A Homebuyer’s Guide to Climate Forecasting

C+S 2020 students are blogging about topics that interest them for Applications in Climate and Society, a core spring class.

As if shopping for a new home wasn’t difficult enough, failing to consider the impacts of climate change on your new property could be a costly (or even deadly) mistake. In just the past three years, climate change-related disasters caused $415 billion worth of damages in North America alone, according to Morgan Stanley. To avoid even more major losses, financial institutions like insurance companies and asset managers are paying top dollar for climate risk forecasts and building these probabilities into their investment decisions. But you don’t need $100 million in assets to access these insights. With a little research, anyone can understand the climate risks involved when making the biggest financial decisions of their life.

Will a hurricane flood your new basement? Will a drought ruin that beautiful landscaping? Will a fire send your domestic bliss up in smoke? Some risks may force you to consider living in a different neighborhood or even city. Others may require you to invest in strengthening your home’s resilience to a natural disaster. Regardless, the first step of managing risk is understanding it. Without this understanding, you put your home, financial well-being and family’s health at risk.

Let’s say this past winter wore on you and you are now planning a move to the beautiful city of Miami, Florida. While preparing for your move, you saw a CBS news story about flooding related to sea level rise. As you shop for a new home, you know it’d be wise to avoid neighborhoods susceptible to coastal flooding. But where to find that important information?

Before diving headfirst into the forecasts, it’s important to understand the role that uncertainty and risk play in any statement about the future. Just because you promise to attend a friend’s birthday party doesn’t mean you’ll actually show up. Any number of things could get in your way: You could become too sick to attend, your car could break down or the event could simply slip your mind. These various scenarios—though unlikely—all pose some risk that you’ll break your promise. Similarly, climate scientists use probabilities when discussing the future, and these probabilities can help determine your level of risk when purchasing a new home.

With an understanding of risk and uncertainty, you can begin identifying the types of climate-related threats where you’re planning to move to. For Paradise, California; you’re likely worried about the threat of fire. For Louisiana’s coast, you might be concerned about sea level rise. For others, it may be harder to know which threats to worry about. These homebuyers may find interest in a series of maps from the Washington Post displaying the threat of natural disasters across the U.S. as well as the site States at Risk, which explains the threats in each state. You can also hop on your city’s and state’s websites, which often have sections devoted to preparedness for natural disasters (if they’re preparing, you should be, too). Once you have identified the biggest climate threats where you want to buy, you can begin researching your new home’s exposure to these threats and the forecasts out there.

Any good forecast will include the forecast period, the carbon emission scenario, and the certainty of the forecasts. If a forecast is missing any of these items, use it only with caution. To aid your search, here are a few recommended sources: Ocean’s at the Door Risk Map and Surging Seas Risk Finder by Climate Central, Fire Risk Map by Cal-Adapt, and Visualizing a Warmer World by WRI. But don’t limit yourself to these—new tools come out all the time.

All that’s left is incorporating these forecasts into your decision. Now that you understand the risks, it’s time to manage them. Will you choose a home in a safer location? Will you invest in lowering your home vulnerability to the threats? Will you take out insurance policies to transfer the risk away from your own assets? These decisions are entirely up to you but require careful consideration. Whatever decision you make, you’ll do so with the comfort of knowing you had the information necessary to assess the risks.