Real Estate and the Rising Sea Level

by Daniel Brouse

“Living near the water is incredibly appealing for people around the country, but it also comes with additional considerations for buyers and homeowners,” Zillow chief economist Svenja Gudell wrote in a new report. “Homes in low-lying areas are also more susceptible to storm flooding and these risks could be realized on a much shorter timeline as we have seen time and time again.”

Climate change is causing the sea level to rise. The effects are already being felt in places like the Jersey Shore. Atlantic City, N.J. ranked third in the top ten U.S. areas that experience nuisance flooding with a 682% surge since 1957.

“As relative sea level increases, it no longer takes a strong storm or a hurricane to cause flooding”said William Sweet, Ph.D., oceanographer at NOAA’s Center for Operational Oceanographic Products and Services (CO-OPS) and the report’s lead author. “Flooding now occurs with high tides in many locations due to climate-related sea level rise, land subsidence and the loss of natural barriers. The effects of rising sea levels along most of the continental U.S. coastline are only going to become more noticeable and much more severe in the coming decades, probably more so than any other climate-change related factor.”

“We’ve seen the enormous impact flooding can have on a city and its residents,” said Gudell. “It’s harder for us to think about it on a long-term timeline, but the real risks that come with rising sea levels should not be ignored until it’s too late to address them.”

The Zillow report found:

  • Coastal homes are threatened by the prospect of rising sea levels
  • More than $900 billion worth of U.S. residential real estate could be lost by a 6-foot rise in sea levels
  • The rise in water levels projected by 2100 could destroy 2 million homes

A CNBC analysis of the report said, “Of the nation’s largest cities, Miami, New York, Boston, Tampa and Fort Myers, Florida, have the highest volume of homes at risk of flooding. Los Angeles, Charleston, South Carolina, Houston and New Orleans are also in the top 20 markets at risk.”

Flood insurance is usually needed to obtain a mortgage for a property located in a flood zone. Flood insurance is the only insurance offered by the federal government that can be obtained by anybody. The National Flood Insurance Program (NFIP) is made available by the Federal Emergency Management Agency (FEMA).

The NFIP offers coverage for: 1) Building Property, up to $250,000, and 2) Personal Property (Contents), up to $100,000. The coverage is cumulative which means NFIP will pay out a maximum of $250,000 for the structure. If you make a claim for $100,000 and then sell the property, the next owner can only get insurance for up to $150,000.

The Zillow study found:

  • One-third (32 percent) of underwater homes would be valued in the bottom third nationally, meaning $123 billion in losses.
  • Two in five (39 percent) underwater homes would be valued in the top third nationally, translating to $597 billion in lost high-end real estate.
  • In rural and suburban areas, homes in the top value tier may face particular risk, while in urban areas homes in the bottom value tier are more likely to be affected.

MORE INFORMATION:
Top 5 Risks
How Do We Handle Flood Risk?
Senegal Forecasts Climate Change Changes
Biloxi-Chitimacha-Choctaw Indians Climate Change Refugees
Atlantic City Going Under
Biggert Waters Flood Insurance Reform Act of 2012
Flood Insurance Reform 2011
About Flood Insurance
Who Pays For Flood Losses?
Floodplain Maps Force Towns Into Tricky Waters
Head of the Federal Flood Insurance Program Resigns
Sacramento And FEMA Fight On Flood Insurance
Global Warming

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