Foreclosures result in judicial sales.
"[I]nvestors have snapped up foreclosed homes and bid up prices in the past year." "Pending Home Sales Fall Again," p. B8, col. 6 (New York Times Nat'l ed., Tuesday, November 26, 2013; Associated Press Copyrighted News Report).
Pending home sales have fallen for the last five months in a row. The number of pending sales -- where there is a signed contract but not a completed sale -- is at the lowest reading calculated by the National Association of Realtors since December, 2012. "October Pending Home Sales Down Again, But Expected to Level Out" (National Association of Realtors Press Release, November 25, 2013); see "Pending Home Sales Fall Again," AP report published in the New York Times, supra.
I have not seen any reports or studies on the purchase of property insurance by the investors that purchase these properties.
Moreover, since these investors do not carry mortgages, they do have no need to buy mortgage insurance.
Further, the number of homeowners is necessarily declining since fewer homes are being sold and purchased in 2013. It seems that as a consequence the number of homeowner's insurance policies must also decline. That will have clear results in falling homeowner's insurance sales and premiums. What effects will it have on the handling of homeowner's insurance claims in a tightening market?
There is potentially good news on the other hand for sellers of tenants and renters insurance policies. Investors are buying the foreclosed homes in order to rent them.
Simple math. That is one reason, at the least, why home ownership is in decline. There are fewer homeowners because there are fewer homes bought and sold; instead, homes in 2013 are increasingly bought and rented.
© 2013 by Dennis J. Wall. All rights reserved. No claim to original U.S. Government works.
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