The threat of climate change is, for some people, merely a political consideration. However, as the effects of climate change become more evident, real estate developers have begun taking it into account as part of their development strategy, shaping their plans based on the predicted impact of a warming planet. This has led them to begin developing in places that might not have seemed attractive before, while avoiding some traditional markets that look more like bad bets in the face of a changing climate.
What is Climate Change?
In simple terms, “climate change” refers to the ongoing phenomenon where the average temperature of the air and ocean has begun to rise. This, in turn, has led to shifts in weather around the world, causing substantial changes to wind patterns, rainfall, and flooding, among other issues. In addition, extreme weather events, such as hurricanes, wildfires, and tornadoes, have become a more common occurrence, leading to more property damage in affected areas.
What is the Effect That Climate Change Has on Real Estate?
One of the biggest issues that climate change causes for real estate is that it can substantially affect the viability of development in certain areas. For example, low-lying areas that were once considered largely safe for development may get reevaluated if rising sea levels or increased rainfall turn it into a flood zone. Likewise, previously unappealing areas may become more targeted for development, if they are considered relatively safe from the potential effects of climate change.
How Are Real Estate Investors Reacting?
Where once real estate investors might have ignored the potential risks of a changing climate, many investors now have begun doing environmental assessments of every property they look to develop. This includes assessments of a property’s sustainability and resilience, which includes its ability to withstand severe weather events. It also includes the increased risk a property may face over time, which can affect a property’s insurance rates.
How Could This Affect You?
If you are a current homeowner looking for a new home, or a first time buyer looking for the perfect property, it can be worthwhile to take environmental concerns into consideration. What may seem like an ideal place to live right now may not be quite as appealing in twenty years, based on current climate trends. That is why you should always make sure to do a full assessment of a property’s risks, including an environmental assessment, before you buy, so you know exactly what you are getting into.
If you are an attorney assisting a client with a real estate transaction, you should contact the title insurers at Habitat Abstract. Our experienced staff will assist you with obtaining a title insurance policy that protects your clients and prevents unforeseen issues related to a defective title. Contact us at 1-888-99-TITLE (1-888-998-4853) or visit our contact page for more information.
