People still owned homes before residential mortgages were a thing, which didn't take its modern shape until the 1930s. In uninsurable markets, liquidity will d

People still owned homes before residential mortgages were a thing, which didn't take its modern shape until the 1930s. In uninsurable markets, liquidity will drop, prices will follow, until a new equilibrium forms. In sleepy beach towns where the primary use is recreation, that equilibrium will probably be very low. In New Orleans, the economic value is significantly higher and the equilibrium will be commensurately higher. Of course, in the real world, the federal government will step in to subsidize insurance (more than it already does) and keep that 30-year mortgage available in New Orleans, for the reasons I outlined in my original comment.