Should I buy in an A0 flood zone? (Bend, Redmond: for sale, 2013)

[redguard57]

So I'm pending on a house in an area that's been designated by FEMA as an A0 flood zone. That means it could get 1 foot of water in a 100 year flood scenario. It was built in 2007, so there's been no damage since then. This is in Jefferson county, a place that gets at best 50 inches of precipitation a year. From my research on FEMA's website, the last flooding that affected the area was in 1964. The FEMA map is from 1987.


This house was at the price I wanted and with the amenities I wanted. But since my lender got back to me and showed me the map, now I'm very alarmed. 1) My dad always told me "don't live in a flood plain." 2) I'll have to purchase flood insurance which I've heard is expensive. 3) It will aversely affect the home's appreciation.

What's so frustrating is that this is Central Oregon, a place where the home values fluctuate wildly.

Rents are getting out of control; I'm already priced out of house rents. The future increasingly looks like one where I'll be stuck in a crappy apartment where I can hear the spousal abuse going on downstairs and have to deal with the drunk neighbors one door over peeing in the parking lot.

I've been looking for 5 months now and finally thought I found something, but now this.

I've lived here for almost 2 years and now I'm starting to hate Oregon.

[Silverfall]

I'd be very cautious buying in a flood plain. FEMA is $24 billion in debt and the Briggart Waters Act was passed a couple of years ago that will jack up flood insurance rates. It was delayed for 4 years due to outrage over the massive insurance rate hikes. Congress just passed a revision that will gradually increase rates, but living in a flood plain will restrict the resalability of the property if the rates increase like they are expected to.

To give you one example, someone here local went from $1600 a year for their insurance rider to $6500 a year.

[Steve Pickering]

100 year floods have been occurring about every 20 years lately.

And you must be picking some real sketchy neighborhoods to live in. I only remember living in one apartment as you described and it was a real shady neighborhood. Your description is not common for most apartment dwellers.

[redguard57]

You'd be surprised how sketchy many of the rentals in Central Oregon are, at least at what I can afford, which is under $1000. Mine wasn't that bad until about halfway through 2013 when rents around the region began to rise sharply. The occupancy rate has gone to something like 97-98%, so it's a seller's market when it comes to rentals. What I assume happened is that people started having to double or triple up and share rent.

Basically, if you don't have at least $1500 to rent a house, or can borrow $250,000 or more, it's hard to get a decent place now. I can only borrow up to $150K, and truthfully I would be more comfortable at $130K or lower.

I think I've decided to walk away from this particular house in the flood zone. So frustrating. At what I can afford, there are just not many options.

[Steve Pickering]

With all the foreclosures, people who had jobs in the area needed housing, and that meant rentals. Most will never be able to buy a house again, and that will continue to fuel high rental dollars.

Also many of the Californians and other out of state newcomers are here for the same reason. They lost their house and figured this would be a good time to move, so they landed in Bend, and rent now.

[Larry Caldwell]

In 2007, FEMA flood certification was required for all new construction. Your local planning office should have the cert on file. It was required to be built at least one foot above maximum flood height. The yard may get wet, but the house won't unless we get a 250 year flood event.

If flood insurance is required, you don't want the house. Insurance rates will be as much as the mortgage as federal subsidies are phased out. However, you haven't done your due diligence. Get to the planning office, contact FEMA to find out if insurance will be required, and find out what is going on.

If the cert isn't on file, somebody screwed up. Require the current owner to provide it as part of disclosure.

[oregonwoodsmoke]

I'm trying to picture any place in Jefferson County where the level of the river is not at about 600 feet below the elevation of the buildings.

Where specifically are you looking?

There is some place in Jefferson County that gets 50 inches of rain a year? What?

[oregonwoodsmoke]

For $130,000, you can still buy a small house in Redmond (Deschutes County), Prineville (Crook County), or Crooked River Ranch, Madras, Metolius (Jefferson County). None of those places ever flood.

I know of two houses in Tumalo, right on the river, that have to sand bag every 7-8 years. They would cost a heck of a lot more than $130,000, so those aren't the ones you are looking at.

I had an acre and a half with house for sale for $135,000 in Bend last year, although it wasn't financable, but I see others at that price range. Either you aren't hunting very hard, or you have higher standards than you can afford. You won't get much for that amount of money.

[Hawk J]

Live on a rural mountain. You will need to drive the backroads. Many local folks don't even list their home with a realtor, they just put up a sign at the bottom of their driveway, or put a note on a bulletin board, or pass word around......

[Steve Pickering]

Originally Posted by oregonwoodsmoke

For $130,000, you can still buy a small house in Redmond (Deschutes County), Prineville (Crook County), or Crooked River Ranch, Madras, Metolius (Jefferson County). None of those places ever flood.

I know of two houses in Tumalo, right on the river, that have to sand bag every 7-8 years. They would cost a heck of a lot more than $130,000, so those aren't the ones you are looking at.

I had an acre and a half with house for sale for $135,000 in Bend last year, although it wasn't financable, but I see others at that price range. Either you aren't hunting very hard, or you have higher standards than you can afford. You won't get much for that amount of money.

I financed 2,400 square feet with acreage in Dallas for $80,000 with the rehab loan. There are currently 17 listings in and around Dallas under $130,000. Five of them with acreage.