Climate change and the coming coastal real estate crash
It could rival the bursting dot-com and real estate bubbles of 2000 and 2008
Amid the havoc Hurricane Michael caused on blocks of waterfront property in Mexico Beach, Florida, a single home stood out after the storm cleared, a survivor of winds that made buildings “buck like an airplane wing.”
This so-called Sand Palace, a home owned by Russell King and his nephew, Dr. Lebron Lackey, and profiled in the New York Times, has become famous for its resilient reinforced-concrete construction, which allowed it to survive the Category 4 hurricane. While the owners wouldn’t tell reporters how much their home cost, architect Charles A. Gaskin said that the techniques used to make the home less susceptible to storms, such as raising it on stilts and using additional concrete supports, “roughly doubles the cost per square foot.”
The striking image of the Sand Palace standing alone above the wreckage is one of many images communicating the scale of the storm’s impact. Property analysts at CoreLogic estimated that Florida alone will suffer $2 to $3 billion in wind-born property damage from Michael, and potentially $1 billion more in losses from storm surge.
The Sand Palace story also underscores a new reality that’s been slow to dawn on many involved in coastal real estate: Climate change, and the accompanying rise in sea level and storm activity, will require expensive investments and shake the foundations of some of the most expensive land in the country. Like many of the impacts of a warming planet, the serious economic reverberations and permanent damage caused by declining coastal property values are simply not being addressed in an urgent enough manner. Read full article.