Bailout by fire?

[cr]

Regarding fires and the effect on housing costs/supply/demand:

I think the fires in all of southern California will end up driving some people out of the area. Let’s assume the majority of people in danger aren’t facing foreclosure; they are seeing values decline and some may still be able to sell at a higher price than they paid. Those facing resetting ARM’s are probably more likely, but even those who aren’t may have job affordability problems with soaring costs living, and just need the last straw to say adios.

It would take a lot more destroyed homes for this to reduce the 11 months supply on hand to drive prices up.

Not to mention, in all the areas where houses were close to fires do you thinkthe average emotion-based financial descision-maker would go buy anytime soon?

[kaycee]

Regarding the insurance question. My mother had serious damage to her house due to a hurricaine. The initial insurance payment went to the lender to pay off the note. She then applied for a construction loan to rebuild the house, and then once the U&O certificate was issued, she refinanced into a traditional, brand new mortgage. She ended up even to a little bit ahead when all was said & done. This was many moons ago but I assume the process is the same. The lender doesn’t care if you leave a burned out shell. But generally the city/township does. They can’t make you rebuild, but they can make you take down the damaged building and landscape the lot. Not sure what effect/power the HOA has in such a situation though. My thoughts and prayers to all affected.

[kaycee]

Regarding the insurance question. My mother had serious damage to her house due to a hurricaine. The initial insurance payment went to the lender to pay off the note. She then applied for a construction loan to rebuild the house, and then once the U&O certificate was issued, she refinanced into a traditional, brand new mortgage. She ended up even to a little bit ahead when all was said & done. This was many moons ago but I assume the process is the same. The lender doesn’t care if you leave a burned out shell. But generally the city/township does. They can’t make you rebuild, but they can make you take down the damaged building and landscape the lot. Not sure what effect/power the HOA has in such a situation though. My thoughts and prayers to all affected.

[kaycee]

Regarding the insurance question. My mother had serious damage to her house due to a hurricaine. The initial insurance payment went to the lender to pay off the note. She then applied for a construction loan to rebuild the house, and then once the U&O certificate was issued, she refinanced into a traditional, brand new mortgage. She ended up even to a little bit ahead when all was said & done. This was many moons ago but I assume the process is the same. The lender doesn’t care if you leave a burned out shell. But generally the city/township does. They can’t make you rebuild, but they can make you take down the damaged building and landscape the lot. Not sure what effect/power the HOA has in such a situation though. My thoughts and prayers to all affected.

[Eugene]

“replacement cost is no more than 150% of the value of their policy coverage”

well 150% is still a good chunk of money. A new $1 million house in 4S ranch might have assessed value of buildings in $500k range.

The bigger question is, does 150% really cover what it costs to rebuild, when the house was originally built by a megabuilder like Lennar as part of subdivision containing 200 identical houses (so that Lennar could cut costs), and now it has to be rebuilt by custom contractors?

[Eugene]

“replacement cost is no more than 150% of the value of their policy coverage”

well 150% is still a good chunk of money. A new $1 million house in 4S ranch might have assessed value of buildings in $500k range.

The bigger question is, does 150% really cover what it costs to rebuild, when the house was originally built by a megabuilder like Lennar as part of subdivision containing 200 identical houses (so that Lennar could cut costs), and now it has to be rebuilt by custom contractors?

[Eugene]

“replacement cost is no more than 150% of the value of their policy coverage”

well 150% is still a good chunk of money. A new $1 million house in 4S ranch might have assessed value of buildings in $500k range.

The bigger question is, does 150% really cover what it costs to rebuild, when the house was originally built by a megabuilder like Lennar as part of subdivision containing 200 identical houses (so that Lennar could cut costs), and now it has to be rebuilt by custom contractors?

[cr]

Quick follow up-
I just read in the paper the # of lost homes in SD is 655.

To put that in perspective I did a quick search and found that in October of ’06 3,282 homes were sold in the county, down 21% from 4,155 12mos prior.

The current number of homes lost is ~20% of last October’s monthly sales volume.

[cr]

Quick follow up-
I just read in the paper the # of lost homes in SD is 655.

To put that in perspective I did a quick search and found that in October of ’06 3,282 homes were sold in the county, down 21% from 4,155 12mos prior.

The current number of homes lost is ~20% of last October’s monthly sales volume.

[cr]

Quick follow up-
I just read in the paper the # of lost homes in SD is 655.

To put that in perspective I did a quick search and found that in October of ’06 3,282 homes were sold in the county, down 21% from 4,155 12mos prior.

The current number of homes lost is ~20% of last October’s monthly sales volume.

[Anonymous]

Here’s an even better question. When these houses are re-built, does the ‘closing’ go down as a sale in the books? If so, over 800 homes just went pending with closing dates in the next 6 months – 2 years.

[Anonymous]

Here’s an even better question. When these houses are re-built, does the ‘closing’ go down as a sale in the books? If so, over 800 homes just went pending with closing dates in the next 6 months – 2 years.

[Anonymous]

Here’s an even better question. When these houses are re-built, does the ‘closing’ go down as a sale in the books? If so, over 800 homes just went pending with closing dates in the next 6 months – 2 years.

[Eugene]

Don’t compare these numbers with existing home sales.

If people who lost their homes are in position to buy new homes to replace the ones they lost (and it seems from this thread that they aren’t), this has the effect of absorbing ~1 month of production of new homes in the county.

If not, the fire simply creates temporary additional demand for 700 rental apartments/houses.

[Eugene]

Don’t compare these numbers with existing home sales.

If people who lost their homes are in position to buy new homes to replace the ones they lost (and it seems from this thread that they aren’t), this has the effect of absorbing ~1 month of production of new homes in the county.

If not, the fire simply creates temporary additional demand for 700 rental apartments/houses.

[Author]

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