A Conversation With Howard Botts
Extreme heat doesn’t just challenge our physical endurance; it has a ripple effect on nearly every aspect of our lives.
From contributing to the intensification of natural disasters like hurricanes and wildfires to affecting property values, insurance risks, and even migration patterns, rising temperatures are worth paying attention to.
As natural disasters continue to accelerate in pace and intensity, it’s becoming clear that both homeowners and businesses must adapt to a new normal — one where extreme heat and its related perils are key considerations in every decision.
In this conversation, host Maiclaire Bolton Smith talks to CoreLogic’s Chief Scientist, Dr. Howard Botts to discuss how extreme heat is reshaping the property landscape. The conversation touches on the evolving risks that both homeowners and insurers must navigate as well as how extreme heat is affecting business considerations.
See Your Portfolio’s Climate Risk
As the conversation explores these challenges, the pair also looks at how communities and businesses are beginning to adapt, using new technologies and strategies to build resilience against a hotter future.
In This Episode:
2:08 – What is extreme heat, scientifically speaking?
5:10 – What are the impacts of extreme heat from a property perspective?
7:12 – How many U.S. properties are exposed to extreme heat, and what is the value of those exposed properties?
10:03 – Erika Stanley does the numbers in the housing market in The Sip.
11:27 – How will additional days of extreme heat make natural disaster events worse?
15:53 – What are the knock-on effects of accelerating natural disasters on climate change?
19:22 – Do businesses have extreme heat on the radar as a peril that affects bottom lines?
21:03 – Erika Stanley reviews natural catastrophes and extreme weather events across the world.
22:51 – How will extreme heat affect land-use planning and climate resiliency?
Howard Botts:
We are starting to see a decrease in price of homes and length of time on market. Some places like Miami Beach, the poster child for issues related to increased sea level and coastal flooding, or there’s shore acres in Tampa or Balboa Island in California, what we’re finding is home prices have decreased in many parts of these areas by at least 5% and a 20% decline in sales volume.
Maiclaire Bolton Smith:
Welcome back to Core Conversations: A CoreLogic Podcast, where we tour the property market to investigate how economics, climate change, governmental policies, and technology affect everyday life. I am your host, Maiclaire Bolton Smith, and I’m just as curious as you are about everything that happens in our industry.
Climate change is a subject that we talk a lot about on this podcast, but that’s because the human and financial costs associated with our changing climate is both nuanced and evolving. While the impact of climate change can be readily seen in the increased frequency and severity of natural disasters like hurricanes and wildfires, one peril that’s often overlooked is extreme heat. Although many parts of the US are accustomed to high temperatures, extreme heat coupled with high humidity can fuel other environmental perils that put properties and people at risk of significant financial impact.
So to talk about the knock-on effects of rising temperatures and the physical risk that it presents to properties across the globe, we have CoreLogic’s Chief Scientist Howard Botts. Howard, welcome back to Core Conversations.
HB:
Well, thanks, Maiclaire. I’m super excited to be back again.
Erika Stanley:
Before we get too far into this episode, I wanted to remind our listeners that we want to help you keep pace with the property market. To make it easy, we curate the latest insight and analysis for you on our social media where you can find us using the handle @CoreLogic on Facebook and LinkedIn or @CoreLogicInc on X, formerly known as Twitter, and Instagram.
But now let’s get back to Maiclaire and Howard.
MBS:
Well, it’s always great chatting with you, so here is a new topic that we’ve not talked about yet. I guess we’re going to talk about extreme heat, and depending on where you may live, your definition of hot could be very different I know. You and I would be like, “Oh, it’s so hot here in Southern California,” and somebody in Texas would roll their eyes at us because it’s a very different definition of heat. I guess from a scientific standpoint, what do we actually mean by extreme heat?
HB:
Well, that’s a great question, and your lead-in was perfect too, since it could be different depending on where you are. I think the standard definition, Maiclaire, we usually hear is in the US extreme heat is defined as high heat and humidity above 90 degrees for two or three days. For example, this week we’re seeing a heat dome forming, and so we will see 90 degree temperatures throughout the Midwest and eastern US that’ll impact 74 to 110 million people.
MBS:
Wow.
HB:
A more scientific definition, and pardon me, for people that slept through their physical geography class, let me add a little more context. We often talk about the wet bulb temperature, which is really how we measure human heat stress, and increasing extreme days driven by climate change.
