Florida Realtors’ data: More closed sales, more new listings and higher median prices (up 24.5% for single-family homes, 22.4% for condos) than a year ago. Chief Economist O’Connor: The ratio of buyers to sellers may be easing; as a result, home price growth could begin to cool down in the future.

ORLANDO, Fla. – Florida’s housing market continued the same trends as previous months with more closed sales, higher median prices and more new listings compared to a year ago, according to Florida Realtors® latest housing data.

Home sales in Florida were still up significantly year-over-year, but the numbers are starting to even out a bit when compared with the pre-pandemic real estate market.

Watch video

►

“Coming out of a record spring home-buying season, the state’s housing market continued its strong gains in June,” says 2021 Florida Realtors President Cheryl Lambert, broker-owner with Only Way Realty Citrus in Inverness. “Of course, the impact of the pandemic last June is still a factor to consider when looking at the comparison data. In a positive sign, new listings for single-family existing homes in June rose 21.6% year-over-year, while new listings for condos-townhouse properties increased 10%. However, while Florida Realtors’ data shows that new listings have remained at fairly typical numbers even throughout most of the pandemic, it hasn’t been at the levels needed to keep up with greater buyer demand.”

Closed sales of single-family homes statewide in June totaled 34,165, up 23.6% year-over-year, while existing condo-townhouse sales totaled 16,155, up 79.6% over June 2020. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

The statewide median sales price for single-family existing homes in June was $351,000, up 24.5% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $256,945, up 22.4% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Florida Realtors Chief Economist Dr. Brad O’Connor points out that recent data trends indicate the ratio of buyers to sellers may finally be easing a bit. As a result, “Florida’s red-hot rate of home price growth could begin to cool down somewhat in the coming months, although that will also depend on whether interest rates start to trend higher again, as well. For now, though, the numbers continue to astound,” he says.

Another trend to consider, Dr. O’Connor adds, is that over the past few months, the share of closed sales that are all-cash purchases has been on the rise compared to recent norms.

“Over in the single-family category, 31% of closed sales were all-cash this June, compared to 19% a year ago and 22.4% in 2019,” he says. “The last time Florida had more than 31% single-family cash sales in June was in 2015, when the state was still working the last foreclosures from the Great Recession out of the system.”

According to O’Connor, the current rise in cash sales as a percentage of closed sales is tied to two factors, with the first being a bit of a technicality.

He said, “This year, higher-end sales have made up a greater share of closings than in previous years, and those types of sales are historically much more likely to be all-cash sales. About 56% of single-family sales over a million dollars in June were all cash. That’s actually not much different than last June’s share, which was about 55%. But since luxury sales are a greater share of overall sales this year, that’s pushing up the overall cash share.”

The other factor is a rise in the percentage of single-family home sales paid in cash in price tiers below $400,000, O’Connor says. “This indicates a rise in investor activity, so of course Florida Realtors will be watching these numbers closely,” he adds. “The most prevalent price tier where this is occurring depends on the area’s market and its overall price level. The trend started emerging first in the state’s major population centers, but has since expanded to a degree into small- and mid-sized markets, as well.

On the supply side of the market, inventory (active listings) remained extremely tight in June. Single-family existing homes were at a very low 1.2-months’ supply while condo-townhouse inventory was at a 1.8-months’ supply.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 2.98% in June 2021, down from the 3.16% averaged during the same month a year earlier.

To see the full statewide housing activity reports, go to the Florida Realtors’ Newsroom and look under Latest Releases or download the June 2021 data report PDFs under Market Data on the site.

© 2021 Florida Realtors®

Pandemic numbers are rising again. That’s shaken investors and pushed 30-year mortgage rates lower again this week, though adjustable rates moved a little higher.

MCLEAN, Va. – The 30-year fixed-rate mortgage (FRM) averaged 2.78%, according to Freddie Mac’s weekly survey. It’s the fourth week in a row for a drop.

“Concerns about the Delta variant, and the overall trajectory of the pandemic, are undoubtedly affecting economic growth,” says Sam Khater, Freddie Mac’s chief economist. “While the economy continues to mend, Treasury yields have decreased, and mortgage rates have followed suit.”

Khater said the “declining rates provide yet another opportunity for homeowners to save money on their monthly mortgage payment through a refinance,” however, “many homebuyers are unable to take advantage of low rates due to low inventory and high prices.”

Average mortgage rates for July 23, 2021

• The 30-year fixed-rate mortgage averaged 2.78% with an average 0.7 point for the week, down from last week’s 2.88%. A year ago, it averaged 3.01%.
• The 15-year fixed-rate mortgage averaged 2.12% with an average 0.7 point, down from last week’s 2.22%. A year ago, it averaged 2.54%.
• The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.49% with an average 0.4 point, up from last week’s 2.47%. A year ago, the 5-year ARM averaged 3.09%.

© 2021 Florida Realtors®

Nationally, cash buyers made up about 1/3 of all 2021 home sales so far, but that percentage rises to 52.6% in West Palm Beach – the top metro for cash sales in the U.S.

SEATTLE – More wealthy consumers are closing with all-cash transactions, which can give them an edge in bidding wars.

Nationally, almost one-third of U.S. home purchases this year have been made to cash buyers – the largest share since 2014, according to a housing report from Redfin that tracked county records across the country from January 2001 through April 2021.

“I’ve never seen more cash in Boise’s housing market than I’ve seen in the past year,” says Shauna Pendleton, a real estate professional with Redfin in Idaho. “I just sold a $700,000 home to a cash buyer last week. The entire $700,000 came from his E*Trade account.”

In many areas of Florida, the percentage of all-cash sales is notably higher than the national average, with seven metro areas listed in the top 10 nationwide for percentage of cash sales. That list includes No. 1 West Palm Beach, where 52.6% of sales used all cash.

U.S. metros with the highest percentage of cash sales

1. West Palm Beach: 52.6% of home purchases this year were paid for with cash
2. Naples: 52.5%
3. Nassau County, N.Y.: 50.2%
4. North Port: 49.4%
5. Port St. Lucie: 46.2%
6. Greenville, S.C.: 45.4%
7. Palm Bay: 44.1%
8. Cape Coral: 44.1%
9. Des Moines: 41%
10. Jacksonville: 40.1%

One possible reason for the uptick in all-cash sales: Remote work has allowed some homeowners in high-priced locales like San Francisco to sell and then relocate to a less expensive area. The pricey selling price of their San Francisco home then may allow them to pay cash for a new home.

Another factor: Investors are increasing their presence in the housing market. U.S. home purchases to investors or second-homebuyers tend to account for the biggest bulk of cash sales. In May, investor home purchases comprised 17% of existing-home sales, up from 14% a year earlier. All-cash sales accounted for 23% of transactions in May, according to the National Association of Realtors®.

One downside to the rise of all-cash sales: The growth makes it more difficult for first-time homebuyers and lower-income homebuyers to compete. And according to Redfin data, about two-thirds of home offers written over the last month faced a bidding war.

Source: “Share of Homes Bought With All Cash Hits 30% for First Time Since 2014,” Redfin (July 15, 2021)

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

The pandemic changed things: Home values for properties with long commute times are rising faster than units in or near metro areas.

NEW YORK – In some of the nation’s most expensive metro areas, home prices rose faster in areas with longer morning commutes to business districts than they did in neighborhoods with short commutes, according to a Zillow analysis.

That’s a reversal from prior years. Home prices in metro areas have traditionally accelerated faster in neighborhoods close to job centers.

The results, according to analysts, show that commute length has declined in importance among homebuyers, likely because many workers expect to travel to their offices less often.

In metro areas where the downtown job centers are traditionally cheaper to live in than the suburbs, home buyers still sought out affordability, the analysis found.

