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  • March 22, 2023

Home prices are forecast to decline 8.8 percent in Los Angeles

Category : Uncategorized

Home prices are forecast to decline 8.8 percent in Los Angeles and around the state this year, according to the California Association of Realtors, but that’s not a big reason to cheer for those looking to enter the home-buying market.

Median home prices remain unaffordable for about 80 percent of Californians, according to a recent statement from the residential broker trade group.

In a study released last week, CAR found that only 17 percent of Californians could afford a median priced home of $790,000 in the fourth quarter of 2022. The number of Californians able to afford a median priced home was 18 percent in the third quarter of 2022 and 25 percent in the fourth quarter of 2021.

A median income of $201,200 was required to make monthly payments of $5,000 for principal, interest and taxes on a 30-year fixed-rate mortgage at a 6.8 percent interest rate, according to study authors.

The outlook for the condominium market was better. About 26 percent of California home buyers were able to purchase a $610,000 median priced condo. A minimum income of more than $155,000 was required to make a monthly payment of $3,880.

Jordan Levine, CAR’s chief economist, does not think California and Los Angeles’ housing market is going to change much for the rest of 2023. The biggest reason was rooted in a basic supply and demand issue.

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“We can expect some modest price adjustment in L.A.,” Levine told TRD. “Even with business cycles that go up and down, we have an economy that is so underhoused, it means affordability is a persistent challenge.”

Inventory has long been tight for many areas of Los Angeles and surrounding markets. However, the bonanza market of 2021 and 2022 has kept expectations high for many sellers, said Cyrus Mohseni, founder of The Keystone Team, a brokerage based in Huntington Beach which has closed deals from North San Diego County to West Los Angeles.

Mohseni said residential agents are being pulled in two directions in this market.

“You have a bunch of sellers who want the value of the last two years. You have a bunch of buyers who can’t pay the value of the past two years because of interest rate hikes,” he explained.

But there is opportunity in a tight market. Mohseni said that many homes are priced incorrectly, and their listings expire. He recommends Keystone Team agents dig through MLS for expired listings. Contact sellers of the expired listings and pitch them on listing their homes at an ask more in tune with the market.

Mohseni forecast an increasing number of California agents will drop out of the market because it is not as easy to close a deal as it was in the recent bonanza market. But those agents who remain will be able to take market share from those who exit.

  • March 22, 2023

Home Sales Surged 14.5% in February

Category : Uncategorized

Existing-Home Sales Surged 14.5% in February, Ending 12-Month Streak of Declines
Largest monthly percentage increase since July 2020
March 21, 2023Media Contact: Troy Green 202-383-1042
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Key Highlights
Existing-home sales jumped 14.5% in February to a seasonally adjusted annual rate of 4.58 million, snapping a 12-month slide and representing the largest monthly percentage increase since July 2020 (+22.4%). Compared to one year ago, however, sales retreated 22.6%.
The median existing-home sales price decreased 0.2% from the previous year to $363,000.
The inventory of unsold existing homes was unchanged from the prior month at 980,000 at the end of February, or the equivalent of 2.6 months’ supply at the current monthly sales pace.
WASHINGTON (March 21, 2023) – Existing-home sales reversed a 12-month slide in February, registering the largest monthly percentage increase since July 2020, according to the National Association of REALTORS®. Month-over-month sales rose in all four major U.S. regions. All regions posted year-over-year declines.

Total existing-home sales,1 https://www.nar.realtor/existing-home-sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – vaulted 14.5% from January to a seasonally adjusted annual rate of 4.58 million in February. Year-over-year, sales fell 22.6% (down from 5.92 million in February 2022).

“Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” said NAR Chief Economist Lawrence Yun. “Moreover, we’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs.”

Total housing inventory2 registered at the end of February was 980,000 units, identical to January and up 15.3% from one year ago (850,000). Unsold inventory sits at a 2.6-month supply at the current sales pace, down 10.3% from January but up from 1.7 months in February 2022.

“Inventory levels are still at historic lows,” Yun added. “Consequently, multiple offers are returning on a good number of properties.”

The median existing-home price3 for all housing types in February was $363,000, a decline of 0.2% from February 2022 ($363,700), as prices climbed in the Midwest and South yet waned in the Northeast and West. This ends a streak of 131 consecutive months of year-over-year increases, the longest on record.

Properties typically remained on the market for 34 days in February, up from 33 days in January and 18 days in February 2022. Fifty-seven percent of homes sold in February were on the market for less than a month.

First-time buyers were responsible for 27% of sales in February, down from 31% in January and 29% in February 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 20224 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.

All-cash sales accounted for 28% of transactions in February, down from 29% in January but up from 25% in February 2022.

Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in February, up from 16% in January but down from 19% in February 2022.

Distressed sales5 – foreclosures and short sales – represented 2% of sales in February, nearly identical to last month and one year ago.

According to Freddie Mac, the 30-year fixed-rate mortgage(link is external) averaged 6.60% as of March 16. That’s down from 6.73% from the previous week but up from 4.16% one year ago.

Single-family and Condo/Co-op Sales
Single-family home sales soared to a seasonally adjusted annual rate of 4.14 million in February, up 15.3% from 3.59 million in January but down 21.4% from the previous year. The median existing single-family home price was $367,500 in February, down 0.7% from February 2022.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 440,000 units in February, up from 410,000 in January but down 32.3% from one year ago. The median existing condo price was $321,000 in February, an annual increase of 2.5%.

“Owning a home provides a path to long-term financial security and is a vehicle by which to transfer wealth to future generations,” said NAR President Kenny Parcell, a REALTOR® from Spanish Fork, Utah, and broker-owner of Equity Real Estate Utah. “REALTORS® deliver expert guidance, objectivity and professionalism to consumers during the complex process of purchasing a home.”

