The inflection point, if there is one, is likely a decade or more away. Real estate losses will be unique to each area. So you're more likely to see a smattering of "Hurricane Katrina Moments" than a wholesale reversal in the financial markets a la 2008. Deep out of the money options on overexposed instruments is a plausible position to take here, especially during the ~6 week hurricane season.
Another thing to note is that it costs money to short -- you are borrowing the shares after all, so you need to pay interest on the loan. This makes a multi-year position shorting select REITs troublesome.
The position I'm taking (roughly) is to hold oceanfront property with excellent sea-level protection. Think cliff-front, not beach-front. A different play? Construction companies specializing in sea level mitigation.
Cliff-front property may have its own issues. For example, the cliff parts of Cape Cod are eroding by an average of 3 feet per year according to http://woodshole.er.usgs.gov/staffpages/boldale/capecod/ques... -- and that link claims that sea level rise would be expected to speed up erosion.
Of course if you pick sturdier cliffs you might be better off.
Another thing to note is that it costs money to short -- you are borrowing the shares after all, so you need to pay interest on the loan. This makes a multi-year position shorting select REITs troublesome.
The position I'm taking (roughly) is to hold oceanfront property with excellent sea-level protection. Think cliff-front, not beach-front. A different play? Construction companies specializing in sea level mitigation.