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Catskills - Sullivan County - Ulster County Real Estate -- Catskill Farms Journal

Old School Real estate blog in the Catskills. Journeys, trial, tribulations, observations and projects of Catskill Farms Founder Chuck Petersheim. Since 2002, Catskill Farms has designed, built, and sold over 250 homes in the Hills, investing over $100m and introducing thousands to the areas we serve. Farms, Barns, Moderns, Cottages and Minis - a design portfolio which has something for everyone.

October 2, 2024

Water, flooding

The flooding in western North Carolina and Tennessee is frightening.  With no warning 16”-24” of rain fell onto a mountainous region crisscrossed with small streams and rivers, turning meandering waterways into raging monsters.  I mean, we have that all over my working and living territory - lazy little streams that barely flow sometimes.  If something like this happens again, somewhere else, people will start to peer off their decks at those little streams with a feeling of unease.  If this is climate change - random, unpredictable storm events that aren’t even considered a possibility in civil engineering planning processes, that will become disorienting very quickly.

This catastrophic rain event puts my mind to work on a few fronts.  I list them first, so I don’t forget: insurance, familiarity, construction, consumption of news.

In some ways, we all are the proverbial frog in the boiling water.  The water is getting hotter, the symptoms and consequences of a changing climate - more disasters, higher costs to rebuild, uninsurable areas, less predictability, a human nature sense that it won’t ‘happen here, to me’.

I don’t watch any network or cable news.  As a news junkie - or a reformed one, as I had a hard time to continuing to read the news as propaganda that became ever present recently - I read my news, or catch it on TikTok, and both approaches are vastly different than watching it on one of the cable news shows.  I have a friend who gets her news only from blips on the TV and while taking zero away from her, her opinion and perspective can be summed up whatever is being shown and repeated on the TV.  Tik Tok actually has a pretty interesting way of delivering the news, with different sources, different voices, none of them predictable, many times personal accounts, many times contradictory, many times with greater length, meaning more closely paralleling the actual event duration rather than saturation coverage and then moving on.  The stuff broadcasting through TikTok from NC or St. Petes is truly up close and personal, without the distracting political goals.

I’m familiar with St Pete’s, purchasing a pretty fabulous top floor condo in a best in class building in DownTown St Pete’s, which has experienced a surge in downtown condo construction.  I’ve been waiting since spring of 2021 for it, having signed up for it prior to construction.  This building is 30’ above sea level a mile or so from the nearest body of water so other than psychologically and some debris cleanup, unaffected by a storm that left its world class beaches in disarray.  The rebuilding of the sandy beaches effort was turned on its head when all that new sand was pushed inland, and now the streets and houses a block or two from the ocean are covered with the tiny sand molecules.  In NC, it’s all mud.  I experienced a flood event in 2021 in Phoenixville PA where I own 4 single family residential rentals, and one thing we didn’t have for whatever reason was residue mud.  Just water that rose, flooded us, and then went away.  The mud, now that’s a different cleanup story altogether.

Reflection, a proposed 18-story condo tower in St. Pete, is over 40% sold

I’m also familiar with Ashville, specifically the Biltmore Village and Manor, the largest home in America built by the grandson of the Commodore back in 1890.  Climate disasters are the true equalizers, since neither wealth nor privilege protects against Mother Nature, or even more true, since wealth likes water, perhaps the upper classes are even more at risk here, over time.

It was always clear that insurability of homes in certain areas was going to bring about a ‘come to jesus’ moment in confronting climate change, because while politicians can posture, and us individuals can hide from it, the science and actuarial tables of insurance are solely in the business of risk management, and the risks were/are increasing, as are the flow through insurance problems of insurance companies pulling out of areas or raising premiums to shocking levels in those areas.

What is now apparent is that insurance companies can never hedge their risks enough by solely concentrating on at-risk areas and that’s what we are seeing across the board - that all insurance is getting more expensive, particularly homeowner policies.  What used to be $800 or $1200 or $1600 is now $3800, especially in areas not close to fire stations or fire hydrants, ie, rural homes.  So the insurance companies are, in order to stay financially solvent, spreading the pain to all their policy holders.  Same is true with car insurance - everything is more expensive to fix - cars, homes, boats - and that results in higher premiums across the board. (caveat - some of this also, for me, is that I'm buying nicer things, and haven't adjusted my 'insurance mindset' to the obviousness that nicer things cost more to insure - a Mercedes is more expensive to insure/fix than a 1998 Rav 4, a 2008 Mariner, or a Jeep Grand Cherokee).

So in some ways, insurance costs and/or the inability to actually even get insurance, is the proverbial canary in the coal mine, and that bird is experiencing difficulties.  We had a homeowner who had a wood-stove, installed in new construction 10 years ago, which was flagged for improper installation, with a demand for installation records and proof of professional install.  That’s one hard exercise for a new homeowner trying to trace the installation back through 1 homeowner, it’s another when the wood stove was installed in 1952 and the same demand is made.

What we are seeing is this new-found seriousness on the part of insurance companies to reduce their risks.  And also making payouts a lot more difficult.

I’m pretty careful about where I build.  But if we start to see random flooding after intense rain where every stream is a potential problem, that’s a gigantic expansion of risk from where we currently are, with oceanfront and documented flood plains at most risk.  I mean, if the government starts to change flood plain maps as flooding becomes more pronounced, and one day you wake up and your home is now rated as flood prone, that is big deal for the homeowner and the inherent investment in the home, since flood plain/prone homes are worth less.

Anyways, what has happened to the those communities, communities I have visited and know well, leaves me with a disorienting sadness for those folks who were just doing their thing, at 2000 ft above sea level, and then it was gone.

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