Flood Insurance price increase (homes, crawl space, buyer)

[MikMal]

Another story on how the flood insurance rates may (will) have a negative impact on real estate sales was on ABC7 today.

[JERSEY MAN]

Originally Posted by MikMal

Another story on how the flood insurance rates may (will) have a negative impact on real estate sales was on ABC7 today.

The part of the story that sticks out for floridians is this.


When a seller is paying $1,900 flood premium and a buyer comes along and they get a quote for $9,000 they are not going to want to buy the house. They are not going to be able to pay for the flood insurance," Conlan added.








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[sware2cod]

Originally Posted by JERSEY MAN

Our new flood maps came out in the northeast. Many areas were not even in flood zones before. The new maps have many homes at V zones and AE 8/9 zones. So if you're in a A9 zone now you would be equal to the BFE. They want you 2 feet above. Homes that were worth 500K now are worth 200K(land only). It is not an easy equation. Just giving you the heads up. There is a grass roots organization call "Stop Fema Now" on FB. All the updates are on there.

Those map changes are pretty scary. It would be awful to be within specs one year and then have a map change that puts the home below BFE the next year, facing massive insurance increases going forward. You would have to pay off the home and forego flood insurance or sell. or rebuild.

With an infux of sellers, this could decrease property values pretty quickly for homes under BFE and make the homes above BFE more desirable.

Only cash buyers that forego flood insurance will want those 'below bfe' homes.

I suppose a lot of speculators will buy those homes for good prices, then knock them down and rebuild a new home that meets FEMA BFE.

[yellowsky]

There is a trend in the Hampton Roads area of VA of companies jacking up older, wood houses and setting in cinder block foundations. This is possible if the house is not very large but as Sware2cod noted these rate increases will hand many houses over to speculators.
This act by Congress could be the death knell for the real estate recovery in Florida and in many low land areas of the country. Coastal areas of Georgia, SC,NC and all around the Chesapeake.
The law of unintended consequences. We will all pay the price in the end.

[achildofthesky]

Originally Posted by sware2cod

Those map changes are pretty scary. It would be awful to be within specs one year and then have a map change that puts the home below BFE the next year, facing massive insurance increases going forward. You would have to pay off the home and forego flood insurance or sell. or rebuild.

With an infux of sellers, this could decrease property values pretty quickly for homes under BFE and make the homes above BFE more desirable.

Only cash buyers that forego flood insurance will want those 'below bfe' homes.

I suppose a lot of speculators will buy those homes for good prices, then knock them down and rebuild a new home that meets FEMA BFE.

I think a lot of well bought houses, those purchased with cash will be rented out for a good income stream rather than torn down.

Buying with a mortgage is pretty danged scaredy to me right now...

Be safe
Patty

[kansasman2]

If a person taking a mortgage builds a new house on a std. 80X120 lot in Punta Gorda FL can the lot or house be built up a couple of extra feet to avoid the massive rate increases for flood insurance that will likely continue to increase forever over time?

[gettinoutofjersey]

Just as a note.. The standard realtor form has been changed to point out that flood insurance costs should be looked at and is a contingency to kill the deal.

[coastal chic]

Originally Posted by kansasman2

If a person taking a mortgage builds a new house on a std. 80X120 lot in Punta Gorda FL can the lot or house be built up a couple of extra feet to avoid the massive rate increases for flood insurance that will likely continue to increase forever over time?

The lot can't be built up more than 1', but the house could. It costs about $2000 per course of stem wall (8"); so to go up 2 feet, it would cost around $6000. If the maps never changed, would that be worth it? If they did change, and you had to pay slightly more, how many years would it take to recoup the cost? Those are the questions to ponder.

[yellowsky]

Wondering why you say a lot can't be built up more than one foot?

[coastal chic]

The rule was changed to eliminate people from building their homes on mounds that forced the rainwater runoff into drainage ditches/ lakes that the municipalities have to maintain. The theory is the rainwater needs to be absorbed into the ground, rather than becoming runoff.