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It’s weird that the insurance industry hasn’t capitalized on this. Make people pay for covering the risk that their house will drop in value, and make money on
by Joeri 4y ago
It’s weird that the insurance industry hasn’t capitalized on this. Make people pay for covering the risk that their house will drop in value, and make money on the fact that the vast majority of houses will rise in value.
- grensley 4y agoWill the vast majority of houses rise in value?
- brabel 4y agoAlmost everywhere in the world, yes. There may be some localized falls, but those are temporary and as long as there's people having to live in a place, prices will keep going up, the whole system is built for making that happen.
- loandbehold 4y agoNot really. If new suppy growth outpaces demand then prices will drop. Recent advances in robotics may make construction much less labor intensive, crashing prices in many areas.
- brabel 4y agoWhere is there a place where prices have gone down (and stayed down) in practice for a long time? I've been waiting for 20 years to get a "bargain" and except for a small area in the US and some very short lived downs elsewhere, that just never happens.
- EVa5I7bHFq9mnYK 4y agoin 2007-2009 home prices in the US declined by $6T, plus commercial real estate declined $2t. Insurance companies simply don't have that kind of money. AIG tried to insure only very tiny percentage of that market, and lost.
- 8note 4y agoBut then, you cash out during boom times, and go bankrupt in bad times. Not a good reason for people to buy your insurance, but some people might believe in the boom times