Shocking and unexpected flooding from Ida in New York and New Jersey could wipe out or delay 47,000 pending sales.
Pending Sales Valued at +$19.4B in New York and New Jersey At Risk
Not only did Hurricane Ida wreak devastating damage in Louisiana and Mississippi, Ida, even as a downgraded tropical storm, also wreaked unexpected and extensive flood damage in New Jersey and New York.
That flood damage could cause as many as 47,000 pending sales (valued at $19.4B) in New York and New Jersey to blow up, according to an analysis, by ClosingCorp.
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How in-Jeopardy Are Those 47,000 Pending Sales?
A lot. The Federal Emergency Management Agency (FEMA) has declared ALL of New Jersey and approximately one dozen counties in Southeastern New York disaster areas.
Lenders usually delay funding loans for homes in federal disaster areas until appraisal re-inspections have been done. If and/or when those re-inspections determine that storm damage has reduced a home’s valuation from its pre-storm-damaged price, the potential buyer could simply walk away from the deal without any penalty.
Storm Damage Flooding in New Jersey & New York Only Tip of Iceberg
In addition to parts and/or all of New York and New Jersey hit by Ida’s severe flooding, FEMA declared disaster areas devastated by Hurricane Ida in Mississippi and Louisiana.
Pre-Ida, FEMA had declared disaster areas in parts North Dakota, Missouri and Tennessee impacted by flash floods earlier this summer.
Timing of Ida’s Flood Damage Could Not Be Worse
New risk ratings for the National Flood Insurance Program are set to go into effect October 1. This means that many homeowners may not have been insured for this summer’s early fall’s flood damage because those soon-to-be-defunct rates were simply too high.
On top of that, a recent report from the US Government Accountability Office indicated that FEMA’s floodplain maps may not reflect current and/or potential damages due to flooding and heavy rainfall. This means that the new risk ratings for the National Flood Insurance Program were defined by out-of-date and/or inaccurate data.
Any way one cuts it, what happens with these 47,000 pending sales is currently up in the air or under water.
Thanks to ClosingCorp and Inman.