|Type of paper:||Research paper|
|Categories:||Global warming Climate change|
Global warming has negatively affected some industries such as agriculture, coal, and oil. The real estate industry has also been awakened by potential catastrophic risks relating to climate change. Real estate's particularly those established along the vulnerable coastlines are more likely to face the risks arising from rising sea levels and storm-driven floods. The global warming is thus changing the client's perceptions of waterfront real estates and thus influencing the demand and supply (Urbina). This is because the potential clients are demanding to know the actual distance between the real estate and the coastal waterline. Global warming causing rises in sea level has necessitated the need for realtors to buy an insurance policy to protect their properties. Some economists and analysis have therefore identified the need to inform the home buyers about the potential fallout that has been likened to waterfront property market collapse of 2008.
A lot of focus has been placed on the rise in sea level as a major effect of the climate change. Some analysts believe that more focus is supposed to be placed on the potential damages on real estate property as a result of global warming. The value of real estate properties is expected to diminish before the properties go under the water. The property values have already been affected by the nuisance flooding that has the potential to swamp basements and contaminate the groundwater. According to the housing data, home sales have declined by an average of 7.6 percent in flood regions considered to be high-risks in Miami-Dade County. The drop in home sales is recorded despite a national increase in sales by about 2.6%. The situation calls for a balancing act where revenues from the real estate industries are spent on digging run-off tunnels, roads elevation and ponds detention as mitigation measures.
The homeowners and buyers have to incur the rising premium costs of flood insurance. According to the real estate agents, the notable trends indicate a fall in property values as the insurance premium rises, thus hurting the home prices in areas such as Florida, St. Petersburg, Norfolk and Atlantic City. The majority of real estate's are working to provide information to home buyers about the risky flood regions using global warming maps. Different states and real estate agents are solving disclosure issues in different methods (Urbina). For instance, the home buyers must be notified by real estates about the occurrence of potential natural hazards. However, no penalties are implied for non-compliance with such requirements. The failure to report the past damages caused by floods have resulted in flood risks being overlooked, and the buyer has to carry the burden of discovering possibilities of such occurrences.
The property owners, sellers, client's as well as banks and insurers are trying to adapt and estimate the financial implications of global warming and rise in sea levels to the real estate markets. It is quite complicated to determine whether the coastal real estate buddle is likely to deflate or suddenly pop up. Again, the real estate and mortgage markets have not done enough to confront the climatic changes. It is currently estimated that the national flood insurance program has incurred more than $20 billion in debt particularly related to major coastal storms (Urbina). Despite the climate change risk, the majority of people are still considering living in floods prone areas. Many such cities are still growing as indicated by the number of new buildings going up.
Urbina, Ian. "Perils Of Climate Change Could Swamp Coastal Real Estate." Nytimes.Com, 2018, https://www.nytimes.com/2016/11/24/science/global-warming-coastal-real-estate.html. Accessed 9 Aug 2018.
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Essay Sample Describing Perils of Climate Change for the Real Estate Industry. (2022, Jul 14). Retrieved from https://speedypaper.com/essays/essay-sample-describing-perils-of-climate-change-for-the-real-estate-industry
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