Study: Consumers Are Still Willing To Pay More For Houses In Flood Zones
Houses in areas prone to natural disasters across the country are increasing in value.
While that might not make sense, that was the finding of a yearly nationwide study by ATTOM Data Solutions, a company dedicated to crunching housing numbers.
After Hurricane Irma, there have been lots of conversations about how best to rebuild given the area's elevation and tendency to flood, even on sunny days.
“It doesn’t make sense,” said Daren Blomquist, senior vice president with ATTOM. “ Especially when it comes to flood risk, consumers aren’t feeling the true pain I guess of flood risk because of that subsidized insurance through the National Flood Insurance Program.”
That program was more than $23 billion in the hole before Hurricanes Harvey and Irma wreaked havoc on Texas and Florida.
The program was recently extended past its Sept 30 deadline to Dec. 8.
Blomquist said there’s more news about and people seem to be more aware of the impact of natural hazards on homes.
“Consumers are increasingly interested in this when they’re looking at specific housing,” but any negative information does not seem to be dissuading people from signing on the dotted line, he said.
He said the discussion about the padding of flood insurance rates is one for politicians. He points to 2012 when Congress did remove the subsidies, but the backlash from people—some of whom had insurance bills that went from a few hundred dollars to thousands of dollars—forced those in Washington to reinstate the federal assistance.
“Really if you were taking on the true risk of that area in buying a home, your flood insurance bill would be exponentially higher.”
One exception to this trend in Florida is the Tampa area, where there has been a shift in home price appreciation that is weaker in higher risk areas.
Another interesting thing to note is that Palm Beach County is not considered in a “very high risk” category. It is “very low” both for flooding and hurricane storm surge. Blomquist says those numbers come from the percentage of homes in the high flood zones or areas with the threat of high storm surge.
One thing the data does not take into consideration is any threat posed by the aging Herbert Hoover Dike around Lake Okeechobee.
You can click below to see the county-level information for your area.
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