Wednesday, May 15th 2019, 1:10 pm - Frequent hurricanes and coastal erosion make owning in Florida a risky bet, says one top investor.
Destructive hurricanes are common in Florida, an area that's still cleaning up after Hurricane Michael, a powerful storm that hit the area in October and racked up $6 billion US in damages and killed seven people.
Despite regular storm activity, Florida remains a popular tourist destination -- but Spencer Glendon, a senior fellow at Woods Hole Research Center and a former partner and director of investment research at Wellington Management, predicts a real estate crash is coming, fueled by coastal erosion and housing that hasn't been built to withstand powerful storms.
“No one should be lending for 30 years in most of Florida,” he said at an investment conference in New York last week, according to Bloomberg.
“I tell my parents that it’s fine to rent in Florida, but it’s insane to own or to lend.”
Glendon cited an inability to rebuild storm-damaged infrastructure as one reason to avoid acquiring property in Florida.
“I hope this is clear,” he said at the conference.
“Civilization is built on climate stability. We are now accelerating into instability.”
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BIG STORMS EXPECTED THIS YEAR
While researchers at Colorado State University (CSU) are predicting a below-average season in the Atlantic, CSU is forecasting 13 named storms in the basin this season, which runs from June 1 until the end of November.
Five of those storms are expected to become hurricanes, at two could reach Category-3 strength or greater.