If property values start to fall, Cason said, banks could stop writing 30-year mortgages for coastal homes, shrinking the pool of able buyers and sending prices lower still. Those properties make up a quarter of the city’s tax base; if that revenue fell, the city would struggle to provide the services that make it such a desirable place to live, causing more sales and another drop in revenue.
And all of that could happen before the rising sea consumes a single home.
As President Donald Trump proposes dismantling federal programs aimed at cutting greenhouse gas emissions, officials and residents in South Florida are grappling with the risk that climate change could drag down housing markets. Relative sea levels in South Florida are roughly four inches higher now than in 1992. The National Oceanic and Atmospheric Administration predicts sea levels will rise as much as three feet in Miami by 2060. By the end of the century, according to projections by Zillow, some 934,000 existing Florida properties, worth more than $400 billion, are at risk of being submerged.
The impact is already being felt in South Florida. Tidal flooding now predictably drenches inland streets, even when the sun is out, thanks to the region’s porous limestone bedrock. Saltwater is creeping into the drinking water supply. The area’s drainage canals rely on gravity; as oceans rise, the water utility has had to install giant pumps to push water out to the ocean.
The effects of climate-driven price drops could ripple across the economy, and eventually force the federal government to decide what is owed to people whose home values are ruined by climate change.
Sean Becketti, the chief economist at Freddie Mac, warned in a report last year of a housing crisis for coastal areas more severe than the Great Recession, one that could spread through banks, insurers and other industries. And, unlike the recession, there’s no hope of a bounce back in property values.
Citing Florida as a chief example, he wondered if values would decline gradually or precipitously. Will the catalyst be a bank refusing to issue a mortgage? Will it be an insurer refusing to issue a policy? Or, he asked, “Will the trigger be one or two homeowners who decide to sell defensively?”
“Nobody thinks it’s coming as fast as it is,” said Dan Kipnis, the chairman of Miami Beach’s Marine and Waterfront Protection Authority, who has been trying to find a buyer for his home in Miami Beach for almost a year, and has already lowered his asking price twice.
Some South Florida homeowners, stuck in a twist on the prisoner’s dilemma, are deciding to sell now—not necessarily because they want to move, but because they’re worried their neighbors will sell first.
When Nancy Lee sold her house last summer in Aventura, halfway between Miami and Fort Lauderdale, it wasn’t because she was worried about sea-level rise, rising insurance costs, nuisance impacts or any of the other risks associated with climate change. Rather, she worried those risks would soon push other people to sell their homes, crashing the region’s property values. So she decided to pull the trigger
“I didn’t want to be there when prices fell,” said Lee, an environmental writer.
Ross Hancock has the same worry, and sold his four-bedroom house in Coral Gables three years ago. He described South Florida’s real estate market as “pessimists selling to optimists,” and said he wanted to cash out while the latter still outnumbered the former.
“I was just worried about my life’s savings,” Hancock said. “You can’t fight Mother Nature.”
A short drive through mangrove trees off Highway 1 in Key Largo, Stephanie Russo’s house backs onto a canal that opens into Blackwater Sound, and from there to the ocean; her neighbors lounge in shorts and flip-flops beside their boats.
A few months after Russo, a partner at a law firm in Miami, moved to Key Largo in 2015, the big fall tides brought 18 inches of water onto the road in front of their house. Unlike previous tidal floods, this one lasted 34 days.
“When we bought, there hadn’t been a flood like that for years,” said Russo, who was sitting at a table between the home’s outdoor bar and its pool.
“Ever,” interjected her husband Frank, who was working on the grill.
The saltwater ruined cars around the neighborhood, destroyed landscaping and sparked a mosquito infestation.
But the worst part might have been the trash.
“When people would drive, it creates a wake,” said Russo. “That knocks over all the garbage cans, and then everybody’s garbage is floating in the streets, and in the mangroves. It’s just disgusting.”
Officials in Monroe County agree there’s a problem, and plan to raise some roads in an attempt to reduce future flooding.
Russo says if she knew in 2015 what she knows now, she wouldn’t have purchased the house. People buying in her neighborhood today are probably just as clueless as she once was, she guesses. “I would bet money that the realtors are not telling them.”
Apparently see levels in South Florida are approximately four inches higher than in 1992. That is certainly a concern and a possible trend. However, I would take the National Oceanic and Atmospheric Administration’s prediction that sea levels near Miami will be three feet higher by 2016 with a grain of salt. It is impossible to know. However, the economic consequences of people voting with their feet right now are certainly an economic concern, as the article explains.
My grumpy old man comment: look at those huge ugly apartment buildings which are completely ruining the coastline. It looks like a scene from urban China.
When I was a teenager, the Fuller family enjoyed a couple of Christmas holidays at Pompano Beach, not far from Miami in Florida but without the vulgarity. Pompano was nice and quiet, with people mostly living in one story houses with decent gardens and a few swimming pools. The occasional hotels were small. The breach was never crowded. There was nothing special about the food but I do recall an - “All you can eat for a dollar” – fried chicken restaurant which appealed to me after a good swim.