Monthly Archives: January 2022

Fed Says It May Raise Interest Rates in March

In the face of persistent inflation, the Fed announced Wed. it would soon raise interest rates. That’s likely to push all types of credit rates – including mortgages – higher.

WASHINGTON (AP) – The Federal Reserve signaled Wednesday that it plans to begin raising its benchmark interest rate as soon as March, a key step in reversing its pandemic-era low-rate policies that have fueled hiring and growth but also escalated inflation.

With high inflation squeezing consumers and businesses and unemployment falling steadily, the Fed also said it would phase out its monthly bond purchases, which have been intended to lower longer-term rates, in March.

The Fed’s actions are sure to make a wide range of borrowing – from mortgages and credit cards to auto loans and corporate credit – costlier over time. Those higher borrowing costs, in turn, could slow consumer spending and hiring. The gravest risk is that the Fed’s abandonment of low rates could trigger another recession.

The central bank’s latest policy statement follows dizzying gyrations in the stock market as investors have been gripped by fear and uncertainty over just how fast and far the Fed will go to reverse its low-rate policies, which have nurtured the economy and the markets for years. The broad S&P 500 index fell nearly 10% this month before rebounding slightly Wednesday.

High inflation has also become a serious political threat to President Joe Biden and congressional Democrats, with Republicans pointing to rising prices as one of their principal lines of attack as they look toward the November elections.

Yet Biden said last week that it was “appropriate” for Chair Jerome Powell to adjust the Fed’s policies. And congressional Republicans have endorsed Powell’s plans to raise rates, providing the Fed with rare bipartisan support for tightening credit.

A separate potential source of higher rates is the Fed’s plans for its bond holdings, which are at a record high of nearly $9 trillion. The bond purchases, which the Fed financed by creating money, have been intended to reduce longer-term interest rates to spur borrowing and spending. Many investors also saw the bond buying as helping fuel stock market gains by pouring cash into the financial system.

Earlier this month, minutes of the Fed’s December meeting revealed that the central bank was considering reducing its bond holdings by not replacing bonds that mature – a more aggressive step than merely ending its purchases. The impact from reducing the Fed’s bond stockpile isn’t well known. But the last time that the Fed raised rates and reduced its balance sheet simultaneously was in 2018. The S&P 500 stock index fell 20% in three months.

By not replacing some of its bond holdings, the Fed in effect reduces demand for Treasuries. This raises their yields and makes borrowing more expensive

Some analysts have said they aren’t sure how big the impact on interest rates will be or how much the Fed will rely on reducing its balance sheet to affect interest rates.

All of which means the Powell Fed faces a delicate and even risky balancing act. If the stock market is engulfed by more chaotic declines, economists say, the Fed might decide to delay some of its credit-tightening plans. Modest drops in share prices, though, won’t likely affect the Fed’s thinking.

Some economists have expressed concern that the Fed is already moving too late to combat high inflation. Others say they worry that the Fed may act too aggressively. They argue that numerous rate hikes could unnecessarily slow hiring. In this view, high prices mostly reflect snarled supply chains that the Fed’s rate hikes are powerless to cure.

This week’s Fed meeting comes against the backdrop of not only high inflation – consumer prices have surged 7% in the past year, the fastest pace in nearly four decades – but also an economy gripped by another wave of COVID-19 infections.

Powell has acknowledged that he failed to foresee the persistence of high inflation, having long expressed the belief that it would prove temporary. The inflation spike has broadened to areas beyond those that were affected by supply shortages – to apartment rents, for example – which suggests it could endure even after goods and parts flow more freely.

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


Condo Q&A: New Board Members Must Take Classes?

Also: May condo unit owners request a list of fellow owners who are delinquent? And what are the rules for replacing carpets with hardwood floors?

NAPLES, Fla. – Question: I am running for the board of my condominium association. I heard that, if elected, I have to take a class about my responsibilities as a board member. Is this accurate? – J.W., Naples

Answer: The Condominium Act (Chapter 718, Florida Statutes), the Cooperative Act (Chapter 719, Florida Statutes), and the Homeowners Association Act (Chapter 720, Florida Statutes) all require that, within 90 days after being elected or appointed to the board of directors, each new director shall certify in writing to the secretary of the association that he or she has read the association’s bylaws, articles of incorporation, declaration of condominium (condominiums), declaration of covenants (HOAs), proprietary lease (cooperatives), and the association’s rules, regulations, and policies. Further, he or she will work to uphold the documents and policies to the best of his or her ability and that he or she will faithfully discharge his or her fiduciary duty to the association’s members.

I strongly recommend that all board members review their governing documents so that they are familiar with the board’s and the owners’ rights and responsibilities. That being said, after reviewing these documents, most board members are still left with questions on how to properly carry out their responsibilities.

Chapters 718, 719, and 720, Florida Statutes provide that, in the alternative to the written certification above, newly elected or appointed board members, within 90 days of election or appointment, may submit a certificate of having satisfactorily completed the educational curriculum administered by a division-approved education provider within one year before or 90 days after the date of election or appointment. Further, a certificate is valid for the uninterrupted tenure of the director on the board.

If a director does not comply with the requirements within the time periods provided, he/she shall be suspended from the board until he/she complies with the requirement. The board may temporarily fill the vacancy during the period of suspension.

I do want to reiterate that although these courses are provided as an alternative to the written certification that board members have reviewed their governing documents, I still strongly encourage board members to review the governing documents for their own associations so that they are aware regarding any specific provisions that apply to their own communities.

Question: My condominium association allows for owners to replace their carpeting with hard-surface flooring like tile, marble, wood, etc., but only after obtaining approval from the board of directors. The problem is that the board does not have a consistent policy regarding hard-surface flooring installations and some requirements are different from one request to another. Do you see an issue with this? – S.B., Naples

Answer: Yes, there are definitely issues with the fact that the association does not have a consistent policy regarding hard-surface flooring installations. Without these requirements, the association will likely run into selective enforcement claims from owners if the association requires certain installation parameters for one unit but not for another. Some associations will have different parameters for hard-surface flooring installations with regard to the flooring type.

I have no issues with either one of these approaches as long as they are consistently applied from one unit to another.

In my opinion, your board needs to consult with a professional in the hard-surface flooring industry to determine the appropriate sound-deadening material that needs to be installed before the hard-surface flooring installation. Then, it needs to set a consistent policy for the association so the owners are aware of what is required if they want to install hard-surface flooring.

Because this policy is considered a rule affecting the use of a unit, the board will need to mail or email (for those who have consented to receive notices electronically) and post the notice of the board meeting at least 14 continuous days prior to the board meeting. For more information regarding hard-surface flooring policies as well as rules regarding the use of a unit, your board should consult the association’s legal counsel.

Question: I’d like to see a copy of all the owners who are delinquent in payment of assessments in my homeowner’s association. Can I ask the association to provide me access to these accounts? – M.L., Bonita Springs

Answer: Yes, you can ask the association to provide you access to these accounts. The association is required to provide access within 10 business days of receipt of your request to review these records.

Please note that access to the records does not mean that the association is required to provide you with copies free of charge or to automatically email you these records. The association can require that you review the records within 45 miles of the community or within the county in which the association is located. Usually, the records review occurs at the association clubhouse or the management company’s corporate office. You are allowed to bring a camera or a scanner to make an electronic copy of the official records. However, if you would like photocopies, then the association may charge you up to $0.25 per page.

S. Kyla Thomson, Esq., is a partner of the Law Firm Goede, DeBoest & Cross. The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, DeBoest & Cross, or any of our attorneys.

© 2022 Journal Media Group


Dec. New Home Sales Up 11.9% Month-to-Month

Buyers worried about rising interest rates and home prices pushed new-home sales to a 10-month high in Dec.

SILVER SPRING, Md. (AP) – Sales of new single family homes in December rose to their highest level in 10 months as buyers took advantage of lower prices in anticipation of higher interest rates.

The increase put the seasonally adjusted annual sales pace to 811,000 for the month, according to the Commerce Department, an 11.9% increase over November’s figure, which was revised down to 725,000 from 744,000.

The median price of a new home, the point where half the homes sold for more and half for less, fell to $377,700 last month, its lowest level since June (down from $416,100 in November), but it’s about 4% higher than December 2020.The average sales price was $457,300.

In the months following the pandemic outbreak in the spring of 2020, new home sales exploded as people sought out more space. Including December’s big increase, sales for 2021 fell 14% from the red-hot 2020.

New home sales rose in three of the four regions, with the Midwest leading the way with a whopping 56.4% increase. Sales rose 14.9% in the South and nominally in the West, offsetting a 15.6% decline in the Northeast.

Historically low mortgage rates have fed the demand for housing, even though rates are expected to rise as the Federal Reserve dials back its bond purchases to tamp down surging inflation. Mortgage buyer Freddie Mac says the average rate on long-term, 30-year mortgages in the U.S. has risen from just over 3% a month ago to 3.5% last week, the highest level since March 2020.

Just as the Fed is expected to announce its first rate hike since the pandemic began, the Mortgage Bankers Association reported Wednesday that for the week ending Jan. 21, mortgage applications fell 7.1% from the previous week with an even bigger downturn – about 13% – in the number of people seeking to refinance existing mortgages.

The National Association of Realtors reported last week that sales of previously occupied homes fell in December for the first time in four months as many would-be buyers bailed, frustrated by the lowest level of available houses in more than two decades.

Median prices for existing homes have also risen at a furious pace, jumping nearly 16% from a year ago to $358,000. Homes sold in an average of 19 days and the number of houses for sale slumped to just 910,000 in December, the fewest since records began in 1999. The lack of previously occupied homes has put additional pressure on homebuilders, who have amassed huge backlogs of orders to fill in 2022.

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


Will That Lead Convert? How to Assess the Chances

Gathering leads isn’t the goal. It’s a step. To effectively convert leads into customers, agents should know how to identify the likeliest candidates.

NEW YORK – Real estate professionals sort through various sources to find leads, such as a Facebook or Instagram presence, hosting open houses, working with larger ad websites and through their circle of influence.

However, many agents become experts at gathering leads but not so great at converting them into customers, which should be their top priority.

Tom Toole, founder and team leader at Tom Toole Sales Group, says his team operates from a top prospect list that identifies people close to buying or selling a home, those who are ready to become clients, and the most promising prospects in the CRM (customer relationship management).

Agents should forecast where their next transaction will likely come from by building a basic spreadsheet that tracks such things as client names, timeframes in which they hope to buy or sell, the geographic location where they’re buying or selling, the price point, the agent’s potential commission upon closing, and the date of last contact with the client. Agents should set a goal to speak to each of these potential customers about every 7 to 10 days.

Next, agents should give each lead a score using a 1 to 10 scale, where 1 means they aren’t likely to convert and 10 means they’re very likely to make a real estate decision soon.

This field of prospects should be nurtured to ensure that when one drops out, several others remain. To flesh out this rated list, agents should ask questions to understand the situation surrounding their prospects and how motivated they are to transact, and then prioritize their activities accordingly.

Finally, agents should focus their time and attention on the high-scoring prospects first, such as by prioritizing weekend and evening appointments for them.

