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Monthly Archives: August 2021

Supreme Court Hears Arguments For/Against the Eviction Ban

State Realtor associations told judges the ban exceeds the CDC’s authority. The CDC said the delta variant makes this moratorium even more important than the last one.

WASHINGTON – The U.S. Supreme Court heard arguments, both pro and con, on whether the latest eviction moratorium announced by the Centers for Disease Control and Protection (CDC) should continue until it’s set to expire on Oct. 3, 2021.

Landlords along with the Alabama and Georgia Realtor associations took their case to the Supreme Court after it was heard by a judge and an appeals court. The last time the Supreme Court heard their previous case, it rejected the moratorium, though it allowed the existing one to continue until its scheduled end on July 31. However, Justice Brett Kavanaugh said at the time that new eviction moratoriums would require congressional approval, which the latest ban does not have.

The landlords and associations hope the court will adhere to its earlier opinion. They contend that the CDC’s moratorium exceeds the authority Congress has given it.

For its part, the government focused on the new COVID-19 delta variant, saying its rise has boosted the need to protect tenants. The latest iteration of the ban doesn’t offer blanket protection to renters nationwide, but instead focuses only on areas identified by the CDC as hotspots for the pandemic. Still, that analysis includes up to 90% of the nation’s renters and all counties in Florida.

“The CDC has warned that the public health consequences of an increase of evictions at this time would be very difficult to reverse,” said U.S. Solicitor General Brian Fletcher.

It’s unclear what the Supreme Court will decide. However, even President Biden questioned the legal standing for a new eviction moratorium after it was announced. “The bulk of the constitutional scholarship says it’s not likely to pass constitutional muster,” Biden said at the time. “But there are several key scholars who say that it may and it’s worth the effort.”

Source: Bloomberg (08/23/21) Stohr, Greg

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July New-Home Sales Up 1% as Prices Skyrocket

After a string of declines, new-home sales reversed direction in July, albeit only a little bit. Median new-home prices rose to $390K – 18.4% higher year-to-year.

WASHINGTON (AP) – Sales of new homes rose a modest 1% in July after a string of declines as new home prices soar to record levels.

Sales last month reached a seasonally adjusted annual rate of 708,000, the Commerce Department reported Tuesday. Sales had fallen in April, May and June as builders confronted surging lumber prices and a shortage of workers.

Home prices continue their upward trajectory to new heights. The median price of a new home sold in July climbed to an unprecedented $390,500, up 18.4% from a year ago, while the average sales price in July hit a record $446,000, up 17.6% from a year ago.

Even with the small sales gain in July, new home sales are 27.2% below the pace of a year ago. Sales peaked at a rate of 993,000 units in January but have cooled since then, though they remain at historically high levels.

The surge in prices may start to slow in coming months as builders work to ramp up construction. The number of new homes for sale at the end of July stood at 367,000, up 5.5% from the June inventory level and 26.1% higher than a year ago.

“While demand for homes remains strong, high prices and backlogs in construction will temper sales in the months ahead,” said Nancy Vanden Houten, lead U.S. economist at Oxford Economics.

The National Association of Realtors reported Monday that sales of existing homes rose 2% in July compared to June to a seasonally adjusted annual rate of 5.99 million units while the price of an existing home sold in July climbed 17.8% from a year ago to $359,900, near the all-time high set in June.

For July, new home sales fell in two regions of the country and rose in two regions. Sales dropped 24.1% in the Northeast and were down 20.2% in the Midwest. Sales showed a slight 1.3% increase in the South and rose a stronger 14.4% in the West.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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On-Time Rent and Mortgage Approvals: Here’s How It Works

NEW YORK – With a high-paying job as an environmental engineer for a shipbuilding company, Nicole Lawrence figured snagging a mortgage and fulfilling her dream of buying a home would be a piece of cake.

But when she applied for a mortgage early this year, she didn’t qualify. Her ex-husband had fallen behind on debts he owed but the couple legally shared, such as car payments and medical bills. That lowered her credit score.

“Devastated,” Lawrence, who lives in Virginia Beach, Virginia, with her two kids, said of how she took the news. “I have a great job, I make a great salary. … I was very disappointed.”

But that sort of financial curveball could soon end for people like Lawrence. An announcement last week by mortgage giant Fannie Mae that it would consider on-time rent payment history as part of mortgage approvals could allow her, along with many other aspiring homebuyers with spotty or insufficient credit reports, to still get home loans.

Lawrence, 39, who divorced in 2019, has been paying rent on a three-bedroom condo for more than a year. “If this could possibly help us (buy a house) … I think that is excellent news.”

Until now, credit records generally haven’t factored in rent payments because few landlords provide the information to credit bureaus, and some bureaus aren’t technically set up to include it, says Malloy Evans, executive vice president of Fannie Mae. The rental data is on the reports of just 5% of renters.

But new technology is allowing Fannie Mae to check rent payment histories electronically through bank statements, with the borrower’s permission. The new policy takes effect Sept. 18. Freddie Mac says it’s working to include rent payments in its mortgage reviews as well.

Consumer advocates say rent payment is likely the best indicator of whether a homeowner will default on a mortgage – far more accurate than FICO scores, which rely on transactions such as credit card and car payments.

“It seems obvious that if someone is paying rent consistently, it’s likely they could and would pay their mortgage consistently, too,” Fannie Mae CEO Hugh Frater said when the company made the announcement.

Fannie Mae and Freddie Mac don’t provide mortgages directly to homebuyers. Rather, the government-sponsored enterprises buy the loans from banks and other lenders and sell them to investors. But if their automated underwriting systems determine that a homebuyer is eligible for a mortgage that Fannie and Freddie would buy, lenders generally approve them. Fannie and Freddie purchase about 60% of U.S. mortgages, according to the Federal Housing Finance Agency.

The new policy is expected to aid first-time homebuyers, including many low- to middle-income borrowers, who are often denied mortgages because they have scant credit histories. About 20% of the U.S. population has a skimpy credit record, and Black and Hispanic people fall disproportionately in that group, Fannie says.

“We’re looking for a way to really provide more inclusive access to mortgages,” Evans says.

In a recent sampling of mortgage applicants who had not owned a home the past three years and were rejected by Fannie’s underwriting system, 17% could have been approved if rent payment histories were included, the company says.

Lawrence, the Virginia Beach resident, says buying a home would signify “independence and a fresh start” after her divorce. She adds it would allow her to build wealth instead of burning cash on rent every month.

Lakisha Williams, a Redfin real estate broker in Hampton Roads, Virginia, says that while some of her Black clients don’t have the money to buy a house, many can’t get a mortgage simply because they “don’t know how to play the FICO game.”

“These people have great income, a solid job, but their credit scores” are low or their records are skimpy because they never sought credit cards or they paid for cars with cash, Williams says. “They just don’t know what they need to have.”

A disproportionate share of Black wealth is in homeownership, according to the Urban Institute. Yet only about 45% of African Americans owned homes in the second quarter, compared with about 74% of white Americans, Census Bureau figures show. And while the housing market has boomed during the COVID-19 pandemic, many aspiring first-time buyers have been boxed out.

How rent payment history works

Here’s how Fannie’s new setup will work: If the company’s automated system determines that a mortgage isn’t eligible to be purchased, it will check whether a 12-month history of on-time rental payments would change that decision, according to an analysis by the Urban Institute, which conducts economic and social policy research. If so, Fannie will tell the lender, which can then ask the borrower for permission to examine their bank statements.

Assuming the borrower agrees, the lender will order a report from a Fannie-approved technology vendor that will check the bank statements for rent payments made by check or automatic debit. If the rental history matches the amounts on the borrower’s application, the loan will be declared eligible for sale to Fannie Mae.

At the same time, missed or inconsistent rental payments will not hurt their ability to get a mortgage, Fannie says.

Evans says he expects adoption of the new policy “to be modest at first as consumers understand the opportunity and get comfortable being able to provide their permission” to access their bank statements.

And while hundreds of lenders work with technology vendors, most do not, according to Fannie Mae and the Urban Institute. Banks and other lenders must establish those ties.

Cathleen Pannicia, who heads the residential mortgage team at Customers Bank, says the lender works with a vendor to tap into credit bureau information and plans to expand that relationship to include the rental payment data.

“We want to serve the communities where we are, and this going to help us do that,” Pannicia says.

Fannie Mae, meanwhile, says it’s working with industry partners to ensure that rent payments are automatically reported to credit bureaus so they can be factored into all loans and transactions that rely on a credit score.

“We’re not stopping here,” he says. “This is a starting place.”

Copyright 2021, USATODAY.com, USA TODAY

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Fla.’s Housing Market: Median Price, New Listings Rise in July

Florida Realtors’ data: Median prices for single-family existing homes rose 20.3% year-over-year to $355,000; up 20.5% to $253,000 for condos/townhomes. Chief Economist O’Connor says July data shows signs Fla.’s housing market is heading on a steady path toward normalcy.

ORLANDO, Fla. – In July, Florida’s housing market reported higher median prices, more new listings and a rise in all-cash sales compared to a year ago, according to Florida Realtors® latest housing data.

“In a positive sign for Florida’s housing market, new listings rose year-over-year in July for both single-family homes, up 12.1%, and for condo-townhouse properties, up 4.6%,” says 2021 Florida Realtors President Cheryl Lambert, broker-owner with Only Way Realty Citrus in Inverness. “Our economic experts also report that active listings (inventory) of single-family homes continued to rise throughout July (from its lowest level), which eventually could be good news for buyers who have been sidelined by the shortage of homes for sale. However, any rebound in inventory is going to be slow, and it will take a long while to get back to the levels we had pre-pandemic.”

Closed sales of single-family homes statewide in July totaled 30,740, a slight decrease of 2.1% year-over-year, while existing condo-townhouse sales totaled 13,481, up 21.1% over July 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 July was $355,000, up 20.3% 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 $253,000, up 20.5% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

According to Florida Realtors Chief Economist Dr. Brad O’Connor, the data revealed signs that the state’s housing market is heading on a steady path toward normalcy, at least in some respects.

“The 2.1% drop in closed single-family home sales marks the first time that sales in this category have been down year-over-year at the statewide level since May of 2020, near the beginning of the pandemic,” he says. “But remember, last year’s spring buying season was effectively postponed until the summer and fall by the pandemic, so the second half of 2020 ended up being the strongest second half for sales in at least 15 years. It’s not too surprising if sales counts over the next few months fail to surpass their totals from one year ago.

“However, looking at 2019 – the last full year of anything resembling a normal market due to COVID-19 – we find that July 2021 single-family home sales were over 9% higher compared to July 2019.”

