Flood Prone Areas Are Still Feeling the Effects of Last Year's June Flood
Last year, the flood that hit Calgary was devastating and changed the real estate market in many of the hardest hit areas. In these areas, homes lost an average assessed value of $208,870 and this added up to a total of $405 million that was lost due to the devastating flood. As well, buyer confidence went down in these communities.
For many people, the prospect of living by the river is no longer as appealing as it may have been before June 2013. Some of the Calgary prospective buyers will not even consider moving into one of the communities that were hit hard by the flooding. Others will want to see proof that the flood situation won't reoccur. Every summer that passes by without a flood will help to raise consumer confidence in these areas.
On the other hand, some people are looking at these specific communities due to the lower price values of the homes. After the flood, the home prices in neighbourhoods that were affected the most went down by 10% to 25%. They have been rising ever since but it has been a slow climb upwards.
Another problem that has come about due to the flood is the cost of home insurance. Most insurance companies have raised the premium amounts for residents in Alberta and have also added exclusion zones. In these zones it may be difficult to find insurance that is reasonably priced. As well, some of the regions that are more flood- prone than the others have been targeted by the banks. Buyers are facing more demands in these areas to get approval for a mortgage.
Overall, the number of properties that were hit the hardest would not have influenced the aggregate figures on a citywide basis. While a small number of homes were seeing price decreases due to destruction, housing prices in Calgary continued to rise in other areas.Posted by on