Buyers Market on the Way – 2 reasons you may need to sell
So, i was day-drinking with some business colleagues – friends that own businesses related to real estate – who were equally frustrated by the massive shift happening as a result of the pandemic, subsequent inflation, lack of people who want to work, etc, etc. We agreed the day drinking was justified.
We continued ranting on about how rising home prices are inevitably fueling increased property taxes which will force many from their homes. But there is an additional wave of change that some many not be aware of that will amplify this force, and that is the increase in insurance premiums.
From what I understand, granted I was already 1 vodka in to this conversation, is that insurance carriers are pulling out of certain markets (waco being one of those) because of the increased risk of damage. they report that as of late, there are so many more storms causing more claims. As a result, their loss ratios are not manageable at the current premiums putting waco in a negative insurance market. This is forcing home owners to search out other providers, typically, more expensive providers.
Blue to Red
The other reason some carriers are canceling their coverage of the McLennan County and other areas is due to the large number of people moving here. In case you haven’t noticed, you are sitting longer at the traffic lights before you can make it through the intersection due to population growth in central texas. To an insurance company, this means more claims and higher risk.
On top of all this, the sheer cost of replacing a home that is destroyed or damaged by storms is increasing because of the price of materials. This is referred to as the replacement cost. So, even if you can find a carrier at the same rate you had, the replacement value of your home is now higher and, therefore, a higher premium.
WHAT DOES THIS MEAN???
I started feeling like our rapidly increasing property taxes were going to put several home owners in a financial pinch. but now that we know insurance premiums are also on the rise, we are convinced that a Buyers Market is quickly on the way.
WHAT DO YOU NEED TO DO?
Plan ahead! Give us a call TODAY to start understanding how these changes may impact your monthly payment. and, if you do need to sell your home, then DO SO BEFORE EVERYONE ELSE FIGURES THIS OUT AND THE MARKET IS FLOODED WITH LISTINGS!!!!
Keeping you informed here…. My name is Cristi McGowan, I am the broker and owner of NextHome Our Town right here in Waco texas.