Dr. O’Connor notes that, in a continuing trend, the share of closed sales that were all-cash purchases rose in July compared to the previous year. In July, single-family existing home sales paid in all cash increased by 49.9% year-over-year, while all-cash sales of condo-townhouse units rose by 44%.

On the supply side of the market, inventory (active listings) remained extremely tight in July. Single-family existing homes continued 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 2.87% in July 2021, down from the 3.02% 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 July 2021 data report PDFs under Market Data on the site.

© 2021 Florida Realtors®

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Moving Scams Are Back with S. Fla. a Hotbed of Activity

FORT LAUDERDALE, Fla. – One of the most exploitative business models in America is booming again, thanks to an exploding real estate market, the tireless audacity of some South Florida entrepreneurs – and the naivety of targets who don’t realize they’re trapped until the moving truck pulls away with everything they own.

South Florida is a hotbed for moving brokers – companies that have no trucks and employ no laborers but have figured out how to lure consumers with professional-looking websites and savvy telephone salespeople.

They hook their prey with lowball estimates and promises to handle all details of the move. Then they farm out the work to third-party haulers who hike the price and drive away, leaving owners angry and frightened and unable to reach those once-friendly brokers by phone, text or email.

It’s been three weeks since movers hired by West Palm Beach-based American Plus Moving and Storage left Lincoln, Nebraska, with Rhonda Faehn’s lifetime of possessions. The broker, who told her the load could arrive as early as Aug. 1, has stopped answering her calls, she says. And the carrier they hired won’t tell her where her belongings are or when they are scheduled to arrive at her new home in Statesboro, Georgia.

The family is making do with folding chairs and a borrowed dining table. “I can’t sleep. I can’t eat. I just feel sick,” she said, choking back tears. “People were kind enough to lend us air mattresses to sleep on and dishes to use. That’s it. We have the clothes on our back. I just want my stuff.”

American Plus did not respond to a voice mail message and an email seeking to discuss Faehn’s complaints, 55 complaints to the Federal Motor Carrier Safety Administration (FMCSA) and 34 complaints to the Better Business Bureau.

Complaints setting records

Consumers have been lodging complaints about movers at a record-setting pace this year, says Joshua Swyers, managing attorney for Move Rescue, a nonprofit organization formed by the nation’s largest moving companies to help consumers resolve conflicts. The number of requests for help so far this year – 1,053 – should easily exceed 2019’s total of about 1,200 and probably every other year since the organization was founded in 2003, Swyers said.

South Florida holds the distinction of being home to most of the state’s moving brokers, a slice of the overall moving industry that has replaced carriers as the focus of most consumer complaints, Swyers said.

Of 238 Florida-based moving brokers registered with the Federal Motor Carrier Safety Administration, 190 are in Broward, Palm Beach or Miami-Dade counties.

So far this year, consumers have filed complaints to the FMCSA against 111 South Florida-based moving brokers, and 58 of them are each the subject of 10 or more complaints, according to data posted on FMCSA’s website.

More than 1,100 complaints about movers have been filed with the Florida Attorney General’s Office so far this year, far exceeding 2020’s total of about 890 and about 730 tallied in 2019. Exact numbers weren’t immediately available because of how they are logged in the state’s system, a spokeswoman for Attorney General Ashley Moody said.

One of those complaints was filed by Faehn, who thought she was being a smart shopper this summer when she sought multiple estimates for her family’s move from Nebraska to Georgia.

Rude surprises

The $9,950 estimate she received from American Plus Moving and Storage was around $3,000 less than the next-lowest quote, so she agreed to use the company and sent a $2,242 deposit. The balance was to have been split into two payments of $3,804 – half would be paid when the movers packed up her old house and the other half would be paid when they arrived at the destination.

Like many moving brokers’ websites, American Plus’s site gives the impression of a full-service operation. “Our movers are specialists in what they do, and they need to meet strict criteria to be considered a worker – or like we like to say, part of the household!” one statement reads. “Before our hands-on training procedure, all laborers have to pass a drug screening and background check.”

How that hands-on training takes place is unclear. A Google search of the address on the company’s website brings up a 743-square-foot residential apartment. And according to the FMCSA, the company owns no trucks.

Faehn sent her husband and sons ahead to their new home in Georgia and stayed behind to supervise the movers.

They showed up a day late, on July 28, she said. They identified themselves not as American Plus Moving and Storage, but as another company that Faehn didn’t know and wasn’t able to research prior to the workers’ arrival.

One worker’s girlfriend came along and hung out inside of the house, playing with her phone, Faehn said. The foreman sent Faehn out to buy Bubble Wrap and boxes. When Faehn objected, saying those supplies were supposed to be part of the move, the foreman got angry and insisted that she go. He became angrier still when Faehn’s neighbor came over to keep an eye on the house while she was gone.

Faehn got nervous and took a few seconds of video footage of the movers from behind the blinds of her second-floor bedroom window.

Loading the truck stretched into two days. When the packing was finally completed at 10:30 p.m. on the second night, the foreman informed her that the load exceeded the estimate by 700 cubic feet and she would have to pay an additional $5,539. He also told her he expected a $1,700 gratuity. “And he said if I didn’t pay it, I’d never see my stuff again,” she said.

At first, he refused to leave, but he finally pulled away after she called the police, Faehn said. She didn’t give him the gratuity.

Not all brokers are dishonest, Swyers said. But for the many who are, marks are easy to find among otherwise educated and cautious consumers. That’s because moving, for most people, is rare. Few of us have any day-to-day reason to learn how to avoid being taken advantage of by movers, Swyers said.

The pattern of despair

Complaints against companies that generate large numbers of them tell similar stories:

  • The experience plays out far differently than the brokers said it would.
  • Unknown companies that consumers had no time to research show up to do the move.
  • They wait until the truck is loaded before telling the consumer they have more items than what’s on the estimate.
  • They demand payment on the spot. Facing deadlines to leave their former homes, consumers usually pay up.
  • Weeks go by without delivery, and neither the broker nor the hauler returns calls from consumers frantic to know where their stuff is being stored and when it will be delivered.
  • When they do show up, they demand even more money for unforeseen expenses.
  • Finally, much of what’s delivered is broken or dirty, revealing it had been tossed with no care into a storage unit. Sometimes boxes have been opened and items taken. The relief the consumer feels upon getting their goods back gives way to disgust and sadness over how they were treated.

Most customers have little option but to wait to be contacted and pay what carriers demand, Swyers said.

That’s because a typical carrier’s bill of lading, which customers sign prior to trucks leaving with their goods, gives companies 21 business days or 30 days to deliver their loads. They also allow companies to add new charges for increased expenses.

Companies that breach delivery deadlines are subject to penalties and possibly even loss of their license by FMSCA. But right now, FMSCA is struggling to keep up with an increase in complaints from customers who have been waiting for months to get their stuff back, Swyers said.

This year’s real estate boom and labor shortage has overwhelmed the ability of the nation’s largest and most reputable moving companies to meet demand, he said. They’re booked up for months in advance. Many consumers’ fallback choice, small “mom and pop” haulers, are also booked up. And that’s forced consumers to settle for the brokers who refuse to stop booking moves and making delivery promises they cannot keep, he said.

“They’re continuing to sign people up and put their stuff in storage knowing they can’t meet their timelines,” he said.

While Swyers says Move Rescue usually succeeds in persuading carriers to reunite consumers with their belongings, state and federal enforcement against companies accused of fraud can stretch out over years.

Cat and mouse game

Many companies try to dodge prosecution by playing a shell game. When complaints pile up at the Better Business Bureau or FMCSA, they change their company names and the identities of officers when registering the new entity with the state. Many once-burned customers have become experts at documenting the lineage of company names and intersecting owners.

But successes are possible. Florida’s attorney general this year announced resolutions of four cases filed in 2018 against four moving brokers based in Broward or Miami-Dade counties: Finest Movers Inc., Ocean Moving & Storage Corp., Moving and Storage Accounting Inc. and U.S. Moving Services.

In all of the cases, owners were ordered to pay a total $2.7 million in restitution to customers, penalties, or both. But in three of the cases, companies were barred only from “providing artificially low quotes” in future endeavors.

Defendants in just one case were barred from future ownership, operation or participation in moving services. Those were owners of Moving Service Accounting and Storage Inc., a Fort Lauderdale-based affiliate of Moving and Storage Accounting Inc.

Currently, Moody’s office has litigation pending against two companies and is investigating at least six others. “However, as those investigations are ongoing, we cannot comment further at this time,” spokeswoman Kylie Mason said by email.

© 2021 South Florida Sun-Sentinel. Distributed by Tribune Content Agency, LLC.

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NAR: U.S. Home Sales Climb 2% Higher in July

Prices rose 17.8%, and in a positive sign, the for-sale inventory rose 7.3%. Economist Yun says there’s a chance prices “will level off as inventory continues to improve.”

WASHINGTON – U.S. existing-home sales rose in July, marking two consecutive months of increases, according to the National Association of Realtors® (NAR).

Of the four broad regions included in NAR’s analysis, three of four recorded modest month-over-month gains, and the fourth remained level. In a year-to-year comparison, two regions saw gains, one saw a decline and one was unchanged.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – grew 2.0% compared to June for a seasonally adjusted annual rate of 5.99 million in July. Sales also rose in a year-to-year comparison, inching up 1.5% (5.90 million in July 2020).

“We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” says Lawrence Yun, NAR’s chief economist. “Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren’t seeing as much growth because there are still too few starter homes available.”

Total housing inventory at the end of July totaled 1.32 million units, up 7.3% from June and down 12.0% from one year ago (1.50 million). Unsold inventory sits at a 2.6-month supply at the present sales pace, up slightly from the 2.5-month inventory recorded in June but down from 3.1 months in July 2020.

The median existing-home price for all housing types in July was $359,900, up 17.8% year-to-hear ($305,600). Each of NAR’s four regions showed price increases, and it’s the 113th straight month for year-over-year gains.

“Although we shouldn’t expect to see home prices drop in the coming months, there is a chance that they will level off as inventory continues to gradually improve,” Yun says. “In the meantime, some prospective buyers who are priced out are raising the demand for rental homes, and thereby pushing up the rental rates.”

Properties typically remained on the market for 17 days in July, unchanged from June and down from 22 days in July 2020: 89% of July’s homes sold were on the market for less than a month.

Almost one in three (30%) of July buyers were first-timers, a drop month-to-month (31% in June) and year-to-year (34% in July 2020). Individual investors or second-home buyers purchased 15% of homes in July, up from 14% in June but unchanged year-to-year. even with 15% from July 2020. All-cash sales accounted for 23% of transactions in July, the same as June but up from 16% in July 2020.

