Property/homeowners Insurance

[ultrarunner]

Just today the evening ABC national news did a piece on the people who's houses were burned in the California fires. 46% were under-insured; some by at least $150,000.

I believe it as the cost to rebuild leaped since 2020.

Some policies the onus is on the insurance company to track replacement and not much was done during Covid years…

Many legal battles will be fought on replacement riders and I see more policies no longer offering guaranteed replacement.

The taxpayers and insured with no losses are expected to pick up a billion shortfall per the insurance commissioner…

 

[ericm979]

Just today the evening ABC national news did a piece on the people who's houses were burned in the California fires. 46% were under-insured; some by at least $150,000.

Construction costs have gone up a lot in parts of California.

In 2019 I asked the contractor that was renovating our house what it would cost to replace it if it burned down. He said about $400/sqft. These days I'm hearing more like $800/sqft. This is for a house that's mid range at best, not a mansion.

It's hard to get contractors and they charge a premium. Partly because their costs are higher but also because they can.

When there's a fire that burns a lot of houses the contractor shortage and prices gets even worse.

 

[grsthegreat]

Construction costs have gone up a lot in parts of California.

In 2019 I asked the contractor that was renovating our house what it would cost to replace it if it burned down. He said about $400/sqft. These days I'm hearing more like $800/sqft. This is for a house that's mid range at best, not a mansion.

It's hard to get contractors and they charge a premium. Partly because their costs are higher but also because they can.

When there's a fire that burns a lot of houses the contractor shortage and prices gets even worse.

Holy hell. Still glad i moved out of there 30 years ago. I have a 4000 sf house now here in idaho. I refuse to say what I paid to build it 30 years ago…..but it wasnt much. Mind you i did most of the work myself.

 

[ultrarunner]

You left and didn’t take your friends with you?

 

[grsthegreat]

You left and didn’t take your friends with you?

I left BECAUSE of my crazy friends

 

[ultrarunner]

I understand… it’s crazier now!

 

[ericm979]

Holy hell. Still glad i moved out of there 30 years ago. I have a 4000 sf house now here in idaho. I refuse to say what I paid to build it 30 years ago…..but it wasnt much. Mind you i did most of the work myself.

30 years ago building a house here wasn't terribly expensive either! That was before the tech boom made some people rich, enough to have a significant effect on housing and a lot more. That's driven a lot of it. Other parts of California have other expense drivers.

A friend of mine has a house in town that he GC'd himself and did a lot of the work on. It's very well built. The house next door got bought by a couple who are both lawyers with a large tech firm. They paid a few million and then found out that the house was basically unusable. They tore it down and have been rebuilding it. In the end he estimates it will cost $4M. They could probably get their money out of it when they sell if it's reasonably nice. This is on a small lot and not mansion size.

When my wife and I first moved in together we rented an Eichler in Palo Alto. Eichlers were built as cheap tract homes but people into mid century modern love them now. Back then the part of Palo Alto we were in was mostly regular people like teachers. One neighbor worked at Stanford in plant maintenance. Now Palo Alto is a "nice address"- it's where Mark Zuckerberg has his compound. The house wasn't all that great, it leaked and was dark and cold, but it was cheap and had a garage for our motorcycles.

Last year it sold for $3.5M. Still looked about the same on street view. I don't think they did anything in the last 30 years. It'll need a complete renovation to be nice.

Yes, it's insane. One of the reasons why we're leaving.

 

[ultrarunner]

Do you think over time Southern Oregon will follow California?

I really like Washington but the crazy rules of late make Olympia hard to discern from Berkeley and that’s not even getting into the rocks and bottles thrown at our troops arriving home…

Maybe the West Coast is more alike than different?

 

[ericm979]

Do you think over time Southern Oregon will follow California?

I hope not! We want to escape Silicon Valley and not have it follow us. It's already bad enough that Silicon Valley attitudes and ideas are going national.

The Southern Oregon economy doesn't have anything like Silicon Valley's wealth generation. There are some people from SV who work remote and live in Southern Oregon, or retired there, but they're relatively rare.

Bend's a little ahead of Southern Oregon on that, and house prices are higher.

 

[RayIN]

Construction costs have gone up a lot in parts of California.

In 2019 I asked the contractor that was renovating our house what it would cost to replace it if it burned down. He said about $400/sqft. These days I'm hearing more like $800/sqft. This is for a house that's mid range at best, not a mansion.

It's hard to get contractors and they charge a premium. Partly because their costs are higher but also because they can.

When there's a fire that burns a lot of houses the contractor shortage and prices gets even worse.

That same program had a segment where the leader of people who lost houses to the big fires 4-5 years ago said. After we learned our house had burned I immediately contacted a housing contractor and locked-in a contract to build a new house. Those who didn't follow my advice to hire a contractor ASAP had to pay about double the price per sq. ft. 6 months later.