Tag: real estate

“Above-Normal” Hurricane Season Forecast Means Coastal Real Estate Owners and Buyers Need to Consider Insurance Options NOW

An ongoing La Nina and above-average Atlantic Ocean water temperatures are leading the National Oceanic and Atmospheric Administration (NOAA) to forecast an above-normal hurricane season. “NOAA is forecasting a likely range of 14 to 21 named storms (winds of 39 mph or higher), of which 6 to 10 could become hurricanes (winds of 74 mph or higher), including 3 to 6 major hurricanes (category 3, 4 or 5; with winds of 111 mph or higher), according to an agency news release.

With this extreme threat level, owners of coastal real estate and even those well inland in the Eastern U.S. and Hawaii who could be impacted by flood and wind damage from a degrading storm, need to review their insurance coverage. Considering scientists are reporting that global warming and sea level rise are super-charging hurricanes and tropical storms, people who own real estate in at-risk regions should put this on the top of their to-do lists.

Lenders require homeowners with mortgages to purchase basic dwelling coverage that covers the cost of repairs to a damaged home. In areas vulnerable to hurricanes and flooding, lenders may require special windstorm and flood insurance.

Considering that FEMA’s flood maps are notoriously outdated and homes well outside the designated flood zones have been damaged by flood waters in past storms, it’s important for homeowners in areas with even a seemingly remote chance of getting hit by floods to consider purchasing coverage through the National Flood Insurance Program. For example, in August 2017, thousands of homes outside the FEMA-designated primary flood zone flooded when Hurricane Harvey rolled over the Houston area.

With insurance costs skyrocketing in many coastal areas due to increased claims from past hurricanes and storms, fraud and other reasons, some homeowners are going without insurance. They tend to fall in two camps those who are gambling that their properties will not get hit by a hurricane or tropical storm and those who believe they have enough reserve funds to cover the cost of repairs if they do.

These homeowners need to be aware that waiting until a storm is likely headed their way to purchase insurance won’t work. Flood insurance purchased under the National Flood Insurance Program won’t actually kick in until 30 days after a policy is purchased. In addition, if a tropical storm or hurricane watch or warning is issued in a 16,000 square mile box around Florida, the state’s Citizens Property Insurance Corporation and most private insurance companies will not accept applications for new coverage. Insurers in other states may have their own last-minute purchase limitations. There’s also a risk that providers may not be able to process applications made before a storm in a timely manner.

When property owners are reviewing their insurance policies, they should also revisit their coverage amounts. With inflation, even $250,000 in coverage won’t provide as much repair and rebuilding purchasing power as it used to. They should also double-check their deductibles to make sure they’re still in line with their financial resources.

Evaluating homeowners, flood and wind insurance can be drudge work under the best of circumstances. However, with the high risk of storms and recent years of climate change super-charged storms wreaking record destruction on coastal real estate and points far inland, not doing your homework can lead to serious negative consequences should a storm hit your property.

Sea Level Rise Flooding Threatens More Than Your Real Estate

When people who own real estate in coastal communities consider the threat posed by sea level rise flooding, they often focus only on their own structures and land. That can be a costly mistake.

The fact is sea level rise flooding outside their property lines can impact their property value, financial future and quality of life. How? For example, nearby roads that flood can keep owners from reaching their property. Wastewater systems that are infiltrated by seawater can become ineffective or even inoperable, which can result in sinks and showers that don’t drain and toilets that don’t flush. And taxes can go up when cities and towns are forced to raise seawalls and other critical infrastructure.

A Civil Grand Jury in Humboldt County in Northern California is busy drafting an assessment that lists the many ways sea level rise will impact coastal communities there. In a report titled “The Sea Also Rises”, the Grand Jury warns that the county, which includes Arcata and Eureka, is at risk from flooding due to the double-whammy of sea level rise and natural land subsidence.

