Climate Change, Floodplains, and House-Hunting: Mythbusting for the 21st Century Homebuyer
Finding an affordable home is no small feat these days, so it can be hard to walk away from an apparent bargain. There are many reasons a home might be priced below the market average and not all of them are dealbreakers, but there is one red flag that won’t show up on a home-inspection and can cost you money and headache down the road: being located in a flood zone.
Between the recent IPCC report on the dire state of the climate crisis and helping several of our clients navigate hunting for homes in flood-prone areas, flooding has been our minds quite a lot here at Nashville Real Estate Rockstars. After a recent post from a buyer who only discovered their half-million dollar home was in a floodplain after purchase went viral on the Nashville Reddit forum, we thought it was time to bust some myths about floodplains, flood insurance, and how climate change might factor into your house-hunt.
Myth: Ocean-front properties are the only homes at risk of climate-change related flooding.
While increasingly frequent hurricanes and rising ocean levels do put ocean-front properties at increased risk, climate-related flooding isn’t just a coastal problem. For each degree celsius of warming our planet experiences, the atmosphere can hold 7% more moisture. This causes an exponential increase in the amount of rainfall globally, causing rivers to flood more frequently and with greater severity than in past centuries.
One of the most notable instances of a community having to be relocated due to flooding happened in the middle of the country. In 1990, 75% of the town of English, Illinois was demolished or relocated due to repeated flooding. Tennessee declared a state of emergency earlier this year due to deadly flooding. Landlocked states are not exempt from the risk of climate-related weather events.
Myth: My home isn’t near a river so I don’t have to worry.
Just because you’re home isn’t waterfront-property doesn’t mean you’re out of a floodplain. Some rivers have floodplains that extend hundreds of miles, and not all floodplains experience annual seasonal flooding; some are only at risk during “100-year floods”, which are occurring more and more frequently as the climate crisis progresses.
Nashville experienced one of these flooding events in 2010 when nearly 11,000 properties were damaged or destroyed by flood waters, displacing upwards of 10,000 residents and causing $2 billion in private property damage in addition to $120 million in public infrastructure damage. Opry Mills Mall remained closed for nearly two years after the flood due to the extensive damage caused by ten feet of water. The damage wasn’t limited to expensive river-front properties; homes in low lying areas miles from the river were inundated with inches to feet of water as drainage systems became overloaded.
Myth: The seller will just tell me about flooding.
They might not - if you’re buying a home through HUD, that is. In general, your realtor can ask the seller’s agent if the property requires flood insurance; but if the government is the seller, the information may be harder to obtain, in which case you’re left to find out from your lender, potentially after the point where walking away from the sale is prohibitively difficult or expensive.
Homes sold by the Department of Housing and Urban Development (HUD) are 75 times more likely to be in a flood zone than a home sold by a private seller - and are also more likely to be sold to lower-income households who are seeking the stability of homeownership. Worse yet, HUD doesn’t disclose the flood status of these homes, leaving many buyers to discover they’ve purchased a flood-prone property when their mortgage lender requires them to purchase expensive flood insurance - after it’s too late to back out of the purchase. We’re not saying don’t by a HUD home, just go forward with both eyes open and do as much due-diligence as you can.
Myth: A home inspection will tell me if my potential new home is in a floodplain.
A home inspection can catch a lot of dealbreakers with a home, but it won’t tell you if your house is in a floodplain. Your realtor can check a property’s tax records to see if it’s in a flood zone before you place an offer and can ask the seller’s agent if the property requires flood insurance. The Federal Emergency Management Agency (FEMA) also offers interactive flood maps in addition to providing the majority of flood insurance nationwide.
A good realtor will check this for you unprompted, but we strongly encourage savvy buyers to ask questions. Ask your realtor about the flood status of any homes you’re looking at.
Myth: My homeowners insurance policy will cover flood damage.
Homeowners insurance does not cover flooding. If your home is in a floodplain, your lender will require you to purchase federally-backed flood insurance in addition to a standard homeowners insurance policy before financing your new property.
In the United States, any home with 1% or greater chance of flooding is required to purchase flood insurance. Flood policies can be prohibitively expensive for many homebuyers, so you’ll want to find out from your realtor whether the property requires a policy before you find out from your lender; your bank might not inform you of the need for flood insurance until after the inspection period when backing out of a purchase becomes much more difficult - and potentially expensive.
Myth: If only a portion of my property is within a flood zone, it’s not a problem.
Floodplains don’t follow property lines; sometimes only a corner of the lot you’re looking at is within a flood zone. You might not even require flood insurance if the house itself is outside the boundary of a flood zone. But this doesn’t mean you’re free from the repercussions of buying a flood zone.
When our climate-conscious Millennial buyer expressed interest in a home, Zelda immediately checked the tax records and found not just one but six FEMA flood warnings on the property. She reached out to the seller’s agent to ask about how the house fared during Nashville’s historic 2010 flooding and whether it required flood insurance. The seller’s agent reported that the home didn’t require flood insurance and only a small corner of the yard and chicken coop were damaged in 2010, but that was still enough for our client to walk away. The risk of future flooding and the difficulty of selling the home in the future made the purchase feel too risky.
More and more, house-hunters are thinking like our savvy Millennial - especially in a market where skyrocketing prices leave some buyers worried the booming housing market will go bust. Properties with a flood warning have always been challenging to sell, but they will only become more so as the effects of climate change become more pronounced.
Another important factor to keep in mind is that flood zones aren’t set in stone; maps are updated after major flooding events and, while your house may not have been in a flood zone when you bought it, you may find yourself with water damage as flooding becomes more frequent and severe. Nashville’s FIRM (Flood Insurance Rate Map, part of the FEMA flood insurance program) was redone following the 2010 flood to include areas that were affected by the 100-year event but weren’t previously thought to be in a flood zone. The frustrated homebuyer who shared their stress on Reddit is in a similar situation; their property was technically outside of the flood zone, but flooded during the heavy rains we experienced this past March and is about to be remapped into the floodplain.
Ready To Find Your Next Home? Give Us a Call.
While we can’t completely escape the impacts of climate change by buying the right house, but we can build more resilient communities by being informed house hunters. We hope we busted some myths around flooding and climate change so that you can step into your search with confidence and better information. Knowledge truly is power, especially when facing an uncertain future.
If you’re looking for a realtor to help you navigate the challenges of modern home-buying with confidence, reach out to Zelda with Nashville Real Estate Rockstars at Benchmark.