Source: Inman (01/24/22) Toole, Tom

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


Junk Fees in Mortgages? CFPB Wants to Know

Saying it wants to save consumers billions, the consumer bureau issued a request for Americans’ junk-fee stories – iffy charges added to any financial product.

WASHINGTON, D.C. – The U.S. Consumer Financial Protection Bureau (CFPB) launched an initiative to, it says, “save households billions of dollars a year by reducing exploitative junk fees charged by banks and financial companies.”

“Many financial institutions obscure the true price of their services by luring customers with enticing offers and then charging excessive junk fees,” says CFPB Director Rohit Chopra. “By promoting competition and ridding the market of illegal practices, we hope to save Americans billions.”

According to CFPB, more companies are charging unexpected fees as a way to remain competitive. They advertise an interest rate or charge that seems competitive compared to other firms, only to add a fee later that consumers often don’t understand. As an example, CFPB notes some line-item fees such as “paperwork processing,” “service fees” and “resort fees” often fall into the junk-fee category.

It specifically called out bank fees, saying that in 2019, major credit card companies charged over $14 billion in punitive late fees, and bank revenue from overdraft and non-sufficient funds fees surpassed $15 billion.

For now, CFPB has asked consumers to send in their junk-fee stories, including any insight into mortgage fees. Its list also includes fees associated with bank, credit union, prepaid or credit card account, loans or payment transfers. It identifies junk fees as ones that:

  • Were unexpected
  • That seemed too high for the purported service
  • Where it’s unclear why they were charged

CFPB says it also wants to hear from small business owners, non-profit organizations, legal aid attorneys, academics and researchers, state and local government officials, and financial institutions, including small banks and credit unions.

Once CFPB has the stories in hand, it says it will “craft rules, issue industry guidance, and focus supervision and enforcement resources” to “strengthen competition in consumer finance (and) reduce these kinds of junk fees.”

© 2022 Florida Realtors®


Spring Buying Season May Have Arrived Early

Home prices continue to rise and mortgage rates appear ready to follow. Some skittish buyers are jumping into the market now, fearful what could happen if they wait.

NEW YORK – After registering month-to-month gains of over 1% starting in September 2020 and reaching a high of 2% in July 2021, the increase in U.S. home prices appeared to slow down in the fall. But a rapid home value appreciation has reignited just ahead of the spring homebuying season, jumping from 1.2% in November to 1.4% in December, according to a new Zillow report.

Experts are blaming the return of big price gains on historically low levels of housing stock and a rush by buyers to beat a rise in mortgage rates.

Buyers in December had 19.5% fewer homes to choose from than a year earlier when inventory was already at a record low. And compared with December 2019, they found 40.5% fewer homes available for sale.

“It is a hint to us that perhaps the spring homebuying season is coming early,” says Alexandra Lee, an economist at Zillow. “We would usually expect the winter months to still be relatively slow. But with this re-acceleration and understanding just how hot the market has remained over the last year, the housing market is starting to heat up earlier than usual.”

Total housing inventory at the end of December amounted to 910,000 units, down 18% from November and down 14.2% from one year earlier (1.06 million), according to the National Association of Realtors.

The rise of the omicron variant of the coronavirus could be partially responsible, pushing homeowners to wait for infection rates to subside before listing, experts say. The uncertainty around long-term working arrangements could also play a part in keeping inventory low.

Home prices keep rising

A December survey conducted by Zillow found that 52% of workers reported that their employer had announced post-pandemic work arrangements – a lower share than was reported in June 2021. That is likely due to the rise of new coronavirus variants causing employers to push back in-person start dates.

The median existing-home price for all housing types in December reached $358,000, up 16% from December 2020 ($309,200), as prices rose in each region. This marks 118 straight months of year-over-year increases, the longest-running streak on record, according to the National Association of Realtors.

In 2021, existing-home sales totaled 6.12 million – an increase of 8.5% from the prior year and the highest annual level since 2006.

Properties typically remained on the market for 19 days in December, fewer than the 21 days in December 2020. Seventy-nine percent of homes sold in December remained on the market for less than a month.

Lawrence Yun, the National Association of Realtor’s chief economist, believes the expectation of rising mortgage rates could be forcing buyers to jump into action sooner than usual.

Mortgage rates hit their highest levels since March 2020. The 30-year-fixed rate reached 3.56% for this week, according to Freddie Mac.

“One can say that there are some people who want to jump in before the interest rates rise even more strongly,” he says. “We will get more inventory throughout the year but some of the buyers will be priced out because of higher interest rates.”

Copyright 2022, USATODAY.com, USA TODAY


5.9M Borrowers Missed Refinancing Savings

It’s not too late for these owners to save by refinancing – but if not, they also won’t feel locked into their homes, afraid to sell because “my interest rate will go up if I do.”

NEW YORK – The number of owners who can save on their monthly mortgage payment by refinancing is down by more than half from the start of this year to 5.9 million, according to Black Knight data. Black Knight considers refinance candidates as 30-year mortgage holders who have a maximum 80% loan-to-value ratio, a credit score of 720 or higher, and a likelihood of reducing their current first lien by at least 0.75%.

The average 30-year fixed-rate mortgage has climbed about 50 basis points in the first weeks of the year. Still, even with recent mortgage rate increases aside, many of those 5.9 million borrowers could still see savings of $275 a month per borrower, according to Black Knight. More than 1 million of them could save at least $400 a month, and 661,000 borrowers could trim $500 or more from their monthly mortgage at current rates.

The remaining borrowers may have missed the opportunity to save by not refinancing when mortgage rates were below 3%. The number of refinance candidates has dropped significantly from about 11 million at the start of the year and is down by about 20 million in late 2020.

Mortgage applications to refinance a home are down by half from a year ago, the Mortgage Bankers Association reports. Nearly 18 million homeowners have refinanced over the last two years.

While many homeowners over the last two years have taken advantage to lower their mortgage payments, they’ve also quickly accumulated equity, in record amounts. A sharp increase in home prices has meant that, in the last year, homeowners have gained an average of $50,200 in equity, according to data from the National Association of Realtors®.

Still, rising mortgage rates can impact the inventory of for-sale homes. Owners with a historically low rate would have to take out a new mortgage if they decide to upgrade in a higher interest rate environment.

As a result, more homeowners could decide their best option is stay put – but that problem wouldn’t apply to the 5.9 million who never refinanced when the timing was optimal to do so.

Source: “More than 5 Million Borrowers Just Missed Their Chance to Save on a Mortgage Refinance,” CNBC (Jan. 21, 2022)

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


4Q Commercial RE: Fla. Home to 9 of Top 15 Markets

A 4Q 2021 NAR commercial report finds metros from Jacksonville to Miami and Naples with “the strongest overall commercial real estate market conditions.”

NEW YORK – Out of 390 commercial markets studies in the U.S., Florida is home to nine of the top 15 areas with strong commercial real estate conditions, according to the fourth-quarter 2021 Commercial Real Estate Metro Market Reports from the National Association of Realtors® (NAR).”

The report looks at a range of commercial markets, including multifamily, office, industrial, retail and hotel property, and creates individual reports by state, with the Florida report also available online.

Top 15 U.S. commercial metros in 4Q 2021 (Population of at least 250,000)

  • Charleston, South Carolina
  • Durham, North Carolina
  • Fort Myers, Florida
  • Jacksonville, Florida
  • Kennewick-Richland, Washington
  • Miami, Florida
  • Naples, Florida
  • Nashville, Tennessee
  • North Point-Bradenton-Sarasota, Florida
  • Orlando, Florida
  • Olympia, Washington
  • Palm Beach, Florida
  • Port St. Lucie, Florida
  • Seattle, Washington
  • Tampa, Florida

The reports include indicators of an area’s economic and demographic conditions (GDP growth, employment, unemployment, wage growth, domestic migration, population growth). They also include commercial market indicators on net absorption, vacancy rates, rent, deliveries, ongoing construction, inventory, total sales volume, transaction price and cap rates based on CoStar market data.

NAR says it created the Commercial Real Estate Market Conditions Index as a comparison tool to gauge one area’s overall conditions relative to national conditions.

The index is calculated as a ratio of the number of variables where one metro area’s condition is stronger compared to other metro areas across the nation. An index above 50 means market conditions are stronger than they are nationally, and an index below 50 means local market conditions are weaker.

© 2022 Florida Realtors®


U.S. Consumer Confidence Drops a Bit in Jan.

Consumers’ current attitudes rose even as future expectations fell. Still, the gauge of people planning to buy a home within the next six months also went up.

BOSTON – After three consecutive months of increase, the Conference Board Consumer Confidence Index declined a bit in January.

The Index now stands at 113.8, down from 115.2 in December. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – improved to 148.2 from 144.8 last month. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – declined to 90.8 from 95.4.

“Consumer confidence moderated in January, following gains in the final three months of 2021,” says Lynn Franco, senior director of economic indicators at The Conference Board. “The Present Situation Index improved, suggesting the economy entered the new year on solid footing. However, expectations about short-term growth prospects weakened, pointing to a likely moderation in growth during the first quarter of 2022.”

While future optimism faded, however, it didn’t seem to impact consumers’ desire for expensive items, including homes.

“The proportion of consumers planning to purchase homes, automobiles and major appliances over the next six months all increased,” says Franco. “Meanwhile, concerns about inflation declined for the second straight month but remain elevated after hitting a 13-year high in November 2021.”

According to Franco, pandemic concerns amid the omicron surge have also had an impact.

“Looking ahead, both confidence and consumer spending may continue to be challenged by rising prices and the ongoing pandemic,” Franco says.

Present situation

·      21.1% of consumers said business conditions were “good,” up from 19.4%

·      25.6% of consumers said business conditions were “bad,” down from 27.1%

·      55.1% of consumers said jobs were “plentiful,” down from 55.9%; still a historically strong reading

·      11.3% of consumers said jobs are “hard to get,” down from 11.7%

Expectations six months from now

·      23.8% of consumers expect business conditions to improve, down from 25.4%

·      19.0% expect business conditions to worsen, up from 18.6%

·      22.7% of consumers expect more jobs to be available in the months ahead, down from 24.2%

·      15.7% anticipate fewer jobs, up from 14.7%

·      16.7% of consumers expect their incomes to increase, down from 17.5%

·      12.4% expect their incomes to decrease, up from 11.2%

 Toluna conducts the monthly survey, based on an online sample, for The Conference Board. The cutoff date for the preliminary results was Jan. 19.

© 2022 Florida Realtors®


Case-Shiller Price Increases: 2 Fla. Cities Top List

Nationwide, home prices rose 18.8% in Nov., and the S&P CoreLogic Case-Shiller index finds Tampa (up 29%) and Miami (up 26.6%) in 2 of the top 3 spots.

NEW YORK – One of the most-watched indicators of home prices, the S&P Dow Jones Indices (S&P DJI), found a slight slowdown in the national rate of home price increases – but less so in Florida. Two state metro areas, Tampa and Miami, ranked second and third for year-to-year price increases, with Phoenix topping the list.

“For the past several months, home prices have been rising at a very high – but decelerating – rate,” says Craig J. Lazzara, Managing Director at S&P DJI. “That trend continued in November 2021.”

Overall, the National Composite Index rose 18.8% year-to-year, but that rate is less than it was the month before (19.0%).