Distressed sales – foreclosures and short sales – represented less than 1% of sales in July, without any apparent change month-to-month or year-to-year.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.87% in July, marginally down from 2.98% in June. The average commitment rate across all of 2020 was 3.11%.

Single-family and condo/co-op sales: Single-family home sales increased to a seasonally adjusted annual rate of 5.28 million in July, up 2.7% from 5.14 million in June and down 0.8% from one year ago. The median existing single-family home price was $367,000 in July, up 18.6% from July 2020.

Existing condominium and co-op sales were at a seasonally adjusted annual rate of 710,000 units in July, down from 730,000 in June and up 22.4% from one year ago. The median existing condo price was $307,100 in July, an annual increase of 14.1%.

“As more homes come on the market, opportunities for prospective buyers continue to increase in regions across the country,” says NAR President Charlie Oppler. “But even though we are beginning to see some normalcy return, NAR continues to work alongside legislators and policymakers to ensure we are doing everything we can to boost the supply of safe, affordable housing in America.”

Regional breakdown: Existing-home sales in the Northeast remained steady in July, registering an annual rate of 740,000 for the second straight month and a 12.1% rise from July 2020. The median price in the Northeast was $411,200, up 23.6% from a year ago.

Existing-home sales in the Midwest rose 3.8% to an annual rate of 1,380,000 in July, a 1.4% decline from a year ago. The median price in the Midwest was $275,300, a 13.1% increase from July 2020.

Existing-home sales in the South rose 1.2% in July, recording an annual rate of 2,630,000, up 1.2% from the same time a year ago. The median price in the South was $305,200, a 14.4% jump year-to-year.

Existing-home sales in the West grew 3.3%, posting an annual rate of 1,240,000 in July, equal to the West’s level a year ago. The median price in the West was $508,300, up 12.5% from July 2020.

© 2021 Florida Realtors®

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Big Life Changes Spark Big Moves – Including Lost Loves

A “fresh start” pushes many singles to upend their life and seek a new one. Still, almost half of relocating love-losers pick a destination for its job opportunities.

NEW YORK – If you’re single and ready to mingle, should you move?

Many singles say they moved to a new city or state for a fresh start after ending a romantic relationship, with four out of five relocating, according to a new survey conducted by Cinch Home Services. Singles were more than two times as likely to make such a post-breakup move during the pandemic than before it, the survey found.

“With remote work becoming more common, moving doesn’t necessarily entail a job loss as often as it would have beforehand,” the study notes. “COVID-19 also caused major price fluctuations in living expenses, perhaps making a post-breakup move even more appealing.”

The top criteria for choosing a new city among singles, according to the survey:

  • Job opportunities (49.2%)
  • Cost of living (37.8%)
  • Proximity to family (33.5%)
  • Social scene (24.3%)
  • Landscape features (24.3%)

Source: “Best Cities to Go for Singles,” Cinch Home Services (June 8, 2021)

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Mortgage Giant Will Soon Accept Bitcoin Payments

United Wholesale Mortgage plans to accept cryptocurrency before the end of this year, saying it wants to be the first lender in the U.S. to do so.

NEW YORK – United Wholesale Mortgage (UWM), the second largest mortgage lender in the U.S., announced it will accept cryptocurrency for home loans by the end of this year. UWM wants to be the first lender to do so in the national mortgage industry.

“We’ve evaluated the feasibility, and we’re looking forward to being the first mortgage company in America to accept cryptocurrency to satisfy mortgage payments,” said CEO Mat Ishbia during UWM’s second quarter earnings call. “That’s something that we’ve been working on, and we’re excited that hopefully, in (the third quarter), we can actually execute on that before anyone in the country because we are a leader in technology and innovation.”

At first, the company plans to accept bitcoin for home loans, but it’s also evaluating ether and other cryptocurrencies. It hopes to have everything finalized and accept one or more digital currencies by at least the end of the year, the Detroit Free Press reports.

UWM also announced during its earnings call that it had a record volume of mortgage business in the second quarter. At the same time, however, its profits are shrinking, which is impacting other lenders in the mortgage industry due to fluctuations in interest rates.

The company’s net income during the second quarter was $138.7 million, down from $860 million in the first quarter, even as the lender closed on a total of $59.2 billion in mortgages – a company record.

Source: “Second-Largest U.S. Mortgage Lender Will Accept Payment in Bitcoin,” CNBC (Aug. 19, 2021) and “UWM Sees Business Growth, Says It Plans to Start Accepting Bitcoin for Mortgage Payments,” Detroit Free Press

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Appeals Court Overturns Beach Access Ruling

The decision overturns an earlier ruling that backed waterfront property owners. The issue focused on dry-sand parts of the beach, “customary use” rules and a 2018 law.

TALLAHASSEE, Fla. – A federal appeals court overturned a ruling that backed waterfront property owners in a battle with a Pinellas County town about public beach access. The decision by a panel of the 11th U.S. Circuit Court of Appeals focused, in part, on a 2018 Florida law that put restrictions on what is known as “customary use” of beaches.

The panel said U.S. District Judge James S. Moody should not have granted summary judgment to a group of property owners in Redington Beach who argued that an ordinance allowing public access to certain parts of the beach violated the 2018 law. The Atlanta-based appeals court also tossed out Moody’s conclusion that the ordinance resulted in a “taking” of property.

Friday’s decision sent the case back to district court for “further determination” about whether the town had properly established customary use of the disputed portions of the beach. Summary judgments are issued without full trials.

The Florida Constitution ensures public access to portions of beaches “below mean high water lines,” often described as wet areas of beaches. But the lawsuit and the 2018 state law focused on dry-sand portions of beaches closer to homes.

Customary use is a legal concept that involves people having access to property “based on longstanding customs,” the appeals court said Friday. The 2018 law put in place an extensive process for local governments that want to have ordinances aimed at ensuring customary use of beach areas above the mean high-water line, including requiring them to receive judicial approval.

The law took effect July 1, 2018, but Redington Beach approved an ordinance on June 6, 2018, designed to allow the public to continue the customary use of dry-sand areas of the beach.

In 2019, seven beachfront property owners filed a lawsuit challenging the ordinance, saying their lot lines included dry-sand portions of the beach. In a brief filed at the appeals court, attorneys for the property owners said the ordinance violated the state law and that Moody’s ruling in 2020 should be upheld.

“The district court properly declared the town’s customary use ordinance was void as violating (the state law),” the brief said. “There is simply no way to read (the state law) as authorizing the town’s decision to keep its customary use ordinance in effect beyond July 1, 2018.”

But the appeals court disagreed with the property owners’ reading of the law and said Moody erred in discounting evidence “supporting customary use.” It pointed to evidence dating back to Charles Redington, who founded the town in 1935 and donated beach-access points.

“As such, the town provided evidence suggesting that residents and nonresidents alike use the dry sand beaches, including residents who do not own beachfront property,” said the 24-page decision, written by Judge Beverly Martin and joined by Judges Britt Grant and Andrew Brasher. “This overview of the evidence is not exhaustive. Nevertheless, it reflects competent evidence put forward by the town in support of its customary use defense.”

Source: News Service of Florida

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Can You Fight a Plan to Add Townhouses to a Community?

STUART, Fla. – Question: We recently learned that the developer of our community is going to be acquiring adjacent land to add onto our existing community. We currently have single family homes and town homes which total of about 250 residences.

The plan, from what we understand, is to add somewhere around 100 additional townhouses. My biggest issue is that the current amenities – pool and gym – are not very large and, while they can accommodate the existing residents, we believe that the addition of almost 100 more residents will overtax these amenities. Is there anything that we can do? – S.B., Delray Beach

Answer: Developers have extremely wide latitude in deciding how they want to develop a community. And you are correct that until turnover occurs, they maintain that control. As a matter of fact, some developer rights even continue long after turnover. So, the question is: What can you do about it?

To be completely honest, there is very little that you can do as an owner in a developer-controlled association. Keep in mind that the community is going to be governed according to the terms contained in your governing documents. While developers have to follow the rules that they set forth in the documents, those documents will usually give the developer the right to annex additional land to your community, with very little in the way of limitations, especially before turnover. All-in-all, developers will leave themselves with extremely broad rights in the documents.

Notwithstanding this, you may have an argument that the addition of the townhouses violates the “scheme” of the community.

By “scheme,” I am referring to the overall nature of the community that was sold to you when you purchased your home. In your case, the argument could be that the addition of the townhouses takes away the use of the common amenities from existing owners due to the limited size of those amenities, as you described it.

Remember, I said you may have an argument. You need to review your documents very closely and speak to an attorney about how they could be interpreted, as developers have been down that road before and will likely include language designed specifically to derail any arguments on deviation from “scheme.”

As an example, I recently reviewed documents for an HOA that, amid other provisions, had the following language: “Developer has established an overall Development Plan. However, notwithstanding the above, or any other document, brochures or plans, Developer reserves the right to modify the Development Plan or any site plan at any time as it deems desirable in its sole discretion …” And this language, as well: “Developer reserves the right to change all plans and site plans … Developer may wish and has the right to develop adjacent property owned by Developer into residences, estate homes, villas, coach homes, townhomes, zero lot line homes, patio homes, multi-family homes, condominiums, rental apartments, and other forms of residential dwellings, as well as commercial development, which may include shopping centers, stores, office buildings, showrooms, industrial facilities, technological facilities, and professional offices …”

It is language like the foregoing that can frustrate your making successful arguments about a “scheme” change to prevent the adjacent property from being developed. In short, you have an uphill battle in trying to prevent the developer from moving forward with its plans, but you should consult with an experienced attorney to explore any potential options and strategies that you may have at your disposal that may be unique to your situation, as a lot of this will hinge on the language contained in the governing documents.

Question: What are the rules regarding owners’ ability to speak at board meetings? – R.K., Wellington

Answer: Florida law provides that either owners and/or their authorized representatives have the right to attend condominium association meetings that are open to the membership. You also have the right to speak at association meetings, with the caveat that you can only speak about the specific items on the agenda that was posted prior to the meeting.

Although most meetings are open to members, members generally cannot raise new issues that are not listed on the agenda. Also, keep in mind that not every board meeting is going to be open to members. For example, a meeting to discuss litigation with the association’s lawyer will be a closed meeting in order to preserve attorney-client privilege. Also, as a member, you are permitted to record an open meeting, if doing so is not unduly distracting.

