Author Topic: Real Estate and Climate Change  (Read 5584 times)

HappyHoya

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Real Estate and Climate Change
« on: October 17, 2015, 10:56:40 AM »
Does climate change factor into how anyone here thinks about buying property? I will likely only ever own my primary residence, but I live in an expensive city (DC) where even a modest home will tie up a significant amount of money (why I'm currently renting) which would hopefully become some sort of useful asset. I understand that I shouldn't count on my home as an investment, and I intend to buy only when it makes sense as a cost of housing myself, but it would still suck to pay a mortgage for a long time only to have the property value slashed by natural disaster or widespread fear of impending disasters. DC is not so coastal or disaster prone that I am worried about land washing away, but I am concerned that as estimates about climate change and rising water levels become more common and are forecasting nearer in the future, there will be skepticism and unrest in areas predicted to be affected (once such estimate here: https://shar.es/1ucAJS). Am I being paranoid?

gaja

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Re: Real Estate and Climate Change
« Reply #1 on: October 17, 2015, 11:32:30 AM »
In my area, climate change will probably simply exaggerate existing problems. For the last house shopping spree, when we bought at a hill by the coast, we found a house that was protected from strong winds. In addition, we cut down any trees that could fall over the house. We had two hurricanes while we lived there, and except for some uprooted bushes and a trach can falling over, nothing happened. When we went house shopping in january, we avoided houses that were next to the river or creeks, or in dumps or flat areas without good drainage. Already there have been a couple of flooding incidences in the areas where we decided not to buy.

In the last house, we were able to avoid quick clay. In this area, the entire city is built on clay. We managed to avoid the known danger zones, and the recent expanding of the danger zone missed us by a couple of houses. But I'm quite sure it will only be a matter of time before our property is included in the red zone. But we priced that into our offer, and will take care not to do any digging without checking with the city engineers.

Landslave

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Re: Real Estate and Climate Change
« Reply #2 on: October 17, 2015, 02:04:25 PM »
This is such an apt and timely question!!  YES, we are considering it, and we are selling coastal properties.  Here is why.

  First, when the actuaries and the public finally really decide that at-risk geographic locations are devalued, I don't want to own them!  And our thinking is that the consensus will be sudden, without warning, and devastating. 

  Second, no one pay rent based on flood insurance premiums.  So, as a cash-flow decision, it makes sense to be out of a flood zone.

  Third, why risk a disruption of business, and why not have the much more valuable property after the flood happens?  Rental prices will rise dramatically when everyone downhill has been made homeless.

  Fourth, common properties (condominiums, home owner associations) will have to re-mortgage their properties to ameliorate the effects of rising water levels.


    EVEN MORE -- I have fear for whole cities.  Cities like Albuquerque, Las Vegas, and Chattanooga and many gulf coast cities make me cringe.  They are in NO WAY prepared for what has already happened in South Carolina, Golden and Boulder Colorado, Pennsacola, and Hershey Pennsylvania.  The macroprecipitation events ("1000-year rain") is CLEARLY the new normal.  In Albuquerque the hydro engineers are looking nervously at their arroyos.  In Chattanooga the TVA is wringing its hands and deciding if they need to make their dams taller. 

    Buy the house on top of the hill.  And sell everything that could be struck by a 1000-year precipitation event.....because we are all MUCH MORE LIKELY to see a 1000-year event than we were at the year of our births.  Some people are in denial about AGW, but while they argue about it, it is happening!  Hard to argue over observations which are actually occurring. 

Landslave


clarkfan1979

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Re: Real Estate and Climate Change
« Reply #3 on: October 18, 2015, 10:56:11 AM »
Don't buy an property in Big Bear City, CA. In 20 years it's not going to be cold enough for them to consistently make snow and have a season. Once the resorts close, the bubble will burst and I might pick something up on the cheap.

I own a rental in South Florida and projections for the next 10 years are very favorable. However, it's really frickin hot in the summer and I also worry about sea level rise.

I also think a serious hurricane can derail the growing economy.

