Why owning a home is so pricey ...

[alarmguy]

Having two homes at the age of 73, I don't mind the expenses of maintenance and repairs, much of which I do myself. What ticks me off is the ever-increasing cost of homeowners insurance. Please don't lecture me about my vulnerable locations in NC and FL. Homeowners insurance premiums are up dramatically almost everywhere in the past 6-8 years. I get it. Insurers aren't in business to lose money, but the trend is still worrisome.

I get it, I live near the coast now too (as of last year) still my insurance is cheap but I always shop around. I agree with you though but I do also acknowledge that the cost to rebuild a home has gone up dramatically and coastal storms are getting more powerful partly to blame on less air pollution in the Atlantic, more sunlight hitting the oceans. Still a lot of it is hype by the media though there must be something to it because many insurers leave those risky states and they wouldnt if there was a lot of money to be made.

Anyway you are correct though, they are in business to make money and that is what they are doing. Their responsibility is to the shareholders of the company and its employees. NOT the customer. Yes, frustrating but not much you can do about it except insure yourself.

 

[Dave Hess]

This is misleading for some (maybe not you), a CONDO HOA is completely different than a home HOA.
A Condo HOA is ALL Building Maintenance ex. roofs, landscaping, including having sufficient funds for emergency repairs. Such as the building collapse that took place in Florida. It's not the HOA to fault, it's choosing not to own your own home and co-owning an apartment style home (condo) instead. Sadly people make their own decisions and that is what being free is about.

Yes, I’m aware of the differences.

Her condo is 50 years old with no pool or gym. LOL
Landscaping of condo area is very basic, not fancy looking like Ritz Carlton.

—————————————————

If I had to live in a detached home with HOA, I don’t want a community pool, tennis courts, Gym, BBQ grills, children’s play area / jungle bars / swing sets, etc….

https://ardenfl.com/gallery/

^^^^
This is absolutely ridiculous and unnecessary for a HOA.

 

[supton]

There are health benefits to living down south. I was outside swimming in a heated pool yesterday, and will play golf today, and the week before I spent freezing around a campfire up north.

People are just afraid of making any change.

I think about it, especially as I tire of the short days and long cold winters. Problem is, I burn within minutes of being outside, being fair skinned and all, and sweat profusely. I get it, I could go outside mornings and evenings, and that'd be nice, but in the end, I'm just trading heat for a/c (which might be cheaper, as others have pointed out).

I'd also have to either get a divorce or own two homes. Wife would never move south. She loves the cold and winter, and only just tolerates our summers. Heck I find our summers to often be intolerable. Now if I won the lottery (that I don't play) I'd be open to the idea, a summer home and a winter home.

At the moment I have a decent job--why take a risk?

 

[CKN]

Yes, I’m aware of the differences.

Her condo is 50 years old with no pool or gym. LOL
Landscaping of condo area is very basic, not fancy looking like Ritz Carlton.

—————————————————

If I had to live in a detached home with HOA, I don’t want a community pool, tennis courts, Gym, BBQ grills, children’s play area / jungle bars / swing sets, etc….

https://ardenfl.com/gallery/

^^^^
This is absolutely ridiculous and unnecessary for a HOA.

HOA's also provide road maintenance among other things. Many times a city will permit a development but will not want to take responsibility for the streets. In addition-they can have rules for those who wish to use air compressors and drop transmissions in their drieway. A positive thing-IMHO.

 

[alarmguy]

Yes, I’m aware of the differences.

Her condo is 50 years old with no pool or gym. LOL
Landscaping of condo area is very basic, not fancy looking like Ritz Carlton.

—————————————————

If I had to live in a detached home with HOA, I don’t want a community pool, tennis courts, Gym, BBQ grills, children’s play area / jungle bars / swing sets, etc….

https://ardenfl.com/gallery/

^^^^
This is absolutely ridiculous and unnecessary for a HOA.

Ridiculous to one is someone else treasure to another. Calling it unnecessary doesnt make sense, its simply how we choose to live our lives.
Analogy would be why drive a $60,000 car when a $30,000 car will do the same thing? Or why live in a community without a vast array of things to do? Why own a property with an acre or more of land?

All I am saying is everyone spends their money for things important to them.

