Yearly Archives: 2022

NAR: Pending Sales Dip 4% in Nov.

The number of homes under contract fell for the sixth month, but Economist Yun expects to see a rebound as late-2022 interest rate drops affect pending sales.

WASHINGTON – In November, pending home sales slid for the sixth consecutive month, according to the National Association of Realtors® (NAR). All four U.S. regions recorded decreases both month-to-month and year-to-year.

“Pending home sales recorded the second-lowest monthly reading in 20 years as interest rates, which climbed at one of the fastest paces on record this year, drastically cut into the number of contract signings to buy a home,” says NAR Chief Economist Lawrence Yun. “Falling home sales and construction have hurt broader economic activity.”

The Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – fell 4.0% to 73.9 in November. Year-over-year, pending transactions dropped by 37.8%. An index of 100 is equal to the level of contract activity in 2001.

“The residential investment component of GDP has fallen for six straight quarters,” Yun says, but “There are approximately two months of lag time between mortgage rates and home sales.” Since mortgage rates peaked about 7% in October and again in November before falling at the end of 2022, Yun expects pending sales to “inevitably rebound in the coming months and help economic growth.”

Pending home sales regional breakdown: In November, the Northeast PHSI slipped 7.9% to 63.3, a year-to-year drop of 34.9%. The Midwest index decreased 6.6% to 77.8, a fall of 31.6% from one year ago.

The South PHSI retracted 2.3% to 88.5 in November, dropping 38.5% year-to-year. The West index dropped by 0.9% in November to 55.1, retreating 45.7% from November 2021.

“The Midwest region – with relatively affordable home prices – has held up better, while the unaffordable West region suffered the largest decline in activity,” Yun says.

© 2023 Florida Realtors®


Mortgage Rates Move Up After 6-Week Decline

In Nov., the average 30-year, fixed-rate mortgage peaked at 7.08%, but six weeks of steady declines ended last week when it rose slightly to 6.42%.

WASHINGTON (AP) – The average long-term U.S. mortgage rate rose this week after falling for six straight weeks, adding to the challenges potential homebuyers face amid higher home prices and a limited supply of available houses.

Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate increased to 6.42% from 6.27% the week before. That is more than double the year-ago average rate of 3.11%.

The long-term rate reached 7.08% in late October and again in early November as the Federal Reserve has continued to crank up its key lending rate this year in an effort to cool the economy and tame inflation.

The big increase in mortgage rates has torpedoed the housing market, with sales of existing homes falling for 10 straight months to the lowest level in more than a decade.

While home prices are now dropping as demand has declined, they are still nearly 11% higher than a year ago. Higher prices and a doubling of mortgage rates have made homebuying much less affordable and a much more daunting prospect for many people.

George Ratiu, senior economist at realtor.com, calculates that the monthly payment for a median-priced home is now about $2,100 before taxes and insurance, up more than 60% from a year ago. The median is halfway between the highest and lowest figures.

Sales of new homes are also falling. Ratiu expects mortgage rates will remain above 6% next year and sales to stay low.

“All of these data are indicative of a market going through a major reset, which is the Fed’s goal,” he said.

The Fed has hiked its benchmark interest rate seven times this year to a range of 4.25% to 4.5%, the highest in about 15 years. It has signaled it may raise them another three-quarters of a point next year.

Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


What Does the U.S. 2023 Appropriations Bill Do for RE?

The $1.7T spending bill that funds the federal government through Sept. covers a number of RE priorities, such as buyer assistance, fair housing and flood insurance.

WASHINGTON – The National Association of Realtors® (NAR) waded through the massive

$1.7 trillion spending bill passed late in 2022 by Congress and created a PDF list of the initiatives that focus on real estate, many of which received increased funding.

The omnibus bill funds the federal government through September 30, 2023, and builds upon the FY 2022 budget to ensure federal continuity of services.

NAR’s list of funded priorities important to real estate

  • Anti-money laundering: Money to develop the beneficial ownership database, which includes information on real estate ownership to support anti-money laundering efforts.
  • Broadband: The USDA’s ReConnect Broadband program gets $364 million for loans and grants to fund construction, improvement or acquisition of facilities and equipment that provide broadband service in eligible rural areas.
  • Community Development Block Grants: Nearly $6.4 billion goes to the Community Development Block Grant (CDBG) program and other local economic and community development projects that benefit low- and moderate-income areas and people – a $1.6 billion increase in funding.
  • Community Development Financial Institutions Fund: $324 million for the Treasury Department’s Community Development Financial Institutions (CDFI) Fund, which promotes economic and community development in low-income communities, including investments in low- income housing.
  • COVID assistance programs: Among other things, increased funding goes to programs that include housing and rental assistance.
  • Disaster assistance: $27 billion will help communities recover from recent natural disasters, rebuild infrastructure and prepare for future events.
  • Elderly housing assistance: $1.435 was appropriated for the Housing for the Elderly and Housing for Persons with Disabilities program under HUD.
  • Emergency disaster assistance: $38 billion for emergency funding will help Americans impacted by recent disasters in the West and Southeast, including tornadoes, hurricanes, flooding and wildfires, as well as funding for FEMA’s Disaster Relief Fund.
  • Energy assistance: $5 billion goes to the Low Income Home Energy Assistance Program (LIHEAP), which helps low-income families pay their energy costs, including home energy bills, weatherization and certain energy-related home repairs.
  • Fair housing: $86 million goes to HUD’s fair housing grants and activities, including the Fair Housing Initiatives Program (FHIP), the Fair Housing Assistance Program (FHAP), and the National Fair Housing Training Academy.
  • Federal Housing Administration (FHA): The bill sets a limit of $400 billion in FHA commitments to guarantee single-family loans, plus $150 million for administrative costs through Sept. 30, 2024.
  • Flood insurance: The National Flood Insurance Program (NFIP) is now extended through Sept. 30, 2023. Before bill passage, NFIP expired on Dec. 23, 2022. The bill also increases flood map funding from $275 million to $313 million.
  • Ginnie Mae: Up to $900 billion can now be spent on new loan-guarantee commitments, and $40.4 million goes to salaries and expenses for the Government National Mortgage Association (Ginnie Mae).
  • HOME Investment Partnerships Program: $1.5 billion is provided for HUD’s HOME Investments Partnerships Program, which provides grants to states and localities to fund housing-related activities, including building, buying and rehabilitating affordable housing for rent or homeownership, as well as rental assistance.
  • Homelessness assistance: $3.6 billion for homeless assistance grants, which will help an estimated 1 million people. It expands assistance to special populations, including survivors of domestic violence, homeless youth, and new permanent supportive housing for people experiencing homelessness.
  • Housing Choice Vouchers: $130 million in new incremental funding for Section 8 Housing Choice Vouchers – enough to support an additional 11,700 low-income households.
  • Housing supply: $85 million for grants to reward state and local jurisdictions that reform land-use policies and remove barriers to affordable housing production and preservation. The program’s goal: To encourage state, local and regional jurisdictions to promote zoning practices and land-use specific policies that increase density, reduce minimum lot sizes, create transit-oriented development zones, streamline permitting processes, and permit a mix of housing types.
  • Infrastructure: $62.9 billion for the Federal Highway Administration, which includes funding for federal highway programs from the 2021 Bipartisan Infrastructure Framework and money to address structurally deficient bridges.
  • Manufactured housing: $225 million for the preservation and revitalization of manufactured housing and manufactured housing communities.
  • Native community housing: Over $1 billion for Native communities to purchase, construct, or rehabilitate housing and related infrastructure to address production demand and a need for higher quality housing stock.
  • Retirement savings: The bill updates rules relating to employer 401(k) and 403(b) plans by requiring them to automatically enroll all new, eligible employees.
  • Rural housing: $2 billion for the USDA’s Rural Housing Service – a $183 million increase in 2023. The money includes $40 million in rental assistance funds.
  • Small business programs: More than $1.2 billion for the Small Business Administration (SBA), including funds for SBA disaster loans, Entrepreneurial Development grants, and Small Business Development Centers.
  • Veteran housing: $2.7 billion for critical services and housing assistance for veterans.

© 2022 Florida Realtors®


As Rates Drop, Nov. New-Home Sales Increase

NAHB says new sales incentives offered by builders coupled with a mortgage-rate drop sparked a 5.8% increase in Nov. new-home sales.

WASHINGTON, Dec. 23 – November sales of newly built, single-family homes increased 5.8% to a 640,000 seasonally adjusted annual rate, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

However, on a year-to-date basis, new home sales were down 15.2%.

“Declining mortgage rates during the second half of November combined with builder sales incentives lifted the pace of new home sales for the month,” says Jerry Konter, chairman of the National Association of Home Builders (NAHB). “However, due to higher construction costs and ongoing supply-chain issues, the median price of a newly-built single-family home in November was $471,200, 9.5% higher than a year ago.”

“Higher construction costs has made building entry-level homes particularly difficult, and this is where we see the greatest amount of pricing out for the housing market,” adds NAHB Chief Economist Robert Dietz. “In November 2021, 13% of new home sales were priced below $300,000. That share has now fallen to 7%.”

A new-home sale occurs when a sales contract is signed or a deposit accepted. The home can be in any stage of construction: not yet started, under construction or completed. The November reading of 640,000 units is the number of homes that would sell if this pace continued for the next 12 months after adjusting for seasonal effects.

New single-family home inventory remained elevated at an 8.6-months’ supply (in varying stages of construction). The count of homes available for sale, 461,000, is up 18.2% over last year.

A year ago, there were 32,000 completed, ready-to-occupy homes available for sale. By November 2022, that number increased to 64,000, reflecting flagging demand and more standing inventory due to lower sales.

Regionally, new home sales fell in all four regions on a year-to-date basis, down 3.6% in the Northeast, 22.3% in the Midwest, 13.1% in the South and 19.3% in the West.

© 2023 Florida Realtors®


Prices No Longer Increasing by Double Digits

For over two years, monthly stats on home-price increases have reported something over 10%, but in Oct., Case-Shiller found 9.2% and FHFA reported 9.8%.

WASHINGTON – Annual price growth in the increasingly fragile U.S. housing market slid into the single digits in October for the first time in about two years when mortgage rates that month surged above 7% and further stifled demand, a pair of closely watched surveys showed last Tuesday.

