Home Prrice Appreciation in Highest-Risk Natural Hazard Cities 1.7 Times the Overall Market Rate over Last Decade, Finds ATTOM Data Solutions

Daren Blomquist

IRVINE, CA,  Sept. 20, 2018 — ATTOM Data Solutions, curator of the nation’s premier property database, today released its 2018 U.S. Natural Hazard Housing Risk Index, which found that median home prices in cities with the top 80^th percentile for natural hazard housing risk have appreciated 40 percent on average over the last 10 years — 1.7 times the 24 percent home price appreciation in the overall U.S. housing market during the same time period.

For the report ATTOM indexed natural hazard risk in more than 3,000 counties and more than 22,000 U.S. cities based on the risk of six natural disasters: earthquakes, floods, hail, hurricane storm surge, tornadoes, and wildfires. 

ATTOM also analyzed housing trends in 2,616 cities and 440 counties — containing more than 53 million single family homes and condos — broken into five equal quintiles of natural hazard housing risk (see full methodology below).

“While combined natural disaster risk has not seemed to hobble home price appreciation over the past decade, the story is much different for some individual hazard risks — namely flood, hurricane storm surge and wildfire risk,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. 

“Home price appreciation in the overall U.S. housing market was double the rate of appreciation in cities with the highest flood risk and triple the rate of appreciation in cities with the highest hurricane storm surge risk over the past 10 years. 

"The broader market has also outperformed appreciation in cities with the highest wildfire risk during the last decade, although the gap is much narrower.”

	Overall Natural Hazard Risk Category
Housing Metric	Very Low	Low	Moderate	High	Very High	Grand Total
Number of Cities	524	522	524	523	523	2616
Single Family Homes & Condos	9,185,179	9,434,995	11,107,207	12,524,073	11,039,375	53,290,829
Average Home Value	$282,218	$267,380	$260,204	$298,559	$624,357	$346,516
Average Property Age (Years)	45	43	39	36	42	41
Average Property Tax	$4,518	$3,705	$3,321	$3,652	$4,959	$4,031
Average Property Tax Rate	1.7%	1.4%	1.3%	1.3%	0.9%	1.3%
Average Foreclosure Rate	0.65%	0.38%	0.36%	0.29%	0.21%	0.38%
Avg Pct Seriously Underwater (LTV 125+)	10.2%	9.9%	9.8%	7.9%	4.7%	8.5%
Average Homeownership Tenure	8.19	7.63	7.60	7.66	9.23	8.06
Average 2018 Median Sales Price	$244,079	$232,812	$231,432	$267,133	$582,876	$311,640
Average Premium/Discount to Market Value	-3.7%	-3.7%	-3.0%	0.3%	1.0%	-1.8%
Average of 1-Year HPA	6%	7%	7%	6%	9%	7%
Average of 5-Year HPA	29%	39%	39%	43%	54%	41%
Average of 10-Year HPA	11%	19%	21%	28%	40%	24%

Foreclosure rates elevated in highest-risk flood cities

Foreclosure rates were lower in cities in the top 80^th percentile for natural hazard housing risk, and this was true for all individual natural hazard risk types except for flood risk. In cities in the top 80^th percentile for flood risk, active foreclosures represented 0.61 percent of all properties, well above the foreclosure rate of 0.38 percent across all risk categories.

“Weather is the largest external swing factor in U.S. economics and accounts for over $550 billion per year in lost revenue and up to 76,000 lost jobs,” said Mark Gibbas, president and CEO at WeatherSource, a technology company that provides global weather and climate data along with advanced analytics. 

Mark Gibbas

“Weather can have an enormous impact on homeowners and the housing market.  When big weather events such as hurricanes, tornados and hail hit, many homeowners suffer financial hardship from various sources such as lost wages and losses due to inadequate insurance. 

"And while the impact on homeowners can be severe, hurricanes like Harvey can change the landscape of the housing market region wide, including shifts in the number of available homes and shifts in home values.” 

Cities with the highest flood risk also posted seriously underwater rates (loan-to-value ratio of 125 percent or higher) above the overall market average — 8.9 percent of all homes with a mortgage compared to 8.5 percent nationwide. 

Tornado risk was the only other individual natural hazard risk factor with seriously underwater rates above the market average in the highest risk cities — 10.0 percent of all homes with a mortgage.

CONTACT:

Christine Stricker Sr.
Marketing Manager, Projects
Office: 949.748.8428
Email: christine.stricker@attomdata.com