U.S. buyers don’t dodge high-risk homes — except in Central Florida

Florida’s flood-prone areas might be the exception to new findings showing the highest risk areas for natural disasters have had the greatest price growth, a new study found.

The riskiest areas — those with the greatest chance for hurricanes, floods, storm surge, tornadoes, wildfire or earthquakes — have risen the most in value over the last decade, according to Attom Data Solutions’ annual study of 22,000 U.S. cities.

The riskiest spots outperformed the safest ones in terms of price growth, length of homeownership and owners no longer seriously underwater with mortgages that are larger than the home value, the study found.

“Strong demand for homes in high-risk natural hazard areas has helped to accelerate price appreciation in those areas over the past decade despite the potential for devastating damage to homes that can be caused by a natural disaster — as evidenced by the recent hurricanes that made landfall in Texas and Florida,” said Daren Blomquist, senior vice president at Attom Data Solutions.

In Central Florida, Orange and Seminole counties were considered high risk, while Lake and Osceola were moderate, based on historical events. In terms of price appreciation since the downturn that started in 2007, none of the four counties has fully rebounded. Lake has come back the most, with prices down just 9 percent, while Osceola lagged the furthest behind, with prices down 21 percent from a decade ago.

Just how much weight buyers give to natural risks is uncertain. Jobs and population growth have also boosted prices, but buyers don’t appear to be shying away from potential.

Overall, the study found that Florida’s flood-prone counties proved to be an exception to price growth on the front lines of danger. Blomquist said the increasing uncertainty of the federal flood insurance program, which is $2 billion in debt and likely to become more expensive, may be off-putting to buyers.

“In Florida, there is some evidence that natural-disaster risk may be becoming a more important factor in the buying decision,” Blomquist said. “I think flood insurance is a big factor. It’s more complex than a lot of issues relating to natural disasters … and could cause costs to spiral, and that is a concern.”