For Architectural Digest, by Nick Mafi.
According to a study by the National Oceanic and Atmospheric Administration, the planet’s surface temperature has roughly climbed 1.71 degrees Fahrenheit over the past century due to greenhouse gases. The study projects that by 2030, this sharp rise in temperature will be too much for the oceans to contain, causing a gradual increase in the rate of melting glaciers and ice sheets. This, of course, will lead to rising seas and storm-driven flooding. The consequences to certain regions of the world will be devastating. Here in the U.S., one repercussion will be the ways in which home values could be significantly altered.
Rising sea levels have forced homebuyers to change the way they value waterfront property. Indeed, a county-by-county study conducted by Attom Data Solutions showed that, over the past five years, home sales in flood-prone areas grew by about 25 percent less quickly than in counties that do not typically flood. And considering that roughly 40 percent of Americans live and work in coastal areas, the significance of the report is even more present. Below, AD surveys four areas in the U.S. that have been, or likely will be significantly impacted by rising sea levels in the coming years. Not coincidentally, they are almost exclusively those areas where coastal real estate isn’t as sought after as it once was.
An analysis conducted by CoreLogic revealed that in 2016, a total of more than 6.8 million homes located along both the Gulf and Atlantic coasts of the U.S. were at risk of storm surge damage. The top three states — Florida, Louisiana, and Texas — were the most at-risk areas in the country because of both the length of their coastlines and the lower elevation of their land. Of course, one main reason homeowners are becoming increasingly wary of buying coastal property is due to the cost of maintenance and repair associated with oceanfront real estate. By CoreLogic’s estimation, the total reconstruction cost value of coastal homes is just over $1.5 trillion. This projection was made by considering the costs from reconstruction materials, equipment and labor, and other factors.
The Coastal Carolina
The counties of Brunswick, Onslow, and Carteret have, over the past five years, not only experienced a higher risk of hurricane storm surges but also a significant decline in existing home sales when compared with other counties in the area. Point being, the areas that flood the most have seen the worst real estate movement—a clear indication that potential coastal residents are rethinking their investments.
The Gulf Coast
This region has perhaps the most counties at risk of significant damage from flooding. As a result, many coastal homes in areas such as Walton County on Florida's north Gulf shore have lost value. According to the real estate website Zillow, the market health index for Walton County scores at 4.7 out of 10.
Since early 2016, the national rate of home sales has increased 2.6 percent. Nevertheless, during this same period of time the rate of home sales has dropped roughly 7.6 percent in the high-risk flood zones of Miami-Dade County. The region is the worst metropolitan area in the country in regards to storm surge risk, with an estimated 780,000 homes potentially affected. In 2016, Freddie Mac published reports that estimated in Florida alone, there is a 1 in 20 chance that more than $346 billion in current property will be underwater by 2100. To compound issues, sea levels in South Florida are roughly four inches higher today than they were in 1992. What's more, the National Oceanic and Atmospheric Administration estimates that sea levels will rise as much as three feet in Miami by 2060.
New York City
While the state isn’t among the top three in the country most affected, New York City is among the top cities that faces major risks. With almost 720,000 homes potentially affected by hurricanes, large segments of south Brooklyn are at risk for flood-related damages. Unlike parts of Texas, New York City does not have a long coastline. What makes the area so vulnerable, however, is the densely populated land — an issue most notably witnessed during the aftermath of Hurricane Sandy.
Ultimately, this data doesn't bode well for the housing market as a whole. Sean Becketti, the chief economist for Freddie Mac, issued a grave warning in April 2016, stating that it's only a matter of time before rising sea levels and storm surges become so unrelenting that people will leave their coastal homes, forgoing their mortgages and potentially triggering another housing crisis. Unlike previous housing meltdowns, however, this one would likely mean that their home value would never recover.
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