For homeowner’s associations, Florida Statutes section 720.303(2) provides that members have the right to attend all board meetings, and that “the right to attend such meetings includes the right to speak at such meetings with reference to all designated items.” The statute then goes on to state that the board may adopt reasonable rules governing the frequency, duration, and other manner of owner statements.

It is important to note that this is slightly different from Chapter 718, which governs condominiums. The condominium statute provides that owners have the right to speak “with reference to all designated agenda items,” the distinction being that homeowner’s associations are not required by statute to have a detailed agenda while condominium associations are. The purpose behind allowing members to speak is that if the board is going to exercise business judgment, it needs to be informed, and part of this information gathering is hearing from the owners.

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, Adamczyk, DeBoest & Cross or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

© 2021 Journal Media Group, Stuart News. Harris Katz is a partner at the Law Firm of Goede, Adamczyk, DeBoest & Cross, PLLC.

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Land Sales: Going, Going and Going Up

NAPLES, Fla. – In parts of Southwest Florida, vacant residential lots are commanding record-high prices. With a shortage of homes on the market, more buyers are choosing to purchase land so they can build what they want. The trend has resulted in some eye-popping listing and sales prices for buildable dirt in the region, especially in Collier County.

One recent example? On Aug. 9, an undisclosed buyer purchased a more than one-acre property with 158’ of beach frontage for $18.05 million in Bay Colony. The lot sits in the single-family enclave known as The Strand, directly on the Gulf of Mexico at the north end of Pelican Bay, south of The Ritz-Carlton, Naples. One of only 12 beachfront home sites in the exclusive double-gated subdivision, it fetched more than any other lot in the waterfront community’s history.

According to the real estate agents involved in the sale, the buyer plans to build a four-story, 20,000-square-foot home on the lot – located at 7607 Bay Colony Drive. Public records show the buyer as a limited liability company, going under the name Dolphin Blue and managed by Thorp Investment Management Corp. in Naples.

Another example of the escalating land prices? Earlier this month, a double lot in Old Naples – at 59 Ninth Ave. S. – hit the market for $18.9 million. Based on its size, the lot has room for a 16,000-plus-square-foot home. Although it’s a house away from the beach, the listing boasts panoramic views of the Gulf of Mexico.

“It’s not even on the water. That’s pretty crazy,” said local real estate market expert Denny Grimes, of the asking price.

Another telling transaction? A 0.71-acre plot of waterfront land at 4100 Gordon Drive in Naples that went for $13.9 million in January after years of sitting on the market, resold for $18.9 million – or $5 million more – a few months later, Grimes pointed out.

“That’s an interesting thing,” he said. “Right?”

This year, a total of four residential lots have sold for more than $10 million in Collier County, through Southwest Florida’s multiple listing service, or MLS, Grimes said.

More records to set

There are five more lots on the market in that rare price segment in Collier, including one at 999 Admiralty Parade in Port Royal, with 122 feet of water frontage, listed at $25.9 million.

“Those super-duper land prices are a function of rising home prices and low inventory to choose from. So the alternative is to look for land, or people are buying older houses and tearing them down,” said Grimes, a longtime Realtor and president of his own sales team at Keller Williams Realty in Fort Myers.

South of Naples, Marco Island is seeing some crazy land prices of its own.

In the prestigious estate area, a waterfront property at the tip of Heights Court went under contract on Aug. 16 and when it closes it will likely top the all-time-high price paid for a residential lot on the island, said Jim Prange, a Realtor with Premier Sotheby’s International Realty. Listed at $6.3 million, the land should sell at – or near – the asking price, he said, based on the strong demand for housing on Marco.

“It could be a record price. We won’t know until it closes,” said Prange, as an observer.

Last June, a beachfront lot in Hideaway Beach, a gated community at the northwest corner of Marco, set the current record of $5.5 million on the island. A few years ago, a buyer could have purchased a waterfront lot in the estate area on Marco for $1 million, or even less, Prange said, but not anymore.

In the swanky area, there is just one waterfront lot on the market for less than $3.95 million. It’s priced at $1.8 million, due to site-specific challenges, Prange explained.

“There are actually bones on the property,” he said. “It’s an old Indian site. There is a little cemetery on the site, so you’ve got to build around it.”

A few buyers have purchased lots on Marco, then resold – or flipped – them for more money, to take advantage of the rising prices, Prange said.

One buyer got a waterfront canal lot for $340,000 about six months ago, for example, and expects to sell it for double the price. The lot is under contract for $700,000, with a closing imminent, said Prange, who’s involved in the transaction.

In 2010, Prange sold two larger waterfront lots on the tip of Scott Drive for $1.9 million each – and they recently resold for $5 million and $4.8 million, he said.

A new home

Most homebuyers on Marco Island are not in it for the money, Prange said.

Rather, many of them are making Marco their permanent home, fleeing from states with higher taxes and larger populations, where COVID can spread more easily through crowded places and there are more pandemic-related restrictions on residents and businesses.

“It’s amazing the younger people that are coming here,” Prange said.

That’s because, through the COVID crisis, more people have learned they can work remotely, giving them more freedom to live where they want.

“It made them realize too that life is a little short – and think about what is really important,” Prange said.

The Marco Island Area Multiple Listing Service shows 272 residential lots sold last year on the island. Now, there are fewer than 70 on the market, with another 25 pending, or under contract.

“Marco Island has quickly become the primary residence for many families,” Prange said. “Since I have been here, I have never seen a movement like we are seeing now.”

While lot prices have been on the rise in Southwest Florida since last year, they’ve really escalated in the past four months, particularly in Collier, Grimes said.

“Collier has very few homesites available, compared to Lee,” he said.

Scattered lots in Golden Gate and Golden Gate Estates have also seen price increases, but are still some of the most affordable in Collier. In Lee, lots can be found much cheaper, but they’ve ballooned in price as well.

Collier has just under 500 residential lots for sale, ranging from $20,000 to more than $25 million, Grimes said. Lee County has just under 5,000 residential lots for sale, ranging from $6,500 to $15 million, he said.

From January to June, Lehigh has averaged 550 lot sales a month, an increase of 170% from the same time last year.

Waterfront lot values are up 70% in Cape Coral, compared to last year.

In Cape Coral, builders are part of the rush to purchase land, as they snatch up sites to meet the strong demand for new homes in the city.

Over the year, lot prices for single-family homes are up 107% in Lehigh and 120% in Cape Coral – for dry ones, Grimes said.

“Those lot owners are happy,” he said.

However, Grimes pointed out that prices aren’t back to the artificial ones driven in part by speculators at the peak of the housing bubble in June 2005 – ahead of the Great Recession, which he’s happy about.

“It’s a bad sign if we see those numbers again,” he said.

Records broken

Mike Dodge, an assistant manager and director of market research at John R. Wood Properties in Naples, found record lot sales in a smattering of neighborhoods, communities and cities in Lee and Collier counties this year through the Southwest Florida MLS. That includes:

In Collier County:

  • A sale on Golden Oakes Lane for $561,000 in Oakes Estates
  • A sale on Brynwood Drive for $1.69 million in Quail West
  • A sale on Caribbean Court for $3 million in Pine Ridge
  • A sale on Kingfish Road for nearly $5 million in Royal Harbor
  • A sale on Banyan Circle for $2.95 million in Coquina Sands

In Lee County:

  • A sale on West Gulf Drive for nearly $3.9 million on Sanibel
  • A sale on South Seas Plantation Road for $5.6 million on Captiva Island

“I’m sure there are many more records in other communities. These are just from where I happened to search,” Dodge said.

His research also identified record home sales in a handful of areas, including Port Royal, where a mansion on Gordon Drive fetched $52 million in January – an all-time high price in Collier that generated headlines.

Another record sale stands out. A waterfront estate at 233 Mermaids Bight recently went for $13.7 million – making it the most expensive single-family home sale in the history of Park Shore. Custom designed and built by its owner, it has been described as one-of-a-kind, with coastal elegance inside and out.

Kim Price, a broker associate with Premier Sotheby’s International Realty, the exclusive listing agent, who marketed the property for sale, said the record-breaking price “demonstrates the high demand for Park Shore real estate.”

“This neighborhood is now being shopped alongside the sought-after areas of Port Royal and Aqualane Shores,” she said. “It offers a beautiful beach and easy Gulf access for boaters – all while being located in the heart of Naples.”

Even with record sales occurring for homes and lots, Southwest Florida is still “considered something of a bargain when compared to some other markets,” Dodge said. “It’s no secret to those of us who live here how special this place is and, based on the fact that we’ve now got buyers coming in from so many new feeder markets, it seems like that secret may have gotten out.”

Copyright © 2021 Journal Media Group, Naples Daily News, Laura Layden

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Appeals Court Refuses to End Eviction Moratorium

Realtor associations lost their appeal to halt the eviction ban extended to Oct. 3, which makes it likely that they’ll now ask the Supreme Court to consider their case.

WASHINGTON (AP) – A federal appeals court on Friday allowed the COVID-19-related pause on evictions imposed by the Centers for Disease Control and Prevention to remain in place, setting up a likely battle before the nation’s highest court.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia rejected a bid by Alabama and Georgia Realtors to block the eviction moratorium reinstated earlier this month. The panel said the appeals court had rejected a similar bid and a lower court also declined to overturn the moratorium.

“In view of that decision and on the record before us, we likewise deny the emergency motion directed to this court,” the judges said in the ruling.

The Realtors are likely to appeal to the Supreme Court, which voted 5-4 in June to allow the moratorium to continue through the end of July. But Justice Brett Kavanaugh – who joined the majority – warned the administration not to act further without explicit congressional approval.

The Biden administration allowed an earlier moratorium to lapse on July 31, saying it had no legal authority to allow it to continue. But the CDC issued a new moratorium days later amid mounting pressure from lawmakers and others to help vulnerable renters stay in their homes amid the surge of the coronavirus’ delta variant.

As of Aug. 2, roughly 3.5 million people in the United States said they faced eviction in the next two months, according to the Census Bureau’s Household Pulse Survey.

The new moratorium temporarily halted evictions in counties with “substantial and high levels” of virus transmissions and would cover areas where 90% of the U.S. population lives.

The Trump administration initially put a nationwide eviction moratorium in place last year out of fear that people who can’t pay their rent would end up in crowded living conditions like homeless shelters and help spread the virus.

Biden acknowledged there were questions about the legality of the new eviction freeze. But he said a court fight over the new order would buy time for the distribution of some of the more than $45 billion in rental assistance that has been approved but not yet used.

In urging the appeals court to keep the ban in place, the Biden administration noted that the new moratorium was more targeted than the nationwide ban that had lapsed, and that landscape had changed since the Supreme Court ruling because of the spread of the highly contagious delta variant.

