What are the risks of investing in housing markets near coastal areas?

Investing in housing markets near coastal areas carries several risks, primarily due to the increased vulnerability to natural disasters such as hurricanes, floods, and rising sea levels due to climate change. Coastal properties are also more prone to erosion, which can diminish property values over time. Additionally, insurance premiums for these properties tend to be higher, impacting the overall return on investment. Local regulations and zoning laws can become stricter as climate-related concerns grow, adding uncertainty for investors. The demand for coastal properties may fluctuate as people become more cautious about environmental risks, making it crucial to carefully assess the long-term viability of such investments.