Housing market slows retreat from rising seas, bigger storms

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Hot real estate markets have made some homeowners wary of participating in voluntary flood buyout programs, impacting efforts to move people away from flooding from rising seas, intensifying hurricanes and more frequent storms.

Chuck and Terry Nowiski lived in their country-style farmhouse with a wrap-around porch for 36 years before it flooded. After hurricanes Matthew and Florence, they said “yes” to the state's offer to buy their place and tear it down.

Buyouts also are considered cheaper for taxpayers compared to repairing and rebuilding flooded houses — sometimes multiple times — with government payouts and federal flood insurance. And while experts say housing markets are cooling off with rising interest rates, the challenge of finding affordable homes is likely to get worse.

“In general, they weren’t designed from the start with the idea of, ‘How does this household end up in a better place in the end?’” Hino said. “The focus has been on removing the buildings from the flood plain.” Democratic U.S. Reps. Sean Casten of Illinois and Earl Blumenauer of Oregon introduced legislation last month that's designed to shorten wait times and offer more assistance.

They're now considering selling to a “house flipper” or just staying in their home, which is near a tributary of the Cape Fear River. Other states are also offering money on top of federal disaster dollars. In response to rising home prices, the South Carolina Office of Resilience teamed up with coastal Horry County to create a “market adjustment incentive" in February, said Ran Reinhard, the office's mitigation director.

Rising home prices aren't making it easy. For example, the appraised buyout value of one Charlotte home rose from around $250,000 in 2020 to about $325,000 in late 2021. The property was then purchased by a private buyer for what county officials believe was as much as $100,000 over asking price.

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