In 2017, Angela and Donald Brudos moved to a modest, ranch-style house where the Caloosahatchee River empties into the vast calm of the Gulf of Mexico. Despite Florida’s reputation for extreme weather, it held out the promise of an affordable paradise where they could retire.

“We felt safe,” said Angela, “because neighbors told us it had never flooded.”

Climate Coach: Real Estate Edition

Climate change is repricing your most valuable asset: your home. Here are the tools you need to navigate a hotter planet.

But even as the Brudoses’ home remained perfectly dry, climate change was beginning to reshape the housing market here — and in vulnerable places throughout America. By the time they settled in their new home, research suggests, flood risks were already making people less willing to pay top dollar for houses in waterfront neighborhoods such as theirs, eroding prices even as values marched upward in lower-risk neighborhoods.

As buyers and sellers wake up to risks on a hotter planet, Cape Coral might be a preview of what millions of homeowners throughout the country could face: a slow and almost imperceptible re-pricing of many people’s biggest asset.

Advice

For the Brudoses, the risk became apparent only when Hurricane Ian crashed ashore in 2022, leaving their living room buried under mud and debris.

When I stepped onto their front lawn this July, nearly two years after the storm, they were still living in a trailer in their driveway. Escalating expenses and insurance delays had left them drowning in debt. To qualify for flood zone insurance, they took out a $210,000 loan to elevate their home.

“The only choice we had was to go severely in debt and raise the house, and hope by being elevated, you can recoup the money,” Donald Brudos said. “We’re scared to death.”

• Purchase price in 2017:

  $174,900

• Cost of Hurricane Ian expenses:
  $241,000

  • $125,000 to elevate the house
  • $80,000 for interior repairs
  • $36,000 for a trailer

Scientists can say only that climate change’s warmer temperatures are probably intensifying hurricanes such as Ian, not pinpoint its role in damaging the Brudoses’ home. And the value of real estate is shaped by a wide range of factors, from interest rates to local economic conditions.

But the couple said they think Florida, which has been hit by two hurricanes in the past month, has changed: It’s a riskier place than when they arrived.

This year, I visited cities such as Cape Coral on the front lines of climate risk. Working with colleagues at The Washington Post, we analyzed millions of real estate transactions along the Florida coast to see how climate change may be transforming home values. And we found that the gap between riskier properties and safer ones is only growing.

Other Americans are facing similar challenges. Extreme thunderstorms in Iowa. Wildfires in California. Rain bombs in Vermont. Driven by painful insurance premiums and extreme weather damage, the true cost of risky properties is becoming clear. A small but growing number of home buyers are fleeing for metaphorical high ground, while others are being left behind.

Here’s what climate risk means in your neighborhood, and how to protect what may be your most valuable asset.

Welcome to Cape Coral

The signs are the first things you notice driving over the Cape Coral Bridge. Just off the causeway, above the sparkling waters of the Caloosahatchee, a real estate information center welcomes new arrivals with huge blue letters. Within an hour, half a dozen billboards have implored me to rent, sell or buy a home.

Florida’s economy runs on real estate. The industry generates roughly 17 percent of the state’s gross domestic product, the most of any sector. Few places in Florida rely on this real estate revenue engine more than Cape Coral.

Nearly a quarter of a million people live within its sprawling 120 square miles. City officials say the number of residents could double by mid-century, many living along the city’s 400 miles of canals carved out of mangroves and pine lands since the 1950s.

The city’s design is inviting sea-level rise into people’s homes, said James Beever, a retired biologist who wrote Cape Coral’s climate vulnerability and resilience plan, later shelved by city leaders, in 2017. By mid-century, the National Oceanographic and Atmospheric Administration (NOAA) predicts the region could endure more than 100 days of flooding at high tide. By 2080, it will be daily.

“City leaders stopped being interested in planning for climate change,” said Beever, who has watched thousands of people move into places he predicts will be engulfed by storm surges and rising sea levels around the turn of the century. “Some said there was no climate change. There was this kind of denial.”

But some home buyers were waking up to the risk.

A tale of two real estate markets

As a young researcher, Benjamin Keys studied the fallout from subprime mortgages. The economist saw how unpriced risk had brought the global economy to its knees during the 2008 financial crisis. Then climate change caught his attention.

“Thinking about what were the biggest risks to homeowners, it seemed like climate was the most important and least examined,” said Keys, now a real estate and finance professor at the Wharton School of the University of Pennsylvania.