Regional Breakdown
Existing-home sales in the Northeast improved 4.0% from January to an annual rate of 520,000 in February, down 25.7% from February 2022. The median price in the Northeast was $366,100, down 4.5% from the previous year.

In the Midwest, existing-home sales grew 13.5% from the previous month to an annual rate of 1.09 million in February, declining 18.7% from one year ago. The median price in the Midwest was $261,200, up 5.0% from February 2022.

Existing-home sales in the South rebounded 15.9% in February from January to an annual rate of 2.11 million, a 21.3% decrease from the prior year. The median price in the South was $342,000, an increase of 2.7% from one year ago.

In the West, existing-home sales rocketed 19.4% in February from the prior month to an annual rate of 860,000, down 28.3% from the previous year. The median price in the West was $541,100, down 5.6% from February 2022.

The National Association of REALTORS® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.

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  • September 16, 2022

The Riskiest Housing Markets, Where Home Prices Could Fall the Most

Category : Uncategorized

The Riskiest Housing Markets, Where Home Prices Could Fall the Most By Clare Trapasso
Sep 15, 2022

With the housing market correction well underway, the big question on the minds of just about everyone is if home prices are poised to fall. Mortgage rates are rising, fears are mounting that the nation will slip into a recession, and inflation continues to soar.

Something has to give, right?

However, when it comes to real estate, it’s all about location. New Jersey, Illinois, and inland California had the most at-risk real estate markets if the nation slips into an economic downturn, according to real estate data firm ATTOM. New York City and Chicago were particularly susceptible.

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Meanwhile, the South and Midwest were the least vulnerable.

“Most of the markets that are most at risk tend to have higher unemployment and tend to be the least affordable markets,” says Rick Sharga, executive vice president of market intelligence at ATTOM. “We’re not suggesting any of these metros is in imminent danger of a housing crash. In the event of a recession, these metro areas would be the most likely to have some fallout.”

To come up with the list, ATTOM assessed the vulnerability of 575 U.S. counties by looking at the percentage of homes facing a potential foreclosure; the share of homes with mortgage balances that were higher than property values; local unemployment; and the percentage of average local wages needed to afford homeownership expenses. Counties had to have enough data to analyze.

The analysis assumes that the Federal Reserve’s determination to continue raising rates to combat inflation, along with other worrying economic factors, will push the nation into a recession. If that happens, some parts of the country are likely to fare better and worse than others, similar to what was experienced during the Great Recession.

Nearly two-thirds of the 50 most at-risk counties were in the Chicago, New York City, and Philadelphia metropolitan areas and in inland California. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

“When you look at the top 10 to 15 most vulnerable markets, they tend to be in places like the New York metro and the Chicago metro, where you have limited affordability and relatively high unemployment,” says Sharga.

On the other hand, at least half of the 50 least vulnerable markets were in the South and 14 were located in the Midwest. Tennessee, Wisconsin, and Arkansas had the most markets that were deemed safer.

“In the South, homes are less expensive,” says Sharga. “And many of the people moving into the South have been moving out of high-priced, high-taxed states and looking for more affordable properties [to help buffer these markets]. They have very, very strong employment as well.”

#Silver Lake Realtor #Los Feliz Realtor

  • September 16, 2022

Home Price Growth Has Just Showed a Clear Sign It’s Reaching Its Peak

Category : Uncategorized

Home Price Growth Has Just Showed a Clear Sign It’s Reaching Its Peak—Here’s Proof By Judy Dutton
Sep 15, 2022

It’s hard to not feel bad today for homebuyers, who are being simultaneously squeezed by rising mortgage rates and ever-higher home prices. But at long last, some relief seems to be on the horizon.

“How’s the Housing Market This Week?” is our regular column in which we look at real estate statistics. For the week ending Sept. 10, they indicate that the runaway real estate inflation that homebuyers have been struggling to keep up with is slowing down—if just by a bit.

“Although home prices continue to register double-digit growth relative to one year ago, the rate took a notable step back this week to the lowest pace since January,” notes Realtor.com® Chief Economist Danielle Hale in her analysis.

Here are the latest figures and what they mean for both homebuyers and sellers so that all can stay on top of today’s fast-changing market.

Weekly Housing Trends – latest
Home prices are still growing, but they’re definitely slowing
In August, home prices hovered at a national median of $435,000. And prices are still rising—by 11.7% for the week ending Sept. 10 compared with this same week last year.

While that’s the 39th straight week of double-digit growth, the glimmer of good news for buyers is that this week’s rate does mark the lowest level seen since January. The home price growth in previous weeks clocked in even higher—in the 15%–16% range throughout July, followed by the 13%–15% range in August. In this context, this latest week’s 11.7% price growth doesn’t seem so bad.

Plus, now that summer’s homebuying frenzy is over, real estate prices are already sloping downward along with dwindling temperatures.

“Home prices typically decline as we move into the second half of the year, one of the key seasonal trends that help make fall the best time to buy a home,” says Hale.

In fact, statistics suggest that the very best time to buy a house in the entire year is the last week of September, when prices are slated to be $20,000 lower than June’s all-time high of $450,000.

In other words, home shoppers who want to double down on their efforts right when the cards are heavily stacked in their favor had best hit those open houses hard right now before this prime window of opportunity closes.

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New real estate listings dropped a lot
For the week ending Sept. 10, the number of new home sellers putting their properties on the market dropped by 13% compared with this same week last year. That’s the 10th straight week of year-over-year declines, and a double-digit drop at that.

Clearly, “sellers are less optimistic about conditions compared to a year ago, which is a likely factor behind the scarcer new listings trend,” says Hale.

