Is climate change affecting the real estate market?
Floods due to sea level rise have not yet reached the bottom of most houses in Miami-Dade, but some research indicates that the threat of climate change is already negatively affecting the value of properties. New data collected by Harvard University and the University of Colorado suggest that homes on lower land are selling less and accumulate less value than similar homes in higher areas.
Researchers consider it a sign that buyers are taking into account the risk of climate change in their purchase offers and investments, a trend that could have major implications in a state with more coastal areas at risk.
However, real estate professionals in Miami are skeptical of the effect of climate change and point to the steady increase in the value of properties in areas adjacent to the sea in places like Miami Beach and Key Biscayne. They say that their buyers are more concerned about the quality of schools and taxes than if the properties are going to be below sea level in 50 or 100 years.
"I have not heard that. My staff has not heard it. My real estate agents have not heard it. It's not a big public concern", said real estate agent Christopher Zoller of Coral Gables. "Yes, people talk about that. Has it influenced their purchases? No”, he added.
However, Jesse Keenan, a professor at the School of Design in Harvard University, said his recently published study is the first indicator in dollars and cents that climate change already has an impact on the real estate market.
His team studied the sales of more than 100,000 homes in Miami Dade County between 1971 and 2017, and determined that homes on less elevated land accumulated value less quickly than those on higher ground. That difference increased further after the year 2000, which Keenan said is when the floods in South Florida became more frequent.
"It highlights the fact that low-land properties are now essentially lower-quality investments", he said. "I think it's very clear. Maybe it's climate change, or not, but it's hard to argue that it's not climate change", he added.
A larger study by the University of Colorado at Boulder identified that the effect is not limited to South Florida.
Assistant Professor Ryan Lewis and his team reviewed nearly half a million sales of homes and apartments across the country between 2007 and 2016 and determined that homes vulnerable to sea level rise were sold at an average price 7 percent lower to similar homes in areas not threatened by sea level rise.