“Despite this deceleration, it’s important to remember that November’s 18.8% gain was the sixth-highest reading in the 34 years covered by our data,” says Lazzara. The top five months for price growth were the ones immediately preceding November.

Phoenix, Tampa and Miami reported the highest year-over-year gains among the 20-city index in November. Phoenix led the way with a 32.2% year-over-year price increase, followed by Tampa with a 29.0% increase and Miami with a 26.6% increase.

“Tampa and Miami continued in second and third place in November, narrowly edging out Las Vegas, Dallas and San Diego,” says Lazzara. “Prices were strongest in the South and Southeast (both up 25.0%), but every region continued to log impressive gains.”

Prices in 19 cities are at all-time highs, and Phoenix’s increase led all cities for the 30th consecutive month.

“We have previously suggested that the strength in the U.S. housing market is being driven in part by a change in locational preferences as households react to the COVID pandemic,” says Lazzara, but it’s too soon to gauge whether it’s a temporary change or one that might have occurred naturally over the next several years.

“In the short term, meanwhile, we should soon begin to see the impact of increasing mortgage rates on home prices,” Lazzara says.

© 2022 Florida Realtors®


Fla. May Spend $400M on Rural-Area Broadband

It’s hard to work remotely with slow internet speeds, and the $400M in fed money could expand housing options to Fla.’s 21.2% of rural areas without broadband.

TALLAHASSEE, Fla. – Florida lawmakers are looking to use at least $400 million in federal stimulus money to help broadband providers expand services to mostly rural, underserved areas.

But don’t expect to see the money reduce rates for customers.

The Senate Commerce and Tourism Committee on Monday unanimously supported measures (SB 1800 and SB 1802) by Sen. Jim Boyd, R-Bradenton, that would fund a broadband program that lawmakers created last year within the Department of Economic Opportunity.

While voting for the proposal, Sen. Bobby Powell, D-West Palm Beach, and Sen. Jason Pizzo, D-North Miami Beach, noted that not everyone can afford broadband service where it is available.

“I can even pinpoint an area in my district, a block area where people are surrounded by broadband, but it’s not accessible to them,” Powell said.

When asked by Sen. Victor Torres, D-Kissimmee, if customers could see savings from the program, Charter Communications lobbyist Albert Kaminsky said private providers are bearing the cost as they have to seek reimbursement from the state.

“Ultimately, again, (customers) would be taking advantage of this service, so we wouldn’t be passing on additional costs to them by any means,” Kaminsky said. “They’re (companies are) just offering a service.”

Sen. Joe Gruters, R-Sarasota, said the goal is to provide service as Florida ranks second in the number of residents without reliable internet access.

“I’ll say that this bill was all about winners, because when you think about it, 10% of Floridians don’t have any service,” Gruters said. “I’d rather not have any discount, but I’d rather have internet access. Because that’s a great equalizer when it comes to employment. I mean, that’s got to be the number one hindrance of growth in some of our rural areas. And I think (an existing) discount program that’s offered by the providers is, when (customers) could prove that they need the assistance, is more than adequate.”

The importance of internet access for work and education became even more clear as businesses and schools went remote during the COVID-19 pandemic.

The 2021 law required municipal electric utilities to offer to broadband providers through mid-2024 a discounted rate of $1 per attachment per year for any new pole attachment necessary to reach an unserved area or consumer. The law prohibits municipal utilities from raising current pole attachment rates for broadband providers before July 31.

A Senate staff analysis of Boyd’s bill said broadband access is available to 98% of the state’s urban areas and just 78.6% of rural areas. The disparity is attributed to the cost of building broadband infrastructure “across larger swaths of rural geographic areas.”

“Often, broadband providers who seek to expand their infrastructure are met with denied or delayed utility pole access, or are asked to pay an excessive fee for the attachment, or even replacement of the entire pole,” the Senate report said.

Kaminsky said while the state’s funding proposal is “sizable,” North Carolina has half the number of residents without service and recently advanced a $1 billion broadband package. Still, he said the funding would “supercharge” the industry in Florida.

Before the meeting, Florida TaxWatch released a report that estimated a half-million Floridians, predominantly in rural areas, don’t have access to high-quality internet.

“Though Florida is currently fifth-best in a national ranking of broadband access, there’s clearly still significant room for improvement,” TaxWatch President and CEO Dominic M. Calabro said in a statewide.

The Tallahassee-based group estimated that just under half of the state’s 67 counties are more than 95% covered with broadband, ranging from 100% in Pinellas County to 1% in rural Dixie County. Five other rural counties – Gilchrist, Holmes, Jefferson, Levy and Washington – are under 50% covered.

Under the proposal, pandemic stimulus money would be available to broadband providers at $5,000 or 50% of the cost – whichever is less – of the replacement cost for existing utility poles in unserved areas.

The money would be gathered in a new trust fund, with the idea of first using $400 million in federal money for the state to apply for another $100 million from the federal Coronavirus Capital Projects Fund.

The fund was part of a $10 billion allocation in the American Rescue Plan Act to carry out critical capital projects, with an emphasis on broadband infrastructure. Each state was eligible for at least $100 million, with additional money available based on the proportion of the population in rural areas and household incomes below 150% of the poverty line.

However, state lawmakers are unsure if the state will be able to get the additional money. as the deadline to apply was Dec. 27.

Rep. Josie Tomkow, R-Polk City, has filed a similar proposal (HB 1543 and HB 1545) in the House.

Source: News Service of Florida


Spouse vs. House? Single Women Buying More Homes

Two out of three single women – the second-largest buying group – don’t need wedlock to buy a home, with 71% willing to move a future spouse in later.

NEW YORK – A growing number of single women buy real estate on their own. More than two-thirds of single women said they’d rather not wait until marriage to purchase a home, according to a Bank of America survey that suggested more single females are “skipping the spouse ahead of the house.”

Eighty-seven percent of single women agree that it’s an “outdated idea” you must be married to purchase a home. Once they have the finances in place, single females surveyed say, they won’t hesitate to buy on their own.

As a group, only married couples buy more homes than single women, according to 2021 data from the National Association of Realtors® (NAR). Currently, single women make up 19% of the homebuying market, while 9% are single men and 60% are married couples.

What’s more, 71% of single women considering a home say they intend to have their future partner move later, according to the Bank of America survey.

For single women, finances are the main homebuying hurdle. Nearly three-quarters of single women who have not purchased a home yet say they haven’t done so because they want to feel financially stable first, compared to 64% of men. They want to save more for a down payment and improve their credit score.

According to the studies, single women save more diligently than single men: 70% say they save money first and only spend what’s left after covering the basics. Only 63% of single men report an equally aggressive savings plan.

Four out of five (80%) single women considering a home purchase are excited by the idea. The majority also feel it’s a great accomplishment to buy a home on their own.

Source: “Bank of America Homebuyer Insights Report: Spotlight on Single Women Homebuyers,” Bank of America (2022)

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


Loans for Condos? New Rules Start to Have an Effect

HERMOSA BEACH, Calif. – A nightmare scenario looms for condo buyers applying for certain types of federally backed mortgages. If you are selling or are looking to buy an attached condominium in a community with five or more attached units, conventional financing from mortgage giants Fannie Mae and Freddie Mac may soon become elusive.

Beginning Jan. 1 for Fannie and starting Feb. 28 for Freddie, the mortgage giants are putting the screws to a required HOA questionnaire. New questions ask applicants about the structural integrity of the community and whether any code violations are anticipated.

No doubt, Fannie and Freddie’s updated lender mandates are in response to the Florida condo tower that killed 98 people last June 24. Years of deferred maintenance at the Champlain Towers in Surfside caused the 12-story building to collapse.

Answering the agencies thoroughly and completely could force lenders to decline a mortgage application. (Remember: Mortgage lenders fund a loan, and then may sell it to Fannie or Freddie).

“Yes, lenders are declining projects even for a simple special assessment for repairs now. Things are just trickling in right now because the guidance started Jan. 1,” said one condo project approval expert, who asked to remain unnamed because he’s not the media spokesman for his company. “Soon enough we’ll see the effects hit all the condo market. I’ve only seen it affect projects with major issues at this point; meaning (the project) has code violations and millions of dollars of repairs underway.”

Answering these questions honestly or possibly with a guess could bring liability in the form of future lawsuits against HOA stakeholders, such as the property management company, board members, inspectors, engineers and the association.

If the questionnaire isn’t completely answered because the answers are unknown or undetermined, it might mean the purchase or refinance gets torpedoed.

Here is a sprinkling of questions included in Fannie Mae’s Form 1076 condominium project questionnaire (posted December 2021 and updated to eight from five pages):

Question: Is the HOA aware of any deficiencies related to the safety, soundness, structural integrity or habitability of the project’s building(s)?

My take: If management didn’t know about any deficiencies, for example, and answered as such, should they have reasonably known these calamities could come up later?

Question: Is it anticipated the project will, in the future, have such violations (zoning ordinances, codes, etc., which are related to safety, soundness, structural integrity or habitability)?

My take: For the love of peace, how could one possibly determine if yet-to-be-written, jurisdictional codes trigger new violations in the condo complex?

These dubious questions could be akin to a winning lottery ticket for any attorney who lives in the world of HOA litigation.

Why is this so problematic? The nation has a huge community of really old condos and many of them are backed by Fannie Mae and Freddie Mac mortgages. The U.S. has as many as 156,000 condo associations and cooperatives housing between 27 million and 32 million Americans, according to the Community Associations Institute (CAI).

“Seventy percent of all condo loans in the U.S. are Fannie or Freddie (backed),” said Dawn Bauman, senior vice president of government affairs at CAI. “Sixty to 70% of all condo complexes are more than 30 years old.”

Fannie Mae has a published list of 82 “unavailable” California condo-projects, including the Marina City Club in Marina Del Rey, which has $80 million to $140 million in needed repairs according to a report last year. That a 10-acre complex is one of nearly 1,000 “unavailable” condo projects nationwide. To Fannie Mae, unavailable means a property is ineligible for purchase by the agency.

One mortgage executive told me Fannie is making the rounds, emphasizing these new condo questions during lender visits. So don’t be surprised if that unavailable list explodes as Fannie collects more intel.

To be fair, Fannie and Freddie need to dig more deeply to assess and consider condo structural risk before purchasing those mortgages from lenders. The mortgage giants also may disqualify a condo community for other reasons, such as a lack of budget reserves.

If your loan is denied over the Fan or Fred HOA certification answers, you may be able to get funded on what the industry calls a non-warrantable loan. You should expect to pay perhaps one-half to one point higher in rate than conventional financing. You also might have to provide a larger down payment or have more remaining equity compared with Fannie-type requirements.

But buyer beware: Non-qualified mortgage lenders that offer the exotic non-warrantable condo mortgages are not a loan approval shoo-in, either.

For example, California-based LendSure has a condo guidance checklist to help determine investor risks. The common three items it looks at are investor concentration (how many rentals are in the complex), single investor (does one person or entity own a bunch of the units), and litigation against the condo complex, according to Joe Lydon, co-founder, and managing director of LendSure.

Why so much deferred maintenance? Unit owners are often resistant to increased HOA fees or special assessments for repairs and updates.

Condo complex building inspections can run $15,000 to $50,000 depending on the number of units, according to Bauman.

