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Makes you wonder when coastal property prices start plummeting. And when banks stop granting mortgages for buying coastal homes. I don’t believe this is happeni
by wsc981 7y ago
Makes you wonder when coastal property prices start plummeting. And when banks stop granting mortgages for buying coastal homes. I don’t believe this is happening yet.
- rectang 7y agoIs there a way to short these real estate investments and fleece climate-change-denying ideologues who are keeping coastal property values high? Do well by doing good! :D
- listenallyall 7y agoClimate-change-denying ideologues like the Obamas? Or are you the one being duped? https://www.google.com/amp/s/www.masslive.com/capecod/2019/08/barack-and-michelle-obama-buying-29-acre-estate-on-marthas-vineyard.html%3foutputType=amp https://www.google.com/amp/s/www.masslive.com/capecod/2019/0...
- badfrog 7y agoIf there was, you'd probably be paying a lot to hold the position for 30 years.
- CydeWeys 7y agoIt's gonna happen over too long of a time horizon (from now, anyway) to profit handsomely off of. There are much better investments you can make today because they will pay off sooner.
- shams93 7y agoYeah so far coastal prices are far above the inland prices
- GenerocUsername 7y agoOddly lots of rich and connected are buying coastal properties... You would think their financial advisors would prevent them even if the banks give no resistance
- akiselev 7y agoIf they're rich, they can afford to experience prime real estate before it's erased forever and if they're connected, they can get a bailout afterwards.
- heavyset_go 7y agoThey can afford to insure and rebuild homes in these areas.
- vermontdevil 7y agoThey are not going to spend $ to rebuild - they'll have the government to bail them out.
- heavyset_go 7y agoThis is very true.
- flukus 7y agoI'm surprised they still grant mortgages, a lot of coastal places can't get insurance anymore, a responsible lender wouldn't grant a mortgage on an un-insurable property. Of course government can always mandate a head in the sand approach... Then there's the mega wealthy that can always afford a new house anyway, they'll be happy to pay for the location.
- peacetreefrog 7y agoAll else equal, being in an area susceptible to climate change related flooding lowers value about 7% on average according to some research: https://www.axios.com/sea-level-rise-costing-billions-in-home-prices-7920a7a8-8db4-45b1-ad21-357c4d522fcb.html https://www.axios.com/sea-level-rise-costing-billions-in-hom...
- Gibbon1 7y agoOne thing I learned the average life of a 30 year mortgage is around 5 years. Everyone involved is passing the hot potato to the next sucker.
- Reedx 7y agoAnyone know how insurance companies are reacting? That'd be interesting to watch, since they're all about risk management and have a lot of skin in the game.
- symplee 7y agoCrossing their fingers for the next great bailout.
- dredmorbius 7y agoInsurance is definitely the point to watch. Real estate as investment makes sense only where the risk is insurable, and increasingly that's becoming less the case. If insurers won't insure, and banks can't get bailed out, mortgages won't get made, and property values will plummet. A recent realisation of mine is that the so-called FIRE sector (apt name...), Finance, Insurance, and Real Estate, effectively tripods itself. Finance provides the liquidity, insurance assesses and socialises risks, and real estate provides a huge share of the actual backing assets. If any one leg of that tripod starts to weaken, the entire structure is at risk. I ran across a pretty good explainer video from the WSJ yesterday on just this topic (or at least the "it's getting harder to insure" bits), mostly addressing California and wildfire, but also mentioning Florida and coastal storms. https://invidio.us/watch?v=7X3FmFDOiDc https://invidio.us/watch?v=7X3FmFDOiDc Looking for a good text treatment, that's not as easy to find at the moment.