MDM

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Re: Real Estate and Climate Change
« Reply #4 on: October 18, 2015, 11:38:43 AM »
Does climate change factor into how anyone here thinks about buying property? ...I am worried...there will be skepticism and unrest in areas predicted to be affected (once such estimate here: https://shar.es/1ucAJS). Am I being paranoid?
The default view in that link shows some group's estimate of the year 2200.  The information behind it is replete with qualifiers such as "could", "may", "might", etc.  Your assessment of actual safety risk should depend on how confident you are about that group's ability to predict the future.  The related question of property values should depend on what you think the general population will believe about that and any other group's ability to predict the future.

Of course, property values are all about "location, location, location."  Buying in an area known to experience hurricanes is a choice that could be good or bad, regardless of what one thinks about global warming, because hurricanes have occurred in the past and will occur in the future.
« Last Edit: October 19, 2015, 07:44:38 AM by MDM »

undercover

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Re: Real Estate and Climate Change
« Reply #5 on: October 18, 2015, 04:56:52 PM »
Yes I think you're being paranoid. Don't let an extreme unknown dictate your financial decisions.

HappyHoya

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Re: Real Estate and Climate Change
« Reply #6 on: October 19, 2015, 07:03:37 AM »
Thanks for the replies, everyone. I live in DC, where it's tough to factor geographic contours into finding a place to live, because inventory is quite limited already and it doesn't make sense to broaden my range with the way commuting and traffic is around here. I will note all the advice in the event I ever do have those choices to make, though.

brooklynguy

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Re: Real Estate and Climate Change
« Reply #7 on: October 21, 2015, 07:55:33 AM »
Yes I think you're being paranoid. Don't let an extreme unknown dictate your financial decisions.

The OP questioned whether climate change should "factor into" real estate purchasing decisions, not "dictate" them.  I don't think it's crazy to take the potential effects of climate change into account (as but one factor among the total mix of relevant considerations) in making a real estate purchasing decision, as forward-thinking municipalities are already doing in their urban planning decisions and as property insurers are already doing in their underwriting decisions.

In deciding to purchase my home, I gave some greater-than-zero level of weight to my house's situation near the highest elevation in Brooklyn.  By contrast, sea level projection maps like the one linked in the OP put my childhood home in Coney Island underwater even under the most generous set of assumptions available (to MDM's point, those projections are only as good as their underlying assumptions, but climate change's attendant risks are without question greater in certain locations than in others).  This really hit home for me the night Hurricane Sandy made landfall, which I spent trapped in my mother's apartment (the one I grew up in) as the lobby of that high-rise building was submerged under ten feet of Atlantic Ocean.

Mntngoat

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Re: Real Estate and Climate Change
« Reply #8 on: October 21, 2015, 08:03:29 AM »
Yes I think you're being paranoid. Don't let an extreme unknown dictate your financial decisions.

exactly   especially when it cannot be proved it is going to affect anyone in their lifetime.
« Last Edit: October 21, 2015, 08:11:35 AM by Mntngoat »

Mntngoat

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Re: Real Estate and Climate Change
« Reply #9 on: October 21, 2015, 08:16:33 AM »
I better inform the city council  climate change is  going to make teh entire  downtown section of  Huntington Beach, CA  will be under water. SMH
ML

James

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Re: Real Estate and Climate Change
« Reply #10 on: October 21, 2015, 08:21:31 AM »
Am I being paranoid?


Yes.


Factor it in to some small degree if it makes you happy or more comfortable. NOT saying you shouldn't do what you want, but my honest answer is that you sound paranoid. Please remember that the estimates that got all the attention have been greatly off so far (look at all the estimates made 10-15 years ago about where we would be today), and are frantically trying to find reason to maintain doom and gloom. Climate changes, but predicting it and what reaction it will have or cause is not something we can currently do with any real accuracy.

undercover

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Re: Real Estate and Climate Change
« Reply #11 on: October 22, 2015, 10:03:25 PM »
Yes I think you're being paranoid. Don't let an extreme unknown dictate your financial decisions.

The OP questioned whether climate change should "factor into" real estate purchasing decisions, not "dictate" them.  I don't think it's crazy to take the potential effects of climate change into account (as but one factor among the total mix of relevant considerations) in making a real estate purchasing decision, as forward-thinking municipalities are already doing in their urban planning decisions and as property insurers are already doing in their underwriting decisions.

