The Looming Global Warming Catastrophe and its Effect on Real Estate
While the property market of the United States of America is heating up, so is the temperature of mother earth. Global Warming has hit the world but what effects will it have on the real estate market of America? Read on to find out how Global Warming has affected land values, demand for water-front properties and insurance rates.
According to Discovery, Global Warming is not just 'climate change' and one must not view it as a 'season'. It is a major global crisis and some of its worst effects include, drought, disease, loss of biodiversity, war and above all, rising water levels.
As glaciers shrink and the polar caps melt, the increase in water levels could threaten survival on land. Apparently, in the next 50 years, more than half of the United States will be uninhabitable due to flooding. But that is just the tip of the iceberg.
According to Frank Lowenstein, leader of Climate Adaptation Strategy at The Nature Conservancy, some areas have already reached the point where survival is critical. Several ports are constantly battered by storms and typhoons while deserts are incredibly hot and drought-laden, reports AOL.com.
Demand is un-proportional to Fear
While scientists are trying to fix global temperatures, what do property pundits have to say about the demand for real estate and its effects on land value?
Most of the property players are aware of the catastrophe on the way and believe that values will be highly affected by the condition. However, they are all keeping mum on the issue. Miami Herald recently reported that builders have started considering 'sea level rise change' in their construction plans and are quietly making amendments.
"Len Berry, director of Florida Atlantic University's Center for Environmental Studies, reports developers have quietly contacted the university to check out projections of how much sea level will rise in the coming decades as they look for future safe investments," the publication writes.
Apparently the issue of rising sea levels diffusing demand for waterfront properties is a grey area. According to a National Geographic estimate, sea levels could rise up to 6.5 feet by 2100 which is enough to submerge many cities along the U.S. East Coast. However, buyers fear no facts as they have been buying homes in coastal areas and investing in waterfront homes because it's 'desirable'. While some think that demand would gradually decline for sea-front properties as a result of neighbourhood crowding and global warming reports, buyers are fearless and are unhesitant about plonking millions on bay-front residences.
"Waterfront is very desirable," Jill Hertzberg, a real estate agent of the Miami Beach area said to Miami Herald. She added that clients don't mention 'global warming' while picking up the properties.
Like photographer David Bailey said:
I don't think global warming is to do with us, I think it's a natural circle. I don't think a few Ferraris make that much difference.
Most Americans don't believe in global warming and are not afraid to invest in properties. This attitude has evoked a great optimism in realtors. They definitely believe it is a seller's market now.
Insurance Rate Rises
Insurance is another problematic aspect of rising sea levels. Flood insurance and disaster premiums are going to hit the roof in the coming few years with the number of typhoons and storms hitting the country. Availability of premiums could also take a hit. High insurance costs could fuel a drop in property prices in disaster-prone areas.
"Insurers have already begun cancelling homeowners' policies in high-risk areas and raising insurance costs in potentially impacted locations," Kelly Coplin, a Water program Assistant for San Francisco said in an interview.
In a nutshell, global warming will probably leave no inhabitable square footage. Until the doomsday arrives, property prices in coastal areas could vary depending on the panic customers feed on.
For now, it is rosy. In a recent survey by Coldwell Banker Real estate, it was found that 13 of the country's priciest listing markets are in the coastal areas of California that include Malibu, Newport beach, Saratoga and Los Gatos. The average price listing ranges from $2.1 to $1.3 million in these regions.
But the question is, for how long.
Your City or Mine?
According to the Huffington Post, Miami, Boston, Atlanta and New York City are some of the areas that could be completely be wiped-off by the next century due to global warming.
On the Brighter Side, Detroit, Homer and Seattle are some cities that could withstand the lash of global warming, according to Grist.com.
However, no area is safe from the effect of climate changes.
"Warm places will get warmer, cool places will also get warmer, wet places will get wetter and dry places will get drier. In broad sweep that's what's happening and will likely happen. There is nowhere immune to climate change," Dr. Carl Safina, marine biologist told AOL Real Estate.
What we can Do
As Dr, Safina points out, what will happen, has to happen. But we can definitely change what we can do.
If we want to address global warming, along with the other environmental problems associated with our continued rush to burn our precious fossil fuels as quickly as possible, we must learn to use our resources more wisely, kick our addiction, and quickly start turning to sources of energy that have fewer negative impacts -David Suzuki.
Let us all do our own bit to beat Global Warming. Head over here, to see what you can do.