You're getting downvoted, but the data is on your side. People will knowingly buy homes in areas with high risk because they know insurance or the government will bail them out, so home prices don't properly reflect the risk.
For example, houses in New Orleans should be nearly $0 because of the risk, but since FEMA will rebuild your house in a flood, they aren't. There are houses there where FEMA has paid out 10x the current value because they've been destroyed so many times.
I understand people have attachments to their place of birth or upbringing, and that's fine. But the house prices should reflect that. Imagine instead of the home costing $300,000 and you have to get a loan for that, the house costs $300 but they give you a loan for $300,000 to rebuild if it gets destroyed. This would cause people to gravitate towards homes that are less likely to be destroyed because then you don't have to take on the $300,000 loan. It's standard risk aversion.
For example, houses in New Orleans should be nearly $0 because of the risk, but since FEMA will rebuild your house in a flood, they aren't. There are houses there where FEMA has paid out 10x the current value because they've been destroyed so many times.
I understand people have attachments to their place of birth or upbringing, and that's fine. But the house prices should reflect that. Imagine instead of the home costing $300,000 and you have to get a loan for that, the house costs $300 but they give you a loan for $300,000 to rebuild if it gets destroyed. This would cause people to gravitate towards homes that are less likely to be destroyed because then you don't have to take on the $300,000 loan. It's standard risk aversion.