The S&P CoreLogic Case Shiller national home price index increased by 9.2% in October, down from 10.7% in September, notching the first single-digit gain since November 2020.

Meanwhile the Federal Housing Finance Agency (FHFA), which oversees U.S. mortgage-finance entities Fannie Mae and Freddie Mac, said annual home price growth slowed to 9.8% in October from 11.1% in September, marking that index’s first non-double-digit gain since September 2020.

On a month-over-month basis, S&P Case Shiller’s index fell for a fourth straight month, while FHFA’s gauge was unchanged.

“As the Federal Reserve continues to move interest rates higher, mortgage financing continues to be a headwind for home prices,” Craig Lazzara, managing director at S&P DJI, said in a statement.

The housing market has suffered the most visible effects of aggressive Fed interest rate hikes that are aimed at curbing high inflation by undercutting demand in the economy. In December, the Fed raised rates again by half a percentage point, capping a year that saw its benchmark rate shoot from near zero in March to between 4.25% and 4.5% now – the swiftest rates have risen since the early 1980s. Fed officials projected rates would climb further in 2023, likely topping 5% .

Unlike other parts of the economy – many of which have yet to show a significant impact from the Fed’s actions – the housing market reacts in near real-time to the jump in borrowing costs engineered by the central bank.

The 30-year fixed mortgage rate breached 7% in October for the first time since 2002, more than doubling in the span of nine months, pulling the rug out from what had been a red-hot housing market fueled by historically low borrowing costs and a rush to the suburbs during the coronavirus pandemic.

December data showed the combined annual sales rates of new and existing homes through November had slumped by 35% since January – among the fastest falls on record – to the slowest since late 2011. New single-family housing starts and permit issuance skidded to a two-and-a-half-year low last month as well.

While mortgage rates have retreated since early November to around 6.3% this month, according to data from Freddie Mac and the Mortgage Bankers Association, they remain nearly twice the level they were a year ago at this time and will continue to weigh on the housing sector.

Economists do not, however, see a repeat of the housing price crash witnessed in the financial crisis when prices by S&P Case Shiller’s measure fell year-over-year for a full five years from March 2007 through April 2012. Unlike then, the supply of homes on the market remains extraordinarily limited and should keep a floor under house prices.

The National Association of Realtors earlier this month projected prices for existing homes – by far the largest part of the market – should remain more or less flat in 2023.

‘As the Fed tightens financial conditions, the housing market will likely slow further in the coming year,’ LPL Financial Chief Economist Jeffrey Roach said. ‘However, low inventory of homes available for sale should soften the impact from rising rates and insulate the residential market from a redux of the Great Financial Crisis.’

© Philippine Daily Inquirer (Published: 28-Dec 2022)


The Biggest Housing Buzzwords of 2022?

Most-used words in listing descriptions were basic, such as “room” and “bedroom,” but the top 10 also included “fireplace,” “pool” and “stainless steel appliances.”

MIAMI – As more and more people house-hunt online, compelling home descriptions are essential for a home to remain competitive in the online real estate arena.

Point2, a division of Yardi Systems, examined more than 730,000 home descriptions on Zillow to identify the buzzwords of 2022. It found that the most frequently used words in descriptions included “room” and “space,” which surpassed “beautiful.”

The words “spacious,” open,” “great” and “new” also appeared frequently, just behind conventional terms like “home,” “bedroom,” “bathroom” and “kitchen.”

Descriptions also focused strongly on outside terms, including amenities like “patio/porch” and “yard,” in addition to the more traditional features of “garage” and “parking.”

Also among the top 10 keywords were luxurious items such as “fireplace,” “pool” and “stainless steel appliances.”

Top term usage varied based on region, however. For instance, “garage” was mentioned most in the Midwest, “patio/porch” in the South, “garage” and “yard” in the West, and “full bath” in the Northeast.

Among price ranges, “yard” and “patio/porch” were most frequently found in listings under $1 million. For those above $1 million, “fireplace” was the No. 1 descriptor. Among listings over $5 million, “chef’s kitchen” came in at No. 2.

Source: South Florida Agent (12/21/22) Mack, Emily

© Copyright 2023 INFORMATION INC., Bethesda, MD (301) 215-4688


Right of First Refusal: Can Sellers Cancel Contracts?

A condo seller secured a sales contract, but the condo association has Right of First Refusal and opted to buy the condo under the contract’s terms. If the seller doesn’t want to sell to the association, can they cancel the contract altogether?

WEST PALM BEACH, Fla. – Question: Last June, I had intended to sell my condominium unit to a third party who extended a generous offer in cash. The sale was blocked by the association, who invoked their right of first refusal. As soon as I found out that I was supposed to offer my unit to the association, I decided that I no longer wanted to sell my unit.

The association sued me claiming I have violated their right of first refusal when they extended an offer to me containing the same terms and conditions as the outside offer, and they have asked a judge to force me to sell the unit to them.

I clearly denied their offer since I had no interest in selling my unit to the association – I was only interested in selling it to the third party.

Can the court force me to sell my unit to the association? – C.C.

Dear C.C. – Under relevant Florida case law, a community association cannot have a right to approve or deny the sale of a unit or lot without a right (or obligation, really) to purchase the unit at the same terms as the offer presented for approval. That is, the association must have a duty if it rejects the transaction to complete the sale on its own behalf (or sometimes the association can substitute a third party as an approved purchaser).

It’s not entirely clear why you don’t want to sell to the association. You entered a deal to sell your unit for a generous amount of cash, and the association has agreed to make you whole by completing the deal.

The fact that you are balking at that deal makes me wonder if you were selling the unit to a friend, or if instead there were some additional terms of the deal that are not being fulfilled by the association. In any event, whether they can enforce the clause in their declaration will really depend on the exact language of the right of first refusal itself and whether all of the procedures were completed properly.

There may be some technical issues related to how they enforced the right of first refusal, and perhaps an attorney representing you can find a loophole that gets you out of the deal. And if, for example, the declaration says that the association must purchase the unit at the same terms as the contract, perhaps there’s language in the contract itself that provides a loophole (for example, if the contract gives you the unilateral right to walk away from the deal at any time).

But specific performance (forcing you to sell) is a remedy that may be available, and so I do think there’s a real risk that you could be forced to sell your home.

Again, logically speaking, this should not be a bad thing as you wanted to sell your unit, and you will, in fact, be selling it for the exact amount – the ultimate buyer should be irrelevant to you. Still, I can appreciate that there are sometimes unrelated factors that may affect your desire to sell your home to the condominium itself, and so I think your best bet is to hire an attorney experienced in these issues to see if there’s a way to defend against the sale.

The longer you fight the inevitable, the higher your legal fees will be (and you may be responsible for the association’s fees as well); and that is going to cut into the generous amount you will receive for the unit.

Question: Under the condominium law, who can sign checks? – D.W.

Dear D.W. – The various community association statutes do not provide any guidance about who can sign association checks, and ultimately this is a practical question for the board.

I always advise that it is best to have two signers on every check, because it helps prevent fraud. Traditionally, the signers would be the president and treasurer, or perhaps the president and secretary; but it can be whatever combination works best for the board, depending upon who is regularly available.

Some community associations allow their property manager or the management company to sign checks on their behalf. I am not usually a fan of such an arrangement because it makes it much easier for a rogue employee to steal money from the association, and it may not come to light until a significant amount has been stolen.

I am not in any way suggesting that property managers are inherently untrustworthy (the vast majority are entirely trustworthy, just like people generally) – but when the board is directly involved (and particularly when two board members must sign any check), it adds a check and balance that will make fraudulent acts much more difficult. In fact, some management companies may even require that at least two board members sign every check. Also, your bank may have its own check signing requirements.

© Copyright 2022 The Palm Beach Post. Ryan Poliakoff, a partner at Backer Aboud Poliakoff & Foelster, LLP, is a Board Certified specialist in condominium and planned development law. This column is dedicated to the memory of Gary Poliakoff.


Confusion: Kick Out Clause vs. Right of First Refusal

When asked about the Kick Out Clause vs. a Right of First Refusal, most Realtors say, “I know they’re not the same thing – but I can’t tell you how they’re different.” Here’s a rule of thumb: The Right of First Refusal usually stems from something external, such as HOA docs.

ORLANDO, Fla. – Do you understand the difference between the Right of First Refusal and Kick Out Clause – what they mean and when might you encounter them?

Based on Legal Hotline calls, there’s some confusion over the terms, and they’re often used interchangeably. Some calls start with: “I’m looking for a Right of First Refusal rider.” Usually, however, this member is actually looking for the Kick Out Clause rider but confused over terminology.

What is a Right of First Refusal? How does that differ from the Kick Out Clause rider?

Right of First Refusal: In general, a Right of First Refusal is an interest granted to a person or entity to purchase property before another third-party can do so. A commonly seen example is a property association’s right of first refusal. Normally reserved within the community’s documents, this right allows the property association to purchase a property before another buyer can.

In this case, the contract between the seller and the buyer is usually given to the association for review within a certain timeframe (i.e. 10 days) to give the association time to decide whether or not to exercise that right. If the association chooses to do so, it then “stands in the shoes” of the buyer in the contract, meaning that the terms of the contract remain the same, pending renegotiation, and the association can’t make the seller change a term, such as the purchase price.

Another common scenario that might have a Right of First Refusal is in a landlord/tenant relationship. Some tenants might incorporate a Right of First Refusal into their leases, stating that they have the right to buy the home before another buyer does, should the landlord want to sell that property one day. The Florida Supreme Court-approved lease doesn’t contain any such language, so tenants that may want a right of first refusal in this context should consult their own attorney for the appropriate language to add to their lease.

Kick Out Clause: The language in kick-out clauses could vary depending on the contract used, but in the Florida Realtors/Florida Bar Residential Contracts for Sale and Purchase (FR/Bar), the Kick Out Clause language is in a rider.

Adding Rider X to the Florida Realtors/Florida Bar contracts clarifies that the seller can continue to show the property and enter into bona fide back-up contracts. Any back-up contract with a third-party is, of course, subject to termination of the primary contract.

Upon entering into a back-up contract, the seller must share a copy of said contract with the primary contract buyer, though with certain information, like the price, redacted.