The list of problems the Grand Jury says will be created as seawater inundates more and more land includes the following:

  1. Communities around Humboldt Bay will experience more frequent flooding.
  2. Highway 101 and the only access road to King Salmon could be cut off by floodwater.
  3. The local energy system could be disrupted as flooding impacts a PG&E generating station, municipal water transmission lines, electrical transmission towers, and transmission poles.
  4. An interim spent nuclear fuel site could be damaged.
  5. Commercial properties, including three cargo and commercial docks, could be flooded.
  6. Environmentally contaminated sites in the Arcata and Fairhaven could be compromised.

The Grand Jury isn’t only forecasting future problems, it’s taking stock of problems that exist today. For example, the report says property values in the Fairhaven/Finntown area are already suffering because very high tides are causing septic systems and leaching fields to fail — which is a problem in many coastal areas experiencing sea level rise flooding.

In its draft summary, the Grand Jury is calling on all elected officials to make sea level rise flooding a priority. “The County of Humboldt; the cities of Arcata and Eureka; and the Humboldt Bay Harbor, Recreation, and Conservation District should formally state their immediate and continuous support for, and commitment to, SLR (sea level rise) mitigation and adaptation efforts,” it wrote.

Cities and towns all along the US coastline are taking stock of the threats posed to residential and commercial real estate, public lands, and critical infrastructure. A few years ago, an environmental consultant estimated that the mid-sized South Florida city I live in needs to spend $378 million to defend itself against sea level rise. With inflation, it’s likely the actual cost is higher now.

Owners and buyers of real estate in coastal communities need to know what’s at-risk from sea level rise flooding in their community, how much it will cost to eliminate and mitigate the flood waters, how much local taxpayers will be expected to contribute to the effort, and the soundness and life-expectancy of the projects being implemented and those under consideration. Not knowing this critical information could lead to an unexpected loss of property value and spike in taxes and other expenses.

2021 Was a Record Year for Sea Level Rise, That’s Bad News for Coastal Real Estate

This week, the the World Meteorological Organization (WMO) reported that four key climate change indicators reached record highs in 2021. The amount of greenhouse gases in the atmosphere, ocean heat, ocean acidification, and sea level rise all broke records. The WMO also reported that the years 2015-2021 were the warmest since the industrial revolution–with 2016 being the hottest on record.

Professor Petteri Taalas, WMO Secretary-General, commented, “Our climate is changing before our eyes.”

In 2021, humans burned more fossil fuels — coal, oil and natural gas — which released more greenhouse gases into the atmosphere. The global warming we’re creating is what’s driving the sea level rise that’s already flooding coastal real estate.

The most disturbing findings for those who own or are interested in purchasing real estate vulnerable to sea level rise flooding: Ocean heating hit a record high in 2021, with the last two decades showing the greatest rate of temperature gains. (Ocean heating and expansion are a major driver of sea level rise.) In addition the rate of sea level rise is accelerating. It increased at nearly .18 of an inch per year from 2013-2021, a rate more than double the increase measured each year between 1993 and 2002.

There’s no sign in 2022 that humans are going to break their addiction to fossil fuels. According to basic science, that means the globe is going to continue to warm and sea level is going to continue to rise at an ever-accelerating rate. Flooding will, too.

Coastal real estate owners who are betting that they’ll be able to sell before the problem impacts their property value need to factor the rapid changes taking place on air, land and sea into their calculations.

Cape Hatteras Houses Collapse into Ocean: Is this the future of sea level rise?

When it comes to sea level rise damaging beachfront real estate, Cape Hatteras National Seashore in the Outer Banks of North Carolina is the canary in the coal mine. The thin, sandy barrier island is infamous for losing houses to the sea whenever there’s a hurricane or strong tropical storm.

Now, before hurricane season even begins, houses in Rodanthe, south of Nag’s Head, are being swept out to sea. The National Park Service says three houses have been lost to the waves since February and another nine are currently at-risk of the same fate.

