Juggling Dynamite

A wave of new multifamily residential projects are coming online as migration slows and high mortgage rates weigh on housing demand. Add to the mix an insurance crisis, and a seller’s market is becoming a buyer’s one. See, In Southwest Florida, high home insurance rates are driving away would-be buyers:

Florida’s southwestern coast — long one of America’s fastest-growing regions — is losing some of its boomtown swagger as a home-insurance crisis and other soaring costs make homes unaffordable.

Homeowners from Sarasota south to Naples, known for its eight-figure waterfront mansions, are having a tougher time selling their properties, and the buildup in inventory has caused home prices to fall at some of the fastest rates in the nation. Realtors point to rising insurance costs that were exacerbated by Hurricane Ian in 2022, prompting some homeowners to list their homes for sale and would-be buyers to walk.

In the US inflation estimate for January, auto insurance premiums rose 20.6% year over year, while tenant and household insurance rose 6% annualized over just the last three months.

Across the developed world, insurers are exiting some areas and demanding higher premiums and deductibles in others; affordable insurance — often a condition of mortgage and vehicle debt — is getting harder to secure.

As individuals increasingly bear more and more financial risk, our ideas of what constitutes diversification and mitigation naturally change. At the same time, the companies and activities contributing to the chaos will be tapped to pay for the damage created via rising fees, taxes and damage awards. See The uninsurable world: what climate change is costing homeowners:

Last year saw a record-breaking number of natural catastrophes causing at least $1bn in insurance losses: 37 separate events, according to data from insurance broker Aon. That included 25 so-called severe convective storms, of which 21 were in the US. It is the growing weight of events such as storms and wildfires — and the broadening of the areas that are exposed to them — that is raising anxiety in the sector, and changing the way risk is viewed.

New bare trust reporting requirements for the 2023 tax year include accounts where adults have been added to the bank and investment accounts of another relative.

For Bare Trusts ending December 31, 2023, you have to file a T3 tax return, says Ali Spinner, tax partner at Crowe Soberman LLP. Here is a direct video link.