Real Estate Value Insurance? No thanks.

    If you have been paying attention to radio commercials, you have noticed that there is now real estate value insurance.  Clearly, this is not Allstate, or State Farm, Liberty Mutual, Met Life or any other company that we have heard of.  So, that leads to at least some question to the validity of the insurance.  While, an argument may be able to be made regarding whether this is a scam, I will put that aside.  I have not researched these companies and I cannot comment on whether they are above board.  The reality is that this could be with Allstate, or any other top brand, and it still wouldn’t make sense to take out one of these policies.
    In our local market, we have seen an increase in price per square foot over thelast three months. We have seen our inventory reduced to less than three months. All market indications are that prices have formed a pretty firm bottom and will be headed up from here.
    Insurance companies are in business to make money. The mere fact that they are just now coming out with this insurance should reassure you that all market indicators are pointing to a solid bottom in the housing market.  Had they come out with the insurance during the actual falling market, they would have had much more demand, but they would not have been able to withstand the falling prices and the actual losses they would have taken.  Getting home value protection insurance now is like getting full coverage on your car after the hail storm, or shorting a stock after it has hit bottom and is starting to come up.  It just doesn’t make sense.