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Florida's real estate reckoning could be closer than you think

A state built on real estate speculation, whose chief attribute was proximity ... professors from the University of Colorado at Boulder and Pennsylvania State University found that homes exposed to sea-level rise sell at a 7 percent discount compared ...

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Before the storm, Bloomberg reported about the concerns of homeowners, local officials, business executives, and housing lenders that South Florida's real estate downturn could be closer than many people realizeThis month we checked in with some of the people featured in that story, to find out how Irma affected them-and what their experiences augur for the future of the real estate market in Florida and other coastal areas. dhGlobalObj.showArticleBodyAd( 2 ); One of those people is Albert Slap, who would rather not be profiting from other people's misfortuneBut his business, determining the flood risk facing specific homes around South Florida, has never been betterAnd he thanks Irma. "It changed everything for us," Slap, owner of Coastal Risk Consulting, said by phone"As a flood assessment company, it's kind of on fire for us now." What's good for Slap isn't necessarily good for the region's property valuesHis customers include insurance companies worried that federal flood maps underestimate risk, as well as potential homebuyers trying to find out if they're about to buy a house that will be regularly inundated by South Florida's increasingly troublesome tidal flooding. The region's frothy home values, Slap said, have persisted because of what he calls "a dirty little secret" among real estate agents, who are aware of the flood risks but face no requirement to disclose them to buyers. Slap said the increase in his business shows that buyers are starting to become more aware of the problem-and as that happens, housing values will fallAnd he said it's only a matter of time before real estate agents are required by law to reveal those flood risks, noting that the House passed a bill to that effect in 2017The Senate has yet to take it up. dhGlobalObj.showArticleBodyAd( 3 ); The alternative is a housing market kept afloat by "systemic fraudulent nondisclosure," Slap said"Which is pretty much what we have now." Irma left Dan Kipnis' Miami Beach house mostly untouched"I lost three little stick palm trees," Kipnis, chairman of Miami Beach's Marine and Waterfront Protection Authority, said by phone"And one of my papayas fell over." But it's not hurricanes that have Kipnis worried about the local real estate marketRather, it's the seemingly endless construction-elevating roads, installing new stormwater drains, and other projects-designed to lessen the impact of sea-level riseAnd then there are the property taxes required to pay for all that work: Miami Beach's plans are set to cost as much as $500 million. The noise and inconvenience of that work pushed Kipnis to try to sell his houseBut he worries that the same things which make him want to leave are also scaring off buyersAfter 18 months on the market, and despite dropping the price by more than one-third from $3.2 million, Kipnis still hasn't sold his home. "I had a couple look at it yesterday," Kipnis said"They said, 'This is terrific.'" But when the real estate agent mentioned the roadwork, Kipnis said, the couple lost their nerve"They're not going to live here while we spend two years raising the streets." dhGlobalObj.showArticleBodyAd( 4 ); When Jim Cason first became mayor of Coral Gables in 2011, he sometimes felt like a lonely voice, warning about sea-level rise and what it could mean for South Florida's real estate marketHe argued for then-radical ideas, such as the need for cities to set aside money now to pay for the eventual demolition of homes inundated with water and then abandoned. Those concerns no longer make him an outlierCason, who left office in May, attended a regular gathering of South Florida elected officials in Fort Lauderdale in December to talk about the effects of climate changeUnlike previous years, he said, the event this time was "totally sold-out." He said mayors and city managers shared their anxiety about what rising seas mean for their cities' property valuesThose worries range from the mundane-finding more money to update infrastructure damaged by storms-to the existential: How long will banks keep issuing 30-year mortgages? "The hurricane certainly added to that concern," Cason said by phone during a break"That's why so many people are at this conferenceThey just saw it." Cason said rising property taxes driven by infrastructure costs, combined with ever-higher premiums for flood insurance, would "make it much more expensive for people to live along the water." He sounded more philosophical than concerned about that possibility"Maybe," he said, "a lot of them shouldn't be living along the water." #article_video {width:100%;margin:25px 0;max-width:576px;overflow:hidden;} try { _402_Show(); } catch(e) {} Tweet !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)?'http':'https';if(!d.getElementById(id)){js=d.createElement(s);;js.src=p+'://';fjs.parentNode.insertBefore(js,fjs);}}(document, 'script', 'twitter-wjs'); --> This article filed under: Business Commercial Real Estate Residential Real Estate Bloomberg dhGlobalObj.showAd( { 'sizes':[ 300, 250 ], 'pos':'btf', 'module':'article-end' } ); Article Comments () Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacksPeople who harass others or joke about tragedies will be blocked If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment boxTo find our more, read our FAQ. dhGlobalObj.showAd( { 'slug':'Billboard1' } ); dhGlobalObj.showAd( { 'slug':'ArticleTower' } ); dhGlobalObj.showAd( { 'slug':'Sticky' } ); dhGlobalObj.showAd( { 'slug':'Leaderboard2' } ); News Sports Business Entertainment Lifestyle Opinion Follow Us Facebook Twitter Google+ Pinterest LinkedIn YouTube About Us Subscribe | Customer Services | Feedback | Advertise | Jobs at Daily Herald | Terms of Service | Privacy Policy |

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