Single-family homes in U.S. flood plains are overvalued
by a total of $43.8 billion, new research shows,
highlighting the unsustainability of real estate markets in
the face of escalating climate change.
An estimated 3.8 million single-family homes are located
in flood plains, meaning the average flood plain home is
overvalued by more than $11,500, according to an April
27 paper in the Proceedings of the National Academy of
Sciences.
“The overvaluation we find is really concerning,
especially given the increases in climate risk that are
coming our way,” said lead author Miyuki Hino, an
environmental social scientist at the University of North
Carolina at Chapel Hill.
The widespread overvaluation could represent a ticking
time bomb for the millions of Americans whose assets are
tied up in flood zone properties, which are concentrated,
but not exclusively located, in coastal states. As sea levels
rise, natural disasters worsen and flood insurance rates rise,
these properties’ values could plummet.

Hino and her co-author, Marshall Burke of Stanford
University, found that a single-family home being located
in a flood plain does decrease its value by a little bit — but
to a far lesser degree than it should.
“Lots of […]