Median Home Prices 15 Percent Higher in Zips with Low Risk Than Zips with High Risk;
10-Year Price Appreciation Negative in High Risk Zips, Up 5.3 Percent in Low Risk Zips;
Dirty Dozen Markets With Highest Share of High Risk Zip Codes Identified
IRVINE, Calif. – Dec. 17, 2015 — RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its second annual Manmade Environmental Hazards Housing Risk Report, which shows 25 million U.S. homes are in zip codes at high risk or very high risk for manmade environmental hazards — representing 38 percent of the 64 million homes in all zip codes analyzed. The combined estimated market value of the 25 million homes in high risk or very high risk zip codes was $6.9 trillion as of November.
For the report, RealtyTrac analyzed 7,751 zip codes with sufficient home price and appreciation data nationwide for the prevalence of five manmade environmental hazards: air quality, superfund sites, polluters, brownfields and former drug labs. An index based on these five factors was assigned to each zip code, and index scores were divided into five categories of risk: very high, high, medium, low and very low (see full methodology and definitions below).
“Buying a home in an area with low risk of manmade environmental hazards may not just be a good idea for health and safety reasons; it may also be good for financial reasons,” said Daren Blomquist, vice president at RealtyTrac. “Across the country, home prices in high risk zip codes were lower on average, and appreciation over the last 10 years slower when compared to home prices and 10-year appreciation in low risk zip codes.”
Median home prices lower, 10-year price appreciation slower in high-risk zip codes
The median sales price of homes in high risk zip codes for manmade environmental hazards was $251,106 in 2015 on average, 15 percent lower than the median sales price of $295,202 for homes in zip codes with low or very low risk.
Median home prices in high risk and very high risk zip codes were still 1.8 percent lower than they were 10 years ago on average, even while median home prices in low risk zip and very low risk zip codes were up 5.3 percent from 10 years ago.
Home price appreciation over the past year was also stronger in low and very low risk zip codes, up an average of 7.3 percent from 2014 to 2015 compared to an average increase of 6.4 percent in high risk and very high risk zip codes. Five-year price appreciation was stronger in high risk and very high risk zip codes, up 27.7 percent in 2015 from 2010 compared to an average increase of 26.8 percent in low risk and very low risk zip codes.
12 major markets with no high risk zip codes
There were 12 major metro areas with no zip codes at high risk for manmade environmental hazards: Albuquerque, New Mexico; Anchorage, Alaska; Cape Coral-Fort Myers, Florida; Charleston, South Carolina; Myrtle Beach, South Carolina; Naples, Florida; Palm Bay, Florida, Port St. Lucie, Florida; Provo-Orem, Utah; Salinas, California; Santa Rosa, California; and Winston-Salem, North Carolina.
“Miami is a 21st century city, with most of our development post World War II, with no real environmental baggage from the past,” said Mike Pappas, CEO and president of the Keyes Company, covering the South Florida market, where only 3 percent of zip codes were rated very high risk or high risk for manmade environmental hazards. “We have clean air, blue skies, clean water and clean industry.”
“Dirty Dozen” markets dominated by Southern and Central California, Northeast Ohio
The top 12 “dirty dozen” metro areas with the highest percentage of zip codes at high risk for manmade environmental hazards were Riverside-San Bernardino in Southern California; Akron, Ohio; Cleveland, Ohio; Stockton, California; Louisville, Kentucky; Reading, Pennsylvania; Toledo, Ohio; El Paso, Texas; Los Angeles; Kansas City; Grand Rapids, Michigan; and Bakersfield, California.
“The lingering effects of drug particles in a home where drugs have been stored or made can have devastating effects on the health of the next occupants of the property. With a record number of drug overdose deaths across Ohio this year, there has been an increase in enforcement to determine where the drugs are stored and made,” said Michael Mahon, president at HER Realtors, covering the Cincinnati, Dayton and Columbus markets in Ohio. “As public record history details are usually not readily available regarding drug use in a property, consumers are strongly encouraged to require an air quality check to their pre-purchase property inspections. Many Realtors maintain a list of certified inspectors that offer such services to provide the added benefits of environmental inspections to insure the health, safety, and welfare of consumers in their home.”
“Finding a home in a low risk neighborhood sometimes may mean that buyers will need to consider moving to a completely different market, but that is certainly not always the case,” Blomquist said. “Even in metro areas dominated by high risk zip codes, buyers can dig deeper down to the individual property level to evaluate risk of manmade environmental hazards using property-specific research tools such as the new Home Disclosure Report powered by RealtyTrac.”
For the report, RealtyTrac analyzed manmade hazard data in 7,751 zip codes with sufficient home price data and sufficient data for the following five factors: air quality, superfund sites, polluters, brownfields and former drug labs.
A combined natural hazard index comprised of these five 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 384. Air quality, superfunds and polluters each accounted for 25 percent of the index, while brownfields and former drug labs each accounted for 12.5 percent of the total index.
Data for number of superfunds, number of brownfields, and number of polluters came from the EPA. Only active superfunds on the national priority list (NPL) were factored into the index. Superfund data is reported quarterly while data on number of brownfields and number of polluters is reported annually. Former drug lab data came from the U.S. Drug Enforcement Administration (DEA) and is reported quarterly.
Air quality scores are reported by the EPA annually. This percentage is based upon the average percentage of good days without significant traces of Carbon Monoxide, Fine Particles, Particulate Matter, Nitrogen Dioxide, Ozone, or Sulfur Dioxide in the air. Air quality scores are reported on data from 2014.
For most states median home sales prices were used for year-to-date 2015 along with all of 2014, 2010 and 2005. For non-disclosure states and other states without sufficient sales price data from sales deeds median loan amounts or median estimated values at time of sale were used. Annual median household income data came from the U.S. Census Bureau for 2000 to 2012.
Air Quality: This percentage is derived upon the average percentage of days without significant traces of Carbon Monoxide, Fine Particles, Particulate Matter, Nitrogen Dioxide, Ozone, or Sulfur Dioxide in the air as reported by the Environmental Protection Agency. For more details, visit http://www.epa.gov/airquality/cleanair.html.
Superfund on National Priorities List: is the list of national priorities among the known releases or threatened releases of hazardous substances, pollutants, or contaminants throughout the United States and its territories. The NPL is intended primarily to guide the EPA in determining which sites warrant further investigation. For more details, visit http://www.epa.gov/superfund/sites/npl/.
Brownfield Site: With certain legal exclusions and additions, the term “brownfield site” means real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. For more details, visit http://epa.gov/brownfields/index.html.
Polluters: Data from the Toxic Release Inventory (TRI) Program that requires certain industrial facilities that manufacture or process more than 25,000 pounds of a TRI-listed chemical or otherwise uses more than 10,000 pounds of a listed chemical in a given year to report that to the Environmental Protection Agency. For more details, visit http://www2.epa.gov/toxics-release-inventory-tri-program.
Former Drug Labs: locations where law enforcement agencies reported to the U.S. Drug Enforcement Administration (DEA) that they found chemicals or other items that indicated the presence of either clandestine drug laboratories or dumpsites. For more details visit http://www.justice.gov/dea/clan-lab/clan-lab.shtml.
The RealtyTrac Manmade Environmental Hazards Housing Risk Report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.
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