This is one of the reasons, why climate-change risks can not be priced into home prices.
Take europe- after several instances, homes in mountanous regions and near small rivers/springs are to be expected to be regularly destroyed or damaged with high statistically likelihood. Examples abound:
Now, if the risk was assessed reasonable, the risk would be priced into the housing in those regions and industrial activities in these regions. Austria, germany and some other regions would see significant drops in value.
Same goes for florida and california, with forrest fires and hurricanes.
The market can not be rational, if your lifelihood and pension depends on it.
https://en.wikipedia.org/wiki/2021_European_floods
Now, if the risk was assessed reasonable, the risk would be priced into the housing in those regions and industrial activities in these regions. Austria, germany and some other regions would see significant drops in value. Same goes for florida and california, with forrest fires and hurricanes. The market can not be rational, if your lifelihood and pension depends on it.