If you’ve been reading the BiggerPockets Blog for any length of time now, you’ll have noticed that the Midwest has often been named as one of the best places to invest in real estate right now. It offers reasonable home and rental prices and stable job markets in major cities. The result is a buoyant housing market that has so far avoided the post-pandemic slump seen in other areas.
But what if we told you that, while all this is true, the Midwest is also the most at-risk area for flood damage over the next 20 years—with all the related consequences: abandoned communities, dropping house prices, and rising insurance costs that will make homes less attractive for both buyers and investors?
The Midwest: An Upcoming Flood Zone
Unfortunately, according to the latest cutting-edge research from the climate risk-focused nonprofit First Street Foundation, it’s all true. The Midwest has the highest projected share of what the foundation is calling Future Climate Abandonment Areas—areas that will see population declines over the period between 2023 and 2053 because of increasing damage from floods.
How can we trust this new research? It’s highly detailed, and it’s based on real data from flood risk assessments performed on real homes. Instead of making sweeping statements about the most at-risk states (Florida and Texas are well known to be at huge risk of regular flooding), the researchers adopted what they’re calling a ‘‘granular’’ approach, assessing communities county by county and even block by block. ‘‘Climate risk is a house-by-house issue, not a state-by-state issue,’’ the report says.
This method of projecting where Climate Abandonment Areas will be clustered offers a great advantage because flood risk can vary significantly within small areas. Quite simply, even within a single city, there will be areas that are far more prone to flooding than others. It can even come down to one block of houses being…