How Man-Made Environmental Threats Affect The Housing Market

Posted by Patrick Barnard on September 24, 2014 No Comments
Categories : Residential Mortgage

In many areas of the U.S., housing market trends are correlating with the presence of man-made environmental hazards, according to a new report from RealtyTrac.

Based on the percentage of bad air quality days and the number of superfund sites, brownfield sites, polluters and drug labs per square mile, the home values in the 50 markets with the lowest rankings (the fewest hazards) had higher median values and stronger long-term price appreciation over the past decade, as well as higher employment rates and median incomes, says Daren Blomquist, vice president at RealtyTrac.

However, he says, in recent times (the last year and five years), short-term price appreciation is stronger in the top 50 markets ranked the highest (the most hazards).

‘Not so surprising is that the most hazard-prevalent housing markets are much more populated than the least hazard-prevalent housing markets,’ Blomquist remarks. ‘However, this report demonstrates that prospective home buyers don't have to sacrifice potential environmental safety concerns to buy in a market with ample jobs that are relatively well-paying – and where home prices have steadily appreciated over the long term."

Among the 578 U.S. counties with a population of at least 100,000, those with the highest prevalence of man-made environmental hazards were Saint Louis City; Philadelphia County; Baltimore City; Hudson County, N.J.; and Denver County.

On average, these counties had 9.48% of days annually considered bad air quality days by the Environmental Protection Agency (EPA), compared to an average 5.43% bad air quality days for all counties nationwide.

The average median home price in these markets was $197,946 in July, compared to a national median home price of $191,000. Median home prices increased an average of 7.4% from a year ago, were up an average of 17.4% from five years ago and were up an average of 6.8% from 10 years ago.

The average unemployment rate in these markets in June was 7.5% – well above the national unemployment rate of 6.1%. The average estimated median household income in 2014 for these counties was $48,811 – below the estimated median household income nationwide of $52,912.

Among the 578 U.S. counties with a population of at least 100,000, those with the lowest prevalence of man-made environmental hazards were Deschutes County, Ore. (Bend metro area); Saint Louis County, Minn. (Duluth metro area); Saint Lawrence County, N.Y. (Ogdensburg-Massena, area just south of Montreal, Canada); Skagit County, Wash. (Mount Vernon-Anacortes metro area north of Seattle); and Snohomish County, Wash. (Seattle metro).

The 50 counties with the lowest prevalence of man-made environmental hazards had an average population of 212,040. On average, these counties had 0.46% of days annually considered bad air quality days by the EPA, compared to an average of 5.43% bad air quality days for all counties nationwide.

The average median home price in these markets was $212,638 in July, compared to a national median home price of $191,000. Median home prices increased an average of 2.0% from a year ago, were up an average of 6.3% from five years ago and were up an average of 16.0% from 10 years ago.

The average unemployment rate in these markets in June was 5.6% – below the national unemployment rate of 6.1%. The average estimated median household income in 2014 for these counties was $55,850 – above the estimated median household income nationwide of $52,912.

Blomquist stresses that "not all of these environmental hazards are created equal, ranging widely in scope and severity." He says that although we should consider this data, we "should dig into the details for each local hazard to make the most informed [real estate] decision."

The full report can be found here.

Register here to receive our Latest Headlines email newsletter




Leave a Comment