Florida Foreclosure Armageddon, The 2014 Florida Real Estate Is Crashing Because of Biggert Waters Flood Act

Remember that real estate recovery in 2013?  Remember how Florida’s economy started to rebound because real estate sales started to tick up again?

I was getting my hair cut the other day and my barber commented on how the Realtors had really gotten their swagger back….but that it was like someone punched them in the gut recently.

Well, my friend Billy the Barber is correct.  The Realtors did get kicked in the gut….although it should be noted that their own National Association of Realtors supported Biggert Waters, apparently not concerned about the devastating impact it was going to going to have the larger economy.

Did they have any idea that Biggert Waters was going to completely devastate entire regions…like all of Florida?

Well, you can throw in the toilet all the ratios and models regarding mortgage modifications and short sales….they’re completely useless in a climate where insurance premiums are going to continue to rise.  And keep in mind that this increase, the Biggert Waters flood increase, is just the first of so many that are going to come. Look for dramatically increasing premiums across insurance of all types. Health, home, auto.  Insurance is a quasi-government function, mandatory payment to a regulated industry that’s in bed with the government….a way to bleed additional blood from a citizen without the blatant attack of tax or fee increases.

It doesn’t appear that the banks have any idea this has happened…just yet. I haven’t seen any new escrow analysis letters arriving in homeowner mailboxes.  And what about all the REO properties held by the banks?  When will they realize that their insurance costs just went through the roof?  How’s that gonna work when they try to sell that property?

From Sarasota Tribune:

“It’s a disaster,” said area real estate attorney Matt Weidner. “Values are going to plummet and home sales are going to suffer in many coastal areas like Siesta Key and Longboat because nobody will be able to afford flood insurance.”

The disaster ain’t just for rich folks in big waterfront homes.  In fact, the impact will be far more significant on modest homes near any bit of water. (you know, all of Florida basically)

Premiums will begin to climb exponentially for older waterfront properties, with estimates as high as 400 percent in some parts of Southwest Florida. That will add substantially to the cost of buying and owning real estate.

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