Nationwide, median home prices in areas with few public transportation options rose 32.8% between January 2020 and May 2021; meanwhile, while home prices in transit-accessible neighborhoods rose 15.6% in the same period, according to Redfin Corp.

Source: Wall Street Journal (07/21/21) Friedman, Nicole

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

On July 22, 2021, Florida Realtors released a new addendum for use with Florida Realtors contracts, the Escalation Addendum to Contract, available through Form Simplicity and other licensed vendors. FAQs and how-to-complete info is available on the association’s website.

ORLANDO, Fla. – Florida Realtors® released a new form, Escalation Addendum to Contract, on July 22, 2021, available now in Form Simplicity and through other licensed vendors. This form can be used with any of the Florida Realtors contracts, as reflected in the new form.

To help members become familiar with the new form, two additional accompanying documents have also been published to provide guidance to members using the addendum.

1. How to Complete Escalation Addendum to Contract (automatic download)

2. Q&A on Escalation Addendum to Contract

Members should take time to review the new form carefully – as well as the supporting documents – as these resources should help answer many of your questions.

Still have a question, though? Call Florida Realtors Legal Hotline at (407) 438-1409.

Meredith Caruso is Associate General Counsel for Florida Realtors

© 2021 Florida Realtors®

Not only “smart buildings” face danger since most systems – HVAC, security access, etc. – now connect to the internet. In one case, a parking system sent a bomb threat.

WASHINGTON – At first blush, the ransomware attack on Colonial Pipeline in May and a hacker’s attempt to poison the water supply in Oldsmar, Fla., in February may not appear to have much bearing on the safety of the average commercial building. But in reality, most buildings are vulnerable to these types of cyberattacks, a panel of experts said during a webinar last week called “Cybersecurity in the News: What It Means for Commercial Real Estate.”

“There are over 40 years’ worth of digital technology in our building stock,” said Fred Gordy, director of cybersecurity at Charlotte, N.C.-based consulting firm Intelligent Buildings, which hosted the webinar. “It’s not just in so-called ‘smart buildings.’”

Operational technology and information technology can be open doors for cybercriminals, said Lucian Niemeyer, CEO of security firm Building Cyber Security in Bethesda, Md. Most people know what IT means – OT is simply all of the technology in a building that physically interacts with the world, such as HVAC and electrical systems, parking, access control, and fire alarm and suppression systems.

“Office buildings, malls, schools, banks, sporting venues – all of these places have physical systems that are now integrated with IT,” said Niemeyer. “And all of these places are vulnerable.”

Gordy offered a real-world example involving one of his clients, the owner of a 30-story office tower. A tenant in the building received a bomb threat from hackers who gained remote access to the tenant’s printer and produced a menacing message. The entire office building was evacuated. An investigation revealed that the threat had come through the parking system, which was run by a third-party contractor and not by the building management or owner.

Still, the building owner’s reputation was at risk because of the incident. “Tenants don’t know who runs what,” Gordy said. “If your name is on the building, then you’ll get the brand damage.”

Bringing contractors up to speed is an important step in shoring up vulnerabilities in commercial buildings, said John Hester, owner of Hester Consulting, a building operations firm in Peachtree Corners, Ga. As many as 3,000 technicians and staffers can interact with the OT systems in a large building, Hester said, and even small- and medium-sized buildings can have multiple contractors entering on any given day.

“Contractors create open spaces for risk,” Hester said. “You have to manage them and do your due diligence. Know what they are doing to vet who comes into your building.”

Administrative systems that control who can access the building’s other systems are often vulnerable points, Hester said. Contractors and building management staff may be given access that doesn’t expire when their employment ends. Systems that don’t require a VPN login are another potential weak spot. When access isn’t properly controlled, Hester said, systems such as fire alarms, elevators and security cameras can become vulnerable to cyberattacks.

Mitigating cyberattacks in any building boils down to two steps that every owner can take: inventory and assessment of OT.

“For inventory, you have to know what you’ve got. For assessment, you have to know how old it is and who’s working on it,” Hester said.

While the task of evaluating OT systems may seem overwhelming, it’s worth the effort, and owners should remember that it’s a process.

“Don’t think you have to know it all,” Hester said. “A little time and money spent now can save you a lot later.”

Source: National Association of Realtors® (NAR)

© 2021 Florida Realtors®

In a likely boost for Fla. tourism and real estate, the Canadian government will ease border rules in Aug. Fla. Policy and Budget official expects “a big jump in people.”

TALLAHASSEE, Fla. – State economists expressed optimism that already-rebounding tourism numbers will see a quicker-than-anticipated boost from international travelers as Canada eases COVID-19 border restrictions.

While the White House hasn’t announced decisions yet about Canadian travelers entering the United States, members of Florida’s Economic Estimating Conference said Tuesday they anticipate changes that will make it more convenient for people traveling south of the U.S.-Canada border.

“The borders closed. The border opens. You’re going to have a big jump in people,” Holger Ciupalo, policy coordinator for the governor’s Office of Policy and Budget, said as the economists looked at a long-range outlook for Florida’s economy.

On Monday, the Canadian government announced that, starting Aug. 9, fully vaccinated U.S. citizens will be able to visit Canada without having to quarantine for two weeks. Children under 12 who are not approved to receive vaccines will also be exempt from the quarantine rule, so long as they follow public-health measures such as avoiding certain group settings, including camps and day care.

Even with growing uncertainty about the spread of the COVID-19 Delta variant, which sent the stock market reeling on Monday, the panel of Florida economists forecast that Canadian travel would reach pre-pandemic figures earlier than the first quarter of 2022.

With less than 48% of eligible Florida residents fully vaccinated against COVID-19, Amy Baker, coordinator of the Legislature’s Office of Economic & Demographic Research, expressed hesitancy about being too optimistic in forecasting travel because of the Delta variant.

But Ciupalo said he expects the White House to match the Canadian border-policy changes within the next three weeks.

“Yes, you have the Delta variant coming out. However, Canada’s over 70% vaccinated. They’re still getting vaccinated,” Ciupalo says. “Yes, the U.S. is lacking on that. Be that as it may. So, I do not think that the forecast for Canadians should come down from wherever it is right now.”

The United States and Canada restricted non-essential travel across the border because of the pandemic. On Monday, White House spokeswoman Jen Psaki told reporters that international travel decisions await guidance from public-health and medical experts.

“We take this incredibly seriously, but we look and are guided by our own medical experts. I wouldn’t look at it through a reciprocal intention,” she said.

Canadian travel into Florida for the first quarter of 2021 was down 97.2% from the same period in 2020, with Florida attracting 34,000 Canadians during the period, according to Visit Florida numbers.

The state’s tourism-promotion agency also estimated that overall international tourism was down 74.4% during the first quarter of 2021, compared to the same period in 2020. The state drew an estimated 564,000 overseas visitors the first three months of the year, with many nations imposing border screening and other travel restrictions due to COVID-19.

Second-quarter numbers from Visit Florida aren’t expected to be released until next month. Those numbers are expected to easily top the second quarter of 2020, when the tourism industry bottomed out because of the pandemic.

Florida this year drew an overall 26.16 million visitors from Jan. 1 to March 31, down from 30.4 million tourists during the first quarter of 2020, according to Visit Florida.

Vesselka McAlarney, who conducts economic forecasts for the Office of Economic & Demographic Research, said this year’s first-quarter numbers might be in part “artificially boosted” by former part-time residents and online workers permanently relocating to Florida. But that shouldn’t impact the anticipated growth in international travel to Florida.

Florida attracted an estimated 79.75 million tourists in 2020, a 39.3% drop from 2019. The 2020 figures were the lowest in a decade for a state that relies heavily on tourism to fuel its economy.

