Dave Burt at DeltaTerra Capital thinks the market is due for another correction, as homeowners in places with a growing risk of flooding and wildfire have to pay more for insurance.
Rather than default on their loans, most homeowners should be able to sell and move somewhere cheaper if necessary, said Ben Keys, a professor of real estate and finance at the University of Pennsylvania’s Wharton School.
“The idea that we would expect there to be a huge wave of defaults or delinquencies feels relatively unlikely,” he said. Even in the case of a disaster, “I think what you see in many cases is actually people use insurance payouts to pay off their loans and move elsewhere.”