The landlords accused Biden’s administration of caving to political pressure and reinstating the moratorium even though it knew it was illegal in order to buy time to hand out rental aid.

“As the President himself has acknowledged, the CDC’s latest extension is little more than a delay tactic designed to buy time to distribute rental assistance,” their attorneys wrote in court documents.

A lower court judge ruled earlier this month that the freeze is illegal but rejected the landlords’ request to lift the moratorium, saying her hands were tied by an appellate decision from the last time courts considered the evictions moratorium in the spring.

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

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How Will the Exurbs Fare in the Long Run?

Realtor.com: Outer suburbs saw the highest price growth in the past year, but “the jury is still out” if that continues once workers return to their offices.

SANTA CLARA, Calif. – A flood of new buyers moved to the outer suburbs during the pandemic. The exurbs became a new hot spot for home buyers who fled big cities in search of larger homes and greater affordability.

Exurbs saw the highest price growth over the past year, according to realtor.com®. But once workers return to their offices, will the exurbs remain desirable?

“The jury is still out,” says Danielle Hale, realtor.com’s chief economist. “It’s possible that some areas that saw prices rise because they were particularly attractive during the pandemic might not be able to sustain those high prices. … The factors that drew people to those areas, like having a lot of space and being far away from everything else, may change.”

Big cities are reporting higher numbers of people returning or moving there since vaccines became available and entertainment and restaurants reopened.

However, a shortage of homes for sale remains problematic for the housing industry. That shortage in first-ring suburbs and cities is still persuading many aspiring homebuyers to search further out for affordability and inventory. The offerings of larger homes and backyards in the exurbs continue to be alluring. Overall, housing experts are not predicting a drop in exurb home prices yet.

“The desire for affordability, which is only going to become more important as interest rates go up, is going to keep interest in the suburbs and outer suburbs high,” Hale says. “They have always been the escape valve for high city prices. It’s not a new phenomenon that, when people can’t afford the city, they look farther out.”

Also, exurbs offer an opportunity for homebuilders, who’ve been searching for more land to build.

“Exurbs have great potential for development,” Hale says. “They have more open space for builders to build and create things, which is a bit harder to come by the closer in you get to the city.”

Source: “Future of the Exurbs: Will Prices in the Outer Suburbs Stay High – or Fall?” realtor.com® (Aug. 18, 2021)

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Fed’s Powell: There’s No Returning to Pre-Pandemic Economy

The chair says the U.S. economy has been permanently changed by the pandemic, and the central bank must understand and adapt to those changes before making decisions.

WASHINGTON (AP) – Federal Reserve Chairman Jerome Powell said Tuesday that the U.S. economy has been permanently changed by the COVID pandemic, and it is important that the central bank adapt to those changes.

“We’re not simply going back to the economy that we had before the pandemic,” Powell said at a Fed virtual town hall for educators and students. “We need to watch carefully as the economy continues to get through the pandemic and try to understand the ways that the economy has changed and what the implications are for our policy.”

Powell said that, while it is not yet clear if the delta variant of COVID will have further impact on the economy, the country has already seen significant changes since the pandemic began shutting the country down in March 2020.

Those changes range from the increase in remote work, to restaurants offering more take-out meals, to real estate agents learning to show homes virtually, he noted. Many companies have already made large investments in technology to adapt to the challenges that the pandemic has presented.

“It seems a near certainty that there will be substantially more remote work going forward,” Powell said. “That’s going to change the nature of work and the way work gets done.”

Powell said the heavy investment by companies in new technology means there will be more jobs in the future associated with maintaining that technology but also potential job losses in industries focused on in-person contact. He said some of those industries may be moving to an “automated, no-contact model.”

This trend is already showing up in the jobs data, with the recovery slower in industries that rely on public interaction, such as travel, leisure and hospitality. Those are jobs disproportionately held by women and people of color and typically pay lower wages, Powell noted.

“It may be that some of these people will have a harder time finding their way back into the workforce without more education and training,” he said. He said there are millions of people who have lost service sector jobs and remain out of work and need to be supported. “That’s a part of the recovery that’s far from complete.” he said.

Speaking to the audience of students and educators, Powell said the pandemic could turn out to be an historical inflection point that will allow the current generation of students to turn the lessons learned into “profound tools of change.”

Students who have lived through the pandemic will see the world differently, he said.

“You have seen a world upended, but you have also seen a world that is rapidly changing — sometimes more in one week than some of us have experienced over the course of decades,” he said.

“This is an extraordinary time and I believe that it will result in an extraordinary generation,” Powell said.

At the town hall is an event started by Ben Bernanke, one of Powell’s predecessors as Fed chairman, and continued by former Fed Chair and now Treasury Secretary Janet Yellen. It seeks to highlight the importance of classes in economics.

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

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Tips for Creating a Neighborhood Profile Video

Sharing knowledge about an area helps agents develop rapport and credibility with consumers. It’s a good idea to show landmarks, amenities and other community aspects.

NORWALK, Conn. – Real estate professionals can highlight their expertise by recording videos about the communities they serve. The goal is to boost awareness and interest about an area and create leads. Sharing knowledge about a neighborhood also helps agents develop rapport and credibility with people interacting with their brand while also generating more traffic.

Making a neighborhood profile is a good opportunity for agents to introduce themselves and reveal their personality. Rather than create a sales pitch, agents can present the profile as a way to keep viewers in the know.

Agents can educate consumers through digestible segments related to things like the average cost of homes and affordability compared with other markets.

They can speak on camera as they stroll through a neighborhood, outlining the community and providing appealing statistics, such as population density and average temperature. Other aspects of a community that can be highlighted include a robust dining scene or exciting landmarks.

Agents also can take a trip into town or nearby commercial areas to showcase the different aspects of a neighborhood’s culture. They can then interview local mom-and-pop businesses and add them as b-roll or local testimonials.

Once agents merge the information and footage into a video, they can share it with their sphere, social media, and website.

Source: RISMedia (08/10/21) Grice, Jordan

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That’s It – I’m Done! How to Break Up with a Client

Red flags could include a customer’s unrealistic expectations, time-consuming and excessive demands, disrespect or even lack of proper communication.

SAN FRANCISCO – Real estate professionals should watch for red flags that may warrant dismissing a client. These red flags could include unrealistic expectations, time-consuming and excessive demands, disrespect or lack of proper communication.

Before letting a client go, however, agents should review their contract, which typically has built-in clauses that allow either party to terminate the agreement, also known as an “opt-out clause.”

If agents are contractually bound to their client, it might be worthwhile to have an honest discussion and set boundaries, rather than ending the relationship suddenly or letting the contract run its course and not renewing. Otherwise, the client might attempt to retaliate for violating the agreement.

As a last resort, agents could raise their rates to a level they think the client can’t afford. In some instances, the client isn’t the problem, but rather something like their property or credit score. For instance, a home is in bad condition, but the client is unwilling to make repairs to get it ready for market. In this case, the agent can tell the client he or she should be able to work with a cash buyer, who could offer as little as 50% below fair market price. In a case like this, the client could decide not to move forward.

If a client decides to criticize the agent after severing ties, the agent can highlight reviews, testimonials and social media to new clients to demonstrate their merit. Real estate agents who are good at their jobs should not be affected by one troublesome client.

Source: Inman (08/10/21) Babich, Luke

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Some Landlords Seek Exit Strategy During Eviction Ban

NEW YORK (AP) – When Ryan David bought three rental properties back in 2017, he expected the $1,000-a-month he was pocketing after expenses would be regular sources of income well into his retirement years. He also was counting on the rent money from the properties in Dupont, Pennsylvania, to help with the cash flow of his business buying and selling distressed properties, launched early last year.

But then the pandemic hit and federal and state authorities imposed moratoriums on evictions. The unpaid rent began to mount. Then, just when he thought the worst was over, the Centers for Disease Control and Prevention announced a new moratorium, lasting until Oct. 3. A federal judge dismissed a legal challenge to the order last week.

David, the father of a 2 1/2-year-old who is expecting another child, fears the $2,000 he’s owed in back rent will quickly climb to thousands more.

The latest moratorium “was the final gut punch,” said the 39-year-old, adding that he now plans to sell the apartments. “I have had this internal struggle going back and forth. I have lost sleep at night, and I have now come up with a decision to sell and walk away.”

Most evictions for unpaid rent have been halted since the early days of the pandemic and there are now more than 15 million people living in households that owe as much as $20 billion in back rent, according to the Aspen Institute.

A majority of single-family rental homeowners have been impacted, according to a survey from the National Rental Home Council, and 50% say they have tenants who have missed rent during the pandemic.

Smaller landlords with fewer than four units, who often don’t have the financing of larger property owners, were hit especially hard, with as many as 58% having tenants behind on rent, according to the National Association of Realtors. More than half of back rent is owed to smaller landlords.

Landlords, big and small, are most angry about the moratoriums, which they consider illegal. Many believe some tenants could have paid rent, if not for the moratorium. And the $47 billion in federal rental assistance that was supposed to make landlords whole has been slow to materialize. By July, only $3 billion of the first tranche of $25 billion had been distributed.

David points to two tenants who received paychecks throughout the pandemic but didn’t pay rent or bother to file for rental assistance. Others singled out delinquent tenants who they claimed still managed to drive a luxury car, get food deliveries or go on vacation.

“Without rent, we’re out of business,” said Gary Zaremba, who sold 40 of his properties in Ohio due to the moratorium and still has a quarter of his tenants in the remaining 100 buildings struggling to pay rent. He has helped some apply for rental assistance, he said.

“It’s like a restaurant that doesn’t have patrons,” he said. “I don’t get the rent. I can’t pay my maintenance staff. I have to lay them off. I can’t fix the buildings and keep them in good repair. So, that means they are going to get even worse off. I can’t pay my taxes.”

Zaremba, who also owns a handful of properties in New York City, sold some of his single-family homes to homebuyers and some multi-family commercial apartment buildings to small investors.

Many landlords are saddled with tens of thousands of dollars in lost rent – money that was meant for retirement, a college fund or for their investors, who themselves had sought a safe investment. They are maxing out credit cards or dipping into savings to pay property taxes, staff salaries, insurance, water bills and maintenance.

“I keep thinking to myself, when does my family get paid?” said Matthew Haines, who owns 253 units with his wife in the Dallas/Fort Worth area and is owed more than $300,000 in back rent. He has referred $250,000 of that to collections.