This puts the ball in the buyer’s court, and the buyer must make a decision: either place an additional deposit down with the designated escrow agent and, in doing so, waive contingencies for financing and sale of buyer’s property (if any) or don’t place the additional deposit in the timeframe required, thereby terminating the contract. In the case of termination, the buyer would receive any initial deposit back and both parties are released from further obligations under the contract.

Once terminated, the seller then notifies the back-up contract buyer that that contract is in primary position.

When might a seller want to use this type of rider? A common use is when the buyer’s offer contains a contingency for the sale of a property the buyer currently owns. A seller may want to counter the buyer’s offer with this rider added in order to retain the ability to go with an entirely different contract with a subsequent buyer should they choose to do so.

In sum, a Right of First Refusal is granted to a party via a separate legal document (i.e. a declaration of association or a lease) to purchase property before another third-party. On the other hand, a Kick Out Clause rider to the Florida Realtors/Florida Bar contract gives the seller the potential opportunity to proceed with a back-up contract.

Still have questions? As always, feel free to contact the Florida Realtors Legal Hotline at 407-438-1409.

Meredith Caruso is Associate General Counsel for Florida Realtors
© 2022 Florida Realtors®


Code of Ethics and Arbitration Manual: 2023 Changes

The Code of Ethics has been around for over 100 years. It’s a dynamic document, ever evolving and adapting with the real estate industry. Changes generally go into effect at the beginning of the year. Here’s what’s new in 2023.

ORLANDO, Fla. – Dear Shannon: I’m our local association Ombudsman and recently attended Florida Realtors® Professional Standards Training. I learned that the Code of Ethics has been around for over 100 years, and that the Code of Ethics and Arbitration Manual isn’t a static document and changes along with the industry.

We were also told that changes, if any, usually take place at the beginning of the calendar year. That led me to wonder: Since Jan. 1, 2023, is here, are there any changes this year to the Code of Ethics and Arbitration Manual? – Tell Me What’s New

Dear Tell Me What’s New: Ombudsman is a crucial role, and I’m sure your local association appreciates all the work you do. I’m thrilled you had a chance to attend one of Florida Realtors Professional Standards Trainings.

You are correct. The Code of Ethics has been around for over 100 years. It was adopted in 1913 as a commitment to professionalism. Yes, it is also a living document that evolves with the real estate industry. I dare say it has proven to be dynamic, nimble and responsive to changing times.

And yes, you are also correct that, generally, if changes are made to the Code of Ethics and Arbitration manual, they go into effect on Jan. 1 of each year. To make transitions easier, all changes will be shaded in grey in the manual, so you’ll know what’s new. In 2023, the changes include:

Replace “handicap” with “disability”

The term “handicap” is replaced with “disability” in Article 10, the Standards of Practice, and in all corresponding references to the protected classes within the National Association of Realtors®’ (NAR) policy and resources. The rationale for this change? The term “handicap” is widely considered to be an antiquated, if not offensive, term.

“But doesn’t the Fair Housing Act still use the term ‘handicap’?,” you may be asking. Yes. Federal Fair Housing Act text still contains the word “handicap,” likely because it’s difficult to amend legislation. However, federal agencies have been using “disability” instead of “handicap” in regulations, policies and documents for a while now.

A change of terms may also lead you to wonder if the meaning changes in any way. The short answer: It does not. The change updates Article 10 with preferred terminology but keeps the substance and intent of the article intact, with no substantive difference in the definition of the terms. This is just an example of how the Code adapts to changing times.

Standard of Practice 3-9 replaced “the listing broker” with “the seller”

On Jan. 1, Standard of Practice 3-9 replaced “the listing broker” with “the seller.” The rationale for this change is simple: It clarifies and reinforces the existing ethical obligation for the listing broker to follow the instructions of the owner or seller when establishing terms related to the marketing and sale of the property.

Standard of Practice 3-9 change: REALTORS® shall not provide access to listed property on terms other than those established by the owner or the listing broker the seller.

Six new case interpretations relating to Standard of Practice 10-5: 

  1. Case Interpretation #10-6, Use of Hate Speech and Slurs on the Basis of Race
  2. Case Interpretation # 10-7, Use of Harassing Speech on the Basis of Political Affiliation
  3. Case Interpretation # 10-8, Use of Harassing Speech against Protestors
  4. Case Interpretation # 10-9, Use of Speech or Ideas included in Religious Doctrine
  5. Case Interpretation # 10-10, Use of Speech or Ideas included in Religious Doctrine
  6. Case Interpretation #10-11, Display of Symbols

Attention Professional Standards Administrators: Remove Board President from Ethics complaint dissemination process

Also changed on Jan. 1: Section 21, Ethics Hearing, Subsection (b) and Section 23, Action of the Board of Directors, Subsection (j) of the Code of Ethics and Arbitration Manual to remove the Board President from the process of disseminating the ethics complaint, response and the appeal decision.

The rationale for this change: It strengthens the grievance process by removing any appearance of impropriety due to the ability of a Board President to review a complaint and response at the beginning of the grievance process while, at the same time, also serving on the board that hears an appeal or ratifies a hearing panel’s decision.

The Preamble of the Code of Ethics and Arbitration Manual states, in relevant part; Realtors® continuously strive to become and remain informed on issues affecting real estate and, as knowledgeable professionals, they willingly share the fruit of their experience and study with others. What you do matters. Happy New Year!

Shannon Allen is an attorney and Florida Realtors Director of Local Association Services

Note: Advice deemed accurate on date of publication
© 2023 Florida Realtors®


Avoid Fair Housing Violations – Even Accidental Ones

When a buyer asks a question, such as one about crime rates, a Realtor serving as their best friend in the real estate industry feels compelled to give an honest answer. But that puts you in a tenuous position because you could be violating the Fair Housing Act.

ORLANDO, Fla. – When a buyer asks a question, such as one about crime rates, a Realtor serving as their best friend in the real estate industry feels compelled to give an honest answer. However, that puts a Realtor in a tenuous position because an answer could violate the Fair Housing Act in one of two ways: It’s a clear violation if that answer seeks to “steer” buyers of one protected class into neighborhoods.

And it could also be a subtle violation if the answer an agent gives to a white client differs from the answer they give to a member of a protected class.

“The bottom line is to treat every buyer the same,” says Florida Realtors Associate General Counsel Meredith Caruso. “If ‘Drive around the neighborhood at different times of the day’ is good advice for one of your buyers, it should be advice for all of your buyers.”

Under the Fair Housing Act, protected classes are race, color, religion, national origin, sex, handicap and familial status.

In general, agents should consider themselves “the source of the source of information” for buyers. It’s generally okay to steer them toward unbiased sources that provide answers; it may not be safe to give them the answers they seek directly.

Actions that won’t violate the Fair Housing Act

1. Ask “Do you have any hobbies?” Buyers new to Orlando may have a love for Disney – or they may want to stay as far away from the tourist areas as possible. Water-lovers may want easy access to a lake or canal. Business execs may want to minimize commute time to their place of business.

2. Parents ordinarily ask about local schools, so have printed information or a website page that offers resources, such as the website of the local school district. However, your opinion of the local schools is just that – your opinion – and could violate the Fair Housing Act.

3. Offer contact information for the local police department if they ask about crime rates. And just while “This isn’t a great neighborhood,” flirts with a fair housing violation, the opposite does too. Don’t give a personal opinion on local safety even if you think it’s a great place to live.

4. If clients specifically wish to know the racial makeup of neighborhoods, direct them to the U.S. Census Bureau research page.

What do you do if a buyer gets pushy and considers “good service” the same thing as telling them things that violate the Fair Housing Act? It’s okay to be honest and say you can’t provide that information due to fair housing concerns.

© 2022 Florida Realtors®


About that Money: Handling Commissions and Deposits

When providing real estate services, sales associates and broker associates often have broad autonomy. When receiving and handling money, however, license law limits their options.

ORLANDO, Fla. – What is supposed to happen when an associate receives funds related to a real estate transaction, such as an escrow deposit under a sales contract or a deposit under a lease?

The good news is that the answer is very simple. Under Florida Administrative Code Section 61J2-14.009, “Every sales associate who receives any deposit, as defined in Rule 61J2-14.008, F.A.C., shall deliver the same to the broker or employer no later than the end of the next business day following receipt of the item to be deposited.”

Note that the definition of deposit is broadly defined, so the safe answer for associates is to get money related to a real estate transaction out of their own hands and into the hands of their broker as quickly as possible, no later than the next business day.

How about receiving payment for real estate services the associate provided? This should come from just one source – the brokerage firm (or owner/developer, if that is where the license is registered). Section 475.42(1)(d), Florida Statutes provides “A sales associate may not collect any money in connection with any real estate brokerage transaction … except in the name of the employer and with the express consent of the employer …” There is one small exception, where a broker can give a closing agent written authorization to pay an associate directly at a real estate closing.

Can an associate form an entity to receive commissions? Yes, if the entity complies with Section 475.161, Florida Statutes, which permits the Florida Real Estate Commission (FREC) to “license a broker associate or sales associate as an individual or, upon the licensee providing the commission with authorization from the Department of State, as a professional corporation, limited liability company or professional limited liability company. A license shall be issued in the licensee’s legal name only and, when appropriate, shall include the entity designation.”

The wording of that statute confuses quite a few people, so read on to see a step-by-step picture of how this works.

Let’s say you are an associate whose legal name (as registered with FREC) is Anna Marie LeBeau. If you choose to form a limited liability company, then the name of your limited liability company must be “Anna Marie LeBeau, LLC.” This LLC should be a single person entity (just one member) and should not have a fictitious name, or DBA.

The second step is to register the entity with FREC. You can do this by submitting form DBPR RE 16. Section II of this form asks for your name and license number before providing two check-the-box sections. In your case, you would check the box “Add” followed by “LLC” before signing and submitting the form.

The third and final step is to inform your broker that future commission checks or other payments you earn for licensed real estate activity should be paid to Anna Marie LeBeau, LLC instead of your personal name. You can show your broker proof of the new entity by verifying your license on the website myfloridalicense.com. If you have successfully completed steps one and two, your license should now include the letters “LLC” after your name.