He thought Florida was the right place to look. Although the Sunshine State’s real estate market was booming, he suspected climate risk might lead to a correction in the housing market.

To test this idea, Keys and Philip Mulder, now on faculty at the University of Wisconsin at Madison’s business school, searched for the prelude to a housing crash: a distinctive “lead-lag” pattern of a spike in unsold homes (“the lead”), followed by falling prices (“the lag”).

The same pattern had preceded the subprime mortgage housing collapse in the mid-2000s.

By sorting through more than a million Florida home transactions based on climate risk, they could see whether homes vulnerable to flooding were bought and sold differently than comparable ones on safer ground.

20012013201720191.5x avg.0.5x avg.Homes soldHome prices2001-2012 averageLow riskHigh riskLow riskHigh risk

Before 2013, sales of Florida homes most exposed to sea-level rise moved in lockstep with properties on higher ground.

And the same held true for prices. Coming out of the Great Recession, riskier properties started to regain their value more quickly, but prices in both low and high-risk areas mostly rose in tandem.

After 2013, riskier properties began to see sales decline, while the trajectory of lower-risk properties remained unchanged.

Four years later, home prices also followed this pattern. By 2020, prices of riskier homes dropped by 5 percent relative to their pre-recession high.

There were now, it appeared, two emerging real estate markets: homes insulated from climate risk, and those most exposed to it.

Keys and Mulder tested whether any factors besides climate change could be to blame for falling home values: higher insurance premiums, recent flood damage, access to mortgages, poverty rates or a dearth of new construction.

Only one proved “strong and statistically significant”: people’s attitudes toward climate risk. Using public opinion data to gauge local sentiment, they found prices fell most where people were most worried about climate change.

“The most natural explanation for this pattern is the shrinking and eventual departure of market optimists from the market,” Keys and Mulder wrote in a 2020 paper published by the National Bureau of Economic Research.

Their analysis ends in early 2020, just before the pandemic sent hundreds of thousands of new residents to Florida and home prices soaring, swamping the climate signal in the data, Keys said.

To see if the same pattern had reemerged after the pandemic, The Post employed a similar methodology to analyze 2.2 million homes sold near the Florida coast since 2000: The pricing gap is now bigger than ever.

Since 2022, home values in areas most threatened by rising seas gained only 2 percent, while similar homes on safer ground rose 7 percent. The difference in appreciation amounts to roughly $20,000 on a $400,000 house.

The Post found sales in low- and high-risk areas alike declined sharply from pandemic highs, meaning there might not be a lead signal in recent years. Several factors could help account for this, including rising insurance rates, the impact of Hurricane Ian or rising interest rates that made some homeowners reluctant to sell their homes and buy new ones.

But climate change may permanently reset expectations about how risky — and expensive — it is to live in Florida.

Historically, home prices rebound after a natural disaster. Superstorm Sandy broke that pattern in 2012 by changing buyers’ expectations. Five years after the storm devastated the Northeast, homes in flood zones around New York City, even those untouched by the storm, were selling for less than similar homes on higher ground, according to a 2017 study. The most recent data from 2020 to 2023 suggests that discounts on homes damaged by the storm, while smaller, remain, wrote the study’s co-author, Francesc Ortega of the City University of New York.

“Sandy changed people,” said Simon Buechler, an economist at the Massachusetts Institute of Technology’s Center for Real Estate. “People started realizing this is for real.”

Laura Bakkensen, an economist at the University of Arizona who studies the economic impacts of natural disasters, reviewed The Post’s findings. She said the data suggests the market in Cape Coral, like others, may now be reflecting climate risks, although teasing out other factors — from insurance premiums to demographics — remains difficult.

Bakkensen called the analysis “an intriguing result,” adding, “This is something to pay attention to: Are markets starting to pay more attention to these dynamics, as well?”

Looking to leave

The Brudoses, who originally paid $175,000 for their home in March 2017, now hope to sell and move north, perhaps to Colorado. “It’s too expensive to retire here,” said Angela Brudos.

Their home has appreciated significantly since they bought it, but home prices in the Brudoses’ neighborhood have begun declining. Four major hurricanes from the Gulf of Mexico have come perilously close to their home since Ian. Helene and Milton, the most recent, drove floodwaters nearly to the steps of their trailer. The number of unsold homes in Cape Coral has surged by more than 80 percent since last year, among the highest such rate in the United States.

