As a University of Miami doctoral student studying climate change, Mayra Cruz knew more than most about the risks of sea rise and wetter storms and hurricanes.
So when she and her husband bought their first home in 2021, they picked inland Miami Springs and bought federal flood insurance. They felt good, learning the only previous claim had come long ago, after Hurricane Andrew.
Then three storms in three years sloshed 18 inches of water into their backyard. And when the city posted a warning about flooding on Instagram, it used pictures of her impassable street.
Last summer, the couple decided to sell because of the repeated flooding. They wrote a “crystal clear” disclosure: the home escaped damage, but water got unnervingly close. Cruz worried if anyone would buy it. “My Realtor said it would still sell. I asked ‘Are you sure?’ I wouldn’t buy this house knowing what I know.”
They got an offer almost immediately, selling for nearly $250,000 more than they paid for it.
It’s a paradox of South Florida’s super-heated real estate market: When homeowners like Cruz move out because of growing flood risks, somebody else always seems willing to move in — and often at a much higher price.
“Our housing value almost doubled in that time,” Cruz said. “That’s absolutely insane. Our house should not have been worth that much.”
The value of her home and thousands of others in Florida have been buoyed at least in part by what some experts call a climate denial bubble. A wave of reports in the last five years has pegged the size of the bubble in the billions and suggested a correction is looming, potentially a major one. It has yet to come.
In 2020, the consulting firm McKinsey predicted coastal home values could drop by as much as 15 percent by 2030 as flood risks from sea rise, hurricanes and more intense thunderstorms are factored in. Another paper the same year found that Miami-Dade County was the most overvalued county in the nation — about $3.5 billion higher than it should be because of flood risks. One recent report estimated that real estate statewide was overvalued by $50 billion based on flood risks alone.
As part of a continuing series investigating flood risks, the Herald consulted more than a dozen economists, academics and real estate professionals on when, how or even if the increasing threat will impact cost and demand.
While some see signs that frequent hurricane strikes and associated skyrocketing insurance costs may be finally cooling things off, the South Florida real estate market, in particular, has so far remained remarkably resilient to flood risks – more resilient than many of the actual homes.
One veteran analyst agreed to chart home sales for the Herald in four South Florida neighborhoods that experienced extreme flooding events in the last decade. She found property values increased after every disaster – sometimes dramatically. They even continued rising in a Key Largo neighborhood that remained flooded for 90 straight days.
Keep up with Tampa Bay’s top headlines
Subscribe to our free DayStarter newsletter
We’ll deliver the latest news and information you need to know every morning.
You’re all signed up!
Want more of our free, weekly newsletters in your inbox? Let’s get started.
Explore all your options
So, despite dire warnings from environmentalists and some economists, the South Florida real estate industry looks at the numbers and doesn’t see evidence of a bubble ready to burst. Rafael Corrales, a senior Redfin agent in Miami, acknowledges hearing more questions about flooding but says it’s not a deal-breaker for most buyers. Yet.
“It’s all fun and games until it’s not,’’ Corrales said, “and that’s what we’re all bracing for, God forbid, as residents of South Florida.”
A slow leaking bubble?
Most experts the Herald spoke to don’t expect a sudden nosedive in home values from flood or climate change threats. When it comes, they say, it may be more of a slow leak from the denial bubble.
“The short version is that it’s true that we should expect house prices to decline, but this is one of those instances where the long run may still be a long way off,” said Ben Keys, a real estate professor at the Wharton School of the University of Pennsylvania who’s published research on sea level rise and property value.
Keys points out what anyone who has shopped for an apartment in South Florida knows. Rents remain high, even in the spots where flooding is already a problem, like sections of Little Havana. That’s a sign that the benefits of finding a place to live in a market with a shortage of affordable housing still outweigh the costs of living here — even with the chance of financially ruinous floods.
“I think it’s going to be a very gradual process. I don’t think it’s a tipping point,” he said. “Housing markets are very durable assets. Things that affect house values move very slowly.”
Home sale data from South Florida backs him up. The market is still relatively hot, even in the South Florida spots most vulnerable to flooding. Despite a slight sales slowdown in recent months, home values are still creeping upward. Many factors have driven the market up in recent years, including a pandemic-era buying frenzy and an influx of northern residents. But so far, climate and flood risk have yet to make a visible mark.
That’s underlined by a custom analysis of home sales in some of the most infamously flooded spots in South Florida, conducted by Ana Bozovic of Analytics Miami for the Miami Herald.
Bozovic, a Miami-based realtor and real estate analyst who consults with prominent Miami developers, examined single-family home sales in four communities that experienced headline-making flooding in recent years. In all four, her findings were the same. Prices rose in the wake of flood disasters.
