New York, or Kansas City? Miami, or Denver? With the mantra “location, location, location” always relevant to considerations of real estate investment, will climate change cause existing real estate market darlings to fall out of favor? Are concerns about the effects of climate change likely to drive investment away from US coastal hot spots and into the interior? A recent article in Forbes indicates that climate change will force a reckoning in the real estate market that will ripple across both residential and commercial real estate portfolios affecting owners, investors and lenders alike. Rather than seeking out oceanfront property, in future people will want to own a slice of heaven in a nice landlocked community and the more landlocked (and higher) the better! In the January 27 article “These Are The Cities Most People Will Move To From Sea-Level Rise,” the following cities are cited as beneficiaries from migration away from US coastal areas: Atlanta, Houston, Dallas, Denver, Las Vegas, and Austin. Whether these cities actually benefit from climate change migration remains to be seen, and some of these cities may themselves experience climate-related issues affecting their desirability (for example, higher ambient temperatures in the southern and desert regions of the US, and coastal storm threats, could drastically affect the livability of many of the cities cited in the article). Nonetheless, it is worth focusing on the basic premise of the article–climate change will significantly alter the thinking about where it is prudent to buy and invest in real estate. At this moment, it may be almost unthinkable that great US cities such as Miami and New York (which are on the list of the top 20 cities projected to experience the most significant losses due to climate change) may eventually go the way of Atlantis, but for the investor it is not premature to continuously consider these issues and evaluate one’s portfolio accordingly.
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