As climate change fuels large-scale natural disasters, the real estate mantra of “location, location, location” is taking on new meaning. In 2021, homeowners have contended with threats including paralyzing cold on the Great Plains, wildfire evacuations in the West and flooding from the South to New York City and New England.

Buying a house is complicated enough in a market that has become supercharged in many U.S. cities. Emerging climate change risks will further complicate those decisions. Investors will be less likely to regret their decisions if they do due diligence in researching local climate risks. Mortgage lenders will face less risk of borrowers defaulting, and insurers will face fewer losses, if they factor climate risks into decisions on loans and insurance policies.

I study environmental economics, and in my recent book, “Adapting to Climate Change: Markets and the Management of an Uncertain Future”, I explore how the rise of Big Data will help people, firms and local governments make better decisions in the face of climate risks. I see the emergence of a climate risk analysis industry for real estate as a promising development, but believe the federal government should set standards to ensure that it provides reliable, accurate information.

Read full story at The Conversation: https://www.gettyimages.com/detail/news-photo/lake-tahoe-ca-august-31-2021-a-cabin-is-illuminated-by-fire-news-photo/1234991812

Imagery: https://theconversation.com/a-new-ratings-industry-is-emerging-to-help-homebuyers-assess-climate-risks-171898