Finally, what can an associate do if a client or customer refuses to pay money owed for real estate services the associate provided? They can encourage the broker to take action – but they can’t take matters into their own hands, since Section 475.42(1)(d), Florida Statutes provides that “… no real estate sales associate … shall commence or maintain any action for a commission or compensation in connection with a real estate brokerage transaction against any person except a person registered as her or his employer at the time the sales associate performed the act or rendered the service for which the commission or compensation is due.”

In other words, they look to the broker to see if the broker is willing to pursue an unpaid commission.

Joel Maxson is Associate General Counsel for Florida Realtors

Note: Information deemed accurate on date of publication
© 2022 Florida Realtors®


Many Older Adults Should Downsize

A lot of 55-plus adults plan to die in their home, but choosing to move now beats being forced out later. Counseling, listening and kindness may create listings.

PASADENA, Calif. – Question: I am a healthy and active widow in my late 70s. My intention is to stay in my home forever. That is until a good friend visited and said, “You should be moving; the house is much too big with too many stairs. Move before you have to.”

That jolted me since I love where I live and love my home and community. It’s where my late husband and I raised our three children. After 40 years, what should I reluctantly be thinking about? Many thanks. D.M.

Answer: Thank you for your question which has at least two parts. The emotional part may be the more difficult one.

Home is full of memories and memorabilia. It’s where children are raised, holidays are celebrated and special dinners shared. Our home is part of our routine, it is familiar and within our comfort zone. We may have a beautiful flower garden, fruit-bearing trees, a bird feeder or maybe even a pool. And then there is the ocean. We may have neighbors who have become friends and stores, markets, movies, restaurants, doctors, hospitals or houses of worship that are familiar to us. Our home gives us a sense of stability and certainty. If just a few of the attributes mentioned are part of our lives, it’s a lot to give up – for the unknown.

Now to the practical part …

You are not alone in wanting to stay in your home. A 2022 Michigan University survey found that 88%, or almost nine out of ten, f adults age 50 and older want to age in place. A 2021 AARP survey similarly noted that 77% or almost three out of four want to do the same.

AARP respondents identified their priorities in making a move. A majority would consider living in an accessory dwelling unit (ADU) to be close to someone while maintaining their own private space. An ADU is a small home built on the same land as a larger home. They would want to live in a community that has in-home high-speed Internet, clean water, safe trails for walking, running or biking and well-lit community parks. They would consider moving if they could live independently, have a lower cost of living and more affordable housing choices.

Here’s the rub. Most adults are not prepared to age in place.

Sara Zeff Geber, author of “Essential Retirement Planning for Solo Agers” (2018, Mango Publishing) noted in a recent conversation that “aging in place is haphazard. You may think neighbors and friends will help, but that’s not a contract. They have agreed to nothing.” Her final comment, “Solo agers have no business to age in place; that’s not a plan.”

Not all older adults want to downsize. The pandemic served as a motivator for many to rethink their lifestyle and what is important. Family ranked high. Even before the pandemic, fewer empty nesters were downsizing according to Jessica Lautz, Vice President of Demographics and Behavioral Insights for the National Association of Realtors as quoted in Forbes (July 17, 2022).

Rather than less space, many older adults indicated they wanted extra space, particularly for their children and grandchildren who come home for the holidays. That extra space would have been useful for the many adult children who moved in with parents and grandparents in the early months of the pandemic. Zillow research reports that number was three million, an all-time high.

If downsizing and relocation is a consideration, the first question to ask is:

  • Why do I want to do this?
  • Is the current space too much to maintain?
  • Is it just too big for one or two people?
  • Are the costs for home ownership too high considering taxes, insurance, heating and general maintenance?
  • Have friends and neighbors moved or died?
  • Do I want to be closer to children and grandchildren?
  • Am I lonely?
  • Is transportation an issue particularly if one is no longer driving?
  • Is it pressure from peers and adult children?
  • Do I want to use the equity in my home to travel?
  • Do I feel the need to be closer to medical services?

Then there is something called pre-downsizing. Ellen Ryan, in an article for the online publication Next Avenue, offers several reasons to pre-downsize: You can work at your own pace without pressures or deadlines; you are physically up to the task; your loved ones will have less to do; you may be so happy with a decluttered environment that you may decide to stay in your home longer.

Most experts in the field suggest planning early in deciding whether or not to downsize and relocate. Given that the average home has 300,000 items, it’s never too early to sift and sort, regardless of the decision.

D.M. Thank you for your important question. In this holiday season and all seasons, know kindness is everything.

© Copyright © 2022 Pasadena Star-News. Helen Dennis is a nationally recognized leader on issues of aging and the new retirement with academic, corporate and nonprofit experience.


NAR: Nov. U.S. Home Sales Down 35.4% Year-to-Year

Even with fewer sales, the median home price was up 3.5% year-to-year. Month-to-month, home sales were down 7.7% and there’s a 3.3-months’ supply of inventory.

WASHINGTON – Existing-home sales declined for the tenth month in a row in November, according to the National Association of Realtors® (NAR). All four major U.S. regions included in NAR’s monthly reports recorded month-over-month and year-over-year declines.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – waned 7.7% from October to a seasonally adjusted annual rate of 4.09 million in November. Year-over-year, sales dwindled by 35.4% (down from 6.33 million in November 2021).

“In essence, the residential real estate market was frozen in November, resembling the sales activity seen during the COVID-19 economic lockdowns in 2020,” says NAR Chief Economist Lawrence Yun. “The principal factor was the rapid increase in mortgage rates, which hurt housing affordability and reduced incentives for homeowners to list their homes. Plus, available housing inventory remains near historic lows.”

Total housing inventory at the end of November was 1.14 million units, down 6.6% from October but up 2.7% from one year ago (1.11 million). Unsold inventory sits at a 3.3-month supply at the current sales pace. That’s identical to October but up from 2.1 months in November 2021.

The median existing-home price for all housing types in November was $370,700, a 3.5% increase from November 2021 ($358,200). Prices rose in all regions, marking 129 consecutive months of year-over-year increases – the longest-running streak on record.

Properties typically remained on the market 24 days in November, up from 21 days in October and 18 days in November 2021. Two out of three (61%) homes sold in November 2022 were on the market for less than a month.

First-time buyers were responsible for 28% of sales in November – unchanged from October, but up from 26% in November 2021.

All-cash sales accounted for 26% of transactions in November – identical to October and up from 24% in November 2021.

Individual investors or second-home buyers, who make up many cash sales, purchased 14% of homes in November, down from 16% in October and 15% in November 2021.

Distressed sales – foreclosures and short sales – represented 2% of sales in November, virtually unchanged month-to-month and year-to-year.

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.31% as of December 15. That’s down from 6.33% the week before but up from 3.12% one year ago.

“The market may be thawing since mortgage rates have fallen for five straight weeks,” Yun says. “The average monthly mortgage payment is now almost $200 less than it was several weeks ago when interest rates reached their peak for this year.”

Single-family and condo/co-op sales: Single-family home sales declined to a seasonally adjusted annual rate of 3.65 million in November, down 7.6% from 3.95 million in October and 35.2% from one year ago. The median existing single-family home price was $376,700 in November, up 3.2% from November 2021.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 440,000 units in November, down 8.3% from October and 37.1% from the previous year. The median existing condo price was $321,600 in November, an annual increase of 5.8%.

“For most of this year, prospective homebuyers have faced the dual challenges of elevated mortgage rates and limited housing inventory,” says NAR President Kenny Parcell. “Consumers can rely on Realtors to provide informed guidance on changing market conditions and trusted expertise throughout all steps of the home buying process.”

Regional breakdown: Existing-home sales in the Northeast decreased 7.0% from October to an annual rate of 530,000 in November, down 28.4% from November 2021. The median price in the Northeast was $394,700, an increase of 3.5% from the prior year.

Existing-home sales in the Midwest retreated 5.6% from the previous month to an annual rate of 1.02 million in November, falling 30.6% from one year ago. The median price in the Midwest was $268,600, up 3.9% from November 2021.

In the South, existing-home sales dwindled 7.1% in November from October to an annual rate of 1.84 million, a 35.0% decrease from the previous year. The median price in the South was $340,100, an increase of 4.4% from this time last year.

Existing-home sales in the West fell 12.5% from October to an annual rate of 700,000 in November, down 45.7% from one year ago. The median price in the West was $569,800, a 2.0% increase from November 2021.

“The West region experienced the largest decline in home sales and the smallest increase in home prices compared to the other regions of the country,” says Yun.

© 2022 Florida Realtors®


U.S. Consumer Confidence Bounces Back in Dec.

After two months of declines, the Confidence Index rose to 108.3 after last month’s 101.4. A preference for services and lower desire for big-ticket items continued.

BOSTON – Americans grew a bit more optimistic in December after two months of declines, according to the latest Conference Board Consumer Confidence Index.

The Index now stands at 108.3, up sharply from 101.4 in November.

The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – increased to 147.2 from 138.3 last month.

The Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions – improved to 82.4 from 76.7. However, Expectations are still lingering around 80 – a level associated with recession.

“Consumer confidence bounced back in December, reversing consecutive declines in October and November to reach its highest level since April 2022,” says Lynn Franco, senior director of economic indicators at The Conference Board.

“The Present Situation and Expectations Indexes improved due to consumers’ more favorable view regarding the economy and jobs,” adds Franco. “Inflation expectations retreated in December to their lowest level since September 2021, with recent declines in gas prices a major impetus. Vacation intentions improved, but plans to purchase homes and big-ticket appliances cooled further.”

Franco expects the consumer shift from big-ticket items to services to continue in 2023, “as will headwinds from inflation and interest rate hikes.”

Present situation in December

  • 19.0% of consumers said business conditions were “good,” up from 17.8%
  • 20.1% said business conditions were “bad,” down from 23.6%
  • 47.8% said jobs were “plentiful,” up from 45.2%
  • 12.0% said jobs were “hard to get,” down from 13.7%

Future expectations – six months from now

  • 20.4% of consumers expect business conditions to improve, up from 19.8%
  • 20.3% expect business conditions to worsen, down from 21.0%
  • 19.5% expect more jobs to be available, up from 18.5%
  • 18.3% anticipate fewer jobs, down from 21.2%
  • 16.7% expect their incomes to increase, down slightly from 17.1%
  • However, 13.3% expect their incomes to decrease, down from 15.8%

Toluna conducts the monthly Consumer Confidence Survey for The Conference Board. The cutoff date for the preliminary results was Dec. 15.

