Capital region real estate market could feel the ripple effects of increases in flood insurance
Changes to FEMA’s National Flood Insurance Program may mean higher rates for residents of Louisiana, and residents of the Baton Rouge area living in the floodplain could be significantly affected. So what does this mean for home buyers?
The new rates will be an important consideration for buyers and could have a ripple effect in the tight real estate market, says Christi Adams, real estate agent at RE / MAX.
Changes to the pricing policy depend on a home’s perceived flood risk, not its location on the flood map. Since the new rates won’t increase equally across the region, homeowners or potential buyers can’t just look at the map to see what their rates might be, Adams says,
The Baton Rouge area continues to experience a housing shortage, Adams says, but these new rates will make it harder for buyers to know they will have to add flood insurance on top of potentially inflated housing costs. This will affect the market tremendously, she says, particularly in Ascension, Livingston and the lowlands of East Baton Rouge.
People who have already been flooded, as in 2016, will be the hardest hit by the new flood insurance rates, she said.
Jerry Del Rio of Del Rio Real Estate says many potential buyers will consider disclosures about homes in a flooded area, even in non-flood areas, which will affect their purchase.