Author Topic: Interesting article about a pending housing/insurance/finance crash  (Read 4529 times)

dividendman

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https://www.bloomberg.com/news/features/2017-04-19/the-nightmare-scenario-for-florida-s-coastal-homeowners

TL;DR - Coastal regions in Florida are already being impacted by the sea level rising. This is causing a vicious cycle of people wanting to be the first seller even though the sea level hasn't gone up so much to put their home at risk. This causes more to sell. Eventually the defaults on mortgages, etc. will cause banks to fail and ripple throughout the system.

The article claims this is worse than the great recession because there is no chance of the property value recovering (the property is slowly going away).

maizeman

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #1 on: April 21, 2017, 08:13:12 PM »
I didn't realize just how far along things were in Florida already.

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A few months after Russo, a partner at a law firm in Miami, moved to Key Largo in 2015, the big fall tides brought 18 inches of water onto the road in front of their house. Unlike previous tidal floods, this one lasted 34 days....

Realtors in Florida face no legal requirement to warn potential buyers about those flood risks. ...

“Anybody in these floody areas, if they disclose to a buyer, the buyer probably won’t buy that property,” said Slap, whose company is doing work for the city of Miami Beach. “That’s going to drive the value down to zero, well before water is up to their front door.”

Reminds me very much of the ethical dilemma presented in "Margin Call." If you realize something that cost you a lot of money is actually worthless, but everyone else still thinks it is worth a lot of money, do you just sell it on so someone else is left holding the bag when the truth comes out?

On a nationwide scale this doesn't sound as serious as the housing crisis. Housing crash supposedly wiped out about $6 trillion in home values, while this article says there are ~$0.4 trillion in homes at risk from rising sea levels. But these loses would obviously be much more concentrated in a few parts of the country.  I'm just glad I don't own property near the coasts or live in a state whose tax base depends on the value of all the coastal real estate.

ChpBstrd

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #2 on: April 22, 2017, 06:52:59 AM »
One might think Floridians would be building their houses exclusively out of concrete by now, instead of hurricane-vulnerable sticks. Yet, people keep lapping up houses in new stick-house developments, and paying more for insurance than the mortgage. Your average buyer cares more about granite countertops than elevation or hurricane survivability. Similarly, your average car buyer cares more about luxury than cost. The cost/reward economics of cable TV should have long ago wiped out that industry. American middle-class households routinely spend more on decor than their grandparents ever owned. The capacity of people to economically destroy themselves for the sake of luxury has no limit.

None of these buildings is expected to outlive a 30 year mortgage. New beachfront properties a few decades from now might have a view of offshore rock piles that used to be buildings, bridges, and roads, extending for miles. The yachts will follow a channel through what used to be a city. All this will be as normal as it is today.

Also, we'll all pay for it. Your federal taxes will be used to raise roads, rebuild bridges, replace utilities, and buy out homeowners with sob stories. The luxury cycle must keep going. The economy depends on it, they'll tell us.

Written while watching the ocean from the balcony of a condo I borrowed for the cleaning fee, elevation 3' on a sandbar, distance from beach 300 yards.

Grogounet

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #3 on: April 23, 2017, 04:00:17 AM »
This is not Florida unfortunately, this is everywhere around the world.
Most metro cities have been built according to their proximity to the sea as boat was the main transportation for goods before plane.
As sea level rises, it is just mathematical effect that some houses and entire suburbs will disappear.

Re-investment though. Proximity to sea/coast has always been almost guarantee LT returns (Capital wise). I guess one will have to figure out the area the least impacted!

seattlecyclone

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #4 on: April 23, 2017, 11:04:47 AM »
I'm not too worried about dense city centers. The real estate there is concentrated and valuable enough to make seawalls and stuff worth the cost. Not so much in suburban housing developments.

maizeman

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #5 on: April 23, 2017, 11:48:52 AM »
This is not Florida unfortunately, this is everywhere around the world.
Most metro cities have been built according to their proximity to the sea as boat was the main transportation for goods before plane.
As sea level rises, it is just mathematical effect that some houses and entire suburbs will disappear.

