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Leading The Nation In The Number Of At Risk Homes And Total Reconstruction Costs

CALIFORNIA - California, Colorado And Texas Are Leading The Nation In The Number Of At Risk Homes And Total Reconstruction Costs.
 
California has 1,279,214 homes at risk with a combined reconstruction cost value of more than $760 billion. Los Angeles metro area leads one of the top three states in terms of the number of residential properties with higher wildfire risk. Property and Casualty insurance companies in California must deal with higher replacement costs for materials and labor construction.
 
It is estimated that in the last 5 years reconstruction costs in California have risen by 33.5%. Wildfire risk assessment tools need to be built on comprehensive wildfire science and account for mitigation from fires for the at-risk properties and communities. They need to have protocol for home hardening and retrofits with older buildings that can reduce wildfire damage for the properties at risk.

REAL ESTATE - Single family starts grow in the month of July. Single Family residence home building rose in the month of July 2023 which has been boosted by pent up demand. Demand for affordable Single Family has continued to run high due to supply and demand issues which has kept construction number numbers very solid even with mortgage rates rising rapidly.
 
Combined with homeowners who are choosing to keep the mortgages they have, demand for new construction pushed up in July even with builders who are concerned with uncertainty of mortgage rates rising. Buyer traffic has slowed down, and builders agree that rates need to stabilize to prevent the housing market from slowing down. 
 
Builders are now scaling back as housing costs continue to grow, evidenced by permits dropping by 13% year over year in July.

MORTGAGE - Commercial and multi family originations are down 53% year over year in the second quarter of 2023. Commercial and Multi Family origination were down this amount due to heavy drop-in activity across all asset closes. Healthcare has the largest annualized decrease at 74%, office saw a decline of 66% below Q2 2022 levels.
 
Loan Originations for the retail and industrial properties each decreased by 55% while multifamily and hotel sectors fell 48% and 32%. In Q2 2023 loan originations were up 23% from the prior quarter. Multi Family led the bounce at 37% increase in loan originations for the first quarter of the year. Retail originations have slipped by 13% from Q1 2023 and hotel originations backtracked by 27%.