Category Archives: Real Estate

California – How will the fires affect insurance rates?

Posted on December 13, 2017 | Leave a comment

This year’s wildfire fire disasters, including the Lilac fire, could change insurance policies in California. Insurers are likely to take a massive hit as 2017 is now the worst wildfire season in the state’s modern history. Here’s what you need to know:

Insurance rates could slightly go up with all these wildfires

Homeowner insurance rates could go up in fire-prone areas, but state laws will likely hold back any dramatic increases.

Regulators like the California Department of Insurance are quick to say that rates are based on 20-year averages, so one year is not going to make a significant difference. By California law, insurance companies can’t increase rates without government approval and the state can reject increases it deems excessive.

But, Cathy Seifert, equity analyst at CFRA Research, said insurers will still ask the state to allow them to charge more because of the severity of recent wildfires.

“These losses are likely to review their risk assessment and how much exposure they want to these areas,” she said.

However, California’s Proposition 103 gives state regulators tools to prevent major increases. Since 2011, the department has rejected nearly $2.6 billion in requested premium increases by insurers.

Also, the proposition calls for “catastrophe loading” by insurance companies where large losses are spread out over a 20-year period.

Disclaimer: for information and entertainment purposes only

How the Senate tax plan affects San Diego housing

Posted on December 5, 2017 | Leave a comment

The Senate bill would keep the mortgage interest deduction as is, except remove an equity debt deduction of up to $100,000. The House plan would lower the annual mortgage interest deductions to newly issued loans totaling no more than $500,000, down from $1 million right now. This is a major concern for real estate agents because homes in San Diego cost more than the rest of the nation.

As of the start of November, 3,651 out of 32,900 homes had sold in 2017 for more than $1 million in San Diego County, said ReportsOnHousing. In the same time period, 17,862 homes sold for more than $500,000.

What does that mean for buyers: Typical buyers put 10 to 20 percent down, so most San Diegans will not be affected by the deduction yet. The luxury market is another story.

What does it mean for affordability: The bills both look to nearly double the standard deduction, so people might have more money in that regard. However, both the Senate and House versions of the bill would curtail the state and local income tax deduction as they are now (the Senate version includes an amendment to allow deductions of up to $10,000 for state and local property taxes). Because taxes are high in California, it could mean less income for potential buyers.

How will millennial buyers fare: Many millennials have student loans, especially those being recruited by tech companies in California, that could prevent them from having enough money for a down payment. The House bill would remove the student loan interest deduction, which allows borrowers to get back up to $2,500 a year. The Senate bill leaves the deduction alone. There were 1.1 million student loan deduction claimants in California in 2016, said the National Association of Realtors.

Disclaimer: for information and entertainment purposes only

San Diego home prices increases among highest in nation

Posted on November 29, 2017 | Leave a comment

San Diego was among the top three cities in the U.S. with the biggest annual home price increases in September, said a key real estate index released Tuesday.

The region’s home prices have risen 8.2 percent in a year, said the S&P Case-Shiller Indices. Only Seattle and Las Vegas had bigger increases in the 20-city index.

San Diego also made its way into the top three cities in the previous month. Before that, the last time it received that distinction was 2014.

Susan Wachter, a real estate economics professor at the Wharton School at the University of Pennsylvania, said San Diego’s price increases show steady job growth but, like much of the nation, a lack of homes for sale.

“Every job doesn’t come along with a new house. That’s the bottom line,” she said. “Supply doesn’t necessarily respond to demand, and it hasn’t.”

San Diego County added 24 new homes for every 100 jobs created from 2012 to 2016, according to building permits and the U.S. Census. As of September, the region was adding about 30 homes per 100 jobs.

San Diego’s yearly increase outpaced the nationwide gain of 6.2 percent and the other California cities covered by the index, Los Angeles (6.2 percent) and San Francisco (7 percent).

disclaimer: for information and entertainment purposes only

Category Archives: Real Estate

California – How will the fires affect insurance rates?

How the Senate tax plan affects San Diego housing

San Diego home prices increases among highest in nation

Follow Blog