney.com, The Washington Post, Entrepreneur Magazine, Forbes.com and American Express OPEN Forum. Williams is also the author of several books, including "Washed Away: How the Great Flood of 1913, America's Most Widespread Natural Disaster, Terrorized a Nation and Changed It Forever" and "C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America"

Born in Columbus, Ohio, Williams lives in Loveland, Ohio, with his two teenage daughters and is a graduate of Indiana University. To learn more about Geoff Williams, you can connect with him on LinkedIn or follow his Twitter page.

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