© 2022 Florida Realtors®


Save on Property Ins.? Maybe 13% in Fla. ‘Go Bare’

MIAMI – Florida Gov. Ron DeSantis last week signed into law a property insurance bill aimed at lowering the state’s skyrocketing homeowners insurance costs and staving off a looming crisis.

But some homeowners are already “going bare” in response to big policy renewal price increases, choosing to opt out of coverage, even though experts warn that’s a big mistake.

The state has no regulations mandating homeowners to carry insurance for fire, theft, hurricanes or floods. Mortgage lenders do require homeowners’ insurance, including windstorm coverage and, for homes located in designated flood zones, separate policies to cover damage from inundation.

But people can legally go without if they buy their homes in cash or own them outright by paying off their home loans.

That doesn’t mean it’s a good idea, experts say.

“I have often said that going without homeowners insurance is penny-wise and pound-foolish,” said Robert Hartwig, an economist and formerly president of the Insurance Information Institute who’s now a finance professor at University of South Carolina. “Few people would recover in a situation where their home was totally destroyed, and could through savings or borrowing be able to fully recover.”

How many Floridians are going without property coverage?

Florida regulators don’t track how many homeowners are choosing to forgo insurance. It’s a decided minority – but more go bare in Florida than across the rest of the country. The Insurance Information Institute estimated that 13% of all homeowners in the state don’t carry property insurance, nearly double the national average of 7%.

As policy costs continue to rise, that number could go quite a bit higher, experts and officials fear.

The country has over 30 million mortgage-free homes, according to a report published last month by Bloomberg News. The report also found that Palm Beach and Broward counties have the highest concentration of mortgage-free homes compared to any other county with over 500,000 residences.

About 460,000 condos and houses are paid off out of the nearly 1.2 million residences in the two counties. The concern is that many of those mortgage-free owners – whether in South Florida or elsewhere in the state – may be increasingly choosing to skip insurance altogether.

Who is going without insurance, and what are the risks?

While rising costs affect all income levels, they hit middle-income and low-income homeowners especially hard. Homeowners’ insurance typically runs between $4,000 and $5,000 a year for a single-family home in Florida, Hartwig said. Coverage for a condo is somewhat short of that. The additional cost for flood insurance varies widely, from hundreds of dollars to several hundreds of thousands.

Often those who forgo property insurance are low-income individuals that inherit a mortgage-free, family home and choose to skip coverage, Hartwig said.

The very wealthiest can afford to go bare and rebuild if disaster strikes. But lower-income homeowners who choose to forgo insurance because they can’t afford it are also the most vulnerable to losing everything in case of fire, flood or hurricane and being unable to rebuild. Many of them live in mobile homes or older houses or condos that may have been built under older building codes or are in need of repairs, and thus more susceptible to damage, experts say.

Because insurance also protects homeowners if someone is injured on their property, those who go without coverage risk full liability if someone sues them.

Because the risk to what is usually an individual or family’s single largest asset is so great without insurance coverage, state officials and experts strongly advise against dispensing with it.

“It is important for homeowners to purchase homeowners’ insurance,” said Florida’s Insurance Consumer Advocate Tasha Carter. “The purpose is to protect your largest asset. Without homeowners insurance, someone would be required to cover all of the costs to rebuild. Often times, the costs to repair are more than what someone can afford.”

Said Hartwig: “The insurance related to the value of the home is generally small. For a few thousand dollars a year you can protect your most valuable asset.”

I own a condo. Can I do away with my insurance?

Absent a mortgage, there is no requirement for an insurance policy covering the interior or contents of a condo unit, which is the owner’s responsibility. However, the condo association will usually have a master insurance policy to cover common areas, and that cost is passed on to individual unit owners, Carter said.

How can I figure out if I can afford to go ‘bare’?

Those willing to risk going without home insurance should consider the amount they need saved up in case of an emergency, the experts say. That includes not just enough to repair or rebuild, but the cost of temporary living expenses if a home becomes uninhabitable. The typical financial advice is to have three- to six-months’ worth of living expenses saved up.

Hartwig recommended saving about $725,000 to cover living expenses, fees to clear out debris, and reconstruction. That figure is for rebuilding a single-family home at the current median sale price in the state, which the Florida Realtors trade association puts at $407,000.

I can no longer afford property insurance. What can I do instead of going without it?

Homeowners can sometimes find savings by enlisting the help of an insurance agent or broker, though bargains in the current market, especially for windstorm insurance, which is calculated separately from basic fire and burglary coverage, don’t exist.

“Windstorm insurance is incredibly expensive,” said Thomas Nealon, an expert in property development at the University of Miami’s law school. “I got my bill and wondered if they had me confused with another McMansion in Pinecrest.”

Nealon advised obtaining multiple quotes and making sure you are taking into account the coverage and limits of each policy. Bundling different policies for homeowners and auto insurance with the same agent or company can also save some money on premiums. So can home improvements for storm and other hazard mitigation like burglar and fire alarms, hurricane-resistant windows and doors, including garage doors.

Experts also urged homeowners to take the highest deductible their insurer allows, which can save significantly on premiums. But be aware that will leave you holding the bag for damage and losses that could range well into the tens of thousands of dollars; so first be sure you can afford to cover that out of pocket.

If not, take a lower deductible. That can still save you some money while providing more coverage for losses and security.

© 2022 Miami Herald. Visit miamiherald.com. Distributed by Tribune Content Agency, LLC.


Nov. Housing: Higher Inventory, Prices, Lower Sales

Florida Realtors: Nov. closed single-family sales fell 38.2% in the face of rising interest rates, but for-sale inventory increased 105.2% to create a 2.8-months’ supply.

ORLANDO, Fla. – Florida’s housing market reported more inventory (active listings) and higher median prices in November compared to a year ago, though inflation and interest rates above 6% continued to influence buyer demand, according to Florida Realtors®’ latest housing data.

While the effects of higher mortgage rates were felt across Florida during November, a long-waited-for boost in inventory helped ease house hunters’ frustrations.

Closed sales of single-family homes statewide last month totaled 17,009, down 38.2% year-over-year, while existing condo-townhouse sales totaled 7,084, down 38.9% from November 2021, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

According to Florida Realtors Chief Economist Dr. Brad O’Connor, Freddie Mac’s weekly national mortgage market survey showed that the average 30-year fixed mortgage rate rose above 6% in mid-September and crested at about 7% in late October, where it remained for the next three weeks. Since then, it has fallen somewhat but remains above 6% – a rate level not seen since late 2008.

“The effect of these higher rates on homebuyer demand throughout the U.S. this fall was not a positive one,” O’Connor says. “Here in Florida, we could already see that conditions were worsening in response to the rise in rates above 6% in October’s housing market data. Based on those figures, it’s not surprising that the newly released November figures for closed sales from Florida Realtors exhibit similar declines – and we should probably expect similar declines in closed sales for December, as well, given that rates were at their recent peak near 7% for much of November, when many of the homes scheduled to close in December were going under contract.

“This is reflected in the year-over-year changes in new pending sales reported for November: a decline of 36.8% for single-family homes, and 42.1% drop for townhouses and condos.”

In the wake of the higher interest rates, the rate of price growth for Florida’s home sales continued to slow but remained above the long-term trend, O’Connor noted.

In November, the statewide median sales price for single-family existing homes was $400,000, up 9.6% from the previous year; for condo-townhouse units, it was $307,000, up 12.3% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

“In many local markets across the state, we’re starting to see more for-sale inventory, which gives previously frustrated buyers more opportunities,” said 2022 Florida Realtors President Christina Pappas, vice president of the Keyes Family of Companies in Miami. “Homes in Florida continue to go under contract quickly, though the time to contract continues to increase: The median time to contract for single-family existing homes last month was 29 days compared to 11 days during the same month a year ago. The median time to contract for existing condo-townhouse units was 27 days compared to 15 days in November 2021.”

Statewide inventory was higher last month than a year ago for both existing single-family homes, increasing by 105.2%, and for condo-townhouse units, up 47.4%. The supply of single-family existing homes increased to a 2.8-months’ supply while existing condo-townhouse properties were at a 2.7-months’ supply in November.

To see the full statewide housing activity reports, go to the Florida Realtors Newsroom and look under Latest Releases or download the November 2022 data report PDFs under Market Data.

© 2022 Florida Realtors®


Santa’s Home Off-Market but Viewable on Zillow

The entire compound is worth a Zestimated $1.2M and includes a 3D tour of Elf Village – the original tiny home – a state-of-the-art toy shop and tiny reindeer stables.

NORTH POLE – Santa Claus’ North Pole home is the only residence in the world with a southern view from every single window.

While never listed for sale, Zillow says St. Nick claimed it in 2016 and added touches that allow everyone to see what life is like in a 24/7 winter world.

Santa and Mrs. Claus first claimed their home on the Zillow website in 2016, and gave people around the world a glimpse into their enchanted lives where they live “off the grid.” The listing includes a 3D tour of the Elf Village, his toy-making factory, a garage dedicated to sleighs and stables suitable for eight tiny reindeer.

The secluded property is now worth an estimated $1,154,137, according to Zillow’s valuation tool.

More than 3 million people have Zillow-surfed Santa’s home, making it one of the most viewed” homes on Zillow’s website.

“Touring Santa’s house on Zillow has become a new, high-tech holiday tradition,” says Amanda Pendleton, Zillow’s home trends expert. “The immersive virtual 3D home tour of the Elf Village allows families to explore this corner of the North Pole from the comfort of their living room, preferably by the fire with a mug of hot cocoa.”

Six years ago, Santa’s home was worth just over $650,000, but even North Pole values have risen dramatically and his equity has surged. His house value has increased 12% over the past year and nearly 77% over the past six years.

Zillow says it first calculated a special Zestimate value for Santa’s one-of-a-kind property using comparable homes – some on remote coasts of Alaska – and applying a “Santa premium.”

© 2022 Florida Realtors®


Wells Fargo Paying $3.7B for Consumer Violations

CFPB says Wells Fargo charged illegal fees on mortgages and auto loans, and it improperly denied mortgage loan modifications. Overall, 16M people were impacted.

