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Darcie Lloyd in front of the house she lost to the flood last year in the Bowness community of Calgary, Alberta, April 25, 2014.Todd Korol/The Globe and Mail

Darcie Lloyd has had little sleep, or peace of mind, since historic floods hit southern Alberta 10 months ago.

The bungalow she and her ex-boyfriend own a few hundred metres from the Bow River was badly flooded on June 21, 2013. The dirt basement filled with water, crumbling the structure supports and making their home unfit for habitation. It is now set for demolition.

As far as Ms. Lloyd knows, the house, built in 1954, had never flooded before last year. Assessed by the city at $425,000 in early 2013 – before the floods hit – the property's latest valuation was pegged at $250,000, less than what's still outstanding on the mortgage, before any insurance and disaster-aid payments.

"That was a real kick in the crotch," said Ms. Lloyd, 38, an electrician. "I still have no idea how I'm going to come out of this."

Ms. Lloyd and her boyfriend split up in part owing to the financial and emotional stress of the flood. Neither has been able to pay their rents and the mortgage at the same time. Now, the home, listed for sale at $300,000, is being foreclosed on.

Alberta real estate is booming thanks to the province's strong economy, but the pockets where the flood damage was severe inhabit a completely disparate reality. A number of experienced Calgary real estate agents say some disaster-affected homes have seen price drops of 10 per cent. And for houses in the hardest-hit neighbourhoods with the worst damage – including homes that saw water slosh through their main floors or structures that need to be torn down – prices have plummeted 25 per cent or more.

Now, as the high-water season looms, these markets are in a state of limbo. The normal spring season of buying and selling has been marred by uncertainty about whether flood-mitigation dams and tunnels will be built, the city's proposed new rules for building in flood-affected areas, and delays and disappointments in the size of payments coming through the province's Disaster Recovery Program. In the town of High River, Alberta's hardest-hit community, the market is far from rebounding.

In Calgary's flood-affected neighbourhoods, desolate houses and empty lots now sit next to properties undergoing full renovations. Almost 2,000 homes in 15 neighbourhoods, or 0.4 per cent of all city homes, saw some sort of market value reduction due to both physical flood damage and the "market view," according to city assessment rolls released earlier this year. The average lost value in each of these homes – some in the most expensive neighbourhoods in the city – was $209,000. The high waters hit some of the most desirable and wealthy neighbourhoods in Calgary.

Since the disaster, the process of buying a house has become more onerous. Real estate agents say lenders have demanded extra proof of flood repairs, even in neighbourhoods far away from any river. RBC is asking some clients to confirm whether the property was damaged or not. Toronto-Dominion Bank is using postal codes as a guide, and in some cases is requiring an inspection and extra documentation.

But there are signs the high demand for houses and Alberta's booming economy is creeping back even into the flood market. The city's chief property assessor Nelson Karpa said he has already noticed property values depressed by the flood are slowly starting to inch toward their preflood prices.

Simon Lord is one buyer attracted by the discounted prices. He bought and renovated a century-old bungalow in a fashionable section of inner city Calgary that he'd wanted to buy into for years.

The Calgary defence lawyer believes the home's just-under $1-million price tag was a "bargain" that would have been several hundreds of thousands dollars higher one year ago, before the tree-lined neighbourhood and the bungalow itself – located one block away from the Elbow River – were swamped by last year's historic flood. The previous owners "didn't have the heart" to renovate again and face the potential of another flood, said Mr. Lord, who will be standing by with sump pumps and a generator at the ready in June.

"If there's another massive flood this spring, I'm an impetuous fool. And if there isn't, then I'm a real-estate genius," Mr. Lord said.

Donna Rooney and Gary Cronin, Mr. Lord's real estate agents, say they have been involved in almost half of the postflood sales in the hard-hit Calgary neighbourhoods of Roxboro, Elbow Park and Rideau Park – affluent, centrally located bastions near the winding and usually lazy Elbow River. Today there are a small smattering of "for sale" signs on streets packed with construction and renovation company trucks as the postflood work continues.

"Assuming we get through this June, which is our wettest season, I think again you'll see the demand increase," said Mr. Cronin. "Within four years we'll be fully back to where we were."

But in the northwestern neighbourhood of Bowness the picture is decidedly less sunny, according to real estate agent Ken Richter.

The area was steadily creeping toward gentrification in recent years, especially on Bow Crescent where huge lots with long, lush yards back onto the Bow River. While some properties damaged by sewer backups during the floods have been moving, Mr. Richter said he hasn't seen any sales of homes directly hit by overland flooding. "It's going to take a long time to heal," he said.

In an ideal world, Ms. Lloyd, whose property is also located in Bowness, would like to use some of the government aid to make her mortgage payments for a few years until the market rebounds, and then sell the land. But she believes her mortgage lender First National Financial LP will push for a quick sale at a rock-bottom price.

But Robert Inglis, chief financial officer of First National, said the lender extended a three to six month mortgage amnesty to dozens of Alberta customers following the floods. For the few whose mortgage is greater than the current value of their properties, he said lying in wait for a potential real estate market rebound isn't feasible.

"We can't move forward with a proposal that doesn't make any sense," Mr. Inglis said. "Waiting three years for the market to change is not a good bet for us."

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