Just how do you shop for real estate in Miami? The world’s ninth most vulnerable city when it comes to sea level rise has been magnetizing real estate developers and and starry-eyed homeowners for decades. But these days most of us would be just a bit wary of snatching up one of those multi-million-dollar deals without asking a key question: “How’s the tides around here these days?”
But that’s exactly what potential homeowners seem a little reluctant to ask when faced with a potential buy. Maybe it’s the prospect of bad news, knowing that Miami is sinking. Why ask about something that seems far off?
And that may be why, according to a Miami Herald survey, 64 percent of realtors in the Miami area say their clients don’t ask whether climate change or sea level rise will affect the house they are looking to buy.
The research, which was conducted by Bendixen & Amandi International, surveyed the opinions of 100 realtors from the Miami-Dade area who had direct experience in South Florida areas like the upper-end at risk neighborhoods of Miami Beach and Brickell.
Surprisingly, it was those areas that sat closest to eventual flooding that clients were clamoring to snatch up.
And it wasn’t because the real estate agents who were leading the search were unfamiliar with climate change risks in the area, either. When asked whether they were concerned about the potential impact of climate change and sea level rise on the local market, 59 percent of realtors said they were very concerned.
More than a quarter of the agents said more educational content about buying and selling in the local market was needed. The majority of the respondents also said buyers weren’t doing enough due-diligence when it came to assessing the property before they bought.
Sellers also had unrealistic expectations. A full 50 percent said sellers were overpricing their real estate and having unrealistic expectations.
Those statistics, combined with the criticism that fellow realtors were being “unprofessional” or offering bad advice/judgment (aggregate score: 56 percent) underscored the fact that buyers might not be getting enough information about the risks of buying Miami coastal property.
Yet agents resoundingly said that if they were in the market to buy, Brickell and Miami Beach would be the last places they would go property-hunting.
Miami’s eternal optimism
The survey didn’t explain why buyers weren’t considering climate change as a risk factor, but an article by a Miami local Mario Ariza may shed a bit of light on the thinking behind the real estate craze.
Ariza admits that even he wants to stay in “Magic City.” He’s well aware that Miami is in for challenging times in the next few decades and that “climate change has me thinking twice about purchasing property.”
“I’ve made up my mind to settle down here,” Ariza said as he segued into “How to buy a home in Miami, the sinking city,” drawing attention to the fact that by 2030, Miami is supposed to see 380 high-tide events a year. “Which is just around the time I’ll probably finish paying the mortgage,” he jokes.
It’s that kind of cocky, optimistic (and many would say short-sighted) view that prevails on Florida’s most endangered coastline and as he points out, it rises all the way to city hall. As Jane Gilbert, Miami’s resiliency manager points out, owning a home in an area ripe for a 100-year flood that’s already listed on the Federal Emergency Management Agency (FEMA) map isn’t necessarily a deterrent toward buying, it’s good information to have while you are checking out its elevation certificate. That certificate is important, as it tells the buyer that the property is for now, above sea level.
And it is contractors who still see profit to be gained in promoting a front-row property that is expected to disappear who contribute to the optimism, too. They see Miami’s future in relation to real estate cycles, not sea level inches and future property values.
It’s a short-range point of view that Miami Herald’s survey also underscores. Areas like Miami Beach and Brickell have been gaining, not decreasing in value and density in recent years. People want a piece of that soon-to-be-gone living experience.
The survey highlighted one other interesting tidbit of information about the city’s buying craze: Realtors’ jaundiced views about local governance.
Forty-three percent of respondents said “no” when asked if they felt Miami-Dade County government was taking a leadership role, opposed to 42 percent that said yes and 13 percent that didn’t know or didn’t answer.
The division was even starker when it came to determining whether the local government was an obstacle or a facilitator to doing business in the real estate market. Forty-six percent said it was an obstacle, 34 percent said facilitator, 10 percent said both, and 8 percent said neither. Yet 80 percent said that the local government played an essential role in ensuring a vibrant market that enhanced property values.
And, as Ariza points out, Miami’s real estate market it isn’t just dependent upon whether the city and county resiliency managers do their jobs, but whether that optimism matches up with the more pragmatic views of insurance companies. It’s the reinsurance companies, Ariza astutely points out, that have the power to pull the plug on mortgage funding when they think their own investments are in danger.
Still, to the condo shopper looking for that once-in-a-lifetime home, now doesn’t seem to be the time for asking deep questions about the future of a sinking coastline.
They know full well there may never be a view like that again, and the cost of inflated real estate is worth being able to say they owned a tiny part of it — even if they may not be able to recoup their investment.
Flickr image: Ines Hegedus-Garcia