Widespread flooding hits the UK: a different approach to flood insurance
Today England has posted two severe flood warnings, meaning a danger to life, for the Somerset Levels, as well as more than 160 flood warnings and over 300 flood watches covering every other region of England. It is, therefore, topical to ask: How does the UK deal with the problem of flood insurance?
I spoke yesterday to Matt Cullen, Policy Advisor on Flood at the Association of British Insurers. One huge difference between the UK and the US is that in the UK flood is included in a standard homeowners policy, whereas it is excluded in the US. A second is that the UK has really accurate flood maps, while as we have seen of late not only are existing flood maps widely out of date in the US but there have been suggestions that the new maps, in Massachusetts for example, are not being produced using appropriate techniques.
One of the basic tenets of insurance is to spread risk over as many people as possible. In the UK there are about 20 million homes of which more than 90% carry property insurance and 70% contents insurance. Since flood is included in standard policies, the cost is shared widely. By way of comparison the Congressional Research Service in a February 2013 report stated:”Nationally, recent reports suggested that only 18% of Americans in flood zone areas have flood insurance.” Another report suggests that 40% of federally backed mortgages, required to carry flood insurance, do not do so. (more…)
The weather is freezing, but 2014 could be a really good year for real estate
Since its low in March 2009 the stock market, even after the January correction, has increased by 141% and is 12% above its prior 2007 peak.
By way of contrast, the housing market is up 22% from its low and is still 21% below its 2006 peak.
Throughout the country the cry is the same: there is not enough supply. Come on sellers!
Well, here’s a thought. For most of us our home is our largest asset. During the great recession, as values decreased, we felt worse off. Now, as prices are recovering, we feel better off. But human nature is such that we are reluctant to sell at a price lower than one that could have been achieved in the past. And nationally prices would need to increase 25% to get back to 2006 levels. (more…)
Salem 2013 Condo Review and 2014 Outlook
The condo market in Salem is larger than the SFH market in terms of number of units sold and so I am writing separate report on each segment. Here’s the condo review.
The headlines: sales continued to recover, but the median price was down 7% from 2012 and remains 18% below the peak of 2005. A median price decline, however, can reflect either an overall reduction of prices or a change in the mix of sales. As this report will show, it was a mix change in 2013, and, as another calculation will demonstrate, underlying prices actually increased. (more…)
Salem 2013 Housing Review and 2014 Outlook
The Single Family (SFH) market in Salem had a very good year in 2013 with total sales within 2 of the peak year of 2004, median prices rising 16% to get back to within 7% of the all-time high, and the ASR (the ratio of Assessed Value to Sales Price) dropping to below 90%. (more…)
2013 Housing Market in 4 numbers
If you are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 781.631.1223 or andrew@HarborsideRealty.com.
Andrew Oliver is a Realtor with Harborside Realty in Marblehead
Flood insurance:What’s up between Harry Reid and President Obama?
On Monday the Senate, as anticipated, voted to move ahead with the Homeowner Flood Insurance Affordability (HFIA) Act, to delay the implementation of the Biggert-Waters Act. That night came a White House statement in support of Biggert-Waters, but on Thursday the Senate went ahead and the Bill passed on a 67-32 vote.
In his State of the Union address on Tuesday President Obama said that free-trade deals with Asia and Europe were a top priority of his second term.The next day Harry Reid (D), Senate Majority Leader said “I think everyone would be well-advised just not to push this right now”.
The fate of the HFIA is uncertain in the House, where Speaker John Boehner (R) said two weeks ago:“While I don’t support repealing the 2012 law, we’re listening to members and the alternative ideas they are offering on this issue. There have been ongoing discussions with members, and the House may consider changes to the law in the weeks and months ahead that both help homeowners and protect taxpayers.”
So let me try to get this straight. On Monday the Senate voted to proceed with debate on the HFIA Act and on Monday night the President issued a statement in support of the original Act, but the Senate passed the Bill anyway on Thursday. On Tuesday the President talked of his desire to see free-trade deals and on Wednesday Mr.Reid said, in effect, no.
Meanwhile, the Republican House Speaker appears to be siding with the President.
I think the Polar Vortex must be affecting people in Washington.
If you are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 781.631.1223 or andrew@HarborsideRealty.com.
Andrew Oliver is a Realtor with Harborside Realty in Marblehead
Flood Insurance: Senate to vote Monday on bill to delay flood premium increases
According to an article in the Times-Picayune of New Orleans, the US Senate is finally scheduled to vote on Monday to allow debate to proceed on legislation to delay flood premium increases .