Until the pandemic, Florida posted nine consecutive years of increased tourism numbers, topped by 131.4 million travelers in 2019.

The pandemic began hammering the state’s economy in March 2020, amid a period of the year that includes tourist draws such as spring break and baseball spring training. The number of tourists fell to 9.92 million in the second quarter of 2020, a 69.4% drop from the prior year, before increasing to 20.33 million in the third quarter and 19.096 million in the fourth quarter.

Source: News Service of Florida

In light of the building disaster in Surfside, a Fla. Bar-affiliated group is analyzing the possible need to change state standards regarding engineer inspections.

TALLAHASSEE, Fla. – A Florida Bar-affiliated task force will consider whether tougher standards for engineer inspections in Florida are warranted in light of the Surfside disaster.

Task force chairman Bill Sklar says the team is mulling legal proposals, and items under consideration include the frequency of communications with condo boards and town officials, and whether engineers in the state should be required to conduct deeper analyses than currently required for an initial inspection.

American Society of Civil Engineers fellow Joel Figueroa-Vallines says that his organization also intends to consider engineers’ communications as part of a larger assessment of the Surfside collapse.

Both reviews follow the delivery of reports by structural engineer Frank Morabito to the local condo board concerning the status of needed repairs that failed to address safety risks. Morabito was overseeing the Champlain Towers South renovations when the building fell. Investigator Allyn Kilsheimer says he’s analyzing Morabito’s correspondence and inspection reports for indications that might yield insights into the collapse.

“At no time did the board receive any indication that there was any risk of imminent collapse of the building or that any evacuation was necessary,” says Surfside condo board spokesman Max Marcucci.

Figueroa-Vallines and Florida-based forensic engineer Gerald Zadikoff note that engineers are not under an obligation to provide a timeline by which condos should make repairs, other than in cases where engineers see an imminent safety threat.

Source: Wall Street Journal (07/19/21) Levy, Rachael; Acosta, Deborah; Calvert, Scott

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

Another major Fla. newspaper backed the goal of Florida Realtors’ amendment petition drive to keep “Housing Funds for Housing.” Editors said it’s “nonsensical” to remove “hundreds of millions in designated housing money during an unprecedented affordable housing crisis.”

PALM BEACH, Fla. – When the Florida Legislature gathers in Tallahassee, a sweep of the Sadowski Housing Trust Funds to pay for projects that have nothing to do with housing usually follows.

State documentary stamp taxes on real estate sales provide the Sadowski funds with $423 million annually for state agencies and local governments to develop initiatives to help people own homes and afford rents. The funds are critical for Palm Beach County and much of Florida, as the housing market becomes less affordable. Yet, state leaders too often see the funds as nothing more than a piggy bank for other budgetary priorities.

After years of pillaging the only funds for affordable housing initiatives, this year lawmakers came up with an odd fix: They would keep their hands off the funds, in exchange for permanently cutting the amount it provides for housing.

The remedy is as nonsensical as “raiding” hundreds of millions in designated housing money during an unprecedented affordable housing crisis.

Unfortunately, the Legislature has a history of dipping into trust funds to pay for things for which they’re not designated, like corporate tax cuts and pet projects. In one particularly galling move that came to light after the condominium collapse in Surfside, legislators had diverted $15 million over the last three years from the Insurance Regulatory Trust Fund. That fund pays for programs that enforce laws and regulations and help condo boards understand their responsibilities in maintaining their buildings.

Florida has roughly 80 trust funds, according to a 2017 report by the Office of Florida’s Chief Financial Officer. Whether it’s anti-fraud prevention, highway safety or international trade promotion, they all rely on specific fees, fines or taxes to address specified problems.

Over the past three years, lawmakers have skimmed $1 billion from various trust funds and moved the money to other uses. The “Unobligated Cash” section of every state budget reveals the impacted trust funds and the amounts of diverted money. More than half of those so-called “sweeps” – about $559 million – was meant for the current budget year which began July 1.

Besides the Insurance Regulatory Trust Fund, lawmakers swept $105 million since 2019 from the Agency for Health Care Administration’s Grants and Donations Trust Fund, which pays health insurance costs for low-income uninsured children.

Last year, the governor left the Sadowski fund whole, for a change. The same can’t be said for the Department of Environmental Protection’s Inland Protection Fund, which generates money to protect sensitive lands from oil and chemical spills, It took an $85 million hit.

The “Unobligated Cash” section only shows the decisions lawmakers took in reaching the final budget. It doesn’t take into account any trust fund sweeps Gov. Ron DeSantis also might make. Last month, for example, vetoes by DeSantis swept away $40 million in housing funds.

The Sadowski trust funds have been Florida’s biggest target when it comes to raiding a dedicated source of revenue for the general budget. Since 2002, when then-Gov. Jeb Bush took $12 million from it, an estimated $2.3 billion in housing money has been diverted to other programs and expenses.

Now, half of the fund instead will go towards sea-level rise and wastewater projects, leaving a paltry $209 million a year for housing programs and angering those who want to see greater efforts taken to curb the impact of higher housing prices.

The Florida Realtors are up in arms. They’re petitioning to change the state constitution to overturn the new law and prevent future housing fund sweeps. Yet, many affordable housing advocates, including The Sadowski Coalition, remain cool to that idea. They insist that while the new appropriations are smaller, the money still exceeds what had been left over after lawmakers raided the housing trust fund in the past.

But there’s no dispute housing becomes less affordable by the day.

It now costs $1,650 a month to lease a one-bedroom apartment in Palm Beach County and the median cost of a house is $475,000. And the county’s once-$20.5 million share of Sadowski funding for affordable housing has been cut to a paltry $9.7 million.

Old habits die hard. The drama may be over when it comes to lawmakers filching dedicated housing funds, but the ability to address an increasingly unaffordable housing market is still in question. So too is the practice by state leaders of eyeing trust funds as easy fixes to enduring problems.

This article originally appeared on the Palm Beach Post: Editorial: Housing funds aren’t a piggy bank for Florida lawmakers

© 2021 The Palm Beach Post (West Palm Beach, Fla.). Distributed by Tribune Content Agency, LLC.

It’s a positive turn during a year with wild construction swings. The biggest jump came in the West (up 12.6%) and South (up 9.7%), which includes Fla.

SILVER SPRING, Md. (AP) – Home construction in the U.S. jumped 6.3% in June, another big swing in a volatile year.

The rise in June put home construction at a seasonally adjusted annual rate of 1.64 million units, the Commerce Department reported Tuesday.

Home construction starts rose 12.6% in the West and 9.7% in the South, offsetting high single-digit declines in the Northeast and Midwest.

Applications for building permits, which are used to forecast future activity, declined 5.1% in June to a seasonally adjusted rate of 1.59 million units. Applications for permits declined in all four regions. Those declines could validate some economists’ predictions that the surge in home building and sales over the past year may begin to slow, especially for single-family homes.

Supply chain problems caused by the coronavirus pandemic have hamstrung builders, who have faced material shortages and inflated prices for lumber, though the latter has moderated somewhat, at least at the wholesale level.

Month-to-month, homebuilding activity has been on a wild ride so far this year, with several double-digit swings in either direction. But housing remains one of the stronger segments of the economy, with buyers far outnumbering sellers.

The 6.3% overall increase in home construction in June matched the 6.3% increase in single-family home construction which rose to a rate of 1.16 million units. A 6.8% rise in construction of apartments pushed that category to a rate of 474,000 units.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

An injunction stopped part of a Fla. law intended to reduce the number of insurance roofing claims, and two more roofing companies have joined the legal fight.

TALLAHASSEE, Fla. – Two more contractors have jumped into a case challenging the constitutionality of a new Florida property-insurance law that seeks to restrict advertising that could lead to residents filing roof-damage claims.

