Real Estate Crash thread

[Conundrum]

Hey, I hope Lemonade works. If I were to bet, they’ll be in the same price range as others sooner than later. That’s why I said take the savings now. I just did a quick read on their annual statements and the loss ratio isn’t terrible but they’re playing in a hard market and haven’t matured claims yet to be credible.

[Dantheman]

I’m pretty confident my neighborhood is not going to have catastrophic wildfire loss. There’s just not enough fuel up wind.

Remember the fire that burned down Hutash's house? There was a famous pic (that I now can't find) of a Home Depot burnt to the ground despite being surrounded by hundreds of feet of parking lot on all sides. If the winds are right and the fire takes hold in the neighborhood all bets are off even if you're not directly in the WUI.

[XXX-er]

This....getting wealthy is for the non-wealthy. For the wealthy its all about capital preservation.

At least in Canada at a certain point (age 65-70) you gota buy RIF's with your RRSP's so you can start taking it out and paying the deffered taxes on your money hopefully at a lower rate than when you put it in cuz you ain't working, but so much money just appears as you add it up so the sooner you get into the drawing down the better to draw less per month and pay less tax which is what I was doing with money guy last week

one can only drink so much beer ski so many skis when the living is too easy until the day of reckoning when you are forced to start looking and suddenly its like wow forgot about that $ and that $

[schuss]

I’m pretty confident my neighborhood is not going to have catastrophic wildfire loss. There’s just not enough fuel up wind. That says nothing for the solvency of lemonade though.

I assume some increases but a 55% savings goes a long way.

It reminds me of esurance when they first started. Super low rates, now they are like everyone else.

I read a lot reviews of lemonade and most of the negatives are from renters

I do like the app based interface.

Until recently all they did was renters

[dan_pdx]

This is probably more prevalent in the PNW than elsewhere, but it's a combination of supply/demand, better school continuity, and not wanting to waste the short summers.

Looking at supply, there are fewer listings in the first quarter of the year, so when people decide to make a move that more or less will coincide with the end of the school year (so start looking around March) they don't have much to choose from. More listings come on in April/May and competition pushes the offers higher. June listings now have those comps baked into the asking price, and the buyer pool starts getting into the 'we're going to miss out' frenzy.

By the time July rolls around, sellers look at what just happened, and start to ask stupid prices, BUT a big chunk of the buyers have already bought, and many that didn't have lost the sense of urgency that was driving everything up. Some drop out altogether with the notion that things will return to "normal" or that there will be a correction in the future (just read half the posts in this thread). So now we have more overpriced listings with fewer buyers, resulting in fewer bidding wars, more days on market, and even price reductions.

Late summer sellers think they missed the boat (or are just enjoying what little summer we have) so listings begin to fall off just when parents are trying again for the least disruption by moving somewhere around the first day of school, and those who were sitting the summer out start thinking about RE again. So September tends to have more demand than supply. And supply continues to fall all the way to January.

Thanks Ted! Lots to think about there...is the takeaway that you may pay less but will have less to choose from at the end of Q4 / start of Q1?

[wordbird]

Yep, and from what I've heard the houses being bought aren't even being occupied, it's speculative buying from people out of the area who hear CDA and Kalispell are hot markets and see that Libby is inbetween and cheap. Locals spit shining and dumping houses that were unwanted and $70k just a couple years ago on wannabe Robert Kiyosaki's. They must have found a secret, right?

If it pops, there's going to be a lot of self proclaimed "Real Estate Investors" left holding the bag, with a ton of leverage exposure as Luke noted.

I don't see anything remotely close to these numbers...

https://www.zillow.com/homes/recentl...e%22%3Atrue%7D

[TAFKALVS]

I don't see anything remotely close to these numbers...

https://www.zillow.com/homes/recentl...e%22%3Atrue%7D

Zillow in rural Montana and Idaho seldom is accurate for sales data, fyi.

[Core Shot]

As someone in the industry - Lemonade are very impressed with how smart they think they are.

Lloyds is not actually an insurer, it's more an exchange for investment groups willing to insure certain risks at certain prices. Quite fascinating, actually - https://en.wikipedia.org/wiki/Lloyd's_of_London

Holy shit. That lloyds wiki is scary. I always thought they were gold. Probably news stories over the decades. Stupid shit like insuring hand models or whatever.

