Sea Level Rise, Homeownership, and Residential Real Estate Markets in South Florida

This article builds on a small but rapidly growing body of research that seeks to determine the impact of sea level rise on the pricing of residential properties. Through a spatial hedonic regression analysis of real estate markets in two Florida counties (Miami-Dade and Pinellas), we assess the influence of different exposure levels on market discounts. Our article stands out in terms of its focus on two comparative case studies and its differentiation between properties that are primary homes versus nonprimary homes. We find that generally discounts are positively associated with exposure levels and overall Miami-Dade experiences higher discounts than Pinellas due to the former's lower average elevations. We also observe different market behaviors of primary versus nonprimary home buyers and these are partially dependent on affluence. In Miami-Dade, price discounts are less for highly priced properties purchased by nonprimary owners. We attribute this to different buying motives and risk tolerance of affluent nonprimary homeowners. We argue that nonprimary ownership, particularly in high-end waterfront residential real estate, is tempering gradual market adaptation to sea level rise exposure risk, which could have detrimental longer-term consequences in terms of market volatility.

Automated summary

This article explores the impact of sea level rise on residential property pricing in Florida, particularly focusing on market discounts in two counties. It finds that discounts are generally positively associated with exposure levels, with differences between primary and nonprimary home buyers, especially in terms of wealth. The study suggests that affluent nonprimary homeowners' different buying motivations and risk tolerance may be affecting the market's adaptation to sea level rise exposure risk.