You are likely to loose your shirt short-selling coastal property. For short-selling to be profitable, what you are short-selling should decrease in value, and do so rather quickly. The reason is that in the mean time you are required to reimburse the person you're borrowing the asset from for the revenue he would have had, had he held on to it. In the case of property that is the rental revenue. Time works against you when short-selling.

Home prices in flood-prone areas are still rising (albeit slower than elsewhere) in the US [1]. At some point they will go down, but time your short-selling wrong, and you will loose money.

[1] https://www.nytimes.com/2016/11/24/science/global-warming-co...