Sea level rise impacts on residential real estate value in Hawaiʻi

Abstract This paper examines the impact of sea level rise (SLR) exposure on residential property values in Hawaiʻi by employing a repeat sales methodology on coastal properties transacted between 2000 and 2022. Our analysis reveals that properties exposed to a projected 3 ft of SLR appreciate by 0.8% less annually than unexposed properties. This depreciation effect is particularly pronounced on Oʻahu (-1.4% annually) and Hawaiʻi Island (-1.1% annually). The discount is in part explained by local buyers, with properties they purchase incurring a significantly higher annual penalty compared to those acquired by non-local buyers. Seawalls are associated with higher home appreciation rates; however, they do not offset the penalty associated with SLR exposure. Our work provides new evidence on the forward-looking capitalization of climate change exposure into housing markets, demonstrating that buyer origin—potentially representing differing beliefs or knowledge of risk—has a significant influence.