Buyers would rather not try their luck with at-risk property—and that means coastal homes, too. Nearly 1 million homes will be at-risk for chronic flooding due to rising sea levels, according to a University of Pennsylvania research study. From 2013 to 2018, the number of homes sold in the most at-risk for chronic flooding markets dropped between 16% and 20%, reports MarketWatch. And these home sale drops are not due to mortgage lenders. Researchers pointed out that lenders continued to show willingness to hand out home loans, but the buyers were simply not interested.
And in more recent years, the drop in transactions has started to effect the prices that sellers are fetching for their homes. Home prices in both markets rose between 2013 and 2015, but after that point prices in the more-exposed areas began to dip. The researchers noted that this trend matched what occurred in Florida during the housing bust that preceded the Great Recession.
“Falling sales volumes preceded sharp declines in prices,” the researchers wrote in the paper, which was distributed by the National Bureau for Economic Research. “The most natural explanation for this pattern is the shrinking and eventual departure of ‘market optimists’ from the market.”