House Price Trends in Coastal US Cities

Abstract

Coastal location is both an amenity adding to the value of a property, and at the same time a hazard detracting from its value. Several recent studies of house price trends in flood-prone coastal portions of the United States in general, or Florida specifically, have yielded different conclusions: some have identified a price discount for coastal property that is attributed to the vulnerability to sea-level rise while others have found no such effect. Flood insurance, which has become increasingly costly in the last decade, is mandatory for homebuyers seeking mortgage financing for properties in the areas designated by FEMA of having at least a 1% annual chance of flooding. This addition to the cost of homeownership could increase prices and reduce demand for properties in these locations.