WASHINGTON (AP) – Consumer banking giant Wells Fargo agreed to pay $3.7 billion to settle charges that it harmed customers by charging illegal fees and interest on auto loans and mortgages, as well as incorrectly applying overdraft fees against savings and checking accounts.

Wells was ordered to repay $2 billion to consumers by the Consumer Financial Protection Bureau (CFPB), which also enacted a $1.7 billion penalty against the San Francisco bank Tuesday. It’s the largest fine ever leveled against a bank by the CFPB and the largest yet against Wells, which has spent years trying to rehabilitate its image after a series of scandals tied to its sales practices.

Regulators made it clear, however, that they believe Wells Fargo has further to go on that front.

“Put simply: Wells Fargo is a corporate recidivist that puts one out of three Americans at risk for potential harm,” said CFPB Director Rohit Chopra, in a call with reporters.

The bank’s pattern of behavior has made it necessary for regulators to take additional actions against Wells Fargo that go beyond the $3.7 billion in fines and penalties, Chopra said.

The violations impacted more than 16 million customers, the bureau said. In addition to improperly charging auto loan customers with fees and interest, the bank wrongfully repossessed vehicles in some cases. The bank also improperly denied thousands of mortgage loan modifications for homeowners.

Wells Fargo has been sanctioned repeatedly by U.S. regulators for violations of consumer protection laws going back to 2016, when employees were found to have opened millions of accounts illegally in order to meet unrealistic sales goals. Since then, executives have repeatedly said Wells is cleaning up its act, only for the bank to be found in violation of other parts of consumer protection law, including in its auto and mortgage lending businesses.

Wells paid a $1 billion penalty in 2018 for widespread consumer law violations, the largest against a bank for such violations at the time.

The bank had signaled to its investors that it anticipated additional fines and penalties from regulators and set aside $2 billion in the third quarter for that reason.

Wells remains under a Federal Reserve order forbidding the bank from growing any larger until the Fed deems that its problems are resolved. That order, originally enacted in 2018, was expected to last only a year or two.

CEO Charles Scharf said in a prepared statement Tuesday that the agreement with the CFPB is part of an effort to “transform operating practices at Wells Fargo and to put these issues behind us.”

While Wells Fargo tried to frame the agreement with the CFPB as a resolution of established bad behavior, CFPB officials said some of the violations cited in Tuesday’s order took place this year.

“This should not been seen as Wells Fargo has moved past its problems,” Chopra said.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


Housing Starts Down 0.5% – Single-Family 4.1%

The Nov. number of multifamily units under construction was its highest since December 1973,  even as the number of single-family starts dropped six months in row.

WASHINGTON – Single-family housing starts continued to fall in November, with the pace of construction down 32% since February, the month when mortgage rates began to rise.

The housing market continues to weaken as higher construction costs, elevated interest rates and flagging demand harm housing affordability. The count of multifamily units under construction reached a near 50-year high in November, but even there multifamily permit growth is weakening.

Overall housing starts decreased 0.5% to a seasonally adjusted annual rate of 1.43 million units in November, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The November reading of 1.43 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months.

Within that overall number, single-family starts decreased 4.1% to an 828,000 seasonally adjusted annual rate. Year-to-date (10 months, January to November), single-family starts are down 9.4%. The multifamily sector, which includes apartment buildings and condos, increased 4.9% to an annualized 599,000 pace.

“It’s no surprise that single-family starts are running at their lowest level since May 2020, given that builder sentiment has dropped for 12 consecutive months as builders remain fixated on rising building material costs and supply chain bottlenecks, with electrical transformers in particular being in short supply,” says Jerry Konter, chairman of the National Association of Home Builders (NAHB).

“One important characteristic of the single-family housing market is that there have been more single-family homes that completed construction than have been started over the past four months,” says NAHB Chief Economist Robert Dietz. “The most recent data for November shows there were 25,500 more single-family homes completed than started, thus pushing down the number of new homes under construction.”

On a regional and year-to-date basis, combined single-family and multifamily starts are 1.3% higher in the Northeast, 0.8% higher in the Midwest, 0.6% higher in the South and 7.0% lower in the West.

Overall permits decreased 11.2% to a 1.34 million unit annualized rate in November. Single-family permits decreased 7.1% to a 781,000 unit rate. Multifamily permits decreased 16.4% to an annualized 561,000 pace, the lowest reading for apartment permits since September 2021.

Looking at regional permit data on a year-to-date basis, permits are 5.6% lower in the Northeast, 0.5% lower in the Midwest, 0.6% lower in the South and 6.5% lower in the West.

The number of multifamily units under construction for November is 932,000 – the highest number since December 1973. The number of single-family units under construction has fallen for six consecutive months, declining to 777,000 homes in November.

© 2022 Florida Realtors®


New Year’s Resolution: Invest in Real Estate

Stocks mainly pay when they appreciate and bonds via coupons, but real estate offers five profit centers, such as income, tax savings and principal paydown.

NEW YORK – If you invest in stocks or bonds, you may be more accustomed to one way of getting paid. For stocks, typically you’ll only get paid from stock price appreciation. For bonds, you’ll typically only get paid from the coupon payments (similar to net rental income of rental properties).

Since 2000, government bond yields have averaged 2-4%, while corporate bonds have averaged 4-6%. Bonds can also appreciate and depreciate in price if the investor sells before maturity.

In comparison, let’s take a look at the five profit centers in real estate investing and how they can impact your long-term investment strategy:

  1. Net rental income: This is the money you make after all expenses (mortgage, insurance, property management fees) are deducted from your monthly rental income.
  1. Tax savings: When you invest in real estate, you can take advantage of numerous tax deductions and write-offs. This can help you save a lot of money come tax time!
  1. Principal paydown: Every month, a portion of your mortgage payment goes towards paying down your balance, paid by your renter. This is a great way to build equity in your property and reduce your overall mortgage balance.
  1. Home price appreciation: Over time, the value of your property is likely to increase. This can provide you with a nice return on investment when you refinance or sell the property. Out of all of the profit centers, home price appreciation will have the greatest impact on return on investment over a full market cycle (10-20 years.)
  1. Inflation hedging: When inflation goes up, the prices of goods and services also increase. But since your mortgage payments remain the same, your purchasing power actually goes up! This makes real estate a great hedge against inflationary pressures.

© Copyright © 2022 Financial News & Daily Record, All rights reserved.


Builder’s Index Tracks New-Home Slowdown

NAHB’s monthly survey of builders’ attitudes recorded higher pessimism every month in 2022. The Dec. reading was down 2 points to 31, the lowest reading since 2012.

WASHINGTON – Builder confidence in the market for newly built single-family homes posted its 12th straight monthly decline in December, dropping two points to 31, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

It’s the lowest confidence reading since mid-2012, with the exception of the onset of the pandemic in the spring of 2020. The index goes as high as 100 with 50 representing a relative balance between optimism and pessimism about the market.

“In this high inflation, high mortgage rate environment, builders are struggling to keep housing affordable for homebuyers,” says NAHB Chairman Jerry Konter.

“Our latest survey shows 62% of builders are using incentives to bolster sales, including providing mortgage rate buy-downs, paying points for buyers and offering price reductions,” says Konter. “But with construction costs up more than 30% since inflation began to take off at the beginning of the year, there is little room for builders to cut prices. Only 35% of builders reduced homes prices in December, edging down from 36% in November. The average price reduction was 8%, up from 5% or 6% earlier in the year.”

NAHB Chief Economist Robert Dietz says there’s a small silver lining in the latest report: “It’s the smallest drop in the index in the past six months, indicating that we are possibly nearing the bottom of the cycle for builder sentiment,” he says. “Mortgage rates are down from above 7% in recent weeks to about 6.3% today, and for the first time since April, builders registered an increase in future sales expectations.”

Builders still need to plan a year or more out when thinking about land and construction timelines, however, and it’s not yet clear how they’ll make decisions over the near term.

“NAHB is expecting weaker housing conditions to persist in 2023, and we forecast a recovery coming in 2024, given the existing nationwide housing deficit of 1.5 million units and future, lower mortgage rates anticipated with the Fed easing monetary policy in 2024,” says Dietz.

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.

The HMI index gauging current sales conditions fell three points to 36 and traffic of prospective buyers held steady at 20. The component charting sales expectations in the next six months increased four points to 35.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell five points to 37, the Midwest dropped four points to 34, the South fell six points to 36 and the West posted a three-point decline to 26.

© 2022 Florida Realtors®


Government Homelessness Goal: 25% Fewer by 2025

HUD says the annual homelessness count in Jan. 2022 found about half a million Americans on the streets. The White House’s ‘All In’ initiative hopes to change that.

WASHINGTON – The Biden administration said Monday it would work to reduce homelessness by 25% within the next three years in part by expanding housing support.

The U.S. Department of Housing and Urban Development said there were about a half million people who experienced homelessness at least one night as of January 2022.

President Joe Biden in a statement said the housing initiative, dubbed All In, is the most ambitious effort yet by any administration.

“My plan offers a roadmap for not only getting people into housing but also ensuring that they have access to the support, services and income that allow them to thrive,” he said. “It is a plan that is grounded in the best evidence and aims to improve equity and strengthen collaboration at all levels.”

Biden’s plan calls for improvements and expansions for housing support services. State-level governments, meanwhile, are called on to adopt their own 2025 goals to address homelessness.

Inflationary pressures are down from peak levels of close to 10% from earlier this year, though mortgages, rents and utility bills remain high. The Commerce Department reported inflation over the 12-month period ending in November was 7.1%, though shelter, education and apparel were among the higher-priced consumer items.

Only energy and groceries were higher than the 7.1% year-on-year inflation reported from the shelter component of the Consumer Price Index.

The strategy announced Monday builds on similar efforts from former President Barack Obama, for whom Biden served as vice president from January 2009 to January 2017.

Homelessness has increased slightly, however, even with a moratorium on evictions during 2021. The situation is particularly acute in Los Angeles, where newly-elected Mayor Karen Bass declared a state of emergency to deal with the situation in one of her first acts of office.