I need some lemonade. Gotta see if they are admitted in my state.

[wordbird]

Zillow in rural Montana and Idaho seldom is accurate for sales data, fyi.

Seems like all of Montana doesn't have published sale prices. But 200k list price for slightly over 1k sqf old barn in Libby is probably fair considering what's going on in CDA and Kali...

[schuss]

Holy shit. That lloyds wiki is scary. I always thought they were gold. Probably news stories over the decades. Stupid shit like insuring hand models or whatever.

I need some lemonade. Gotta see if they are admitted in my state.

Well, it's realistically the easiest mechanism to insure things that don't fit in normal products, or risk profiles that are outside of the 90% of market stuff, so it's kind of a necessary thing to ensure there's some level of oversight given how regulated insurance generally is.

[Meadow Skipper]

Remember the fire that burned down Hutash's house? There was a famous pic (that I now can't find) of a Home Depot burnt to the ground despite being surrounded by hundreds of feet of parking lot on all sides.

I believe you’re referring to the Tubbs Fire up in NorCal that took out a KMart - Santa Rosa. I think hutash lives in SoCal. Your cautionary warning however is right on.

[Kinnikinnick]

As someone in the industry - Lemonade are very impressed with how smart they think they are.

Lloyds is not actually an insurer, it's more an exchange for investment groups willing to insure certain risks at certain prices. Quite fascinating, actually - https://en.wikipedia.org/wiki/Lloyd's_of_London

No way?!??!!

Counterparty risk is actually a real thing?

You can just buy the cheapest rate and expect the same product…


…until you actually have a claim and then good luck


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[fastfred]

insurance companies are the scum of the earth
every ad I see on tv should have a disclaimer at the end that says they will try to fuck you over hard they will not pay shit and you will have to sue them to get their attention

[Ted Striker]

The insurance industry net premiums are over a trillion per year, and net profits are close to half of that. That's a lot of people paying for something they never receive.

[altasnob]

Washington has some of the strongest consumer protection laws against abuse by insurance cos in the nation. If you prevail in a lawsuit you get three times damages plus attorney fees. Drives up our insurance rates though.

[sirbumpsalot]

The insurance industry net premiums are over a trillion per year, and net profits are close to half of that. That's a lot of people paying for something they never receive.

Post your source. I've always seen gross profit margins of just under 50% and net margins in the single digits.

[4matic]

I believe you’re referring to the Tubbs Fire up in NorCal that took out a KMart - Santa Rosa. I think hutash lives in SoCal. Your cautionary warning however is right on.

I don’t know Hutash area but I know where that Big box burned. The big box was in a risky place.

[ötzi]

West of the Mississippi?

[AdironRider]

I've been dealing with some insurance bs recently and just have to mention two words, "bad" & "faith", and they instantaneously become the most helpful people on earth.

[Ted Striker]

Post your source. I've always seen gross profit margins of just under 50% and net margins in the single digits.

You're right. I meant sales vs payouts. Fingers moving faster than brain this morning.

[m2711c]

Insurance companies don’t make money by paying claims.

[sirbumpsalot]

You're right. I meant sales vs payouts. Fingers moving faster than brain this morning.

If people really want to rail over profit margins they should get informed....its not oil and insurance companies that are raking it in....its tech companies.

[Deebased]

If people really want to rail over profit margins they should get informed....its not oil and insurance companies that are raking it in....its tech companies.

But that would impact muh conveniences. Its easy to sit at home on our ever expanding asses waiting for the latest collection of fatty foods and cheap Chinese shit to arrive and virtue signal about our Teslas and renewable energy usage.

[4matic]

Lumber down limit again today. $650

[RoooR]

If people really want to rail over profit margins they should get informed....its not oil and insurance companies that are raking it in....its tech companies.

Truth. Insurance is actually a competitive industry so profit margins are pretty slim. Most net profit is in the low single digets. Back in the day when oil companies were the biggest in the USA their profit margins were also in the low single digest.

Tech on the other hand (net profit margins):
MSFT: 35%
Facebook: 35%
Google: 26%