HIGH Insurance CRUSHING DREAMS Of Home Ownership

today I'm in North Shore open space Park

here in Miami Beach and it's been a long

time since I shot a video here and the

reason I came here today is because

they've been totally renovating this

park and wanting to come check it out

haven't been here since some of the

renovations so in the meantime I can

wave to the rush hour traffic behind me

now one of the biggest looming issues

with home ownership today is homeowners

insurance guys and the reason it's such

a big issue is because how much the cost

of it has been rising but also the fact

is if you have a mortgage on a property

you have to have homeowners insurance

there's no two ways about it if you

don't have homeowners insurance and you

have a mortgage the mortgage lender will

Implement a forced policy on your behalf

that will likely cost far more than what

your current policy costs and it will

mainly cover their losses in case of an

event and not yours so you really don't

want this to be the case that's like

kind of Last Resort unless no other

insurance company will cover you but

I'll bet you didn't know that Florida is

actually not the worst place when it

comes to homeowners insurance in fact it

is in Oklahoma

and I had no idea it was there either I

would never have guessed that Oklahoma

is where people spend the most out of

all of their yearly income on homeowners

insurance it turns out in Oklahoma

people on average pay 3 659 dollars per

year and that's about 305 dollars per

month or about 5.3 percent of most

Oklahoma people's annual income so

there's a chart I'll have it linked in

the description if you guys want to

check it out from bank rate that kind of

has a breakdown of all 50 states of how

much people pay for insurance but uh

Oklahoma's at the top of the list when

it comes to the percentage of people's

income that they need to spend on

insurance you see they have like half

the park done here and in this half

they're still working on

so I'm gonna explore the half that's

done now many people probably don't

realize this especially first-time home

buyers that your homeowners insurance

premium is likely going to be your

second largest expense with owning your

home besides paying your mortgage and

unfortunately this is one of those

expenses that gets overlooked when

people are looking at homes and looking

at buying something and the easiest way

to prevent having any trouble with this

is to just get a homeowner's insurance

quote before getting too deep into the

contract you know you make an offer on

the house you get seven to ten days due

diligence period where you can back out

usually for just about any reason if you

find that the homeowner's insurance

premiums are too expensive that could be

a great reason to back out of your

purchase so something to keep in mind

playground area here

this whole sidewalk I'm walking on is

brand new new exercise equipment all

over the place

looks like the layout of the park hasn't

really changed they just upgraded the

appearance of it now one of the biggest

complaints I see from people in the

comments is that they've had homeowners

insurance for the past couple of decades

never had a claim but yet they're seeing

their premiums go up well why is that

guys well the thing is they don't care

if you've never made a claim so you

might as well make a claim if you need

to first of all but a lot of people then

are afraid of getting dropped that if

they make a claim that they're going to

drop them from the policy or raise their

premium even more which is a legitimate

concern but the other thing is that your

homeowner's insurance premium can go up

every year even if you've never made a

claim simply because of the fact that

they usually have inflation guards with

the policy so when inflation goes up

your coverage limits also go up with

inflation but naturally you end up

paying more for those higher coverage

limits so that's one thing that's

happening right now and then of course

here in Florida we've come covered time

and time again the major insurance

issues we're having down here as it

pertains to so many insurance companies

going insolvent here in fact there's

been seven in the past 13 14 months

going solvent that's almost one every

two months and on top of that we

obviously get hit with hurricanes here

and last year we got hit with a big one

hurricane Ian so the biggest issue with

securing a homeowner's insurance policy

here in Florida now is number one can

you even get coverage because in a lot

of cases people can't get coverage

because their roof is too old they need

to replace the roof before an insurance

company will cover them or they might

require you to also have a flood

insurance policy if you have citizens

that's a new requirement with them where

you got to have flood insurance no

matter where your home is located

doesn't matter if it's in a flood plain

or not so that pretty much sucks but

look at this guys the average homeowners

insurance premium from 2022 to 2023

jumped 20 percent and this is not just

here in Florida we might be one of the

more extreme example cases of this

happening of just how much things have

gone up and how bad the insurance

problem has gotten here but by no means

are we alone it's not happening only

here plus here in Florida people need to

get wind insurance if they want to be

covered from a hurricane for example and

just the wind Insurance alone on average

can run you an extra 3 600 a year just

for that but California is dealing with

their fair share of wildfires a few of

you have told me that the Wildfire

insurance is getting too out of control

in California and they're leaving

because of that which is also pretty

similar to what's going on here in

Florida when it comes to our premiums

but this is the reality guys if you buy

a home in a disaster prone area your

homeowners insurance is going to be

considerably more than somebody who buys

and a less disaster prone area but not

only that but the amount that you're

going to have to pay in Insurance

reduces how much you can actually afford

to pay for a home because it's such a

large chunk of your monthly payment like

say for example you wanted to buy a 350

000 house and put twenty percent down

you get a six and a half percent

mortgage rate well just your mortgage

payment with your principal and interest

is going to be 17.69 per month and that

does not include your homeowner's

insurance premium so this is something a