“If I were to guess, OK, an area got a lot of bad press, one may assume that would lead to a decrease in demand,” she said. “But that was not the case.”
In the Stillwright Point neighborhood in Key Largo in the Florida Keys, residents endured 90 days straight of flooded streets in October 2019, with water levels pushed up by hurricanes and unusually high tides. It was so deep that police couldn’t patrol, and delivery drivers couldn’t reach homes. The saga became a national news story.
In the months following, plenty of residents put homes up for sale. Despite the publicity and the flooding problem, year-over-year sales rose by 40%, and so did the median sale price — by $20,000. Six years later, the roads have yet to be fixed, although a project is in the works. Now, the median sales price for a single-family home in that neighborhood is almost $200,000 higher.
In Miami’s Little Havana, where another rainstorm swamped homes and apartments in June 2022, the same story played out. Bozovic found the median price for homes sold in the floodprone neighborhood rose $20,000 the following year, to $655,000.
In Fort Lauderdale’s Edgewood, ground zero of a “biblical rain bomb” in April 2023 that swamped hundreds of homes, flooded major downtown streets and inundated runways at Fort Lauderdale-Hollywood International Airport, the results were similar: a $15,000 jump in median price for single-family homes the year after the flood.
In the Shorecrest neighborhood in Miami, Hurricane Irma inundated pricey coastal homes in September 2017. The next year, the median sale price jumped $60,000.
Those catastrophic floods — which left some residents in financial ruins or sparked multimillion-dollar government drainage projects — aren’t even visible blips in the sales data, Bozovic said.
“If people really want to be in a region, they’re willing to overlook things like this. Six months later, it’s like it never happened,” said Bozovic. “People have short memories.”
A 2022 study looking at pre-pandemic values shows the same trend going back decades. The report, by several researchers, including one from the U.S. Government Accountability Office, looked at Florida from 2000 to 2016 and found that home prices in hard-hit parts of the state actually bumped up in the immediate aftermath of a storm — about 5% — because people were desperate for housing. After three years, things even out.
Why no impact?
Despite a string of dire or damaging predictions for South Florida’s future, sea rise-induced flooding still does not appear to be a major factor for real estate purchases, according to the Miami Association of Realtors, which surveys brokers annually on their clients’ top concerns.
As of 2021, flooding resilience ranked 14th out of 20 buyer concerns. More pressing concerns sit at the top of their list: affordability, proximity to work, quality of schools and neighborhoods and other family-related issues.
Julia Poliadis, with ONE Sotheby’s Realty in Miami, said she’s had plenty of clients ask about flooding, particularly from out of state. But many don’t plan to hold onto homes for decades when the worst is expected to come. To Poliadis, and many of her clients, the idea of seas reclaiming low-lying Miami neighborhoods feels very far away.
“At least not in my lifetime. I don’t see it being a huge concern. I don’t see those predictions that they’re showing. I think that’s in the long run,” she said. “I don’t think we’re going to see South Florida underwater for a very long time.”
With increasingly wet hurricanes and storms, South Florida’s flooding threat isn’t confined to the coast as this November 2023 scene from Hialeah shows. That’s debris, not a fish, swirling around an overwhelmed storm drain. Pedro Portal
The view that significant threats are far in the future is common. Risa Palm, a Georgia State University professor of urban geography, surveyed nearly 700 South Florida real estate agents and found that while most understood sea level rise was a big risk, they saw no dampening of desire for coastal real estate.
“I had a grad student working on this project, and she wanted to ask the real estate agent what it looks like 20 years out and they laughed at us,” Palm said. “Who looks 20 years out? Nobody does.”
Well, not nobody.
Researchers and economists crunching long-term risk data may think the price for a ground-floor home on a canal is too high. But in the market, all that matters is that some buyer is willing to pay that price.
“Property values are a weird indicator because they’re set by one person,” said Miyuki Hino, a researcher at the University of North Carolina-Chapel Hill whose 2020 paper found Miami-Dade was the most overvalued county in the U.S.
Key, the Wharton professor, echoed that. Florida has been raked by hurricanes over the years, but the lure of the coastal lifestyle remains powerful. “As long as there are people out there willing to pay a fortune to live by a beach, there will be a market for it.”
Despite science showing that rising tides will reach front doors in a matter of decades, many people who making their living buying and selling property downplay warnings of a potential market crash due to increasing climate change impacts.
“History is full of the powers that be, of professors, of politicians, being horribly wrong about things,” said Bozovic, a skeptic that climate concerns will roil the market — a view echoed by many real estate pros. “I’m always wary of politicized data and professors with no skin in the game.”
