“A smooth sea never made a skillful sailor,” according to Franklin D. Roosevelt, but rising seas may make a poorer homeowner, according to New York-based First Street Foundation. The nonprofit released a report on Tuesday speculating that rising seas are hitting New England property values with hurricane force. In fact, the report states the New England home values have dropped more than $400 million due to tidal flooding and rising sea levels.
According to the Boston Globe, the report estimates that the value of homes in Massachusetts alone has potentially eroded by $273 million since 2005, with the biggest impact occurring in low-lying parts of coastal towns such as Salisbury and Barnstable.
“Increased tidal flooding leads to a loss in home value appreciation. As sea level rise accelerates, we expect the corresponding loss in relative home value to accelerate as well,” said Jeremy Porter, a consultant to First Street.
Is it time for you to sell now before the worst is yet to come? Alternatively, is it time for buyers to take advantage of the depreciated values?
Consider this example from First Street’s report: a triple-decker unit on Marginal Street in East Boston is being valued at $374K today. Had it not been for sea level impact, First Street estimates the property would be valued at $800K. If you’re a buyer who is open to risk, grab a life vest and head to the closing!
Now, there is some hopeful news. The study states that if cities can act now, coastal properties may be sheltered from some of the projected risk. In Boston, Mayor Marty Walsh is already pursuing “Climate Ready Boston” to help plan how to proactively defend waterfront neighborhoods. Back to the example on Marginal Street, new developments in this area are now being designed to prevent flooding, and that could actually increase property values, according to the Globe.
No matter what, homebuyers are drawn to the ocean. We don’t see that changing. Bank of England Mortgage can help put together the right lending package based on current appraised value and provide guidance on possible refinancing options in the future if need be. Contact us.