Bloomberg News Shows Florida’s Coastal Home Buyers Are Fools

Eric Zuesse

According to Bloomberg News, “When it comes to buying homes on the coast, most Floridians are still optimists. Since the end of 2010, median home prices in and around Miami rose 120 percent.” In other words: they’ve more than doubled. And yet, “Relative sea levels in South Florida are roughly four inches higher now than in 1992. The National Oceanic and Atmospheric Administration predicts sea levels will rise as much as three feet in Miami by 2060.”

And the Mayor of the city of Coral Gables is quoted there as saying that the break-point for real-estate values along Florida’s coast will be “the first time a [boat’s] mast fails to clear the bottom of one of those bridges because the water level had risen too far. ‘These boats are going to be the canary in the mine,’” he said.

Furthermore, “The impact is already being felt in South Florida. Tidal flooding now predictably drenches inland streets, even when the sun is out.” Moreover, “Sean Becketti, the chief economist at Freddie Mac, warned in a report last year of a housing crisis for coastal areas more severe than the Great Recession, one that could spread through banks, insurers and other industries. And, unlike the recession, there’s no hope of a bounce back in property values.” That wasn’t a regular consumer saying this; it was Freddie Mac’s chief economist, a top expert on the matter.

Despite the optimism among the general public regarding those homes (“Since the end of 2010, median home prices in and around Miami rose 120 percent”), insurance risk-assessment professionals are aiming to lead the abandonment of Florida’s coastal properties, selling theirs while the boom for those properties still exists. “‘Nobody thinks it’s coming as fast as it is,’ said Dan Kipnis, the chairman of Miami Beach’s Marine and Waterfront Protection Authority, who has been trying to find a buyer for his home in Miami Beach for almost a year, and has already lowered his asking price twice.” Kipnis “said he doesn’t want to live through all the construction required to keep Miami Beach livable for a few more decades.” He won’t wait until (as the Coral Gables Mayor had put it) “the first time a [boat’s] mast fails to clear the bottom of one of those bridges because the water level had risen too far.” He’s not waiting for that canary to die first.

Thus, too, “Ross Hancock … sold his four-bedroom house in Coral Gables three years ago. He described South Florida’s real estate market as ‘pessimists selling to optimists,’ and said he wanted to cash out while the latter still outnumbered the former. ‘I was just worried about my life’s savings,’ Hancock said.”

The entire Bloomberg News article is here, but those are its highlights.

However, many news-sites reject outright the very idea that the climate is heating up. The basis for that pessimism about coastal-Florida real estate values is being denied by many reporters. For example, the zerohedge site, which is read by many independent investors, bannered on April 19th, “Trump Mulling Reneging on Another Campaign Pledge, Thanks to Ivanka and Jared Kushner” and reported that, “The global warming activist democrats in Trump’s White House, led by Ivanka and Jared Kushner, are trying to convince the President to reneg on yet another campaign pledge, against the advice of Steve Bannon. According to Bloomberg, a pro Paris bloc in his administration, which targets greenhouse emissions, is recruiting energy companies to lobby the President to remain in the controversial agreement that he specifically said was a waste of money during the campaign.” That Bloomberg article was titled, “Exxon, Shell Join Ivanka Trump to Defend Paris Climate Pact”, and reported that, “As President Donald Trump contemplates whether to make good on his campaign promise to yank the United States out of the Paris climate accord, an unlikely lobbying force is hoping to talk him out of it: oil and coal producers. … On the other side are senior adviser Stephen Bannon and Environmental Protection Agency Administrator Scott Pruitt, who on Friday said ‘we need to exit’ the pact. Gas producers and exporters are highlighting the value of the agreement, which could help prod a worldwide move toward that fossil fuel.” (The idea here is that Trump makes his decisions on the basis of lobbyists, instead of any real grassroots constituency, and that his campaign promises such as “to drain the swamp” were simply lies from him, the exact opposite of what he’s now actually delivering as the President. But he has managed to retain most of his voting-base, nonetheless. They believed him that global warming is a hoax. So, he can’t be both honest and permanently retain his existing voter-base. And all that he really tries to please is the lobbyists — the very people whom he had promised he would crush, “drain the swamp” of them. It’s a government of lies, and it guides him; he doesn’t really lead anything.)

Real-estate investors are the bulls-eye of this particular environmental target. If the current long-term trend toward higher temperatures does reverse, despite the increasing carbon-content of our atmosphere, then that reversal would require many decades before it would come to be established by scientists and so to protect Florida’s coastal home-buyers against a 100% loss of their houses’ values. But if the current long-term trend instead continues, as the long-term impact that increasing atmospheric carbon will have becomes only more clear with each passing year — i.e., if “the greenhouse effect” is real — then the collapse in those real-estate values could start at any time, and any guessing now, as to precisely when the canary will die, would be only a fool’s game. Consequently, any current owner of Florida-coastal real estate there who is not placing his or her property onto the market as soon as possible, is inviting a total loss of that value, and only a fool would willingly do such a thing. Anyone other than a fool, would instead be looking for someone who still is an “optimist.”

Sometimes, “the free market” is dependent upon finding ignoramuses, dupes, people of sheer faith, and other individuals who — due to their misfortune from thus holding onto the false beliefs that they had been given — don’t know as much as you do. At other times, it depends upon people who know more than you do, finding you, to sell to. At any given time, any given person could be on either side of that process; and, the result, as to which side one was on in a given trade, can never be known until after the trade is done, which could happen sooner, or later — and which, for the loser in that, might better be known only after this person is already dead and thus protected from ever knowing that the wrong decision had been made.

