A new Natural Resources Defense Council report exposes potential hidden costs associated with purchasing a single-family home with a flood history in North Carolina.
According to the report, “Estimating Undisclosed Flood Risk in Real Estate Transactions,” these costs can add up to more than $36,000 over the course of a 30-year mortgage.
In North Carolina, 13,237 homes were purchased in 2021 that were estimated to have been previously flooded, with an estimated $16 million in flood damages.
Most states don’t require flood damages to be disclosed to buyers. But homes that have been flooded in the past are more likely to experience repeated flooding, putting buyers at increased risk and facing unexpectedly high flood insurance premiums, the report said. The report, prepared by Milliman, Inc., estimates that less than 4% of homeowners in the U.S. have flood insurance coverage, and that home buyers who are not aware of previous flooding could be less likely to purchase flood insurance.
Flood losses may become even more extreme over time if climate change follows some predictive models.
For more information, read Joel Scata’s blog about the report.
Photo: Flooding in 2018 in Kinston, N.C. Hot real estate markets have made some homeowners wary of participating in voluntary flood buyout programs. (Ken Blevins/The Star-News via AP)
Was this article valuable?
Here are more articles you may enjoy.