Christina Wilson Your Charleston Realtor

WOE IS WE: FEBRUARY 2024 MARKET UPDATE

It’s time we had a little chit, a little chat if you will, about the alarming surge in homeowner’s insurance premiums. Some say it’s the price you pay for living on the coast but it’s not just us; renewal costs increased by an average of 35% nationwide between May 2022 and May 2023. We are all littermates of rising costs. One of the biggest factors in the price of premiums is replacement cost, which is the expense to repair or replace damaged property without deducting for depreciation. And as we’re all painfully aware, the cost of *literally everything* but particularly housing supplies skyrocketed during the pandemic and has not returned to what most (anyone?) would consider an affordable level.
 
That, combined with escalating frequency and severity of hurricanes, wildfires, and floods is leading insurance companies to reassess and recalibrate their risk models and many are washing their hands of South Carolina. In California, legislators capped private insurance premium increases at 7% per year and as a result, several insurance companies opted to leave there as well after determining the risk just isn’t worth it. We’ve heard lore of homeowners without mortgages say “this math ain’t mathing” and opting to self-insure… ahh, the ugly side of chance.
 
Since this does not appear to be a short-lived problem, a word of advice from your trusty real estate troubadours: it is essential that you treat insurance almost like you would a mortgage pre-approval process. You must figure out what you can afford prior to or during your due diligence period. Shop rates and make sure you understand your coverage. We have a two-part series on recent insurance happenings on our Between Two Brokers podcast. Part one is out today!
 
In other “woe is we” news – mortgage rates increased about ½ a percent over the last three weeks to the surprise of just about everyone (except us – we warned of this in January’s newsletter!) thanks to job growth and continued inflation. But January is a big time for companies when it comes to hiring and firing so the next jobs report (March 8th) will be telling. Rates are still expected to be lower as the year goes on…prices are not.
 
How about some good news: The Charleston economy continues to be the belle of the ball. Redwood Materials, a producer and recycler of anode and cathode battery components for electric vehicles, announced it is breaking ground for the first phase of construction at its Battery Materials Campus. The entire project is set for 600 acres and a $3.5B investment in Berkeley County. It is estimated that 1500 people will be employed within the next 10 years. SHL Medical, a Switzerland based provider of advanced drug delivery solutions, is building a $150M facility in North Charleston. Nix Development received financing for a $26M 72-unit affordable senior housing community planned for Johns Island. The North Charleston City Council recently approved contract agreements for the 50-acre riverfront development known as Battery Park. A partnership consisting of Jamestown, Weaver Capital Partners, and WECCO Development will assist the city in transforming the former Charleston Naval Complex into a vibrant, mixed-use district and regional destination that will include over 1,400 residential units. Air Canada is boosting its North American network capacity with the addition of Charleston as a nonstop destination. The daily international service between CHS and Toronto Pearson International Airport begins March 28… in case you prefer an extended winter!
 
Cheers,
Christina

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