Home Owners Face New Hurdles Post-Irene

September 1, 2011

Many home owners in communities from North Carolina to Vermont are still picking up the pieces after severe flooding plummeted the Eastern seaboard last weekend. And some housing experts say Irene may have a lasting impact on those communities’ real estate markets, possibly depressing home values further and putting more home owners on the brink of foreclosure.

"There's so much downward momentum in the real estate market that this is just one more straw on the camel's back," says William Harrison, a faculty lecturer at the Moore School of Business at the University of South Carolina. "The Northeast just had the hell scared out of it and fear has a way of translating into lower home prices."

Home values may be pushed down if the public now views living near these riverbank or beachfront communities--once considered “hurricane proof”--as risky.

Closing delays on pending sales are also expected to grow, according to news reports. Bridgette McGee, a loan officer at Allied Home Mortgage Corporation in Baltimore, Md., says several properties in the area have faced closing delays from the storm, with homes in the areas seeking funds from the Federal Employment Management Agency (FEMA) being asked to submit to additional inspections.

"Lenders are being cautious so they're requiring re-inspections before moving forward," McGee told MSNBC news. "Major damage could affect the marketability of a house and if there's property damage people might start to look elsewhere."

Some home owners also are finding that their insurance won’t cover the full cost of damages from the flooding and storm. Home owners who were already underwater on their mortgage and who have sustained damage from the hurricane that isn’t fully covered by insurance may see this as the deciding factor in walking away from their home, housing experts note. 

Source: “Hurricane Spells More Bad News for Home Owners,” MSNBC.com (Sept. 1, 2011)

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After Irene, Home Owners Find Insurance Gaps