June 27, 2013 | CREBNow
It will take some time to determine the full impact of Alberta's worst flood ever on the housing market, however, recent history suggests property values in affected areas in the city of Calgary will not take a long-term hit.
Although estimates are difficult until the extent of the damage is revealed, this year's flooding saw far more damage than seen in 2005.
"In terms of property values in the impacted communities, if we look back to 2005, there does not appear to be any long-term impacts on property valuations," said Ann-Marie Lurie, CREB®'s chief economist.
"While the full extent of the 2013 flood damage is said to be more widespread, the desirability of these neighbourhoods is likely to outweigh concerns regarding future flooding risks, indicating that remediated homes will likely maintain their value over time.
"We would expect that listings in (affected) communities would decline, which could impact demand in surrounding areas that were not impacted by the floods, and the already tight rental market," she said.
As floodwaters recede, Calgarians are cleaning up while the city makes its way back to business as usual — including the buying and selling of homes. One Calgary lawyer is pleased to see how buyers and sellers are adjusting to the circumstances.
"People have been taking really, really good approaches to things, very easy negotiations," said Jeff Kahane, a lawyer specializing in real estate and wills and estates.
"The general rule is when someone buys something and damage occurs before the possession date, the seller is responsible for putting it back into that proper state it was in beforehand," he said.
Kahane said ultimately home transactions affected by the flood depend on the extent of the damage to the home — minor damages can be fixed, but where major damages are concerned, "The buyer would have a reasonable amount of time to know what, if any, insurance was in place to repair it.
"We had one (situation) ... where the water came in probably because it was blowing the wrong way," Kahane said. "The client went to do an early walkthrough and there was a puddle at the bottom of the stairs and he said, 'You know what? I don't even want compensation for it.'
"It was an unusual, out-ofthe- blue, extraordinary kind of thing — an unfinished basement, 'I'm not worried about it', and there's none of this trying to rip people off or anything, so (I'm) really impressed."
As far as home transactions go, Kahane said some complications arise when it comes to condos. He has had calls for people with condos where their actual suite is intact, as it was on an upper floor away from water, but they're not yet aware of the extent of the damage to the building's parkade.
"A lot of insurance policies do not include flood damage. If it's sewer backup, then it usually depends on some specific policies — but it usually is included. If it's a mixture of the two, then usually, it does go through as an insurance claim."
CREB® is holding a free public information session for REALTORS® on July 3 from 1 – 4 p.m.
"Although downtown businesses in particular have been hit hard by the flood, the business of real estate carries on," CREB® President Becky Walters said in a message to members. "This is a time when you prove your value as a REALTOR® to your clients, and we are here to support you in those efforts.
"For matters relating to property damage or loss, homeowners are encouraged to get in touch with their insurance company for claims."
As the floodwaters decreased, Calgary's sense of community increased at an incredible pace with several acts of kindness and camaraderie shown. At McMahon Stadium on June 24, Calgary Mayor Naheed Nenshi addressed a crowd of thousands gathered in hopes of volunteering for flood relief and cleanup.
"This is Calgary, folks. This is the spirit of this community," he said. For more information, visit www.calgary.ca
. follow the City of Calgary on Twitter at @cityofcalgary
and visit www.calgarytransit.com
for updates on the City's transit systems.
Calgary Real Estate | Calgary Real Estate News | City of Calgary | CREB President Becky Walters | CREB Chief Economist Ann Marie Lurie | Jeff Kahane