The Temporal Impact of Flooding on the Coastal Housing Market of New York, New Jersey, and Connecticut in a Changing Climate

Flooding affects the housing market, potentially leading to financial difficulties for homeowners and raising concerns for buyers, insurers, and lenders. Given that home value is a crucial driver of the national economy and financial well-being, the escalating risk of flooding due to climate change poses a significant systemic threat. To better understand flooding risk, we employed a Socio-Environmental (SE) model to study the impact of flooding on home value in coastal census tracts of New York, New Jersey, and Connecticut, US. The model applied to historical data (1970-2021) revealed memories of past floods, community risk perception, and participation in the National Flood Insurance Program (NFIP) are closely related to mean home values. The model parameters describing changes in housing prices post-flood were also significantly correlated with social vulnerability indices, suggesting that flooding disproportionately affects home values. A cluster analysis using housing price change parameters identified three distinct clusters in the study region, which are well characterized by differences in social vulnerability. We extended the SE model to project the time path of housing prices up to 2100 under climate projections of precipitation, storm surge, and sea level rise for two shared socioeconomic pathways (SSP245, SSP585). The impact of climate projections on future housing prices varied among clusters. The most socially vulnerable cluster exhibited a significant drop in home values around mid-century with no indication of recovery. An improved understanding of the fate of the housing market in a changing climate could help managers make informed decisions and reduce flood risk.