Re-investment though. Proximity to sea/coast has always been almost guarantee LT returns (Capital wise). I guess one will have to figure out the area the least impacted!

In different areas elevation rises at different rates as you travel away from the coastline. California would lose a lot less land to a 1 ft rise in sea levels than Florida for obvious reasons:



Bangladesh has only 360 miles of coastline, but they're going to be in much more trouble as sea levels rise than Chile (4,000 miles of coastline). So it's not as simple as saying everyone within X miles of the ocean is going to have problems.

Different folks have estimated that this different ways since there are issues with the accuracy of elevation and population and range of tides around average sea level, but it seems likely that somewhere between 2-10% of world population lives close enough to sea level that they're at risk from rising oceans.* Which is still a LOT of people. Just not most.

Here's a cool map of how that plays out along the US east coast: http://www.preventionweb.net/files/7701_USA10mLECZandpopulationdensity1.pdf

*https://www.quora.com/What-percentage-of-the-worlds-population-lives-less-than-a-meter-above-sea-level

bacchi

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #6 on: April 23, 2017, 12:58:46 PM »
We regularly see local stories about cliff side homes getting condemmed.  Cities usually seem to buy them to bail out homeowners staying as a more expensive public safety risk.  Doesnt seem likely to scale well though for many units.

Yeah, someone is going to be left holding the bag. Obama set aside millions to move a sinking town in Louisiana but there are a few towns in Alaska that need money to move, too. Those town and homeowner numbers will increase dramatically within our lifetime.

But, hey, there'll be strong demand for civil engineers.

maizeman

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #7 on: April 20, 2018, 08:54:50 PM »
I wanted to resurrect this thread because in the year since we had this discussion the first evidence is coming out that property values are already starting to fall (or least least rise less slowly) in the parts of coastal cities likely to be lost to rising sea levels.

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Another new paper, from researchers at the University of Colorado at Boulder and Pennsylvania State University, shows that the trend in Miami is playing out across the country, with homes that are vulnerable to rising sea levels now selling at a 7% discount compared with similar but less-exposed properties. The paper, which is under peer review, shows that the size of the coastal discount has grown over time.

Ryan Lewis, an assistant professor at the University of Colorado’s Leeds School of Business, said he and his co-authors noticed the strongest discounting among investors and second-home owners, who have the most choices about where to buy. Increasingly, he said, ordinary home buyers in places such as Miami, where there is strong awareness of the risks, also are starting to discount.

Market forces, he said, could cause migration away from the coasts.

Here's a link to the original preprint (paper which is still undergoing peer review): http://leeds-faculty.colorado.edu/AsafBernstein/DisasterOnTheHorizon_PriceOfSLR_BGL.pdf

maizeman

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #8 on: April 20, 2018, 08:59:54 PM »
More from the paper itself.

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Our first contribution is to show that properties exposed to projected SLR sell at around a 6–7.5% discount relative to otherwise similar properties (e.g. same zip, time, distance to coast, elevation, bedrooms, property and owner type.).

This discount implies very similar time horizons for rising sea levels as the medium to highly pessimistic scientific forecasts. Pricing effects are primarily driven by properties unlikely to be inundated for over half a century, suggesting that it is due to investors pricing long horizon concerns about SLR costs. Moreover, the same discount does not exist in rental rates, indicating that this discount is due to expectations of future damage, not current property quality.

Surf

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #9 on: April 20, 2018, 10:44:04 PM »
More from the paper itself.

Quote
Our first contribution is to show that properties exposed to projected SLR sell at around a 6–7.5% discount relative to otherwise similar properties (e.g. same zip, time, distance to coast, elevation, bedrooms, property and owner type.).

This discount implies very similar time horizons for rising sea levels as the medium to highly pessimistic scientific forecasts. Pricing effects are primarily driven by properties unlikely to be inundated for over half a century, suggesting that it is due to investors pricing long horizon concerns about SLR costs. Moreover, the same discount does not exist in rental rates, indicating that this discount is due to expectations of future damage, not current property quality.

This is fascinating information, thanks.  Spent some time in the FL keys recently, which are still really torn up from last hurricane season.  Plenty of properties completely uninhabitable, or with a 40' boat on their lawn, etc.  I couldn't believe some of the new construction / renovated properties that appeared to be no more than 4' above sea level.

