Biggert Waters Act - Selling Homes in Flood areas (Oceanside: section 8, for sale)
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Has anyone here encountered or have had difficulty selling a home in a flood area due to the Biggert-Waters Act? For those who aren't in the know, effective Oct. 1st, 2013 - flood rates for homes on the flood map (from low risk to high risk areas) will increase and homes previously grandfathered in, will now have to deal with paying higher rates (especially new buyerse who will pay the higher premiums).
These articles sums up the disaster that its causing the housing market:
Our house is in a high-risk area, so now even if we try to sell, we may have trouble finding a buyer willing to pony up for the higher flood insurance cost (in some cases, I have heard as much as $16-50K/year which is completely unaffordable). I am curious to hear from any real estate agents/brokers on this site if they have encountered buyers backing out of closings due to this...
Last edited by LegalDiva; 10-25-2013 at 09:36 AM..
My former residence now needs flood insurance. Current occupants are paying $4288for home and contents. Rhode Island. Home built 1960. Has never flooded. Elevation 13 feet. X zone. Part of property is in wetlands.... though house is not.
I have low to moderate risk....I pay $1788 home and contents.
I don't personally know anyone who's been hit with a $50,000 quote for Flood.......but I imagine it would have to be sitting directly on the beach in a VE zone. I know of one property with a list of $2.9 million sitting on the beach............it's been up for sale for a very long time. VE zone naturally.
In some communities here in RI, most of the properties listed are in flood zones... which is going to skew all our realty data badly.
Very true that Rhode Island will skew the data given the rates there and BFE levels of flood zones, but I am concerned what this will do in general for the LI housing market. How many homeowners like ourselves will be stuck living where we do simply because buyers won't want to pay these high rates, or don't have the $$ to make all-cash offers?
I am surprised Newsday hasn't covered this - this is a disaster in the making, and when we were rate shopping after State Farm dropped us this summer, we were quoted as much as $9K/yr which is more than what we pay in property taxes!. Its not like we asked to live by the water, our house was remapped from a no-flood zone, to a flood-zone after TS Irene. We want to sell but now with B-W Act of 2012, we may be stuck.
Last edited by LegalDiva; 10-25-2013 at 10:25 AM..
This is going to be a big issue in towns like Island Park and East rockaway where homes have been flooding for years. Those looking to sell will either have to raise there homes to new code or sell the home for the property value alone.
This is going to be a big issue in towns like Island Park and East rockaway where homes have been flooding for years. Those looking to sell will either have to raise there homes to new code or sell the home for the property value alone.
Also an issue as a lot of older folks in Island Park and East Rockaway did not have flood insurance or were rentals
I saw many end up dirt cheap in hands of flippers who got them sold prior to 10-1-2013 without elevation.
Those new owners will have sky high flood insurance as homes were not elevated.
Also I know folks whose homes were not deemed "substantially damaged" who repaired with SBA loans on top of mortgage. When flood insurance rates rise those homes are going to end up foreclosed.
One thing people forget is PRPEE homes. Preferred Rate Program Eligibility Extension Homes which include a large part of Oceanside was not effected by BW although rates are rising. So homes in that category the new owner can get that rate for now.
Very true that Rhode Island will skew the data given the rates there and BFE levels of flood zones, but I am concerned what this will do in general for the LI housing market. How many homeowners like ourselves will be stuck living where we do simply because buyers won't want to pay these high rates, or don't have the $$ to make all-cash offers?
I am surprised Newsday hasn't covered this - this is a disaster in the making, and when we were rate shopping after State Farm dropped us this summer, we were quoted as much as $9K/yr which is more than what we pay in property taxes!. Its not like we asked to live by the water, our house was remapped from a no-flood zone, to a flood-zone after TS Irene. We want to sell but now with B-W Act of 2012, we may be stuck.
Same thing happened after Katrina. Which has not been hit by a big flood yet. Tons of homes in foreclosure and folks in general who could not sell, dropped flood and rented to section 8 type people and created slums.
NYS Rising in part is doing more from lessons learned in Katrina. I read folks with a mortgage and flood insurance in Katrina found it useless. Why if most on block did not have flood and bank only releases funds to elevate and rebuild you have a house sitting on an abandoned block. Sure it is new but still worthless.
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