In deciding to purchase my home, I gave some greater-than-zero level of weight to my house's situation near the highest elevation in Brooklyn.  By contrast, sea level projection maps like the one linked in the OP put my childhood home in Coney Island underwater even under the most generous set of assumptions available (to MDM's point, those projections are only as good as their underlying assumptions, but climate change's attendant risks are without question greater in certain locations than in others).  This really hit home for me the night Hurricane Sandy made landfall, which I spent trapped in my mother's apartment (the one I grew up in) as the lobby of that high-rise building was submerged under ten feet of Atlantic Ocean.

My point is that if you're applying an excessive amount of weight on a variable that is extremely unknown, then you are being paranoid, thus allowing paranoia to dictate that decision.

mrpercentage

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Re: Real Estate and Climate Change
« Reply #12 on: October 23, 2015, 02:09:29 AM »
A house is a contract for hundreds of thousands of dollars and possibly decades of dedication. Be paranoid. Be very paranoid. Go in expecting everything to break, at some point it will, because houses require repairs and none of them are cheap. You need that money set aside and ready. Rent and save and invest conservatively. You will know when you have found the right one.

Example:
New roof $10,000
Stucco $4,000
Paint for the Stucco $500-1200
New windows because they are recommended for Stucco $2000
New carpet $2000-3000
Refridgerator $1000
Washing Machine $500
AC Repairs 1,2, and 3 $400 each
New AC $6000
New Waterheater $1000
New Toilet $200
Sprinkler repair-- varies, how much do you want to work? Like digging ditches do ya?
Lawn mower-- $200
No lawn mower you have gravel.. okay weed control? How much do you like pulling weeds?
Pipe breaks call a plumber $300
Whirlybird squeeks like hell and you climb up on the roof and replace it yourself $60
APS breaks your gate to check your power meter. You locked it during a storm so it wouldnt blow around $500
Peeling off the bamboo wallpaper put on in the 70's 10 hours and $50 for the paint to cover the walls
Dishwashing machine goes because of hard water $500
Replace the pipes under the sink yourself because they are old and start to leak $30 and an hour of your time.
Replace a front door because the previous owner had someone try to break in and the crack in the door became unreparable
$1500
Cracked foundation-- just level the house and start over
Black mold-- just level the house and start over


This is the true story of what a decade can look like in a house. Be paranioid. Be very paranoid if your house in not brand new and in a known possible disaster zone
« Last Edit: October 23, 2015, 02:25:37 AM by mrpercentage »

undercover

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Re: Real Estate and Climate Change
« Reply #13 on: October 23, 2015, 10:17:46 AM »
A house is a contract for hundreds of thousands of dollars and possibly decades of dedication.  It doesn't have to be hundreds of thousands of dollars? Be paranoid. Be very paranoid. Go in expecting everything to break, at some point it will, because houses require repairs and none of them are cheap. A bit misleading. You need that money set aside and ready. Rent and save and invest conservatively. You will know when you have found the right one.

Example:
New roof $10,000 In 35 years, 3 new roofs haven't cost us over $10k. Who is ripping you off?
Stucco $4,000 You don't generally replace stucco...
Paint for the Stucco $500-1200 Fair enough, if you're extremely picky
New windows because they are recommended for Stucco $2000 ?
New carpet $2000-3000 Don't have carpet? Get the good stuff the first time
Refridgerator $1000 Not specific to homeowners
Washing Machine $500 See above
AC Repairs 1,2, and 3 $400 each Never had an AC problem in 35 years
New AC $6000 See above. Although we did overhaul our system for other reasons
New Waterheater $1000 Had a working water heater for 35 years until we stupidly replaced it thinking it wasn't working right
New Toilet $200 Now you're just getting trivial
Sprinkler repair-- varies, how much do you want to work? Like digging ditches do ya? Not sure how many Mustachians own sprinklers...
Lawn mower-- $200 Not specific to homeowners
No lawn mower you have gravel.. okay weed control? How much do you like pulling weeds? Not specific to homeowners
Pipe breaks call a plumber $300 ...Unless you don't. Again, trivial
Whirlybird squeeks like hell and you climb up on the roof and replace it yourself $60 Trivial
APS breaks your gate to check your power meter. You locked it during a storm so it wouldnt blow around $500 Trivial and highly unlikely
Peeling off the bamboo wallpaper put on in the 70's 10 hours and $50 for the paint to cover the walls Trivial
Dishwashing machine goes because of hard water $500 Never had this happen in 35 years. Not even sure what you're referring to.
Replace the pipes under the sink yourself because they are old and start to leak $30 and an hour of your time. This is something you should be proud of doing.
Replace a front door because the previous owner had someone try to break in and the crack in the door became unreparable
$1500 Paranoid, much?
Cracked foundation-- just level the house and start over I'm assuming you mean tear the whole thing down? I'm facepalming.
Black mold-- just level the house and start over Facepalming again.


