Florida’s real estate market has remained strong, despite the COVID-19 pandemic. But in coming decades, it could take a hit from climate change.
Many Florida residents live near the shore, and ocean-front property is valuable. But as seas rise, more coastal homes are under threat from tidal flooding and storm surges.
“So as a result of all of this, we could see increased damages to Florida real estate,” says Mekala Krishnan of the McKinsey Global Institute.
Her team analyzed the potential damage to the state’s real estate market if nothing is done to reduce or adapt to climate change.
They found that exposed homes could lose up to 15% of their value this decade and up to 35% by mid-century.
Rising insurance costs and more widespread flooding could compound the problem.
“If we start to see climate hazards affect things like public infrastructure – water systems, sewage systems, transportation systems – all of that could contribute to more aggressive devaluation of exposed properties,” Krishnan says.
In a state that is very dependent on property tax revenue, the ripple effects could be felt throughout coastal communities.
So Krishnan says the report underscores the urgent need to adapt to climate change.
Reporting credit: ChavoBart Digital Media.