Flooding due to climate change-related sea level rising, the erosion of natural barriers and long-periods of rain pose substantial economic risks to Florida, particularly to the value of South Florida real estate, according to two new reports released last week.
Estimates based on past trends suggest that losses from flooding in Florida could devalue exposed homes by $30 billion to $80 billion, or about 15% to 35%, by 2050, according to a report from McKinsey Global Institute.
A separate report from the climate-risk analytics firm Jupiter Intelligence said the percentage of vulnerable oceanfront properties affected by extreme flooding will rise in Miami-Dade County from 5% in 2019 to 98% by 2050.
By 2050, annual flooding damage county-wide in Miami-Dade County is expected to roughly double, leading to shortages in affordable insurance coverage and real estate market instability, according to the Jupiter Intelligence report.
“Ignoring, or underestimating, the actual economic risk posed by moderate flooding is common to other geographies in the U.S. and around the world,” said Rich Sorkin, CEO of Jupiter in a statement. “Almost none of this risk is reflected in prices. Most of this dynamic is not yet understood, nor is it implemented into the decision-making of financial institutions.”