Expect the cost of insurance to rise, or taxes to go up. Or both! An excerpt:
Earlier this month, JPMorgan estimated the fires around Los Angeles had inflicted $50 billion in losses, of which only $20 billion were insured.
One reason for the gap: State regulators have prevented insurers from charging premiums commensurate with rising property values, construction costs and wildfire risk exacerbated by a warming climate. Many thus stopped renewing policies.
Hundreds of thousands of homeowners shifted to California’s state-run backstop, the Fair Plan, whose exposure has tripled since 2020 to $458 billion. It has only $2.5 billion in reinsurance and $200 million in cash.
If the Fair Plan runs out of money, it canimpose an assessmenton private insurers to be partly passed on to all policyholders. In other words, the costs of the disaster will be socialized.
California is a microcosm of what happens when insurance breaks down: Either households face potential ruin or the public is handed a financial time bomb.
“What we are seeing is a real disconnect,” said Carolyn Kousky, an economist specializing in risk and founder of the nonprofit Insurance For Good. “There are opposing views on insurance: Is it a private market good, or is it social protection, to make sure everyone has the resources to recover from disaster?”
A central feature of insurance is risk pooling: The combined contributions of the community cover the losses incurred by members of the community in a given year.
Another feature of private insurance is actuarial rate-making, that is, calibrating premiums to the customer’s risk. That’s to prevent “adverse selection,” in which only the riskiest people buy insurance, and moral hazard—the tendency to encourage risk by undercharging for it.
But some activities or individuals are so risky they could never obtain, or afford, private insurance. That’s when risk gets socialized. The federal government’s expansion since the 1930s has largely been through the provision of insurance: Social Security, unemployment insurance, health insurance for the elderly and poor, deposit, mortgage, and flood insurance and, after Sept. 11, 2001, terrorism insurance. Not for nothing is the federal government often called an insurance company with an army.
It’s inevitable that artificial intelligence will be utilized in the business of selling homes. Having AI assist with writing home descriptions or other advertising would seem to be a natural fit.
How about speaking with clients on the phone though? Listen to the brief conversation above.
If you want to watch it on your schedule and don’t mind paying $4 to $5, click HERE.
We had a great time while filming the movie, and hopefully some day we’ll see what ended up on the cutting-room floor. Here are the previous blog posts:
School is back in session and the holidays are right around the corner – it’s the time of year that potential home sellers start looking forward to the next selling season, instead of moving in September/October.
Are you thinking of waiting until 2022? Here are my reasons for selling now, instead of later:
1. The Shine Is Off The Frenzy. Those who are pulling back on their enthusiasm:
JBREC – Two of three buyer categories are down slightly (above chart).
CoreLogic – they only predicted a gain of +9.1% in San Diego pricing over next 12 months, which is way less than the +23.7% since last July. Don’t be surprised if +9% becomes the new +3% of predictions – it’s a lot higher than the previous safe bets without being double-digit.
Zillow Offers – backtracking 5% on price commitments made 2-3 weeks ago.
Navy Fed – suspended the issuing of home-equity loans ‘temporarily’.
Refi appraisals – heard of several appraisals coming in low as market softness creeps into their minds.
2. Interest rates – They have nowhere to go but up, and it’s just a matter of when. Once they start, home buyers will want something in return from sellers.
3. Boomer liquidations – There probably won’t be a mass exodus, but all you need is 2-3 on your street.
4. Fewer Fix-Ups – The current inventory is so thin, sellers are getting away with murder now. If there was an index that measured how close sellers got to selling ‘as-is’, we’d be setting records today.
5. Safe – You know what you can get today, and let’s admit – it’s a lot higher than it used to be. Cashing out now instead of risking any of the above getting worse in 2022 is the safe bet. How much are you hoping to hold out for next year? Another 2% or 3%?
When is the best time to sell? When everyone else isn’t!
Hat tip to Eddie89 for sending in this article that includes 14 stories of how millennials purchased homes:
An excerpt:
Homeownership, like other forms of participation in the American dream, increasingly resembles an exclusive country club, with membership predicated on who your parents are and your race. To wit: A millennial’s likelihood of owning a home increases 9% if their own parents were also homeowners. While 39.5% of white millennials own homes, the black homeownership rate is just 13.4%, the Asian ownership rate is 27.2%, and the Hispanic ownership rate 24.6%. “Left unchecked,” the Urban Institute study declares, “current trends will result in even greater wealth disparities among white, black, and Hispanic millennials.”