Imagine a thermometer wrapped in a wet cloth. And as water evaporates, the cloth cools the thermometer, which basically mirrors how the human body cools itself with sweat. So at 100% humidity, it’s basically the same as the air temp. And so for scientific purposes and certainly for our climate change models, we talk about a wet bulb temperature of 90 degrees, which is about equal to a heat index of 131.
MBS:
Wow.
HB:
Being at the point at which humans can really no longer carry out normal activities. I think that’s a definition that really takes into account human impact in a way that’s just saying temperature doesn’t, because as you pointed out at the beginning, humidity and our ability to shed heat as humans definitely changes the definition of extreme heat.
MBS:
Wow, wow. Well, that is really interesting, and thank you for setting the stage with that. I guess, I mean, when you hear somebody say 130 degrees, that just is stifling. You can’t carry on anything in that kind of temperature. I guess what are the actual risks associated with extreme heat? I guess from a physical property perspective, we think of it from a human perspective of maybe we can’t carry on our normal activities, but from a property perspective, what are the impacts of extreme heat?
HB:
Well, I think over half of the US homes are at risk for severe or extreme heat, and climate risks are driven by this increased global warming or heat. And certainly we’re seeing that impact on wildfire flood, severe convective storms, which would be tornadoes, hail, straight line winds. Sea level rise is certainly an issue if you’re in a coastal area, and increased hurricane risk.
MBS:
Sure.
HB:
And so last year alone there were $28 billion disasters, and so far this year we’ve had $11 billion-plus disaster events in the US.
MBS:
Wow, wow.
HB:
All of these being driven by increased heat or the consequences driven by heat.
MBS:
We are now midway through hurricane season and the possibility of having more of those extreme events is definitely upon us, especially given what we’ve seen from hurricane season so far this year and what we’ve seen from the forecast that they’re anticipating that hurricane season can be this year. So $28 billion events, we may go far beyond that with the rest of the year. Just depends on how things are going to evolve.
HB:
Yeah, absolutely. And this is setting up to be a record year.
MBS:
Sure.
HB:
Already in June, Gulf sea temperatures are in excess of 100 degrees, something we wouldn’t see normally until the end of or toward the end of hurricane season. So that definitely sets us up for another record-breaking year.
MBS:
Yeah, it’s going to be interesting to see. We had a podcast earlier this season with Brian McNoldy from the University of Miami where we talked about the conditions that we had in the Atlantic right now, what we might expect. So yeah, it’s going to be interesting to see how the continuation of hurricane season continues throughout this season.
You did mention, Howard, that over half the properties in the US are exposed. Do we have a number? Have you done any research on either the valuation or the number of properties that are exposed to extreme heat?
HB:
Well, we would anticipate at least half of the US residences would be impacted likely, and certainly that varies regionally.
MBS:
Do you say varies regionally, are there areas specifically that we know are more extreme heat? I mean, I have to think of the desert areas like Nevada, New Mexico and Texas, where we think of being extreme heat areas. But are those the ones that we’re the most concerned of, or is it … I mean, we’ve been hearing about these high temperatures in the Northeast this year.
HB:
Exactly. And you’re right, we would expect Central, Southern California, Arizona, Texas, Louisiana and Florida, and really across the Inland South at increased risk for high heat. But some of the areas that we’re really worried about would be Pacific Northwest, New England, where historically they haven’t been used to high heat, maybe don’t have the levels of insulation or home cooling, central air.
MBS:
Sure, yeah.
HB:
All of those are certainly at risk. Places that are poster children for high heat are like Phoenix, which Associated Press usually refers to as the hottest large city in America.
MBS:
Wow.
HB:
Last summer alone, they had 31 consecutive days above 110 degrees.
MBS:
Wow.
HB:
So a hot city, even hotter. And 99% of those homes are air-conditioned. And you can imagine if a power outage were to occur, emergency management estimates are potentially 800,000 people could be hospitalized.
MBS:
Wow.
HB:
So a very, very big concern. And how do you deal with mass heatstroke, heat risk individuals?
MBS:
Wow.
HB:
And this is not just a US phenomenon. Certainly we’re seeing it around the globe. And I think, based on a lot of conversations I’ve had in Washington, DC, the US government is becoming very concerned with this. They created recently a website called heat.gov, which ranks all areas from one to four, based on levels of heat stress.