An example would be I would look at the Arden Florida link you posted as the minimum to possibly satisfactory (as long there is more than I see in the link) for community living and I wouldnt settle for less but you see it much differently.
Our community has multiple pools including an indoor pool, two amenity centers, 2 gyms, outdoors gas BBQ grills and refrigerators, ballroom, meeting rooms, 4 pickleball courts, 2 tennis courts and a 27 hole golf course. There is more as well, the condos in our community have their own pool and amenity centers.
The amenity centers are there because they sell homes and command good prices both new and resale. However I personally find some of the newer communities amenity centers short on amenities.

 

[Owen Lucas]

Please don't lecture me about my vulnerable locations in NC and FL. Homeowners insurance premiums are up dramatically almost everywhere in the past 6-8 years. I get it. Insurers aren't in business to lose money, but the trend is still worrisome.

My concern with this is are losses up in places like the Midwest, South West, or the North East? Excluding Sandy, nothing major has happened IIRC. It’s not fair that underwriting is raising rates in states without major losses. Homeowners insurance and underwriting is not my specialty though.

 

[IndyIan]

I’m out in the middle of nowhere in Indiana. 25 minutes from the nearest Walmart and nearly 40 minutes from an actual grocery store. I moved in 2019; just over 1750SF, 24x30 garage, 16x30 barn, 3.25 acres. I locked in a refi at 2.25% (was originally 2.75%) right after CV-19 lockdowns. At the time my mortgage payment was a hair under $400/mo and insurance & property taxes combined was ~$140/mo. Fast forward thru the past 4 years (for many reasons) and I’ve had zero claims and zero changes to coverage… but now my home insurance ALONE is $298/mo. Propane heat & well water/septic kinda balance out but still is ~$250/mo when averaged over the full year (was $1.49/gal in 2019, $2.89/gal today). Electric bills, even though average monthly kWh & overall usage are essentially identical, have gone from <$100/mo in 2019 to over $190/mo today.

So in one 4-year period essentially, bad choices that are not under my control nor otherwise changeable by me have increased my monthly expenditures by nearly 100% when looking at the sum total, even with absolutely no changes in my circumstances. I can’t imagine how anyone who was on the edge of just scraping by in 2020 is still managing their circumstances today.

It’s clear that when some people say that by 2030 “we will own nothing” (not by our choice, of course) really mean it. This is unsustainable. Big, rapid, meaningful changes need to be made in 2025 and even that may not stave off the 2008-cum-1929 financial mess that appears to be materializing very soon.

You can probably do way better on house insurance. We insure our house(woodstove secondary heat), land, and small farm for a lot less, and that includes some outbuildings, tractor, even some livestock coverage, and a few millions in coverage for a few different expensive scenarios. I don't think our insurer is covering any high risk areas and spreading the cost to our low cost area, so insurance is pretty stable. Kind of like car insurance, our area has few accidents, thefts, and few city people driving, so car insurance is pretty cheap!
Maybe find a more local insurance company?
The rest is harder to cut back on, and we feel the same increases...

 

[SubieRubyRoo]

You can probably do way better on house insurance. We insure our house(woodstove secondary heat), land, and small farm for a lot less, and that includes some outbuildings, tractor, even some livestock coverage, and a few millions in coverage for a few different expensive scenarios. I don't think our insurer is covering any high risk areas and spreading the cost to our low cost area, so insurance is pretty stable. Kind of like car insurance, our area has few accidents, thefts, and few city people driving, so car insurance is pretty cheap!
Maybe find a more local insurance company?
The rest is harder to cut back on, and we feel the same increases...

It is a local company, Farm Bureau. I haven’t had a chance yet to go in and chew my agent. Will try to get in there this week and let you know. There’s no flood plain or really any level of property crime where I live, and in 125 years since the house went up, there hasn’t been a tornado on the ground within 25 miles.

Moving my house and 4 cars to another insurer will definitely be on the table if I get stonewalled.

