Natural hazard risk holding back home sales
But home prices are higher in high-risk areas
Home sales in counties with low natural hazard risk increased during the first half of 2016 at double the rate as those with high natural hazard risk, according to ATTOM Data Solutions, a source for comprehensive housing data and the new parent company of RealtyTrac.
Home sales in counties with low risk increased at a rate of 4.2%, while home sales in counties with high risk increased at only 1.9% in the top fifth of U.S. counties, according to ATTOM’s Natural Housing Risk Index.
Over 3,000 counties were indexed based on risk of six natural hazards: earthquakes, floods, hail, hurricane storm surge, tornadoes and wildfires using data collected by ATTOM’s neighborhood research portal. ATTOM also analyzed home sales and price trends in over 800 counties with at least 100 single-family home sales in the first six months of 2016.
“While price and affordability along with access to jobs are the primary drivers in local markets with strong increases in home sales activity in 2016, it’s evident from this data that natural hazard risk does make a difference to homebuyers and investors who are active in this housing market,” said Daren Blomquist, ATTOM Data Solutions senior vice president.
“Even among the subset of counties where the median price is below the national median as well as among the subset of counties where home prices are still affordable for average wage earners, there is a consistent trend of stronger increases in home sales volume compared to a year ago in the lowest-risk markets for natural hazards compared to the highest-risk markets,” Blomquist said.
The median sales price of single family homes and condos sold between January and June 2016 in the lowest-risk counties was $156,245 on average, 39% below the median sales price in the highest-risk counties during the same time period: $255,160.
In fact, median home prices in the first six months of 2016 increased an average of 6.5% compared to a year ago in the highest-risk counties compared to a 3.2% average increase in the lowest-risk markets during the same time period.