Nonetheless, overall housing inventory—a combination of these fresh listings and stale ones still on the market that have yet to find a buyer—is strong, up by 27% over last year.

“While the number of newly listed options was smaller, today’s shoppers have more than five homes to consider for every four they had at this time a year ago,” Hale explains.

Home sales are slowing
Since the COVID-19 pandemic, the pace of home sales has sped up, with median days on the market in August clocking in at a mere 34—22 days faster than this same month from 2017 to 2019.

Yet finally, this frenetic rush is mellowing. For the week ending Sept. 10, properties spent six extra days on the market compared with a year earlier. That’s the seventh straight week of homes sticking around for sale longer than last year.

Still, Hale reminds us, “relative to pre-pandemic, shoppers need to make faster decisions.” And the pace of sales will range widely based on where the house hunt is taking place.

Homes in the country’s hottest markets—currently in the Northeast and Midwest, which offer affordability—will still disappear quickly. (For example, listings in the hottest market of all, Manchester, NH, linger a mere 23 days before being snapped up.)

“And with more shoppers than ever before willing to look across state lines for a home, affordable areas are likely to see ongoing demand,” adds Hale.

Mortgage rates broke the 6% mark
According to Freddie Mac, for the week ending Sept. 15, the average 30-year fixed mortgage rate increased to 6.02%, up from the previous week’s 5.89%.

And since many are bracing for the Federal Reserve to hike its short-term interest rates at its meeting next week to combat stubborn inflation, mortgage rates may continue rising, making this fall’s housing market more of a mixed bag of good and bad news for buyers.

“Higher mortgage rates combined with still-high home prices are making it challenging for homebuyers as we head into what historically has been the best time of the year to find a better deal,” Realtor.com Senior Economist George Ratiu notes. “Something has to give.”

days on markethome inventoryhome priceshousing marketWeekly Housing Market Update

  • August 26, 2022

Affordable Housing in California Now Routinely Tops $1 Million

Category : Uncategorized

Affordable Housing in California Now Routinely Tops $1 Million per Apartment to BuildwordPublished 2 months ago on June 21, 2022By NewsArtist rendering shows a proposed affordable housing complex at Shaw and Glenn Ave. in Fresno. (Image: UPholding)
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More than half a dozen affordable housing projects in California are costing more than $1 million per apartment to build, a record-breaking sum that makes it harder to house the growing numbers of low-income Californians who need help paying rent, a review of state data has found.

The exorbitant price tags mean that taxpayers are subsidizing fewer apartments than they otherwise could while waiting lists of renters needing affordable housing continue to grow.

A key driver of the increases is labor and material prices, which have soared because of inflation, supply-chain problems and worker shortages during the COVID-19 pandemic. But numerous factors within the control of state and local governments also to blame for the high cost of building affordable housing in California.

Read more from the Los Angeles Times

#Silver lake #Los Feliz

  • August 24, 2022

SoCal Housing Market Cools with Slow Sales and Declining Prices

Category : Uncategorized

SoCal Housing Market Cools with Slow Sales and Declining Prices
The number of homes sold since last June has dropped 21 percent as mortgage rates rise—but the effects aren’t felt in all counties
By Laurenz Busch -July 20, 2022
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The California housing market has further cooled in June, dropping a remarkable 21 percent in units sold since the same time last year.

The market also saw an eight percent drop in units sold since May, when California’s median home price was pushed to a record-high of $900,170 according to the California Association of Realtors. June’s statewide median dropped four percent, to $863,790.

“Excluding the three-month pandemic lockdown period in 2020, June’s sales level was the lowest since April 2008,” the association’s Vice President and Chief Economist Jordan Levine said in its report. “With inflation remaining high and interest rates expected to climb further in the coming months, the market will normalize further in the second half of the year with softer sales and more moderate price growth.”

Levine added that sales can be expected to continue to slow in the coming months.

The fact that the housing market has been lethargic is not surprising, considering that mortgage rates increased. However, as the Los Angeles Times reports, the fact that the market saw a four percent decrease during peak season from May to June, is surprising—since 2010 was the last time that median home prices fell from May to June.

The C.A.R study uses a “seasonally adjusted annualized rate,” or the amount of homes expected to be sold in 2022 based on June’s numbers to assess the market. That number is currently 344,970, down roughly 30,000 units from May.

Across the state, fewer homes are being sold and home values are decreasing, but it’s not as drastic in all parts of the state. Although the market in SoCal slowed, it hasn’t affected all counties. Los Angeles and Ventura both saw increases in home prices since May, whereas Orange, Riverside, and San Diego saw drops—San Bernardino remained unchanged. Still, over the past year, the average home price is up 5.4 percent.

“At the regional level, home prices in all major California regions increased in price from last year, with the Central Coast leading the way at a 10.1 percent increase, followed by Central Valley (10.0 percent) and Southern California at 8.4 percent,” the report states.

Santa Barbara even saw home prices increase 38.9 percent since May, an anomaly only Del Norte County has even come close to at 25 percent.

Despite rising mortgage rates, the news could potentially benefit homebuyers who may have missed out on the highly competitive markets. As the Times reports, 29.6 percent of all homes on the market in the L.A. metro area had price cuts in June, which is more than double the 12.6 percent rate of June 2021 and higher than in dozens of other cities, including San Francisco, Boston, Detroit and St. Louis.

“California’s housing market continues to moderate from the frenzied levels seen in the past two years, which is creating favorable conditions for buyers who lost offers or sat out during the fiercely competitive market,” said C.A.R President Otto Catrina. “With interest rates moving sideways in recent weeks and fewer homes now selling above listing price, prospective buyers have the rare opportunity to see more listings coming onto the market and face less competition that could force them to engage in a bidding war.”

