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A lot of retirees who bought beach houses will be disappointed. Sea level rise is already being priced into real estate https://www.rocketmortgage.com/learn/cl

A lot of retirees who bought beach houses will be disappointed. Sea level rise is already being priced into real estate https://www.rocketmortgage.com/learn/climate-change-real-estate-prices https://www.rocketmortgage.com/learn/climate-change-real-est... "A titled “Disaster on the Horizon: The Price Effect of Sea Level Rise” published by the University of Colorado identified a drop in sales in high-risk coastal areas starting in 2013. The study also states that, on average, homes near sea level rise sold for 7% less than other comparable homes. This downward trend strands in contrast to increased sales prices in nearby lower-risk areas. As sea levels continue to rise, this trend may continue. Wealthier homeowners will be able to move to lower-risk areas, while people with lower incomes will be subject to higher risks of flooding. Fewer Home Sales In High-Risk Areas In addition to decreased sales prices, there are also fewer homes being sold in coastal high-risk areas. It should come as no surprise that people don’t want to live in areas where they feel threatened by extreme weather and wildfires. Even if being close to the woods or the ocean is a huge plus, no one wants their home to be threatened by a fire or flood. With fewer homes being purchased in these areas, those who want to sell may have a harder time. The decrease in sales prices and home sales could be a housing market indicator for the future of coastal home sales."

mcculley 4y ago
My assessment as a 51 year old native Floridian is that, "a lot of retirees who bought beach houses will be disappointed" is fundamental to the problem. Our economy is based on 30-year financial instruments. Largely nobody is incentivized to think ahead further than 30 years, especially retirees. I am astounded when I see coastal properties sold knowing that they will be untenable in the long term.
- toomuchtodo 4y ago
  The insurance market is fixing the problem. Citizens Insurance, the high risk pool, is slowly rolling out a flood insurance requirement across all policyholders. You can either afford insurance, or you will self insure. If you can’t afford the insurance, you won’t be able to carry a mortgage. Arguably, the system is correcting the previously mispriced risk. https://www.citizensfla.com/-/20230127-flood-insurance-requirements-for-renewal-eligibility https://www.citizensfla.com/-/20230127-flood-insurance-requi...
  - mcculley 4y ago
    I am very familiar with Citizens and while I am pleased to see reform of it, I don't see how the changes made end up with correctly priced risk. The continued existence of Citizens is proof that the risk is not priced correctly or private insurers would be willing to sell policies. But the mispriced risk is only part of the problem. Even if the risk were correctly priced, I do not believe that many properties being sold today will be standing in 30 years without significant extra investment. It is not just the private properties. Roads and other infrastructure are built in Florida with no apparent long term plan.

mcculley 4y ago

My assessment as a 51 year old native Floridian is that, "a lot of retirees who bought beach houses will be disappointed" is fundamental to the problem. Our economy is based on 30-year financial instruments. Largely nobody is incentivized to think ahead further than 30 years, especially retirees. I am astounded when I see coastal properties sold knowing that they will be untenable in the long term.

toomuchtodo 4y ago
The insurance market is fixing the problem. Citizens Insurance, the high risk pool, is slowly rolling out a flood insurance requirement across all policyholders. You can either afford insurance, or you will self insure. If you can’t afford the insurance, you won’t be able to carry a mortgage. Arguably, the system is correcting the previously mispriced risk. https://www.citizensfla.com/-/20230127-flood-insurance-requirements-for-renewal-eligibility https://www.citizensfla.com/-/20230127-flood-insurance-requi...
- mcculley 4y ago
  I am very familiar with Citizens and while I am pleased to see reform of it, I don't see how the changes made end up with correctly priced risk. The continued existence of Citizens is proof that the risk is not priced correctly or private insurers would be willing to sell policies. But the mispriced risk is only part of the problem. Even if the risk were correctly priced, I do not believe that many properties being sold today will be standing in 30 years without significant extra investment. It is not just the private properties. Roads and other infrastructure are built in Florida with no apparent long term plan.