To keep federal flood insurance, homeowners in flood zones must meet the latest Federal Emergency Management Agency flood regulations when rebuilding their properties if repairs cost at least half of the home’s market value. The policy is designed to avoid repeated insurance claims. In practice, this means raising the home or demolishing it. “The cheaper of the two was to elevate the house,” Donald Brudos said.

To lift the house, they borrowed $210,000 from federal disaster-relief programs on top of their mortgage, and also raided their retirement to help pay $80,000 to replace the flood-damaged interior and wrecked appliances and $36,000 for a trailer. So far, they say, their insurer has refused to cover much of this.

But without the improvements, Donald said, their house would be worth a fraction of what they paid. By raising the home, real estate agents told him the couple could recover their equity, and perhaps their life savings. “The first offer we get that is above what we owe and plus some, we’re done,” he said.

Climate risks in plain sight

Whether the Brudoses recover their investment will depend on how buyers react to risk. Today, they have more information than even just a few years ago, when the couple bought their house.

Climate researchers have long known sea-level rise would inundate coastlines late in the 21st century, but it’s only recently that more precise regional maps and risk models started to circulate widely.

Much of this information is now at your fingertips. Redfin, Realtor.com, and ClimateCheck are now disclosing climate risk in newly listed homes, and Zillow will soon follow.

And more states are passing mandatory flood-disclosure laws to warn potential home buyers: As of Oct. 1, Florida sellers must disclose whether they have filed insurance claims for flood damage or received federal flood assistance. These disclosures, studies show, can lead to steep discounts on affected properties.

Tip from Joel Scata, a senior attorney with the NRDC, for people who live in states that don’t have mandatory disclosure laws: “You have a right to ask if the home has flooded. Buyers can’t intentionally lie to sellers.”

Some experts say the market hasn’t fully priced in this new reality. “There’s this enormous disconnect between what we think is likely to happen over the next decade or so and what’s already happened,” said Jenny Schuetz, an economist and senior fellow at Brookings Metro.

But if you know where to look, clues are everywhere.

In Miami, homes at the lowest elevations have been appreciating slower since 2000 than those on higher ground. In California, Oregon and Washington state, wildfire risk has lopped 3.9 percent off home prices. On the U.S. coasts, prices for properties vulnerable to sea-level rise sell for 7 percent less than safer comparable homes, researchers report in the Journal of Financial Economics.

Home values are set by how much the buyer thinks a property is worth today — and how much they think the next buyer will pay for it.

That math pulls risk forward by decades, because Americans stay in their home for an average of 12 years. A home buyer in 2025 doesn’t face only the climate conditions of 2037 when they try to sell their home — but the next buyer’s expectations of the home’s value around 2050. That could dent the values of the 648,000 U.S. properties predicted to be flooded every day during high tide by mid-century, according to a Climate Central study. But timing is tricky.

“People ask me: Isn’t it a housing bubble?” Keys said. “My answer is, well, in the long run, yes. We know that in 100 or 150 years, a lot of these places are going to be underwater. … But there’s nothing that says that the value has to go to zero immediately.”

Several real estate agents in Florida told me the market would bounce back as it always had, especially once interest rates came down. Mike Darda, who has sold real estate in southwest Florida since 1987, said many homeowners plan to be long gone before rising seas, wildfires, droughts or extreme heat arrive.

“We sell a lot of houses, 100 a year,” Darda said. “I can probably count on one hand the number of people who told me, ‘I think that the floodwaters or global warming is going to be an issue.’”

Yet it takes only a small number of buyers getting cold feet for demand to fall, dragging prices down. A study published last year with the real estate brokerage Redfin showed how powerful this can be. The researchers randomly showed publicly available flood risk scores to 17.5 million potential buyers. Homes shown to have higher flood risk sold for about $7,000 less, on average, relative to those without disclosure. In all, the experiment influenced $135 billion in hypothetical real estate transactions.

A looming climate correction

Housing markets are noisy. Everything from natural disasters to waterfront views affects what people will pay for a home. In risky places where homeowners won’t notice thousands of dollars in additional annual costs, houses may go on appreciating as before. The most expensive home for sale in the United States as of Oct. 14 is a $295 million compound in Naples, Fla., just south of Cape Coral, jutting into the Gulf of Mexico on a spit of land a few feet above sea level.

But for homeowners on a tighter budget, rising insurance premiums are forcing a broader market shift.

