Plantagenet wrote:, and I believe Ibon sold a portfolio of coastal real estate in the Miami Beach area earlier this year (pardon me if I got that wrong, ibon).
Two homes, our last real estate in Florida, were sold in the last 36 months. The last property we just sold 8 weeks ago. Both properties were 2 miles from the coast but bordering directly the New River which will rise as part of the storm surge due to hurricanes.
Just to add a couple point to Plant's introduction. Banks will not issue mortgages without hurricane insurance in coastal areas affected by these storms, and I can imagine in California banks also will not issue mortgages without fire insurance. Municipalities affected by climate change consequences are already taking some mitigation steps (whether they are futile is another topic) that result in property taxes going way up. This is the case in South Florida where sea walls and elaborate big volume pumps are being installed to mitigate rising sea levels.
Both insurance and property taxes have risen astronomically in the past 30 years and they will continue to do so as major hurricanes and fires impact insurance rates and property taxes.
What this all means is that the market will send the signal of declining housing prices before the climate change events in the affordability of housing in these areas. Imagine a first time home owner purchasing coastal property where the hurricane insurance and property taxes annually are between $ 20,000 and $ 30,000 us for a modest home.
We will see the beginning of this real estate crash following major events (hurricanes,fires, flooding) that force communities and insurance companies to again make major increases.
On the flip side there might be a housing boom as well as displaced home owners need housing in safer areas. So we might see the construction industry experience a bit of a boom in new housing starts as a result.
I mentioned in another post that the market sends the signal long before the seas actually rise or the fires burn down your home.
I agree we are close to seeing this. That is the reason we sold . I have proceeds now that are in fixed income and money markets and I do not want to put more eggs in the Panama basket and I am looking still in the US for some real estate opportunities, also keeping in mind that I am 62 and my late stage retirement may take me back to the US if my old bones cant negotatiate this 4WD road any longer here in our resort.
I have a few areas in mind. Actually, my wife and I visited Logan Utah on our last trip up to the USA> We like this small town. Might nibble on some real estate there in the next 24 months.
Patiently awaiting the pathogens. Our resiliency resembles an invasive weed. We are the Kudzu Ape
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