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For many people, owning a luxurious home on the beach is the ultimate dream. However, climate change is making that dream a nightmare for some wealthy homeowners across the United States.
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- Climate change is causing rising sea levels and stronger storms, threatening expensive beach houses with erosion and flooding.
- The risk of losing their homes to the ocean is driving down the prices of beachfront properties, sometimes by millions of dollars.
- As property values fall, the tax revenue these communities rely on also drops, potentially forcing cuts to essential services or tax increases for everyone.
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Climate Change Threatens Coastal Property Values in the United States Due to Rising Seas
Coastal areas like Dana Point, California, Long Island, New York, and Nantucket, Massachusetts, boast some of the most expensive beachfront properties in the nation. According to some reports, these locations can see median home values of at least $1 million. In just these areas on the East and Gulf coasts, a combined 77,005 properties are at significant flood risk, according to models by First Street, a climate risk data and analytics firm. That is roughly $100 billion in potential losses.
Unfortunately, these locations face a significant threat – climate change. Rising sea levels and intensifying storms are causing coastal erosion and flooding at unprecedented rates.
The National Oceanic and Atmospheric Administration (NOAA) predicts an “above-normal” 2024 hurricane season, with up to 13 hurricanes and 4 to 7 categorized as “major” storms. This can cause even more dramatic erosion and flooding than usual. Homes once considered prime beachfront property are now at risk of being devoured by the ocean they overlook.
The consequences are already playing out. In Nantucket, a house listed for over $2.2 million last summer was recently sold for a mere $600,000. A powerful storm the previous fall, fueled by rising sea levels and heavy rainfall, ripped away 70 feet of the beach the house sits on.
This isn’t an isolated incident. Real estate agents are reporting numerous similar cases where beachfront properties sell for a fraction of their original value due to the looming threat of erosion. One agent on Nantucket mentioned properties selling in the mid-7s and mid-8s of millions, which would have likely sold for $10 or $12 million without the erosion risk.
The situation is so concerning that some agents even conduct seminars on accurately pricing these risky properties. They believe it’s their ethical obligation to inform potential buyers about the dangers before they invest millions in a house that could be underwater in a few years.
The issue extends far beyond individual homeowners. Coastal communities heavily rely on property taxes generated from these expensive beachfront properties. As property values plummet, so does the tax revenue these communities receive. This can lead to a domino effect, forcing cuts in essential services or tax increases for everyone else to compensate for a shortfall of potentially $100 billion along the East and Gulf coasts alone.
Some homeowners are fighting back. They argue that their property taxes should be lowered to reflect the decreasing value of their homes adjacent to the ocean. One attorney working with Nantucket homeowners pointed to a property with an assessment of $2.2 million that has yet to be reassessed recently. In contrast, its neighbors on the eroding cliff have been reassessed for as low as $250,000 due to losing 12-15 feet of sand and essential access points.
This situation isn’t just bad for wallets; it also hurts the environment and people. As the ocean rises, salty water can seep inland, dirtying our fresh water and harming plants and animals.
Stronger waves and storms eat away at the beaches, which are fun for swimming and playing. They can even take away homes from people who live by the shore. This can force people to move away from their communities if their houses get damaged or if living by the ocean becomes too expensive.
Several questions remain unanswered. How will coastal communities adapt to this changing landscape? Some communities consider building seawalls or levees, but these solutions can be expensive and have environmental drawbacks.
Others are exploring managed retreat, which involves moving people and buildings away from the coast. Will there be significant government intervention to protect these areas, potentially costing billions of dollars? How much are people willing to pay for a beachfront property with a built-in erosion risk, knowing they might only get a few years of enjoyment out of it?
The answers to these questions will likely determine the fate of many coastal communities and the future of beachfront living. One thing is clear: climate change is fundamentally altering the equation regarding coastal property values. The days of ever-increasing beachfront property prices may be numbered, and a new era of risk and uncertainty is upon us.
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