My father has been visiting there for decades and says the full moon high tides have become a serious problem in the last few years both in the keys and Miami area.  I have no idea what the big picture financial impact will be but this is going to put a hurt on a lot of people as SLR continues.

CA does much better due to elevation but the Bay Area is still particularly vulnerable.  Australia has 95% of its population within a few miles of the coast, but elevations vary wildly there as well.

Here's to hoping mustachian restraint catches on everywhere and we can keep the CO2 emissions down. 

That said my next property will be both further inland and higher elevation as i'm an optimist, not myopic.

Mr. Green

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #10 on: April 21, 2018, 12:16:55 PM »
There will always be wealthy people wanting waterfront property. On the barrier islands of the Outer Banks we occasionally get a hurricane that wipes out enough land that houses can't be rebuilt and second row homes become oceanfront. The loss of the oceanfront house is somewhat offset by the increase in value of the second row home, economically speaking. We (taxpayers) are already paying the price for these homes via grandfathered flood insurance plans that are still inexpensive, which does not reflect the actual risk of flooding as our understanding of what's possible has changed after Sandy and other recent hurricanes that behaved differently than expected.

ChpBstrd

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #11 on: April 21, 2018, 12:41:53 PM »
I suspect the lag in price growth is due to the high and rising cost of insurance. Just as rising interest rates limit the growth of home prices, high insurance rates also contribute to the affordability of oceanfront property. I.e. if you can afford $4,000/mo for your beach house, and insurance rises from $600/mo to $1,000/mo, then that's $400/mo less that's available to spend on the mortgage.

This is another way of saying what the authors are saying. The present value of future devastation is built into the price. High elevation property by the ocean (e.g. Pensacola, California coast) will become more valuable than the soon-to-be-submerged keys.

maizeman

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #12 on: April 21, 2018, 02:08:35 PM »
I suspect the lag in price growth is due to the high and rising cost of insurance. Just as rising interest rates limit the growth of home prices, high insurance rates also contribute to the affordability of oceanfront property. I.e. if you can afford $4,000/mo for your beach house, and insurance rises from $600/mo to $1,000/mo, then that's $400/mo less that's available to spend on the mortgage.

This is another way of saying what the authors are saying. The present value of future devastation is built into the price. High elevation property by the ocean (e.g. Pensacola, California coast) will become more valuable than the soon-to-be-submerged keys.

Interesting point. I was thinking that since rents weren't effected by home values were that this meant rental properties in areas likely to be submerged in the next 50 years were producing more cash flow for landlords who weren't concerned with the long term value of their housing stock.

But if you are right the lower prices are begin driven by higher insurance rates meaning people cannot afford as large a principal+interest payment on their mortgage (and properties only being attractive to potential landlords -- given constant rental prices -- at lower prices), then landlords wouldn't be benefiting in even the short term.

Now flood insurance itself is extremely federally subsidized, and doesn't seem to have particularly data-driven underwriting going into pricing individual policies, but I'm guessing there are lots of other bad things that happen to houses as sea levels rise which would end up on a regular homeowners policy rather than a flood insurance policy.

BuildingFrugalHabits

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #13 on: April 21, 2018, 02:41:32 PM »
It's hard to believe the discount is only 7%.  I wouldn't touch anything in a low lying area.  I would also be interested to see if there is a similar effect for people buying ski condos or mountain property in areas projected to become more vulnerable to wildfires. 

Bicycle_B

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #14 on: April 22, 2018, 08:22:24 PM »
Heartening information from these articles.  A smooth transition based on gradually rising prices is a best case scenario.

Surf

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #15 on: April 23, 2018, 12:10:42 AM »
I suspect the lag in price growth is due to the high and rising cost of insurance. Just as rising interest rates limit the growth of home prices, high insurance rates also contribute to the affordability of oceanfront property. I.e. if you can afford $4,000/mo for your beach house, and insurance rises from $600/mo to $1,000/mo, then that's $400/mo less that's available to spend on the mortgage.

