Climate change will break the housing market, says David Burt, who predicted the 2008 financial cris

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Climate change will break the housing market, says David Burt, who predicted the 2008 financial crisis

https://www.marketwatch.com/story/climate-change-will-break-the-housing-market-says-david-burt-who-predicted-the-2008-financial-crisis-2019-11-01

Risk to the housing market from underestimated climate change echoes lessons from the 2008 subprime-mortgage debacle — as does the chance to capitalize on these miscalculations.

That’s the view of David Burt, whose old firm and its timely escape from the financial crisis just over a decade ago featured in Michael Lewis’s book “The Big Short.”

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The problem, other climate-change experts allege, starts with government flood maps that under-report risk and continues through the complex multilayer housing, lending and insurance market where risks are diluted, or at least, mispriced.

Between $60 billion to $100 billion worth of mortgages for U.S. coastal homes are issued each year. Some 311,000 existing coastal homes will be repeatedly flooded, or lost altogether, within the next 30 years, according to sea-level calculations that the Union of Concerned Scientists publishes. That means the often high-population states of California, Texas, Florida, Maryland, New Jersey and New York are vulnerable, as are retirement destinations including the Carolinas.

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