There are several factors contributing to the string of house collapses. A low pressure system swirling off the Outer Banks is sending powerful waves crashing onto shore. In addition, the barrier island has long experienced erosion due to regular wave action that gets worse whenever a hurricane or tropical storm hits or even passes close to the area.

Experts, however, have predicted that higher seas due to sea level rise would serve to intensify and speed up the erosion and house destruction, which only makes sense. Higher seas scour away sand more quickly and effectively. They also mean storm surges will travel further inland with more punch. In addition, the warming of the oceans and atmosphere due to climate change is super-charging hurricanes and tropical storms, which means they pack a stronger wallop.

Home loss on the Outer Banks is also due to the unique geology of barrier islands. In their natural state, the narrow sandy strands are meant to migrate inland as sea level rises. The Park Service is allowed to protect critical infrastructure, such as roads, but not houses. Even if the Park Service could take steps to shield the houses, such as building seawalls, nature would eventually break through the armor and sweep them out to sea.

It’s important to note here that scientists blame the loss of houses not only on natural forces but also the fact that humans never should have built the homes on shifting barrier island sand to begin with. Real estate owners and buyers need to carefully consider the consequences of owning real estate on barrier islands and beaches all along the US coast, especially now that sea level rise is in play. One thing’s for sure, houses toppling into the sea are going to become more common as the sea level rises and storms intensify in the decades to come.

(Photo Credit: National Park Service)

Freddie Mac Warns Sea Level Rise is Not Priced into Coastal Florida Real Estate Values

If you want to see where the real estate market is headed in light of climate change and sea level rise, watch lenders and insurers. Why? They have to be forward looking to protect their investment.

With that in mind, a research brief published this month by Freddie Mac, a governmental-sponsored company that backs mortgages, should sound a wake-up alarm to real estate buyers and owners in Coastal Florida (and across the country). In the piece, titled “Homebuyers in Coastal Florida are Not Factoring Sea Level Rise Risk into Home Prices”, Freddie Mac reported that prices are not being discounted for properties that are in sea level rise (SLR) exposed areas not within FEMA-designated floodplains. In fact, researchers found buyers of a primary residence, individual investors, and institutional investors were paying a 3.5% price premium for these homes.

Freddie Mac also reported that homes located in areas vulnerable to sea level rise experienced price discounts after hurricane flooding likely because buyers perceived a heightened flood risk rather than due to the risk of sea level rise itself.

“We conclude that homebuyers either lack awareness of SLR risk or consider it a long-term risk that will not be a concern during the time they own a home,” the researchers said.

Freddie Mac is concerned that the failure to consider the threat sea level rise poses to a property now could eventually lead to sea level rise-driven price drops later when (and if FEMA) updates its flood maps to reflect sea level rise flooding. The researchers say Florida’s housing market, with its large share of vulnerable properties built at very low elevation, could be significantly impacted.

This is yet another example of why owners and buyers of coastal property need to assess the risk posed by sea level rise flooding to make informed decisions and protect their financial futures.

With Hurricane Season Approaching, Now’s the Time to Purchase Flood Insurance

Hurricane season 2022 officially begins on June 1, and it’s expected to be a busy one.

With climate change and sea level rise intensifying tropical storm and hurricane rains and storm surge, now is the time for real estate owners in coastal communities and well inland to consider purchasing flood insurance — if they haven’t already. This is especially important because standard homeowner’s insurance policies do not cover flooding.

Property owners who plan to wait until a storm is aimed at their region to purchase flood insurance are making a big mistake. New policies under FEMA’s National Flood Insurance Program take 30 days to take effect.

Property owners who purchase properties using government-backed mortgages are required to purchase flood insurance policies. Many owners who purchased their homes using cash self-insure their properties. Some owners who are self-insured are under the mis-impression that because they’re located outside of designated flood zones that they shouldn’t be concerned about flooding. This can be a costly mistake. Estimates are that 25% of flood damage occurs in low-risk flood zones. An extreme example of this hazard is the fact that more than half of the homes that flooded in Houston, TX, during Hurricane Harvey were located outside designated flood zones.