This is another way of saying what the authors are saying. The present value of future devastation is built into the price. High elevation property by the ocean (e.g. Pensacola, California coast) will become more valuable than the soon-to-be-submerged keys.

Interesting point. I was thinking that since rents weren't effected by home values were that this meant rental properties in areas likely to be submerged in the next 50 years were producing more cash flow for landlords who weren't concerned with the long term value of their housing stock.

But if you are right the lower prices are begin driven by higher insurance rates meaning people cannot afford as large a principal+interest payment on their mortgage (and properties only being attractive to potential landlords -- given constant rental prices -- at lower prices), then landlords wouldn't be benefiting in even the short term.

Now flood insurance itself is extremely federally subsidized, and doesn't seem to have particularly data-driven underwriting going into pricing individual policies, but I'm guessing there are lots of other bad things that happen to houses as sea levels rise which would end up on a regular homeowners policy rather than a flood insurance policy.

the flood insurance may be federally subsizidized, but it's a mess.

Speaking from experience, a 3br/2b home two blocks from the water, and a 5br/3b home on the water, in my area, has the same flood insurance costs as long as they are technically in the same flood zone, which they often are.  The cap is 250k structure damage and both homes are above that cap by FEMAs reckoning.  That cost is ~5k/yr with a several thousand dollar deductible.

It would make sense that rising insurance costs are depressing property values.  Insurance costs are worse than taxes or interest on a mortgage as they can't be written off in any way.   Property taxes in the northeast are so high that cost of living is comparable to areas in CA, even if property values are 200-400k higher in CA.  an extra $1000 a month in tax takes a huge chunk out of the sale value of a home.  The insurance issue will only make this worse.

dragoncar

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #16 on: April 23, 2018, 12:16:53 AM »
Top is in

I always wondered how common it is for builders in Florida to just truck in some dirt and build a little hill.  Is this uncommon because it's expensive or because it's impractical?

ChpBstrd

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #17 on: April 23, 2018, 08:08:00 AM »
It strikes me as odd that more people don't build houses that wouldn't need insurance. I'm thinking concrete monolith, 12 feet off the ground on massive piers supported with a foundation too big to wash away in a hurricane. With plate steel shutters and a concrete roof, there would be no exposed parts vulnerable to hurricanes. Plus it would be fireproof and termite-proof. The owner would just go without insurance to cover the higher cost of construction. Perhaps the insurance subsidies are why it's cheaper to build slab-on-grade stick houses at 5' elevation.

In coastal Mexico and the Carribean, people with a lot less money than Floridians build with solid concrete like this and there's no panicked evacuation every time a hurricane comes. People just ride it out, and the fatalities that occur tend to be people outside in cars or with power lines.

maizeman

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #18 on: April 23, 2018, 08:48:57 AM »
Maybe it just boils down to people seeing their houses as fashion statements? Concrete monoliths are associated with eastern europe and the former soviet republics and based on the small number of TV shows I watch, my impression is there is a direct linear relationship between how wealthy a character is supposed to be and how much of their house/office which is made of glass.

Growing up (tornado country rather than hurricane) there was one concrete house in my neighborhood and my impression is that a lot of people regarded the family that lived there as odd.

thd7t

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #19 on: April 23, 2018, 09:57:51 AM »
Top is in

I always wondered how common it is for builders in Florida to just truck in some dirt and build a little hill.  Is this uncommon because it's expensive or because it's impractical?
It's both.  One impractical side is that it's pretty hard to make that little hill stay there.  Another impractical side is that moving that much earth is more challenging than it seems.  Most people underestimate how big exterior objects/landforms are.

Long story short: (Hill)Top is in (the water)

KTG

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #20 on: April 23, 2018, 12:06:00 PM »
I've given this some thought, as I live in Florida. I plan to spend the rest of my life here.  My house was built in 2001, and like most Florida homes, it is built like a bunker.

