Is Environmental Hazard Risk Good for Home Values?
ATTOM Data report seems to suggest so.
Now, here is some news for those who like to live dangerously: ATTOM Data Solutions is reporting that median home prices in communities within the highest 20 percent for environmental hazard risk appreciated at a faster pace than the overall housing market over the past year, past five years and past 10 years.
ATTOM Data Solutions analyzed 8,665 ZIP codes for risks related to superfund sites, brownfields, polluters and poor air quality. The results: A little toxic soil appears to be good for valuation. Median home prices in ZIP codes in the top environmental hazard risk quintile increased 7.4 percent from a year ago on average (compared to 7.1 percent increase nationwide). Furthermore, they were up 57.1 percent from 2012 (compared to 51.1 percent increase nationwide), and were also up 22.2 percent from 2007 (compared to 12.3 percent increase nationwide).
Simultaneously, home foreclosure rates in ZIP Codes in the highest quintile for environmental hazard risk were slightly lower at 0.3 percent of all homes with a mortgage than in the overall market with its 0.4 percent rate.
Still, there was an exception to the rule. Of the four environmental risk factors analyzed in the report, high Superfund risk ZIP codes appreciated at a slower pace than the overall market and had a slightly higher foreclosure rate than the overall market.
The markets with the most combined value of homes in ZIP Codes in the top quintile for environmental hazard risk were Houston ($415 billion), California’s Riverside-San Bernardino metro ($344 billion), Portland ($254 billion); Washington, D.C. ($161 billion), and Chicago ($134 billion). Zip codes with the 10 highest total Environmental Hazard Housing Risk Index values in 2017 were in Denver, Southern California, Portland, St. Louis, North Carolina’s Burlington metro market, Tulsa and Houston.
“With housing inventory in short supply, even homes in higher-risk zip codes for environmental hazards are in high demand from buyers looking for lower-priced properties and investors looking for the next up-and-coming neighborhood,” said Daren Blomquist, Senior Vice President with ATTOM Data Solutions. “Buyer demand does seem to have a bit of a limit when it comes to environmental hazards, however. Homes in zip codes with superfunds on the EPA’s national priority list have seen weaker home price appreciation and have higher foreclosure rates than the overall housing market.”