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Market Adjustment After Harvey Flood?

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Workbox

Elite Member
Joined
Mar 2, 2005
Professional Status
Certified Residential Appraiser
State
Colorado
I am doing investor flip or hold properties for a hard money lender and I am just now getting the flooded rehabs that have been damaged by Harvey.

Sales price $260k, repairs $90k, FOV $515k.

The FOV is before the flood. I am trying to wrap my head if there is any stigma or environmental adjustments at this point?

Any Pointers Guys?
 
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A K

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Jul 31, 2013
Professional Status
Certified Residential Appraiser
State
Maryland
Only the data can answer that question.
 

Workbox

Elite Member
Joined
Mar 2, 2005
Professional Status
Certified Residential Appraiser
State
Colorado
What research have you performed so far?
So far at this point, those that are did not get damaged and based on condition and percent differences. These are first time floods for some houses, This one second time flooded. Usually 10-15% discount.
 

A K

Elite Member
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Jul 31, 2013
Professional Status
Certified Residential Appraiser
State
Maryland
I think one of the considerations would be if there is impact on value for a renovated house on a street or neighborhood full of damage houses.
 

Workbox

Elite Member
Joined
Mar 2, 2005
Professional Status
Certified Residential Appraiser
State
Colorado
I think one of the considerations would be if there is impact on value for a renovated house on a street or neighborhood full of damage houses.
This neighborhood is half and half damage. Almost a 30% difference. I am trying to figure out any added %/Stigma after renovations.
 

Workbox

Elite Member
Joined
Mar 2, 2005
Professional Status
Certified Residential Appraiser
State
Colorado
Stigma from what? Parts of Houston have historically suffered flooding. Homes that suffered fire damage have been repaired and resold. The data you seek is out there
Good point, once they finish this renovation, they will put back on the market and wondering what a willing buyer will pay for a renovated dwellings that has been damaged, currently. I guess we need more time or couple of months to really start seeing the impact for first time flooded areas.
 

timd354

Elite Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
I am doing investor flip or hold properties for a hard money lender and I am just now getting the flooded rehabs that have been damaged by Harvey.

Sales price $260k, repairs $90k, FOV $515k.

The FOV is before the flood. I am trying to wrap my head if there is any stigma or environmental adjustments at this point?

Any Pointers Guys?
It is probably too soon to tell exactly what the amount of the stigma will be (if any) for houses that damaged by the Harvey flood in Houston which were then restored as there have been likely very few (or no) sales of such properties yet. You are going to have to research and dig deep into this one to figure it out....You are going to need to interview a bunch of market participants, research what happened after similar flood disasters in Houston and/or other localities, etc.

One thing to keep in mind is that over 100,000 houses in the Houston area suffered flood damage and over the past few years the population of greater Houston (the Houston MSA) has increased by over 120,000 per year for several years now. Considering that most of Houston's infrastructure and industry survived the flooding just fine and the economy is back up and running there (I just visited there two weeks ago), there is a lot of reason to think that there is and will continue to be a shortage of available housing (both for sale and rent) in the overall Houston MSA for at least the next few years until most of the 100,000+ damaged homes are repaired/rebuilt.
 
D

Deleted member 130081

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Yes, you wont know until you know. You have an appraisal problem where the local data has not yet surfaced. Maybe you could look to other storm-damaged parts of the country and get a sense of how a market might react after. I would say this is an instance where general data, in the absence of subject specific data, would be relevant and possibly all you have. Pendings could be all you have and helpful too. Be sure you disclose this stuff in your report (quantity/quality of data, reconciliations, etc) - hard lenders are not your typical mortgage lenders (in a good way). Good luck.

On another note, I too am an investor and wonder what FOV is?
 
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