The city’s unhoused population has surged in recent years, with the nearly 42,000 people experiencing homelessness representing a near-2% increase from 2020, the last year a city survey was conducted. The slight increase experienced this year followed a 32% jump between 2018 and 2020.

“COVID-19 and its economic impacts could have led to significant increases in homelessness, however investments, partnerships and government agency outreach resulted in only a .3% increase in the number of people experiencing homelessness from 2020 to 2022,” HUD stated.

Copyright 2022 United Press International, Inc. (UPI). Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI’s prior written consent.


Despite Market Shifts, RE Education Still a Sound Investment

The pandemic opened a new world of online educational and training opportunities for Realtors that can help them keep up with the changing market.

Looking for a way to stand out as a trusted real estate professional? Sign up for NAR’s Commitment to Excellence program.

Real estate agents have a wealth of resources available to navigate the post-pandemic market, including online courses to keep abreast of the latest technology tools and market research.

Acquiring a new designation or certification offers another way for Realtors® to invest in their professional growth and demonstrate their expertise to homebuyers and sellers. A host of options are available — from the Accredited Buyer’s Representative (ABR®) designation to credentials recognizing a person’s mastery of social media marketing and advanced pricing and negotiation strategies.

Another useful tool for professional growth and attainment of expertise is acquiring new designations or certifications, which range from the Graduate, Realtor Institute and Accredited Buyer’s Representative designations to credentials acknowledging proficiency in social media marketing and advanced pricing and negotiation.

The National Association of Realtors®’ Commitment to Excellence program skills agents to assess, enhance, and highlight the highest levels of professionalism via tailored education plans and action steps.

Meanwhile, real estate master’s degrees are offered at some of the nation’s top universities — including Georgetown, New York University, the NAR Academy at Colombia College and the Massachusetts Institute of Technology — aimed specifically at imparting a rigorous understanding of the nation’s real estate market dynamics.

Real estate summits are another opportunity for agents to learn the latest market developments, participate in expert-led panel discussions, and join training workshops. Such resources will become essential as the housing market’s complexity and competitiveness persist.

Source: “In a Shifting Housing Market, Real Estate Education Remains a Sound Investment,” Real Estate Weekly


Top 5 Home Trends to Watch in 2023

Backyards top the list along with other up-and-coming home trends: outdoor rooms, edible gardens, and … mirrored walls. Plus, the “renovation generation” is here, and they’re not scared of a hammer.

SEATTLE — Move over, chef’s kitchens. Functional outdoor space is the new must-have for 2023 home buyers.

Zillow® data find backyards are now being mentioned 22% more often in for-sale listings compared to last year, suggesting this once-overlooked area will be one of the most sought-after spaces in the coming year.

The evolution of the backyard tops Zillow’s top five home trends to watch in 2023, based on Zillow’s data and analysis.

The humble backyard, once overshadowed by chef’s kitchens and walk-in closets, is the new luxury for today’s home buyers. Backyards are now highlighted in 1 out of every 5 Zillow listing descriptions. Mentions of patios and pools also surged, up by more than 13% and 11%, respectively, in 2022. 

“The rising popularity of outdoor features suggests the pandemic has changed the way we want to live for good, priming the backyard for a 2023 evolution,” said Amanda Pendleton, Zillow’s home trends expert. “When the pandemic forced all entertaining outdoors, homeowners reclaimed their backyards from the kids or the dogs. Now they’re rethinking how that space could serve as an extension of their home in new, creative ways.” 

In 2023, look for outdoor home gyms, natural pools alive with plants, edible gardens, and outdoor rooms for dining, lounging and quiet reflection.

Kitchen islands get their glow up

Today’s ideal kitchen now includes a spacious island. This hub can seamlessly flex from breakfast bar to homework headquarters to dinner prep station, which is likely why there was a 19% increase in mentions of this multifunctional feature in listing descriptions on Zillow this year.

“As we redefine the spaces in our homes, kitchen islands are being designed to accommodate dining and entertaining activities in the kitchen rather than the formal dining room,” said Kerrie Kelly, creative director at Kerrie Kelly Design Studio. “In 2023, we will see a surge of larger and even double kitchen islands using unique colors and materials.”

Instead of islands blending in with the kitchen, expect to see them stand out in contrasting paint colors or wood stains. Different countertop materials, combination wood and stone worktops, and mixed metal fixtures and hardware will become more common. Look for homeowners to increasingly repurpose unique furniture pieces or vintage tables as islands.

Mirrored walls are back 

A mirrored wall or ceiling might conjure up 1970s flashbacks, but this throwback feature is primed to make a 2023 comeback in a modern way. Mirrored surfaces reflect light and can make tight quarters feel more spacious. Today’s mirrored wall is often antiqued and applied in a grid, adding character and an on-trend Parisian feel. Mirrored walls or ceilings are now appearing 12% more often in listing descriptions on Zillow.

Privacy, please

For nearly three decades, contractors have been taking down walls across America as homeowners and builders embraced open-concept living. However, the pandemic exposed the fatal flaw of the open floor plan once everyone was living, working and schooling at home: the lack of privacy. A soundless space for video calls or a quiet sitting room for reading became more desirable than ever. More than a quarter of all Zillow listings now mention privacy or private spaces, a 7% increase over last year. 

As home buyers and homeowners seek out privacy, calm and quiet, expect the closed floor plan to make a return to style in 2023. Closed floor plans create cozy, comfortable, enclosed spaces within a home, allowing for bold color and design statements in each room. Homeowners who have open floor plans will look to compartmentalize their space through furniture layout and design to create private nooks and corners. 

The renovation generation

The youngest homeowners will lead a new wave of the pandemic-era renovation boom. A new Zillow survey finds 48% of homeowners younger than 40 have tapped the equity in their home in the past two years, most commonly to pay for home improvement projects. However, 90% of those homeowners under 40 who took out a home equity line of credit or second mortgage, or opted for a cash-out refinance, have yet to spend all the money they borrowed, suggesting 2023 may be the year they complete all the renovation projects on their to-do list. 

Look for this younger generation of renovators to focus on projects that make their homes more sustainable, low-maintenance and high-tech. Investing in drought-resistant landscaping and smart-home systems are energy-efficient projects that can help save money, the environment and boost a home’s value when it’s time to sell. 

SOURCE Zillow Group, Inc.


RE Q&A: Does Condo Association Pay for Leak Under Slab?

Check your documents, but generally, the association is responsible for what is inside the walls, the exterior of the building, and the common areas. The unit owner is responsible for the inner wall and what is inside their apartment.

Q: We had a water leak below the slab at our condo. We filed a claim with our insurance company which is paying for the repair. Our condo association won’t pay my deductible. Many residents have told me that since the leak was outside the condo, the association is responsible for the entire cost. What do I do? — Louis

A: Each condominium association deals with this situation based on the terms of the declaration of condominium and other association documents. Review these documents to see where your responsibility ends and your association’s begin.

Generally, determining who is responsible for a repair transition at the unit’s walls. The association is responsible for what is inside the walls, the exterior of the building, and the common areas. Each unit owner is responsible for the inner wall and what is inside their apartment.

While this is the most common way, you must confirm how your community does it by reviewing your association’s documents.

Your question states your insurance company is paying for the repairs. This indicates that despite what your neighbors say, the damage is your responsibility because your insurance is covering the claim.

In your case, since it seems you are responsible for the repairs, you will need to pay the deductible.

If your association was responsible for the damage, it would also have to cover the deductible.

Your condominium documents could make the association responsible for the damage to their part of the building while leaving you to fix the damage to your unit.

In this case, your insurance company would retain the right to look to your association for reimbursement if the damage was caused by your association because of negligence or neglected maintenance.

After you review the documents and your insurance policy, speak with your insurer to see who they believe is responsible and to coordinate your attempt to get your community to reimburse you for the deductible.

© 2021 Sun Sentinel (Fort Lauderdale, Fla.), Gary M. Singer. Distributed by Tribune Content Agency, LLC.


2023 Business Plan: Top 5 Ways to Prepare for the Unpredictable

Follow these strategies to help you set realistic goals and expectations based on a thorough assessment of your previous year. 

Agents who persevere in the coming year will be those who have taken steps to prepare amid the uncertainty.

The first step is to set realistic, clearly defined goals based on an in-depth assessment of the previous year.

Questions to ask include:

  • What beneficial skills did I develop?
  • Where did I find the most beneficial networking prospects?
  • Were there any missed opportunities I could have handled differently?

Next, agents need to make an effort to develop personal connections, including those with clients, vendors, and colleagues.

Eric Thompson, founder and CEO of The Leading Edge Academy, suggests, “Plan an event to support a charitable organization you love or throw a party with Instagram-friendly backdrops. The most connected agents are the ones who stay true to their personality.”

Other strategies for making connections include sending handwritten notes to past clients, leads, and leading members of the agent’s sphere of influence.

Agents need to work their database by communicating with clients or key referral friends via snail mail, emails, and texts, as well as in-person meet-ups such as catching up over coffee or hosting a luncheon event.

Thompson says it is also essential for agents to establish themselves as knowledgeable and credible, especially regarding pricing, inventory, and days on market.

Another crucial step for agents is to identify their purpose and adjust their mindset to gain business. In addition, every quarter, agents should reevaluate their approach and adjust for actual market conditions.


Economy Expected to End 2022 on Positive Note Ahead of Modest Recession in New Year

Following a significant decline in 2022 with a slight end-of-year uptick, housing and mortgage markets are not expected to meaningfully recover until 2024.

WASHINGTON — Following an upward revision to third quarter 2022 real gross domestic product (GDP) and stronger-than-expected incoming personal consumption data to begin the fourth quarter, the economy is now expected to eke out positive growth of 0.4 percent in 2022 before entering a modest recession in the new year, according to the December 2022 commentary from the Fannie Mae (OTCQB: FNMA) Economic and Strategic Research (ESR) Group.

The ESR Group views the current rate of personal consumption growth as unsustainable given the combination of a low personal saving rate and an elevated ratio of consumer debt to personal disposable income. The ESR Group forecasts 2023 GDP growth to be negative 0.5 percent, an improvement from last month’s forecast of negative 0.6 percent; the ESR Group then expects the economy to begin expanding again at a 2.2 percent annual growth rate in 2024.

