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Flood zone changes could hike home prices

Posted at 6:35 PM, Mar 19, 2021
and last updated 2021-03-19 18:39:16-04

LEE COUNTY, Fla. — Diane Marsch left her family in Baltimore, MD, and moved to the Sunshine State four years ago. She said she’s ready to buy her first home. But, low real estate inventory makes the process exhausting.

“I’ve looked at so many homes. My husband and I, Ray - we both have been looking nonstop. I even get in my car. I ride around the neighborhood just to see what’s out there,” she said.

New data will likely complicate her search. The research group First Street Foundation shows with the threat of global warming and rising sea level, the flood risk for the Gulf Coast will get worse over the next 30 years, which means Marsch will have to dish out more money for flood insurance in years to come.

“I don’t feel too great about it, believe me, because it’s going to make the mortgage go up even higher on the house that we do buy,” she said.

She said she’s willing to pay a higher mortgage. But, realtor Kayinah Destine with Twin Metro Realty says the increases could take some people out of the running for a new home.

“So, it’s going to be harder for that debt-to-income ratio to be met when buyers are qualified for that particular home. And it’s going to be harder for their income to match up with that mortgage amount,” she said.

People who weren’t paying for flood insurance at all could be stuck with a new bill in October when the Federal Emergency Management Agency FEMA updates their flood maps.

The National Flood Insurance Program (NFIP) shows some will get stuck paying more. For older homes that may end up in a high-risk flood zone, owners who live there part-time could get hit with a 23 - 25 percent rate increase.

FEMA will increase flood insurance premiums in April and then again by as much as 18 percent for owners who they say have been underpaying.

Despite the obstacles, Marsch is still looking forward to the big purchase, and inviting her loved ones to a proper housewarming.

“I’m just like waiting for that time to come, so that we can have a party and celebrate, because it’s been so long that we’ve been looking,” she said.

Marsch’s realtor Adrian Waring with Priceless Realty said if you happen to close on a house, and you’re not in a flood zone, get insurance just in case that changes when FEMA updates the flood maps in October.