Are You Ready for the Great Climate Migration? The Future of U.S. Real Estate

A new report that by 2055, climate change could lead to a $1 trillion drop in U.S. real estate value. This is due to people moving away from high-risk areas and into more climate-resilient ones. Some regions will see a population decline, while others will still grow despite climate risks.

The report classifies areas into five categories based on climate risk. “Climate abandonment” areas are seeing a population drop due to high risks and insurance costs, while “risky growth” areas continue to grow because of local factors like good amenities or job opportunities. “Climate resilient” areas attract more people because they face fewer risks. Other regions might be in a “tipping point,” where risks are rising but haven’t yet caused a population decline.

Notably, areas with high risks, like some big Texas cities, are expected to see growth, but property values might drop by around 1.7% over the next 30 years. On the other hand, places facing higher risks, like Tampa, could see a 25% drop in home prices. Overall, the U.S. real estate market could lose more than $1 trillion in value by 2055.

One of the key takeaways is that climate risk is very local. People are not necessarily leaving entire cities but are instead choosing to move to safer neighborhoods within the same metro area. For example, people might move to parts of a city with lower risks but stay close to family, work, and schools.

Some areas, particularly in the Midwest, are expected to be more resilient, with places like Dane County, Wisconsin, and Franklin County, Ohio, topping the list of climate-safe locations.

In short, while climate change is reshaping the real estate market, the changes will happen on a local level, and people will continue adjusting where they live based on climate risks.