The Real Estate Market does not Reflect Global Warming

Whether or not you believe the phenomenon of global warming* is man-made, there's no doubt the Earth has been getting warmer over the past century. Naturally, a warmer Earth leads to melting ice which as a consequence creates higher sea levels. The only point of contention is how fast sea levels will rise. There are many models.

The most extreme of these models expect major devastation in rich and highly populated areas in the United States like Miami by as soon as 2050. Yet Miami seems almost oblivious to the threat. The real estate market in Miami continues to boom.

How can respected scientists' prediction that an area will be under water not change the value of its real estate? There are three possibilities:
  • The players in the market do not believe in sea level rise/global warming.
  • The chronologic window for the devastation is still too great to affect prices. Perhaps when predicted calamity is within the window of a 30 year mortgage, banks will think twice.
  • Market actors do believe in sea level rise, but act irrationally through some sort of group think.

Markets are not always great predictors of long term trends.

*I use the term "global warming" because I feel "climate change" is a kind of doublespeak. Global warming describes the Earth on average getting warmer, whilst the now more politically correct climate change can be deemed an accurate prediction regardless of what happens to the Earth's average global temperature. Yes I understand its defense is that global warming will not be a universal trend - some areas will get colder. I still think of it as doublespeak though.

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Based on tdSimple originally by Lasantha Bandara and released under the CC By 3.0.