Fire Insurance and Defensible Space

The booming U.S. housing market has spilled over to the rental market, which has seen demand for apartment and single-family rentals skyrocket this year, as high sales prices and an inadequate supply of available housing have forced many prospective buyers to rent for the foreseeable future. Increased demand for housing, along with an improving economy, has competition for rental units soaring, and landlords are taking note, with the national median rent increasing 11.4% in 2021 so far, according to Apartment List.  The state of California has its own set of rental restrictions under AB1482 but the rental market in San Diego continues to remain limited.  

With delta variant cases continuing to rise throughout the U.S., the negative economic effect of the COVID re-emergence has become more obvious in the past couple of weeks.  Consumer confidence in the latest reports dipped to the lowest level since February, while job growth slowed sharply in August.  The speed bump for the economic recovery, however, is good news for homebuyers as the Fed will likely delay tapering and mortgage rates will be low for a little longer.  

As California finds itself in another alarming fire season, existing and future homebuyers in all parts of California may be struggling to secure fire insurance.  Some homeowners say they weren't prepared for steep insurance premium increases or being dropped from their insurance coverage altogether.  In 2019 alone, following two years of devastating fires mainly in Northern California, insurance companies dropped the policies of about 230,000 homeowners in the state....a 31% increase from the year before.  And between 2017 and 2020, the state-approved over a billion dollars in insurance premium increases, according to the state's insurance department.  

Now in California, under AB38, when you sell property that is located in a high or very high fire hazard severity zone, you'll need documentation of a compliant Defensible Space Inspection.  Defensible space is your property's front-line defense against wildfire.  Creating and maintaining defensible space around your home can dramatically increase your home's chance of surviving a wildfire and improves the safety of firefighters defending your property.  These inspections are all completed by CalFire.  

I continue to take many calls from Sellers and Buyers in this marketplace and always welcome the opportunity to reconnect with you or speak with your referrals.