Home buyers are likely to encounter rising insurance premiums, with coverage more difficult to find, in the wake of news that State Farm and Allstate have stopped writing new homeowner policies in California.
But the potential impact on home prices is difficult to determine, particularly in fire prone areas, according to real estate agents in the Santa Cruz mountains and Santa Rosa region, who noted that inventory remains low while demand has stayed high.
“We thought with the increase in interest rates, momentum would slow down,” said Logan Francavilla, a real estate agent with the Santa Rosa-based Prosper Real Estate Team. “But we’re still seeing multiple offers and above-asking prices.”
Homeowners insurance isn’t required by law in California, but most mortgages require it as a condition of the loan.
In Santa Rosa, where the Tubbs Fire caused devastation in 2017, it hasn’t been too hard to find an insurer willing to cover most homes, though new homeowners now may have to do more searching and be willing to pay higher premiums without State Farm and Allstate as an option, Francavilla said.
In the Santa Cruz mountains, however, realtors are more nervous about the potential impacts, especially given the continued risk of wildfire.
By and large, State Farm and Farmers Insurance have been the only two brand-name insurance companies that are still offering policies for mountain homes — with only the former offering conventional plans that cover fire insurance, said Tim Huxley, a real estate agent with Room Real Estate, which is based in Santa Cruz County.
Farmers Insurance often requires Santa Cruz mountain home buyers to purchase the state-offered FAIR Plan for fire insurance, Huxley said. The FAIR plan is an “insurer of last resort” and is generally more expensive because it covers high-risk fire areas other insurers refuse to cover.
Farmers Insurance was not immediately available to comment on its approach to fire coverage.
For a million dollar house in the Santa Cruz mountains, a conventional policy including fire insurance is usually $150 a month, whereas the FAIR Plan can be up to $600 a month, Huxley estimated. Without State Farm as an option for new homeowners, “moving forward, everything is going to have to be FAIR Plan up in the mountains,” Huxley said.
It’s possible that high insurance premiums will mean fewer offers for homes in the mountains, though, putting some downward pressure on price, said Bri Steel, owner of real estate agency Live Love Santa Cruz.
But Mike Scherer, broker and owner of Cruz Mountains Real Estate, said he thinks the real estate market will remain strong: “Our median price home is around $1.4 million. $5-6,000 a year for insurance is not going to be much of a factor."
With the additional cost of insurance, especially as more homeowners get on the FAIR Plan, people may not be able to buy the house of their dreams, said Jennifer Watson, president of the Santa Cruz County Association of Realtors.
With the lack of supply and steady high demand, Watson also said she doesn’t see home prices or sales changing much, even with the added expense of higher insurance: "There’s always going to be somebody that can pay that.”

FWIW, Schwab has indicated to me that they will honor the $15 trading fee originating from ThinkorSwim (then to TDA); if anyone else falls into that category. I'm not sure yet if that will be automatic, or you'll have to ask for it.

Was this transfer for all TD accounts, mine seem unchanged as of now?

. FWIW, I think everyone's accounts are not transferred yet. You can create your new User name and password on Schwab.com, and it will tell you when all your accounts are scheduled date-wise... based on combined assets $ value-Per Schwab rep. Majick

Was this transfer for all TD accounts, mine seem unchanged as of now?

And the beat goes on . . .

The U.S. economy continued to crank out jobs in May, with nonfarm payrolls surging more than expected despite multiple headwinds, the Labor Department reported Friday.
Payrolls in the public and private sector increased by 339,000 for the month, better than the 190,000 Dow Jones estimate and marking the 29th straight month of positive job growth.
The unemployment rate was at 3.7% against the estimate for 3.5%, just above the lowest level since 1969.

I wonder how Mr. Market will like that. I don't think the Fed will.

The Fed won't like this report. But they have to be careful in raising overnight fed funds rate. Bank deposits would fly out to MM funds more if they raise rates.

And the beat goes on . . .

The U.S. economy continued to crank out jobs in May, with nonfarm payrolls surging more than expected despite multiple headwinds, the Labor Department reported Friday.
Payrolls in the public and private sector increased by 339,000 for the month, better than the 190,000 Dow Jones estimate and marking the 29th straight month of positive job growth.
The unemployment rate was at 3.7% against the estimate for 3.5%, just above the lowest level since 1969.

I wonder how Mr. Market will like that. I don't think the Fed will.