The effects of climate change in the housing market: The case of Miami

Danger in the shoreline

It is no wonder that those areas close to the shoreline will be the ones that will be directly affected by climate change and sea level rise. A great number of cities are projected to be completely under water in the future. Sea level rise causes damage to the costal areas from erosion and floods. This can result in damage to homes and the infrastructure of the city. Extreme whether and increased temperatures can also highly decrease the value of the homes in the shoreline, making them less attractive for future buyers or investors. With rising sea levels, flooding becomes more frequent and this can lead to structural damages to the homes affected by it. Even in the good cases, it can still result in mould growth. On the other hand, erosion can cause land to be lost, leaving homes exposed to the risk of being washed away or destroyed by storms or other natural disasters. Hotter temperatures can also cause roofs to become weaker, making them prone to damages from storms and rain pour.

The Miami projection

According to the research conducted by Corelogic recently, Miami is projected to see a sea rise of 1.5 feet by 2050 and this will cause the homeowners of Miami up to $7.9 billion. They note that homebuyers have become increasingly aware of the long term affects that climate change will have on their potential property and are steering clear of areas which are projected to be hit by rising sea levels, such as Miami. Corelogic have been able to come to this projection by developing an algorithm on the possible damages to property based on IPCC projections.

However, it should be noted that Miami homebuyers are somewhat of a peculiarity when it comes to their decision making. According to a Yale’s Climate opinion survey , 50% of Miami residents believe that climate change will personally affect them in the future. This might sound like a lot but in perspective, it is quite a low number, considering Miami has a reputation of climate projections which are far from positive. For perspective, 70% of respondents in Delaware and 90% in Canada, Western Europe and Japan believe that climate change will affect them personally.

What is to be done?

So, the problem here is twofold. The first obvious issue is that climate change will affect shoreline property and cause billions in damage. If we want to reduce this damage, out emissions will have to be cut as soon as possible, otherwise we might be looking to damages which will go into hundreds of billions according to the current trend, possibly even more. This type of financial damage will be absolutely devastating to those affected and will threaten many people’s livelihoods. The other problem is that many buyers and residents are still unaware of the climate projections or might question their validity. The public, especially those that will be most affected need to be educated on the possible consequences of their decision in the context of climate change. This will help avoid investments that will go to waste and reduce the number of properties that will be swallowed by climate change.