Monday, June 18, 2018
Business

From home sellers and agents, a sigh of relief over flood insurance overhaul move

ST. PETERSBURG — When her daughter called with news of the Senate's flood-insurance overhaul this week, Keller Williams real estate agent Eve Sawicki decided she had to celebrate.

Sawicki, a St. Petersburg agent who for months had watched sales of homes threatened by huge rate spikes go "dead in the water," popped a bottle of Korbel champagne.

"What buyers have been very leery about is the uncertainty, this big black hole," Sawicki said. "What the Senate did for us … was remove that uncertainty from the market. Waterfront homes are once again going to sell."

Congress' overwhelming support of a bill softening the terms for flood insurance, as well as the bill's imminent signing into law by President Barack Obama, has local Realtors long stymied by soaring rates and sluggish sales breathing a sigh of relief.

The bill would remove one of the most grating provisions of the Biggert-Waters Flood Insurance Reform Act by allowing insurance premium subsidies to carry over when a home is sold.

The loss of subsidies had stunned many home buyers, who learned that their insurance costs would soar by thousands of dollars a year. Sales in flood-zone neighborhoods such as Shore Acres, the Pinellas beaches and even inland St. Petersburg plunged.

It wasn't a problem just for sellers either. J. Lori Johnston, who wanted to buy a home near the beach but was hindered by high costs and a bureaucratic "nightmare," said in recent months that "childbirth labor would have been easier."

The new law would allow for refunds for buyers already hurt by that change, set yearly insurance rate-increase caps for older homes and preserve subsidized rates for "grandfathered" homes later designated as higher risk.

Some agents puzzled over details of the law's implementation and worried that homeowners could get soaked again as rates continue to climb.

"This is probably the best news we've had in months," said Re/Max real estate agent Kelly Lee McFrederick, whose flood-zone sellers, even after dropping prices, have seen interest from buyers suffer. "But there's still going to be confusion. Is there going to be a cloud hanging over us for the next four years? What happens then?"

But other agents said this could mark the start of a turnaround for a fragile coastal market.

"I don't know that it'll be this firecracker that goes off and we say, 'Woohoo! Let's sell real estate!' " Coldwell Banker managing broker Vicki Gonzales said. "It's going to be a more slow and steady effort. But it's something we can hang our hat on. We're not chasing that unknown."

Drew Harwell can be reached at [email protected] or (727) 893-8252.

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