Sonshine Roofing, Inc., which is based in Sarasota County, and Florida Forever Roofing & Restoration, LLC, which is based in Hillsborough County, intervened in the federal lawsuit last week.

The moves came after Chief U.S. District Judge Mark Walker sided with another contractor, Gale Force Roofing & Restoration LLC, and granted a preliminary injunction to at least temporarily block the advertising restrictions.

The companies contend that the restrictions violate their First Amendment rights, as the law would prevent practices such as using door hangers to urge homeowners to seek roof inspections. Such inspections can lead to filing roof-damage claims with insurers.

“The statute does not prohibit false or misleading advertising,” a court document filed Friday by Florida Forever Roofing & Restoration said. “Rather the statute prohibits the intervenor-plaintiff (Florida Forever Roofing & Restoration) and other Florida contractors from advertising accurate, truthful information concerning their services and the possibility that insurance may pay for those services. The statute also violates the First Amendment rights of Florida homeowners to receive accurate, truthful information about roofing services and the possibility that their homeowner’s insurance may pay for services that are needed.”

Lawmakers passed the restrictions in April as part of a broader bill (SB 76) aimed at curbing rising property-insurance rates and homeowners losing coverage. Backers of the bill and insurers contend that questionable, if not fraudulent, roof-damage claims are driving up costs in the insurance system.

In a court filing this month, attorneys for state Department of Business and Professional Regulation Secretary Julie Brown – the named defendant in the case – said Florida has a “compelling state interest” in making sure that homeowners are protected from soaring insurance rates and have access to coverage. The document said fraud by contractors drives up costs.

“This translates into hundreds of dollars in increased premiums for some homeowners, and denial of coverage for others,” Brown’s attorneys wrote. “In Florida, this sort of fraud is particularly rampant given the concern over hurricane-driven roofing damage and the propensity for unscrupulous contractors to take advantage of homeowners who cannot readily assess whether their roofs need service. Plainly, the state’s interest in regulating this sort of commercial speech is substantial.”

But in granting the preliminary injunction, Walker on July 11 said the law’s advertising restrictions went too far.

“To be clear, this court recognizes that the state of Florida has a valid and weighty interest in regulating contractors and protecting Floridians from fraud, exploitation and the deleterious effects that fraud and exploitation have on the insurance market in Florida,” Walker wrote. “And it is within the Legislature’s purview to address these concerns. But it must do so within the bounds set by the Constitution. Here, the Legislature failed to do so.”

While Walker issued a preliminary injunction, the roofing contractors are seeking a permanent injunction and what is known as a declaratory judgment that the law is unconstitutional. Sonshine Roofing and Florida Forever Roofing & Restoration are both represented by the Texas-based Gibbs Law Firm, P.A.

The law seeks to prevent contractors from soliciting homeowners to file roof-damage claims through a “prohibited advertisement,” which could include such things as emails, door hangers, flyers and pamphlets.

In a court document filed Friday, Sonshine Roofing said it uses door hangers and lawn signs that could be prohibited under the law.

“The provisions of (the law) are far removed from targeting the disfavored conduct and practices that the state of Florida seeks to control,” the Sonshine Roofing document said. “Rather, the statute sweeps in an unconstitutionally broad fashion to prohibit the advertising of truthful information concerning storm damage that a consumer’s home may have suffered and that the possibility that the consumer’s homeowner’s insurance may cover that damage.”

Source: News Service of Florida

In May, the year-to-year median home price was up almost 24%. The inventory shortage played a role, says NAR’s Yun, but affordability is squeezing some buyers out too.

WASHINGTON – Just how wild is the real estate market right now? You don’t hear National Association of Realtors® (NAR) Chief Economist Lawrence Yun say this every day: “We’ve never seen price appreciation of this magnitude.”

It’s a sobering message in NAR’s latest home sales video, which covers the month of May, when the median home price rose nearly 24% year-over-year, from $283,500 in May 2020 to $350,300 in May 2021.

Higher prices have sidelined some house hunters waiting for more housing inventory. But buyer competition is starting to cool, which could help consumers’ prospects.

Inventory is particularly scant in price points below $300,000, Yun says. And homes that are available in those price points are quickly being bid up. For example, Indianapolis house hunter Kelly Robinson said she budgeted for a $250,000 home, but properties in her target area were selling within days and sometimes fetched $100,000 above the asking price.

“There are so many aggressive shoppers out there, and I’m not willing to compete with that,” Robinson told CNN.

Buyers fatigued

Some buyers are dropping out of the market – at least for now. Mortgage applications, a gauge of future homebuying activity, have decreased over recent weeks even as mortgage rates remain low. Home sales have dropped in recent months, too, mostly due to record-low inventory.

But housing analysts also point to buyers who are getting sticker shock from high home prices. “Clearly, sales are moving down partly due to the inventory shortage, but affordability is squeezing some buyers out of the market,” Yun told CNN. “Home buyers qualify for a mortgage based on their income, but with prices rising 20% or higher, it is simply pricing them out of the market.”

Ultra-low mortgage rates under 3% are helping to offset some of the price hikes, and many buyers don’t want to give up their shot at locking in some of the lowest borrowing costs on record.

Relief in sight?

Though bidding wars reportedly are decreasing, “it’s still a seller’s market, no doubt,” Yun says. But sellers should price their homes cautiously to remain competitive as sales decline and more inventory is added to the market over the coming months. New listings in June increased 5.5% year-over-year and were up 10.9% over the prior month, offering a sign that more listings are coming, according to realtor.com.

Yun predicts a “calmer” market emerging for the remainder of the year. The market likely will remain tipped in sellers’ favor, he says, but buyers likely will feel less pressure to rush their purchase decisions. That could be a welcome trend that encourages buyers who’ve paused their home search to resume.

Source: “Hope for Greater Inventory as Home Sales Slip Again,” REALTOR® Magazine (June 22, 2021) and “Many Homebuyers Are Dropping Out of the Market,” CNN (July 13, 2021)

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

Mortgage bankers say that many homeowners are coming out of forbearance, with only 7.4%, so far, either selling the home, doing a refi or otherwise paying off the mortgage. 1 in 4 (23.2%) never stopped making monthly payments; another 1 in 4 (28%) ended up having their loans deferred.

NEW YORK – The number of homes in forbearance this week (3.5%) dropped again from last week’s numbers (3.76%), according to the Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey

According to MBA’s estimate, 1.75 million homeowners are in forbearance plans.

Percentage in forbearance by type of loan

• Fannie Mae and Freddie Mac loans (conventional): Down 8 basis points to 1.83%.
• Ginnie Mae (FHA, VA, etc.): Down 42 basis points to 4.36%
• Portfolio loans and private-label securities (PLS): Down 61 basis points to 7.33%
• Independent mortgage bank (IMB) servicers: Down 19 basis points to 3.68%
• Depository servicers: Down 36 basis points to 3.62%

“Forbearance exits edged up again last week, and new forbearance requests dropped to their lowest level since last March, leading to the largest weekly drop in the forbearance share since last October and the 20th consecutive week of declines,” says Mike Fratantoni, MBA’s senior vice president and chief economist.

“The forbearance share decreased for every investor and servicer category,” he said, crediting recent economic data that supports “further improvements in the forbearance numbers as more homeowners are able to resume their payments.”

Where happened when homeowners came out of forbearance?

