David Moot assumed he’d never be able to afford his dream of owning a beachfront home on the Massachusetts coast, his vacation retreat for nearly 20 years. When he spotted one on Cape Cod listed at a surprisingly low $395,000, he jumped at the deal.
There was a catch: The ocean might soon be at his doorstep. The house, at 157 Brownell Road in Eastham, sits just 25 feet (7.6 meters) from an eroding sand bluff. With the tides projected to encroach 3 feet closer to his door each year, his investment could get swept away within a decade.
“Life’s too short, and I just said to myself, ‘Let’s just see what happens,’” said Moot, 59. “It’s going to eventually fall into the ocean, and it may or may not be in my lifetime.”
What Moot paid for the Eastham home was 67% less than the $1.195 million the seller initially sought in 2022. On Nantucket, an island retreat for the wealthy south of Cape Cod, a seaside house at 28 Sheep Pond Road sold in June for just $200,000, about a 10th of its assessed valuation this year.
House hunters with a gambling spirit may soon be able to find more steeply discounted deals like those as owners in prime US beach towns seek to cut their losses before the waves take a costly toll. The expectation of bargains could lure investors in vacation rentals, rich buyers able to withstand financial risk, and even everyday people aspiring to own a slice of treasured waterfront land — if only for a while.
As warming oceans spawn stronger, more frequent storms and sea levels rise, more than $106 billion in US coastal properties could be consumed by the ocean in less than 30 years, according to data from the National Oceanic and Atmospheric Administration. Especially vulnerable are the low-lying barrier islands off the East Coast — including Cape Cod and Nantucket as well as North Carolina’s Outer Banks, where six homes have collapsed into the sea since 2020.
“The bottom line is, between 50 and 100 years from now, there are communities that will be underwater,” said Dylan McNamara, a professor of oceanography at the University of North Carolina Wilmington who has studied coastal real estate markets for nearly two decades. “It’s just a matter of time before those property values go down. How they go down, whether it’s a precipitous drop off a cliff or it’s a smoother unwinding, is still up in the air.”
East Coast Vacation Hot Spots Face Rising Tides | Low-lying beach towns with flat terrain could erode fastest
On Nantucket, which has been battered by increasingly intense winter storms, some areas have seen erosion of more than 12 feet of shoreline per year, according to a local government website.
“There’s no question there are going to be more homes at risk,” said Shelly Lockwood, a Nantucket real estate agent with Advisors Living. “The hard conversation to have is with the owners. They’re losing millions and thought they were going to leave this for their grandchildren. Now, their homes are worthless.”
A house on Sheep Pond Road with an estimated value of more than $2.1 million was condemned and torn down last year after its deck collapsed, the Nantucket Current reported, and billionaire Barry Sternlicht was forced to demolish a property on the island in April.
A representative for Sternlicht, chairman and chief executive officer of real estate investor Starwood Capital Group, didn’t respond to a request for comment.
In the Outer Banks, the risk is so imminent in some spots that the National Park Service has begun buying properties at steep discounts with plans to demolish them. The intention is to keep beaches and waterways free from debris that would harm delicate coastal ecosystems.
Demand for property in the Outer Banks remains high, especially in towns such as Nags Head, Kitty Hawk and Kill Devil Hills that have artificially widened their beaches, according to Eric Braojos, a broker at Howard Hanna.
The six homes that collapsed into the ocean since 2020, all in Cape Hatteras and Rodanthe, “should have never been built,” Braojos said.
The wealthy buyers traditionally drawn to oceanfront homes have pushed up prices in coastal towns, but values may come down as the properties become harder and more expensive to insure, according to McNamara.
Lockwood, the Nantucket agent, said major insurers are unwilling to offer policies for erosion-threatened homes there, and lenders are reluctant to finance purchases.
“If you want to buy the house, you’re going to have to pay all cash and you can’t insure it,” she said. “That’s going to make the buyer pool that much smaller.”
Moot, the buyer of the house on Cape Cod, said he’s considering renting it out to help cover the high insurance and tax costs. While the purchase price was a bargain, he faces almost $4,000 in annual property taxes and the same amount for homeowners insurance, which doesn’t cover erosion-related damages.
Moot, who lives in Pittsburgh, said he has consulted experts and studied projections for the ocean’s encroachment on his property. He’s still brainstorming ideas for the home, such as converting it into a space where terminally ill people might be able to spend time surrounded by the cape’s natural beauty. He also wants to allow daytime visitors to take in the sea breezes and ocean views that drew him to house in the first place.
“This is such a wonderful dream for me that has come true that I would love to be able to share it,” Moot said. “I would like people to enjoy it as much as I can.”
This article was provided by Bloomberg News.