Today, you can buy a 1,616 sq ft home in Detroit, Michigan, for $40,000 (£25,000). At the same time, you can buy a 2,078 sq ft house in Los Angeles for $1.6m. How can a similar-sized home be 40 times more expensive in Los Angeles than in another major city? Everyone familiar with London property trends knows the answer is "location, location, location". But I would ask you to ponder, "location to what?"

In my 20-year research career studying environmental and urban economics, I have focused on the key role of local quality of life as a determinant of property prices. In this footloose age, cities with great quality of life will attract employers and the skilled, and urban growth will flourish there.

There is no law of physics stating that Los Angeles will always be 40 times more desirable or productive than Detroit. The current Los Angeles price premium is due to its unique quality of life.

Climate change could severely injure quality of life in cities such as Los Angeles and lead to a sharp decline in its population.

While such an exodus would not occur overnight, such "environmental refugees" will seek out new cities to live in that offer better quality of life.

Climate change poses several significant risks to US south-west cities. Major south-west cities such as Los Angeles, Phoenix and Las Vegas face mega-drought and severe heatwave risk. Climate scientists continue to study how long drought could last. Policymakers debate how to allocate increasingly scarce water between agricultural and urban interests.

While economists advocate raising water prices to reflect increased scarcity, politicians shy away from this in order to gain short-term political support. Suppose that the mega-drought persists and desert cities such as Phoenix begin to experience summer temperatures above 43C? In my book Climatopolis, I predict that US urbanites will adapt to these new realities by moving to other cities that are better able to adapt to the new conditions.

Locations such as Detroit (to the north and endowed with water) are prime examples of where we can build our future cities.

The US has more than 300 major cities. These cities will compete to see which (due to natural geographic features and smart local public policies) are best able to cope with Mother Nature's blows. The winners from this competition will experience a net influx of population and rising property prices.

Urbanites will win because they will have a greater menu of destination locations to choose from. Property owners in cities whose quality of life suffers will experience an asset value loss.

They bet on the wrong location.

Matthew E Kahn is professor of economics, UCLA Institute of the Environment, and author of Climatopolis: How Our Cities will Thrive in the Hotter Future