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The scientific community estimates that the first financial effects of rising sea levels will be felt in a matter of two decades. Some highly regarded scientists project an earlier date, around one decade from now. Either way there is one harsh truth, no area in the country will feel more of an impact from rising sea levels than South Florida and much of that financial impact will come from real estate.

Storm a comin'

“Even a six-inch rise would cost the area much of its acreage.”

A three-foot rise in sea levels would change South Florida as we know it, leaving a large part of the region under water, but even a six-inch rise would cost the area much of its acreage. The timetable for when such a rise would occur is not completely reliable, but the most widely used projection is that of the Army Corps of Engineers. This group projects that South Florida will see a three- to seven-inch rise in sea levels by 2030. A sea level rise of nine to 24 inches could be expected by 2060.

According to a group formed by the Miami-Dade, Broward, Palm Beach and Monroe Counties called the Southeast Florida Regional Climate Change Compact, the region would lose up to $4 billion in taxable real estate from even a one-foot rise in sea levels. A three-foot rise would cost around $31 billion or more.

Professionals are beginning to wonder when the devaluation of waterfront property in South Florida will begin. Most likely, this process will occur as flooding in the area begins to increase. Along with the inconvenience of constantly flooded streets, buyers will grow wearisome of rising premiums for flood insurance. Most climate change experts expect this to begin occurring a decade from now.

However, there is hope for normalcy in the future of South Florida real estate as many entities have already started planning for these events. For example, the City of Miami Beach has dedicated $200 million to stop flooding in South Beach over the next 20 years. The real estate industry itself is also preparing. Many urban planning groups are taking rising sea levels into consideration when discussing projects with developers.

These are all strong first steps, but more work will need to be done to prepare for drastic changes in regards to waterfront properties or perhaps to attempt to prevent some of this damage from being done. Over the next decade, South Florida should be a melting pot of interesting and revolutionary ideas that will help the real estate industry overcome rising sea levels.

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The Federal Bureau of Economic Analysis recently released new numbers indicating that the real estate sector accounted for nearly a third of South Florida’s economic growth last year. The $274 billion economy expanded at a rate of 3.5 percent, the largest that the tri-county area had seen since 2006 and well past the national average of 2.5 percent.

Miami-Dade, Broward and Palm Beach have the real estate sector to thank for their exceptional rate of expansion. In 2012, real estate accounted for $52 billion contributed to the South Floridian economy. That number represented an 8.4 percent growth from real estate’s contribution in 2011.

Much like the overall numbers, real estate also experienced it’s best year since 2006, displaying the close-knit relationship that the sector has with the area’s economy. South Florida also experienced the sharpest growth rate of all of Florida’s largest economies.

Trump-Hollywood-Condo-Tower

Condo prices have seen strong increases in each of the past 26 months

This report comes on the heels of more good news for the real estate sector in Miami-Dade. The month of August brought another double-digit surge in the year-over-years numbers for prices and sales in the area. Single-family home sales experienced an increase of 15.1 percent from August of 2012, while condo sales also gained 7.9 percent from last year.

The median sales price of a single-family home in Miami-Dade increased 2.2 percent to $235,000 from July to August. That price represents a 20.5 percent surge from the previous August. The price of condo sales saw a spike, as well. The new median sales price of $180,500 represents a 5.3 percent increase from last month and 27.5 percent year-over-year growth. Condo prices have seen strong increases in each of the past 26 months.

Real estate, however, was not the only contributing factor to the surprising growth rate in South Florida. Sectors such as trade, finance, retail and information also played an integral role in the area’s progress. The success of the retail sector speaks volumes for commercial real estate prospects in the South Florida area.