What's Happening?
A recent study conducted by Nori Tarui, an economics professor at the University of Hawai‘i at Mānoa, and Muhammad Talal Khan, a finance graduate student, reveals that sea level rise is impacting property values on different Hawaiian islands. The research
indicates that coastal properties on O‘ahu and Hawai‘i Island are experiencing depreciation, while Kaua‘i shows no significant price effect. This variation is attributed to the difference in buyer behavior, with local buyers being more cautious compared to non-local buyers. The City and County of Honolulu has sent out property value assessments to over 300,000 homeowners, which will determine the next year's property taxes. The deadline for filing an appeal is January 15, 2026.
Why It's Important?
The findings of this study highlight the economic implications of climate change on real estate markets, particularly in coastal areas. As sea levels rise, property values in vulnerable regions may continue to decline, affecting homeowners' equity and local tax revenues. This could lead to broader economic challenges for communities reliant on property taxes for funding public services. Additionally, the study underscores the importance of informed decision-making by buyers, as non-local buyers may not fully understand the risks associated with coastal properties. The research also suggests a need for policymakers to consider climate change impacts in urban planning and real estate development.
What's Next?
Homeowners and potential buyers in Hawaii may need to reassess their property investments, considering the long-term risks posed by sea level rise. Local governments might explore strategies to mitigate these impacts, such as investing in coastal defenses or revising zoning laws to discourage development in high-risk areas. The study could prompt further research into the economic effects of climate change on real estate markets in other coastal regions. Additionally, there may be increased advocacy for policies that address climate change and its economic consequences.
