Climate change may already be affecting your biggest investment. Rising sea levels are driving home prices down, a study by researchers at the Wharton School of the University of Pennsylvania finds.
Philip Mulder, a doctoral candidate at Wharton, and Benjamin Keys, a professor of real estate at the school, looked at home sales in coastal Florida from 2013 through 2020. They compared real estate markets that are threatened by sea level rise to markets that are not as threatened by sea level rise. They found drops in prices and the number of home sales in threatened areas, as buyers became more pessimistic about climate change.
Relative sales volumes in at-risk areas fell as much as 20% from 2013 to 2018. Prices stayed steady over that period, but fell by about 5% relative to less-exposed areas from 2018 to 2020.
Mulder says divided views on climate change might be why prices were slow to fall. While people who are worried about climate change might pay less for a house on the coast or avoid buying it altogether, climate change skeptics will still be happy to buy.
“There’s still a market and the people in this market are entirely optimistic about what’s going to happen to the housing market in those areas,” Mulder said.
A home is likely the most expensive thing you’ll ever buy. If you’re worried about how climate change will affect the value of your home or the home you want to buy, here’s what to do.
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