If you're purchasing a family residence, vacation home, condo, rental property or a real estate investment on the beach today don't you want to know if the property will be gone in 50, 60, or 80 years? If you signed and closed yesterday without disclosure, will you sue?
Are sellers, developers, appraisers, bankers, brokers, mortgage lenders, contractors, insurers, and residential and commercial litigators doing due diligence for impacted zip codes?
For instance, here's 540 multiple listings of Key West, Florida real estate for sale today. Will these sellers disclose the limited lifespans of their properties in their mandatory sellers disclosure statements required for all Florida real estate transactions? Nothing to see in the MLS's... It will be interesting to review the comps.
State laws mandate that real estate sellers provide prospective buyers written disclosures for all material or structural defects and natural hazards such as flood zones, areas subject to unusual flood risks, fire hazards, wild fires, or land slides. Surely if the property is predicted to be underwater in 60 years falls under this law. In fact, Florida has something called a Natural Hazards Disclosure law that seems to be overdue for an update to include being submerged underwater!
Buyers and investors rely on disclosures to make informed decisions and the high likelihood of real estate in our Key West, Florida example - among many other US coastal cities - being underwater in 60 years is at least as relevant as, say, the presence of termites. The investment will be worthless in your kid's lifetime.
Since sea level predictions are regional and relatively unarguable - like being in a flood zone - real estate agencies, brokers, and directories like Zillow and Trulia should be required to identify the zip codes and lots red flagged with potentially 60 years lifespans.
How soon will banks and lenders start pricing loans and basing rates on the depreciating value? How will mortgages even be made for disappearing houses, for loans that will become uncollateralize?
As these market adjustments catch up to the science and geography of global warming and rising sea levels (see IPCC: 'Unequivocal' human-caused global warming on course to raise temperatures above 2°C by 2100, Meteor Blades) how will it change prices, property taxes, estate taxes?
How quickly will property values increase for today's inland zip codes that will be tomorrow's prime coastal real estate? Seems like a key factor estate planners should be evaluating today.
Home buyers beware - your million dollar dream home will be worthless in maybe as little as 60 years.
Key West is just one of many barrier islands in this country.
Buying on the Jersey Shore? New York's Fire Island, Jones Beach area, the Hamptons?
What about Texas? Galveston? Padre Island? Primo properties...today.
Congress, state legislatures, and cities are running out of time to get in front of the massive law suits that can reasonably be expected to hit the courts as long as the real estate and mortgage lending industry continues routinely selling properties with undisclosed expiration dates.
What other markets will start to react to rising sea levels and global warming?
It is unreasonable to plan on responsible government action but it's irrational to think the markets will not react to clear and easily measurable changes, especially when the law suits begin.
Politicians can maintain their manana behavior but the window in which financial markets look ahead and adapt is here now.