As the Seas Have Been Rising, Tri-State Home Values Have Been Sinking

Source: First Street Foundation | Published on August 26, 2018

A summery day out at a beach in the Hamptons.
Scientists from the non-profit First Street Foundation analyzed recent housing market trends in New York, New Jersey, and Connecticut and found $6.7 billion has been lost in home value from 2005 to 2017 due to sea level rise flooding.
 
This builds on their previous research that found $7.4 billion in home value had been lost across 5 southeastern coastal states, bringing the total loss in the 8 states to $14.1 billion. These findings have been integrated into Flood iQ, a flood risk tool from First Street Foundation, which enables individuals to find their property-specific value loss and aggregated loss for their city.
 
Steven A. McAlpine, Head of Data Science at First Street Foundation, and Dr. Jeremy R. Porter, a Columbia University professor and First Street Foundation statistical consultant, recently released an academic publication in the journal Population Research and Policy Review showing $465 million was lost in Miami-Dade County’s real-estate market from 2005 to 2016 due to sea level rise flooding. The peer-reviewed analysis has now been expanded to cover all of New York, New Jersey, Connecticut, Florida, Georgia, South Carolina, North Carolina, and Virginia by analyzing over 9.2 million real estate transactions, and extrapolating the results to 20 million properties. The expanded analysis has found a total home value loss of $14.1 billion across these eight coastal states since 2005.
 
Previous peer-reviewed academic studies have forecasted the negative impact sea level rise will have on the future value of coastal properties, but McAlpine and Porter’s research is the first to demonstrate value loss has already occured. By taking into account characteristics associated with home value, such as square footage and proximity to amenities, and accounting for economic trends like the 2008 housing recession, the scientists were able to isolate the impact that increased frequent tidal flooding, caused by sea level rise, has had on home value.
 
“This is the first market indicator that rising seas and related flooding have depressed home values,” said McAlpine. “This is not just a Florida issue, but an issue the entire coastal United States needs to address.”
 
“As we have expanded our study, the results have been incredibly consistent,” said Porter. “Americans across 8 states have already lost $14.1 billion from increased flooding caused by sea level rise, and all signs are pointing to this being an accelerating trend.”
 
The research is the first to find that in addition to direct, property-lot flooding, nearby road flooding also has a major impact on home value. This suggests that all residents in neighborhoods with flooding should be concerned by any flooding in their streets.
 
“We all knew that flooding issues were getting worse from sea level rise, but the home value loss associated with it is truly staggering.” said Matthew Eby, Executive Director at First Street Foundation. “The time to act is now.”