“Community Associations Institute is lobbying for laws mandating reserve studies and building inspections,” said Bauman. CAI is also asking Fan and Fred to give HOAs more time to be able to address so many of the new HOA questions. “Five years to ramp-up the requisite building inspections.”

Fannie Mae provides weekly updates of approved condo projects in Florida.

Copyright © 2022, Daily Breeze, all rights reserved. Jeff Lazerson is a mortgage broker.


Study: More Minority Fla. Buyers Denied Loans

Of all Fla. mortgage rejections in 2020, 21.8% were Black, second only to American Indian/Alaska Native. Nationwide, the denial rate is 84% higher for Blacks.

TAMPA, Fla. – In the current housing market, owning a home is already difficult, especially for first-time homebuyers. Across the United States, minorities are approved for mortgages less often than their white neighbors, according to Zillow.

Zillow, a real estate company, studied mortgage denials across the country to see which demographics were denied mortgages more often. The company analyzed data from the Home Mortgage Disclosure Act (HDMA) during its research.

“The mortgage denial rate was 84% higher for Black applicants than white applicants in 2020 (the latest year for which data is available), according to HMDA, up from 74% in 2019. Nationwide, 19.8% of Black applicants were denied a mortgage in 2020, the highest among races and much higher than the 10.7% of white applicants who are denied,” according to data Zillow analyzed from the HMDA.

Unlike credit card payments, student loans, or other types of consumer debts, home equity turns from money-sink into a wealth asset over time for many Americans.

As property values rise and homeowners pay off their loans, i.e. mortgages, the market turns shelter into an investment. Rising home prices are now increasing equity amounts for homeowners more quickly, as the shortage of available housing inventory for buyers stays limited.

In Florida, the largest percentage of mortgage rejections in 2020 were among American Indian or Alaska Native homebuyers, with 22% of all applicants denied mortgages. According to the Zillow report, closely behind were Black homebuyers, with 21.8% of them seeing their mortgage applications denied.

“Prior to the pandemic, Black homeownership had already hit a record low of 40.6% in the second quarter of 2019,” according to CNBC.

Data from the U.S. Census Bureau showed that pre-pandemic Black homeownership had fallen to 40.6% by the second quarter of the fiscal year. By 2020 Q2, the number of Black homeowners had risen to 47%, but fell again in 2021 Q2 when the percentage shrunk again to 44.6%. In 2019 Q2, at the same time, 57.7% of Asian, Native, Hawaiian and Pacific Islanders owned their homes. That number went up to 61.4% in 2020 Q2, but fell to 58.7% in 2021 Q2.

In the past five years, from 2017 to 2021, Black homeowners across the U.S. remained the demographic in the United States with the lowest percentage of homeowners among their population.

Hispanic families weren’t far behind, while non-Hispanic white families had the highest homeownership rates nationwide, at 71.8% or higher, quarter by quarter.

Echoing a higher likelihood of homeownership among white families and homebuyers, Zillow’s study of HMDA data showed that, compared to all minority demographics, whites had the lowest mortgage denial rate, at just 14.3% in Florida.

Tampa rental data shows minorities spend more income on rent than white neighbors, and Zillow reported a similar gap trend in Tampa concerning the rent burdens families face. The study was published in October 2021, finding that Black and Latinx families spent a higher percentage of their monthly income on rent, meaning more households were rent-burdened compared to their white neighbors.

Mortgages have, historically, been cheaper options than renting while also providing financial equity to families.

The Zillow study showed that households of color “were more likely to report encountering housing and economic challenges due to the pandemic.” Black families were reportedly “more likely than white ones to report a job or income loss and difficulty keeping up with mortgage or rent payments,” adding to the issue of mortgage denial. Mortgage approval is also affected by income, after all, a mortgage is a loan, and the ability to pay off the loan has a significant effect on approval.

“Black home purchase applicants in 2020 had a median income of $67,000, compared to an overall median of $83,000 for all applicants,” Zillow reported. “This may help explain why Black mortgage applicants had smaller down payments in 2020 than applicants from other races.” Zillow also said the median property value of homes Black applicants were trying to purchase through a mortgage were typically lower than any other applicants’ property values, on average.

“Black applicants also typically applied to purchase less-expensive homes in 2020 than applicants from other races – a median property value of $225,000 for Black applicants, and $275,000 for all applicants,” Zillow reported. “The typical down payment from a Black applicant was $16,600 less than the overall median down payment in 2020.”

Affordable housing concerns are common across the U.S., as material shortages and limited housing markets push prices up for those trying to buy their first homes, or move somewhere new.

© 2022 WFLA, Nexstar Broadcasting, Inc. All rights reserved.


The IRS Wants (Requires) Your Photo?

Americans won’t need identification for basic tax services via the IRS website, but for some functions, such as a childcare tax credit, they must register with ID.me.

WASHINGTON – The Internal Revenue Service says that beginning this summer, it will require people who pay their taxes online to use facial recognition in order to access certain tools and applications at IRS.gov. A username and password will no longer suffice when the rule takes effect.

Instead, you will need to provide a government ID (such as a driver’s license, state ID, or passport), a copy of a utility bill, and a selfie to ID.me, a third-party identity verification company that uses facial recognition. To sign up, the company will ask you to take a video selfie with your webcam from your computer or smartphone.

If you have an ID.me account from another government agency, you can use those credentials to log on. The IRS is prompting users to create an ID.me account “as soon as possible.”

The selfie requirement applies to many Americans, including almost all working parents who file via the IRS website and use the Child Tax Credit Update Portal. It’s also required for a tax transcript, to view a payment agreement with the IRS and other functions.

“The IRS emphasizes taxpayers can pay or file their taxes without submitting a selfie or other information to a third-party identity verification company,” the agency said in a statement. “Tax payments can be made from a bank account, by credit card, or by other means without the use of facial recognition technology or registering for an account.”

Source: “The IRS Will Soon Make You Use Facial Recognition to Access Your Taxes Online,” The Verge (Jan. 20, 2022) and “IRS Will Soon Require a Selfie to Access Some of its Online Tools and Applications,” CNBC.com (Jan. 20, 2022)

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


New Construction? S. Fla. Is Almost Out of Land

FORT LAUDERDALE, Fla. – Very little vacant land is left for building homes in South Florida, but just how scarce are the options? As the region struggles with a housing shortage, the amount of vacant land zoned for residences is down to less than 1% in parts of the region.

The South Florida Sun Sentinel requested the amount of all vacant land parcels that are currently zoned “vacant residential” or “vacant commercial” from the Palm Beach County and Broward County property appraiser’s office.

According to an analysis of the data, there are only about 20 square miles, or less than 1%, of land that remains vacant and zoned for residential use. For perspective, Palm Beach County is 2,383 square miles. On top of that, those 20 square miles are fractured into hundreds of lots all over the place.

It’s even worse in Broward County. Of the county’s 1,323 square miles, only 5 square miles, or less than 1%, remain vacant and zoned for residential use.

Miami-Dade County did not return the request for information.

Much of the vacant land in Palm Beach County is parceled in the western parts of the county, such as Belle Glade, Clewiston and in areas such as Westlake and Loxahatchee. For Broward County, the land is more scattered, with areas of remaining land concentrated in the areas of Southwest Ranches, Davie and west of Sunrise.

“Broward County is a sought-after place to live as people from all over the world are making it their home. Although impossible to say for certain, it is my belief that the lack of vacant land is a contributing factor in the increase in value for the existing homes and properties and likely will be for the foreseeable future,” said Marty Kiar with the Broward County Property Appraiser’s Office.

South Florida is in the midst of a real estate boom fueled in part by record low inventory and an influx of new residents. One of the most important factors in the housing shortage, however, is the scarcity of land on which to build. Developers are having a hard time finding vacant land zoned for residential commercial use, as each county is braced by the ocean on one side and the Everglades on the other.

“Broward County is one of the most land-constrained markets in the country,” said Brent Baker, division president with Pulte Group, who builds homes throughout Palm Beach County and Broward County. “Palm Beach County is slightly better.”

Many of Pulte’s projects are reflective of the land constraints that South Florida is facing. They’ve had to turn to land-use conversions, building on areas that were once golf courses or flea markets.

Pulte isn’t the only developer turning to outlying areas in a quest to find land.

AKAI Estates turned to Southwest Ranches, out in the western part of Broward County, and Symphony at Jupiter, a new housing community, is built on one of the few remaining parcels of land in Jupiter, that was at one point a nursery.

Land scarcity and housing prices

Land scarcity will drive up land prices, explained Ken H. Johnson, real estate economist with Florida Atlantic University.

“It causes the price to be significantly higher. It’s pure supply and demand,” added Baker. “As the availability of land dwindles, that reduces the supply, and that ultimately makes it harder and more expensive for the builder and the developer to get housing on there.”

It also motivates developers to build costlier homes. “The more expensive land gets, the more value you need to put on it on the land,” said Michael Sochaczevski, a developer on the AKAI Estates team.

The AKAI Estates development sells custom homes built on about 2 acres of land ranging from $8 million to $13 million.

All of these factors help fuel South Florida’s affordable housing crisis.

Will agricultural lands and golf courses help?

Beyond vacant lots, there are other open spaces in South Florida, some held as nature preserves, while other areas consist of agricultural lands, golf courses or industrial lands. These could be rezoned in the future to accommodate residential developments.

Broward County currently has about 19 square miles of land that are golf courses, agricultural properties and other large parcels, while in Palm Beach County, around 684 square miles are zoned as agricultural or agricultural residential.

“We’re going to be looking for land,” said Johnson.

Case in point, former President Donald Trump announced plans to convert the Blue Monster golf course at Trump National Doral, one of four golf courses there, into a luxury housing, retail and commercial space.

And last year, Miami Dade County commissioners voted 10-2 to redevelop the Calusa Country Club into a 550-home development by GL Homes.

The land shortage is happening as population growth in the tri-county area is expected to rise over the next 10 years: Palm Beach County should see the population increase by 14% over the next 10 years, while Broward County should see increases of 12% and Miami-Dade 8.7%, according to numbers provided by Johnson.

Whether and how that land is rezoned remains to be seen.

Golf courses have seen a resurgence in popularity, preventing some of the courses that may have been converted from doing so, said Baker. There is a chance that some of the larger nurseries could be redeveloped. The rezoning process can take anywhere from 18 months to 24 months, Baker said.

© 2022 South Florida Sun-Sentinel. Distributed by Tribune Content Agency, LLC.


Number of Homes a Buyer Views Hits Record Low

In 2021, the average homebuyer viewed a median of eight homes before making an offer – and three of those showings were done virtually online.

CHICAGO – Last year, homebuyers viewed a median of eight homes before purchasing – the lowest number on record, according to new research from the National Association of Realtors® (NAR). That’s fewer than in 2009 and 2011, when housing inventory was more plentiful and buyers viewed a median of 12 homes before buying, notes Jessica Lautz, NAR’s vice president of demographics and behavioral insights.

The even-more limited housing inventory in 2020 coupled with increased buyer competition likely played a big role in the home-showing drop, with NAR’s December housing report finding that inventory had reached an all-time low.

Technology also likely played a role, since homebuyers can narrow their search online before physically seeing properties, Lautz says.

