From the epicenter of building shit at sea level, Florida, comes this doozie from the New York Times:
“If rising seas cause America’s coastal housing market to dive — or, as many economists warn, when — the beginning might look a little like what’s happening in the tiny town of Bal Harbour, a glittering community on the northernmost tip of Miami Beach.
“With single-family homes selling for an average of $3.6 million, Bal Harbour epitomizes high-end Florida waterfront property. But around 2013, something started to change: The annual number of homes sales began to drop — tumbling by half by 2018 — a sign that fewer people wanted to buy.
“Prices eventually followed, falling 7.6 percent from 2016 to 2020, according to data from Zillow, the real estate data company.”
In a surprise to no-one not financially compromised by Florida’s housing market:
“All across Florida’s low-lying areas, it’s a similar story, according to research published Monday. The authors argue that not only is climate change eroding one of the most vibrant real estate markets in the country, it has quietly been doing so for nearly a decade.”
Here’s the plot for the percentage change in number of houses sold, year over year:
High risk means areas where more than 70% of the land would be under water if the sea rose about 2 meters.
And here’s the plot for the annual change in house prices:
I find this second one particularly fascinating. Until about 2009, you can see that there is literally no perception of risk or anything else at all separating the two groups.
Then, weirdly, it is around 2011 where the average sale price starts to drop less (but still drop), and it drops less for the more at risk areas!
And then in 2014, high risk area house prices rise on average year-on-year, whereas low risk area house prices only start to rise in 2015 year-on-year.
But the high risk area prices still keep rising faster than low risk area ones until 2017.
It’s beyond my pay level to understand this.
Perhaps coming out of the big recession in 2008, people that could afford it said, “Fuck it, let’s get a house with a view”, even if that meant being in a riskier spot near the beach, and of course houses with a view tend to cost more.
However, sales in the risky areas had already started to drop in 2013. So you have less sales, year by year, in the risky areas, yet the average price of these sales has been rising since 2014 and in fact continues to rise, though now at a lower rate than for low risk areas.
So, again, less and less houses are being sold in risky areas, but the average price of those that are still being sold is still rising fast (around 30% in the last year), though a little less quickly than in low risk areas (more like 40%).
However, prices are already decreasing in particularly low-lying parts of Florida:
“In Key Biscayne, an island 20 minutes southeast of Miami where the average elevation is 3.4 feet above sea level, sales volume in 2018 was one-third below its 2012 peak, and the parts of the island most exposed to rising seas saw the greatest drop. In the town of Sunny Isles Beach, in the northeast corner of the county, one particularly low-lying census tract saw sales volume fall by two-thirds.
“Since 2016, prices have fallen by 13 percent in Key Biscayne, and 9 percent in Sunny Isles Beach.”
In an amusing attempt for balance, the New York Times asked for reactions to these facts from the towns’ mayors.
“The mayors of each city took issue with the paper’s findings. Some argued that the recent declines are part of the natural cycle of Florida real estate and that the market has shown signs of recovery in the past few months.
“George “Bud” Scholl, the mayor of Sunny Isles Beach, said he didn’t think climate concerns explained the drop in sales volume, which he attributed to families that have lived in the town for a long time and were “simply holding onto their properties.”
“On Key Biscayne, Mayor Michael Davey said his city is addressing those concerns, seeking to elevate roads, protect beaches and bury power lines to avoid wind damage and power cuts as storms worsen. “We’re protecting our property value by doing these projects,” Mr. Davey said. “I don’t think the sky is falling.”
The last guy clearly doesn’t believe sea level rise is a problem in the local real estate market. He’s elevating roads just for the hell of it!
All that this article needed to be complete was a few quotes from the most neutral, truthtelling folks of all: real estate agents.
Well, is it your lucky day or what?!
“Real estate agents were equally skeptical. Oren Alexander, a broker at Douglas Elliman Real Estate who sells what he called “trophy properties” around Miami, said every part of the country faces climate threats.
“Hurricanes have reached New York City. California is burning,” Mr. Alexander said. “I’ll tell you firsthand from working with buyers, are they concerned with sea level rise? No.”
I’m gonna go out on a limb here and suggest that maybe if you’re no longer looking to buy a place that already floods once a week, you’re also not going to be talking to real estate agents?
Just a guess.