Almost 4 million single-family homes in floodplains are overvalued at an average of $11,526, according to new research from Stanford University published in Proceedings of the National Academies of Science.
- Big picture: As experts put a more accurate price on flood risk, homeowners face insurance hikes and decreases in property value.
- Go deeper: Researchers looked at the impact updating flood maps has historically had and found that inclusion in new maps costs homes roughly 2 percent of their value. But after accounting for expected flood damage, fully insured homes lose anywhere between 4.7 and 10.6 percent in value.
- What they’re saying: The overvaluation is really concerning, said study lead author Miyuki Hino. “Improving how we communicate about flooding is an important step.”
What’s next: More homeowners will find themselves in a floodplain if FEMA implements a new pricing model for the National Flood Insurance Program (NFIP) called Risk Rating 2.0.