American house prices are worth $187 billion less when you factor in flood risk
The risk of future flood damage is not factored fully into home values in most rural and inland regions.
Floods are the most expensive type of natural disaster in the United States. They have caused at least $323 billion in direct damage since 1960. Most private insurers do not offer residential coverage for floods. Therefore, Congress established the National Flood Insurance Programme (NFIP) to offer flood insurance. If you live in a 100-year floodplain, an area predicted to have a 1% flood chance or greater annually, you can only obtain a government backed mortgages if you are insured. The NFIP pays out more in claims than it takes in in premiums.
In 21 of 50 states, sellers are not legally obligated to disclose past flood damage or future flood risk. Many buyers are not aware of the significant risk floods pose, and if they are, they do not sufficiently discount their offer. The combination of both subsidized insurance, and the over optimism of buyers, results in housing markets that are significantly overpriced in flood prone areas.
Works Cited:
https://www.economist.com/graphic-detail/2023/04/11/accounting-for-flood-risk-would-lower-american-house-prices-by-187bn
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