New Flood Program Changes Good News For Coast Real EstateBy Evelina Burnett | Published 16 Mar 2014 02:13pm |
The Mississippi coast real estate industry is breathing a sigh of relief now that a bill to roll back some flood insurance rate hikes appears certain to get signed into law.
As MPB’s Evelina Burnett reports, those looming premium increases had dampened sales.
Workers are building a new home in Long Beach. That hammering is something that the Coast real estate industry hopes to start hearing more of, now that the flood insurance relief act is heading to the President’s desk. Real estate agent David Bourdette says the rate increases, and uncertainty over when and how high they might go, had stymied sales.
"They put the brakes on," he says. "People just stopped buying in certain areas. It slowed them down, made them more cautious, because the unknown is the biggest fear."
The bill limits some flood rate increases and lets home owners pass along their current rates to buyers. Joe Rogers is director of the Gulf Coast Association of Realtors. He hopes this flood insurance measure, which the national realtor group has pushed hard for, will help improve the market by adding some certainty.
"People can now plan for the future, and somewhat be able to plan how they're going to pay for these things, or if they can afford it in their budget," he says, "versus if they buy this property and then all of a sudden the insurance goes up 30 to 40 percent."
Coast home prices soared after Hurricane Katrina, and fell just as sharply a few years later, hit by the economy and other issues, like the oil spill.
Rogers says he hopes this latest news will continue the slow but steady growth the real estate market is finally seeing.
"You may have a month where it's down a little bit, and then it will regain in the next month or so, but I think the trend is going up," he says. "I think that you're going to see a continual increase, it's not going to be overnight, but it's going to continually, and as long as it's doing that, I'll be happy with it. Because it's stable, it's gradual appreciation, and I think people can make plans over that, versus a roller coaster up and down."
Coast home prices in January were up 17 percent, though the number of sales fell. Overall last year, home prices rose 5 percent.
The National Association of Realtors' explanation of the changes included in the Flood Insurance Affordability Act (HR 3370) is here.
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