  • August 24, 2022

This is the salary you need to afford a home in California

Category : Uncategorized

This is the salary you need to afford a home in California
By Alexa Mae AsperinPublished August 8, 2022Updated 8:47AMCaliforniaFOX 11
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California’s real estate market continues to be extremely competitive
FOX 11’s Hailey Winslow was in Mission Viejo as the demand for homes remain extremely high across Orange County.

LOS ANGELES – It is cheap to live in California – said no one ever.

The Golden State is notorious for its exorbitant housing prices up and down the coast – from San Francisco down to San Diego – it isn’t a surprise to see houses for sale triple the amount than in other parts of the country.

Just how expensive is it?

Visual Capitalist used data from Home Sweet Home to analyze the salary one needs to earn in order to buy a home in America’s 50 biggest metros.

RELATED COVERAGE: This is how much money you need to make to be happy living in California, survey finds

According to the data, the median home price in the U.S. is around $370,000. That means the average person would need to earn around $76,000 to consider comfortably purchasing a home in the U.S.

But that does not apply to some states like California, where cities like Los Angeles, San Diego, San Jose, and San Francisco are the most expensive cities in the country.

The highest median home prices in the U.S. can be found in San Jose, where you’d need to earn around $337,000. The data revealed the monthly mortgage payment in San Jose for the median home is $7,718.

RELATED COVERAGE: Despite high rent, it’s still cheaper than buying a home – except in these cities

Here are the salaries needed to comfortably afford a home in California’s largest metros:

San Jose
Median Home Price: $1.88M
Salary Needed: $330.76K

San Francisco
Median Home Price: $1.38M
Salary Needed: $249.69K

San Diego
Median Home Price: $905K
Salary Needed: $166.83K

Los Angeles
Median Home Price: $792.5K
Salary Needed: $149.13K

Riverside/San Bernardino
Median Home Price: $560K
Salary Needed: $106.19K

Sacramento
Median Home Price: $545K
Salary Needed: $105.93K

You can see how other major cities like New York, Boston, and Seattle ranked by tapping or clicking here.

If you’re thinking that renting may be a cheaper option versus owning in California, think again.

The Out of Reach report from the National Low Income Housing Coalition revealed Californians are among those who have it the worst.

RELATED COVERAGE: This is how much money you need to make per hour to afford rent in California

According to the report, the average Californian needs to earn an hourly wage of $39.01 and work full-time to afford a two-bedroom apartment.

For more on that report, tap or click here.

  • April 21, 2021

10 Questions Everyone Selling a Home Should be Asking

Category : Uncategorized

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When you are getting ready to put your home on the market, you may be lying awake at night wondering about the logistics and the financial ramifications of your decision. Here are ten questions that you should ask an agent in order to set your mind at ease and feel more prepared for the road to the closing table.

1. How will you determine what price we should charge for my home?

A real estate agent will look at recent comparable sales in your area as well as your current competition among active listings. Agents will probably throw out unusually high and unusually low prices as these are generally considered outliers. That will give you a good baseline potential valuation for your home.

large white kitchen with white cabinets and hanging lights

2. What improvements should I make to optimize my home’s resale value?

An agent will conduct a thorough walk-through of your home and look for any needed repairs or extremely out-of-date fixtures or finishes that might deter a buyer. Beyond that, you’ll discuss updates that can add value while offering a solid return on investment.

You don’t necessarily want to put in a whole new kitchen or all new baths, because you probably won’t get the money back in the sale price. However, if your home is severely out of date, you may need to give it an overhaul in order to realize a sale price comparable to those of other, more updated homes in your area.

3. Is bigger always better when it comes to pre-sale home improvements?

Actually, no. According to the National Association of Realtors® (NAR), some of the most cost-effective improvements with the highest ROI include those items related to curb appeal. A new front door or a fresh coat of paint can make a huge difference in the way that the home is perceived. In addition, interventions like deep cleaning or decluttering cost little or nothing, yet can have a big impact on potential buyers.

Don’t forget the outdoors, which offers some of the most affordable improvements with the highest ROI. Get your lawn in check, plant a new tree, and spruce up the landscaping to improve both curb appeal and the home’s value at sale time.

4. What if I don’t want to make any improvements to my home before listing it?

For a variety of reasons, you may be unable or unwilling to make changes or improvements to your home, or you may not be in a financial position to do so. You are certainly not required to make any improvements and an agent can list your property for sale as-is, indicating to potential buyers that you do not intend to negotiate on repairs or damages.

Keep in mind that an as-is sale can affect your ability to get top dollar for your home, even if it is in good overall condition. In addition, many mortgage lenders require certain baseline repairs to major systems, so if there are plumbing, electrical, or structural issues, you may be required to make needed repairs in order to get your home sold.

large wooden front door with hanging lights and topiaries

5. How will you pre-market my listing?

The home sale doesn’t start the day the listing goes live in the MLS. Generally, an agent will start helping you get your home buyer-ready before the first buyer or agent arrives. This may involve staging the home, bringing in a professional photographer, and otherwise advising you on preparing the home for sale. The home may be put into the MLS as a Coming Soon listing and an agent may use yard signage and direct mail to let people know that about your listing.

6. How will you market my listing?

An agent may market your listing in many different ways, depending on the norms for your area, your property’s unique features, and other factors. Marketing may be as simple as signage, photography, and a well-written property description or as elaborate as print and TV ads, drone videography, and outreach to international buyers.