Flood insurance policies cost on-average $700 a year, though FEMA has started to place a heavier premium burden on properties built in higher risk areas. The policies cover up to a quarter million dollars in damage. Buyers should also be aware that a seller’s flood insurance policy can be transferred to them at closing often at a significant savings.

Flood insurance is clearly worth purchasing. According to FEMA’s Flood Damage Cost Estimator, one inch of floodwater can cause up to $25,000 in damage and one-foot up to $72,000. As building materials and labor have become much more expensive in most regions of the country, these estimates are most likely on the conservative side.

Owners and buyers of real estate at risk of flooding can get more information about National Flood Insurance Program policies from the National Flood Insurance Program website.

New Hawaii Law Requires Sea Level Rise Threat Disclosure in Coastal Real Estate Transactions

Beginning this week, property owners selling coastal real estate in Hawaii are required by law to disclose the threat sea level rise flooding poses to a property. According to a State Department of Land and Natural Resources news release, real estate transactions involving properties located on or near the ocean must include the new disclosure. The new disclosure law is in addition to the National Flood Insurance Program’s requirement that sellers notify buyers that a property of interest is located near a flood-prone stream or area that may flood during heavy rainfall events.

According to an article posted on the Hawaii Life Real Estate Brokers website, the new disclosure law is based on modeling performed by researchers at the University of Hawaii. They studied coastal areas at risk from flooding or other damage due to sea level rises, annual high wave flooding, or coastal erosion.

Properties built between current sea level and 3.2 feet of elevation — the potential sea level-driven high water mark at the end of this century — are subject to the new disclosure law. Buyers, sellers and real estate agents can use the state’s interactive map to determine if they’re inside the disclosure zone.

Due to the hodge-podge of state-level sellers disclosure laws, buyers and sellers should always check to see what’s mandated in their area to avoid costly lawsuits and/or purchasing property that’s prone to flooding.

Sea Level Rise Flooding Isn’t The Only Climate Change Symptom Vexing Coastal Real Estate

Climate change is posing many challenges to coastal communities. Sea level rise flooding is one of the more obvious symptoms of a warming planet. Other problems include longer, hotter heat waves and droughts. This time of year in South Florida, sargassum seaweed season begins and it can run sporadically right through the fall.

The smelly, scratchy seaweed washes ashore by the ton on hundreds of miles of beaches in South Florida, Mexico and throughout the Caribbean islands. The seaweed drives tourists away and could one day threaten local real estate markets when buyers get fed up.

Scientists say seaweed blooms in the Caribbean and off Brazil are getting worse every year due to global warming heating up the ocean and humans using too much fertilizer on farms and lawns. Runoff containing animal waste from large-scale farms is also a problem.

Coastal communities are employing a number of methods to combat the seaweed. Some plow it into the sand, others truck it away at great expense. Some communities are even exploring ways to harvest and process the seaweed before it ever reaches land.

The sargassum seaweed problem is expected to get worse until humans stop or at least cut back the use of greenhouse gas producing fossil fuels and get water pollution under control. Real estate buyers and owners in coastal communities need to keep an eye on the seaweed problem as it could one day impact the value of their properties.

Are Houses on Stilts the Future of Sea Level Rise-Threatened Coastal Real Estate?

Coping with sea level rise flooding and sea level rise-intensified storm surge requires innovation and imagination in the public and private sectors. Among the solutions now being implemented in areas with real estate that floods or soon may experiencing flooding are building and raising seawalls, installing pumps and storm drains, setting aside parks and open lands to absorb and store flood water, and elevating homes, roads and critical infrastructure.

