SEATTLE, March 12, 2019 /PRNewswire/ -- With climate
change and natural disasters posing a growing threat to communities
across the United States,
economists and real estate experts favor funding for preventative
measures and construction regulations over the government providing
or requiring insurance.
This is according to the Q1 2019 Zillow® Home Price Expectations
Survey[i]. The quarterly survey, sponsored by Zillow and conducted
by Pulsenomics LLC, asked more than 100 real estate economists and
experts for their predictions about the U.S. housing market,
including their point of view on what, if any, action governments
should take in areas at a high risk of experiencing a natural
disaster.
In November, Zillow predicted a record number of homes
would be affected by natural disasters in 2019. Approximately
15,000 homes were destroyed by wildfires in California alone last year. Previous research
by Zillow and Climate Central estimated more than 386,000
coastal homes worth in excess of $200
billion are at risk of permanent inundation or chronic
flooding by 2050 due to rising sea levels, and homes are still
being built at striking rates in areas that face high risks of
future flooding.
"Natural disasters are occurring with growing frequency and
intensity, and across the United
States residential development has expanded in recent
decades closer and closer to vulnerable wildlands," said Zillow
senior economist Aaron Terrazas.
"The result is that more and more Americans are discovering –
sometimes painfully too late – that their homes are at risk. Policy
makers are struggling to find solutions to protect their
communities and often face a difficult tradeoff between new
building regulations and infrastructure investments that can drive
up housing costs and taxes, or requiring insurance that also raises
costs to homeowners and, in some cases, makes taxpayers liable for
the bill. There are no easy solutions, but the one outcome that is
clear is that residents of the most at-risk communities will
ultimately pay the cost in one way or another."
Despite these forecasts, less than a fifth (19 percent) of
panelists say the government should underwrite or subsidize
property-loss insurance. Less than half (42 percent) support
government mandates requiring homeowners in high-risk areas to
carry insurance against natural disaster losses.
Suggestions for preemptive measures garnered more support. Among
five policy proposals suggested in the survey, the panelists' top
choices were enforcing strict building codes to meet
state-of-the-art resilience standards and declaring construction
moratoriums in the highest-risk areas. Public investment in
defensive infrastructure, such as seawalls, jetties or de-forested
zones, was popular as well. Insurance mandates and the permanent
demolition of homes repeatedly destroyed by natural disasters were
less favored.
Nearly half (47 percent of panelists) said homeowners in
high-risk areas who cannot find insurance or afford higher premiums
should sell their homes and move to a lower-risk or more affordable
location. Government intervention in the form of state-sponsored
coverage, financial assistance or requiring private insurers to
offer affordable policies received much less support.
Panelists are also asked each quarter to forecast the
performance of U.S. home values. In Q1 2019, they on average
predicted a 4.3 percent increase in U.S. home values this year, up
from the 3.8 percent rate projected for 2019 just three months
ago.
"The downturn in mortgage rates since our previous survey
appears to have elevated price expectations for 2019," said
Pulsenomics® Founder Terry Loebs. "The longer-term outlook
continues to be mixed and reflect uncertainties about housing
supply, first-time homebuyer capacity, and other lingering market
risks. For example, the most optimistic group of experts expects
28.3 percent cumulative home value appreciation through 2023, while
our least optimistic group expects a cumulative gain of just 6.6
percent over the same period. In dollar terms, the difference
between these scenarios is $6.3
trillion in national home equity value."
Zillow
Zillow is the leading real estate and rental
marketplace dedicated to empowering consumers with data,
inspiration and knowledge around the place they call home, and
connecting them with great real estate professionals. In addition,
Zillow operates an industry-leading economics and analytics bureau
led by Zillow Group's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of
economists, data analysts, applied scientists and engineers produce
extensive housing data and research covering more than 450 markets
at Zillow Real Estate Research. Zillow also sponsors the quarterly
Zillow Home Price Expectations Survey, which asks more than 100
leading economists, real estate experts and investment and market
strategists to predict the path of the Zillow Home Value Index over
the next five years. Launched in 2006, Zillow is owned and operated
by Zillow Group, Inc. (NASDAQ:Z and ZG), and headquartered in
Seattle.
Zillow is a registered trademark of Zillow, Inc.
Pulsenomics
Pulsenomics LLC (www.pulsenomics.com) is
an independent research firm that specializes in data analytics,
new product and index development for institutional clients in the
financial and real estate arenas. Pulsenomics also designs and
manages expert surveys and consumer polls to identify trends and
expectations that are relevant to effective business management and
monitoring economic health. Pulsenomics LLC is the author of The
Home Price Expectations Survey™, The U.S. Housing Confidence
Survey, and The Housing Confidence Index. Pulsenomics®,
The Housing Confidence Index™, and The Housing Confidence Survey™
are trademarks of Pulsenomics LLC.
[i] This edition of the Zillow Home Price Expectations Survey
surveyed 113 experts between Feb. 6,
2019 and Feb. 20, 2019. The
survey was conducted by Pulsenomics LLC on behalf of Zillow,
Inc.
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SOURCE Zillow