SD Realtor, my question was: how much of dwelling replacement insurance coverage homeowners should carry on their homes? If replacement cost (to build a new house on owned land) is less than $130/sf it would be foolish to be over-insured. I was thinking that new buyers need to obtain HO insurance and they might ask you what coverage they should carry.

Vizcaya, 10 or 15 years might just about get you even. Don’t forget inflation, and ownership premium. Even if house prices recover to previous levels, those two factors alone will result in heavy losses to the people who stuck it out. That’s not to mention that they end-up with 15-year-old houses that will need repairs while the newer houses will have better technology such a new appliances and perhaps the latest tech gizmos such as fiber optics and solar panels.

During the recession, I expect heavy out-migration from high cost areas such as San Diego, perhaps proportionately more than we had in the early 1990s recession.