Buying a house? The real-estate industry is sounding the alarm about an increasingly expensive risk.
One expense is weighing heavily on home buyers and homeowners

By
Aarthi Swaminathan
Published: Oct. 9, 2024 at 2:30 p.m. ET

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The housing market is grappling with the implications of recurring natural disasters, as hurricanes damage properties across the U.S.
PHOTO: GETTY IMAGES

In his 13 years as a real-estate agent, Scott Goshorn has never seen a home-insurance market this difficult. … When he was helping sell an $8 million house in the Westlake section of Los Angeles, Goshorn got quotes from insurance companies so he could give prospective buyers an idea of their potential insurance costs.

He was told that wildfire coverage on the property would cost $140,000 a year. A few years earlier, the cost probably would have been $20,000 or less, he said. … “Selling a home in a fire zone is very difficult,” Goshorn told MarketWatch. “The crazy insurance is now a deal killer.”

The home’s eventual buyer ended up getting a policy that cost a relatively reasonable $60,000 a year by working with an insurance provider that had insured other homes he had owned.

Others haven’t been so lucky. … Across the U.S., skyrocketing insurance costs are weighing on the housing market. Buyers and homeowners can’t find sufficient insurance coverage. … Insurance challenges are having such a profound effect on the housing market that real-estate companies that pioneered the industry’s shift to the digital arena are making changes to how they do business.

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