Yahoo Finance Coastal Home Values Plunge As Rising Seas Erode Market Confidence
Home values in many coastal communities are eroding along with the beaches they sit on.
A Nantucket home listed for $2 million last summer sold this year for $600,000 after a Nor'easter washed away 70 feet of the beach it sits on. The buyer told The Boston Globe, "the price mitigates the risk to a good degree."
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Rising sea levels and the increased frequency of severe weather events, attributed to climate change, render the areas more susceptible to flooding and storm damage, leading to higher insurance costs and more stringent building regulations.
Consequently, potential buyers are wary of the long-term viability and safety of such investments, dampening demand. The economic impact of environmental changes is also prompting some residents to relocate, further depressing the market. As a result, once highly coveted coastal properties are seeing their values erode, reflecting the growing apprehensions about the sustainability of living in vulnerable regions.
Nantucket real estate agent Shelly Lockwood said several homes that likely would have sold for $10 million to $13 million before rising sea levels and intense rainfall wiped out their beaches have sold for less than $1 million.
Lockwood recently launched a seminar aimed at helping real estate professionals reprice at-risk homes. She said it's a broker's duty to inform their clients about the risks.
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"I was getting frustrated that wasn't being communicated to my satisfaction because I saw houses selling, and I thought that's not worth that, it's falling into the ocean," Lockwood said.
According to climate risk data and analytics firm First Street Foundation, ZIP codes in 33 towns on the East and Gulf coasts have median home values of at least $1 million and 77,005 properties are at significant risk for flooding. That works out to about $100 billion in potential losses.
Some homes on Nantucket are being buried as the rising ocean pushes sand inland. Rising sand covers homeowner John Conforti's entire front yard, and his deck, which had a stairway to the yard, is even with the beach.
Without the new risks to Conforti's home from climate change, Lockwood estimates it would be worth about $2.5 million.
"I don't know if you could sell it. Maybe five, maybe $500,000? Maybe. But you'd have to have some buyer willing to lose it," Lockwood said.
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This article Coastal Home Values Plunge As Rising Seas Erode Market Confidence originally appeared on Benzinga.com
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