 

[thescreensavers]

My Taxes and Insurance is 40% of my total mortgage+ escrow payment. South Florida things

 

[Cropduster172]

If you own a home on or close enough to a coast, the luxury of price shopping for insurance doesn't exist. Flood insurance is mandatory if you have a mortgage as is property/liability. There are only certain companies that write policies for coastal homes and they're not the ones that most are familiar with. They're not the Allstates, State Farms, Farmers, Hartfords, etc...They are smaller outfits that write policies through the reinsurance market, Lloyd's, etc...
Flood insurance is controlled by FEMA including the pricing. There is no price shopping for flood insurance... period.
I know this because I own a home in NJ in a beach town 7 blocks from the ocean and 30 yards from the Bay. Flooding is the number one risk. Wind damage is minimal risk. It's possible to get some premium discounts for flood based on foundation elevation and also the type of foundation vents(SmartVents).
Building codes were changed after Sandy, raising foundation heights significantly.
There are government financial assistance programs that will contribute to the cost of raising homes to increase foundation height but for many, it's more cost effective to tear down and rebuild to the new codes. Coastal home construction is an entirely different ballgame altogether compared to inland home construction.In general, everything is raised...AC units, gas meters, pool filter equipment. Foundations are poured onto multiple pilings that are driven 20-30+ feet. Pools are all concrete/ gunnite...no fiberglass or vinyl liner pools. Water tables are too high for those. It's quite different overall.

 

[Donald]

Well I read an article on property taxes and the low was some county in Alabama and the high might have been a county in NJ. And the difference in tax rates was very significant.

My taxes on an almost comparable home in DE compared to near Albany NY are I pay 1/10 in DE of what I paid in NY.

Casualty insurance companies are pretty good at calculating the risk of a home by zip code. Areas where there is more risk for fire or natural disasters are going to pay more as it's more likely the home will have a claim. If they cannot raise the rates enough to cover the risk then they will stop writing insurance in that area or state. In reality my home is about 10 miles inland. Would I want to be averaged in with the homes on the ocean? Or worse the homes on the ocean in FL? My home has less risk of being damaged by a storm or fire and I expect a lower rate because of that. And my homeowners insurance is reasonable.

It's hard for a state to write a law to force the insurance company to lower the rate. The risk is what it is and the insurance company is not going to loose money.

 

[Dave Hess]

If you own a home on or close enough to a coast, the luxury of price shopping for insurance doesn't exist. Flood insurance is mandatory if you have a mortgage as is property/liability. There are only certain companies that write policies for coastal homes and they're not the ones that most are familiar with. They're not the Allstates, State Farms, Farmers, Hartfords, etc...They are smaller outfits that write policies through the reinsurance market, Lloyd's, etc...
Flood insurance is controlled by FEMA including the pricing. There is no price shopping for flood insurance... period.
I know this because I own a home in NJ in a beach town 7 blocks from the ocean and 30 yards from the Bay. Flooding is the number one risk. Wind damage is minimal risk. It's possible to get some premium discounts for flood based on foundation elevation and also the type of foundation vents(SmartVents).
Building codes were changed after Sandy, raising foundation heights significantly.
There are government financial assistance programs that will contribute to the cost of raising homes to increase foundation height but for many, it's more cost effective to tear down and rebuild to the new codes. Coastal home construction is an entirely different ballgame altogether compared to inland home construction.In general, everything is raised...AC units, gas meters, pool filter equipment. Foundations are poured onto multiple pilings that are driven 20-30+ feet. Pools are all concrete/ gunnite...no fiberglass or vinyl liner pools. Water tables are too high for those. It's quite different overall.

Yep, we are all at the mercy of these big companies that have lots of power and influence on what’s ‘best’ for us.

 

[SC Maintenance]

My concern with this is are losses up in places like the Midwest, South West, or the North East? Excluding Sandy, nothing major has happened IIRC. It’s not fair that underwriting is raising rates in states without major losses. Homeowners insurance and underwriting is not my specialty though.

There was pretty heavy flooding in New England along the rivers a year or so ago. You mentioned Sandy - that was FEMA's biggest loss at its time. So you never really know what's next - but "next" seems to be happening more often everywhere.

A big portion of the insurance is cost to rebuild. You also have loss of use. It stands to reason that if it costs double to rebuild than it did 5 years ago, and renting a place while you wait is more, that your insurance is going way up.

Certainly not defending the insurance companies -there as crooked as the day is long. But at least in this case there may be some correlation.