To summarize my previous posts on this subject:
– only a small percentage of homes in flood zones carry insurance
– the NFIP has worked well with the exception of major catastrophes
– Congress passed the Biggert-Waters Act without understanding the consequences
– FEMA was supposed to complete an affordability study before implementing new rates, but didn’t
– an independent study suggests that FEMA “used a mapping method fit for the Pacific coast, where the wave periods are much longer and the beaches are straighter, instead of developing a correct approach for New England.”
Other than that….. (more…)
How will a wind turbine affect my home’s value?
A recent study Relationship between Wind Turbines and Residential Property Values in Massachusetts by the University of Connecticut and the Lawrence Berkeley National Laboratory analyzed more than 122,000 home sales between 1998 and 2012 occurring near the current or future location of 41 turbines in densely-populated Massachusetts communities.
While “weak evidence suggests that the announcement of the wind facilities had a modest adverse impact on home prices….. those effects were no longer apparent after turbine construction and eventual operation commenced. The analysis also showed no unique impact on the rate of home sales near wind turbines.” The study “found no net effects due to the arrival of turbines in the sample’s communities.” (more…)
Marblehead Oceanfront Open House Sunday 12-2
THERE WILL BE ONLY ONE BUYER. Will it be you?
Dutch auction: the price is reduced $25,000 every Friday on this 11CrownWay 1850 Marblehead Oceanfront family compound.The first person to hit the bid buys the house! (more…)
Can reverse auction move Marblehead mansion?
Boston.com posted this article today.
Here’s a link to the property’s website 11 Crown Way
If you are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 781.631.1223 or andrew@HarborsideRealty.com.
Andrew Oliver is a Realtor with Harborside Realty in Marblehead
THERE CAN BE ONLY ONE BUYER
Dutch auction: the price is reduced $25,000 every Friday on this Marblehead Oceanfront family compound. The first person to hit the bid buys the house! (more…)
The best time to buy or sell a home in Massachusetts
(Note: this article was updated in February 2016 at When is the best time to buy or sell a home in Massachusetts?)
Ok, I know, you don’t own a home – or are not thinking of buying a home – in “Massachusetts” but in Marblehead, or Swampscott, or Salem or Beverly.
But… as a commentator on a blog article I wrote last year pointed out, it is always useful to know what is going on beyond one’s immediate neighborhood. That may mean the state of the economy, which will affect mortgage rates, or geopolitical developments, which affect general confidence.
We all spent 2013 reading of bidding wars and dire warnings of “a new bubble”. I freely admit to greeting bubble warnings with disdain, even with that well known refuge of the desperate – or at least the British – sarcasm.
Well, the results are in: the housing “bubble” in Massachusetts in 2013 produced just a 5% increase in the median price of a Single Family Home (SFH), as sales increased by 8%. Bubble? I don’t think so. (more…)
New mortgage rules raise costs for borrowers
Carl Edwards, V-P Lending for National Grand Bank in Marblehead, made a presentation at the offices of Harborside Realty this week. His main message was that the new rules, designed to “protect” the consumer, would have the effect of increasing the cost of mortgages.
The new rules, which are part of Dodd- Frank: generally require creditors to make a reasonable, good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling …… and establishes certain protections from liability under this requirement for “qualified mortgages.”
The concept of requiring a lender to determine if a borrower can repay a loan may seem like basic common sense, but with regulation comes additional costs. For example, a borrower with a credit score of 700 making a deposit of 30% on a loan sold to Fannie Mae or Freddie Mac will now pay 1.50% in upfront fees. (more…)
Is the 30 year fixed rate mortgage an endangered species?
Discussion about mortgage rates normally focuses on the 30 year fixed rate mortgage (FRM). As the table below shows, the US is unique in developed countries in having FRMs as the dominant product:
Only Denmark and France have significant FRM markets and their products differ from the US in certain ways. (more…)
Swampscott 2013 Housing Review and 2014 Outlook
I will start with the Single Family Home (SFH) market and comment on the condo market at the end of this post.
2013 was a strong year for the Swampscott SFH market in terms of both sales and median price increase.
Sales jumped 38% to a level exceeded only once – in 2004, and then by only 7 units – this millennium.
The median price increased for the second year in a row, by 11% to $442,000, although it is still below the 201o level and 15% below the peak level of 2005 which increasingly looks like an anomaly. (more…)
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