According to MBA, of all forbearance exits between June 1, 2020, and July 11, 2021:

• 28.0% resulted in a loan deferral/partial claim
• 23.2% were borrowers who kept making monthly payments in forbearance, perhaps seeing the forbearance option as a “just in case” tool
• 15.7% didn’t make all of their monthly payments while in forbearance, yet exited the program without a loss-mitigation plan in place
• 13.5% resulted in reinstatements – paying back past-due amounts and picking up where they left off
• 10.7% resulted in a loan modification or trial loan modification.
• 7.4% paid off the full loan, either by refinancing or selling the home
• 1.5% resulted in repayment plans, short sales, deed-in-lieus or other reasons

© 2021 Florida Realtors®

In 2020, FHFA made homeowners pay an extra fee if they refinance, but that fee will go away after Aug. 1 – part of a new focus to help owners keep their property.

WASHINGTON – Federal Housing Finance Agency (FHFA) Acting Director Sandra Thompson announced on July 16 that Fannie Mae and Freddie Mac will no longer assess a 50 basis point fee on lenders when they deliver refinanced mortgages after Aug. 1.

The agency’s scrapping of the adverse market fee is Thompson’s first rescission of a Trump-era policy since she took charge of FHFA last month.

Ex-FHFA Director Mark Calabria required the mortgage lending giants to impose the temporary fee in September 2020, stating it was a way to recoup projected losses from COVID-19.

“The COVID-19 pandemic financially exacerbated America’s affordable housing crisis,” Thompson said. “Eliminating the Adverse Market Refinance Fee will help families take advantage of the low-rate environment to save more money. Today’s action furthers FHFA’s priority of supporting affordable housing while simultaneously protecting the safety and soundness of the enterprises.”

Thompson is expected to roll back several policies led by Calabria, who wanted to curb risk in Fannie and Freddie’s portfolios and shrink their market presence.

Source: Politico Pro (07/16/21) O’Donnell, Katy

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

Buyer demand remains strong, but builders can’t deliver homes until supply-side challenges subside, pushing NAHB’s builder attitude index one point lower this month.

WASHINGTON – Strong buyer demand helped offset supply-side challenges in the new-home industry this month, pushing the monthly index – the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) – one point lower in July to 80.

“Builders continue to grapple with elevated building material prices and supply shortages, particularly the price of oriented strand board, which has skyrocketed more than 500% above its January 2020 level,” says NAHB Chairman Chuck Fowke, a custom home builder from Tampa. “We are grateful that the White House heeded our urgent plea to hold a building materials meeting with interested stakeholders on July 16 to seek solutions to end production bottlenecks that have harmed housing affordability.”

“Builders are contending with shortages of building materials, buildable lots and skilled labor as well as a challenging regulatory environment,” adds NAHB Chief Economist Robert Dietz. “This is putting upward pressure on home prices and sidelining many prospective homebuyers even as demand remains strong in a low-inventory environment.”

The three major HMI indices were mixed in June. The HMI index gauging current sales conditions fell one point to 86, the component measuring traffic of prospective buyers dropped six points to 65, and the gauge charting sales expectations in the next six months posted a two-point gain to 81.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell four points to 75, the Midwest moved one-point lower to 71 and the West posted a two-point decline to 87. The South held steady at 85.

Derived from a monthly survey that NAHB has been conducting for 35 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

© 2021 Florida Realtors®

Seller’s agents have an opportunity to debut a listing in a way that increases the chance they’ll also find a buyer, but it takes more than just adding it to the MLS.

SAN DIEGO – Joe Sesso, director of sales and national speaker for Homes.com, recommends that real estate professionals follow a seven-day strategy for a strong listing launch – a system developed by Kyle Whissel, an agent based in San Diego.

Whissel says agents should kick off their listing by sending invites to the open house on Monday to people living in the listing’s neighborhood. By Tuesday, agents should be ready to run Facebook Ads for their listing, but they should wait until Wednesday to activate them because a Redfin study finds that that Thursdays and Fridays are the most active dates for potential buyers to search for homes – the days they begin to look for homes they can visit over the upcoming weekend.

For Thursday, agents should take time to physically drop off invitations to the neighbors, or, if not possible, hire someone else to drop them off.

On Friday, agents should take the time to conduct circle prospecting, which is a system or program that generates names and phone numbers for prospects in an area.

On Saturday, they should host a mega open house. Whissel suggests placing signs everywhere and offering two different timeframes for the open house – two hours for neighbors in the area and two hours for the public to view the property.

Finally, agents should conduct a final follow-up on Sunday to see where potential buyers are in their decision-making process. They should follow up with all individuals who attended and remind them that if they need anything, they have the necessary contact information.

Source: RISMedia (07/16/21) Sesso, Joe

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

The stock market plunged as biz leaders worried about the Delta variant and any possible impact on closures, federal bans and even a renewed hesitancy among home sellers.

WASHINGTON – The stock market dropped more than 900 points yesterday – more than 2.7% – as investors and business leaders focused on the Delta variant of COVID-19 and its potential to slow a booming recovery.

While doctors have focused primarily on the health of unvaccinated Americans who appear to be the primary risk category for the Delta variant, business leaders and investors seem wary of the unknown economic impact – a return to earlier shutdowns, for example, or programs created to keep people in homes by banning foreclosures and evictions.

In real estate, a new wave of infections likely won’t slow down homebuyers’ demand, which proved resilient during 2020, but some sellers could again pull back for months if they believe the pandemic danger of selling overrides their desire to move.

This time around, most experts think any economic impact will be uneven: Areas of the country with a high percentage of unvaccinated residents will likely see a stronger impact than areas where a high percentage of residents are fully vaccinated.

Vaccines remain widely available and free to Americans. A government website – vacines.gov – provides the location of nearby vaccination sites. 

In a June 25-28 Axios/Ipsos poll, 48% of respondents were at least somewhat familiar with the Delta variant, and 36% had “heard of it.” Of that 48%, three out of four (72%) were either “very” or “somewhat” concerned.

However, even if the Delta variant caused a spike in local infections, many people in the poll had no plans to start taking precautions again, though 43% said they would self-quarantine, and 57% would stop getting together with family and friends.

© 2021 Florida Realtors®

In S. Fla., two Calif. men pleaded guilty for their role in a $1.3 billion real estate fraud scheme that stole money from thousands of investors across the U.S.

MIAMI (AP) – Two more California men have pleaded guilty in South Florida for their roles in a $1.3 billion real estate fraud scheme that stole money from thousands of investors nationwide.

Dane Roseman, 38, and Ivan Acevedo, 44, both of Los Angeles, pleaded guilty Monday in Miami federal court to participating in a massive investment fraud scheme, in which more than 7,000 victims suffered financial losses, according to court records. Co-defendant Robert Shapiro was previously sentenced to 25 years in prison for orchestrating the scheme. Roseman and Acevedo are scheduled to be sentenced on Sept. 20.

Shapiro was the former owner, president and CEO of Woodbridge Group of Companies LLC. The company had offices employing 130 people in California, Florida, Tennessee, Colorado and Connecticut. Prosecutors say Shapiro told investors that Woodbridge held real estate loans that would pay them rates of interest between 5% and 10%. In fact, the real estate also was owned by Shapiro through 270 shell companies and did not generate the necessary money for investors. Sometimes, the properties didn’t even exist.

It became a Ponzi scheme that paid older investors with money from newer ones, court records show. Five states entered cease-and-desist orders because Woodbridge was selling unregistered securities.

Roseman and Acevedo both worked as sales managers for Woodbridge, officials said. They sold securities and trained and supervised Woodbridge internal sales agents who sold Woodbridge securities. Using high-pressure sales tactics, Shapiro, Roseman, Acevedo and others marketed and promoted these investments as low-risk, safe, simple and conservative.

Authorities say the scam operated from at least July 2012 to December 2017, when the company filed for bankruptcy and defaulted on its obligations to investors.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Realtor.com rental listing costs were up 8.1% year-to-year in June, and two Fla. metros ranked in the top 10 for increases: Tampa-St. Pete, up 21.2% and Jacksonville, up 14.4%. Overall, two-bedroom units saw the largest increase, 10.2%, as demand for a larger living space continues.

