What Could the Potential Loss of Insurance Mean for a California Home Transaction?

The news about State Farm not writing new policies is part of a larger story.  

It's not news that premiums have increased and that areas of wild fires have seen a pullback from insurance companies. The refusal by insurance companies is not just in climate zones, many  types of properties are now affected, including areas that are low risk of fire and flood.

If you're a buyer or seller and currently in a transaction, be aware that the buyer contingency in a standard California Association of Realtors contract allows for investigation of the property, including insurance issues that may prevent coverage.  This is very important that the buyer understand their contracts, and follow up completely on insurance coverage.  Under standard timelines, the buyer contingencies are removed assuming the buyer is satisfied with various areas of investigation. However, since lenders offering a mortgage want to see proof of insurance coverage prior to close of escrow, buyers are strongly advised to obtain an insurance binder or evidence of commitment to insurance coverage as soon as possible in the escrow period (the 1st day it opens), and not remove their buyer contingency until they know they will have insurance policy on that property. Otherwise, they may risk losing their buyer deposit under the terms of their contact with the seller.

Homeowner associations are seeing increases in their master policy premiums, changes in coverage limits, or a refusal to renew policies.  If an HOA master policy isn't renewed, then the mortgages of the condominiums owners are also at risk, since lenders want proof of that policy coverage for the common areas. Or, in the case of some associations, the increase in premium may be so huge it causes a special assessment: one HOA reported in the San Diego Union Tribune ended up with an $8,000 per unit cost for master policy insurance coverage.

If you're a homeowner with current coverage, do not let it lapse, because it may not be renewed.  The California Fair Plan may be an option for some residents and businesses; it protects the home for fire risk and will satisfy a mortgage company's insurance requirement, but it does not cover theft, flood, earthquake, hail, vandalism or personal liability (only special earthquake policy provides coverage for that). 

Insurance brokers are reporting challenging coverage searches for their clients, and are not always successful.  The one area of insurance so far not reporting a problem is renters insurance, which does not cover fire risk.  

If you are not currently represented by a Realtor in a transaction and are interested in finding out what the buyer contingencies are in a purchase transaction, please contact me via phone, text or email.

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Saving Money with Sustainable Home Upgrades

1970s photo of an 1865 house

Property owners of both residential and commercial properties know that it's becoming more critical to understand "green" features during a time of rising utility costs and changing weather conditions. When the house at the right was built, there was no electricity, no indoor plumbing for bathrooms, no telephones, maybe a water pump in the kitchen. By the time my great aunt and uncle bought it in the 1950s, there was indoor plumbing and electricity -- people had to keep up with the times and what was current then. Now, 70-plus years later, there are new features, but still, not all homes that were new in the 1950s have the most current features of a new "smart" home completed today.

Buyers want to know what cost-saving features a new home may have -- in a high-cost environment they also want economic efficiency. Many agents say their clients are evaluating environmental risk during the purpose process.

Realtors are faced with evaluating such features when assisting a seller determine a list and sale price for a property.

The National Association of Realtors 2023 REALTORS® and Sustainability Report is based on a REALTOR member survey about sustainability issues facing the industry, click on the link for a summary of that Report.

Included in the Report are what clients found important: "home features that clients listed to their agent or broker as very important included windows, doors, and siding, proximity to frequently visited places, and comfortable living space."  An important thing to know for buyers and sellers is whether or not the MLS listing a property features categories for "green" features -- in my case in Southern California and beyond, the local MLS (CRMLS) does have such categories, and are listed as: energy generation, energy efficiency, sustainability, water conservation, and walk score, power production, and green energy verification. Such features may lessen the environmental footprint and reduce monthly energy costs.

Green Home Features List for Clients in NAR 2023 Report

"The NAR survey shows that 17% of REALTORS® say a high-performance home—one with improvements made to increase health, operational efficiency and durability—saw an increase from 1% to 10% of the dollar value offered compared to a similar, non-performance home. That could equate to thousands of dollars." "What’s more, energy-efficient home projects could save homeowners up to $2,500 a year on their energy bills, according to a recent survey of 1,000 consumers conducted by Thumbtack, a home services website. For example, installing energy-efficient lighting or smart thermostats could trim yearly energy bills by up to $200 and $100, respectively, the report shows." Article by Melissa Dittman Tracy, NAR REALTOR Magazine, It's Becoming More Critical to Understand Green Features, May 3, 2023. Go to Title 24 link for more information about  energy efficiency standards in California. For more information on the features in your home, please contact me via text, email or phone!

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Snapshot of Single Family Home Market in Los Angeles County and Long Beach - March 2023

The Los Angeles County update for

Los Angeles County Market Update

March 2023.
 

Median Price for Single Family home: $718,370

Home Sales are Down - 30%

Unsold Inventory - 2.2 Months down 22%

Median Time on Market - 19 days

 

 

 

 

 

 

 

 

Long Beach Market for March 2023

Long Beach Market Update

Median Price for Single Family Home $916,000 - Increase over 2%

 Home Sales are Down - 35%

 Active Listings  Down - 21%

 Median Days on Market - 12 days

 Sales to List Price - 100%

 Active Listings w/ Reduced Prices - 30.4%

 Overall, time on market continues to drop, and supply is tight as new listings decline from last year.

California's 50 of 51 counties experienced a sales drop compared to a year ago, with 35 counties dropping more than 30% in sales volume, with weather having a major impact.  Median price statewide for March was $791,490, compared to the $851,130 median price for March of 2022. California Association of Realtors reports:

"California’s median home price grew for the first time in seven months in March, increasing 7.6 percent from February’s $735,480 to $791,490. March’s price also was lower on a year-over-year basis for the fifth consecutive month, declining 7.0 percent from the revised $851,130 recorded last March. With home prices rising more sharply than the normal seasonal pattern last year, the market could see larger year-over-year price drops as it moves through the spring home-buying season."

Even with interest rates higher than last year, prices locally in Long Beach remain strong, while inventory is low and buyers are still competing with each other. If you would like to get an estimate of value for your home, please contact me. Getting a home estimate is a good planning tool, even if you are not sure you're selling right away.  While there are online estimates of value available, automated valuation systems do not select for certain property features, and may vary greatly with one another. Ask a professional.

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

No "Mansion Tax" in Long Beach, A City of Beautiful Homes

The City of Long Beach has many fine homes in the luxury category currently on the market. If you're looking for historic or a more contemporary style, water views or not, Long Beach has much to offer.

View of Downtown Long Beach

And, unlike the City of Los Angeles, there is no "mansion tax" (Measure ULA) such as the one effective April 1 which adds thousands of dollars in the form of a 4% transfer tax for sales above $5,000,000. According to this Los Angeles Time article, the market over $5,000,000 has slowed considerably since then, not generating the planned funds for housing for homelessness.

 

To search homes available as of May 5, 2023 over $2,000,000 in the area, look at these Long Beach opportunities to buy in Naples, Park Estates (listing designed by Lloyd Wright), Belmont Heights, Alamitos Heights, and Virginia Country Club.  For buyer representation, contact me on any property of interest.

In the Long Beach market in the last 6 months there were 21 sales of single family homes between $2,000,000 and $4,000,000, and currently, in the same price range, there are 27 single family homes in escrow or actively listed on the market.  Although properties in the past have sold well over $5,000,000, currently the market is under $5,000,000, a good opportunity for the luxury home buyer.

Naples home, water view

Take advantage of this opportunity now! By using the search function on the link above, a buyer may change the criteria for any price range and type of property for many cities in the Southern California market.   

 

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996