The September floods in Colorado are, by many accounts, the worst case scenario. These conditions are the sort that cities consider in the creation of new flood plans. Without a doubt, the floods will change the lives and the way of life for many Coloradans. But will they have an adverse impact on property values in Colorado?
At our Housing Helpers Boulder office we are already getting this question from homeowners, prospective home buyers, and landlords alike. Boulder Colorado, a place historically where property values have managed to stay relatively insulated from economic recessions, stock market crashes, terrorist attacks, and more. Could the floods of epic proportions be the event that actually bring Boulder’s property values down? According to a study found on the City of Boulder’s website, maybe they will. Maybe they won’t.
The study, published by Stephen Yao of Risk Frontiers – NHRC and Macquarie University, whether a property’s situation in a floodplain impacts its values or not depends on the premium placed on waterfront properties in the area. Some waterfronts are so in demand that owners are willing to take the risk of the 100 year flood in order to have the views and the conveniences of living close to the water.
Whether or not property values decline after a flood has taken place also vary from study to study and region to region. One point emerges from the various results, however. Being located in an area where a flood has occurred is more likely to impact property values than being located in a floodplain. How long adverse impacts of flooding on property values last depends on how extensive the damage was.
As Boulder and the region recover from the floods over the next days, weeks and months, the impact of this month’s events on the real estate market are uncertain.
Those of us in the industry will most certainly be paying attention to the situation, because the people we serve are relying on our experience in the area and our knowledge to make important decisions regarding the buying and selling of properties in the area.
More importantly for now we are simply focused on helping our neighbors, friends, and family to clean up and restore their lives to normalcy as much as possible. For many of us it will be months, if not years, before the reminders of this epic event will be erased.