MBS:
Wow.
HB:
They see this as obviously a national issue, but if we extend out, certainly an international issue also.
ES:
It’s that time again, grab a cup of coffee or your favorite beverage, we’re going to do the numbers in the housing market. Here’s what you need to know.
The US housing affordability remains near an all-time low due to elevated prices and higher mortgage rates. As a result, many Americans continue to rent, which is prompting continued demand and slow but steady price increases. Single-family rents rose by 3.2% year-over-year in May. This is the highest rate of growth since April 2023. In fact, May’s annual rent growth was largely in line with growth numbers recorded over the decade before the pandemic.
Although prices are picking up, people are keeping up, especially in expensive coastal markets where the median monthly rent exceeds $3,000. This is largely thanks to the US unemployment rate remaining near a decade low and a continued rise in wages. Of the 20 metros tracked in the CoreLogic Single-Family Rent Index, St. Louis posted the highest year-over-year increase of 6.2%. New York and Seattle registered the second-highest annual gains, both at 5.9%. And these cities were followed by San Francisco, where rents rose 5.2%. On the other hand, Austin, Texas and Phoenix, Arizona posted annual rental price losses of 0.6% and 0.3% respectively.
To stay current with the latest housing market conditions and trends, visit the link in the show notes. And that’s The Sip, see you next time.
MBS:
Howard, it triggers a thought for me that we talk about, because of climate change, the risk of different perils, like hurricanes, severe convective storm, floods, wildfires, I mean, even winter storms, we talk about how they will progressively get worse because of these extremely hot days.
But can you talk about how they’re anticipated to get worse? You’ve already alluded to and we’ve talked a little bit about how the sea surface temperatures are really warm right now. In the Atlantic it’s going to progressively make hurricane season worse. But can you just talk about why extreme heat impacts all of these in different ways?
HB:
Yeah, absolutely. And we could almost go through each one you mentioned case by case-
MBS:
Yeah. Let’s do that.
HB:
… but I’ll just do a couple of them. 42% of all Americans live in a coastal county. So we start to think about sea level rise, which is a combination of glacial melting and increased rates of that, both continental glaciers, but also the polar glaciers, Greenland, significant glacial melt. As well as warm water expands, so thermal expansion of the water. And so that’s driving increased risk onto the coast. And we will see by 2100 an estimated one million homes in Florida alone being underwater.
MBS:
Wow. Wow.
HB:
But in the shorter term, we’re seeing all kinds of coastal flooding events related to sea level rise. That’s directly driven by increased heat. Floods are the ones that keep me up at night often, and for every one degree Celsius the earth warms, air can hold 7% more water.
MBS:
Wow.
HB:
Or I guess if you’re one of the few countries in the world that still uses Fahrenheit like we do, that would be 1.8 degrees Fahrenheit. And so that’s driving these huge increased flood events we see. Just in last June or June of this summer, we saw Florida get 20 inches of rain in a couple of days. Hurricanes-
MBS:
Wow. 20 inches. Wow.
HB:
20 inches.
MBS:
That’s insane.
HB:
And their stormwater systems are designed for a very limited, maybe a 10-year return period of rain.
MBS:
Sure.
HB:
So you get 1,000-year event, and you can imagine the level of flooding. And I think we’re seeing that hurricanes moving slower and becoming more flooding events. Because most people, if you’re not in a flood zone, aren’t insured for flood loss. That’s what keeps me up at night.
For you and I, Maiclaire, who live in California, wildfire risk are increasing. Heat drives more stress on plants, vegetation, trees. Greater levels of drought are occurring. Decreased soil moisture. And so again, we’re starting early in the season this year. We’ve seen a number of major fires break out in Southern California.
MBS:
Sure, yeah.
HB:
And so again, Really driven by heat. We could toss on tornado risk, hail, kind of on and on. And getting back to our theme today, we talked about heat domes, and the polar opposite of that would be polar outbursts in winter.
MBS:
Sure.
HB:
And it looks like heat is really working to change the way the jet stream moves.
MBS:
Oh, interesting.
