{{ At the very top end of the market, billionaires are happy to buy beachfront homes and simply run the risk that they’ll be destroyed by a hurricane. For them, Florida housing is more of a consumption expense than an investment. }}
Just make sure you’re near the top of the economic pyramid and can afford the loss before you buy. {{ LOL }}
The ones who are really on their game have the company they run buy the house for them. So, if the house is destroyed, the shareholders take the hit, not the “JC”.
At the very top end of the market, billionaires are happy to buy beachfront homes and simply run the risk that they’ll be destroyed by a hurricane. For them, Florida housing is more of a consumption expense than an investment.
Does a contraction in insurance markets away from at-risk regions mean NO ONE should live there? That’s not only a personal financial and quality-of-life choice but an important public policy topic as well. If insurers withdraw coverage from a beach or mountain retreat, that doesn’t immediately suggest no one can or should live there. It means those choosing to do so must understand the physical and financial risks before purchasing and they should be capable of absorbing those risks without a public financial backstop.
Someone worth $20 million wanting to live in a million dollar home in a hurricane zone is more than welcome to build and own a home in that environment. Just don’t expect FEMA disaster relief to rebuild. If you want insurance coverage, be prepared to pay whatever the insurer demands or just self-insure and eat the loss and rebuild out of your own pocket.
In contrast, someone struggling to afford a major car repair, save up for their next car or save for college does not have the income and liquidity to tolerate that type of risk. They shouldn’t be enticed into doing so by government programs that artificially hide the true cost of living in such a location or subsidize that cost by spreading it across a much larger pool of consumers who have the sense to avoid that risk. If it was merely unfair to the rest of the public but in fact covered the risk, that would be one thing. The point here is that even with incorrectly set insurance rates, when a loss IS incurred, that policyholder still faces a material risk of being completely financially wiped out, whether from denied claims, under-insurance or an inability to handle duplicated expenses during a long rebuild.
There are few more certain paths to personal wealth destruction and potential poverty than buying a home in an expensive but unsustainable physical location.
Is government subsidized insurance intended to help the homeowner, or protect the money interests that hold the lien on the home, or have a lot, or a house, they want to sell at the highest possible price?
It also, along with other programs, allows builders to build where nobody should be allowed to build. They make their money on the front end then socialize the future downside
The good news is, 500 yards from the beach, these concerns are much less relevant. Unfortunately, Ocala isn’t as desirable as the last slip on the reef.
Right there is a big reason for the mess today. FEMA distorted insurance rates for decades and only recently started charging more realistic rates this past year.
They’re forecasting 15-20 ft storm surge for the Big Bend area of the Florida coast where land is no more than 5 feet above sea level – even miles inland.
I wonder how far inland you need to go to escape a 20 ft storm surge?
We have had a vacation condo in that area for about 10 years. Hurricane Michael was a category 5 in 2018 that hit a few miles east of us. Our area (Rosemary Beach) didn’t have any major flooding nor anything worse than a few downed tree limbs. Just about all the buildings in the town have been designed to tolerate such an impact. “Beachfront” is behind the sand dunes. Our condo is two blocks back from the dunes, so maybe 200 meters or less and we have never had any issues. Even the town streets/parking is a permeable system to help with rainfall.
Without the dunes there would way more chances of issues. So like everything real estate - location, location, location and how you build.
