"When Will Coastal Property Values Crash And Will Climate Science Deniers Be The Only Buyers?"
CREDIT: NY Times
The latest scientific observations provide strong evidence we are headed toward the high end of sea level projections. And we already knew that devastating storm surges will become routine on the East Coast.
This raises the question: What year will coastal property values crash?
I first posed the question five years ago. Back then we were getting a bunch of studies suggesting sea level rise in 2100 would be 3 to 6 feet. Since then the evidence for that has become even stronger.
Just this month, multiple studies found that both the West Antarctic Ice Sheet (WAIS) and Greenland are poised to continue their accelerating ice loss, with WAIS apparently now in a state of irreversible collapse. This in turn has led top climatologists and glaciologist to warn that we are headed toward the high end of sea level rise projections this century and beyond.
What does that mean for coastal property? As a National Geographic article on the subject last year put it:
In a state exposed to hurricanes as well as rising seas, people like John Van Leer, an oceanographer at the University of Miami, worry that one day they will no longer be able to insure — or sell — their houses. “If buyers can’t insure it, they can’t get a mortgage on it. And if they can’t get a mortgage, you can only sell to cash buyers,” Van Leer says. “What I’m looking for is a climate-change denier with a lot of money.”
South Florida will likely be ground zero for the coastal property collapse. As a 2013 Rolling Stone explained, the region suffers from “two big problems.” First, it has “remarkably flat topography. Half the area that surrounds Miami is less than five feet above sea level.”
So even with a mere three feet of sea-level rise, “more than a third of southern Florida will vanish; at six feet, more than half will be gone.” In short, half of southern Florida could be gone in a century. Jeff Goodell explained in Rolling Stone:
Even worse, South Florida sits above a vast and porous limestone plateau. “Imagine Swiss cheese, and you’ll have a pretty good idea what the rock under southern Florida looks like,” says Glenn Landers, a senior engineer at the U.S. Army Corps of Engineers. This means water moves around easily – it seeps into yards at high tide, bubbles up on golf courses, flows through underground caverns, corrodes building foundations from below. “Conventional sea walls and barriers are not effective here,” says Robert Daoust, an ecologist at ARCADIS, a Dutch firm that specializes in engineering solutions to rising seas.
Harold Wanless, chair of University of Miami’s geological sciences department, has said last year, “I cannot envision southeastern Florida having many people at the end of this century.”
I wrote in 2009 that coastal property values won’t wait to (permanently) fall until sea levels have actually risen 4 or 5 feet:
Coastal property values will crash when a large fraction of the financial community and of opinion-makers — along with a smaller but substantial fraction of the public — realize that it is too late for us to stop 4 to 5 feet of SLR.
Further, if we don’t get on the sustainable sub-450-ppm path soon, then people will quickly come to understand that SLR will continue at a rapid pace post-2100: “Wanless believes that it could continue rising a foot each decade after that.” And that would make protecting most coastal property very, very difficult and expensive.
Of course, we haven’t hit that critical mass of knowledge yet. If we had, the world would be engaged in a massive, desperate effort to avert catastrophe. But the attention given recent observations of WAIS and Greenland instability — even the New York Times pointed out this could lead to “enough sea-level rise that many of the world’s coastal cities would eventually have to be abandoned” — suggests we are closer to the tipping point then people realize.
Certainly the price crash is unlikely to happen over just a 12-month time period — so perhaps the better question is, What year will U.S. coastal property values peak?
I tend to think the peak comes some time in the 2020s.
The peak will probably be linked to one or more major climate disasters of a kind that I enumerated in “What are the near-term climate Pearl Harbors?” Note that the growing fear of a hurricane damage has already been made getting new insurance for coastal homes in places like Long Island difficult. On top of that, the latest research suggests that the strongest hurricanes are occurring more frequently.
And superstorm Sandy demonstrated that sea level rise coupled to a strong super storm can lead to unimaginable coastal destruction. New Jersey in particular has mindlessly proceeded with almost a blanket policy of rebuilding, as Gov. Christie rejects any contribution of climate change to the devastation.
But what would happen if there was anything comparable to Sandy in the next couple of decades? It’s hard to believe we’d have the same kind of coastal rebuilding — especially since the science makes clear such storm surges are going to become commonplace around midcentury. Same if there were a Sandy-level storm surge that hit the Miami area.
As for who will be the buyers of coastal property by the end of the 2020s, it won’t be the smart money, who will long since have divested themselves from assets that like fossil fuel companies that will inevitably be devalued once the world figures out failure to act on climate change is simply not an option.
I suppose the buyers will be the remaining hard-core deniers and/or the super-rich who want to keep the view and the beach-front as long as it lasts, people who can afford to simply let their investment disappear with the rising tide. Sadly, there appears to be a significant overlap between those two groups.