As sea levels rise and storms intensify, coastal properties are experiencing unprecedented flooding and erosion. From Dana Point, California to Long Island, New York, and Nantucket, Massachusetts, some of the most expensive coastal real estate in the United States is in an increasingly precarious position due to climate change.
This year’s hurricane season has arrived and hurricane activity is expected to be “above normal,” according to the National Oceanic and Atmospheric Administration (NOAA). As many as 13 hurricanes are expected, with four to seven classified as “major” storms.
Various risk models show numerous predictions of falling property values, but the effects of climate change are already starting to impact the market, and faster than most expect.
Homes on Nantucket were listed for just over $2 million last summer and sold for just $600,000 earlier this year. A nearly inconspicuous nor’easter in the fall destroyed up to 70 feet of the beach where it sits due to rising sea levels and unusually heavy rainfall.
The buyer told The boston globe, “The price mitigates the risk to a great extent.”
And it’s not the only one.
“There have been several,” said Shelly Lockwood, a Nantucket real estate agent. “One sold in the mid-70s and one sold in the mid-80s. I know that sounds like a lot of money, but what those houses would have sold for without the risk of erosion, I don’t know, 10 or 12 million (USD).
Lockwood just held a workshop for other agents to help them reprice at-risk homes.
“I think we have a duty to our clients to tell them what the risks are and I’m frustrated that that’s not communicated to my satisfaction because I see houses for sale and I don’t think it’s worth it, it’s falling into the sea. ,” Lockwood said.
montauk chaos
In Montauk, on the eastern tip of New York’s Long Island, a series of storms this winter has the community scrambling to shore up beaches and protect millions of dollars’ worth of homes. The water is coming in faster than ever.
“In the past we’ve seen the water recede immediately after flooding, but now it doesn’t recede anymore,” said Kay Taylor, executive director of Concerned Citizens of Montauk. “We have a friend who owns a $10 million home, but he Not even sure what to do with it because if he sells it, it will never be the $10 million he paid for it.”
Looking only at ZIP codes in the eastern United States and the Gulf Coast, 33 ZIP codes have a median home price of at least $1 million. According to modeling by climate risk data and analytics company First Street, 77,005 properties in these areas alone are at serious risk of flooding. That’s about $100 billion in potential losses.
Property tax relief?
With both beaches and home values declining, attorney Chris Farley is working with Nantucket homeowners to help reduce their property taxes. Some homes have been reassessed, while neighbors have not.
“I think we’re just burying our heads in the sand,” Farley said. “It’s only in the past decade that house prices have started to fall, and they’re still falling quietly.”
Farley pointed to a property that he said had an assessed value of $2.2 million. It has not been reassessed recently, but two other properties on the same street and on the seaside bluff have been – one valued at $500,000 and the other at $250,000. The cliffs are severely eroding.
Protective ‘geotube’ exposed due to erosion.
Diana Orlick | CNBC
“I’d say 12 to 15 feet of sand is gone,” Farley estimated, pointing to huge exposed earth pipes beneath the cliff. They should be covered with sand.
“They used to be able to walk right down these steps and then there was another staircase that’s gone now. So they don’t have any more access. To me it affects the property when you can’t even use the waterfront you’re buying. ‘s values are coming online,” referring to homes that have yet to be reassessed.
buried in sand
On another Nantucket beach, rising sea levels pushed sand so far away that it even buried houses. Sand covered both homes up to the windows and exposed septic systems and electrical wiring. Lockwood said the town would have to condemn the property once the problems came to light.
Nantucket home buried by beach
Diana Orlick | CNBC
“This is different from last fall. It all happened so fast,” she said.
The owner, John Conforti, lives next to the two houses. The sand had risen so high that it now covered his entire front yard. His deck, which once had a staircase leading to the yard, is now level with the sand. He has owned his house for 42 years and moved it back from the beach once.
“We all said wait another year,” Conforti said. “It’s unbelievable what happened.
Lockwood estimates that Conforti’s home would be worth about $2.5 million without the new risks climate change poses to the home.
“I don’t know if you can sell it. Maybe five, maybe $500,000? Maybe. But you have to have some buyers who are willing to lose it,” she added.
As more homes lose value and see property taxes decrease, local economies could take a hit, meaning everyone’s taxes could increase to make up the shortfall.
Nantucket residents also vote to determine which areas of the island need help the most and who will pay for it. Meanwhile, in Montauk, experts are re-evaluating coastal recovery plans developed in the aftermath of Superstorm Sandy nearly a decade ago because they have become outdated due to climate change.
— CNBC producers Erica Posse and Dardan Pula contributed to this article.
About The Author
