Risk grows as sea levels rise, however property values along coastlines seem to grow as well. As we can see, climate change and natural disasters are only starting to get worse. Now more than ever, is it a good time to invest inland, away from the edge of the coast.
Almost every year, there is some worrisome news about forest fires, floods and tsunamis destroying cities. The year 2023 has seen some pretty crazy things happen because of climate change. Oregon burning down due to wildfires, Texas freezing over, and Florida being hit with three major hurricanes back-to-back-to-back. According to a 2022 report by the US Environment Protection Agency, coastal flooding has become more frequent along the US coastline.
The question is, what will happen in the long run? That’s hard to predict, especially as a layperson. But what we should know, as real estate investors, is where to put our money. Coastal cities are prone to flooding and storm damage which will eventually hurt properties located there. This is why people are looking towards other options that offer less risk.
Rising sea levels also make it increasingly difficult for insurance providers to insure homes located in these areas at affordable rates. If you’re currently living near a coastline, you know very well, the importance of an insurance policy!
New Developments Sparked By Coastal Residents
As attention turns away from vulnerable coastlines, inland regions are coming into focus as promising frontiers for real estate investment. These areas are generally less exposed to the immediate impacts of climate change, such as rising sea levels and hurricanes.
Moreover, inland locations offer an array of benefits, including more affordable land prices, untapped market potential and the opportunity for pioneering sustainable development projects. The narrative is shifting from the once sought-after coastal living to a prudent, strategic inland investment approach.
Emerging Trends in Inland Real Estate Investment
Inland real estate is attracting a lot of attention lately. What makes it so attractive is that it’s often cheaper than trying to buy a property in ocean-side cities where the demand never rests. Combine this with consumers now wanting to live somewhere that’s safe and sustainable, and you have an environment for innovation.
Different kinds of properties like commercial, residential and mixed use, are popping up in suburban inland locations. With remote work becoming more popular, the need for housing near city centers has dwindled down. So even if there isn’t much going on around the area right now, investors are still buying properties knowing they can convert them to something else later.
Eco-friendly Development Projects
Most of us know how important it is to keep our environment clean and healthy. Still, many people don’t act like it’s true. Thankfully there are organizations that are building structures that prioritize energy efficiency, low carbon footprints, all while using materials that leave little to no harmful impact on our environment.
The goal here is not only to help make the Earth greener but also save long-term costs for those living in these neighborhoods. Green development initiatives are typically focused on single buildings or projects, but sometimes businesses go bigger than that, targeting entire communities from the start. Smart homes outfitted with water conservation systems and waste reduction plans are designed to be eco-friendly from the inside out.
Another appealing factor for inland real estate is its ability to withstand extreme weather events. Some areas get flooded every year while others are affected by heat and combustion of harmful gases. We all know what it’s like to burn our legs on metal seats at a stadium during the summer. Urban planning ensures these areas use materials that will last and have ways for people to stay safe if something does happen.
Climate migration
When the challenges brought on by climate change become too much for people, they usually tend to move to places with a better quality of life. This results in population changes across the globe and directly impacts property markets.
In places where people migrate in large numbers, the first thing owners notice is demand goes up which leads to higher prices. But there’s also more underlying issues like overpopulation, not enough resources for everyone that moved in, etc.
Companies struggle with accommodating new residents because most don’t plan ahead. They don’t expect relocation of entire business units because of climate change and extreme weather. What could have prevented this? Yes, prior planning and research.
These obstacles can only be navigated by discovering solutions internationally, then addressing why people had to leave their homes, and ensuring they won’t have those same problems again somewhere else. Data shows that cities least affected by climate change have gained population recently – leading to increased economic activity.
Finding success in a competitive market
Unique selling point
The demand for climate-resilient properties is growing. Developers have already found success by doing what we just mentioned. Investing in inland real estate offers people many things like a safe place to live, cleaner air, and opportunity to integrate themselves into an existing community. These are all extremely important factors that investors should highlight when selling their product.
It’s also crucial to show the economic benefits associated with living in resilient structures. Potential tax benefits and lower insurance premiums are good places to start. By combining these arguments with the emotional appeal of “safety” and “sustainability,” sales numbers should increase.
Selling inland real estate successfully requires some serious research into how your consumers think. What they want is safety and long term sustainability of their properties. So when you advertise your property, make sure you highlight these aspects. Talk about eco-friendly living and risk management.
Here’s what you can do to follow up on those promises.
– Proactive measures taken in planning/developing properties
– Cleaner air
– Accessible green spaces
– More robust community planning
Research through credible sources
Government agencies or organizations that specialize in climate resilience and disaster risk management (like FEMA in the U.S. or the UNDRR globally) are crucial resources for comprehensive data, reports, risk assessments on areas vulnerable to various natural hazards.
Along with government data, consulting academic research papers, industry reports from reputable organizations like IPCC, or utilizing interactive mapping tools such as NOAA’s Sea Level Rise Viewer can offer invaluable insights into climate-related risks specific to different geographic locations.
Engaging with local experts including urban planners, environmental scientists, and insurance professionals can also provide nuanced perspectives on the potential impacts of climate change on real estate investments in specific regions.
As the real estate landscape continues to evolve under the influence of climate change, inland regions present a strategic opportunity for investors. By understanding the shift in consumer preference and recognizing the potential for growth in these areas, investors can make informed decisions that align with both their financial goals and environmental values.
The convergence of sustainability, safety and economic viability positions inland real estate as a wise choice for those looking to adapt to the realities of our changing world. With thoughtful investment and development strategies, the inland opportunity can be a bastion of stability in an uncertain climate future.