My home is about a 45 minute drive from the beach.  I've checked the flood charts and impact of rising oceans in my area and I am fine as far as the worst case scenarios estimate. But a lot more will happen here that I will no doubt be impacted by. Global Warming isn't just about the oceans rising, which they are, and you can read up on how its already affecting Miami (pumping stations), but it will also cause more hurricanes and make them more destructive. Areas along the coast will flood, and even regions like the Everglades may be severely impacted by the rising saltwater (and since water flows from north to south, once that water rises, the water flowing from the north will have nowhere to go. The damage from all of this will impact tourism, insurance, land values, and so on. I am not sure I will see the day where parts of a city are permanently underwater with structures sticking out of the surf, but I do see areas of coastline that people will abandon or no longer develop on. Then again, there are a lot of idiots out there. Also, sea walls will be useless as most of Florida sits on limestone which erodes pretty badly (sink holes), and the ocean water will just seep through it.

This apocalyptic view is some ways off, but it is coming. But by the time it happens, Louisiana, Galveston, New York, etc etc will all have their own problems too, so it will be a nationwide disaster. Hopefully I will be dead by then.



« Last Edit: April 23, 2018, 12:10:18 PM by KTG »

dragoncar

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #21 on: April 23, 2018, 01:04:00 PM »
Hopefully I will be dead by then.

That can be arranged.  I know a guy

ChpBstrd

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #22 on: April 23, 2018, 07:41:09 PM »
I suspect the effects will be felt in our lifetimes. The evidence just keeps piling up. Climate denialism is becoming an increasingly difficult position to hold. Soon, some sort of depreciation will be applied to low-lying oceanfront real estate by enough market participants to move prices. This is new. How does one value real estate that will cease to exist at some future time?

Funny story: my grandfather once bought a 40 acres of land sight unseen for the value of the unpaid property taxes. Upon inspecting the property, he discovered that the nearby river had meandered since the land was platted decades before, and all but about 4 acres were under water. If you think that's bad, imagine the person who bought all 40 acres and watched it disappear until it wasn't worth paying taxes on. He lost his whole investment and had to pay decades of property taxes on top of that.

This little family goof-up becomes a national economic depression when tens of millions of market participants, who paid full price for prime developed real estate, suddenly watch their investments become unsellable - not because it went underwater, but because everyone suddenly understands it will go underwater.

maizeman

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #23 on: April 23, 2018, 08:10:45 PM »
This little family goof-up becomes a national economic depression when tens of millions of market participants, who paid full price for prime developed real estate, suddenly watch their investments become unsellable - not because it went underwater, but because everyone suddenly understands it will go underwater.

Yeah, as Bicycle_B pointed out above, best case scenario is as gradual decline in prices from now until the day the houses are not longer habitable. Worst case is one day a major mortgage or insurance company announces they're not writing 30 year mortgages/policies for Florida, Louisiana, etc houses within X ft of sea-level and it kicks off an avalanche people trying to sell before other companies pull out, driving other companies to pull out sooner rather than later, which ultimately sees a big chunk of the value of many people's homes disappear in a matter of days or weeks.

dragoncar

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #24 on: April 23, 2018, 08:34:58 PM »
How does one value real estate that will cease to exist at some future time?

Look at property built on land lease/ground lease property.  There are condos in NY and SF that still go for hundreds of thousands of dollars and don't even own the land.  Typically signed a 99 year lease when built, but much less time left now.

Or check out this $2 million mobile home in Malibu: https://www.redfin.com/CA/Malibu/197-Paradise-Cove-Rd-90265/home/28676341

Radagast

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #25 on: April 23, 2018, 09:17:57 PM »
It's hard to believe the discount is only 7%.  I wouldn't touch anything in a low lying area.
+1 I wouldn't own property within 10 vertical feet of sea level or 5 of the nearest 100 year flood plain.

Maybe it just boils down to people seeing their houses as fashion statements? Concrete monoliths are associated with eastern europe and the former soviet republics and based on the small number of TV shows I watch, my impression is there is a direct linear relationship between how wealthy a character is supposed to be and how much of their house/office which is made of glass.

Growing up (tornado country rather than hurricane) there was one concrete house in my neighborhood and my impression is that a lot of people regarded the family that lived there as odd.
Did it look like concrete? Look up insulated concrete form houses (and images) if you aren't familiar. I'd love to have one of those. In Florida you could probably get insulation on the inside only, and have a stucco exterior with epoxy paint directly on the concrete. Throw in some nice steel shutters and it would basically be a bomb shelter, but it would look exactly like any other stucco house except the walls might be a little thicker.