The trends we’re seeing right now in homeownership will reverberate for generations to come — and accentuate the 21st-century parameters of privilege. The difference between people whose family can afford to help with a down payment and people who have no choice but to rent might mean the difference between who can live within 15 minutes of their job and who has to commute two hours, between who’s employed full time and those who depend on contingent work, between who can presume safety in public spaces and whose skin color makes them a perceived threat, between who can pay for college independently and whose children — and grandchildren — will eventually take out their own massive student loans.
I wanted to talk to people within this new reality about how they actually managed to make homeownership work. So I created a survey, and asked readers and Twitter followers and friends of friends of friends: Tell me everything. Tell me how you found the house, how you pulled together the down payment, and how you feel about all of it. Being transparent about this stuff won’t necessarily make buying a home easier for others. But it will hopefully demystify what it takes to make it happen, and help make clear that millennials who don’t own homes aren’t failures. They’re just young people who have faced a dramatically different financial and real estate reality than the generations that came before — a reality that has impacted some more than others.
What follows are 14 stories chosen from over 500 submissions, and they all exemplify, in some way, themes I saw again and again. (Stories have been lightly edited for length and clarity; some names have been changed to protect people’s privacy.) Many people received money from family for a down payment; they chose to buy in an area of the country where homes are markedly cheaper; their parents were homeowners or felt very strongly about homeownership as a mark of adulthood; others are ambivalent about their own homeownership and the way it excludes so many others their age.
Mark Grden was looking for peace and quiet when he bought his house a half-mile from the main entrance to Joshua Tree National Monument in 1998. And for years, he found it.
“I used to sit out on the porch and watch bobcats creep past under skies filled with stars, bats and owls,” he said. “Neighbors knew each other and kept an eye on each other’s property.”
But over the past two decades, this otherworldly landscape has gone from a destination for hikers and rock climbers to an international attraction luring 3 million visitors per year — overwhelming the area’s craggy campsites, low-slung motels and Grden’s once-sleepy community.
“Now, I’m surrounded by Airbnbs filled with vacationing strangers who seem to think anything goes out here,” he said, shaking his head.
It’s all about millennials these days. Everything seems to center around these special snowflakes. But what about the original “me” generation? We’re talking about baby boomers, of course. What do these roughly 76 million Americans want when it comes to housing?
Well, they want multicar garages, for one thing. According to a recent survey by national homebuilder PulteGroup, they were the top feature boomers were looking for in a new home, followed by open decks or patios; eat-in kitchens; and a private yard.
About 38% of boomers plan to buy a home within the next three years, according to the report. About 11% expect to purchase a residence within the year.
The survey was of 1,043 folks between the ages of 50 and 65 who plan to buy a home in the next decade.
“Retirement marks a new phase in a baby boomer’s life, and it only seems natural to relocate or move to a new home when transitioning away from their primary career, or from the day-to-day rearing of school-aged children,” Jay Mason, vice president of market intelligence for PulteGroup, said in a statement. “It’s not surprising that the 55+ buyer wants a variety of options and choices in their homes.”
According to the survey, 39% of respondents said the main reason they’re moving is because they want to retire, 33% want to downsize, and 30% want to move to a more desirable location.
“One thing we know about boomers is they are not done yet,” says Amy Lynch, president of Generational Edge, a Nashville, TN–based company that consults with companies on generational differences in employees. “As a group, they are starting encore careers and also going back to school. And they often move to be near their millennial kids, who are having kids.” They also start new families of their own, through divorce or remarriage.
All of these situations may require a move. About 26% of boomers plan to stay in their current cities, but just move to a different home, while 34% want to remain in the state, but in a different city or town. Also, 38% hope to cross state lines.
Their top retirement destination? You guessed it: Florida. It seems you just can’t beat all of that year-round sunshine. The state was followed by fellow warm-weather states Arizona, North Carolina, and South Carolina. The cost of living is lower in these states than on the pricier West Coast or in the Northeast.
About 82% of boomers wanted to be someplace affordable, and 74% want to be close to their preferred health care programs.