This is the true story of what a decade can look like in a house. Be paranioid. Be very paranoid if your house in not brand new and in a known possible disaster zone

Purchasing real estate is definitely a big decision, but sheesh man, c'mon. Not only are most of your points very questionable, you forgot to include the amount of money saved by buying over time rather than renting. It's not your job to sensationalize something needs to be looked at much more objectively.

thd7t

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Re: Real Estate and Climate Change
« Reply #14 on: October 23, 2015, 01:46:11 PM »
A house is a contract for hundreds of thousands of dollars and possibly decades of dedication.  It doesn't have to be hundreds of thousands of dollars? Be paranoid. Be very paranoid. Go in expecting everything to break, at some point it will, because houses require repairs and none of them are cheap. A bit misleading. You need that money set aside and ready. Rent and save and invest conservatively. You will know when you have found the right one.

Example:
New roof $10,000 In 35 years, 3 new roofs haven't cost us over $10k. Who is ripping you off?
Stucco $4,000 You don't generally replace stucco...
Paint for the Stucco $500-1200 Fair enough, if you're extremely picky
New windows because they are recommended for Stucco $2000 ?
New carpet $2000-3000 Don't have carpet? Get the good stuff the first time
Refridgerator $1000 Not specific to homeowners
Washing Machine $500 See above
AC Repairs 1,2, and 3 $400 each Never had an AC problem in 35 years
New AC $6000 See above. Although we did overhaul our system for other reasons
New Waterheater $1000 Had a working water heater for 35 years until we stupidly replaced it thinking it wasn't working right
New Toilet $200 Now you're just getting trivial
Sprinkler repair-- varies, how much do you want to work? Like digging ditches do ya? Not sure how many Mustachians own sprinklers...
Lawn mower-- $200 Not specific to homeowners
No lawn mower you have gravel.. okay weed control? How much do you like pulling weeds? Not specific to homeowners
Pipe breaks call a plumber $300 ...Unless you don't. Again, trivial
Whirlybird squeeks like hell and you climb up on the roof and replace it yourself $60 Trivial
APS breaks your gate to check your power meter. You locked it during a storm so it wouldnt blow around $500 Trivial and highly unlikely
Peeling off the bamboo wallpaper put on in the 70's 10 hours and $50 for the paint to cover the walls Trivial
Dishwashing machine goes because of hard water $500 Never had this happen in 35 years. Not even sure what you're referring to.
Replace the pipes under the sink yourself because they are old and start to leak $30 and an hour of your time. This is something you should be proud of doing.
Replace a front door because the previous owner had someone try to break in and the crack in the door became unreparable
$1500 Paranoid, much?
Cracked foundation-- just level the house and start over I'm assuming you mean tear the whole thing down? I'm facepalming.
Black mold-- just level the house and start over Facepalming again.


This is the true story of what a decade can look like in a house. Be paranioid. Be very paranoid if your house in not brand new and in a known possible disaster zone

Purchasing real estate is definitely a big decision, but sheesh man, c'mon. Not only are most of your points very questionable, you forgot to include the amount of money saved by buying over time rather than renting. It's not your job to sensationalize something needs to be looked at much more objectively.
Mr. P's point is that there are a lot of potential (and potentially expensive) problems that a house can have.  In some cases, he may have exaggerated what the costs might be for a typical mustachian, but your argument that "these things haven't happened to you" isn't a more valid one.  A risk that isn't always considered in home buying is that you (and the inspector) can't see all the potential/looming problems. 

tonysemail

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Re: Real Estate and Climate Change
« Reply #15 on: October 23, 2015, 02:31:13 PM »
a very large hurricane bearing down on mexico today... which makes me think this is a very timely thread indeed!