The agent should have a plan for marketing your property and should be able to articulate that plan to you. Do your part to support the marketing plan by properly cleaning and decluttering the space in cooperation with the agent’s recommendations.

man with headphones waving on laptop

7. Can you market my listing without bringing lookie-loos through the home?

If you are interested in limiting access to your home, you have a number of options. Talk to an agent about qualifying buyers who are brought into your home in person. In addition, you may want to avoid open houses, preferring instead to offer a video tour of the home to satisfy curious neighbors and others who just want a peep inside.

8. We’ve agreed on a price and gone into escrow. What happens next?

The buyers will bring in a home inspector to check out the home and recommend any needed repairs or improvements. The inspector may identify a major problem and the buyers may ask for a more in-depth inspection. The inspector may identify only minimal issues and the process may proceed.

An agent may recommend that you absent yourself from the home during the inspection process. If you have some special features you would like to show the buyers or if you want to provide them with service records and information about the home’s systems, ask the agent if you can do so at the beginning of the inspection, then leave for the remainder of their time in the home.

woman using a calculator pointing to a graph

9. The buyers submitted a list of requested repairs. Can I say no?

You are free to say no to any repairs that are requested from your buyers with the understanding that they may choose to walk away from the deal based on their home inspection contingency. Discuss with an agent whether or not you should make some, all, or none of the requested repairs, whether you would be willing to provide a credit at closing toward the repair costs, or whether you should put the home back on the market.

Remember that if the repairs requested are legitimate, the next home inspector will likely identify them as well. Ask a real estate agent how the identification of needed repairs will affect your disclosure and the price of your listing going forward if you decide to put the home back on the market.

10. We did some damage during the move-out. What will happen now?

Accidents happen and it is not uncommon for there to be scuffs on the flooring or paint after the movers have finished clearing out the home. If you notice that this has occurred, or if your buyers see damage during their final walkthrough, the closing can still occur. In most cases, you can either provide additional funds at closing to cover the damage or you can prepay a reliable contractor or repair professional to make the needed repairs on your behalf.

  • March 5, 2020

Best Insurance Companies For 2020

Category : Uncategorized

JANUARY 27, 2020
(https://money.com/best-home-insurance/)
#los feliz
#silver lake
Money; Getty Images

If you’re a new homeowner, buying home insurance may seem like just another expensive box to check to satisfy your mortgage lender. Even if you own your home outright, the cost of an insurance policy can take up quite a bit of your yearly budget. According to the National Association of Insurance Commissioners, as of 2016, you could expect to pay around $1,192 per year or more on home insurance, depending on where you live and the value of your home. That’s not exactly cheap.

But consider this: in 2016, 6% of American homeowners had to file a claim, and in 2015 the average payout was $15,532, according to the Insurance Services Office, Inc. In more recent years, there has also been an increase in damages caused by natural disasters. From wildfires in California consuming whole towns to extreme flooding in the Carolinas caused by Hurricane Florence, it’s more important than ever to make sure your home and property are protected. And choosing the right home insurance is one of the best ways to protect yourself against potential losses.

“Insurance, generally and as a rule, is a trade-off. You have to determine if the amount of the premium is worth handing the risk over to the other side or if it’s better to keep it,” said Etienne Font, an attorney at Merlin Law Group with 29 years of experience handling claim litigation for homeowners insurance.

“Homeowners insurance should be treated like any other item you would purchase. Learn what it is that you have. Instruct yourself as soon as you can and then compare the actual item that you’re purchasing, not the price.“

As Font points out, not all insurance options are created equal, and the same rule applies to companies. Once you’ve determined how much coverage you need, you should choose an insurance company based on factors like financial stability, product offerings, and the ease of its claims process. Choosing the right home insurer can help you protect your most valuable asset and save you trouble down the road if you ever need to file a claim.

Important Things To Know About the Best Home Insurance

  • Consider choosing “replacement cost coverage” instead of “market value coverage,” as the former can ensure that your home is rebuilt to the same condition as before, without factoring in any changes in property value that could lower your payout.
  • Understand that choosing a higher deductible can lower your premium, but that also means you’ll have to pay more out of pocket if you ever need to file a claim.
  • Consider purchasing additional coverage for catastrophes that aren’t typically covered by standard home insurance policies, such as damage from hail, earthquakes, or floods.

The 7 Best Home Insurance Companies and Research Tools

Best Home Insurance Reviews

We’ve compiled a list of highly-rated carriers that includes big industry names as well as small independent players with high customer satisfaction and financial strength ratings, as well as a broad range of policy options.

Lemonade Insurance Company

Lemonade has made a splash in its relatively short history. The New York-based company began offering homeowners and renters insurance in late 2016 and has since expanded to about half the country. It has a Financial Stability Rating® of A-Exceptional from Demotech, Inc., a Columbus-based financial analysis firm.

Lemonade uses artificial intelligence to pair the homeowner with the right policy at a super low price. You can apply either through their website or the Lemonade app. To get a quote, all you need to do is enter your name and your address, answer a few questions about safety features you have in your home, and the bots do the rest. Lemonade takes your location, proximity to emergency services, the age of the building or house, and other factors into consideration to give you an initial quote. You can then customize the policy by adding coverage for specific items like jewelry or sporting equipment and selecting your premium. Quotes can be obtained in as little as 90 seconds.

The claims process is just as easy, especially using the app. Just access the claims section, let Lemonade know what happened, record a video describing the incident leading to the claim, give them an electronic signature, and you’re done. Many claims can be paid in as little as 3 minutes, although some may require a more thorough review.

What makes the company stand out is precisely its claim payment policy. Lemonade Insurance Company does not make profits out of claims like other insurance companies. Instead, the company takes a flat fee, pays out any claims from the premiums collected, and — if there is leftover money — pays a portion of the leftover to different charitable causes selected by the policyholder. Lemonade says this unique business model means that it’s not in conflict with its customers, and it aims to pay out the majority of claims “almost instantly.”

