There are many factors, external to property itself, that will affect house prices in a specific area. The weather is one such factor rather out of anybody’s control that can be considered part of the location which, anybody in the property business is all-too aware, can be a real deciding factor in the value of properties. CityHome Collective, a real estate brokerage specializing in luxury homes and condos for sale, say that for the latter type of property, a sunny location is always a bonus. So much is obvious, but the other thing about climate and property prices is that the climate can change, and this is perhaps a new emerging property price factor that many have only come to terms with relatively recently.
Climate Change – Risks and Opportunities
The global risks of climate change are well-known and, often, not a little alarming. A building’s operation and value are always intimately related to how the climate affects it, or how it could affect it in the future. Accordingly, climate change presents risks to property developers, who might be worried that a shift in climate could make an area (and therefore also a property) less desirable.
But of course, by the same token, climate change offers potential opportunities to property developers. To illustrate this with a well-known example, the winters across the northern United States, from New York along to Chicago, are known to have been getting more severe in recent years. And the timescales involved are not so small as to make accounting for changes in climate impossible. There are many things that make a good winter property – from good heat conservation to gardens and local amenities that make the most of winter weather. Building properties able to cope with colder weather, therefore, is a wise move for a property developer in New York and Chicago.
Believing in Climate Change
But when it comes to climate change, there is yet another factor that can affect property prices in ways you might not expect. This factor is whether the people in a certain community actually believe in climate change or not. It is often forgotten that there is a strong community and human dimension to property valuation and, even if there is evidence that climate change will affect the local weather significantly, this will only impact property valuations if the people in that community are actually concerned about it.
For example, if a fact of climate change (like rising sea levels around coastal property areas in states like Hawaii and Florida) is not something that locals are concerned about, then there will not be any phenomenon of flight away from these areas by homeowners looking to sell their property fast and go somewhere else. It is phenomena like this that impact property values the most. Nevertheless, if no such phenomena exist (because people are not concerned) then the property values will not be as sharply impacted as the actual climate reality would seem to suggest.
So in conclusion, when it comes to the effect of climate and climate change on property values, you need to consider both what weather changes could possibly occur and what local homeowners think about them. Accordingly, the best way to navigate the property market, when climate change is a major factor, is to find a brokerage that not only knows the area and housing stock well, but which also intimately understands the buyer and seller attitudes. With such a brokerage then, you can not only avoid the potential pitfalls but also exploit some of the unique opportunities as well.