“Homebuyers today have the ability to view homes online and quickly weed out what they want to see versus what can be discarded,” she says. “Buyers can walk through virtual tours, view videos, see detailed photos in a way that 2006 technology did not allow.”

Among the median eight homes viewed by buyers, three were viewed online only with the help of virtual and video tours as well as virtual open houses, according to NAR.

Buyers may be viewing fewer homes because they’re speeding up their house hunts to better compete. Buyers searched for just eight weeks before deciding on a home to purchase last year, down from more than 12 weeks between 2009 and 2013.

“Buyers today do not have that luxury and need to make fast decisions on which home to place an offer on, as there is likely another buyer ready to pounce right behind them,” Lautz says.

Source: “Home Buyers Narrow Home Search With Technology,” National Association of Realtors® Economists’ Outlook blog (Jan. 18, 2022)

© Copyright 2022 INFORMATION, INC. Bethesda, MD (301) 215-4688


Condo Collapse Legal Costs May Hit $100M

On Fri., the judge urged all sides in the Surfside condo disaster to work together to reach settlements before legal costs become a ponderous burden.

SURFSIDE, Fla. – The legal fees and costs associated with the deadly collapse of a Florida beachfront condominium building could reach $100 million, a judge said Friday.

That’s why Miami-Dade Circuit Judge Michael Hanzman urged all sides to work toward mediated settlements of numerous claims arising from the Champlain Towers South disaster.

“Put forth a Herculean effort to settle these claims if possible,” Hanzman said at a hearing held remotely. “This court cannot force parties to resolve their disputes.”

The 12-story condo building collapsed in the early morning hours of June 24, killing 98 people and destroying the structure in Surfside, Florida. There are claims for wrongful death and for property loss that could take years to resolve, including possible appeals, without some kind of settlement.

Champlain Towers was in the midst of its 40-year structural review when it collapsed, triggering multiple federal and state investigations and a flurry of lawsuits by victims, families and condo owners.

The lead investigating agency is the National Institute for Standards and Technology, which recently estimated its probe could take as long as two years.

Trial date for the lawsuit is currently set for March 2023.

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


HUD Report Card: 2021 Policy Changes

According to HUD, it took “bold actions” over the past year, and it created a one-page list of the updates that will have an impact on the U.S. housing market.

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) says it took “bold action … to create strong, sustainable, inclusive communities and quality affordable homes” during 2021, and it published a list of what it considers its major accomplishments:

Home appraisals process. On June 1, President Joe Biden asked HUD Secretary Marcia Fudge to create an interagency initiative to address inequity in home appraisals. HUD sees it as a way to help families of color build wealth. Working in partnership with Ambassador Susan Rice and the Domestic Policy Council, HUD created the Property Appraisal and Valuation Equity (PAVE) Task Force. The Task Force wants to use “all levers at their disposal to root out discrimination in the home appraisal process.” HUD says it will issue a report for Biden documenting “ \the scope of the problem and provide detailed, actionable agency commitments.”

Homelessness. On Sept. 20, Fudge launched House America, a national partnership with other administration officials, mayors, county officials, governors and tribal nation leaders. The goal: Use American Rescue Plan (ARP) resources to re-house at least 100,000 people experiencing homelessness and add at least 20,000 new affordable and permanent supportive housing units into the development pipeline by the end of 2022.

Evictions and foreclosures. Backed by funding under the Consolidated Appropriations Act, HUD says it used the money to prevent evictions in HUD-assisted households and stabilize families struggling because of the COVID-19 pandemic. It also helped homeowners behind on their mortgage to stay in their homes by extending mortgage forbearance. As borrowers leave forbearance, HUD says it continues to work with the Treasury Department to integrate the Homeowner Assistance Fund with new policies released by the Federal Housing Administration (FHA) and, as a result, evictions and foreclosures are well below historic averages.

$5 billion HOME-ARP program. The Office of Community Planning and Development made funding available to 651 state and local governments to reduce homelessness and increase housing stability. The governments used the money to fund rental housing development, acquisition and development of non-congregate shelter, tenant-based rental assistance and supportive services.

Emergency Housing Vouchers (EHVs). As part of ARP, HUD provided 70,000 housing choice vouchers to local Public Housing Authorities (PHAs). The vouchers help individuals and families who are homeless, at risk of homelessness, fleeing or attempting to flee domestic violence, dating violence, sexual assault, stalking or human trafficking. It also helps those who were formerly incarcerated or recently homeless or have a high risk of housing instability.

Student loan debt. The Federal Housing Administration (FHA) updated its policy on student loan monthly payment calculations to provide easier access to single-family FHA-insured mortgage financing for creditworthy individuals with student loan debt. It did so by removing a previous requirement that lenders calculate a student loan monthly payment of 1% of the outstanding student loan balance for student loans that are not fully amortizing. The new policy bases the monthly payment on the actual student loan payment, which FHA says more closely aligns with industry standards.

Fair housing, lending enforcement and access. HUD signed a memorandum of understanding (MOU) with the Federal Housing Finance Agency (FHFA) to collaborate on fair housing with FHFA-regulated entities, including Fannie Mae, Freddie Mac and the Federal Home Loan Banks. The effort, HUD says, will ensure deeper collaboration on fair housing investigations and enable data sharing to further fair housing within the mortgage industry. In addition, HUD published a legal memorandum saying that certain Special Purpose Credit Programs (SPCPs) that are lawful under the Equal Credit Opportunity Act (ECOA) generally aren’t barred by the Fair Housing Act.

Housing supply and access to affordable housing. HUD restarted its Housing Finance Agency (HFA) risk-sharing program with Treasury’s Federal Financing Bank (FFB) on Sept. 1 to develop more affordable rental homes. The program allows HFAs to obtain FHA insurance on multifamily mortgages they underwrite, with HUD and the HFA sharing the risk of any potential loss. FHA says about 20,000 affordable rental homes will be created or preserved through the program through 2027.

HUD also made more single-family homes available to individuals, families and non-profit organizations – rather than large investors – by limiting the sale of certain FHA-insured and HUD-owned properties to homesteaders rather than investors. Finally, HUD released new research on actions that governments can take to increase their housing supply and is developing a Housing Supply Toolkit filled with easy-to-implement strategies to deploy HUD resources.

Furthering Fair Housing (AFFH) requirement. The Department published an interim final rule (IFR) that went into effect on July 31 to restore the Fair Housing Act’s AFFH requirement. Under that restored definition, HUD funding recipients must regularly certify compliance with the Fair Housing Act’s AFFH requirement and commit to steps that fix any fair housing issues in doing so.

Mutual Mortgage Insurance (MMI) fund. HUD announced a historically strong Mutual Mortgage Insurance Fund Report showing that FHA continued to deliver on its mission of enabling homeownership for first-time and low- and moderate-income, and households of color. HUD says the fund is “well positioned to withstand future economic events,” including any pandemic-induced delinquencies still in forbearance. The percentage of first-time homebuyers using FHA insurance reached a new high, and the share of mortgages insured by FHA to minority borrowers reached almost 42%. FHA served double the percentage of Black and Hispanic borrowers compared to those who used other types of mortgage originations.

LGBTQ+ community and housing discrimination. On Feb. 11, HUD announced that the Fair Housing Act bars discrimination on the bases of sexual orientation and gender identity, consistent with President Biden’s Executive Order 13988 and the Supreme Court’s ruling in Bostock v. Clayton County. This decision expanded Fair Housing Act protections to a community that has historically been subject to discrimination. Through its partners, HUD says it’s processed 235 cases alleging sex discrimination due to gender identity and sexual orientation last year.

Housing assistance and supportive services for Native Americans. The American Rescue Plan provides $750 million for assistance for Native Americans and Native Hawaiians, helping reduce housing-related health risks during the pandemic.

© 2022 Florida Realtors®


Single-Family Rents See Record Growth

U.S. rent grew 11.5% year-to-year, according to a CoreLogic index, with the Miami metro area leading the nation at 33%, and the Orlando area No. 5 at 15.9%.

NEW YORK – Property owners are charging more for their single-family rentals as demand soars and they’re still finding willing tenants. Single-family rental prices continue to rapidly increase with record growth, according to CoreLogic’s Single-Family Rent Index. In November 2021, single-family rent growth nationally rose 11.5% year-over-year.

Annual rent price growth has continued to double – and even triple – in the last several months in some markets, according to the index.

Miami-Miami Beach-Kendall posted the highest year-over-year increase in single-family rents in November 2021, where prices jumped 33% over the past year, followed by Phoenix-Mesa-Scottsdale (19.4%) and Las Vegas-Henderson-Paradise (16.7%).

In addition to Miami, Orlando-Kissimmee-Sanford ranked fifth in CoreLogic’s list for highest yearly rent increases, rising 15.9% in the November report. Overall, the range of rent increases in the top 20 metro areas ranged from Miami’s 33% to No. 20, the Washington, D.C., metro area’s 5.4%.

“Improvements in the economy and job market have helped push single-family rent growth to record levels,” says Molly Boesel, principal economist at CoreLogic. “However, rapid increases in single-family rents, especially for lower-priced properties, have led to a continued erosion of affordability.”

Rent growth also may lead to heightened concerns about inflation since it’s reflected in inflation measures, CoreLogic notes.

Source: CoreLogic

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


3 Fla. Counties More Likely to See Foreclosures

Most homeowners have equity, and at-risk ones will likely sell rather than face foreclosure. But an ATTOM study suggests that’s less true in a few U.S. areas.

IRVINE, Calif. – Some buyers are hoping for an avalanche of low-cost foreclosures because they saw that a decade ago during the Great Recession. However, housing was an important link to the recession itself, and that’s not true this time. Even homeowners in forbearance with no discernable income on the horizon likely have at least some equity in their home thanks to rising prices, making foreclosures far less likely this time around.

However, that’s less true in some U.S. counties, and a few homeowners are underwater (owing more on their mortgage than their home’s worth) this time around too.

ATTOM’s fourth-quarter 2021 Special Coronavirus Report spotlights the county-level housing markets around the United States that are more or less vulnerable to damage from the ongoing coronavirus pandemic. The report finds that New Jersey, Illinois and parts of California had the highest concentrations of at-risk markets in the fourth quarter, with the biggest clusters still in the New York City and Chicago areas. The West, meanwhile, remained far less exposed outside of California.

However, Florida also had three counties in ATTOM’s top 50 list for those likely to see more foreclosures in 2022 and beyond Those include:

  • Bay County (Panama City)
  • Flagler County (Palm Coast)
  • Lake County (outside Orlando)

In the fourth quarter report, New Jersey, Illinois and California had 31 of the 50 counties most vulnerable to the potential economic impact of the pandemic – eight each around Chicago and New York City, with seven in the top half of California, in addition to three counties around Philadelphia and two counties in Delaware.

Overall, the West region had the fewest counties considered at-risk to pandemic-related damage.

What makes a county at-risk?

 ATTOM deemed counties at risk based on the percentage of homes facing possible foreclosure, the portion with mortgage balances that exceed estimated property values and the percentage of average local wages required to pay for major homeownership expenses on median-priced single-family homes. Rankings were based on a combination of those three categories in 575 counties around the United States with sufficient data to analyze in the third and fourth quarters of 2021.

