The Ocean Is Coming for Homes. That’s Not Priced In.
Buyers are oblivious or indifferent to the risk of rising sea levels and need better information about the threat.
The sea is expected to rise an average of 10 to 12 inches by 2050.
Photographer: Joe Raedle/Getty Images
The rise in sea levels is on track to increase highly destructive flooding fivefold in the U.S. by 2050, but a new study of home prices in coastal Florida suggests buyers are oblivious or indifferent to the risk. Governments need to take action to ensure that everyone has the right information about this critical threat.
Freddie Mac researchers led by Ajita Atreya found that homes directly exposed to projected sea-level rise command no discount over those that aren’t. There were discounts for homes in designated flood plains, but that’s probably to offset the cost of flood insurance they must carry if financed with a government-backed mortgage rather than future sea-level risk. The findings hold true for investment properties in addition to those bought as primary residences.