Capital Region real estate market could feel ripple effects from flood insurance hikes

Changes to FEMA’s National Flood Insurance Program may mean higher rates for Louisiana residents, and Baton Rouge-area residents living in the floodplain could be largely affected. So, what does it mean for homebuyers?

The new rates will be a big consideration for buyers and could have ripple effects on the tight housing market, says Christi Adams, a real estate agent with RE/MAX. 

Changes to the pricing policy depend on a home’s perceived flood risk, not where it is on the flood map. Since the new rates will not go up equally across the region, property owners or potential buyers can not just look at the map to see what their rates might be, Adams says, 

The Baton Rouge area is still seeing a shortage of homes, Adams says, but these new rates will make buyers more picky, knowing they will have to add flood insurance on top of possibly inflated home costs. It will affect the market tremendously, she says, especially in Ascension, Livingston and low-lying areas of East Baton Rouge. 

People who flooded previously, like in 2016, will be hit the hardest by the new flood insurance rates, she says.

Jerry Del Rio of Del Rio Real Estate says many potential homebuyers will look at disclosures for homes in an area that flooded, even in non-flood zones, which will affect whether they buy.