But boomers don’t want to just pack up and leave their grandchildren. Being close to kids was their top consideration when choosing a new community. They also want to be near the water and park or other green space.
“We are in a period in this country where family life and family connections are very strong,” says Lynch. “There’s a lot of regret among boomers because they worked so many long hours when their kids were young. With grandkids, there’s a chance to make up for that.”
Ninety-nine percent of pet owners feel that their animal is part of the family.
Eighty-nine percent of those surveyed said they would not give up their animal because of housing restrictions or limitations.
When finding a home, 95 percent of animal owners believe it is important that a housing community allows animals and 81 percent of U.S. households say that animal-related considerations will play a role in deciding on their next living situation.
Twelve percent of pet owners have moved to accommodate their animal.
According to REALTORS®, 61 percent of buyers who own animals say it’s very difficult or difficult to find a rental property or a home owner association that accommodates animals.
When it comes to selling, 67 percent of Realtors say animals have a moderate to major effect on selling a home. Approximately two-thirds of Realtors say that they advise animal owning sellers to always replace things in the home damaged by an animal, have the home cleaned to remove any animal scents and to take animals out of the home during an open house or showing.
Nearly half of all survey respondents, 52 percent, indicated that they had completed a home renovation project specifically to accommodate their animal. Of those who undertook projects, 23 percent built a fence around their yard, 12 percent added a dog door and 10 percent installed laminate flooring. Ninety-four percent of consumers indicated that they were satisfied with their renovation; 58 percent indicated they have a greater desire to be at home and 62 percent enjoy spending more time at home since completing their renovation.
Donna and Jim provided exceptional support and professionalism throughout the entire process. We couldn't have been happier with their efforts. They made our house shine, and thanks to their expertise, it sold above the listing price in the very first weekend! Truly a fantastic experience from start to finish.
jesus a sahagun
2024-11-10
Verified
This year has been difficult on our family, mainly due to having to sell our home. Thankfully we knew God had a plan for us and working with the Klinge team was a key part of it. It was an obvious decision to work with them again after such an amazing experience when purchasing the same home we needed to sell. The challenge was, how will we do this in so little time with so much going on? Jim and Donna held our hand every step of the way. Whenever an unexpected issue arose they found and provided a solution. Never once did we feel pressured to make a decision and the Klinges were always reassuring after providing the information that the decision was ours to make. Despite the curve balls, they never panicked and exemplified the “can do” attitude, making us feel optimistic and taken care of. Their expertise and professionalism was superb. But of all the reasons to work with the Klinges, the most impactful and valuable is their compassion and genuine care for their clients. We pray that we can one day purchase our forever home and you better believe that Jim and Donna will be representing us - as long as they will have us of course. Thank you again Klinge team! Your execution, experience, and care are unmatched.
SabihaPasha
2024-07-22
Verified
Jim and Donna were fantastic! Jim understanding my needs, recommending potential places, pointing out the pros and cons of each property was invaluable. Then when the offer was accepted Donna’s organized guidance through the inspections, paperwork etc made the whole process seem effortless.
So grateful that I had them on my side!
dodyfrancis
2024-07-10
Verified
I appreciate Jim & Donna's great teamwork, sound advice, and guidance that eased the stress of selling our Carlsbad home. Their professional input and assistance throughout the process was very helpful. Highly recommended!
sbisachsen
2024-07-10
Verified
The Good
The Klinge Realty Group operates like a finely tuned machine, with a very personal touch. We contacted them on a Sunday and they were talking to us about our family and our needs on our living room couch the following day. They carefully listened to us and worked with us to identify the best and quickest path to listing within 2 weeks to take advantage of the low inventory conditions in our South Carlsbad neighborhood. They knew our tract specifically and had many previous sales there over the years - they came prepared with a thorough analysis of comparative sales and recommended a pricing strategy that they felt confident would yield offers the first weekend on the market.
The Great
Over the next two weeks Donna coordinated a range of vendors who she knew from experience could get the preparation to list work we needed done on time and with high quality. Our light tune-up involved excellent experiences with their stagers, landscapers, contractors, electricians, and plumbers. Throughout this period Donna's daily communication was clear, concise, and responsive. Any time we had questions Donna picked up the phone or texted immediately - but almost always, she answered our questions before we even knew we had them.
