Climate change is reshaping the real estate landscape as extreme weather events become more frequent and severe.

Rising temperatures, increasing wildfires and intensifying hurricanes are affecting home values and making insurance coverage more costly and, in some cases, difficult to obtain.

One of the most visible effects of climate change on real estate is the growing risk of property damage from natural disasters. Hurricanes have become more intense due to warmer ocean temperatures, leading to stronger winds, heavier rainfall and more severe flooding. Coastal properties, once considered prime real estate, are now at greater risk of storm surge and flood damage, which can lead to significant depreciation in value.

Similarly, wildfires have become an increasing threat, particularly in the western United States. Rising temperatures and prolonged droughts have created ideal conditions for wildfires to spread rapidly, devastating communities and displacing thousands of residents. Homes in wildfire-prone areas face higher risks, and some properties have become uninsurable or require costly mitigation efforts to maintain coverage.

As the risks of natural disasters grow, so do the financial burdens on homeowners. Many insurance companies have started reassessing their exposure to climate-related disasters, leading to skyrocketing premiums in high-risk areas. In some cases, insurers are pulling out of certain markets altogether, leaving homeowners struggling to find affordable coverage. Flood insurance, which was once widely available, is becoming prohibitively expensive in coastal and low-lying regions. Similarly, in fire-prone areas, insurers are either refusing to cover wildfire damage or offering policies at exorbitant rates.

Beyond insurance concerns, the long-term value of real estate is being affected by climate change. Homebuyers are increasingly factoring environmental risks into their purchasing decisions. Properties in areas prone to extreme weather events are seeing slower appreciation and, in some cases, declining values. On the other hand, communities with climate resilience measures, such as improved infrastructure, flood-resistant construction and fire-resistant landscaping, are becoming more attractive to buyers.

Local governments and policymakers are responding to climate risks. Some cities are implementing stricter building codes to ensure construction can withstand extreme weather conditions. Others are investing in infrastructure projects to mitigate flooding or prevent wildfires. While these efforts may help protect property values in the long run, they often come with increased costs for developers and homeowners.

For prospective buyers and homeowners, understanding the effect of climate change on real estate is more important than ever. Researching a property’s risk factors, evaluating insurance options and considering climate-resilient upgrades can help protect investments. As the effects of climate change continue to unfold, the real estate market will need to adapt, with sustainability and resilience playing a central role in shaping the future of housing.