The couple put in $50,000 of their own money to avoid laying off their seven full-time and three part-time employees. Haines is also doing repairs like fixing an air conditioning unit or changing a pool light himself to save money. Their investors, retirees who typically get an annual return of 7% to 9%, got nothing last year on two multifamily apartments and 3% on a third one because of unpaid rent.

“We jumped through hoops to help our residents who were struggling. We have not evicted a single person trying to work with us, even though we have people who owe us seven, eight, nine months of rent,” he said. “We are trying to do the right thing but it’s becoming impossible.”

In upstate New York, Michael Reid sold three of his houses to stem losses – after paying some delinquent tenants thousands of dollars to leave. Already out more than $100,000 in back rent on 13 of his 31 units and more than $20,000 in unpaid water bills, Reid took out a $90,000 home equity loan on his house so he could pay property taxes and other bills. On Tuesday, he finally received $9,000 in federal rental assistance, a fraction of what he’s owed.

“I’ve lost an incredible amount of money on top of the rent owed,” said Reid, who also works as a mortgage loan officer, referring to his delinquent tenants in Binghamton and Endicott, New York. “Thank God, my day job pays pretty well.”

Some owners are taking advantage of a red-hot housing market to sell their units to deep-pocketed investors willing to wait out the moratorium or to families who plan to live in them. Buyers are increasingly out-of-town investors or equity funds, whom critics fear will renovate the properties and market them at much higher prices.

“A lot of landlords are disgusted. They are selling at losses. They are getting out period,” Reid said of the dozens of investors he talks with.

Even those sticking with the property business say the moratorium has forced them to change their operations. Some are leaving apartments vacant for months at a time, either because they lack the money to renovate or fear being stuck with nonpaying tenants. Some aren’t buying any new properties as long as the moratorium is in place; others will only buy in wealthier neighborhoods. Still others are bolstering their screening process and giving extra scrutiny to someone who was unemployed for long stretches during the pandemic or saddled their previous landlord with months of back rent.

“If somebody stiffed their previous landlord out of 12, 15 or 18 months rent, I don’t want to rent to them,” Reid said.

This could result in fewer places to live for low-income tenants facing eviction when the moratorium lifts.

“It makes it worse for everyone. It’s worse for tenants, in particular, because we are going to lose affordable housing,” said Stacey Johnson-Cosby, who with her husband owns 21 units in the Kansas City, Missouri, area.

“The investors are going to come. They are going buy the property, put money into it, renovate it and rent it at a higher amount.”

Rick Martin anguished over just that before selling two of his five buildings in the Dorchester neighborhood of Boston. Before that the 62-year-old left most of them vacant due to the moratorium, depriving him of thousands of dollars in rent.

“The minute they enacted the moratorium, that trigged my decision to sell the properties,” Martin said. “I did not want someone moving in whom I could never get rid of if they didn’t pay rent. That would make the financial situation worse.”

Martin said he was torn about the decision to sell to investors. One has turned a building into condos. Another has already doubled the rent on a three-family building.

“Honestly it’s a very difficult decision,” he said. “I want the small property owners to flourish and grow. But because of this moratorium, we are having everything cut out from beneath us.”

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Mortgage Rates Barely Move This Week: End at 2.86%

Without more homes listed for sale, mortgage money demand has evened out, leading to little week-to-week change. Last week, the 30-year FRM averaged 2.87%.

MCLEAN, Va. – Mortgage rates barely moved this week, however, they still dropped a small amount compared to last week. The 30-year, fixed-rate mortgage averaged 2.86% this week; last week is was 2.87%.

“Mortgage rates stayed relatively flat this week,” says Sam Khater, Freddie Mac’s chief economist. “Housing is in a similar phase of the economic cycle as many other consumer goods. While there is strong latent demand, low supply has caused prices to rise as shortages restrict the amount of sales activity that otherwise would occur.”

Mortgage rate averages for the week of August 19, 2021

  • The 30-year fixed-rate mortgage averaged 2.86% with an average 0.7 point, down slightly from last week’s 2.87%. A year ago, it averaged 2.99%.
  • The 15-year fixed-rate mortgage averaged 2.16% with an average 0.6 point, up slightly from last week’s 2.15%. A year ago, it averaged 2.54%.
  • The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.43% with an average 0.3 point, down slightly from last week’s 2.44%. A year ago, the 5-year ARM averaged 2.91%.

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iBuyers Bounce Back After Pandemic Hiatus

It should be challenging for iBuyers in a seller’s market, but they’re paying more. It could be a business strategy: Accept lower profits to assure long-term success.

PASADENA, Calif. – Defying predictions that the iBuying concept wouldn’t work in an intense seller’s market, this new breed of homebuyers has ramped up property acquisitions to record levels.

“iBuyers,” short for “instant buyers,” mostly stopped buying homes in mid-2020 as COVID-19 injected uncertainty into the housing market. Now, iBuyers have come back strong. They’re wooing home sellers by making aggressive offers and cutting fees.

As a result, the three biggest iBuyers – Opendoor, Offerpad and Zillow Offers – hit new highs for buying activity during the second quarter of 2021, according to research by Mike DelPrete, a scholar-in-residence at the University of Colorado.

“For anyone concerned that the iBuyer model wouldn’t be popular in a seller’s market, the evidence shows that it is resonating with consumers more than ever, and market conditions are in fact fueling its growth,” DelPrete says.

DelPrete himself was among the skeptics. With many homes attracting multiple offers, the thinking was sellers would have no trouble finding buyers – and the iBuyer pitch would fall flat.

iBuyers pay aggressive prices

Part of the reason iBuyers are finding so many takers: They’re paying a premium (as if home sellers needed any more good news in an era of super-low inventory and record-high prices).

The four major iBuyers – Opendoor, Offerpad, Zillow Offers and RedfinNow – made bids that averaged 104.1% of market value during the first half of the year, according to research by Zavvie, a real estate technology company that works with brokerages to help sellers compare offers from iBuyers. That’s up from 97.6% of market value last year.

“iBuyers are paying way over market prices for homes now to buy more of them,” DelPrete says. “Why? I think a big part of it is Opendoor is a public company and needs to demonstrate strong revenue growth.”

How iBuying works

iBuyers position themselves as a fast way to sell. Homeowners avoid the hassle of painting and staging their homes. Sellers need not clean and clear out for showings. iBuyers give a cash offer, and the seller can pick a closing date. The iBuyers then spruce up the homes and quickly put them on the market for sale.

While the companies are paying full price for homes, they had been collecting fees that ranged as high as 12% of the sale price. The average commission for a traditional real estate sale, by contrast, is a fraction of that.

However, iBuyers have been reducing fees so that they’re more competitive with traditional transactions. According to Zavvie, iBuyers’ average service fees dropped from 7.2% in 2020 to 5.1% by mid-2021.

The average concession charged for home repairs fell from 3.6% to 1.9%. In other words, the average hit for selling to an iBuyer is now just 7%, down from nearly 11% last year. Those fee cuts bring iBuyers’ fees in line with traditional sales.

Soaring home prices also have played in iBuyers’ favor. Many homeowners can’t close on another place until they retrieve the equity from their current home, and iBuyers promise fast, predictable sales.

“With supply constrained and demand so high, certainty becomes everything,” says Kerry Melcher, Opendoor’s head of real estate.

The pitch seems to be working. Zillow Offers reported that it bought a record 3,805 homes in the second quarter of 2021. That was more than twice its first-quarter volume.

“I confess to being quite excited by how well Zillow Offers is doing in such a hot seller’s market,” Zillow Group Chief Executive Rich Barton told Wall Street analysts in early August.

‘Extremely convenient’

The pitch appealed to Texas home seller Kenneth Powell. When he decided to sell his family’s house in a Dallas suburb this spring, Powell considered listing the starter home with a real estate agent. After Powell learned he’d get an identical price and pay similar fees by selling to an iBuyer, he chose that path.

Opendoor promised to close quickly – and with no caveats. “I know what a financing contingency is and what an inspection contingency is, and the whole can of worms that can open,” says Powell, a mortgage loan officer. “Even with good preapprovals and good prequalifications, there’s still a risk that it can fall through.”

By selling to Opendoor, Powell says, he netted the same amount he would have gotten through a traditional sale, but without the hassle of marketing the home, and without the uncertainty of an offer falling apart.

“It was extremely convenient for us,” Powell says. “We didn’t have to list our home. We didn’t have to rent a storage unit for our stuff.”

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Judge Dismisses Antitrust Lawsuit, Favors NAR Over Top Agent Network

NAR’s Clear Cooperation policy placed limits on pocket listings, leading a members-only “top agents” network for non-MLS listings to file a lawsuit. The ruling questioned some aspects of Clear Cooperation, but the judge said antitrust does not give TAN a right to “hoard listings among themselves.”

LOS ANGELES – Top Agent Network (TAN) filed a lawsuit against the National Association of Realtors® (NAR) and others, claiming an antitrust violation under NAR’s Clear Cooperation policy that placed new limits on pocket listings.

Exclusive listings must now be entered into the local MLS within one day after being publicly advertised, and MLS users who fail to do so could potentially lose access to their MLS.

In the case, U.S. District Judge Vince Chhabria ruled that TAN failed to show how NAR’s policy breaches antitrust law. He said TAN presented “a reasonable argument” for potential antitrust problems in some situations, but he also said, “TAN could never allege an antitrust injury from [NAR’s policy]” because the policy would improve the parts of TAN’s business model that make it anticompetitive.

He said NAR’s policy isn’t “anticompetitive to the extent that it prevents members of an exclusive listing service like TAN from concealing listings from NAR’s subscribers while simultaneously benefiting from access to NAR’s service.”

Under TAN’s business model, top agents in an MLS area shared listings among themselves first, however the “enter into the MLS within one day after publicly advertising” aspect of Clear Cooperation makes that difficult.

Chhabria also said that TAN is anticompetitive. Since it restricts membership to the top 10% of agents (by sales volume) in a market, it cannot use U.S. antitrust laws as a shield for its anticompetitive activities.

“The key pro-competitive benefit of [the MLS system] is that every NAR-affiliated MLS is open to any licensed real estate agent who is willing to pay the fees,” Chhabria said. He suggested that antitrust might be an issue for the courts to consider if another listing service was equally open to everyone.

Chhabria also noted that the top agents with membership in TAN earned that status working through the local MLS, and they “want to pull the ladder up behind them. … Instead of continuing to share listings with the open network of agents that supported their ascent, they would prefer to hoard choice listings among themselves.”

In a statement emailed to Inman News, TAN’s attorney – Paul T. Llewellyn, partner at Lewis & Llewellyn LLP – said the company was “exploring all available options to challenge” NAR’s Clear Cooperation Policy.

