Will Climate Change Impact Your Decision On Where To Live?

In Wednesday’s Juice, we looked at the stocks inside the most-searched real estate ETFs. In addition to some pop-rock musical fun with one of the ticker symbols — REM — we discovered there wasn’t much difference between the top four names investors search for most in our Trackstar database. A key lesson for ETF investors. 

As we continue our October Housing is Haunted series, we’ll further explore ETFs. So, keep today’s Trackstar list of the most-searched global real estate ETFs in your inbox, because in the October 16th installment of The Juice, we’ll refer back to it and pick apart the holdings of these apparently more worldly ETFs. 

But first … as we like to think we do so seamlessly well around here … let’s switch gears. 

Housing. Climate change. Not sure about you? But we know more than a few people freaking out over the relationship between the two. 

Do you think they’re crazy? If so, no doubt, it looks like you have good company, as evidenced by recent data from Redfin. Large numbers of people don’t seem to care. Or, at least, they’re not letting the warming planet and subsequent extreme weather chaos impact their decisions on where to hang their hats. 

• 26% of homebuyers are considering a move to a different part of the country. 
• That’s up from 24% a year ago and approximately 19% prior to the pandemic. 

So, first thing’s first. 

Us humans have a tendency to think about what’s happening in our lives right now. In certain contexts, we don’t think much about a future we can’t quite vision in any concrete form. In relation to why some people suck at saving for retirement, we wrote about research on the subject in a July Juice:

Hershfield concluded that some people see a version of themselves in the future that they don’t “really don’t feel all that emotionally connected to or invested in,” leading them to “live much more for today than tomorrow.”

Related to housing — we suspect lots of people are having this conversation with themselves:

Today it’s getting unaffordable where I live and/or it’s more affordable in other parts of the nation. I know this and it might be directly affecting me today. So that’s priority number one. Yeah, it has been hotter, there have been more storms and I’m seeing all of these warnings about the future catastrophic impacts of climate change. But that’s a future I can’t quite place myself in. It’s a distant second — or fifth or tenth — to saving money on housing today. 

Makes some sense, right? 

Or you just flat out don’t believe in climate change and it’s not even a factor — let alone a thought — if and when you consider relocating. Also makes sense to help explain things.

Many of the most popular places people are looking to move to are at the most risk as we continue to increasingly feel the effects of climate change. 

For example—

• Sacramento and Las Vegas were #1 and #2 on the Redfin list with people from San Francisco, Los Angeles and Chicago searching those locales the most. Sacramento and Vegas both face the climate change-related risk of extreme heat.  
• Orlando, North Port-Sarasota, FL, Myrtle Beach and Cape Coral also make the top ten, drawing interest from New York City and Washington, DC. They face the risk of extreme wind and hurricanes. 

Interesting. If only we had a crystal ball on all of this stuff. 

Overall, Redfin found that just 8% of U.S. residents looking to move over the next year are moving because they fear climate change where they currently live. Twenty-two percent are planning an escape due to cost of living. 

To that end, these are top ten metro areas, people are leaving: 

• San Francisco
• New York
• Los Angeles
• Washington, DC
• Chicago
• Boston
• Hartford
• Detroit
• Denver 
• Seattle

The top desired destinations include Las Vegas for people currently in LA and Milwaukee for folks in Chicago. Clearly, all about the cost of living there. Meanwhile, folks in gloomy Seattle search Phoenix most when looking out of state. It appears that the desire for extremely hot and dry weather over clouds and rain trumps climate change concerns for these homebuyers. 

For the record, as of the middle of last month, temperatures in Phoenix hit at least 110 degrees for 54 days in 2023. That’s hot. And that’s an all-time record. 

The Bottom Line: We find this fascinating. If you do a search for “the best places to live climate change,” you get a wild assortment of answers. Some sources say San Francisco; others say no way to California as a whole. Seattle and Portland make climate-resistant lists as well, but haven’t they seen their share of wildfires in recent years? 

It’s difficult to make sense of. 

So, here’s The Juice’s consensus: Climate change is real, but it’s something we’re going to have to deal with and, hopefully, manage as best as we can at the individual and governmental levels. While climate change might be a consideration if you’re looking to move, it can’t be the consideration. Because while the science might be overwhelming and straightforward, the data on where you’ll be safest definitely isn’t.

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