The Outstanding
We had a tricky situation with a shared fence that could have delayed our escrow. Donna used superb mediation skills to negotiate the terms of replacement and was personally on site with the fence contractor to make sure everything went smoothly. The fence looks great and escrow closed on time.
The Truly Exceptional
Our house came on the market on a Wednesday and between then and Monday morning Jim was personally at all three open houses. He was in constant communication explaining potential buyer reaction and strength. As he predicted offers began to come in on Saturday and each one was incrementally higher than the last. At the end we had 5 offers, 4 of which were over list, and the final accepted offer was $100,000 over list. In addition to being over list it included rent back terms that met our needs.
The Recommendation
For all of these reasons we would strongly recommend The Klinge Team to anyone wanting to sell in North County Coastal San Diego. I had been reading Jim's blog for 15 years and knew when the time came to sell that he would be our first call. Jim Klinge is not your standard realtor. He is keenly aware of market conditions and sales strategies. And, works his tail off - though not as hard as Donna . At this point he's gone from realtor to friend and I plan to have him over to grill and chill at our new place to talk real estate, but also just about life and raising kids in San Diego. He's more interested in relationships than his sales numbers - and that's why his sales numbers are so high. We have already recommended the Klinge's to some close friends and another successful sale is on deck right around the corner...
user19164788
2024-06-21
Verified
We recently had the pleasure of working with Jim and Donna from Klinge Realty Group to sell our house, and we couldn't be more satisfied with the experience. From the initial meeting, they listened attentively to our needs and provided invaluable guidance on specific improvements to get our home market ready.
Their responsiveness throughout the entire process was truly impressive. Anytime we had questions or concerns, they were quick to address them, ensuring we felt comfortable and informed every step of the way. What stood out the most was their team and extensive network of tradespeople, which made addressing any necessary repairs or updates seamless and stress-free.
Thanks to their expertise and dedication, our house sold quickly and at a great price. We highly recommend Jim and Donna to anyone looking to buy or sell a home. They are a fantastic team who truly care about their clients and deliver exceptional results.
cali4neal
2024-05-07
Verified
We had a wonderful experience buying our home with Donna and Jim! In particular I was very impressed with their efficiency and support through the purchase process. As we were doing the walk through, Donna started contacting roofers, plumbers, aircon, electricians, etc for all the areas we needed potential repairs - by the time we were done with the walk through appointments were already set up to get estimates for all the major services. When we had to change an appointment, or couldn't make one, Donna was there to arrange things to fit our schedule. Even after we closed on our home, Donna helped set up the repairs we needed before move in day. They truly went above and beyond to deliver exceptional service. I'll be calling them for our next home!
zuser20160809095816651
2024-03-16
Verified
The sale of our home exceeded our expectations - Jim and Donna Klinge are the best!
We’ve followed Jim’s Bubbleinfo blog since the 2006 housing bubble. After he helped us buy in 2017 we stayed in touch and Team Klinge were the obvious choice when it came time to move. They guided us through the preparation of the house, including a kitchen refresh - Donna and Lisa skillfully managed the various contractors for us after we had moved out of state. Donna’s excellent attention to detail and regular communication made the whole process run smoothly from a distance.
Jim’s market knowledge, expert negotiating skills and candid opinions, together with Donna’s responsive communications and problem solving, set them in a league of their own.
Highly recommended!
bourmakin
2024-02-09
Verified
Jim and Donna have exceeded my expectations with sale of my house. It was best experience with house sale. Professional, responsive, superior negotiating skills. I would recommend them with 5 star (I would give them even more than max) rating. Sale of my house was closed for really good price in 10 days. Jim and Donna perfectly handled house preparation for sale. Thanks a lot!!!
user1916779
2023-11-17
Verified
Jim and Donna have exceeded my expectations and made my most recent move back to California go so much more smoothly than I expected. Jim’s Bubbleinfo blog was full of useful information about the current market conditions. His experience helped us make a successful offer for the home we wanted in a desirable neighborhood. After the purchase Donna organized the work we needed done in the house without us having to make an additional trip. We were pretty worried when we started searching for real estate that not being in the area was going to makes things really difficult but Jim and Donna made the process so much easier. I enthusiastically recommend them.
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