Raising Your List Price After A Flood...

By
Real Estate Agent with RE/MAX Compass 0524642

harvey houston

Word on the street says "if your home didn't flood that it's now worth 15% more than it was prior to Hurricane Harvey." This is basically hogwash. I even saw this on the local news. There is no formula or rational to say "15% across the board." As with any property valuation, you have to look at each neighborhood individually and compare apples to apples. It was this way before the flood and it's that way now. 

Let's discuss the neighborhood of Estates of Completely Flooded in Cypress, Texas where almost EVERY single home flooded. Consider the scenario were 10 homes didn't flood, but all the others did. These 10 properties would see a dramatic decrease in property value.  Why in God's name would ANYONE want to buy a home in a neighborhood that has "flooded out" twice in the last 18 months? The Tax Day Flood here throughout the Houston Area was only 17 months ago and equally shocked and surprised many of the area residents. Watch this guy use an airboat down the main street in front of my neighborhood. 


Another example could yield the same results for a community that only halfway flooded, but with less severity. The neighborhood I used to live in is a prime example. For 8 years that I was there we never heard of or even saw flooding in the neighborhood, but the The Tax Day Flood changed everything, then there was Harvey.  From Harvey forward this subdivision will likely be labeled as a "neighborhood that floods." This doesn't mean if you live here and your home didn't flood that you can suggest raising your list price or tell everyone your property value increased. I believe the homes that did not flood are seeing an actual drop in overall value by as much 5%, give or take. Again, it's the reputation and stigma now attached to the subdivision. 

 

If your home is near a retention pond, bayou or even a small lake your property could be unjustly stereotyped as a home that will likely flood as anything near a collection of water is now a potential threat. 


Next we have the subdivisions that did not flood. These communities will likely see better appreciation, more showings and more closings. 

Lastly it's the property owners who live in the subdivisions (in a desirable area) with good to great schools who experienced no flooding whatsoever that will be able to possibly see a 10-15% increase in overall property values. And if water came allllllll the way to the door that can still count as flooding. 


People selling their home should not confuse the differences when determining what they should list and sell their home for. Now more than ever you should rely on a local Realtor to buy and sell your next home. The water is gone, but the memories can last a lifetime... and so can the repercussions for making stupid and irresponsible choices. 

 

Posted by
Greg Nino
Realtor
RE/MAX Compass 
Direct & Text 7 days a wk: 832-298-8555 
 
 
Realtor since 2004
Mediator & Arbitrator for the TX Assoc. of Realtors
Member of the Professional Standards Committee for the TX Assoc. of Realtors
Arbitrator for the Comptroller's office for the State of TX for Arbitration of Property Tax Values

 Member of the RE/MAX Hall of Fame & Platinum Club

 

The information contained in this blog is believed to be reliable and while every effort is made to assure that the information is as accurate as possible, the author of this blog, and its comments disclaim any implied warranty or representation about it's accuracy, completeness or appropriateness for any particular purpose. All information is copywritten and the property of Greg Nino.  

Comments (5)

Kathryn Acciari
Arc Home LLC - Shrewsbury, MA
Mortgage Loan Originator

Good golly, I have not heard about this new theory about pricing in areas that have suffered. How to price a home that is not damaged? Aim for a fair price and see what the market activity shows. Then adjust accordingly. Time will tell if those undamaged homes are worth more now than pre-flood. 

Sep 23, 2017 10:52 AM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Greg- I have to agree with you. Even though my brother's home off Telge did not flood, he was nevertheless flooded in!  Were I buying I would definitely take into consideration, besides schools, shopping, etc whether or not it was near or on a any body of water and if it has any history of flooding. 

Sep 23, 2017 03:55 PM
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West - Carlsbad, CA
Presence, Persistence & Perseverance

Greg Nino This sounds like a faulty algorithm that some sellers greedily will test and many unscrupulous agents will use to get potential sellers to list. The proof will be in the resulting sales.

Sep 23, 2017 05:06 PM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

We have a subdivision of condos in Sacramento that regularly floods. When I ask people why oh why would they buy there, they point out that certain streets haven't flooded. Why take that chance? I'm with you on this, Greg.

And maybe that goofy statement that homes without flood waters sell for 15% more means in comparison to a home that flooded? I honestly don't know why anybody would say that anyway.

Sep 23, 2017 06:31 PM
Raymond Denton
Homesmart / Evergreen Realty - Irvine, CA
Irvine Realtor®

I'm just glad to see you and your family are safe, Greg.  Lots of us were concerned.

Sep 24, 2017 08:52 AM