 

[SC Maintenance]

If you own a home on or close enough to a coast, the luxury of price shopping for insurance doesn't exist. Flood insurance is mandatory if you have a mortgage as is property/liability. There are only certain companies that write policies for coastal homes and they're not the ones that most are familiar with. They're not the Allstates, State Farms, Farmers, Hartfords, etc...They are smaller outfits that write policies through the reinsurance market, Lloyd's, etc...
Flood insurance is controlled by FEMA including the pricing. There is no price shopping for flood insurance... period.
I know this because I own a home in NJ in a beach town 7 blocks from the ocean and 30 yards from the Bay. Flooding is the number one risk. Wind damage is minimal risk. It's possible to get some premium discounts for flood based on foundation elevation and also the type of foundation vents(SmartVents).
Building codes were changed after Sandy, raising foundation heights significantly.
There are government financial assistance programs that will contribute to the cost of raising homes to increase foundation height but for many, it's more cost effective to tear down and rebuild to the new codes. Coastal home construction is an entirely different ballgame altogether compared to inland home construction.In general, everything is raised...AC units, gas meters, pool filter equipment. Foundations are poured onto multiple pilings that are driven 20-30+ feet. Pools are all concrete/ gunnite...no fiberglass or vinyl liner pools. Water tables are too high for those. It's quite different overall.

Were 20+ miles from the coast. The county I live in doesn't even touch the coast. But all these apply here too. These companies just don't want to insure here anymore.

 

[4WD]

There was pretty heavy flooding in New England along the rivers a year or so ago. You mentioned Sandy - that was FEMA's biggest loss at its time. So you never really know what's next - but "next" seems to be happening more often everywhere.

A big portion of the insurance is cost to rebuild. You also have loss of use. It stands to reason that if it costs double to rebuild than it did 5 years ago, and renting a place while you wait is more, that your insurance is going way up.

Certainly not defending the insurance companies -there as crooked as the day is long. But at least in this case there may be some correlation.

In my lifetime - “coastal” or “waterfront” here moved from fishing camps for locals - to luxury developments that’s driving distance from major cities - so the real estate world has placed hundreds of millions of USD in the line of fire … Yet, they expect the locals to help pay in taxes and insurance …

 

[SC Maintenance]

She told me yesterday her HOA is now $1170 per month starting this month.

Any clue what portion is insurance and what portion is deferred maintenance?

Not saying its not a crazy amount, but people look at these HOA numbers and think there a rip off. However if insurance equates to $4000 a year per residence - which it could be if its right on the ocean, or if there is $50K per residence of deferred maintenance, she could be paying for that.

 

[4WD]

Were 20+ miles from the coast. The county I live in doesn't even touch the coast. But all these apply here too. These companies just don't want to insure here anymore.

I’m only about 30 miles - that’s enough coastal plains to avoid storm surge only - and that’s really where insurance co’s need to draw a hard line. I have a friend who built on the sand with 9’ of cinder block facing the surf - don’t feel the least bit sorry for what he pays

 

[Dave Hess]

Any clue what portion is insurance and what portion is deferred maintenance?

Not saying its not a crazy amount, but people look at these HOA numbers and think there a rip off. However if insurance equates to $4000 a year per residence - which it could be if its right on the ocean, or if there is $50K per residence of deferred maintenance, she could be paying for that.

I could find out the insurance / deferred maintenance, I need to ask her.
Building is 50 years old and needs maintenance.

She is 2 miles from the ocean.

I’m expecting her to get a big assessment in the near future. Many people in this condo simply will stop paying for everything.

 

[JHZR2]

Living in a high property tax state, this is nothing new/very obvious - tax and insurance erodes your buying power and keeps pricing down.

At least taxes keep others employed, and schools good. Insurance has become ridiculous in some areas - often related to roof coverage and the actions of thieving roofers after small storms.

 

[alarmguy]

Any clue what portion is insurance and what portion is deferred maintenance?

Not saying its not a crazy amount, but people look at these HOA numbers and think there a rip off. However if insurance equates to $4000 a year per residence - which it could be if its right on the ocean, or if there is $50K per residence of deferred maintenance, she could be paying for that.

Also if the HOA is paying property taxes and Florida CDD fees