Whereas, for some people, “ignorance is bliss,” others prefer to know. They want to know, because (more often than not) an ignorant bliss soon becomes followed by a far longer-lasting non-bliss. This way, the economy actually depends upon the few who know, taking advantage of the many who don’t. This is just a fact about real-world economics. And it provides an opportunity for the few homeowners on Florida’s coast, to take advantage of the many individuals who, simply, don’t yet know. Because, after that canary is dead, will be too late to sell, at all. They’ll just be stuck, with that lot of garbage. Continuing to wait for the peak in this market is clearly a fool’s game, at the present stage. It’s more like Russian roulette, than like any sort of intelligent business decision. Some might find it thrilling, but most will find it simply depressing, and they’ll want to get out of it ASAP, now that they know.

Jonathan Marshall headlined on March 5th at Consortium News, “Global Warming’s Threat to Trump’s Mar-a-Lago”, and he reported: “There’s a reason – besides escaping the rising rancor of Washington – that it made sense for President Trump to hop on Air Force One and visit his Mar-a-Lago club in Palm Beach, Florida, three times during his first five weeks in office: he needs to enjoy it while he can. If global warming continues apace, in just 30 years, its ritzy grounds will be flooded most of the year due to rising sea levels, according to an analysis by Coastal Risk Consulting.”

This President has a large personal gamble against the reality of global warming. Nobody can say that he’s not drinking his own Kool Aid on the global-warming issue. But if he continues to do this, instead of to sell that resort to others who have even more faith in this old (and now-discarded) fossil-fuels Kool Aid than he does, then the entire world will be in for some very deep trouble, from a man who refuses to think scientifically about matters. Trump thinks he knows about real estate, but does he think that he’s infallible about it? Is he downright stupid? If he’s not, then perhaps as a sheer personal business-decision, he will intensify (instead of cut back, as he had promised) the global effort against global burning. Having a conscience, and caring about the type of world that his grandchildren will be living in, won’t even be necessary on this issue, if he’s at all intelligent. Maybe his CIA will even tell him that it’s a “slam-dunk,” so as to keep his base voters with him. After all, George W. Bush retained his base voters, and they’re remarkably similar. But, anyway, for Trump, this isn’t only politics; it is also personal business. And he is supposed to be a “business” man — and no mere fool.

For any investment, it’s better to sell near the peak, than not to be able to sell at all.

—————

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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  • kimyo

    Slowing sea level rise

    Sea level rise has been one of the clearest signs of climate change – water expands as it warms and parts of Greenland and Antarctica are thawing, along with glaciers from the Himalayas to the Alps.

    But in a puzzle to climate scientists, the rate slowed to 2.4 millimetres (0.09 inch) a year from 2003 to 2011 from 3.4 mm from 1994-2002, heartening sceptics who doubt that deep cuts are needed in mankind’s rising greenhouse gas emissions.

    The subtle origins of surface-warming hiatuses

    During the first decade of the twenty-first century, the Earth’s surface warmed more slowly than climate models simulated1. This surface-warming hiatus is attributed by some studies to model errors in external forcing2, 3, 4, while others point to heat rearrangements in the ocean5, 6, 7, 8, 9, 10 caused by internal variability, the timing of which cannot be predicted by the models1. However, observational analyses disagree about which ocean region is responsible11, 12, 13, 14, 15, 16. Here we show that the hiatus could also have been caused by internal variability in the top-of-atmosphere energy imbalance

    ‘could’ ≠ ‘settled science’.

  • Marko

    “…Relative sea levels in South Florida are roughly four inches higher now than in 1992.”

    I’m no expert on S.Florida sea levels , but I’d be willing to bet that of that four inches , the majority is not due to sea levels rising but rather to land sinking. Still a problem , no doubt , but this is exactly the kind of writing that the denialists point to and say ” See , they’re trying to deceive you !”

    When talking about sea levels rising and the associated coastal impacts , climate activists should be diligent about addressing the specifics on both sea level rise and land subsidence , so as to avoid the inevitable pushback from the deniers.

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  • Dr Mindbender

    Mankind is polluting the planet. The Oceans have become sess-pools of toxic and nuclear waste. Animals are dying and some soon to become extinct. There is plenty to be concerned about environmentally, but there will never be anything done about it because the corporations responsible will never take responsibility. I will not, as a taxpayer, pay for the mess they made. The responsibility for the pollution problems are the responsibility of the governments and corporations in collusion. The people cannot afford any more tax.

    So many worthless EPA laws, so many designed for profit, and exempt, corporate entitles that it is laughable to even speak about the environment as if it is a catastrophe pending. Earth should fight back, good, and I am totally in support of that, but to think that mankind will clean up his mess is to be in a lower bracket than the greedy pigs who made the mess. No, they will try and make the people pay and it will go into their pockets!

    All global warming BS is BS designed -by the polluters- ( corporate governments) to try and pick the peoples pockets yet again.

    NO.

    All beachfront property is risky, Insurance solves that Risk.
    Now, what you should be concerned about is the criminal levels of speculation and inflation in the general housing market. Homes are up over 100-percent in less than a decade in some areas and this is nothing short of criminal.