lot of people forget when they use the

mortgage calculator and like if you go

on Zillow for example use their mortgage

calculator they include insurance but I

find most the time that's not very

accurate at all guys and neither is the

property taxes that's another thing

people don't take into consideration is

the property taxes and here in Florida

just to cover a two hundred fifty

thousand dollar dwelling you're looking

at about an extra two grand a year or an

extra 165 a month just for that just for

the replacement cost of a 250k property

which is pretty low today by Florida

standards and when you contrast that by

looking at a place like Delaware it's so

much cheaper at only fifty Seven dollars

a month so you're talking a third of the

cost of what it costs to ensure a

similar home here in Florida but there

are things that you can do to lower your

premiums like here in Florida for

example hurricane shutters or hurricane

proof windows a lot of times that'll

give you a deduction on your insurance

you can also get discounts for

fireproofing different things like that

if you live in a fire prone area

or if you're tired of the madness you

can just give up and rent forever like

many people are choosing to do in fact

in a recent survey here in the U.S uh 66

percent of renters are saying that home

ownership is a hopeless Endeavor now and

it's completely out of reach and funny

enough we covered a pretty similar story

a couple weeks back out of Australia and

the statistics were alarmingly the same

you know you had two-thirds of renters

basically giving up on ever being able

to buy a home and the most troubling

part is instead of keeping the goal in

mind of buying a home they're just

blowing the money instead so they're

truly giving up just by blowing all

their money but I do want to just point

something out here because they say that

the median home price has gone from 329

thousand dollars in January 2020 to 476

000 as of April 2023 and that's

according to the U.S Census Bureau data

and I want to point out that all of this

housing market data is so out of whack

guys you have the U.S Census Bureau

saying it's 476k is the median home

price right now but if you look at

National Association of Realtors they

say it's 375k you're talking a hundred

thousand dollar difference Redfin is

saying it's 400k and case Schiller is

saying it's only 293k and these are all

reputable places that collect real

estate data and they should all be

accurate but yet they're all so far

apart so what's up with that I've kind

of brought this up before but it's crazy

how much that these numbers vary with no

explanation Now 51 percent of the

renters that they surveyed said that

owning a home is very important it's an

important Financial milestone in life

but they actually have even higher

priorities over owning a home now since

it's become so expensive and I have to

at least respect some of their other

goals because some of them are saying 71

percent of renters are saying that being

debt free is their number one goal

that's a pretty noble goal to become

debt free I think that's a really good

starting place and just by becoming debt

free they may actually change their mind

and be able to come homeowners after

getting out of debt so that could be

good I'm going to take you guys out to

the beach here in just a minute now 66

percent of the people surveyed said that

having a comfortable retirement is their

top priority over buying a home and some

people would argue that if you want to

have a comfortable retirement owning a

home that's paid off without a mortgage

is essential and I think there might be

some truth to that at least from the

stability aspect in retirement because

if you're renting and you know you're

getting up there in age and the landlord

can just kick you out anytime or raise

the rent to Crazy levels and next thing

you know you have nowhere to live and

you're on a fixed income but on the same

token homeowners that have paid off

homes are in trouble these days too

because of what we just talked about

they're not immune to these Insurance

increases that we've been seeing and

it's affecting the elderly you know

disproportionately because they have

fixed income so it is really taking a

toll on their monthly budget having

these higher insurance premiums and

combine that with higher property taxes

higher costs of everything when it comes

to repairs in the house it's not cheap

here's a surprising data point from this

too 59 percent of renters said that

rather than buy a home they'd rather buy

a car that's a lot of people that would

rather buy a car the biggest surprise to

me was that that many of them don't even

own a car to begin with and then you had

a third of all respondents to this

survey saying that they would just

rather spend their money elsewhere and

they're never interested in owning a

home that they're done now here's the

top reasons why all these people said

that they weren't interested in owning a

home 78 percent said they just can't

afford it so right away many of them

just aren't interested they don't have

the money 72 percent say that because

they don't have the down payment which

is practically the same thing not having

the down payment and not being able to

afford to buy are one and the same

really 71 percent said because of high

interest rates but that just goes to

show you once again guys the biggest

problem with people they focus on the

wrong thing High interest rates is why

they're not looking to buy they didn't

say that prices are too high now I know

that affordability directly correlates

to that but no one just came out and

flat out said that home prices are too

high so they think it's not worth it or

anything like that

foreign

data points from this survey is that 25

of all the renters they talk to are

spending 50 percent or more of their

income just on rent and that is

definitely not sustainable it's going to

be really hard to achieve any of their

financial goals if that's the case

because too much money is going towards

rent guys because the same advice

applies whether you're paying for a

mortgage or rent that no more than 30

percent of your income should be going

towards your housing payments but then

on the flip side you have a segment of

people who are desperate to buy a home

so much so that 31 percent say they

would sell their plasma or 29 say that

they would skip meals if it meant that

they could afford to buy a home now that

is Extreme dedication to becoming a