CHICAGO – The home listing shortage has forced more buyers to rent; and that has boosted rental demand and, as a result, rental prices. Nationwide, the U.S. median rental price in June jumped 8.1% year-to-year, reaching $1,575, according to prices from realtor.com’s website.

The specific asking price for two-bedroom units rose even more as demand spiked. Those saw a 10.2% increase in rental prices year-to-year as consumers’ demand for more space remained high.

Two Florida markets made the top 10 list for rent increases: Tampa ranked third with year-to-year rent increases of 21.1%, and Jacksonville was No. 10 with increases of 14.4%.

Florida metro area rent increases for June, according to realtor.com

• Jacksonville: $1,310 average rent, up 4% month-to-month and 14.4% year-to-year
• Miami-Fort Lauderdale-West Palm Beach: $2,153, up 7.7% month-to-month and 13.3% year-to-year
• Orlando-Kissimmee: $1,500, up 3.9% month-to-month and 13.1% year-to-year
• Tampa-St. Petersburg-Clearwater: $1,605, up 5.6% month-to-month and 21.1% year-to-year

Rental prices in 44 of the largest 55 metros broke records last month. The largest gains were recorded in Riverside, Calif.; Tampa; and Phoenix, which all posted increases above 20% year-over-year, realtor.com reports.

“The surge we’re seeing in rental prices is likely to exacerbate the K-shaped, or uneven, nature of the pandemic recovery in the U.S.,” says Danielle Hale, realtor.com’s chief economist. “Rents are rising at a faster pace than income, which is adding to the challenges faced by lower-income Americans as they struggle to recover from job losses and other hardships brought about by COVID.”

According to Hale, rental prices aren’t likely to ease unless there is a shift – either a higher number of rentals or greater number of homes listed for sale.

Source: realtor.com

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

Housing providers and tenants financially impacted by the pandemic need to look into the OUR Florida program for potential relief.

TALLAHASSEE, Fla. – It’s called OUR Florida, and it was created to provide assistance to Florida tenants and housing providers who have been financially distressed due to the COVID-19 pandemic. The program has been in place since May, but many Floridians still remain unaware of it, even as they continue to struggle to cover their rent, pay their mortgage or simply provide for their families.

OUR Florida is funded through the Emergency Rental Assistance programs passed by Congress late last year. Florida’s program received $800 million and plenty of that money is still available for eligible Floridians.

Applicants are eligible if they:

• Rent their home, apartment or other residential dwelling in Florida.
• Earn an income at or below 80% of the area’s median income (AMI).
• Have qualified for unemployment, experienced a loss of income, incurred significant costs or faced financial hardships due to the COVID-19 Public Health Emergency.
• Are at risk of losing their home, experiencing housing instability or living in unsafe or unhealthy conditions.

Additionally, housing providers can assist tenants in the process by applying for them. To be able to do this, the identity of the renter and the housing provider must be established. A renter must sign the application for assistance attesting that all information is correct, and required documentation may be submitted by the landlord on behalf of the renter, to the extent feasible.

The program began accepting applications for assistance on May 17th, but funding remains available for those who apply. To help spread the word about the program, OUR Florida is providing a comprehensive tool kit that stakeholders can use to share information. The tool kit includes social media content, fact sheets, opinion-editorial templates and much more.

If you are a housing provider or tenant impacted by the pandemic, or know someone who is, please encourage them to visit OUR Florida and apply for assistance.

© 2021 Florida Realtors®

A good home description makes the property appeal to a range of buyers, but luxury homes often have a defining style. If so, focus on that home’s uniqueness.

NEW YORK – Diane Hartley, Institute for Luxury Home marketing president, offers a strategy for writing effective real estate copy for high-end homes:

• Consider how a given property should be framed. “While it’s usually a good idea to allow the buyer to picture themselves in the home by keeping the description vague, sometimes it helps to get specific,” Hartley writes. “Especially for homes with defining qualities, try framing them accordingly.”

• Select a title that grabs the intended audience’s attention. Hartley suggests “using unique adjectives, or at least adjectives other than ‘beautiful,’ ‘awesome’ or ‘amazing,’ as they will make the title stand out.” The goal is to hook the reader and entice them to do more exploration.

• Pack in details without losing coherence. Hartley recommends using tactile and vivid word choices. “When writing real estate descriptions, try playing off the pictures to create the most cohesive copy,” she says, adding that the photos should depict the features mentioned in the copy.

• Use buzzwords the audience is looking for – and verbs that emphasize action in order to create a sense of urgency.

Source: RISMedia (07/15/21) Hartley, Diane

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

Over two days of Congressional testimony, Fed Chair Powell held to his belief that inflation is a temporary concern: Over time, it will fade and perhaps even reverse.

WASHINGTON (AP) – For anyone watching with concern as prices surge for everything from food and gas to airplane tickets and clothes, the message from Federal Reserve Chair Jerome Powell over two days of congressional hearings this week was straightforward: Just give it more time and those price gains should slow, or even reverse.

The Fed chair acknowledged that the U.S. is in the midst of an unparalleled economic reopening on the heels of a pandemic-induced recession, making it that much more difficult to anticipate how things like inflation and unemployment will play out.

“This particular inflation is just unique in history,” Powell said Thursday before the Senate Banking, Housing and Urban Affairs Committee. “We don’t have another example of the last time we reopened a $20 trillion economy. We’re humble about what we understand.”

Powell gave his twice-a-year monetary policy report to Congress this week. On Wednesday, he appeared before the House Financial Services Committee where he said inflation may slow “in six months or so,” suggesting a clear reading on inflation won’t come until the end of the year.

“This is the Fed saying it is prepared to endure a longer period of elevated inflation than just a few months,” Tim Duy, chief U.S. economist at SGH Macro Advisers, a consulting firm, wrote this week.

Powell aimed to soothe senators and members of Congress, with Republicans in particular repeatedly raising the issue of higher prices, often blaming them on President Joe Biden’s $1.9 trillion rescue package enacted in March. The Biden administration has said the recent burst of inflation reflected the nature of restarting the U.S. economy.

White House press secretary Jen Psaki told reporters at a Thursday briefing that supply-chain issues and the shortage of semiconductors are being addressed through legislation and executive actions. The ultimate goal is to increase the supply of available goods, something Psaki said the president’s jobs and infrastructure package would help with.

“We understand the threat that inflation poses,” Psaki said. “We will be vigilant.”

On Tuesday, the U.S. reported that prices paid by Americans in June surged more than they have in the past 13 years. Powell acknowledged that the increases have been larger than he – and most economists – anticipated.

He attributed the gains to a narrow set of industries that were hit hard by soaring demand and in many cases, severe supply shortages, as the nation emerged from the worst of the pandemic.

“It’s airplane tickets, it’s hotel rooms and it’s a handful of other things, and they account for essentially all of the overshoot,” Powell said. “We think that those things are clearly temporary. We don’t know when they’ll end, but they’ll go away.”

Powell conceded that there are forces that could emerge that would continue to lift inflation, though he did not name any. Some economists worry that rising home prices and rents could act as a longer-term boost to consumer prices. But Powell said the Fed is monitoring price trends closely and will react to any such changes.

“We won’t have to wait a tremendously long time, I don’t think, to know whether our basic understanding of this is right,” he said.

Kathy Bostjancic, an economist at Oxford Economics, said that because Powell referred several times to a six-month timeframe, it “seems by then he will judge if indeed it’s temporary or more permanent.”

The Fed has said it will keep its benchmark short-term interest rate pegged near zero until it believes maximum employment has been reached and annual inflation moderately exceeds 2% for some time. The central bank’s policymakers have said they’re prepared to accept inflation above its target to make up for years of inflation below 2%.

