Do Rising Sea Levels Make Buying Coastal Property Too Dangerous?
Q: Gerald, We’ve been watching the devastating Hurricane Harvey aftermath. Do rising sea levels make buying coastal property too dangerous? Ellen, Sea Girt, NJ.
A: That’s a great question, Ellen. As economic losses in Texas and beyond continue to rise, some experts estimate that the losses may exceed $100 Billion dollars from this cataclysmic hurricane. You know, 100 years ago, most people preferred to live away from the water. In recent decades, as evidenced by property values, beach front property has become more desirable and more expensive. But, rising sea levels should change the way people think about waterfront property. At the end of the day, the desirability and the price of real estate boils down to supply and demand.
For example, I was shocked that within a couple of years after having to be evacuated by the National Guard during Hurricane Sandy, real estate prices in Hoboken reached all-time highs. Supply and demand. Climate change is real and it WILL affect real estate worldwide, not just in coastal areas. But, right now, people continue to be willing to pay a premium to buy and to rent beach front property.
I don’t know when it’s going to happen, but I do believe there is some tipping point with respect to natural disasters that will materially affect coastal real estate in a cataclysmic way and, potentially, a permanent way.
Thanks for your question, Ellen! Good luck.
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