Homes valued at $4.9 Trillion are in environmental high hazard areas
February 16, 2017
• Study looks at Superfund sites, brownfields, polluters and poor air quality
• “Those areas have not regained as much of the home value lost during the downturn”
There are about 17.3 million single-family homes and condos with a combined estimated market value of $4.9 trillion that are located in ZIP codes with high or very high risk for at least one of four environmental hazards: Superfunds, brownfields, polluters or poor air quality, according to a report from real estate information company Attom Data Solutions of Irvine, the parent company of RealtyTrac Inc.
That number is about 25 percent of the 68.1 million single-family homes and condos in the 8,642 ZIP codes analyzed. A risk index for each of the four environmental hazards was calculated for each of the 8,642 postal codes, and the indexes were each divided into five categories of risk: Very Low, Low, Moderate, High and Very High.
Of the 8,642 ZIP codes analyzed, 6,238 with 50.8 million single family homes and condos (75 percent) worth a combined $16.9 trillion did not have a High or Very High risk index for any of the four environmental hazards.
"Home values are higher and long-term home price appreciation is stronger in ZIP codes without a high risk for any of the four environmental hazards analyzed," says Daren Blomquist, senior vice president at Attom Data Solutions. "Corresponding to that is a higher share of homes still seriously underwater in the ZIP codes with a high risk of at least one environmental hazard, indicating those areas have not regained as much of the home value lost during the downturn.”
Mr. Blomquist notes that home price appreciation over the past five years was actually stronger in the higher-risk ZIP codes. He says this could reflect the strong influence of investors during the recent housing recovery.
"Environmental hazards likely impact owner-occupants more directly than investors, making the latter more willing to purchase in higher-risk areas,” he says. “The higher share of cash sales we're seeing in high-risk ZIP codes for environmental hazards also suggests that this is the case."
A total environmental hazard index combining the four individual hazard indexes was also calculated for each of the 8,642 ZIP codes nationwide.
And that puts Fresno on the list. Its ZIP code 93725 is ranked fifth highest on Attom’s list. The postal code area runs north-south, covering an area between southeast Fresno and Fowler.
The 10 highest Total Environmental Hazard Index values were, in order, in Denver; San Bernardino; Curtis Bay, Maryland (in the Baltimore metro area); Santa Fe Springs, (in the Los Angeles metro area); Fresno; Niagara Falls, New York ; Saint Louis; Mira Loma, (in the Riverside-San Bernardino metro area); Hamburg, Pennsylvania (in the Reading metro area); and Tampa, Florida.
For the report, Attom Data Solutions analyzed 8,642 U.S. ZIP codes with sufficient housing trend data for the following four environmental hazards: poor air quality, superfund sites, polluters, brownfields and former drug labs.
A housing risk index was calculated for each of the four types of hazards in each of the 8,642 ZIP codes. The maximum index value for each index was 250 and the minimum value was 0.
A combined environmental hazard index comprised of these four factors and with a maximum possible score of 1,000 was assigned to each ZIP code. The highest actual score for any ZIP code was 455. Each individual natural hazard index accounted for 25 percent of the combined index.