homeowner the Redfin CEO Glenn kelman he

came out this week he's pretty vocal in

the media and said that Redfin is much

better positioned to to weather this

housing downturn now that they've

basically trimmed the fat they've

learned a lot from their mistakes when

it comes to the housing market and as

soon as things start picking up that

they're going to be in a much better

position to profit again they said that

there's so many people that want to move

to a more affordable part of the country

here's where I think that people that

earn a lot of money are completely

detached from reality guys okay he says

that if mortgage rates ease by the late

part of the year without causing a

recession that's already delusional talk

right there he thinks that's the big

break that we need to see in the housing

market is interest rates coming back

down by the end of the year and no

recession guys well it's not going to be

no recession okay I don't know how

people that are this high up on the

corporate ladder can think that there

isn't going to be a recession every

single economic indicator that we have

that is pointing to a recession right

now the biggest one that the FED concurs

with is that the yield curve inversion

is out of whack so that is a predictor

of a recession every single time in

history in fact I'll throw up a chart

for you guys every time you see that

Gray Line here on the Fred chart you can

you can see that right before that Gray

Line was a yield curve inversion and

where are we at right now one of the

biggest ones in history as you can see

here so what's coming next a big gray

line there's no two ways about it it's

coming and the other thing is doesn't

Glenn look at the earnings of Redfin

doesn't he look at the state of the

company right now in fact redfin's

projected earnings for the second

quarter of 2023 are between 268 and 281

million and that's down by more than 20

percent from just a year ago so this is

a real estate company that's in the

business of selling real estate and all

things related to real estate and their

revenue is off 20 from where it was a

year ago but yet he's saying there's no

recession guys I mean the only thing I

can even think of when I hear stuff like

this is they have to come out and say

these things because it's the only way

that maybe business will pick up and get

better that's why you see people still

going out and having the fomo and

getting into multiple offer situations

because they hear things like this and

they think that they're never going to

have a chance to own a home again which

is just not true now here's an

interesting real estate story for you

Nordstrom's is the latest retailer to

say that we're pulling out of downtown

San Francisco because of how bad the

drugs and the crime situation is getting

down there and I've been to San

Francisco several times guys so I'm very

familiar with the city it's not a very

big city so it's easy to see the whole

place in a relatively short period of

time and I've done that I've been all

around the city and downtown San

Francisco is not a nice place okay and

it's to the point where these retailers

are literally scared for their employees

well-being because they can be held up

at a robbery at any moment they could be

subject to a stabbing that's why Whole

Foods closed down recently and when you

combine that with the slower business

because of remote work you know San

Francisco is the tech Hub of the America

basically the downtown is dead when it

comes to foot traffic and people

patronizing the businesses there which

is a big problem for businesses and it's

not just Nordstroms and whole foods that

have pulled out you have h m that's

they've pulled out you've had Marshalls

they're gone Gap Banana Republic

anthropology Office Depot Home Depot in

fact it's being reported right now that

they're seeing the highest level of

organized retail crime that they've ever

seen over there and it's so crazy that

they're not doing anything about this to

make things better it's like how many

businesses need to leave the area for

them to really start tracking down and

getting tough on these people when you

can walk into a Walgreens and steal 900

worth of stuff and have nothing happen

to you that's not a sustainable business

model and no retailers are going to put

up with this in the long term I I don't

think I mean Elon Musk he's in charge of

Twitter and in case he didn't know

Twitter's in downtown San Francisco and

he's even talking about on Twitter how

bad it is down there he's saying how so

many stores have shuttered in downtown

that is now feeling post apocalyptic so

the guy's there he's always frequenting

the area and he's seeing this firsthand

I'm gonna spend part of my summer in the

Bay Area this year guys I love

California when it comes to the weather

at least and the activities and that

fresh Mountain Air and hiking and all of

that stuff but I'll be just passing

right through San Francisco over the

Golden Gate Bridge Over by Sausalito and

Tiburon and all that I ain't going to be

dealing with San Francisco because this

sounds like an absolute nightmare right

now but I actually love the Bay Area

because for me it is the perfect summer

weather I love when every single day is

70 degrees during the day or 65 and

night time as you know in the low 50s I

love that guys it's close to the hiking

it's close to the beach it's close to

Wine Country it's close to everything

that I love about the area and you don't

even have to go to San Francisco even

one time to enjoy all those amenities

it's really sad because it is a

beautiful city I mean it absolutely is

with all the hills the architecture how

so many things are walkable over there I

think San Francisco could be one of the

greatest cities in the world if they

would just clean up their act but

unfortunately until that happens you're

probably going to see more of this and

by the way anybody who made it to the

end of this video when you're watching

this Sunday May 7th is my birthday so if

you'd like to wish me a happy birthday I

would love that thank you so much and

I'm actually going to be over in Venice

Florida for the weekend I'm going to

shoot some videos over there for you

guys so just a heads up that next week

there's going to be some new videos and

some new areas that we've never been to

before so that'll be pretty cool and

we'll finally probably see some

affordable homes for sale if you guys

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