Source: Reuters (08/17/21) Scarcella, Mike; Inman News (08/17/21), Andrea V. Brambila

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Lawmakers Want FTC to Investigate Zillow Over Antitrust

Members of House and Senate antitrust subcommittees asked the Federal Trade Commission to see if Zillow’s acquisition of ShowingTime could violate U.S. antitrust laws.

WASHINGTON – U.S. lawmakers want the Federal Trade Commission (FTC) to investigate potential antitrust violations over Zillow Group’s pending $500 million acquisition of ShowingTime, a scheduling platform for home showings.

Rep. Ken Buck (R-Colo.) and Sen. Mike Lee (R-Utah), ranking members of House and Senate antitrust subcommittees, reportedly sent the FTC a letter urging an investigation into the acquisition.

Zillow Group has made several acquisitions over recent years, including one that allows it to operate as a broker. In February, Zillow announced plans to purchase ShowingTime, which it says will remain an open platform. The acquisition is still pending.

In their letter to the FTC, the lawmakers said they believe the acquisition could “further entrench Zillow’s consumer information advantage to the detriment of homebuyers and their competitors.” The letter also refers to Zillow’s Zestimate, alleging it could “unduly influence” homeowners who may be trying to sell their homes.

“The effect of Zillow’s acquisitions appears to be that it can effectively tell the homeowner what their home is worth, buy the home from the homeowner for that amount, and then turn around and immediately sell the home for a higher price,” the lawmakers stated in the letter to the FTC.

Zillow provided the following statement to GeekWire: “Since our announcement to acquire ShowingTime, Zillow and ShowingTime have worked constructively with the FTC staff in their thorough review of the transaction. … Key to our mission is our work to modernize the real estate transaction – which has been notoriously resistant to consumer-friendly change over the decades. By building an open and equitable service which is available to all agents and brokers, which will include ShowingTime, we are helping move the industry towards a more efficient, digital future that works to benefit consumers.”

Source: “Zillow Group Faces Antitrust Scrutiny From U.S. Lawmakers Over $500M ShowingTime Acquisition,” GeekWire (Aug. 13, 2021) and “Lawmakers Flag Zillow Deal for FTC Scrutiny,” Axios.com (Aug. 12, 2021)

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New-Home Construction Slumps 7% in July

Strong housing demand will keep pushing builders to build, and the number of new permits issued – a sign of future activity – rose 2.6%. But high material costs, fewer workers and land limitations hold back growth. July home starts rose only in the South, the area that includes Fla.

WASHINGTON (AP) – Home construction fell a sharp 7% in July as homebuilders struggled to cope with a variety of headwinds.

The July decline put home construction at a seasonally adjusted annual rate of 1.53 million units, the U.S. Commerce Department reported Wednesday. It was the slowest pace since April but was 2.5% higher than a year ago.

Applications for building permits, which can forecast future activity, rose 2.6% in July from the June level to an annual rate of 1.64 million units. It was the first monthly increase in permit applications since March.

Construction starts for single-family homes fell 4.9% in July to an annual rate of 1.11 million while construction of apartments of five units or more dropped 13.6% to a rate of 412,000 units.

Home construction was down in every part of the country except the South where housing starts rose 2.1%. The biggest decline was in the Northeast, a drop of 49.3%, followed by declines of 11.3% in the West and 6.9% in the Midwest.

According to a survey of builder confidence, expectations fell sharply in August to the lowest level in a year as builders struggled with high costs, supply shortages and rising home prices. Expectations dropped five points to a reading of 75 in the National Association of Home Builders/Wells Fargo survey.

While the peak of the housing frenzy may be past, economists believe strong demand will continue to drive the market.

“Housing demand and sparse inventory will give builders strong reasons to maintain solid levels of construction,” said Oren Klachkin, lead U.S. economist at Oxford Economics. “However, high materials prices, a limited supply of workers and limited land availability will constrain activity.”

Also on Wednesday, the Mortgage Bankers Association reported that mortgage applications fell 3.9% last week to their lowest level in a month, reflecting a drop in refinancing applications as mortgage interest rates rose.

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Fewer Bidding Wars May Open Door for More Buyers

Buyer competition has shown some signs of easing, however two Fla. metro areas – Tampa and Orlando – remain two of the top 15 U.S. metros for bidding wars.

SEATTLE – Housing market competition may show some signs of easing, as more markets report price cuts and fewer bidding wars. That may open the door to some buyers previously priced-out of the market to find success this fall.

In July, 60% of offers written by real estate professionals nationwide faced competition, but that’s the lowest level since January, according to an index that measures competing offers among Redfin real estate professionals. The bidding war rate is also significantly down from a pandemic peak of 74% in April. An offer is considered part of a bidding war if at least one competing offer is made.

“Competition has started to slow in the last three weeks,” says Scott Mercer, a real estate professional with Redfin in Sacramento, Calif. “We’re now seeing five to eight offers on homes instead of 25, and they’re coming in $5,000 to $10,000 above the listing price instead of $50,000 to $60,000. Buyers are pushing back. They’ve even started including appraisal contingencies again and making requests for repairs – things that were pretty much unheard of last year.”

Are sellers getting too greedy with list prices?

With more listings coming onto the market, buyers have more homes to choose from, which reduces competition. Also, housing competition typically eases in the summer following the spring homebuying season.

However, nothing about the pandemic-era housing market has strictly followed historical seasonal patterns.

Home prices remain high, which may price out some potential buyers, too. The National Association of Realtors® (NAR) reports that the median existing-home price for all housing types in June was $363,300, up 23.4% compared to a year earlier.

The markets with the largest share of bidding wars in July, according to Redfin’s index, were:

  1. Fort Collins, Colo.: 77.3%
  2. Orlando, Fla.: 77%
  3. Nashville, Tenn.: 74.6%
  4. Honolulu: 74.1%
  5. Colorado Springs, Colo.: 73.2%
  6. Sacramento, Calif.: 72.9%
  7. Charleston, S.C.: 71.4%
  8. Charlotte, N.C.: 70.8%
  9. San Diego: 69.8%
  10. Las Vegas: 68.6%
  11. Tucson, Ariz.: 68.4%
  12. Tampa, Fla.: 66.7%
  13. Denver: 66.5%
  14. San Francisco/San Jose: 66.3%
  15. San Antonio: 66.3%

Source: “Homebuyer Bidding War Rate Drops to Lowest Level Since January,” Redfin (Aug. 16, 2021)

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FHFA’s 2022 ‘Goals’ Expand Lending to Low-Income Americans

The proposed goals expand the number of Fannie and Freddie loans that would go to low- and moderate-income families, minorities, rural areas and underserved populations.

WASHINGTON – The Federal Housing Finance Agency (FHFA) proposed housing goals for Fannie Mae and Freddie Mac (the Enterprises) that would cover the years 2022 to 2024.

According to FHFA, the goals were “designed to ensure the Enterprises responsibly promote equitable access to affordable housing that reaches low- and moderate-income families, minority communities, rural areas and other underserved populations.”

FHFA proposed two new single-family home purchase subgoals that would replace a current subgoal. One new subgoal targets minority communities; the other continues to target low-income neighborhoods.

FHFA says that the new minority census tract subgoal should improve access to mortgage financing in communities of color. A mortgage qualifies under the new subgoal if:

  • A borrower has an income at or below area median income (AMI)
  • The property is in a census tract where the median income is at or below AMI and minorities make up at least 30% of the population

“The new subgoal for minority census tracts was designed to help preserve and support affordable housing in communities of color,” says FHFA Acting Director Sandra L. Thompson. “The subgoal benefits families at or below area median income, allowing them to stay in the communities they helped build.”

Proposed single-family housing goals

  • Low-income home purchase goal: 24% currently, rising to 28%
  • Very low-income home purchase goal: 6% currently, rising to 7%
  • Minority census tracts home purchase subgoal: Introduced at 10%
  • Low-income census tracts home purchase subgoal: Introduced at 4%
  • Low-income refinance goal; 21% currently, rising to 26%

For Fannie Mae and Freddie Mac to meet a single-family housing goal or subgoal, their percentage of mortgage purchases in that category must exceed either the benchmark level set in advance by FHFA or the market level for that year. The market level is determined retrospectively each year, based on Home Mortgage Disclosure Act (HMDA) data showing the actual goal-qualifying share of the overall market.

Multifamily housing goals

  • Low-income goal: Currently 315,000, rising to 415,000
  • Very low-income subgoal: Currently 60,000, rising to 88,000
  • Small multifamily (5-50 units) low-income subgoal: Currently 10,000 units, rising to 23,000

 To meet a multifamily housing goal or subgoal, Fannie and Freddie must purchase mortgages on multifamily properties (five or more units) with rental units affordable to families in each category. FHFA measures Enterprise multifamily goals performance against benchmark levels set in advance.

Interested parties are invited to submit comments on the proposed rule within 60 days of publication in the Federal Register. Comments should be submitted to:

Federal Housing Finance Agency

Division of Housing Mission and Goals

400 7th Street, S.W.

Washington, DC, 20219

Comments can also be submitted through FHFA’s website, fhfa.gov.

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New-Home Material Costs Rose Almost 20% in One Year

Lumber costs – down 30% in July but 72% higher than in Jan. – suggest prices are going down. But they aren’t. Year-to-year steel costs are up 109% and gypsum is up 16%.

CHICAGO – Building materials prices climbed 19.4% over the last 12 months – 13% in 2021 alone – according to the Bureau of Labor Statistics data.

Buyers are seeing those higher costs in the price of new homes. In June, the median sales price for a new home was $361,800, up 6% compared to a year earlier.

Steel mill product prices increased 10.8% in July following a 6.2% increase in June. Prices have increased 108.6% over the past year and 87.6% in 2021. Steel import tariffs have largely been blamed for the price swing.

Prices for gypsum products, used for drywall, rose 2.5% in July and are up nearly 16% in 2021. Copper has also been in short supply, builders report.

Softwood lumber prices decreased 29% in July, for the largest monthly decline in records dating back to 1947. Lumber costs started to move lower in mid-May. However, the price drop still hasn’t returned lumber to levels close to what they were before the pandemic. It’s down almost 30% since its peak, but it’s still 71.9% above January 2020 levels, according to the National Association of Home Builders.

NAHB says the cumulative effect of all the material costs, based on declining availability, drive up the price of new homes. Some builders are even halting new orders because of the difficulty in pricing projects.

“New residential construction remains strong, but building material pricing and availability are likely to remain significant headwinds,” says Charlie Dougherty, an economist at Wells Fargo.

