The real estate market has been buffeted by the twin perils of inflation and interest rates, with inventory issues further complicating matters.

Last week, experts sounded the alarm on another disrupting factor for the continued future: the rising cost of home insurance in a world of climate change.

At last week’s National Housing Conference’s affordable housing symposium, experts discussed the dramatic spike in insurance premiums, an increase that was directly attributable to climate-related natural disasters.

A report from online insurance market Policygenius shows a nationwide average premium increase of 21% over the last year, with some particularly-affected markets hitting an annual increase of up to 50%.

“The rising cost of insurance is an affordable housing issue,” said Thom Amdur, senior VP of policy at the investment firm Lincoln Avenue Communities.

The firm announced that it will begin collating climate risk assessment data to “de-risk” real estate portfolios and incorporate mitigation measures within its projects. This effort is designed to blunt some of the sharp rise of insuring new projects.

However, the continued issue of affordability means that many homebuyers are purchasing homes in at-risk areas, foregoing climate risk mitigation retrofits to existing properties, or even paying off their mortgages early so that they can “go naked” and go without housing insurance at all. Likewise, many insurance companies are canceling policies or withdrawing from markets viewed as too risky, especially in coastal markets in Florida.

Zillow senior economist Nicole Bachaud said climate risk should be weighed more heavily in future developments.

“We should be using climate as a lens of where we focus new communities,” she said. “Places that have less risk—climate havens—will become more popular as people are forced to flee places that have been damaged or where they can no longer afford to pay for the insurance on their homes. We need to be strategic in how we approach the future of housing supply and address ways to mitigate climate risks.”

Here in Huntsville, new listings and pending sales of single-family units were both down in the first week of December, by 9.7% and 10.4% respectively. Inventory increased by 8.9%. According to climate risk assessment site ClimateCheck, Huntsville, Alabama is mostly affected by high heat and precipitation.

The Huntsville Business Journal will continue to monitor developments in the real estate market, both nationally and locally, to keep our readers informed.