BlueHouse

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Re: Real Estate and Climate Change
« Reply #16 on: October 24, 2015, 08:14:37 PM »
I live a few blocks from a river and my house is exactly 15 feet above sea level according to The Google.  Yes, I think about it.  But I love my house and the location is great.   It's a four story row house, so I calm myself by imagining replacing the garage and bottom floor with a boat garage (Venice Style).  If that ends up happening, I figure my property will be worth much more. 

Abe

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Re: Real Estate and Climate Change
« Reply #17 on: October 25, 2015, 10:50:46 AM »
I would look at more local issues regarding water allocation (some towns in california don't have any groundwater anymore, for example), flood zones and flood insurance requirements (if large number of people don't have adequate coverage, your insured house will be worthless if the entire neighborhood goes), rather than overall climate change. Hurricane frequencies rise and drop; most decent houses not on the coast should resist them. Few inland cities will have significant flooding from rising water levels in our lifetime as the expected rise is measured in centimeters, not meters.

justkeepswimmin

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Re: Real Estate and Climate Change
« Reply #18 on: October 25, 2015, 03:40:57 PM »
You are completely justified in your concerns. While it may take hundreds of years for say parts of NYC to be underwater, the effects of more and stronger natural disasters can't be ignored. I absolutely take this into account for my strategy and I think others should as well.

Poorman

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Re: Real Estate and Climate Change
« Reply #19 on: October 27, 2015, 06:18:44 PM »
I better inform the city council  climate change is  going to make teh entire  downtown section of  Huntington Beach, CA  will be under water. SMH
ML

Actually, downtown is on higher ground than most of the rest of the city, so you should be ok.

http://ochistorical.blogspot.com/2012/03/huntington-beach-and-1938-flood.html

Poorman

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Re: Real Estate and Climate Change
« Reply #20 on: October 27, 2015, 06:22:24 PM »
What I gather from this thread is there will be some great opportunities for investors willing to swoop in and buy from people fearful of climate change.  This is good to know.

adamcollin

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Re: Real Estate and Climate Change
« Reply #21 on: October 28, 2015, 03:19:52 AM »
Geographic and climatic factors affect the property value to a great extent. However, I would recommend you to get a expert advice before making any decision.

Landslave

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Re: Real Estate and Climate Change
« Reply #22 on: October 29, 2015, 09:11:07 AM »
Geographic and climatic factors affect the property value to a great extent. However, I would recommend you to get a expert advice before making any decision.

AdamCollin, which expert would you seek advice from?  If it is just to have someone read a flood map, it seems anti-mustachian to do so, if it costs money for the consultation.  Would you get advice from someone else?

It is apparent that many places in the country will see 500-year flooding and an appreciable number will continue to see 1000-year flooding.  So, if I were shopping for new investment or residence real estate, I'd probably make sure to get above the 500-year line, at least.  Macro-precipitation events ARE NOT theoretical any longer, they are happening!! 

So, yes, there will be opportunity when the mass realization comes that low-lying properties are vulnerable.  I plan to not get caught in that mix.

Landslave

powskier

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Re: Real Estate and Climate Change
« Reply #23 on: October 29, 2015, 08:27:46 PM »
It is a fair question. Our average winter temperatures have been soaring and we now have very wet falls instead of snow, and heavy rain events in the middle of winter. Even as recently as 10 years ago it was just all snow, all the time. We are routinely breaking rainfall records, drainage is not set up for these "used to be extreme-now common events". It is a problem.
I would factor it in to any subsequent real estate purchase but not enough to make me sell because it is currently outweighed by other factors.

MoonShadow

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Re: Real Estate and Climate Change
« Reply #24 on: October 29, 2015, 08:55:21 PM »
I would consider investing in lakefront property on a Great Lake, because if all the predictions are accurate; the climate of the Great Lakes area should be close to what it currently is around N & S Carolina.  Beautiful summers on the water and mild-ish winters next to a huge heat mass.  Plus, unlike ocean front property, there is no reason to expect the lake levels to rise.

But then, I don't really accept AGW, and half expect the long term warming trend to break within my lifetime.  So the rest of you can go invest in lakefront resort property.