There are those on the other end of the spectrum, however, who see a potentially dark future, one that could emerge slowly in coming decades or perhaps suddenly triggered by a major hurricane strike in the most populated areas of Florida, where billions in real estate are at risk.
Some experts — ones that some in the real estate industry liken to Chicken Little — worry the spiraling impacts could mirror the 2008 real estate crash, with property values plunging along with the tax revenues that make local governments run. This time, the downward spiral could be supercharged by already skyrocketing insurance rates.
U.S. Sen. Sheldon Whitehouse, a Rhode Island Democrat, took a deep dive into overvaluation of property values across the country, including Florida, when he was chair of the Senate Budget Committee in 2024.
In an interview with the Herald, he said he was worried that insurance companies and steeply climbing rates will be the first domino that leads to a “systemic” collapse of property values, the federal mortgage companies backing them and maybe even some banks.
That’s what he’s heard from the chief economist for federal mortgage giant Freddie Mac.
“His estimate was that, just for coastal property values crashing, is a sufficient economic shock to do to the U.S. economy how the 2008 mortgage meltdown went. That was his model for when this ends,” Whitehouse said. “It was pretty damned grim.”
More ‘climate attention’
While many real estate experts and buyers still see climate-driven floods as too far off to worry about, a growing body of research suggests fewer buyers have their heads in the sand on flooding and sea rise risks.
Popular real estate websites like Zillow and Redfin began to feature flooding and other climate risks prominently beginning in 2020. Some internal research suggests it’s making a difference. A Redfin study in 2022 found buyers provided information are more likely to choose a home with a lower flood risk over homes with a “severe” or “extreme” level — although they still see “moderate” risk as a gamble worth taking.
But as the tides inch higher and flooding becomes more common, more builders and home buyers are also starting to seek elevated land along Miami’s ancient limestone ridge — and sometimes emphasizing it as a selling point.
Johannes Stroebel, a professor of finance at the New York University Stern School of Business, analyzed how often phrases like “high and dry” or “not in a flood zone” appeared in the text descriptions alongside properties listed on Zillow over several years.
His research found that after a flood, ads prominently feature the safety of a property. But a few years later, with no recent floods, those same properties would go on the market highlighting other selling points instead.
Stroebel calls it “climate attention.” When there’s attention on actual flooding, properties exposed to it see a relative drop in value. When it disappear, people pay less attention and the value rises right back up again.
“It certainly shows that climate risk is priced in the real estate market,” he said.
On Gulf Coast, a turning tide?
After a string of hurricane strikes on Florida’s Gulf Coast, there are signs in some markets that climate attention isn’t fading as fast.
Shore Acres, a beautiful but flood-prone neighborhood in St. Petersburg, will be one of Florida’s latest tests of the power of climate denial.
Walloped by both hurricanes Helene and Milton last year, prices for many homes have plunged to “land value” or other steep declines in recent months. Zillow’s Zestimate for one flood-damaged home in Shore Acres, for one example, shows a 37 percent decline from September when Helene’s storm surge plowed ashore.
Dozens of Shore Acres homes for sale tout themselves as an “excellent opportunity to build a new home” with interior images of gutted homes missing the bottom half of their drywall. Some ads are already appealing to buyers to forget what happened, suggesting it was a rarity already in the past.
“While the home experienced flooding during Hurricane Helene, it was the first time it had in 60 years,” read one pitch.
If history holds, the buyers will return, probably building bigger and more expensive homes. But perhaps the Gulf Coast damage, combined with soaring insurance, will prove a pivot point on property values.
When Elijah de la Campa, a senior economist with Redfin, looks at where people are moving to and from in the U.S., he sees indications of a slow, subtle shift away from the riskiest spots. While more people moved into flood-prone areas of Florida than out of them in 2023, de la Campa’s research found the reverse for the first time in Miami-Dade County.
Climate risk likely isn’t the biggest driver of that shift. Miami-Dade is a notoriously expensive place to live. Other equally flood-prone communities in Florida, like Tampa Bay and Naples, saw a net inflow of new residents. But, de le Campa noted, the population growth in both areas did slow from 2022 to 2023.
“I would argue people are becoming more responsive to climate risk and it could be the start of something,” he said. “Perhaps the tides are shifting.”
This series is part of the Pulitzer Center’s nationwide Connected Coastlines reporting initiative.
How we reported this series
The Miami Herald spoke with more than three dozen realtors, real estate agents, politicians, bureaucrats, residents, lawyers, home buyers, sellers and academics for this series. That included reviewing dozens of academic articles published on the subject of climate change and real estate value in the last twenty years.
For this series, Analytics Miami reviewed the Multiple Listing Service data for four neighborhoods selected by the Herald to see how sales volume and median sales price shifted in the year or more following a specific flood event.