In the study, ATTOM notes that housing prices climbed more than 10% last year, but that wasn’t universal across the U.S., and some counties lost businesses and jobs.

 “The U.S. housing market keeps powering on despite the coronavirus pandemic that’s still raging across the country. Indeed, home prices keep rising in part because of the crisis,” says Todd Teta, chief product officer with ATTOM. “Nevertheless, the virus remains a potent threat to the broader economy and the housing market, with some of the same counties we’ve seen in the past continuing to look vulnerable to potential downturns.”

Teta sees no immediate warning signs in any U.S. county, but “pockets are more vulnerable to the market taking a turn for the worse.”

In 36 of the higher risk counties, more than one in 1,500 residential properties faced a foreclosure action in the fourth quarter of 2021; nationwide, it was one in 2,446 homes. Forbearance – the federal program that banned most foreclosures – ended on July 31, 2021, and ATTOM expects the overall foreclosure rate to rise this year.

© 2022 Florida Realtors®


What’s Changing for Fla. Real Estate?

ORLANDO, Fla. – After almost two pandemic years, changes created to deal with COVID-19 have created major shifts that change Florida’s real estate markets, according to a panel of site developers, Realtors® and economic development experts who spoke to more than 300 Realtors during the 2022 Florida Real Estate Trends summit Thursday.

“Prior to COVID, we saw a lot of Wall Street firms testing the waters with CEOs looking at homes,” said Kelly Smallridge, president and CEO of the Business Development Board of Palm Beach County. “Now, these CEOs are signing seven- to 10-year commercial leases, they’re legally domiciling and, most importantly, they’re buying homes and putting their kids in private schools. We now have zero slots open for any private school in Palm Beach County.”

The Real Estate Trends event was part of this year’s Florida Realtors®’ Mid-Winter Business Meetings at the Renaissance SeaWorld Orlando. In addition to Smallridge, other panelists included: Deanna Armel, broker-owner, Armel Real Estate; John Boyd, principal, The Boyd Company; and Melanie Schmees, director of business and economic research, Greater Naples Chamber of Commerce. Florida Realtors Chief Economist Dr. Brad O’Connor and Dr. Jessica Lautz, vice president of demographic and behavioral insights at the National Association of Realtors (NAR) also shared their insights on the 2022 outlook.

Kelly Smallridge, president and CEO
Business Development Board of Palm Beach County

Unfortunately, the misconception that Florida schools lag and the state’s educated workforce is lacking still lingers among many executives inquiring about relocating their businesses, Smallridge said, and that is “absolutely not the case.” Once they’re in Florida, check out the schools and have their children tested for placement, their perception quickly changes, she said.

“The average salary in Palm Beach County is $61,000, while the average salary of the people coming in now is $1 million,” she added – another boon to local businesses and area development.

Many of the business executives interested in moving to Florida want to look at homes first, she said, and may not mention a possible relocation.

“When you’re taking a buyer around to see homes, see if they also have any interest in bringing a business here,” Smallridge advised brokers and real estate agents. “You can offer them information to connect with local chambers of commerce or economic development officials. We help them understand all the logistics of what it takes to get them up and running. So, we’re really part of your team. Together, we can land not only the home but the company as well.”

Melanie Schmees, director of business and economic research
Greater Naples Chamber of Commerce

Like real estate, economic development often involves referrals and regional cooperation, said Schmees. “Naples is a unique market,” she explained. “Right now, we have a 1% industrial vacancy rate; sometimes, we need to direct those interested to other areas near us like Fort Myers. The whole region benefits.”

One factor important for ongoing business relocations and continued economic development in Florida will be the consideration of employees’ needs and how they can manage new lives here.

“We need to create an environment that works for the workers, not only the business executives,” Schmees said. “Often, their workers are concerned that they can’t make the move. They’re worried they can’t find housing or figure out their cost of living.”

Deanna Armel, broker-owner
Armel Real Estate

“Florida in general is a draw for business and for out-of-state buyers,” she said. “There’s no state income tax, our weather, beaches, and in Orlando, our theme parks. Since COVID (the start of the pandemic), home preferences have changed. People want an office, a pool, flex space and a yard.”

According to Armel, the influx of major business relocations and wealthy buyers who can pay cash – like many California residents moving to Florida after selling their homes – has made an impact on the housing market, particularly in the luxury-home sector.

“I call it monopoly money,” she said. “Cash is great, but it’s really hurting our buyers who need financing, our veterans, our workers and first-time homebuyers. The competition is unbelievable, especially in new construction. New construction, turn-key, luxury homes: That’s what California buyers want.”

John Boyd, principal
The Boyd Company

Before the pandemic, about 10% of employees worked remotely, said Boyd. “Today, over half of the workforce works remotely, at least on a hybrid basis, and this change is here to stay. It saves businesses too much in terms of office space, operations and so on. It’s also a great recruiting tool – people like the flexibility.”

He noted that economic development is now a “people first operation.” And that, he said, “has established a new class of economic development workers – the residential real estate agent.”

Brightline, the private high-speed rail system running from Miami to West Palm Beach with an expansion in the works to Orlando, is a positive for marketing Florida for economic development, the panelists said. “I think we’ll see a lot of exciting development projects along those Brightline lines, with the ability to connect between Central Florida and South Florida,” Boyd said.

Another plus for Florida? “Our state is a magnet for global talent, experience and skill sets,” he added. “Having no state income also attracts industry and development. Business and money tend to go where it feels welcome.”

© 2022 Florida Realtors®


Daytona Mayor Wants More Short-Term Rentals

While some Fla. cities prefer to limit short-term rentals, Daytona Beach’s mayor sees expansion into a core tourist area as a way to improve the neighborhood.

DAYTONA BEACH, Fla. – For decades, property owners who have wanted to use their Daytona Beach houses and condominiums for short-term vacation rentals have run into a brick wall of opposition at City Hall.

Now Mayor Derrick Henry is proposing that the city make an exception to its ban on residential rentals for less than six months in just one part of the city: The beachside’s core tourist area. Henry wants to allow the rentals for a few days, weeks or months between East International Speedway Boulevard and Oakridge Boulevard, and between Halifax Avenue and State Road A1A.

At Wednesday night’s City Commission meeting, Henry said it’s “a perfect place for Daytona Beach to offer vacation rentals.”

“The large number of smaller homes with easy access to the beach, and plenty of room for new businesses to accommodate these visitors in the surrounding area is a winning combination,” Henry said. “With changes happening now on Oakridge, and soon East ISB, Daytona’s beachside is poised for a boom.”

A majority of city commissioners said they’re interested in talking more about Henry’s idea and considering a formal proposal that would allow just that portion of the beachside to have short-term rentals.

For many years, the city has only allowed rentals for less than six months in areas of Daytona Beach’s tourist zoning districts and community redevelopment areas where hotels, motels and bed and breakfast inns are also allowed. Bed and breakfast establishments can also legally operate in a residential neighborhood if the area is an established historic district.

Many people have ignored Daytona Beach’s rules and rented homes and condos anyway through Airbnb, Vrbo and other online vacation rental companies. The city has cracked down hard on the illegal rentals in the past few years, hitting owners with code violations for not being licensed to rent their properties.

Henry said he’s thought about easing the rules for short-term rentals on the beachside for nearly a year. He said he realizes “this is very sensitive in our community.”

“We know there will be folks who will not be in favor of this,” Henry said. But he believes it’s the right thing to do.

The city has struggled for decades to revitalize the beachside around Main Street and the Ocean Center with little success. Henry said the short-term rentals could be a catalyst to finally turn around the area between the Halifax River and ocean.

At Wednesday night’s meeting, Henry ran down a list of seven reasons why he maintains allowing vacation rentals “is an excellent way” to improve the beachside neighborhood known as Surfside Village and “boost our Main Street area.” Henry said he wants to make Main Street, which is currently dominated by bars and restaurants, more of a shopping district and a place for festivals. He envisions creating places for vacationers to walk to from their rental properties.

He argues short-term rentals would encourage homeowners and investors to improve dilapidated properties. Increased property values would mean more money for public amenities and infrastructure, he said. Henry also argues that vacation rentals would provide additional income opportunities for resident owners, and visitors staying in vacation rentals would bring new life to the area and patronize nearby businesses. He said that could spur more businesses to open.

He also points out that travelers who prefer a home setting to hotel rooms have to go to a different city now. And he said licensing, regulating and overseeing vacation rentals that try to stay under the radar would minimize the negative impacts they can have on surrounding properties.

Henry and local residents on the Mayor’s Beachside Committee went to 112 homesteaded properties between East ISB and Oakridge and either talked with the residents or left the flier that explains the mayor’s idea. The group talked to 38 people in the homes, and asked them what they thought of the mayor’s short-term rental idea. A total of 27 people in the homes like the idea, nine said they’re neutral on the proposal, and two said they don’t like it, Henry said.

One woman who lives on South Hollywood Avenue said most of the neighborhood already has short-term rentals, and she lives next door to one, according to the group’s survey.

Although it’s getting better, the beachside still has a lot of dilapidated properties, Henry said. There’s also a low percentage of homesteaded properties between East ISB and Oakridge, he said. Henry shared figures from the Volusia County Property Appraiser’s Office showing just 13% of homes between Seabreeze Boulevard and Main Street are homesteaded. From Main Street to ISB, the rate increases to a little over 24%. South of ISB to Silver Beach Avenue, it rises to 29%.

Henry believes competition among short-term rental properties would spur owners to fix up their homes, and that in turn could attract more homesteaded homeowners.

“It would encourage those who own those properties to take it to another level,” Henry said.

City Attorney Bob Jagger said he thinks the city would be on solid legal footing if it allowed short-term rentals in the center of the city’s beachside. A state law passed in 2011 states, “A local law, ordinance, or regulation may not prohibit vacation rentals or regulate the duration or frequency of rental of vacation rentals.”

The city would be adding more rentals, not regulating or prohibiting them, Jagger said. And the city’s existing short-term rental limitations were grandfathered in when the 2011 law was passed, so those rules could remain in effect for the rest of the city.

“I’m confident the city would be able to defend a lawsuit,” Jagger said.

© 2022 www.news-journalonline.com. Distributed by Tribune Content Agency, LLC.


How to Groom and Grow a Facebook Page

Facebook provides an effective and free way to market a real estate business – providing agents maximize their chances for success.

NEW YORK – Real estate professionals effectively use Facebook to show they care for homebuyers and demonstrate their authenticity to potentially a huge audience. Facebook had 2.89 billion monthly active users in the second quarter of 2021.

The best way to use Facebook for marketing? Agents should ensure their Facebook page displays a clear portrait photo with a neutral background, with a photo where they gaze confidently and directly at the camera.

The Facebook cover can consist of a static image, video or slideshow that is eye-catching and relevant to the business. Free tools like Canva can help agents refine the layout.

If the agent’s brand identity includes a slogan, it can be included as a short description in the page’s “About” section. This section consists of two parts – a short description summarizing the business and a part called additional information. One approach could be to use the description field for contact information. The objective of the second part then is to get the agent’s message through and provide a sense of the Realtor’s personality. The page’s main category should cite Real Estate Agent, and the title of the page should reflect the agent’s personal brand or occupation.

