Critical Threat to South Florida’s Strong Real Estate Market
South Florida’s real estate market has been booming, leading many budding entrepreneurs and seasoned commercial real estate agents to flock to the area. However, there is one lurking risk many fail to take into consideration before investing in South Florida: the rising seas. Real estate is at risk of sinking below sea level the further south developers go into the state.
Hurricanes, Rising Sea Levels, and Other Threats to South Florida
With extreme weather conditions and rapidly rising seas, the South Florida commercial real estate market has unique risks that real estate investors need to account for. Commercial real estate plays a significant role in South Florida’s economy, but several elements make it a turbulent market:
- South Florida has a well-documented history of boom and bust real estate cycles, the most recent and notable of which was the 2008 mortgage crisis
- Seven significant hurricanes (category 3 and up) have hammered the Florida coasts since 2000
- Since 2000, hurricanes have caused 225 direct deaths in Florida and 91 indirect deaths
- Experts predict that South Florida sea levels will rise up to two feet by 2060, putting more than $14 billion worth of real estate at very real risk of submersion
Even with these factors, it doesn’t mean investors have to pull out of a still-lucrative market. Real estate agents livelihood is dependent on demand, and South Florida is still booming. To limit their exposure, commercial real estate investors should begin shifting their assets to spread load their risk. For example, investors that keep half of their properties out of vulnerable areas will be able to financially withstand extreme weather affecting their South Florida properties.
The experts at MMA Florida know the risks of a changing climate and severe weather systems affecting the state. Contact us to learn how we can help you protect your Florida real estate investments.