Flood insurance rate hikes shock the real estate market - WECT TV6-WECT.com:News, weather & sports Wilmington, NC

Flood insurance rate hikes shock the real estate market

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One potential home buyer is having second thoughts after learning their flood insurance rates will be more than $30,000 per year! One potential home buyer is having second thoughts after learning their flood insurance rates will be more than $30,000 per year!

WRIGHTSVILLE BEACH, NC (WECT) – From the beach all the way to Bladen County, we're learning more about a story that impacts people from all over the region.

Most people are subject to higher bills from the flood insurance act, also known as the Biggert Waters Act. But it turns out the hikes are much worse for some people.

According to Patrice Willetts, the President of the N.C. Realtors Association, If you own property in a flood zone and don't plan to sell, your rates will go up 25% each year until you reach the actuarial amount that FEMA wants to charge. However, if you choose to sell your property, the new buyer will immediately inherit the actual rate that FEMA sets.

For one property sale in the works at Wrightsville Beach, the rate hikes are a deal breaker. The new buyers of a home on Causeway Drive are having second thoughts after learning their flood insurance rates will be more than $30,000 per year!

"This one property, their premium was 800 dollars but now a new buyer is going to take over and their premium will be more than $30,000," said Willetts.

Willetts said this has adverse effects on the real estate market.

"It's devastating for the clients we represent," said Willetts. "It's devastating for the seller who puts in money to buying a home and now they can't sell. There's no value to that property."

To make matters worse, Willetts said this problem is far reaching. According to Willetts, there are new maps drawn by FEMA that place properties in flood zones that have never been there before.

"You could live in Charlotte, Asheville, Colorado, you could live anywhere and the new maps might place you in the flood zone," said Willetts. "It's not just coastal communities, it's across the board. It's nationwide."

In Wrightsville Beach, local real estate agents like Paul J. Hockaday are even more concerned. He represents the buyer of the aforementioned house for sale.

"This is a deal breaker," said Hockaday. "Who's going to pay $30,000 a year for this property that's been here for 40 years? Any time we lose a sale it takes a direct hit on our family."

More importantly, real estate agents like Hockaday say it's their job to make sure the homeowners know what they're getting into before making a deal. Meanwhile, they're writing letters to congressmen in Washington D.C. – hoping to make a difference.

New legislation introduced on Tuesday would require FEMA to conduct preliminary investigations on properties before applying new rate changes.

Both Walter Jones and Mike McIntyre support that bill.

In a statement sent to WECT, Congressman McIntyre said he believes that flood insurance must be accessible and affordable to North Carolinians, and the increase in rates that stem from Biggert Waters must be stopped.

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