After the page’s backbone has been created, it’s important to keep content fresh. That should include a posting schedule and regular updates.

Postings are like the Goldilocks story – not too much and not too little. Something in the middle is just right.

Since the goal is for viewers to form a positive impression of the agent, they shouldn’t post excessively or brag a lot about their successes. In all cases, they should first decide what their followers want to see. A good ratio would be 80% customer-centric content, and 20% business and bragging posts.

Agents planning to engage with their audience via video should create clips longer than a minute, or, optionally, use the Facebook Live feature to connect in real-time.

Source: Realty Biz News (10/18/2021) Butler, Mihaela Lica

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


RE Trends: What’s Driving Fla. Buyer Demand?

ORLANDO, Fla. – What trends should consumers, Realtors® and policymakers watch for when it comes to Florida real estate over the next year? Drivers for homebuyer demand include demographic shifts, changes in consumer housing preferences – like location, home size and lot size – still-low mortgage rates and rapidly rising rental prices, Florida Realtors® Chief Economist Dr. Brad O’Connor told more than 300 Realtors during the 2022 Florida Real Estate Trends summit Thursday.

“The biggest wave of millennials is now in their mid-30s and they’ll be in prime homebuying years for some time to come,” O’Connor said. “And who are they buying from? The Gen Xers – and there are a lot more millennials than Gen Xers. And, here in Florida, retirees are a pretty big deal – combined with the millennials, that puts pressure on the market.”

The event was part of this year’s Florida Realtors’ Mid-Winter Business Meetings at the Renaissance SeaWorld Orlando. In addition to O’Connor, the summit featured Dr. Jessica Lautz, vice president of demographic and behavioral insights at the National Association of Realtors® (NAR). She shared her thoughts on buyer demand via a recorded Q&A. It also included a panel discussion on buyer motivation featuring Deanna Armel, broker-owner, Armel Real Estate; John Boyd, principal, The Boyd Company; Melanie Schmees, director of business and economic research, Greater Naples Chamber of Commerce; and Kelly Smallridge, president and CEO, Business Development Board of Palm Beach County.

Dr. Brad O’Connor, Florida Realtors chief economist

Analysts are waiting to see what will happen with inflation and how that will impact interest rates long term, O’Connor said, noting that some predictions call for the 30-year fixed rate mortgage to be as high as 4.5% by the end of the year. “That’s what we experienced a few years ago, and if that happens, it will certainly impact buyer demand and financing. We’ll see the market change and return to similar conditions,” he said.

Homebuilding and supply will also be a factor to watch when it comes to buyer demand.

“It’s a long-run problem; we have a long way to go when it comes to building,” O’Connor noted. “We need construction workers. Builders continue to face constraints but have been building at the fastest pace in recent memory. However, high prices and low rates of starter home construction will remain a challenge.”

Looking at 2021, Florida Realtors latest housing data shows that Florida’s housing market had more than 528,000 sales of existing homes (all types), up 19% year-over-year – a total dollar volume of about $241 billion – despite the ongoing COVID-19 pandemic.

In terms of sales, 2021 could also be called ‘The Year of the Condo’,” O’Connor said. “Over 160,000 existing homes in the condo and townhouse category sold in 2021, marking a more than 34% increase over 2020’s total. In contrast, the over 350,000 sales in the single-family home category, while over twice the size in number, represented only about a 13% increase year-over-year.”

The lack of inventory impacted the housing market statewide over the year.

“We got our hopes up for inventory, but except for a few months, that didn’t happen,” he said. “We started the year with a 1.6-month’s supply of existing single-family homes, but we ended 2021 with a 1-month’s supply – and in many of your local markets, it’s down to a half-a-month’s supply. For years, Florida has had more existing condos than single-family homes, but by the end of the year, existing condos and townhomes are down to a 1.3-month’s supply, which is very close to the single-family category.”

Dr. Jessica Lautz, NAR vice president of demographic and behavioral insights

The median age of a first-time homebuyer is 33 years, the same age it has been for several years, Lautz said, noting NAR research found that first-time buyers usually are in a tight age range of 28-33 years.

“However, the age of typical repeat buyer has increased significantly,” she said. “Repeat buyers’ median age is 56 years, and some may be looking to downsize, which can be added competition for the first-time buyers.”

At the beginning of the pandemic, there was a quick uptick in multigenerational buyers as older parents came to live with their adult children and their families, who also may have had college age or older children come back home, according to Lautz. It has since leveled off to about 11%.

When asked about research on buyers and sellers working with real estate brokers and agents, Lautz noted that “agent use is trusted.”

“People are embracing technology and using technology with real estate professionals,” she said. “Agent use is extremely high now; 87% of buyers today are working with real estate agents, and the youngest buyers out there are using agents at the highest rates. For sellers, 90% are using an agent, and they’re working with someone who will be a one-stop shop for them with a broad range of expertise who will handle it all.”

She added that FSBOs (For Sale By Owner) are at historic lows at just 7% today.

Finally, more people see the real estate industry as “a refuge” right now. It’s attracting people seeking flexibility and independence – especially more women, according to Lautz.

“We see this wave of more Realtors entering NAR membership (1.5 million) than ever before,” she explained. “And we’re seeing more women agents and brokers. It’s a pretty stark change from 1978 to today.”

© 2022 Florida Realtors®


House Not Finished Yet? Buyers Still Move In

Supply-chain problems have led to some new-home buyers moving in before completion, even as many builders order supplies months earlier than they once did.

NEW YORK – Material supply chain backups continue to hit the new-home market, and one of the results is some new owners moving into unfinished homes, The Wall Street Journal reports. The problems stem from ongoing factory closures caused by the pandemic, transportation delays and port capacity limits. High-profile shortages include windows, garage doors, appliances and paint.

The supply-chain problem has vexed builders since the pandemic began. They say it hasn’t improved, and it still takes weeks longer than normal to finish homes due to the widespread shortages. In November 2021, about 90% of home builders surveyed were experiencing supply disruptions, up from 75% in January 2021, according to Zonda, a real estate research firm.

To help counter the delays, some builders stock up on products or try to find suitable substitutes for some materials.

The builder Epcon Communities in Dublin, Ohio, said that some of their buyers moved into their new homes before gutters and downspouts were installed. And city officials in Sacramento, Calif., established a policy in November 2021 that allows builders to close on homes with temporary garage doors.

Builders with Homes by WestBay LLC in Riverview, Fla., say they’ve started ordering windows six months in advance. Prior to the supply chain issues, they could order them just 60 days ahead of time.

“About the time we’re getting ready to pave streets in a new subdivision … we’re ordering windows for 100 homes,” says Willy Nunn, president and CEO of Homes by WestBay. He says homes are about a month to two months behind their normal schedule.

Materials aren’t just taking longer to arrive, they also cost more, and builders largely pass those increases on to homebuyers. In November, the median price of a newly built home reached a record high of $416,900, almost 19% higher than a year earlier.

Source: “Supply-Chain Issues Leave New Homes Without Garage Doors and Gutters,” The Wall Street Journal (Jan. 9, 2022) [Log-in required.]

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-4688


NAR: 2021 Existing-Home Sales Highest Since 2006

WASHINGTON (January 20, 2022) – U.S. existing-home sales declined in December, snapping a streak of three straight months of gains, according to the National Association of Realtors® (NAR).

Each of the four major U.S. regions included in the full report saw sales fall in December both month-over-month and year-over-year. Despite the drop, however, overall sales for 2021 increased 8.5% compared to 2020.

U.S. existing-home sales for the month of December – completed transactions that include single-family homes, townhomes, condominiums and co-ops – dropped 4.6% compared to November at a seasonally adjusted annual rate of 6.18 million. Year-over-year, sales fell 7.1% (6.65 million in December 2020).

“December saw sales retreat, but the pullback was more a sign of supply constraints than an indication of a weakened demand for housing,” says Lawrence Yun, NAR’s chief economist. “Sales for the entire year finished strong, reaching the highest annual level since 2006.”

Yun, however, expects existing-home sales to slow slightly in the coming months due to higher mortgage rates, however any drop for that reason might be mitigated some by recent employment gains – and stricter underwriting standards ensure home sales are in no danger of crashing. He forecasts mortgage rates to remain below 4% by year-end and wages to hold firm due to a tight labor market.

“This year, consumers should prepare to endure some increases in mortgage rates,” Yun cautions. “I also expect home prices to grow more moderately by 3% to 5% in 2022, and then similarly in 2023 as more supply reaches the market.”

Total housing inventory at the end of December amounted to 910,000 units, down 18.0% from November and down 14.2% from one year ago (1.06 million). Unsold inventory sits at a 1.8-month supply at the present sales pace, down from 2.1 months in November and from 1.9 months in December 2020. Economists generally consider a 6-month inventory to be a balanced market between buyers and sellers.

“We saw inventory numbers hit an all-time low in December,” Yun says. “Home builders have already made strides in 2022 to increase supply, but reversing gaps like the ones … will take years to correct.”

The median existing-home price for all housing types in December was $358,000, up 15.8% from December 2020 ($309,200), as prices rose in each region. The South, which includes Florida, saw the highest pace of appreciation. December also marks 118 straight months of year-over-year increases, the longest-running streak on record.

Properties typically remained on the market for 19 days in December, one day more than the 18 days seen in November and down from 21 days in December 2020. Four out of five homes sold in December 2021 (79%) were on the market for less than a month.

First-time buyers were responsible for 30% of sales in December, up from 26% in November and down from 31% in December 2020.

“There was a significant surge in first-time buyers at the end of the year,” Yun says. “With mortgage rates expected to rise in 2022, it’s likely that a portion of December buyers were intent on avoiding the inevitable rate increases.”

Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in December, up from 15% in November and up from 14% in December 2020. All-cash sales accounted for 23% of transactions in December, down from 24% in November, and up from 19% from December 2020.

Distressed sales – foreclosures and short sales – represented less than 1% of sales in December, equal to the percentage seen in both November 2021 and December 2020.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.10% in December, up from 3.07 in November. The average commitment rate across all of 2021 was 2.96%.

Single-family and condo/co-op sales: Single-family home sales dropped to a seasonally adjusted annual rate of 5.52 million in December, down 4.3% from 5.77 million in November and down 6.8% from one year ago. The median existing single-family home price was $364,300 in December, up 16.1% from December 2020.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 660,000 units in December, down 7.0% from 710,000 in November and down 9.6% from one year ago. The median existing condo price was $305,100 in December, an annual increase of 11.9%.

“We wrapped up the year witnessing home sales exceed the previous year’s total and saw millions of families secure housing,” says NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “I think the positive momentum will continue as the market prepares to finally see more supply in the coming months, meaning more buyers will be able to land their dream home.”

Regional breakdown: Existing-home sales in the Northeast fell 1.3% in December, registering an annual rate of 750,000, a 15.7% decrease from December 2020. The median price in the Northeast was $384,600, up 6.3% from one year ago.

Existing-home sales in the Midwest slid 1.3% to an annual rate of 1,500,000 in December, a 2.6% decline from a year ago. The median price in the Midwest was $256,900, a 10.0% climb from December 2020.

Existing-home sales in the South retreated 6.3% in December, posting an annual rate of 2,700,000, a drop of 5.3% from one year ago. The median price in the South was $323,000, a 20.2% rise from one year prior.

