![]() Within that group, 34% had a potential buyer decide not to buy because of the difficulty of finding fire insurance. The association found in a survey of its members last year that 27% had issues with fire insurance either personally or with their clients. “Putting an even higher bar on the financial requirements of homeownership means that some folks are going to get priced out.” “It really exacerbates an already challenging environment” for home buyers, he said. Increased insurance costs could slow the pace of home-price increases by making homes less affordable to middle-class buyers, said Jordan Levine, deputy chief economist at the California Association of Realtors. ![]() Housing demand has been high in some of these communities as buyers have been priced out of bigger cities. But anecdotally, real-estate agents around the state say home insurance has become a major issue in certain areas. Housing economists say the highest-risk areas in the state are relatively rural, and the effect of insurance pricing on the home market can be difficult to parse. “We’re just going to get a bunch of houses sitting on the market that won’t sell,” she said. ![]() Green said she sold about $4.7 million in real estate last year, down from $8.8 million in 2018. “I’ve had so many deals fall through,” she said. Lauralee Green, co-owner of Z Group Real Estate in Pollock Pines, Calif., now requires prospective buyers to submit an insurance quote before making an offer. Real-estate agents say potential buyers are having difficulty obtaining insurance and are backing out of purchases or lowering their offers after realizing how much insurance would cost, which can be thousands of dollars a year or more in wildfire-prone areas. Home insurers have declined to renew policies for tens of thousands of homeowners across the state, and regulators expect more nonrenewals in the coming months. Insurance companies have continued to reduce their wildfire exposure in the past two years after paying more than $24 billion for California wildfire losses in 20.
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