Powell acknowledged Thursday that inflation is currently well above 2%, adding “of course we’re not comfortable with that.” But he noted that unemployment also remains elevated at 5.9%, and argued that the Fed doesn’t want to raise interest rates to counter what it sees as temporarily higher prices.

The Fed is also purchasing $120 billion a month in Treasurys and mortgage-backed securities, which are intended to keep longer-term interest rates low to encourage borrowing and spending. The Fed has started discussing its timeframe for reducing those bond buys, Powell said, and will continue to do so at its next meeting in two weeks.

Some economists believe that the Fed will likely announce a reduction in those purchases as soon as September, though others argue a November or December announcement is more likely.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission. AP Writer Josh Boak contributed to this report.

Americans need homes – what can be done? NAR, HUD and others say it took over a decade of underbuilding to get here, and fixing it requires a major national commitment.

WASHINGTON – A top official from the U.S. Department of Housing and Urban Development (HUD) joined policy experts from the National Association of Realtors® (NAR) on Thursday to discuss the nation’s historic housing shortage.

The virtual policy forum discussed research, commissioned by NAR and authored by the Rosen Consulting Group, that found the U.S. is in the midst of an “underbuilding gap” of around 6 million housing units, with problems dating back to 2001. The report, Housing is Critical Infrastructure, has taken center stage lately in national housing policy conversations, particularly after President Joe Biden reiterated his administration’s focus on housing as part of the broader infrastructure push.

“The U.S. housing shortage is … the result of more than a decade of severe underbuilding and underinvestment,” NAR President Charlie Oppler said. “Reaching the necessary volume will require a major, long-term national commitment … [and] building all types of new housing must be an integral part of any national infrastructure plan. Like roads and bridges … housing is an essential long-term asset that helps families climb the economic ladder to prosperity, brings folks closer to job opportunities, and generates tax revenue that supports community residents.”

Biden is aiming for what he called a “historic investment” in housing that would generate 2 million additional homes in the U.S. through construction and rehabilitation.

RCG Senior Vice President and former HUD economist David Bank focused on the connection between the NAR report he co-authored and the President’s infrastructure ambitions in his remarks on Thursday.

“Critical infrastructure … refers to the physical assets and the systems that we need to keep our country and our communities safe and vibrant,” said Bank. “In that respect, it’s hard to think of a physical asset that’s more critical to our success and the vibrancy of our communities than access to decent, safe and affordable housing.”

HUD Senior Advisor Alanna McCargo joined Bryan Greene, NAR’s vice president of policy advocacy, to discuss strategies the administration is considering to boost housing supply. McCargo stressed that a broad number of approaches and policies will be needed to rectify a problem that has been decades in the making.

“There are not really any silver bullets,” said McCargo, who joined HUD this year after serving as vice president of the Urban Institute’s Housing Finance Policy Center.

McCargo said the administration will take “a serious look at how we accelerate renovation and rehabilitation construction projects.” She highlighted the importance of working on the local level to reform zoning and land use policies and also noted that the rising costs of construction must be addressed.

“Getting on track on an … aggressive renovation and rehab process, and also building resiliency and energy efficiency into that for the future, are going to be really key approaches” that the administration is prioritizing, she added.

© 2021 Florida Realtors®

An “HECM for Purchase Loan” allows adults age 62+ to buy with a larger-than-usual down payment, often with transferred equity, and skip future home payments.

WASHINGTON – While most reverse mortgages allows adults age 62 and over to stay in their current home and forego future mortgage payments, one type of loan can be used to purchase property.

Retirees often use an “HECM for Purchase Loan” when they want their next home to be bigger than one they just sold, though it can be used for any size. The rules can be complicated, and anyone considering a reverse mortgage should understand the benefits and their obligations. The Federal Housing Administration (FHA) offers more information on its website.

For the HECM for Purchase Loan, buyers make a substantial down payment, usually somewhere in the 45% to 62% range. Once qualified for a reverse mortgage, they can then live in the new home without making monthly mortgage payments.

“This is incredibly important insight, especially when you consider more and more baby boomers are moving into bigger homes rather than downsizing,” says Rob Cooper, national sales leader at Reverse Mortgage Funding LLC. “There is a lot of room for improvement when it comes to recommending reverse mortgage for purchase financing because most people are not even aware of this option – or have not been well informed about it.”

Older adults considering any type of reverse mortgage should fully understand the benefits and penalties before committing. The FHA-insured program has a non-recourse feature, meaning the home is the only source of repayment, regardless of the loan balance at maturity. It must also be a primary residence and buyers must participate in loan counseling.

HECM loan details vary by transaction. Older adults interested in using an HECM for Purchase Loan should make sure they understand those details and even consider how unexpected events could impact the decision, such as surprise medical issues. Homeowners must also pay non-mortgage home expenses, such as property taxes and property insurance. Failing to do so could potentially lead to foreclosure.

© 2021 Florida Realtors®

A survey of Redfin agents found a slow but steady drop in the percentage of listings engaged in a bidding war. In April, 74.1% of sellers entertained multiple bids; in May it dropped to 72.1%; and in June, it fell to 65%. But Sarasota tops the list of U.S. bidding-war cities at 87%.

SEATTLE – While the U.S. remains in a strong sellers’ market, the buyer competition seems to be easing a bit as home prices continue to rise.

In June, two out of three (65%) home offers written by Redfin agents faced competition, but that’s down from a revised rate of 72.1% in May and a pandemic peak of 74.1% in April. Still, the percentage of bidding wars in June was higher year-to-year. In June 2020 – the housing market’s early rebound after the first wave of pandemic shutdowns – the agents reported a 56.8% bidding-war rate.

While the study didn’t outline the reasons for a drop in buyer competition, buyer fatigue is likely one factor. Some house hunters have moved to the sidelines after losing bidding war after bidding war. An improving supply situation may also be making a difference, with new listings up 4% year over year. With more properties to bid on, the competition for any one property may have dropped a bit.

“The first half of this year was red hot – it was almost impossible to get an offer accepted. But recently, we’ve started to see buyers get cold feet,” says Laura Sechrist Molenda, a Southern California Redfin agent. “Two of my buyers just had their offers accepted because the sellers’ first buyers backed out. The market is still competitive, but buyers are more trepidatious than they were at the start of 2021, and less willing to pull out every stop in order to win.”

Redfin agents report that more buyers are starting to keep contingencies – a sign that competition is beginning to abate.

Sarasota and Charleston have highest bidding-war rates

Of the 52 U.S. metropolitan areas in the analysis, Sarasota, Florida, had the highest bidding-war rate – 87% of offers in June. Next came Charleston, South Carolina (82.9%); Reno, Nevada (80%); Charlotte, North Carolina (78.9%); and Kansas City, Missouri (78.6%).

“It’s still really competitive when there’s a lower-priced home in a very-sought after area,” says Seattle agent Kristi Miller. “But bidding wars are starting to slow for mid- and higher-priced homes.”

Metros must have had at least 20 offers recorded by Redfin agents in both June 2021 and May 2021 to be included in the analysis.

Florida metro areas by percentage of bidding wars

• Sarasota: 87.0% in June 2021; 70.0% in June 2020
• Orlando: 66.2% in June 2021; 68.1% in June 2020
• Jacksonville: 63.6% in June 2021; 52.9% in June 2020
• Tampa: 56.3% in June 2021; 68.2% in June 2020
• Miami: 49.4% in June 2021; 59.4% in June 2020

© 2021 Florida Realtors®

The homeownership rate for Black and Latino families lags white households, but Fla. ranks third nationwide for its efforts and a homeownership rate for both at 68.1%.

