Climate change is starting to have a very noticeable impact across the globe. The rise in temperature and the increased chance of fire and floods have turned former dream real estate hotspots, such as the forests and mountains of California, into abandoned and unattractive venues. My name is Ofir Bar, and in the two decades that I have been investing in real estate, I have witnessed quite a few phenomena that have affected the real estate market, mainly for the short term. This one, however, seems to have implications for the long term as well. Let’s take a look at some trends that I believe will dominate real estate due to global warming.
Emphasis on Reducing Utility Costs
Drastic changes in temperatures will result in higher utility bills for most homeowners. People in many countries are already noticing the need for more AC in the summer, and heating in the winter. If we continue the status quo, the demand for electricity will only rise. Naturally, homeowners across the globe are feeling this in their pockets. The real estate market is having to adapt, in order to address these concerns. On the other hand, don’t forget that climate awareness has us searching for ways to conserve energy, not just for the sake of our monthly bills. As a result, developers are focusing on ways to reduce utility costs. Sustainable materials, renewable energy, and green thinking can help humanity with this goal. The problem is that right now they come with a cost, but I believe that in time the economy will do its thing, and that green real estate will become much more affordable.
Concerns About Coastal Properties
Coastal properties have long been desired across the globe. However, rising sea levels are becoming a very real threat to this aspect of real estate. As we begin to see more and more of these former paradises becoming flooded by rising seawater, the value of coastal properties will start to diminish.
Increased Importance of Sustainable Materials
By using sustainable materials, real estate developers are able to reduce the environmental impact of new developments. The use of new materials, other than the classic wood and stone, has benefitted the forests and canyons while also aiding the real estate industry. Some of the new materials include concrete, steel and masonry. In addition, a lot of effort has been diverted to rethinking about the whole concept of design. The most prominent example nowadays is how to take proper advantage of sunlight, in order to cut down on energy consumption but to avoid the heat. Want another example? Sure. A lot of thought has been put into new methods of easily separating different types of trash, mainly organic from non-organic, inside the building’s infrastructure.
Increased Urbanization Across the Globe
Urbanization is rapidly becoming a fact across all continents on Earth. As the human population increases, so does real estate value. In addition, urbanization is becoming the dominant way of life, mainly due to financial constraints. In turn, this could cause major problems for real estate developers who need to deal with the increasing number of people. On the other hand, the shift to remote work for a large portion of the population has become a fascinating trend to follow. Will this mean a slowdown to urbanization and an adoption of rural living? Right now we are witnessing a beginning to this trend, but only time will tell.
Hope for the future
It is obvious that the effects of climate change are very prominent in the real estate industry. Climate change is very real and powerful, you can be sure of that. It is impacting real estate trends and it is important that prospective home buyers consider what impacts it may have on a home they are looking at. The main thing to take from here is the fact that the real estate market is still undergoing some substantial changes, in order to fit itself to the new reality. Will it assist in the battle against global warming, or have we passed the point of no return? Unfortunately, I can’t answer that.