Flooding in Calgary and effects on Real Estate Transactions
With the flooding occuring in Calgary I have been recieving alot of questions about Real Estate. Along with the devastating losses of personal items, people are also concerned about the loss of Real Estate and how the economy will be affected by it. While it is impossible to predict what lies in the years to come for the affected areas, it is not inconcievable to think that housing prices in the immediate area will decrease dramatically as it slowly rebuilds/renews itself, while prices in surrounding areas will increase as a result of a shortage of housing with many people being stranded. It is unfortunate to think about this early in the recovery process and only time will tell as things progress.
As for transactions that were pending (ie. sold but just waiting for the possession date) many people are wondering what will happen with the sale of their existing homes that may no longer exist, or need extensive repairs. As is, the current rule with insurance companies is that if flooding is due to back up of sewer, claims will be covered, whereas any flooding that occurs through windows and doors is considered an act of God and therefore not insurable. It is up to the insurance companies to decide who is covered and who is not. Ultimately, the government will be providing extensive flood relief to individuals affected as well, however in many cases this will not be enough to cover the majority of expenses.
As for pending transactions, all affected individuals are advised to contact their Realtor and each transaction will be dealt with on a case by case basis. It is impossible to determine how each one will play out and depends more on how the clients wish to deal with it. If you have any questions yourself about what may happen in the case of natural disaster, feel free to contact me to discuss further.
