How do floods impact property value?

As a broker and as an appraiser, the recent Colorado floods have has raised interest as to just exactly how an event like this will impact home values.  In the past, I have typically applied a discount to properties lying in a flood hazard area – these properties face higher cost for flood insurance and also have a higher degree of risk associated with them.  Illustration of that risk became very apparent this past week.

Here are a few studies that dig into this:

ftp://131.252.97.79/Transfer/ES_Pubs/ESVal/hedonics/deitutu_02_prophedonic_floodrisk_mastersthesis.pdf

EFFECTS OF DISCLOSURE OF FLOOD-LIABILITY ON RESIDENTIAL PROPERTY VALUES

http://www.jstor.org/discover/10.2307/3655805?uid=3739568&uid=2&uid=4&uid=3739256&sid=21102661394207

http://clasweb.clas.wayne.edu/Multimedia/DUSP/files/G.Galster/Pryce_Chen_Galster_Floods%20&%20House%20Prices-Housing%20Studies%202011.pdf