Inflation, as measured by the Consumer Price Index, decelerated again in November, and the ESR Group expects the Federal Reserve to closely monitor historically stickier wage growth metrics to help determine how long it should continue its restrictive monetary policy regimen. With a recession predicted to begin in the first quarter of 2023, the ESR Group notes as plausible a scenario in which the Federal Reserve begins once again cutting the federal funds rate in mid-2023.

The ESR Group modestly revised upward its total single-family home sales projections for 2022 and 2023 to 5.72 million and 4.57 million units, respectively, due to the recent significant pullback in mortgage rates. The projection of a home sales decline in 2023 is due largely to the expected economic slowdown and the fact that most mortgage holders continue to have rates substantially below current market rates, creating a disincentive to move.

In 2024, the ESR Group expects home sales to rebound 14.7 percent to 5.24 million due to the expectation that economic growth will resume and mortgage rates will stabilize following an expected compression of the currently abnormally high spread between the 10-year Treasury rate and the 30-year mortgage rate.

“The economy caught its breath in the second half of 2022, but that doesn’t change our expectation that it will run out of air in early 2023 via a mild recession,” said Doug Duncan, Senior Vice President and Chief Economist, Fannie Mae. “While uncertainty still exists, a growing set of signs, including an inverted yield curve, weakness in the Conference Board’s Leading Economic Index, and a slowdown of manufacturing activity, support our ongoing contention that the economy is likely to contract next year.”

Duncan continued: “We expect housing to continue to slow, even though mortgage rates have come down recently. Home purchases remain unaffordable for many due to the rapid rise in rates over the last year and the fact that house prices, though certainly slowing and in some places declining, remain elevated compared to pre-pandemic levels. Of course, refinancing is still not practical for the vast majority of current mortgage holders, which we expect will also continue to constrain mortgage origination activity.”

Source: Fannie Mae


Report: Florida Will Need 570K Housing Units by 2030

The great weather, paired with the “work-from-anywhere” dynamic brought about by the pandemic, continues to bring more people to the Sunshine State, according to the FAA.

The Florida Apartment Association (FAA) has launched a new website, BuildFlorida2030.com, that tracks the state’s growing housing needs and includes a dashboard that tracks the percentage of renters, as well as a breakdown of land and construction costs by county.

“I think the big key takeaway is that Florida … has been growing at a tremendous rate over the past decade or so,” said Amanda White with the FAA. “Between 2010 and 2020 for example, the state grew by 15%, which amounts to 2.7 million people, (and) rank(s) second overall (in-state growth) after Texas.”

According to the data, the Orlando-Kissimmee-Sanford metro area has a shortage of 10,000 apartment units.

By 2030, Florida’s population is projected to grow by 3.2 million, which means the state needs 570,000 housing units by then.

“I think the pandemic really changed the dynamic and people are able to work from anywhere and I think a lot of states in the Sunbelt like Florida that have great weather, beautiful, natural resources and beaches and things of that nature, I think it really attracted folks to live where they want to live,” White said.

Source: “Florida will need 500K housing units by 2030 with growing population, experts say,” ClickOrlando.com


Long-Term Mortgage Rates Eased Down

Freddie Mac: The average 30-year fixed rate mortgage slipped to 6.31% from 6.33% previously, declining for the fifth straight week. It was 3.12% a year ago.

WASHINGTON (AP) – The average long-term U.S. mortgage rate declined for the fifth straight week, even as the Federal Reserve just raised its key borrowing rate for the seventh time this year and signaled there were more to come in 2023.

Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate inched down to 6.31% from 6.33% last week. A year ago the average rate was 3.12%.

The average long-term rate reached 7.08% as recently as early November.

Mortgage rates are still more than double what they were a year ago, mirroring a sharp rise in the yield on the 10-year Treasury note. The yield is mostly influenced by global demand for U.S. Treasurys and investor expectations for future inflation, which heighten the prospect of rising interest rates overall.

The Federal Reserve raised its rate again Wednesday by 0.50 percentage points in a bid to bring down the highest inflation in decades. It was the Fed’s seventh increase this year and pushed the central bank’s key rate to a range of 4.25% to 4.5%, its highest level in 15 years.

More surprisingly, the policymakers forecast that their key short-term rate will reach a range of 5% to 5.25% by the end of 2023. That suggests that the Fed is poised to raise its rate by an additional three-quarters of a point and leave it there through next year.

The Fed made clear, in a statement and a news conference by Chair Jerome Powell, that it thinks sharply higher rates are still needed to fully tame the worst inflation bout to strike the economy in four decades.

The sharp rise in mortgage rates this year, combined with still-climbing home prices, have added hundreds of dollars to monthly home loan payments relative to last year, when the average rate on a 30-year mortgage hovered around 3%.

That’s created a significant affordability hurdle for many would-be homebuyers, spurring this year’s housing market downturn. Sales of previously occupied U.S. homes fell for the ninth consecutive month in October, hitting the slowest pre-pandemic annual sales pace in more than 10 years.

The rate for a 15-year mortgage, popular with those refinancing their homes, fell to 5.54% from 5.67% last week. It was 2.34% one year ago.

Copyright © 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


Recession Fears Grow as Fed Continues Rate Hikes

WASHINGTON (AP) – After scaling 40-year highs, inflation in the United States has been slowly easing since summer. Yet the Federal Reserve seems decidedly unimpressed – and unconvinced that its fight against accelerating prices is anywhere near over.

On Thursday, stock markets buckled on the growing realization that the Fed may be willing to let the economy slide into recession if it decides that’s what’s needed to drive inflation back down to its 2% annual target.

The S&P 500 stock index lost roughly 100 points – 2.5% – in its worst day since early November. The losses came a day after the Fed raised its benchmark interest rate for the seventh time this year. The half-point hike the Fed announced – to a range of 4.25% to 4.5% – had been widely expected.

What spooked investors was Wall Street’s growing understanding of how much further the Fed seems willing to go to defeat high inflation. In updated projections they issued Wednesday, the Fed’s policymakers forecast that they will ratchet up their key rate by an additional three-quarters of a point – to a hefty 5% to 5.25% – and keep it there through 2023. Some Fed watchers had expected only an additional half-point in rate hikes.

Those higher rates will mean costlier borrowing costs for consumers and companies, ranging from mortgages to auto and business loans.

The policymakers also downgraded their outlook for economic growth in 2023 from the 1.2% they had forecast in September to a puny 0.5% – as near to a recession forecast as they were likely to make. What’s more, they raised their expectation for the unemployment rate next year to 4.6% from 3.7% now.

All of which suggested that the officials expect – or at least would accept – an economic downturn as the price of taming inflation.

The message the Fed was sending, said Ryan Sweet, chief U.S. economist at Oxford Economics, was blunt: “We’re going to break something. We’re going to break inflation or we’re going to break the economy.”

Many investors had convinced themselves that with inflation pressures gradually easing, the Fed might soon declare some progress in their fight and perhaps even reverse course and cut rates sometime in 2023.

There was seemingly reason for optimism: Consumer prices rose 7.1% last month from a year earlier, down from 9.1% in June and the fifth straight drop. Even more encouragingly, on a month-to-month basis, prices inched up just 0.1%. And core inflation, which excludes volatile food and energy costs and which the Fed tracks closely, rose just 0.2% from October to November, the mildest rise since August 2021.

A slowing economy has eased pressure on supply chains, which had previously been overwhelmed with customer orders, causing shortages, delays and higher prices. Oil prices, too, have plunged, easing prices at the pump. A gallon of unleaded gasoline cost an average $3.19 on Thursday, down from $5.02 in mid-June, according to AAA.

Yet Fed Chair Jerome Powell, who had been slow to recognize the inflation threat when it emerged in the spring of 2021, was in no mood to celebrate. Powell essentially shrugged off the signs of incremental progress.

“Two good monthly reports are very welcome,” he told reporters Wednesday. “But we need to be honest with ourselves… 12-month core inflation is 6%” – three times the Fed’s target. “It’s good to see progress but let’s just understand we have a long ways to go to get back to price stability.”

Powell seemed to bat down hopes that the Fed might end up cutting rates by late next year – a move that typically acts like steroids for markets and the economy – unless inflation had dropped significantly by then, which he does not appear to expect.

The policymakers increased their inflation forecast for next year above what they were expecting back in September. It suggested that they feel their anti-inflation fight isn’t having as much impact as they had hoped.

Many economists were caught off-guard by that change. For next year, the Fed is projecting more rate hikes, a slower economy and higher unemployment than it did three months ago.

All those things typically help tame inflation. Yet the Fed’s officials predict that their preferred inflation gauge will be 3.1% at the end of 2023, up from their 2.8% forecast in September. That’s above their 2% target and likely too high for them to feel they can cut rates.

The Fed wasn’t the only source of rising recession fears Thursday. The European Central Bank, which is waging its own aggressive war against inflation, signaled that it, too, might send rates higher than markets expected, thereby raising the likelihood of a downturn in Europe.

On Thursday, the U.S. government reported that Americans slashed their spending at retailers in November. That was disconcerting news in the midst of the holiday shopping season. And the Federal Reserve Banks of New York and Philadelphia issued downbeat reports on manufacturing in their regions. Yields on long-term Treasurys fell, a sign that bond investors are growing more concerned about a possible recession.

Even the goods news out Thursday – a drop in the number of Americans seeking unemployment benefits – had a downside: It reinforced the Fed’s concern that a strong and resilient job market is putting upward pressure on wages and overall inflation.

The Fed is especially worried that a worker shortage in the labor-intensive services sector – everything from restaurants and hotels to airlines and entertainment venues – could keep pay growth high and make inflation more intractable.

Sweet of Oxford Economics said he suspects that “the Fed is overstating how strong inflation might be.”

But he said he sympathized with its predicament: Powell and the other policymakers fear that a failure to curb high inflation – even if it means a recession next year – would lead to a central bank’s nightmare scenario: “stagflation.” That’s a worst-of-all-worlds combination of weak growth, high unemployment and persistent inflation.

It’s a problem with no clear solution.

“Faced with that choice,” Sweet said, “they’ll do everything they can to prevent it.”

Choe reported from New York. AP Economics Writer Christopher Rugaber contributed to this report.

Copyright © 2022 The Associated Press, Paul Wiseman and Stan Choe, AP business writers. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.