Surf

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #26 on: April 23, 2018, 11:29:55 PM »
It strikes me as odd that more people don't build houses that wouldn't need insurance. I'm thinking concrete monolith, 12 feet off the ground on massive piers supported with a foundation too big to wash away in a hurricane. With plate steel shutters and a concrete roof, there would be no exposed parts vulnerable to hurricanes. Plus it would be fireproof and termite-proof. The owner would just go without insurance to cover the higher cost of construction. Perhaps the insurance subsidies are why it's cheaper to build slab-on-grade stick houses at 5' elevation.

In coastal Mexico and the Carribean, people with a lot less money than Floridians build with solid concrete like this and there's no panicked evacuation every time a hurricane comes. People just ride it out, and the fatalities that occur tend to be people outside in cars or with power lines.

A family friend built a new house in the keys 2 yrs ago.  It's 10' up on massive piers, concrete construction, and the few windows are "hurricane-proof," rated to withstand 185+ mph impacts.  The so called garage area between the piers on ground level has tearaway walls that yield immediately to floodwaters and are inexpensive to replace.

This house got hit by the hurricane last fall. It sustained 100k+ worth of damages from rainwater intrusion the winds drove through tiny imperfections in the window casings.  the flooding was a non-issue due to the elevation of the home but that is still sizable damage despite using top notch building materials and planning for such a disaster.  He's still way better off than if he built stick-frame on grade as the house would have been completely wiped out, this just showcases the difficulty of making buildings truly hurricane proof. 

dragoncar

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #27 on: April 24, 2018, 12:56:02 AM »
Hopefully I will be dead by then.

That can be arranged.  I know a guy
Scoff... I thought you mustashians were DIY types.

I recently sold a home in coastal SoCal but a couple of miles inland from the coast so not affected in any way. However every year during storms the beach areas are pretty severely eroded and it gets worse each year. Some beach communities built huge sand berms or rock walls every year in hopes of reducing flooding from the sea as well as erosion.  Throw in some earthquakes and wildfires and mudslides and extreme drought and Calif is just a swell place to live. Of course none of that seems to effect rapidly rising home values - especially in coastal areas where people are still happy to build multi-million dollar beach front homes even if there isn't much beach left.

The dollar per hour calculation on 25 to life precludes DIY... your time is WORTH something ya know?

ChpBstrd

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #28 on: April 24, 2018, 08:52:24 AM »
It strikes me as odd that more people don't build houses that wouldn't need insurance. I'm thinking concrete monolith, 12 feet off the ground on massive piers supported with a foundation too big to wash away in a hurricane. With plate steel shutters and a concrete roof, there would be no exposed parts vulnerable to hurricanes. Plus it would be fireproof and termite-proof. The owner would just go without insurance to cover the higher cost of construction. Perhaps the insurance subsidies are why it's cheaper to build slab-on-grade stick houses at 5' elevation.

In coastal Mexico and the Carribean, people with a lot less money than Floridians build with solid concrete like this and there's no panicked evacuation every time a hurricane comes. People just ride it out, and the fatalities that occur tend to be people outside in cars or with power lines.

A family friend built a new house in the keys 2 yrs ago.  It's 10' up on massive piers, concrete construction, and the few windows are "hurricane-proof," rated to withstand 185+ mph impacts.  The so called garage area between the piers on ground level has tearaway walls that yield immediately to floodwaters and are inexpensive to replace.

This house got hit by the hurricane last fall. It sustained 100k+ worth of damages from rainwater intrusion the winds drove through tiny imperfections in the window casings.  the flooding was a non-issue due to the elevation of the home but that is still sizable damage despite using top notch building materials and planning for such a disaster.  He's still way better off than if he built stick-frame on grade as the house would have been completely wiped out, this just showcases the difficulty of making buildings truly hurricane proof.