Source: “Building Material Prices Climbing at Record Year-to-Date Pace,” National Association of Home Builders’ Eye on Housing blog (Aug. 12, 2021); “Rising Cost of Steel, Lumber, and Copper Is Hampering Homebuilding—and Pushing House Prices Out of Reach,” NBC News (June 16, 2021)

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Divorces Lead to About 732K Home Sales Each Year

Life changes spark home sales, and divorces are a big one. Of 1.2M yearly divorces, 61% involve the sale of a home. Finding these couples can be a bit tricky, though.

SAN FRANCISCO – Charles Curry, head of marketing for training platform Authorify, notes that approximately 1.2 million U.S. couples get divorced every year, of whom about 61% list their home for sale.

Divorcees listing a home are also motivated to sell, typically because they need the money. They have attorneys to pay and many want to buy another home once the divorce is finalized.

But where to find the names and addresses of the soon-to-be divorced?

Agents can find leads by accessing court records. And if that’s too time consuming, they can hire freelancers from sites like Fiverr to look up the records.

Agents should also consider forming relationships with divorce attorneys in their market and ask them to refer clients.

In divorce sales, Curry says trust is vital to form connections, and agents should emphasize that when reaching out to people going through a divorce. To get the listing, gain their trust.

While the one-on-one bond is important for building trust, however, it also means ensuring that every social media account an agent has features uniform information: their brokerage’s name, their business address, their license number, their contact information and their website link. They should also have good reviews from the last three months on all their online profiles, including Zillow, Realtor.com and Facebook.

Once agents get a lead, they need to reach out effectively. They need to satisfactorily answer issues, such as how divorcees can get the most money for their home, how they can navigate through the transaction with their ex, and how they can increase the value of their home.

Curry also advises agents to provide a comparative market analysis, a free guide on how to sell their homes and/or a digital book.

Finally, he suggests that agents send follow-up emails at least once per week to help stay top of mind.

Source: Inman (08/12/21) Brandt, Libertina

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Homeowners’ Do-It-Yourself Frenzy May Be Waning

Home Depot’s sales are still up, but not as “up” as they were only a few months ago. One expert says lots of homeowners remodeled during lockdowns – but not as many now.

NEW YORK – Home Depot’s sales continue to surge, though same-store sales appeared to come back to earth after a year in which the home improvement chain outperformed expectations repeatedly.

For the three months ended August 1, sales climbed to $41.12 billion from $38.05 billion. Chairman and CEO Craig Menear said in a prepared statement Tuesday that this was the first time the chain surpassed quarterly sales of more than $40 billion.

Revenue also surpassed the $40.71 billion analysts were expecting, according to a survey by Zacks Investment Research.

However, sales at stores open at least a year, a key indicator of a retailer’s health, increased 4.5% companywide, and 3.4% in the U.S. Wall Street had expected same-store sales of 5.4% according to FactSet. And while the average receipt per ring-up at Home Depot registers was higher, customer traffic slowed compared with the period last year when the pandemic kicked off frenzied do-it-yourself projects at home.

Home improvement stores have filled during the pandemic as people working from home took on new projects. Many also moved to places with more room for the home office, and that too fueled sales.

Yet sales of new homes fell for a third straight month in June, dropping by 6.6% to the lowest level in more than a year.

Neil Saunders, managing director of GlobalData, said in an emailed statement that most of last year’s sales growth was due to an increase in customers and a sharp rise in the volume of products bought thanks to the remodeling and decorating uptick that happened while people quarantined.

“These trends are now abating, albeit gradually, which is evident in the decline in the number of shoppers visiting Home Depot during the quarter,” he said.

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Loans Based on Rent-Payment History? Some Fear New Problems

Some worry that it waters down approvals and could lead to a future foreclosure crisis. Others say it will help the 17% of buyers who were already just shy of approval.

NEW YORK – The mortgage industry had mixed feelings about the Federal Housing Finance Agency’s (FHFA) move to count positive rental history in Fannie Mae’s underwriting process.

Advocates for affordable housing cheered the move. Lenders appeared to be supportive of the change. But some in the mortgage industry fear it is an irresponsible loosening of credit restrictions.

Starting Sept. 18, Fannie Mae will count 12 months of positive rental payment history in its Desktop Underwriter program. To be eligible, borrowers must be first-time homebuyers, pay a monthly rent of at least $300, purchase the house as a primary residence, and consent to sharing 12 months of their bank statement history.

Lenders must obtain a verification of asset report from one of Fannie Mae’s approved vendors to include with the borrower’s file. The inclusion of the rental payment history can only work in a borrower’s favor.

Phil Denfeld, chief operating officer of Fairfax, Virginia-based First Heritage Mortgage, said he is in favor of taking into account on-time rental payments. But, he cautioned, “It should not be at the exclusion of not factoring in, in some way, the negative stuff. If there’s one or two missed payments, great. If there’s a serious pattern, how will the American public feel when a bunch of people are defaulting on their loans?”

A half dozen loan officers HousingWire interviewed voiced similar concerns.

The FHFA’s policy, however, is not up for debate. And the change seems to be just the latest sign that the Biden administration is not afraid of using the GSEs (government sponsored enterprises, i.e., Fannie Mae and Freddie Mac) as leverage to advance its housing agenda.

“It was important to us to look for responsible ways to provide access for folks who have been traditionally boxed out of the ability to access homeownership,” said Malloy Evans, Fannie Mae’s head of single-family. “This was a way to do that in a way that gives them access that maybe wasn’t otherwise there.”

Evans said that the question of whether to ding borrowers for missed or late payments has more to do with the underlying data being used. It’s not evident from a bank statement whether a rent payment was late or not. Likewise, if a rental payment is missing in the asset verification report, it does not necessarily indicate payment was not made, Evans said.

From Fannie Mae’s perspective, the impact the change could have is potentially dramatic: 17% of borrowers who were recently declined would have been approved, had this policy been in place.

“It’s not relaxing our credit standards, it’s looking for reliable indicators of the borrower being able to meet our credit standards,” said Evans.

The Mortgage Bankers Association, which represents lenders, said in a statement that it supported the change.

“The ability to factor rental payment history into loan underwriting aligns with long-standing MBA recommendations to better recognize the complete population of mortgage-ready consumers,” a spokesperson wrote.

Advocates for affordable housing said the change was an important step forward to expand sustainable homeownership.

Mike Calhoun, president of the Center for Responsible Lending, said that incorporating positive rental payment history into Fannie Mae’s underwriting platform “removes a significant barrier, responsibly expanding access to mortgage credit and the economic opportunities that accompany sustainable homeownership.”

David Dworkin, CEO of the National Housing Conference, said he expects the change to lift borrowers who only narrowly do not meet the underwriting requirements, rather than dramatically raise credit scores. This is about “getting someone from a 660 to 680, not getting someone with a 590 and making them qualify,” said Dworkin. “This is only for people who were otherwise on the line.”

The change stands to make the biggest difference for borrowers who have little other credit history.

A quarter of U.S. households are underbanked or unbanked, while 17% of Black and 14% of Latino households lack access to traditional financial services, according to the Federal Deposit Insurance Corporation. Twenty percent of the U.S. population has little established credit history, disproportionately Black and Latino consumers, according to Fannie Mae research.

“For most renters, their monthly rental payment is their single largest recurring payment, but it’s not reported to credit agencies,” said Lesley Alli, HomePoint’s senior managing director of strategic partnerships. “They’re not getting the benefit from that.”

And because allowing rental history to figure into the underwriting process will make it easier for underserved communities to get federally backed mortgages, it may also help some lenders meet Community Reinvestment Act requirements more easily.

“Anything that brings in more borrowers helps to provide accessibility,” Alli said. “Fannie Mae has always had as part of its core mission providing accessibility and liquidity to the market; it’s the core of what they do. The ‘how’ has changed throughout the years.”

Copyright © 2021 States News Service

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Builder Confidence Hits 13-Month Low as Demand Drops

Homebuilder confidence hit its lowest level since July 2020. While labor shortages and supply challenges played a role, buyer “sticker shock” is the new concern.

WASHINGTON – Higher construction costs, supply shortages and rising home prices pushed builder confidence to its lowest reading since July 2020, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

Builder sentiment in the market for newly built single-family homes fell five points to 75 in August. It’s still in positive territory since anything about 50 means builders are on the happy side of the monthly study, but it’s trending in a negative direction.

“Buyer traffic has fallen to its lowest reading since July 2020 as some prospective buyers are experiencing sticker shock due to higher construction costs,” says NAHB Chairman Chuck Fowke, a custom home builder from Tampa. “Policymakers need to find long-term solutions to supply-chain issues.”

“Higher costs and material access issues have resulted in lower levels of home building and even put a hold on some new home sales,” adds NAHB Chief Economist Robert Dietz. “While these supply-side limitations are holding back the market, our expectation is that production bottlenecks should ease over the coming months and the market should return to more normal conditions.”

The HMI index gauging current sales conditions fell five points to 81, and the component measuring traffic of prospective buyers also posted a five-point decline to 60. The gauge charting sales expectations in the next six months held steady at 81.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell one point to 74, the Midwest dropped two points to 68, the South posted a three-point decline to 82 and the West registered a two-point drop to 85.

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.

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Realtor.com Launches Microsite With Fair Housing Resources

The real estate ad site says it built “Realtor.com for Everyone” to provide fair housing information and “demonstrate our commitment … to housing equality.”

CHICAGO – Realtor.com launched a new microsite that provides fair housing resources to renters and homebuyers.

Realtor.com for Everyone” features fair housing news and insights, renter and homebuyer resources, the ability to search for Realtors who’ve taken a diversity course, and links to real estate organizations such as the National Association of Hispanic Real Estate Professionals, the Asian Real Estate Association of America, and the LGBTQ+ Real Estate Alliance.

“There remains an inequality gap in the homeownership rates of Black, Hispanic, Asian American and Pacific Islander, and LGBTQ+ communities … in some cases by up to 30%,” says Maureen Schimmel, Realtor.com’s senior director of brand partnerships. “Nearly 100 million unique users visit our site every single month, and with that comes a big responsibility. We built Realtor.com/foreveryone to give you fair housing information and resources and demonstrate our commitment to helping advance housing equality for everyone.”

However, Realtor.com for Everyone doesn’t link to a real estate organization focused on Black homeownership, such as the National Association of Real Estate Brokers, though it may in the future.

“The /foreveryone site identifies the organizations with whom we’ve established relationships; we continue to reach out to other organizations to identify additional opportunities to collaborate,” says Stephanie Singer, spokesperson for Realtor.com operator Move.

Source: Inman (07/07/21) Brambila, Andrea V.

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