Two thirds of property buyers in Miami don’t even ask their brokers about “the potential impact of global climate change and sea level rise on the local market,” a new survey finds.
Meanwhile, we appear headed toward the worst-case scenario of sea level rise, and President Donald Trump is doing all he can to pop the trillion-dollar coastal property bubble, abandoning the Paris climate deal and trying to gut both domestic climate action and coastal adaptation programs.
The 2017 Miami-Dade Real Estate Study, conducted by the Miami Herald released with polling firm Bendixen & Amandi International, came out this week. In the past month, they interviewed 100 “of the area’s top brokers, agents and analysts,” while guaranteeing anonymity.
Buried deep in the study is the jaw-dropping fact that the majority of respondents (64 percent) said their clients have not mentioned climate change and sea level rise as an issue when purchasing properties — which means that the true level of clients not asking about climate change is much higher. An agent would say his clients asked about climate change if even one client did, but for nearly two-thirds of agents, no one even asked.
This is a stunning degree of obliviousness by home buyers in city where, as Bloomberg has explained, “Tidal flooding now predictably drenches inland streets, even when the sun is out, thanks to the region’s porous limestone bedrock.”
Indeed, Sean Becketti, the chief economist for mortgage giant Freddie Mac, warned a year ago that the coastal property bubble will burst sooner than expected: “Some residents will cash out early and suffer minimal losses. Others will not be so lucky.”
That could be why 59 percent of the agents said that they themselves are “concerned about the potential impact of global climate change and sea level rise on the local market.”
Last fall, the New York Times reported that “nationally, median home prices in areas at high risk for flooding are still 4.4 percent below what they were 10 years ago, while home prices in low-risk areas are up 29.7 percent over the same period.”
Jesse Keenan, who is studying coastal property values, has “begun to see evidence in survey data that middle-income people are leaving Miami Beach and other places with nuisance flooding that makes it difficult to get around at high tides or insure a car,” Scientific American reported in May.
“It’s not out of the question that Miami Beach loses 20 percent of its population and most of those people go to the mainland,” Keenan told Scientific American. “I’m talking about the next 20 years.”
The entire country is facing a trillion-dollar bubble in coastal property values, a Hindenburg inflated by U.S. taxpayers in the form of the National Flood Insurance Program. Nearly $1.25 trillion in coastal property is being covered at below-market rates, a third of that in Florida. Even the conservative Cato Institute has called the program “a subsidy to wealthy coastal homeowners.”
The rate of sea level rise in South Florida has tripled since 2006, according to a 2016 University of Miami study. The disintegration of the Greenland and Antarctic ice sheets is speeding up, increasing the chances we are headed for the worst-case scenario of sea level rise.
On top of all this, President Trump is working to thwart both domestic and global climate action while slashing funding for coastal adaptation and monitoring. The EPA has eliminated its climate change adaptation program and reassigned all the workers. And, in June, Trump abandoned the Paris climate deal, again increasing the chances we face worst-case sea level rise.
This all matters because the bubble will burst long before sea levels rise a few feet. They will crash when a large fraction of the financial community — mortgage bankers and opinion-makers, along with a smaller but substantial fraction of the public — realize that it is too late for us to stop catastrophic sea level rise.
When asked, “What areas would you avoid buying in altogether,” one Miami-Dade analyst replied, “Property on the coastline/oceanfront. Rising seas will affect and determine property values.”
Yet the real-estate experts offer few pearls of wisdom on whether Trump’s election makes a difference: “I believe that long-term effects won’t be severe. The weather is the same whether Trump is in office or not,” said one.
“Besides the fact that he’s an a**hole, foreign buyers are uncertain,” said another.