Another option that’s been in use in areas that have long experienced severe beach erosion and storm surge flooding is building houses on stilts. This has been the go-to solution in areas like coastal Louisiana and the Outer Banks of North Carolina for decades. With the oceans continuing to rise and storm surge becoming and even greater threat, areas that didn’t rely on stilts as a solution to protecting houses and other structures are now considering them.

This month, Dezeen — the self-described “world’s most popular and influential architecture, interiors and design magazine” — has a feature article by reporter Ben Dreith about a 4,500 square foot home Brillhart Architecture built on stilts for an owner who owned a house that was heavily damaged during Hurricane Irma in 2017.

The modern home is built on stilts that range from very slender to large enough to form circular rooms reinforced with rebar that can also be used as storage spaces. The entire first floor has usable living space and open areas that are all designed to quickly shed flood water.

The article gives a great overview of how a stilts can help a house cope with rising waters. There are limits, however, to their usefullness. For example, a house built on stilts is of little use if the property and surrounding roads are frequently or permanently inundated and/or access to fresh water and sewage service, electricity or other utilities becomes impossible due to flooding. These are the types of issues buyers and owners should ponder when they’re considering building a house on stilts in an area vulnerable to sea level rise flooding and storm surge.

Latest UN Climate Change Report is Bad News For Real Estate Threatened by Sea Level Rise and the World in General

The Unite Nation’s climate science panel released a report this week that was bad news for real estate subject to sea level rise, wildfires, drought and other environmental threats tied to global warming.

Researchers found that humans continue to burn more and more fossil fuels, which releases ever-increasing amounts of greenhouse gases, at a time when we need to drastically reduce output. At the current rate of emissions, we’re set to blow through the 1.5 degrees Celsius temperature increase limit past reports set for this century. We’re headed for 3.2 degrees Celsius. At this point, even if nations realize their past greenhouse gas emissions reduction targets, the world would still see 2.2 degrees or more of warming.

The National Oceanic and Atmospheric Administration recently released a report that estimated US coastal cities and towns would see an average of a foot of sea level rise between now and 2050. That estimate was based on 1.5 degrees Celsius of warming. If the globe warms much faster than that, the ocean will expand much faster and glaciers and ice sheets primarily in Greenland and Antarctica will melt faster contributing to faster and greater than predicted sea level rise.

U.S. coastal communities and private real estate owners are already spending billions of dollars to fend off sea level rise-driven floodwaters. They’re building and raising seawalls, installing pumps to remove floodwater, elevating land, homes, and government and commercial buildings, and hardening and/or elevating infrastructure, such as roads, sewer and water pipes and underground energy and communications equipment. If humans don’t drastically reduce their reliance on fossil fuels — such as coal, oil and natural gas — these projects won’t be enough. Last-resort measures such as managed retreat — property buyouts in flooded areas — will increasingly become the norm.

Faster and higher sea level rise will not only lead to more frequent tidal flooding of vulnerable coastal areas, it will also result in more powerful storm surges being driven further inland. All together, this will apply incredible pressure on the already strained insurance and mortgage markets in coastal communities.

UN report researchers say we need to cut all greenhouse gas emissions in half by the next decade. The best way to do this is by relying more heavily on renewable energy sources, such as solar and wind power. Improving energy efficiency in homes and businesses and energy conservation practices also play an important role.

Fortunately, these goals are within reach. For example, the cost per unit of solar energy is 85% less than it was in 2010. The cost per unit of wind power is 55% cheaper.

The X factor in all of this is our political will and personal commitment to changing our habits to achieve these objectives. The world’s nations have been less-than-honest about the efforts and results they’ve achieved so far in the fight against climate change, global warming, and sea level rise. Not being forthright with the facts is dangerous for us all. The simple fact is when we gaslight Earth, we’re the ones who get burned. The planet’s chemistry and physics are well-established, and the its rules can’t be broken without resulting in a world that is inhospitable to human life.

UN scientists say we have a very narrow and quickly closing window of opportunity to fend off the worst case global warming scenario. Each and every one of us has a role in preventing that outcome.

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