Housing market

[Uneek2210]

How will the slow down in the housing market effect subdivision bond writing? Will there be a large drop in subdivision bonds written? Will there be large losses because contractors will be less likely to finish a project when they are having trouble selling the houses?

[Admin]

Excellent questions!

Originally Posted by Uneek2210

How will the slow down in the housing market effect subdivision bond writing? Will there be a large drop in subdivision bonds written?

A slow down in new houses, means less new subdivisions and therefore less bond requirements. Our agency saw some record highs for subdivision last April. April 2007 was less than half of the 06' premium. However, the surety industry in general has many ups and downs for agencies. As of this month, we are seeing a large amount of subdivision bond requests again. I am guessing the subdivision market as a whole is a fraction of what it was last year.

Originally Posted by Uneek2210

Will there be large losses because contractors will be less likely to finish a project when they are having trouble selling the houses?

I do not know enough about the history of the subdivision market to give you an accurate answer on this. One would think that the slowing of the housing market would create an influx of claims. Fortunately, our agency has not seen any influx to date, and we write a large book of subdivision, as many other agencies broker it to us due to our exclusive markets.



I'm curious, how is you line of business related to suretyship or the housing market?