Rising Wildfires Pose Threat to Property Values, Finds New Study
A new study warns that escalating wildfires, like the devastating ones that recently struck Hawaii, could have a massive impact on property values unless urgent action is taken to address climate change. Scientists emphasize that global warming is already causing significant damage to landscapes worldwide, including floods, rising sea levels, extreme weather events, droughts, and wildfires. These climate hazards are not only endangering our environment but also putting property values at risk, according to researchers from the University of Utah.
Led by biology Professor William Anderegg, the research team aimed to quantify the value of U.S. property at risk in forested areas vulnerable to increased wildfire frequency and tree mortality resulting from climate stresses and beetle infestation. Anderegg highlights that while society has various tools and measures in place to mitigate risks, such as insurance policies and safety features in cars, effective risk mitigation relies on understanding and tracking how risks are changing.
Climate change is considered a game changer because it is expected to intensify these risks, though the specifics of where, when, and by how much still remain uncertain. Professor Anderegg explains that the severity of the situation is evident when considering insurance companies leaving states like California. Insurers perceive the growing threat of wildfires and disturbances fueled by climate change.
Published in the journal Environmental Research Letters, the study predicts that more and more U.S. property will be exposed to climate-related hazards as forest health deteriorates and climate change effects proliferate. The most affected areas are currently the Southwest and California, where rising property values near publicly owned woodlands intersect with escalating fire risks.
The researchers intentionally did not pinpoint specific areas at risk. However, a quick glance at Western real estate indicates the potential trouble spots. In northern Utah, valuable residential properties located in scenic locations, including Emigration Canyon and Summit Park, face severe wildfire risks.
The study examines three phenomena that influence property values: wildfires, tree mortality due to drought and other climate pressures, and tree mortality caused by insect infestation. By exploring two climate scenarios—one where no action is taken, and conditions worsen, and another where mitigation efforts are aggressively implemented—the team demonstrates how carbon emission-reduction strategies can significantly reduce exposure.
Geography Professor Tim Collins, a co-author of the study, notes that the results show reduced property value at risk in the future if robust emissions reduction efforts are pursued. Looking solely at privately owned lots of at least one acre in size, the study estimates that about $4 billion in property is currently exposed per year to wildfire in the contiguous United States. Under the do-nothing scenario, this number is projected to increase to $22 billion by 2049 and $45 billion by 2099. However, with ambitious climate action, the study suggests that the value of exposed property will peak at around $11 billion.
Wooded areas are often considered desirable places to live due to their natural beauty. However, if the trees die or burn, properties lose their appeal and their market value declines accordingly. Professor Collins highlights that areas such as California, which are identified as wildland-urban interfaces, are seeing some of the highest rates of residential development due to the amenities associated with forest resources. As climate change progresses, these mountainous environments will become even more attractive to people seeking relief from rising temperatures.
In their study, the researchers focused on assessing the future risk to current property values without considering the increasing population drawn to forested landscapes due to their amenities. As the effects of climate change and forest disturbances worsen, billions of dollars in property value are at stake. The findings underscore the urgent need for comprehensive action to mitigate climate change and prevent further damage to our environment and economy. With the right strategies in place, we can protect both natural landscapes and the value of our properties for current and future generations.