Lemonade is a certified B-Corp®, a type of for-profit company that meets rigorous standards for social and environmental performance, accountability, and transparency.

State Farm

State Farm has been in business since 1922 and is currently ranked as one of the largest underwriters of homeowners insurance in the U.S. With a total market share of 18.4% according to the National Association of Insurance Commissioners, State Farm is an industry leader with an extensive network of agents and availability across 50 states.

State Farm’s homeowners insurance policy covers losses by weather and non-weather events, including lightning, wind, hail, theft, vandalism, and riots, and accidents that result in direct physical loss, like water damage from a broken pipe in your plumbing system. You can also purchase additional coverage against unexpected life events such as earthquakes.

There are several discounts available for its homeowners policy, including a roofing material discount, utility rating plans, home security devices, and more. State Farm also offers discounts when you bundle more than one policy together, such as home and auto.

Quotes can be obtained by logging into State Farm’s website or downloading their app. Simply request a quote and answer some basic questions. You’ll be able to review the policy and make the purchase at that moment, or you can take up to 30 days to decide on whether to purchase it or not.

Liberty Mutual

As one of the nation’s largest insurers, Liberty Mutual Insurance offers a variety of insurance products, including robust add-on protection and coverage options customized to your policy preferences. Founded in 1912, and ranked third in the National Association of Insurance Commissioners 2018 Homeowners Insurance Market Share Report, Liberty Mutual is known for its comprehensive coverage plans and holds an A rating from A.M. Best.

Its standard homeowners policy can cover your property as well as attached structures like a garage or deck. The loss of personal property, such as furniture and electronics, is also covered by Liberty Mutual’s standard policy, as is liability and coverage for additional living expenses if you need to live elsewhere while your home is being repaired. Liberty Mutual also offers similar policies for condo and mobile homeowners as well as renters. Add-on coverage can be obtained for high-value items like jewelry, damages caused by water back-ups, and sump pump overflows.

As for its discount options, the company extends opportunities to save to those who invest in home security and new roofing, have multiple policies, or serve in the military. Policyholders may also choose to invest in additional insurance products such as flood, earthquake, and inflation protection.

Quotes can be easily obtained through the Liberty Mutual website, while the app can help keep all your policy documents together. There are also some educational tools and resources on the company’s site on topics such as how to choose a homeowners insurance policy that suits your needs.

Travelers Insurance

Travelers Insurance has been around for 160 years and is the sixth-largest underwriter of home insurance policies in the U.S. It also has the highest possible A.M. Best rating (A++).

Traveler’s standard homeowners policy can be customized to include coverage for additional structures, loss of use, and personal liability, among others. The company also offers several add-on insurance options like coverage to rebuild a green home, contents replacement cost, identity fraud protection, and higher coverage for jewelry and other expensive items.

Travelers Insurance also offers discounts for purchasing multiple insurance policies (car, umbrella, boat, etc.), purchasing your home within the past 12 months, and even for owning a LEED-certified green home.

Quotes can be easily obtained either online or by speaking to a Traveler’s sales agent for a more personalized experience. There are also several helpful articles and tools on the company’s website with tips on everything from how to prepare your home against potential risks to how to keep a home repair and upgrade log.

New homebuyers can also benefit from Traveler’s OpenHouse app, which allows prospective buyers to see the property’s update and maintenance history, compare it to other home updates in the area, and access tips for buying a home.

Allstate

Founded in 1931, Allstate is an established carrier with multiple lines of business. The company had the country’s second-largest market share of homeowners insurance in 2018, according to the Insurance Information Institute. Many of its policies are sold through dedicated agents who would be your main point of contact when filing a claim. It has earned an A+, “superior” rating from A.M. Best. According to the National Association of Insurance Commissioners, Allstate has received fewer complaints than average for a company of its size.

Standard home insurance policies include coverage for structural damage, loss of personal property, liability protection, and guest medical protection (covering medical expenses for someone injured while on your property). You can also get a HostAdvantage policy to cover your belongings when you’re home-sharing. Quotes can be obtained either online or by talking to an Allstate agent.

In addition to the standard policy options, Allstate offers optional coverage for identity theft restoration, electronic data recovery, and business-related items stored in the home. Customers can receive discounts in certain circumstances, including when their home has theft or fire protection devices and when they’re over age 55 and retired. Customers with more than one type of policy with Allstate can get a multiple policy discount.

Among the tools, Allstate provides its customer is GoodHome. This product accesses information from public records, current weather conditions, and local home insurance claims to provide details that can help you identify potential risks and take the necessary steps to prevent them.

Other tools include the Premium Gauge, which provides information on factors that can affect the cost of your homeowners insurance and articles with tips for homeowners.

SelectQuote

SelectQuote may be better known as one of the biggest term life insurance marketplaces around, but it also works with companies to provide home insurance. SelectQuote only works with companies that have an A.M. Best rating of A- or better, so if you’re worried about being referred to financially unstable companies, this filtering system can be an attractive feature.

SelectQuote is also different than some competitors in that you’ll work with an agent throughout the process. In this way, it’s more like a typical insurance broker than an online marketplace that simply generates quotes based on the information you provide.

SelectQuote also offers more helpful informational tools than other marketplaces do. You can find articles explaining different types of coverage and add-ons you can choose from, which factors can influence the cost of your insurance, and a tool to help you determine how much coverage you need.

SelectQuote also provides direct links to the websites of the 22 insurance companies they work with for home and auto insurance, which makes it easier for you to access more detailed information on the individual companies you’re matched with. As with any policy obtained through a marketplace, make sure to review and compare all the options offered before making a choice.