If buyers must pay higher monthly costs, home values will decline (or appreciate slower). Fewer eligible buyers will qualify for mortgages — lenders have strict rules on the ratio of income to monthly costs — and more potential buyers won’t want to shoulder higher monthly payments. Keys said researchers estimate if annual insurance premiums rise by $1,000, the value of a house will fall by more than $20,000 — even before accounting for future risks.

Nationwide, insurance premiums have risen 30 percent since 2019, according to the Insurance Information Institute, an industry group. In Florida, where homeowners already pay among the highest rates in the nation, premiums have soared almost 70 percent, equivalent to $1,332 annually.

That’s if you can get a policy at all. Some insurance companies are turning away customers: In California, seven out of the top 12 carriers are curtailing coverage. One Florida real estate agent, who spoke on the condition of anonymity to discuss a private transaction, told me their client’s insurance company would only issue their homeowner insurance policy for an annual premium of $40,000 — unless they bought a new roof.

All of this suggests we’re entering the early stages of real estate prices falling in response to climate risk, said Jesse Keenan, a professor and director of the Center on Climate Change and Urbanism at Tulane University’s School of Architecture.

He predicts many risky homes are on track to be “stranded assets.” The effect may not be as large as the global financial crisis, when nearly one-quarter of the nation’s homeowners with mortgages owed more than their house was worth, but in some vulnerable neighborhoods, the fallout may feel very similar.

“What we’re already seeing in some markets is a very rapid decline in asset prices, similar to the mortgage crisis in ’08,” he said. “As things get reevaluated, it fundamentally shapes where people move.”

When you can’t go home again

This is not inevitable. With planning, cities can avert the worst impacts, at least for several decades.

I spoke with Ryan Lamb, Cape Coral’s fire chief and emergency-management director, about how the city was preparing for sea-level rise. He pointed me to climate resilience measures in the city’s 2030 strategic plan — electric-vehicle promotion, biking trails and energy-efficiency grants for low-income residents — and a proposal to convert a golf course into a stormwater-retention park.

But 2030 is already too late, argues Peter Sheng, a former civil and coastal-engineering professor at the University of Florida. “You don’t plan for 2030,” said Sheng, who is developing detailed flood maps for southwest Florida with NOAA to be released publicly next year. “That’s like tomorrow. You need a plan for at least 2050. That’s when things look ugly.”

Some residents have already taken off.

Marilyn and Jim Kovarik didn’t want to take any chances when they retired to southwest Florida from Upstate New York in 2016. The couple pored over FEMA insurance rates and flood maps before buying their house in Marina Bay, a Fort Myers development near Cape Coral four miles from the ocean. It had the lowest flood risk they could find.

Yet after Hurricane Irma, a Category 5 storm, swept up the coast the next year, they vowed never to get caught unprepared. They invested about $24,000 in motorized hurricane shutters, a generator and other home upgrades.

That helped them ride out Ian with minimal damage in 2022. But their dreams of retiring in Florida soured. Storms were getting worse. Insurance and utility costs kept climbing. Seeing neighbors’ ruined belongings on the curb was overwhelming. “We did fine. The house was fine,” said Marilyn Kovarik, a former high school math teacher. “If anything, we could have stayed in the house much longer. But why?”

The couple didn’t blame their decision to leave on climate change, but “that’s exactly what it was,” Jim Kovarik concedes. “We’re evidence-driven people. This [situation] is going to get worse. It’s not going to get better.”

Stilts are all that remain of a structure lost to Hurricane Ian in Matlacha, Fla. (Thomas Simonetti for The Washington Post)

Reconstruction work on a Matlacha bridge destroyed in Hurricane Ian. It is the only roadway connecting Pine Island to the mainland. (Thomas Simonetti for The Washington Post)

The Kovariks were lucky. A buyer displaced by Hurricane Ian wanted to move further inland. Their home, already hardened against extreme weather, looked perfect. They sold for about 30 percent more than they invested, packed up and moved to Macon, Ga.

The Kovariks have no regrets about moving, despite being hit by the remnants of Hurricane Helene. Even if they couldn’t escape a more extreme climate, their best chance to beat the odds was to leave. Jim felt it was only getting worse in Florida.

He advises anyone looking to buy a home to ask themselves one question: What are you willing to risk?

“A lot of people, that’s their philosophy: I may lose everything, but I’m willing to roll the dice,” he said. “I respect that, but I’m not that way. The odds are changing against those people. Your odds are not as good as they used to be.”