WASHINGTON – A study by United Way of the National Capital Area found that homeownership has risen nationwide over recent years, but it remains low for Black and Latino Americans. The racial homeownership gap is worse than it was in 1960.

The study found that some states are seeing improved rates in homeownership, however, due in part to policies and programs designed to create a more equitable housing market. While Blacks and Latinos still face challenges in Florida, however, the state ranked third in United Way’s study for homeownership.

Using an indexed score to rank minority homeownership, Maryland topped United Way’s list at 32.59, with Florida in the No. 3 spot with a score of 31.64. The lowest state in the list, Wisconsin, had a score of only 15.5.

According to the study, Black and Latino Floridian households have a median income of $45,484, an unemployment rate of 10.4% and a total homeownership rate of 68.1%. In addition, some states have zero first-time homebuyer grants and loan programs, while Florida has five – a number matched by only a handful of other states.

Study authors said that Florida, in particular, has the second-highest number of FHA loans filed – a total of 6,790 loans. It included the number of FHA loans in its study because they’re “beneficial for lower-income buyers, seeking lower down payments and lower monthly mortgage insurance payments (in some cases) in comparison to conventional loans.”

The study also considered criteria such as median household income, unemployment rate, number of first-time homebuyer and homeownership rate.

Authors say the homeownership is strongest for Black and Latino residents in Maryland, largely due to the high annual incomes and low unemployment rates in the state. The median household income for Black and Latino residents in Maryland is $70,171, higher than that in other states. For comparison, the national average household income for the two cohorts is $46,859.

© 2021 Florida Realtors®

Florida Realtors chief economist: More homes are being listed than you think. Despite record-low inventory levels, the reason for current buyer frustrations isn’t “fewer homes coming into the market.” It’s strong buyer demand – so strong that listings don’t stay active very long.

ORLANDO, Fla – When it comes to housing, there’s no denying that the U.S. is currently experiencing a seller’s market for the ages – but there’s some confusion about the underlying reason.

We’ve all heard the stories. Tearful would-be homebuyers being outbid at every turn. Their frustrated and exhausted agents turning the town upside-down, trying to find the next listing before it’s gone.

The struggle is real, and the data backs it up.

Here in Florida, there were only about 60,000 active listings of homes for resale as of the end of May. That’s a roughly 56% decline from the more than 135,000 homes on the market just one year ago, at the end of May 2020.

It also happens to be the lowest level of inventory ever reported by Florida Realtors Research Department, whose statistical records extend back to January 2008. The department calculates monthly resale market statistics from data provided by Florida’s numerous multiple listing services.

This decline in resale inventory is not unique to Florida, either. Recent housing market commentary from nationally prominent real estate analysts and economists has zeroed in on the low inventory counts being reported all around the country – and rightly so.

Unfortunately, though, this laser-like focus on inventory levels – along with all those vivid stories of buyer hardship – has given rise to a broadly held belief that significantly fewer homes are being listed today than before the pandemic.

As it turns out, that’s not really true.

Inventory is simply not a good measure of how many homes are being listed for sale. When it falls from one month to the next, it only means that fewer listings became active compared to the number that became inactive. A home going under contract affects inventory just as much as a home being listed for sale.

Most housing market commentators have been so busy telling you about our shockingly low inventory that they’ve forgotten to mention (or haven’t noticed) what’s going on with another key statistic: new listings of properties for sale.

Well, here’s what’s been happening with new listings. From January through May of this year, more than 246,000 existing homes were listed for resale in Florida.

That figure should raise some eyebrows. It is quite close to the roughly 250,000 and 248,000 properties that were listed during the same period in 2018 and 2019, respectively. And with the exception of those two years, it’s the largest total recorded for the first five months of any year dating back to at least 2008.

In truth, apart from a bad April last year (30% fewer new listings than in April 2019), the number of properties coming onto the market each month wasn’t substantially different during the pandemic than what it was pre-pandemic.

The count for July through December last year – over 263,000 – actually set a record for the second half of any year, coming in about 10,000 listings above 2018’s tally.

This trend has been visible for months now, not only in the statewide data, but also across local markets and different property types. And local data from markets elsewhere in the U.S. also reflect this trend, indicating it is happening nationally, not just here in Florida.

So why, then, is our inventory so low? Because all these homes being listed are selling – and selling fast. We’ve obviously had more closings so far this year than in the early months of last year due to the onset of the pandemic. But we’ve also had 28% more closings than during the equivalent period in 2019. Half of the sales that closed this May were only on the market for, at most, 12 days before going under contract. In May of 2020, that figure was 34 days. In May 2019, it was 44 days.

At this current rate, a lot of homes being listed aren’t even showing up in the end-of-month inventory figures. They’re going under contract before they can be counted.

The bottom line: Our inventory has been eaten away by a huge influx of buyers motivated by record-low interest rates and a pandemic-driven desire for a change of residence – not a decline in new listings.

A useful analogy is to think about an empty shelf at the grocery store. That shelf might be empty because the store stopped getting shipments of the product that goes on the shelf. On the other hand, it could be empty because demand has dramatically increased for that product and the shelf is being picked clean as soon as it gets stocked.

The latter scenario is a better description of our housing market right now – and that’s the better scenario. If inventory were instead falling due to a lack of new listings, there would be nothing to sell. Sales over the past year would have been down in a very big way, not marching at the record pace they have been.

Now, are there constraints that are keeping the number of new listings from rising to meet this elevated level of demand? Absolutely. We want to have a lot more new listings than normal right now, and we’re not getting them. That’s why it’s still accurate to call this a housing shortage.

At least, though, we’ve been getting enough listings to accommodate a huge expansion in the number of sales. This expansion has put the housing market at the forefront of our economic recovery.

That’s something we can all take solace in, even if it is cold comfort for all of those prospective buyers waiting to pounce on the next listing that pops up.

Brad O’Connor, Ph.D. is the Chief Economist for Florida Realtors

© 2021 Florida Realtors®

The Fla.-owned insurer had its 10% cap raised under a law passed earlier this year, and its board of governors voted Wed. to raise a Feb. 2022 increase by 2.3%.

TALLAHASSEE, Fla. – On Wednesday, Citizens Property Insurance Corporation’s Board of Governors approved rate adjustments that will raise average premiums by an additional 2.3% in February 2022. The change follows recent legislation created to slow the growth of the state’s insurer of last resort.

The board’s unanimous vote modifies rates previously approved by the Florida Office of Insurance Regulation (OIR). Along with the already approved increase – and assuming OIR approves the board’s latest decision – policies renewing after February 1, 2022, will now see average increases of 7.6%.

February’s increase takes into account provisions of SB 76, signed into law in June, that increase Citizens’ glidepath from 10% to 11% in 2022. It also requires Citizens to factor in additional reinsurance cost estimates when calculating rates.

“These necessary adjustments reflect the efforts of the Florida Legislature to return Citizens to its role as a residual insurance company,” Citizens Chairman Carlos Beruff said in a release announcing the increase. “Unfortunately, we have become the first choice, or only choice, in too many regions of the state.”

SB 76 bill raises Citizens’ current 10% cap on annual premium increases by 1% each year over the next five years in order to make its rates more competitive with private insurance coverage. The bill also requires Citizens to factor into its rates the reinsurance costs – essentially insurance policies for insurers that have exceptionally high losses – to protect its surplus from a 1-in-100-year storm. It also steers policyholders to private insurance carriers if a private policy premium is within 20% of the comparable Citizens policy premium.

Since October 2019, Citizens has seen its policy count jump from 420,000 to more than 640,000 and it’s now seeing increases of more 5,000 new policies per week. At this pace, company officials expect the policy count to exceed 750,000 by the end of 2021.

© 2021 Florida Realtors®