In case you hadn’t noticed, it’s getting wet out there. Following a record-setting atmospheric river over the weekend, the Bay Area is about to be hit by another 3-5 inches of rain, 40-60 mph winds, and all the mess that comes along with it.
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Last year, the Union of Concerned Scientists issued a report called Underwater: Rising Seas, Chronic Floods, and the Implications for U.S. Coastal Real Estate. Under their worst-case scenario, rising global temperatures and loss of polar ice sheets will result in 1.8 feet of average sea level rise by the year 2045. That puts around 300,000 homes in the United States at risk. At this point, it’s no longer about prevention. It’s about stemming the tide. Read the report here.
As the old saying goes, location is the name of the game in real estate, and that’s especially true here in the Bay Area, with long stretches of ocean and bayfront property constantly in high demand and fetching high prices. But coastal properties selling today could be the victims of flooding and sea level rise related to climate change before the end of a 30-year mortgage agreement. It’s clear from this report that homebuyers understand the risk of going underwater — literally. The question is how you measure the risk against the reward.
Did you know that about 20,000 properties in California alone could face routine flooding within the next generation? You’d think that would be enough to scare buyers away. But we’ve come a long way with technology to mitigate the impacts, like reinforced seawalls and flood control systems, and banks are still willing to finance and insure homes at risk from sea level rise. So the market for coastal properties has remained relatively stable. That could change if floods, fires, and other natural disasters become more regular occurrences.
The average cost of flood insurance in California is $779 per year through the National Flood Insurance Program. But, as you can see from this chart, average premiums can vary significantly by region — and more than 100% among some of the 10 largest cities in the state!
One way is the Natural Hazard Disclosure form that the seller is required by state law to provide in their disclosure package.
You could also look at a map. Find your property using this interactive map of FEMA flood hazard zones.
