Coastal Real Estate--A Whole New Ball Game
A Home with a Foot Bath
I'm sure that all of us who have searched for real estate that features a warm climate with white sand beaches and idyllic ocean views have seen an ad that reads something like this:
Beachfront property. Steps from the sand. Awesome ocean view. Imagine yourself on a beach chaise in paradise! Extremely high price, but well worth it.
But increasingly, that particular ad may be replaced by this one:
Beachfront property. Steps from the sand. Frequent minor flooding during high tides. Cash only--financing and insurance are not available. Imagine yourself wading in paradise! Extremely low price, because, well, financing and insurance are not available.
Already own a beachfront property you want to sell? We feel for you, but we're not taking any new listings right now. All the best! We'll send you a Christmas card.
Far-fetched? Maybe not so much.
Check out this analysis of coastal real estate buyer concerns. Many new questions are being asked by prospective buyers, to include:
- How far back (not how close) is the house to the water? What's the elevation?
- Is it fortified against surge? Have emergency power and sump pumps?
The enclosed maps show the danger zones--those areas where it may soon be impossible to obtain financing or insurance. For those (like me) who are of the age to contemplate retirement living, they are well worth some attention and analysis. The theory that rules over everything is of course, 'e caveat emptor'--let the buyer beware. If you're going to be that buyer, then: beware!!
As it Applies to EDM
This issue applies to everyone from the family that wants to allow their children to experience 'the good life,' to insurance professionals that calculate risk and the price of risk, to local through FEMA officials that design protection systems.
This is an attention grabber and a game changer. And we can't ignore it. We've talked for some time about how rising sea levels will affect our lives. That discussion has been an abstract or hypothetical discussion until recently. But once mortgages and insurance become unavailable, then people start to take notice. Government officials start to take notice. And it appears that time is approaching quickly.
So to put the purchase of coastal real estate in standard EDM terms:
- Planning: Before you take the plunge and buy your dream home, be sure to ask the right questions.
- Mitigation: If the requirement to have sump pumps and seawalls is still ok in your calculation, then make sure they're present, functional, and that somebody else paid for them.
- Response: Be sure that your local public officials understand the threats of climate change and sea level rise and have plans to accommodate them. Make sure you yourself have plans to accommodate them.
- Recovery: If you even have to concern yourself with recovery, then you're probably buying the wrong property. Go somewhere else.
- Adaptation: Learn what there is to learn. Base your decisions on facts rather than romanticism. If you need to adapt to the idea that living in a beach home isn't a good idea, then don't. Run for higher ground.
Protect your family, protect society
The success of our civilization depends on billions of day-to-day, mostly trivial decisions made with limited information and foresight. But some decisions, even though seemingly trivial, rise above this characterization. Whether to buy your dream home on the beach may well be one of those significant decisions. Choose well.