Most Chicago area home closings take place at a title insurance company's office. Just setting foot into those offices these days tells you all you need to know about the current state of the Real Estate business: Still open, ready and willing to do business, but it's just not happening. Most are pretty lonely places right now.
The numbers seem to bear this out. According to the American Land Title Association and Inman News, All five of the nation's five biggest title insurers lost money during the third quarter.
Those grisly numbers:
- First American, the nation's largest, reported an $8.3 million third-quarter loss
- Fidelity, number two in 2007, lost $198 million and closed 115 title and escrow offices
- Stewart reported $30 million in losses, closed 40 branches, and canceled 1,750 independent agencies
- LandAmerica lost $599.6 million! which may explain its recent announcement that it was being acquired by Fidelity, and the urgent need for an immediate $30 million in secured credit to keep them liquid).
- Old Republic was $48 million in the red.
So what does this mean for consumers?
Well, on the down side, expect title insurance premiums and closing costs to go up. Fidelity for one is reportedly planning 10-20% price increases nationwide. Underwriting standards are going to be tightened down even tighter. Its going to get harder to "work-around" unresolved title issues. I would not be surprised to see more title companies close down and consolidate operations in their suburban and neighborhood offices. This process has already begun. Smaller title agencies are also likely to start shutting down operations as well.
On the bright side, its going to be pretty easy to schedule closings, and when you do get the deal to the table, everyone is going to be real happy to see you there .