The Middletown Press (Middletown, CT)
FLOOD RISK By Jordan Grice
Owning waterfront property in Connecticut not always a bonus
Owning a home by the water may be a dream for some, but it has been a nightmare for Christine Voight.
“The property value in our house has gone down immensely, and we basically lost 80 percent of what we owned,” said the Bridgeport resident, whose home was severely damaged last summer after the nearby Rooster River flooded.
Voight and her husband are part of a larger pool of homeowners who live in one of the state’s many flood zones and find living near the water has special hazards.
Connecticut reportedly lost nearly $1 billion in potential property value from 2005 until 2017 because of flooding, according to national sources. The median price per square foot of homes at the highest risk of flooding in Fairfield County declined 26.1 percent between 2012 and 2017.
And climate change could do more damage in coming years, according to area observers.
The National Oceanic and Atmospheric Administration determined that roughly 4,500 homes — valued at nearly $3.5 billion — would be subject to flooding by 2045. If the sea level rises higher than predicted, that could surge to 25,000 homes with a value of nearly $15.5 billion and property taxes of more than $252 billion.
The threat of flooding has put many floodzone homeowners in a difficult position as they look to sell their house, according to Voight, who said she has considered listing her home but found it almost impossible.
“Pretty much you have to find a sucker to buy it because it’s going to flood again,” she said.
The costs of danger
That’s due largely to
added costs such flood insurance, which is required in many cases to buy home in a flood zone.
“Flood insurance is really just a joke,” Voight said, adding that she and her husband had little luck collecting when their home was damaged. They also tried getting assistance from the Federal Emergency Management Administration, but couldn’t because their flooding wasn’t caused by a natural disaster.
Industry experts said flood insurance has become more of a burden than a safety net for many people.
“When we were using it a lot here in Connecticut during (superstorm) Sandy, people realized that not only was it not a great product to rebuild your home again and to value your contents, but also what do you do for four months while you’re not living in your home?” said Nick Ruickoldt, a Fairfield based property and casualty insurance agent.
Insurance premiums before Sandy and Irene were already pricey, Ruickholdt said, and policy costs have continued to grow.
Depending on the area and whether the house follows FEMA standards, he said, flood insurance can range from $600 to almost $4,000 annually.
“If you’re not in a community that can warrant that price tag, it has a really shocking effect on the housing market in a normal circumstance,” Ruickholdt said.
Price affects sales
In some markets, the added cost of flood insurance and making a home in a flood plain safe has become a deterrent for buyers.
In the higher end market — $500,000 and above — Realtor Dan Ferriouolo said buyers typically aren’t swayed by the added cost, but it’s a different story on the lower end of the spectrum.
“You have these people who are buying $200,000 homes that are in flood zones and then all of a sudden they find out that they have a flood insurance premium of $2,500 a year and it completely bumps them, because they can no longer afford it,” he said. “They may be near a creek or in a lowlying zone and it kills the value over there.”
That was the case with a home he was selling on Thomas Street in West Haven that closed for almost $70,000 less that it could have because it was in a flood zone. Ferriouolo said he struggled to get any offers for the home, which was eventually foreclosed on and purchased by an investor for $112,000.
According to Ferriouolo, premiums continue to increase even though it’s been more than six years since the two most recent highimpact storms struck the area, tropical storm Irene in 2011 and super storm Sandy in 2012.
Getting an insurance quote creates its own hurdle, according to Adam Roy, associate sales manager of William Raveis’ Milford office.
“It’s a point of contention and a huge factor when pricing a home for a seller because they know that flood insurance is required and that is on top of taxes and everything else,” he said, adding that deals have fallen apart in the past because of flood insurance.
Quality of life
On the other hand, beach property is always desirable to those who can afford it, experts said, and the risk of flooding comes far behind other concerns when a affluent buyer is looking to move into an area.
“There is sense among buyers that if the property that you are buying is FEMA compliant and is built to withhold floods such as the one we experienced with Sandy, there is a comfort level there,” Real estate agent Kim Harizan said.
Homeowner Ian Warburg said his family members have lived in Westport for decades, often in the town’s beach area. He recently listed his mother’s house in the Compo Road area.
He said his family hasn’t been worried about flooding even after Sandy and Irene damaged the house.
“Coastal flooding and the threat of storm surge is something we live (with),” he said. “I don’t think we live with any daily fear and concern, but we can’t deny that the science seems to indicate that, over time — over the next number of decades — water levels are projected to rise and will ultimately have a real impact on living in these lower lying coastal areas.”
Instead, he said, the state’s financial health — not possible flooding — is affecting home values, and said the state’s financial problems are a “cause for pause” for buyers considering suburbs in Fairfield County.
“There is sense among buyers that if the property that you are buying is FEMA compliant and is built to withhold floods such as the one we experienced with Sandy, there is a comfort level there.” Kim Harizan, real estate agent