HB:
It’s dipping down or forming an omega shape, where it dips down and then goes back up toward Canada and back down again. And below that it will trap heat for a long number of days. Or in winter, as we saw a few years ago in Texas, these polar outbursts of extreme cold polar air in the South. So when we talk about climate change, heat is the driver.
MBS:
It is. Wow. It’s fascinating. And, Howard, I mean, you alluded to, in particular with flood, the impact on insurance or the lack thereof really from an insurance perspective with flood, that a lot of people are underinsured or not insured for flood if they’re outside of a flood zone.
What are some of the other risks that people should be concerned with, either from, I guess, an insurance perspective. I think also migration perspective. We’ve talked on this podcast before about how climate is making people move out of coastal regions in particular. And even just the property economy perspective too, are we seeing home price values change because of climate change? I guess all of that, how are we seeing these, I’ll call them knock-on effects or impacts of climate change, on the property industry?
HB:
Yeah, I think you hit on a number of them. I don’t think we’ve seen large impacts yet on migration decisions. People still continue to move to Florida and coastal areas that are at high risk.
But we absolutely are starting to see home prices and length of time on market starting to be impacted by climate change. And so for coastal areas that are low-lying, subject to king tides, or nuisance flooding of various kinds, or sea surge, all of those we’re starting to see a decrease in price of homes and length of time on market. So in places like Miami Beach, kind of the poster child for issues related to increased sea level and coastal flooding, or there’s shore acres in Tampa or Balboa Island in California, all of those they look great if you want to live in a Venice, Italy-like location, I guess, but what we’re finding is home prices have decreased in many parts of these areas by at least 5%.
MBS:
Wow, interesting.
HB:
And a 20% decline in sales volume. So it is having that impact. And there’ve been a number of studies that have come out using CoreLogic climate data recently about home prices. And one that was interesting is comparing people who believe in climate change versus people who don’t believe in climate change.
MBS:
Oh, interesting.
HB:
And what they’re finding is if you don’t believe in climate change, you tend to pay more for your home, and you’ll ultimately find you have less equity when it comes time to sell.
MBS:
Right, right.
HB:
So I guess whether you believe or not, you better do some educational work and see what’s going to be the impact on that particular property you’re interested in looking at.
ES:
Would you like to know more about the psychology of accelerating climate risk and whether it’s affecting American’s home-buying habits? Tune into the Core Conversations episode that aired on August 7th to hear Maiclaire talk to Dr. Kaitlin Raimi, an associate professor of public policy at the University of Michigan. The link is in the show notes.
MBS:
Wow. I mean, the human psychological aspect of this is an interesting one as well, and that is a very interesting fact.
It does make me think too about do we see or do we think that businesses are considering extreme heat? I mean, I know we’ve done a podcast before with Russell McIntyre when the Securities and Exchange Commission did come up with their publicly traded companies and guidance on what people are going to have to do for climate change, and I know that still has been a little bit up in the air throughout the year. But is extreme heat something that’s on the radar for businesses?
HB:
Yeah, absolutely. Businesses, like homeowners, I think are utilizing all kinds of strategies to reduced energy costs, obviously would be a big part of that. So increasing insulation, ventilation. Cool roofing has suddenly become a big, big deal. Building codes in many places demanding we put more reflective roofs in. Increasing shade through landscaping.
MBS:
Sure.
HB:
Increased capacity cooling systems. And I think most importantly, people are no longer relying or businesses no longer relying on the power grid, as you’ve seen from power outages. So backup generators are increasingly becoming common at virtually all businesses.
I guess in particular we’re seeing a lot of emphasis on increasing shade. And certainly for any commercial center or amusement parks with an outdoor focus, shade is a key part of-
MBS:
Oh, of course.
HB:
… what they need to focus on.
ES:
Before we end this episode, let’s take a break and talk about what’s happening in the world of natural disasters. CoreLogic’s Hazard HQ Command Central reports on natural catastrophes and extreme weather events across the world. A link to their coverage is in the show notes.
July started with Hurricane Beryl, the second named storm and first hurricane of the 2024 season. The storm made three landfalls. Its first was over Granada as a category 4 hurricane. Over 24 hours, hurricane Beryl intensified from a category 1 to a category 4 hurricane, making it the earliest recorded category four a hurricane to form east of the Caribbean. Then, as the storm remained over the Eastern Caribbean, it strengthened to a category 5 hurricane with winds of 156 miles per hour. This is the earliest category 5 hurricane in recorded history.