Existing-home sales in the West decreased 6.8%, reporting an annual rate of 1,230,000 in December, down 10.2% from one year ago. The median price in the West was $507,100, up 8.4% from December 2020.

© 2022 Florida Realtors®


2021 Fla. Housing Market: Strong Gains Despite COVID

Florida Realtors’ Dec., 4Q and 2021 data: Year-end single-family sales up 12.9%, median prices up 20% ($348K); condo sales up 34.2%, prices up 17.2% ($252K).

ORLANDO, Fla. – Despite the ongoing COVID-19 pandemic and continuing economic stressors over the year, Florida’s housing market wrapped up 2021 with more sales, higher median sale prices and more new listings compared to 2020, according to the latest housing data released by Florida Realtors®.

Year End 2021

Florida Realtors® Chief Economist Dr. Brad O’Connor pointed out that 2021 was a notable year for the state’s housing market.

In all, there were over 528,000 total sales of existing homes (all types) in 2021 – an increase of 19% over 2020’s total,” he says. “The dollar volume of these sales totaled nearly $241 billion, which, because prices also swelled in 2021, represented an increase of over 48%.”

Statewide closed sales of existing single-family homes totaled 350,516 at the end of 2021, up 12.9% compared to the 2020 year-end level, 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.

The statewide median sales price for single-family existing homes at year’s end was $348,000, up 20% from the previous year. The median is the midpoint; half the homes sold for more, half for less. New pending sales for existing single-family homes rose 5.7% at the end of 2021 compared to the previous year, while new listings for single-family homes were up 7.1% from a year ago.

Looking at Florida’s year-to-year comparison for sales of condo-townhouses, a total of 160,177 units sold statewide in 2021, up 34.2% over 2020. The statewide median price for condo-townhouse properties at the end of the year was $252,000, up 17.2% from the previous year. New pending sales for condo-townhouse units for the end of 2021 increased 29.2% compared to a year ago, while new listings for condo-townhouses rose 5.5% from year-end 2020.

Statewide, the number of cash sales doubled year-over-year in both property type categories at the end of 2021, up 53.2% for single-family existing homes and 50.2% for condo and townhouse units.

According to Florida Realtors’ data, at the end of 2021, in December 2021 and also for 4Q 2021, inventory (active listings) for single-family homes stood at a 1.0-months’ supply, while inventory for condo-townhouse properties was at a 1.3-months’ supply.

“Inventory levels at year’s end were dangerously low in both property type categories,” Dr. O’Connor says. “With inventory as low as it is now, early 2022 isn’t looking so great for prospective buyers in either property type category. Current homeowners, however, continue to have the opportunity of a lifetime in the strongest seller’s market in ages.”

The interest rate for a 30-year fixed-rate mortgage averaged 2.96% for 2021, down significantly from the previous year’s average of 3.11%, according to Freddie Mac.

December 2021

In December, closed sales of single-family homes statewide totaled 29,988, down 1.6% from December 2020, while existing condo-townhouse sales totaled 12,789, a slight uptick of 0.3% year-over-year, according to Florida Realtors’ data.

The statewide median sales prices for both existing single-family homes and condo-townhouse properties rose year-over-year in December. The statewide median sales price for single-family existing homes was $373,990, up 21% from the previous year. Meanwhile, the statewide median price for condo-townhouse units was $285,000, up 23.9% over the year-ago figure.

Statewide, cash sales increased year-over-year in both property type categories in December, up 27.5% for single-family existing homes and 13.8% for condo and townhouse units.

4Q 2021

Statewide closed sales of existing single-family homes totaled 85,157 in the fourth quarter of 2021, down 1.6% compared to the year-ago figure, according to Florida Realtors’ data. The statewide median sales price for existing single-family homes for 4Q 2021 was $365,000, up 19.3% from 4Q 2020.

Looking at Florida’s year-to-year comparison for sales of condo-townhouses, a total of 35,820 units sold statewide in 4Q 2021, remaining at relatively the same level compared to the same period a year earlier (down 0.1%). The statewide median price for condo-townhouse properties for the quarter was $272,000, up 20.4% over the previous year.

Cash sales increased year-over-year in both property type categories in 4Q 2021, up 31.2% for single-family existing homes and 13.3% for condo and townhouse units.

Looking ahead in 2022, Chief Economist O’Connor said mortgage rates trends will impact ongoing market conditions.

“With the Federal Reserve now getting serious about tapering its mortgage and bond purchases, as well as preparing to raise the federal funds rate later this year, we should expect mortgage rates to rise in the coming weeks,” he said. “This increase has been underway for a couple of weeks already. If these increases are sustained, then we should eventually expect some slowdown in the rate of price growth, which on the whole is probably a good thing as our economy continues to recover from the impacts of the pandemic.”

To see the full statewide housing activity reports, go to the Florida Realtors’ Newsroom and look under Latest Releases or download the December, 4Q or Year End 2021 data report PDFs under Market Data on the site.

© 2022 Florida Realtors®


New Condo Lending Rules Affect HOAs, Buyers, Sellers

Fannie Mae’s new condo loan rules require lots of documentation, but what if an HOA doesn’t have it? And who pays the higher fee for reams of paperwork?

CHICAGO – Fannie Mae’s sweeping new national condominium and co-op apartment lending regulations were created to protect residents, but the tough rules do not cover all the problems, appraisal experts say.

High-rises with “aging infrastructure and significant deferred maintenance is a growing concern across the nation,” noted the Fannie Mae memorandum, issued as a result of the tragic collapse of the Champlain South Tower in Surfside, Florida, which killed 98 people. The new regulations went into effect on Jan. 1.

How do lenders and appraisers address deferred-maintenance issues if they do not have access to the documents which now are sold by management companies?

“The elephant in the room is, who is going to absorb the cost of providing the hefty list of documents that reveal the current condition of the property?” asks veteran Realtor Sara E. Benson, president of Chicago-based Benson Stanley Realty.

The new rules will also apply to poorly constructed newer buildings that evidence shoddy workmanship or construction deficiencies, or substandard materials.

Analysts say the tougher restrictions could have a major impact on the sales and purchase of condos and co-ops in Chicago. Many lakefront high-rises date back to the 1950s and 1960s, and some buildings erected in the 1920s, may not qualify for Fannie Mae-backed mortgages because of deferred maintenance issues.

Fannie Mae’s rules now require that lenders and appraisers review a laundry list of items before mortgage approval, including the following documents:

  • The declaration, or covenants, conditions and restrictions (CC &R), bylaws, house rules and regulations.
  • Board-meeting minutes, state mandated disclosures, prior and current year budgets, and the reserve study.

“Doc fees can range from $50 to $250 per document, so the price can really add up depending on the number of documents requested,” Benson said. “On average, fees may run in excess of $500 for electronic delivery for a complete set needed to complete a condominium sales transaction.”

Reviewing condo documents is critical, consumer advocates say, because buyers need to know well in advance if the association being bought into has costly deferred maintenance issues, is on the brink of bankruptcy – or fiscally fit and a sound investment.

“You wouldn’t want to get hit with that $50,000 special assessment six months after the closing, would you?” Benson asked. Some special assessments have exceeded $100,000 per unit.

The new Fannie Mae regulations cover current or planned special assessments. Even if paid in full, they must be reviewed. The lender must document the reason for the special assessment, the total amount assessed, and repayment terms.

Fannie Mae also requires the following information:

  • Documentation to support that the special assessment will not create a negative impact to the financial stability, viability, condition, and marketability of the project.
  • The lender is expected to obtain the financial documents necessary to confirm the condo association or HOA has the ability to fund any repairs.

If the special assessment is related to safety, soundness, structural integrity, or habitability, all related repairs must be fully completed or the project is not eligible.

“Fannie Mae needs a reality check if it believes the necessary information for lenders and appraisers is easily accessible from sellers and buyers or real estate agents,” Benson said. “The gatekeeper is typically the property management company that charges for the information, a practice that only took off after the 2008 real estate collapse.” At that time, management companies were struggling to increase their bottom lines by reselling condo documents for a profit.

“Board meeting minutes are the only place where an upcoming special assessment may be discussed – for example, gathering bids for roof work or structural reconstruction that has not been levied at the time of the sale,” Benson noted.

“What if the property has not yet transferred, and the special assessment has not yet been levied?” Benson asks. “How is the appraiser and/or lender going to review meeting minutes to address undisclosed upcoming special assessments?

“Who is going to pay the fees to the property management companies for necessary compliance and disclosure?” Benson asks.

Regarding documents, most governing instruments and state statutes were created long before online delivery was a possibility, consumer advocates note. They allow for a “reasonable cost” of copying documents.

However, in the age of the Internet, association documents are frequently stored electronically and can be shared with a simple click of a mouse. There is no paper, ink, or shipping costs. There is no manpower time associated with copying docs and sending them to the buyer via U.S. Mail or Fed-Ex delivery.

“Despite this, most management companies – and some boards of directors – are using the documents as a literal profit center,” Benson said. “These are new expenses conjured up by property managers – charging fees for materials that are owned by the sellers or documents that are public record.”

Although the new Fannie Mae regulations are designed to protect sellers and buyers, the real question being overlooked is who pays the cost of the documents?

“Appraisers do not get paid enough to absorb the cost of hundreds of dollars in document fees,” Benson said. “Until Fannie Mae addresses the business model of reselling condo docs, the directives for document examination are nearly impossible to fulfill.”

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30-Year, Single-Family Mortgage Rate Tops 3.5%

Rates had a notable uptick again this week to 3.56%, pressured by inflation and Fed plans to raise interest rates. A year ago, the 30-year FRM averaged 2.77%.

WASHINGTON (AP) – Average long-term U.S. mortgage rates continued to rise this week. The rate on the benchmark 30-year loan breached 3.5%.

Home loan rates have been running in recent weeks at levels not seen since early 2020, when the coronavirus pandemic was breaking in the U.S. They remain at historically low levels, however.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year loan rose to 3.56% from 3.45% last week. By contrast, it stood at 2.77% a year ago.

The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, jumped to 2.79% from 2.62% last week.

Mortgage rates have been expected to rise this year after the Federal Reserve announced last month that it would begin dialing back its monthly bond purchases – which are intended to lower long-term rates – to slow accelerating inflation. But even with the expected three or four rate increases in 2022, the Fed’s key rate would still be historically low at around 1%.

Last week, the government reported that inflation spiked to 7% in December from a year earlier, the sharpest such increase in four decades. In addition, the Labor Department reported that prices at the wholesale level surged by a record 9.7% last month from December 2020.

In addition to surging inflation, experts expect robust economic growth and the tight labor market to continue to push rates higher.

Freddie Mac economists expect the higher mortgage rates to bring a modest decline in purchasing demand ahead of the spring homebuying season. They note that the supply of homes available for sale remains tight and prices are still high.

Available housing has been in short supply since long before the pandemic started, and prices have risen close to 20% over the past year. Higher mortgage rates could make it even harder for homebuyers to secure a new home.

New data released Thursday showed that sales of previously occupied homes fell in December for the first time in four months as many would-be buyers were frustrated by a lack of available homes – which fell to the lowest level in over two decades.

© 2022 Florida Realtors®