HARRISON COUNTY (WLOX)--As insurance costs go up expect housing prices to continue to go down or at the very least remain the same. That's what some South Mississippi realtors are saying. On Thursday the state insurance commissioner announced rate hike approvals for two major insurance companies.
Neighbors say the "for sale" sign went up in front of a house on Collins Boulevard in Gulfport back in December. They say another house a few doors down went on the market more than year ago. Realtors say increasingly people who want to buy a home can't afford it.
"The average house price in May here was about $162,000," said David Belew, a real estate broker. "So for that average buyer, he's typically a payment buyer, has just enough money to get in and qualify for his ratios at the lender. So when you calculate now the new cost of insurance and how that's going to raise his payment, in many cases that average buyer may now not qualify for his loan."
Belew says a recent survey of coast homes prices showed a seven percent drop between January and May. He says the high cost of insurance is affecting coast residents and those thinking of moving here.
"It's difficult for people to justify making a move here if it's going to cost that much more to A. purchase the property and B. own the property," said Belew. "We are in a transitory period from Katrina and I don't think our local markets have found where they're going to settle. "
Mayor Chipper McDermott says news that Allstate and State Farm are raising rates "will just be another little stumbling block as part of living on the coast here."
McDermott says in a town just four miles wide and mostly on the water, affordable insurance is a major concern. McDermott says he's hoping Congress will pass the multi-peril legislation.
"That would solve most of the problems but people in the industry say time would be the next element that would cure it. So that's what we got. Just hope everything stays at it is for 40 more years," said the mayor.