Despite the threat sea level rise poses to coastal communities, buyers continue to line up and pay ever-higher prices for properties located in at-risk areas. Why don’t real estate buyers take sea level rise flooding into account when they’re purchasing coastal real estate? Risa Palm, senior vice president, provost and professor of urban geography at Georgia State University, and Toby Bolsen, a political science professor at the same school, surveyed 680 Florida Realtors in 2020 to find out.
In an article published last week on The Conversation website, Palm and Bolsen shared the results of their survey. They found that buyers in general aren’t considering a property’s risk of sea level rise flooding for the following reasons:
1. Mortgage lenders and appraisers aren’t considering sea level rise risk when they evaluate a property so homebuyers aren’t paying a penalty for buying at-risk properties.
2. Wealthier buyers who pay cash can self-insure so they don’t feel the bite of higher flood insurance premiums.
3. Wealthier buyers can take the steps necessary — such as elevating property and building seawalls — to fend off sea level rise floodwaters.
4. Retired buyers are ok with enjoying coastal property for the remainder of their lives and not worrying about what sea level rise does to it after they’re gone.
Only a tiny number of the agents reported that prices were “very frequently” holding steady or falling due to the risk of flooding and that lenders were frequently denying loans to properties located in flood-prone areas. Ultimately, 70 percent of the agents said “they expect little impact on the property market in the next five to 10 years.”
Palm and Bolsen believe coastal real estate buyers are making a mistake in not taking sea level rise into account when they’re purchasing properties. They write: “Because of rising sea levels and storm risks resulting from climate change, we conclude that many of the houses currently being sold in south Florida will not outlast their 30-year mortgages without damage or expensive adaptations, and that the resale of houses vulnerable to sea level rise is very likely to become increasingly difficult.”
Hopefully, their message will be heard.