Earlier quoted context omitted.
Yeah. There's a market. If there are enough buyers for the market to function normally, then there are enough people trying to get in that one more house won't make much difference. I mean, yes, in your seller's disclosures you should tell the truth, including about the flood risk. If people want to take that, eyes wide open, I'm not sure what's unethical about selling to them.
Also why just flood risk? Is it unethical for me to sell my Condo which is in “up and coming area” which never upped and never came and has a very high crime rate (with/without disclaimer)? My friend lives in another area where schools are as bad as it gets, she is looking to move now, unethical to sell that too (with/without disclaimer)?
The flooding and inevitable destruction of the city is decades away. It's still abstract. Some people might even think it is preventable.
I don't think it's unethical to sell. People have their own motivations. Maybe a buyer just wants it for 5 years, who knows. Probably the risk will get baked into market price. What does need to happen though is the federal government needs to step up, because they're the only ones who can, and guarantee they will buy it for a certain percentage of appraised market value. I would imagine that percentage will decline over time until they declare the city a total loss, after which your property is declared worthless. If they do this now, they can make it possible for people to leave with some semblance of dignity and mitigate hardships.