Flooding is the most common natural disaster in Canada. The Alberta floods in 2013 is the second costliest natural disaster in Canadian history. To simplify, suppose that the floods destroyed only low-quality houses, and assume that there are only two quality levels, low and high.

Predict the effect of the floods on the equilibrium price of low-quality housing. Explicitly consider any changes in market filtering in your answer. Explain your answer with the aid of a graph

I attached 2 pictures, and I'm very unsure if either or any is correct. Please let me know if you have any other input to the graphs in addition to the question itself. Thank you.

Less Supply Filtering Price ($) Initial Supply P New Demand Initial Demand Low-Quality Housing