By July 9th, the storm had traveled over 4,000 miles to make its final landfall over Matagorda, Texas, as a category 1 cyclone. Despite being a category one at landfall, Beryl was able to maintain hurricane strength for a long time. And hurricane force winds were recorded in Houston as the storm continued to travel. CoreLogic estimates that insured wind losses in Texas will be approximately $3.2 billion.
Then, on July 16th, heavy rainfall in the city of Toronto, Canada, caused widespread disruption and property damage. The rapid and intense rainfall caused severe flash and riverine flooding. The recent flooding in Toronto is another example of the rising global concern about flooding and flood damage. The Insurance Bureau Bank of Canada estimates the total economic damage from the heavy rainfall in Toronto may generate $1 billion in damage. The private insurance market will unlikely take heavy losses as standard homeowners policies do not cover flood damage.
MBS:
Well, I guess, just to wrap up here, Howard, I think if you look in your crystal ball and you think of the future of what’s to come, maybe not predicting what’s going to happen from extreme heat, but more on the crystal ball use of where do we think things are going to go from a maybe land-use planning or just climate resiliency in general in the future, on where we think we’re going to go? Can you talk a little bit about that?
HB:
Yeah. My crystal ball perhaps informed a little bit about what I read and see happening as we talk to clients, is a lot of time and dollars are being invested to really understand the impact of heat on homes, businesses, agriculture, and obviously humans as we started out talking about.
We’re seeing local building starting to really understand that this is a critical issue and driving buildings to become more heat-resistant, particularly like using roof coverages that we mentioned a minute ago to reflect heat. We’ve seen some communities actually experimenting with putting a white coating on their streets and to experiment, will that reflect heat and reduce urban heating?
MBS:
Interesting.
HB:
We’re investing a lot of dollars in the US in better instrumentation. So JPL NASA has an instrument called ECOSTRESS, which measures at a very, very high resolution urban heat impacts. And so you combine that with building characteristics we can really help us tune or mitigate or shape our models to increase resiliency.
And something that I’m really excited about, at the federal level we had a couple of recent bipartisan bills that passed, which really with the goal of resiliency funding, support community efforts. One was the Inflation Reduction Act, which again is providing funding for more resilient communities and to protect communities against impacts of climate change, drought, heat, extreme weather. And then the Infrastructure Act, which basically is helping, again, communities, particularly underserved and disadvantaged communities, deal with climate change and strengthening resiliency.
So I am optimistic. I think there are a lot of things we can do, but certainly we’re going to have to adapt to a changing world.
MBS:
I am with you, Howard. I’m optimistic, I think that’s the right way to put it, but need to adapt to a changing world. And I think you really hit the nail on the head earlier when you said the number one thing that people can do to be ready for this is to believe it’s real and believe that it’s happening. And it’s happening before our eyes, kind of at light speed here, with maybe people don’t necessarily realize it’s happening.
So Howard, this has been great. Thank you so much for joining me again today on Core Conversations: A CoreLogic Podcast.
HB:
All right. Well, thank you, Maiclaire. It’s always wonderful. I love your questions.
MBS:
Well, we will definitely have you back again soon, Howard. Thank you for listening. I hope you’ve enjoyed our latest episode. Please remember to leave us a review and let us know your thoughts and subscribe wherever you get your podcast to be notified when new episodes are released.
And thanks to the team for helping bring this podcast to life producer, Jessi Devenyns, editor and sound engineer, Romie Aromin, our facts guru, Erika Stanley, and social media duo, Sarah Buck and Makaila Brooks. Tune in next time for another Core Conversation.
ES:
You still there? Well, thanks for sticking around. Are you curious to know a little bit more about our guest today? Dr. Howard Botts is CoreLogic’s Chief Scientist. Dr. Botts works closely with CoreLogic’s climate change and natural hazard scientists and geospatial professionals who generate and maintain solutions for the insurance, real estate, capital markets, mortgage, banking and energy industries.
With more than 30 years of experience in geospatial modeling, Dr. Botts is a recognized expert in developing climate change and natural hazard risk solutions. His work has been published extensively. He frequently presents to business and professional organizations on a variety of topics, including climate change impacts on the real estate ecosystem, natural hazard risk, and weather forensics.
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