“Homes in areas most exposed to flood and hurricane risk were worth less last year, on average, than a decade earlier,” according to analysis released Monday by Bloomberg News. Also, the price of homes at lowest risk for wildfires “far outpaced those with the greatest risk.”
Their analysis of home prices versus flood risk reveals that from 2007 to 2017, homes at “high” or “very high” risk of extreme flooding saw a 4.8 to 5.6 percent drop in price, while homes at the lowest risk saw an 8.4 to 9.6 percent rise.
This new property analysis comes just days after a special new issue of the journal Nature. It presented the latest findings on the dangers posed to our coastal cities from the Antarctic ice sheet’s accelerating disintegration.
In particular, leading scientists warned that if we don’t reverse President Trump’s climate policies and embrace the Paris Climate Accord quickly, we face worst-case sea level rise that will inundate our coastal cities within decades.
Together, these new findings suggest the huge bubble in coastal property values is getting closer to bursting as global warming-driven sea level rise and storm surges threaten more and more property with flooding.
The chief economist for mortgage giant Freddie Mac warned in 2016 that the coastal property bubble will burst faster than people expect: “Some residents will cash out early and suffer minimal losses. Others will not be so lucky.”
At the same time, the storm surge from future super-hurricanes will be on top of whatever sea level rise we see. So research finds with our current do-little climate policies, Hurricane Sandy-type storm surges could occur every year or two by mid-century.
“The risk will rise as sea levels rise, and when that happens, you’d expect your property value to fall,” as a leading risk management expert explained last October. “At some point, the property becomes worthless.”
The key point is that climate risks are growing rapidly, which means the value of homes most in danger of all kinds of extreme weather will inevitably see a reckoning.