Young Alfred

This company’s namesake is a digital butler for the modern age who’s at your service to help you find the right insurance coverage. It’s a quaint idea, but there’s also some serious science behind this company’s approach. It uses algorithms to match you with the type of coverage you need, so you don’t have to crunch the numbers yourself. Then, it works with a network of more than 40 different insurance companies to find the best one for your needs.

This works a bit differently from most other quote tools, which provide you with the prices for a standard home insurance policy. Many people need additional coverage, and the quotes you get on other websites may not accurately reflect this. Young Alfred is different in that the quotes you get are customized to your profile.

With Young Alfred, you can access expert resources providing tips on how to compare homeowners insurance, how to save money on your insurance as well as a homeowners insurance buying guide. Click on the learning center, and you can easily compare coverages offered by different types of insurance policies.

How to Find the Best Home Insurance

There are many companies out there offering home insurance today. That means you have more options to choose from, but it can also make shopping for the best home insurance company overwhelming.

To help simplify the process, we compiled a list of options taking into account factors like consumer satisfaction, financial strength ratings, claims processing, and coverage options.

Regardless of which company you choose to do business with, we suggest you read through your homeowners insurance policy carefully to understand your coverage and exclusions. While this might sound like a simple step, many homeowners have gone through the experience of having their claims denied after a disaster. Save yourself the trouble and understand your policy before you need to use it.

Coverage Options

Homeowners insurance provides financial protection against unprecedented loss due to natural disasters, accidents, and theft. Most standard policies include four essential types of coverage: coverage for your personal belongings, the structure of your home, additional living expenses (ALE), and liability protection. Some of these policies even allow you to protect tenants if you rent out part of your home.

For this list, we considered companies that offer a wide variety of coverage options and protection for total losses and exceeding coverage limits. We also looked at add on coverage options for events such as flooding and discounts for bundling policies.

Claims Processing

An ideal homeowners policy should safeguard you from any out-0f-pocket expenses to cover damages or loss. For this reason, we prioritized insurance companies that had a solid overall track record of getting back to their clients in a timely manner, as well as those that provide hassle-free, 24-hour claims processing.

Solid Financial Standing

With climate catastrophes becoming more and more common, it’s especially important to seek out insurance companies that can weather the storm, figuratively speaking.

By choosing a company with a strong financial outlook, you’ll avoid headaches like delayed claim payouts down the road. Similarly, we prioritized insurance marketplaces that only work with financially sound companies with high A.M. Best ratings and a solid reputation, according to the National Association of Insurance Commissioners (NAIC).

Consumer Satisfaction

Feeling at ease with your insurance company is one of the key attributes you should consider when shopping around for home insurance. That includes being informed, getting updated during the claims process, and being treated fairly during a claim settlement. We checked out different consumer review websites such as the National Association of Insurance Commissioners (NAIC) to assess how well companies are doing according to customer reviews.

As a rule of thumb, it’s a good sign when organizations answer customer reviews online, as it indicates they value their clients’ feedback and overall satisfaction with their products. Customer reviews can also help you identify complaint patterns before you decide to commit to a policy or company.

How to Choose the Best Insurance Company

Finding the best insurance option is about more than just settling for the cheapest rate. Before you make a decision, consider factors such as the policy’s coverage and exclusions.

“There are certain policies that just have very strange exclusions,” said Font. “It’s important to ask for an itemized policy statement so you know how that exclusion may affect you and if you should invest in additional coverage.“

It’s also essential to take the time to comparison shop. Since insurance companies price risk differently and don’t necessarily offer the same discounts across the board, you could get a better rate by switching carriers.

According to the latest research from Statista, 53% of people don’t shop around for homeowners insurance. Even more alarming, however, is the fact that about 60% of homeowners have underinsured homes. While comparing insurers and policy options can be time-consuming, it can pay off in the long run, especially come time to file a claim for extensive property damage.

While there’s more to the decision, a great place to start can be understanding the different types of homeowners insurance options and what they cover.

Types of Home Insurance Policies

You might see terms like “HO-2” or “HO-3” thrown around when shopping for home insurance. These terms refer to the different types of home insurance policies available today. Here is a brief description of the different types of home insurance policies and what they mean:

  • HO-1: Most basic home insurance
  • HO-2: Home coverage against specific threats
  • HO-3: Home coverage against all threats except excluded ones; the most common homeowners insurance option
  • HO-4: Renters’ insurance
  • HO-5: Most comprehensive home insurance
  • HO-6: Condo insurance
  • HO-7: Mobile home insurance
  • HO-8: Older home insurance

While most homeowners insurance policies fall under HO-3, it’s worth

Get a Replacement Cost Estimate for Your Home

One of the choices you’ll have to make when selecting a homeowners insurance policy is whether you want Actual Cash Value (ACV) or Replacement Cost Value (RCV) coverage.

With Actual Cash Value, your insurance provider will pay your claims after subtracting an amount based on the age and condition of your home or personal property (depreciation). With Replacement Cost coverage, your insurer will pay the repair or replacement cost of your home or property — without subtracting depreciation costs — using the same kind and quality of materials.

While premiums for ACV coverage are lower, the payouts on claims may not be enough to replace all your lost items or repair all damages sustained. RCV coverage will have higher premiums, but the payouts will be higher as well, allowing you to cover most if not all expenses for lost or damaged items.

Even if you decide to go with an Actual Cash Value, knowing the replacement cost of your home can help you decide how much coverage to get. Replacement cost estimates can be obtained through your insurance company, via online calculators, doing the calculations yourself, or by hiring a professional appraiser.

Take Inventory of Your Belongings

Guessing how much insurance you need can be risky. Take inventory of your belongings instead and have a ballpark figure of how much you’re looking to insure make the comparison shopping process easier.

