The real estate industry mantra “location, location, location” took on a rather toxic hue with ATTOM Data Solutions’ third annual Environmental Hazards Housing Risk Index, which determined that 17.3 million single-family homes and condos with a combined estimated market value of $4.9 trillion are in ZIP codes with high or very high risk of Superfunds, brownfields, polluters or poor air quality.
ZIP codes with the 10 highest Total Environmental Hazard Index values were in Denver; San Bernardino, Calif.; Curtis Bay, Md. (in the Baltimore metro area); Santa Fe Springs, Calif. (in the Los Angeles metro area); Fresno, Calif.; Niagara Falls, N.Y.; St. Louis; Mira Loma, Calif. (in the Riverside-San Bernardino metro area); Hamburg, Pa. (in the Reading metro area); and Tampa, Fla.
“Home values are higher and long-term home price appreciation is stronger in ZIP codes without a high risk for any of the four environmental hazards analyzed,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Corresponding to that is a higher share of homes still seriously underwater in the ZIP codes with a high risk of at least one environmental hazard, indicating those areas have not regained as much of the home value lost during the downturn.”
However, Blomquist noted that home price appreciation over the past five years was stronger in the higher-risk ZIP codes markets. “Environmental hazards likely impact owner-occupants more directly than investors, making the latter more willing to purchase in higher-risk areas,” he said. “The higher share of cash sales we’re seeing in high-risk ZIP codes for environmental hazards also suggests that this is the case.”