I'm hearing that groups or slowing down on buying in Houston TX because insurance costs have skyrocketed. Has anyone else heard this? Is this true in all of tx or just Houston because it's on the water?
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This is true everywhere ... particularly on the coast like Florida. Insurance premiums for multifamily has gone up 2-3x in the past 1-2 years. Makes deals penciling hard. Whoever has experience in multifamily in coastal areas can chime in. I read an article a while ago by GreenStreet talking about this issue sometime ago.Apparently apartment investors in 2021 budgeted about $600/unit when underwriting multifamily premiums. Now they're 2-3x that ... brokerage shops will underwrite $1.5-1.6/unit for multifamily BOVs. "Problem is not exclusive to the coast, it's just worse there." In Houston, premiums were $800 roughly but now carriers are quoting $1.2-1.5/unit.
Houston about $200-$300 more per unit/year vs. Austin
At NMHC right now and heard about a Houston deal in a flood zone that just got quoted at $2k/door. Craziness
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