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Along many of Missouri’s riverbanks, we’re seeing waterfront homes being swept away by the swift force of rising water. All that remains are the crumbling concrete foundations.
In river cities like Kansas City, spring rainstorms can cause significant real estate damage. This is true for properties in flood zones, neighborhoods with flood risk, low-lying homes and those with on-site ground problems.
My company, Foundation Recovery Systems, has operated in the Kansas City market since 1992, and because we focus primarily on basements and foundations, we have seen quite a bit of flooding over the past 25+ years. A home with a broken foundation generally cannot get a mortgage, so spreading information on the issues with flooding and water damage is helpful for most homeowners and the real estate market.
This year, the property threat is at an elevated risk. The COVID-19 pandemic is already stretching the community response thin, and both Kansas and Missouri face an above-average flood risk this spring.
As the national real estate market faces uncertainty, let’s take a look at how Kansas City will fare if heavy spring rains pile on during COVID-19, as well as how flood damage impacts property sales.
How is the Kansas City real estate market doing during COVID-19?
Some real estate markets in the United States have remained insulated from the widespread market uncertainty that was caused by the public health crisis of COVID-19 and the resulting stay-at-home orders.
In Kansas City, real estate was hot before the crisis and we’re already seeing how this could protect property values from the downturn that other locations may face.
Even while the Kansas City Association of Realtors reports slower activity in April, the overall strength of the local market is expected to persevere. The number of listed homes as home-selling plans were delayed. However, compared to last year, the average sale price in April increased by 4.1%.
The real estate market in Kansas City has been shaped by high demand and low inventory. According to Zillow, the median price per square foot has been on an upward trend since 2013, while the average length of listing time has been declining.
I predict that this momentum from the past seven years will likely sustain property values and housing desirability, even as COVID-19 upends the way that real estate transactions are conducted.
How will a flood impact home sales?
While the housing market’s response to the pandemic has no precedent, we do have historical models for how housing markets respond to severe weather events.
In Kansas City, May and June are the wettest months of the year. Each month averages at least five inches of rain, according to the National Weather Service. With water tables already high and maintenance potentially left unchecked during the health crisis, the risk of flooding could be an especially bad year.
Depending on the severity of a potential flood, home values could be dramatically changed based on the waterline. Even a few inches of water in a basement could cause structural problems, pervasive air-quality issues and damage to homeowner psyche.
However, if a flooding event is compounded on top of the pandemic, the damage could be even more severe. Emergency management teams face social distancing and protective equipment challenges. The result could be that responses are more limited, and amounts of damage could increase.
In addition to the initial property shock, there could be a lingering effect on the real estate market. A study of a major flood event in Colorado showed that the number of sales dropped by 52% compared to previous years.
How much rain does it take to damage a property?
A major storm will, of course, cause widespread havoc. But even a smaller rainstorm can damage properties under certain conditions. Issues like a home’s site, city drainage and sewer, property grading and foundation strength all come into play. Let’s consider the scenario of just one inch of rain falling on a home that has poor drainage on one side.
First, there’s a wider radius to consider. If the home has grading issues, water from the street or yard could be diverted toward your home’s foundation rather than away from it.
There’s also the question of where the water that’s falling on your roof is going. Even one inch of rain on a roof can total a significant volume. For example, with an 800-square-foot roof, just one inch of rain means that you’ll be dealing with nearly 500 gallons of water. Without effective systems to keep that water away from your house, all of that water could end up in your basement or crawl space. If you have a 12-gallon wet/dry vacuum, that would be more than 40 tanks to empty.
A sump pump can automate water removal to help prevent accumulation inside your basement. However, addressing the structural problems that are causing the flooding is the best way to protect your home from foundation damage.
What other underlying ways can rain damage curb property sales?
After the water is gone, there are also secondary impacts on your real estate investment. Even when water doesn’t accumulate, persistent moisture issues can be a problem. While there are specific ways to address mold remediation, a musty smell can quietly damage your home value.
While the scent of freshly-baked cookies has long been considered a boon for real estate sales, a musty smell can be an instant turn-off to a potential home buyer. One study found that retail shoppers spent an average of 31.8% more money when in an environment with a simple, pleasant scent. In real estate, that would translate to a significant amount of money on the line.
Remember, the residential home market is psychological as much as it is structural. If a potential buyer sees soft ground or evidence of rain damage, doubt could start to grow and property enthusiasm could dwindle.
In a tight real estate market such as Kansas City, those concerns might not be enough to dissuade a buyer. However, it could give them more leverage during negotiations, resulting in a lower sale price, while neighboring properties that fared comparatively well during the storm could become more highly sought after.