Fayetteville homeowners are seeing a bump in home insurance rates. A look at why.

Get yourself a good Realtor.

Not only can they put you into a good home. But if they are like Ronda Atkins is to me, they serve as your unofficial housing market analyst for years afterward.

Atkins is an agent with NorthGroup Real Estate in Fayetteville. I reached out to her the other day to say my wife and my monthly mortgage payment bumped up considerably due to an increase in our insurance. We had not filed any claims related to our home, I said. I asked Atkins if she knew what the deal was.

Atkins said her hairdresser brought up the same subject about her and her husband’s home — big jump in insurance, no claims.

“We just had this conversation last week,” she said. “She was asking me, ‘Ronda, what are the people gonna do that’s in worse shape than us?’”

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The insurance hike got Atkins too, to the tune of an additional $20 to $30 a month, she believes.

She said she has also heard from other clients about it, and believes it is across the board and linked to inflation.

“Actually, you had no warning,” she said of the hikes.

Big insurance rate hikes proposed

Tar Heels are seeing big rate hikes in both home and auto insurance because companies are raising rates to make up for losses over the last few years, according to a story by WUNC. The reporter interviewed Raleigh resident Ezra Croft, who had seen his insurance rise $700 a year and he had — you guessed it — never filed a claim.

The article notes that inflation was partly to blame because it drove up the cost of fixing or replacing damaged homes or cars. Inflation — so Ronda was right (again).

Unfortunately, Mr. Klein, Ronda, her hairdresser, Sarah and I, and many other homeowners in the state may see things get much worse.

Insurance companies are asking the state for permission to raise homeowner rates by a whopping 42% statewide and by 99% for people with property on the coast. 

At a public hearing in January at the North Carolina Department of Insurance, which is soliciting public feedback, ABC-11 News reported that people who spoke arrived from all over the state and were against even a single-digit increase.

I can see why. Back in 2013, homeowners in Cumberland and surrounding counties were hit with large increases as part of an agreement between insurers and the state treasurer. Our county’s 8.5% increase was higher than the increases in other part of the state. 

“For a frame house valued at $150,000, a typical policy could rise from $850 a year to $922,” The Fayetteville Observer reported at the time.

That 8.5% bump seems tame compared to the 42% increase insurers want now.

I don’t need my unofficial housing market analyst to tell me such a jump will force some folks to sell or otherwise be forced to move from their homes. That seems unfair.

The market: ‘Hey you got any offers?’

I asked Atkins about the housing market in general in Fayetteville and Cumberland County and she said it remains hot, but she is seeing signs of cooling down. At any rate, listening to her stories of some challenges her clients have faced makes me glad my family is not in the housing market for now, or anywhere near it.

She said a client recently wanted to go see a house in the $178,000 price range. 

“I called the agent and I said, ‘Hey you got any offers?’”

The agent had just one at the time and another possible offer coming in.

However, by the middle of day two on the market, the house was in a bidding war; the agent by then only sought Atkins' client's highest and best offer. The client said she wasn't going to bother.

A leveling out

The higher insurance rates in particular have added considerably to the costs of homes, Atkins says, often to the surprise of buyers. She says in Cumberland, $200,000 does not get as much home as it used to — in today's market, we are talking 1,100 to 1,200 square feet, she said.

Nonetheless, Atkins said, she is starting to see a “leveling out” in the local housing market. Plus, the federal officials have signaled interest rates will continue to be lowered — she texted over an article of Federal Reserve Chairman James Powell saying words to that effect.

“There are a lot more homes on the market than there were six months ago,” she said. “It's really going back toward a buyer’s market.” 

Myron B. Pitts can be reached at mpitts@fayobserver.com or 910-486-3559.