The risk of floods increasing do to human induced climate change is affecting real estate values. Though the risk is increasing in all flood zones, coastal areas are already feeling the pain. Most homeowner’s don’t know about flood insurance until they need it. Then, it is too late.
Bloomberg News reports:
Recent research confirms that the climate threat is already showing up in prices. Economists Asaf Bernstein, Matthew Gustafson and Ryan Lewis have a recent paper showing that houses exposed to sea-level rise of between 0 and 6 feet have been selling at a 7 percent discount relative to houses a similar distance from the beach that aren’t exposed. The time period they look at is 2007-2016 — before the damage from Harvey. They also confirm that the discount is higher in locations where people report more worry about climate change.
Another recent study, by environmental researchers Jesse Keenan Thomas Hill and Anurag Gumber, shows something similar. Focusing on Miami-Dade County, they show that higher-elevation locations have risen in price faster than similar locations at low elevations. That’s consistent with the theory that wealthy buyers pay a premium to escape flooding risk.