How much or what % does house being in Flood Plain hurt value?

[autobot]

For example:
House is on a once acre lot on edge of flood plain where 1/2 the lot is in and 1/2 is out. Street access is on the out of Flood Plain 1/2.

How different would the Appraisal be if the house is in or out of the Flood Plain, and what sort of formulas are used for things like how deep the Flood is expected to be, and what sort of construction the house has?

Imagine you are consulting for a builder who is considering building in the Flood Plain because its further off the road, etc, but also wants to have max-value/equity.

PS-Is any of that in UAD 3.6?

 

[swandel1]

Depends.......where is house on the lot? In the flood plain or not? You also need to do paired sales in your area. One just cannot assign a generic percentage or dollar amount. Too many variables. Sorry, no easy answer here. You gotta do the work......

 

[autobot]

Depends.......where is house on the lot? In the flood plain or not? You also need to do paired sales in your area. One just cannot assign a generic percentage or dollar amount. Too many variables. Sorry, no easy answer here. You gotta do the work......

Like I said, all other things being equal, what would be the diffs (or default equations) if the house was in the middle of the 1/2 acre, of the 1 acre lot, that is Flood Plain VS if the house was in the middle of the 1/2 that is not in the Flood Plain?

Yeah, I know it will come down to "comps" but what would guess the EQUATIONS are?

Looking at Flood Zone maps they are graduated from IIRC 1-6+ft for "max flood" and I'm wondering if Appraisal/Insurance would straight line or exponential, and which exponential or are there plateaus?
Is it "Floods are Floods" flat or is it "minor Flood is an inconvenience, over 2ft is Total Loss" or what?
How about method of construction vs Appraisal/Insurance. I saw one house by a river build in cinder-blocks that was claimed to be a "forever house".

AI says "average 4-12%".

AI Overview



On average, a home's appraisal value or market price decreases by 4% to 12% when it is located in a designated floodplain compared to an identical home outside a flood zone. This reduction is driven by recurring costs like mandatory flood insurance and buyer caution

 

[Airstream]

1. Just because the house is in a flood zone doesn’t mean the house itself is in the flood zone. Houses can be built to sit above the flood zone and a certification can be given stating it is out of the flood zone.
2. Sometimes people don’t care if it is in a flood zone if it is a 100 year flood zone. They figure they will beat the odds and they like the fact it is a low lot close to the water. Heck look at all those people that buy ocean front property in hurricane areas.
3. It often depends upon the cost of flood insurance for the general property. And this too much of a variable for one size fits all percentage.
4. Typically when doing an appraisal of a property we look for properties in flood zones to compare to. If that is difficult then one could estimate how much more house could be bought with that money. The adjustment on the grid could be at a number of different places and would need to be explained in the comments section. GSE’s don’t like that because it isn’t always a dollar for dollar adjustment because some people are more apt to take on the risk due to other positive factors in the property, plus it become an across the line adjustment. GSEs like what is called bracketing.

 

[Fernando]

Formula? AI can't handle this issue.
Each property is unique and a human appraiser is best to understand how to deal with it.

 

[Zoe]

Some people don’t carry insurance. They are self insured. If they lose it and can’t get disaster money, they lose it all