Wow, I'm curious about the details here! Was their flooring hardwoods with Persian rugs on top? They must have done something to defeat the purpose.

thd7t

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #29 on: April 24, 2018, 08:58:30 AM »
It strikes me as odd that more people don't build houses that wouldn't need insurance. I'm thinking concrete monolith, 12 feet off the ground on massive piers supported with a foundation too big to wash away in a hurricane. With plate steel shutters and a concrete roof, there would be no exposed parts vulnerable to hurricanes. Plus it would be fireproof and termite-proof. The owner would just go without insurance to cover the higher cost of construction. Perhaps the insurance subsidies are why it's cheaper to build slab-on-grade stick houses at 5' elevation.

In coastal Mexico and the Carribean, people with a lot less money than Floridians build with solid concrete like this and there's no panicked evacuation every time a hurricane comes. People just ride it out, and the fatalities that occur tend to be people outside in cars or with power lines.

A family friend built a new house in the keys 2 yrs ago.  It's 10' up on massive piers, concrete construction, and the few windows are "hurricane-proof," rated to withstand 185+ mph impacts.  The so called garage area between the piers on ground level has tearaway walls that yield immediately to floodwaters and are inexpensive to replace.

This house got hit by the hurricane last fall. It sustained 100k+ worth of damages from rainwater intrusion the winds drove through tiny imperfections in the window casings.  the flooding was a non-issue due to the elevation of the home but that is still sizable damage despite using top notch building materials and planning for such a disaster.  He's still way better off than if he built stick-frame on grade as the house would have been completely wiped out, this just showcases the difficulty of making buildings truly hurricane proof.

Wow, I'm curious about the details here! Was their flooring hardwoods with Persian rugs on top? They must have done something to defeat the purpose.
With an expensive construction type like this, repairs may be more costly than in conventionally framed construction.  In addition, they may have performed remedial work to avoid this kind of damage again.  It sounds like the issues were greater than they're being described here.

Surf

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Re: Interesting article about a pending housing/insurance/finance crash
« Reply #30 on: April 24, 2018, 03:19:27 PM »
It strikes me as odd that more people don't build houses that wouldn't need insurance. I'm thinking concrete monolith, 12 feet off the ground on massive piers supported with a foundation too big to wash away in a hurricane. With plate steel shutters and a concrete roof, there would be no exposed parts vulnerable to hurricanes. Plus it would be fireproof and termite-proof. The owner would just go without insurance to cover the higher cost of construction. Perhaps the insurance subsidies are why it's cheaper to build slab-on-grade stick houses at 5' elevation.

In coastal Mexico and the Carribean, people with a lot less money than Floridians build with solid concrete like this and there's no panicked evacuation every time a hurricane comes. People just ride it out, and the fatalities that occur tend to be people outside in cars or with power lines.

A family friend built a new house in the keys 2 yrs ago.  It's 10' up on massive piers, concrete construction, and the few windows are "hurricane-proof," rated to withstand 185+ mph impacts.  The so called garage area between the piers on ground level has tearaway walls that yield immediately to floodwaters and are inexpensive to replace.

This house got hit by the hurricane last fall. It sustained 100k+ worth of damages from rainwater intrusion the winds drove through tiny imperfections in the window casings.  the flooding was a non-issue due to the elevation of the home but that is still sizable damage despite using top notch building materials and planning for such a disaster.  He's still way better off than if he built stick-frame on grade as the house would have been completely wiped out, this just showcases the difficulty of making buildings truly hurricane proof.

Wow, I'm curious about the details here! Was their flooring hardwoods with Persian rugs on top? They must have done something to defeat the purpose.
With an expensive construction type like this, repairs may be more costly than in conventionally framed construction.  In addition, they may have performed remedial work to avoid this kind of damage again.  It sounds like the issues were greater than they're being described here.

The hurricane was relatively slow moving and there was extensive water damage throughout the home requiring structural repair. I haven't been there to see the exact details but I am confident that this person is not exaggerating and also does not go in for rainforest hardwoods with persian rugs, so to speak.

edit: I think this person made the best choice going with elevated home, high quality durable materials, regardless of the outcome.  It would have been way worse otherwise.
« Last Edit: April 24, 2018, 05:14:29 PM by Surf »