Doing a home inventory doesn’t need to take a huge amount of time. You can use apps like MyStuff or BluePlum Home Inventory to quickly create an itemized list of your possessions. The Allstate app has a Digital Locker feature that allows you to take a quick inventory of your household items. From there, you can estimate each item’s value, so you know the total amount of coverage you should get for your belongings.

This can also help you expedite the claims process should you ever need to file a claim.

Decide How Much Insurance You Need

When you get a quote for standard home insurance, it’s just that: a standard policy. There’s a good chance you’ll need to boost your coverage depending on what you need to protect and the hazards that exist in your area.

You can purchase optional add-on insurance, also known as endorsements or riders, to help cover things that are specific to your situation. For example, if you tend to keep a lot of expensive items like jewelry, artwork, photography equipment, or antiques in your home, you might be able to purchase additional coverage beyond the maximum that most policies cover.

Other common endorsements include coverage against sewer backups, home-based business coverage, and inflation riders that gradually boost the coverage limit over time.

If you’re having trouble coming up with an estimate for how much insurance you need, working with an agent could help you determine the right level of coverage and the best add-on insurance products for your situation.

Consider Additional Coverage for Weather-Related Catastrophes

It’s especially important to pay attention to the local threats in your area. Losses from hail damage and wildfires are particularly common and are generally covered by most standard home insurance policies — but damage from flooding and earthquakes usually isn’t. If you live in an earthquake- or flood-prone area, it’s especially important to consider purchasing additional insurance to cover these two types of natural disasters.

“Anything could go wrong when you least expect it,” said José Gandia, a Puerto Rico-based independent insurance broker with over 20 years of experience. “It doesn’t matter if you own your house or if you’re still financing it. It’s always a good idea to consider additional insurance to cover a natural disaster or events out of human control [commonly known in the insurance industry as ‘acts of god’]. In Puerto Rico, many homeowners had paid off their properties and thought that since they sustained a category 5 hurricane, they were in the clear. They didn’t, however, anticipate the devastating damage an earthquake could have.”

Flood insurance is also good to consider, even if you don’t live in a flood plain. According to the Federal Emergency Management Agency (FEMA), over 20% of flood claims come from areas that aren’t deemed high risk. Flood insurance works differently from most other home insurance policies in that it’s purchased separately through the government’s National Flood Insurance Program. However, you may still buy it through a broker.

Identify Potential Risks and Take Steps to Reduce Them

Many insurance companies offer discounts to homeowners who take steps to reduce the risk of property damage or loss. Something as simple as installing a home security system or smoke detectors can qualify you for a discount. Evaluate potential risks in your home and neighborhood and take steps to reduce them.

Shop for Quotes

Now that you know what you need, you can shop around for quotes confidently and know you’re making an apples-to-apples comparison. There are several ways you could go about this.

You can check with each company directly. This is useful because you might be better able to customize your quote, but going through the quote process with multiple companies can be time-consuming.

You can also opt to go with an insurance marketplace. This gives you the option of comparing multiple homeowners insurance quotes from different companies at the same time. However, the quotes you receive are likely for standard home insurance policies and might not have all of the additional options you may need to be fully protected.

Another option is to go with an insurance broker. This might seem more expensive up-front because the broker is getting a commission, but they may be able to find you better rates. They can also help you figure out exactly how much insurance you need so you can buy just the right amount.

Choose a Home Insurance Policy Provider

The next step is to make a decision about which company is right for you. Since you’ve already compared quotes for your specific needs, the final decision could be as simple as choosing the cheapest option. However, if other aspects are important to you, make sure to take these into account as well.

For example, if you’d rather work with a local company or if you value customer service above all else, now is the time to filter for companies that meet these criteria.

Font also advises homeowners not to rely solely on the information provided by your insurance agent, as their recommendations can often be self-serving.

“They will only tell you what they think will sell you,” said Font. “You should ask for the policy or copy of a standard policy they would issue for your property. They should be able to provide that, and if they don’t – then what are they hiding, right?“

Choose Your Deductible

Generally, you’ll be offered a few different options for a deductible. This is just the amount that the carrier requires you to pay before your insurance kicks in. For example, if a fallen tree does $10,000 worth of damage to your house and your deductible is $500, you’ll need to pay $500, and your insurance will pay the remaining $9,500.

The higher your deductible, the lower your premium will be. It’s generally best to choose the highest deductible you can afford. This will save you money on your premium and keep you from being stuck in a difficult financial situation if you need to file a claim.

It’s also a good idea to keep that deductible tucked away in a savings account you don’t use for everyday expenses. That way, you’ll be less tempted to spend it, it’ll earn interest, and you’ll be guaranteed to have the money if you need it.

Review Your Home Insurance Policy Annually

It’s recommended to take a look at your home insurance policy at least once a year to make sure you’re still fully covered. Your insurance needs might change over time, as your circumstances change and evolve.

For example, if you’ve made any substantial changes to your home, such as remodeling the kitchen or bathroom or building a new addition, it’s a good idea to check with your insurer whether this would be covered in the event of a loss or if you need to up your coverage. Similarly, if you’ve recently taken up an expensive new hobby such as woodworking or photography, now’s a good time to make sure that you’re still fully covered for all the new equipment in your home.

Shopping for home insurance doesn’t have to be a daunting task. By doing a little bit of homework ahead of time, learning how to reduce risks, and having a clear idea of the amount of coverage you’ll need, you’ll be able to choose the insurance company and policy that best fits your needs.

Summary: Best Home Insurance Companies

 

  • December 20, 2019

Proven Methods To Sell Your Home Fast

Category : Uncategorized

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