After the May 1 and May 2 flood of Nashville and greater area, many homeowners are asking questions not only about clean-up and repairs but also about future value.  I decided to take two approaches to this blog, one from an opinion point-of-view and one from a fact point-of-view.

I tweeted and facebooked a two question survey asking the following questions:

As a homebuyer, if you knew a home had flooded, however the home was proven repaired, would you still purchase the home?

and

How much less or more do you think a home is worth after it has been flooded?  (Give your opinion, not researched facts.)

Opinion Point of View

The slight majority said they would NOT purchase the home.  For the second question, 8% said it was worth the same amount.  28% said it was worth 10% less.  56% said it was worth 25% less.  8% said it was worth 50% less.  None said it was worth more.

HUGE DISCLAIMER:  This was not a scientific study and the sampling was only 100.  Also, no real estate professional can predict a home’s future value nor should they.  I don’t know what the Nashville market will do.

Now, let’s move the second part of my research.  I called agents in Des Moines, Iowa, Fargo, North Dakota and parts of Mississippi who have lived through floods and the markets following those floods.  Des Moines was flooded in 1993; so, they have a strong history of numbers to support the market data.

Fact Point of View

Most agents will not place their name on hard data due to the litigious nature of the market, so no names are given here.  The blanket answer to the question, “Did your flood affect long term values on those affected homes,” was an overwhelmed “not really,” from almost every agent.  They admitted that the market opinion supports the small data I collected above, but the numbers after the flood didn’t support that opinion.  One Des Moines agent said that the homes in the majorly affected areas after their 1993 flood had to have flood certificates prior to closing, but the values remained similarly in line with the rest of the market.  Again, in Des Moines, they had areas that were considered not safe to build on where the values were gone, but that was a small area.

Much like Nashville, only certain areas are impacted.  It’s a 500 year flood zone.  We’re likely to not see anything like this for another 500 years.  We have little if ANY areas where you should never live again.  In Fargo, a few areas saw “buyouts” where homes couldn’t be built again.  One of the agents in Fargo emphasized, “Do not panic [with your market].  This is a rare, catastrophic event.”

In Mississippi, the message was the same on value.  I actually dug for agents who would give me the other side of this data, even in a confidential area; however, the message remained consistent with 100s of miles separating each of these zones, “Values were not affected.”

At the end of the day, we have larger issues to face right now with safety, health and well-being.  If you are freaking out over your home value, take that worry off your plate.  Other cities and other facts show that your worry may not be necessary.

Tagged as: nashvilleflood