Perils of Climate
Change Could Swamp
Coastal Real Estate

Homeowners are slowly growing wary of buying property
in the areas most at risk, setting up a potential economic
time bomb in an industry that is struggling to adapt.

MIAMI — Real estate agents looking to sell coastal properties usually focus on one thing: how close the home is to the water’s edge. But buyers are increasingly asking instead how far back it is from the waterline. How many feet above sea level? Is it fortified against storm surges? Does it have emergency power and sump pumps?

Rising sea levels are changing the way people think about waterfront real estate. Though demand remains strong and developers continue to build near the water in many coastal cities, homeowners across the nation are slowly growing wary of buying property in areas most vulnerable to the effects of climate change.

A warming planet has already forced a number of industries — coal, oil, agriculture and utilities among them — to account for potential future costs of a changed climate. The real estate industry, particularly along the vulnerable coastlines, is slowly awakening to the need to factor in the risks of catastrophic damage from climate change, including that wrought by rising seas and storm-driven flooding.

But many economists say that this reckoning needs to happen much faster and that home buyers urgently need to be better informed. Some analysts say the economic impact of a collapse in the waterfront property market could surpass that of the bursting dot-com and real estate bubbles of 2000 and 2008.

The fallout would be felt by property owners, developers, real estate lenders and the financial institutions that bundle and resell mortgages.

Over the past five years, home sales in flood-prone areas grew about 25 percent less quickly than in counties that do not typically flood, according to county-by-county data from Attom Data Solutions, the parent company of RealtyTrac. Many coastal residents are rethinking their investments and heading for safer ground.“I don’t see how this town is going to defeat the water,” said Brent Dixon, a resident of Miami Beach who plans to move north and away from the coast in anticipation of worsening king tides, the highest predicted tide of the year. “The water always wins.”

These concerns have taken on a new urgency since the presidential election of Donald J. Trump, who has long been a skeptic of global warming, claiming in 2012 that it was a concept “created by and for the Chinese in order to make U.S. manufacturing noncompetitive.”

A real estate developer, Mr. Trump is also the owner of several South Florida properties, including Mar-a-Lago, a 20-acre site that stretches between the Atlantic Ocean and the Intracoastal Waterway in Palm Beach.

Mr. Trump’s recent selection of Myron Ebell to lead his Environmental Protection Agency transition team intensified these worries in Florida and among many climate scientists. Mr. Ebell has helped lead the charge against the scientific consensus that global warming exists and is caused by people.



State lawmakers in Massachusetts and New Jersey are pushing to impose new rules on real estate agents and others, obligating them to disclose climate-related damage like previous flooding.

Banks and insurers need to protect their collateral and investors more by improving their methods for estimating climate-change risks and creating more standardized rules for reporting them publicly, economists warn.

In April, Sean Becketti, the chief economist for Freddie Mac, the government-backed mortgage giant, issued a dire prediction. It is only a matter of time, he wrote, before sea level rise and storm surges become so unbearable along the coast that people will leave, ditching their mortgages and potentially triggering another housing meltdown — except this time, it would be unlikely that these housing prices would ever recover.

“Some residents will cash out early and suffer minimal losses,” he wrote. “Others will not be so lucky.”

Bull’s-Eye for Property Damage

Much of the uncertainty surrounding climate change focuses on the pace of the rise in sea levels. But some argue that this misses the point because property values will probably go under water long before the properties themselves do.

What is often called “nuisance” flooding — inundation caused more by tides than weather — is already affecting property values. Often just a foot or two deep, this type of flooding can stop traffic, swamp basements, damage cars and contaminate groundwater.

Florida has six of the 10 American urban centers most vulnerable to storm surge, according to a 2016 report from CoreLogic, a real estate data firm. Southeast Florida experiences about 10 tidal floods per year now. That number is likely to be around 240 floods per year by 2045, according to climate researchers.

In the past year, home sales have increased 2.6 percent nationally, but have dropped about 7.6 percent in high-risk flood zones in Miami-Dade County, according to housing data. Many coastal cities are taking steps toward mitigation, digging runoff tunnels, elevating roads and building detention ponds.

Continued at
http://www.nytimes.com/2016/11/24/science/global-warming-coastal-real-estate.html?hpw&rref=us&action=click&pgtype=Homepage&module=well-region&region=bottom-well&WT.nav=bottom-well

Last edited by Goose (11/25/2016 8:20 am)