Over the last week or so I’ve been asked many times, “What’s going to happen?,” or “What do you think about…?” These are tough questions. Sometimes I want to respond, “Well, how much time do you have?” While some may think this is a flip answer, I certainly don’t mean it to be. Here’s the thing: Every situation is different.
For the sake of time consider this snapshot. Pick a couple of streets in Lake Katherine. Let’s say, Quail Lane and Rickenbaker. Same neighborhood, same school zone, same brick ranch style 3/2. Again, in the name of time, let’s assume they both have flood insurance with the same insurance company. Equal FEMA checks notwithstanding, both policies are capped at $250,000, and both homes were purchased within two to five years of each other. Both paid 20% down and both are on a 30 year conventional mortgage. One paid $249,900, and one $450,000. See what I’m getting at? Given the cap on flood insurance, one house in a wildly different situation than the other.
Let’s drill down even closer. Direct neighbors on Portobello. Same style home. Same value, and same damage. One owner has lived there 40 years, and owes $0 to the bank. Next door purchased their home within the last year or so for $500,000, and owes roughly $400,000 to the bank. Both have flood insurance capped at $250,000.
See what I’m getting at? “What do you think?”, and “What’s going to happen?” are big, broad stroke questions that require pinstripe answers. The difference in situations could be the difference between a family rebuilding their home, and throwing the keys in the front yard and walking away. After all, if someone owes $400,000 on a mortgage, and gets a $250,000 check, what does one do? The math is easy enough, but who has that cash difference?
As you can see, every situation is different. Short and long term solutions and property values are another blog post, for sure. That said, the quickest answer to “What do you think?” is, “It’s a mess.” “Well, no duh,” I know, but it’s just not that easy.
Do I think people will want to live in, and pay the same prices they did before the flood hit Downtown neighborhoods like Lake Katherine, Heathwood, Forest Acres, Arcadia Lakes, Forest Lake, Hampton Crest Estates, and King’s Grant? All day.
FJ
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