Monthly Archives: March 2022

Another Fla. Insurer Will Likely Be Dissolved

Insurers need an A rating from Demotech, a ratings firm, to remain viable, and Lighthouse Property Ins.’ loss of an A make its future business unlikely.

TALLAHASSEE, Fla. – In yet another ominous sign for Florida’s failing property insurance market, Tampa-based Lighthouse Property Insurance Corp. lost its financial stability rating, which means it will likely be placed under state receivership and dissolved.

On Wednesday, ratings firm Demotech announced the withdrawal, effective Tuesday, of Lighthouse’s former A rating.

“Despite a substantial capital contribution in the fourth quarter 2021, the operating loss in 2021, which reflected the evaluation of losses and loss adjustment expenses associated with Hurricane Ida, resulted in a level of capitalization below what was needed to sustain [its stability rating] at the A level,” Demotech president Joseph Petrelli said in a brief news release.

Lighthouse reported having 13,200 policies in Florida at the end of 2021. Of those, 947 were in Broward, Palm Beach and Miami-Dade counties. Those policyholders will have to find new carriers or go into state-owned Citizens Property Insurance Corp. if the state Office of Insurance Regulation seeks a court order to put Lighthouse in receivership.

Hurricane Ida, the fifth-costliest hurricane on record, struck the Gulf Coast on its way toward the Northeastern United States. Lighthouse also wrote policies in Louisiana, North Carolina, South Carolina and Texas.

Demotech, in a letter signed last week by Petrelli and the company’s other top executives, warned Gov. Ron DeSantis, Senate President Wilton Simpson and House Speaker Chris Sprowls that failure to call a special session to address financial instability of the state’s insurance market would likely force Demotech to withdraw financial stability ratings of “a number” of companies.

Demotech withdrew Lighthouse’s stability rating just hours after DeSantis called a special session to address congressional redistricting but not the insurance crisis.

DeSantis later told reporters that he expected property insurance reform to be dealt with by the legislature “sometime this year” and possibly not until after the 2022 election in November. That’s when Sprowls, who refused to take up several reform bills considered in the Senate, will be replaced as House speaker.

Loss of Lighthouse’s rating follows failure of four Florida-based property insurers since April 2021.

In February, state officials announced that Orlando-based St. Johns Insurance, a former top-10 insurer with more than 200,000 policies as recently as 2019, went into receivership after losing its financial stability rating. Slide, a newly formed insurer, agreed to absorb 147,000 of the St. Johns policies, preventing those homeowners from having to find new carriers willing to take them.

Earlier this month, about 37,000 customers of Avatar Property & Casualty weren’t so fortunate. They were given until April 13 to find new insurers after that company lost its rating.

A spokeswoman for the Florida Office of Insurance Regulation, which typically oversees initial steps in insurance company liquidations, did not immediately respond to a request for comment about the Lighthouse rating withdrawal.

But when an insurer loses its financial stability rating, “it’s highly likely that the state will put it into receivership,” said Paul Handerhan, president of the consumer-oriented watchdog group Florida Association for Insurance Reform.

Federally backed mortgage guarantors such as Freddie Mac and Fannie Mae will not approve mortgage loans if properties are insured by carriers without Demotech’s A rating.

Together, about 50 Florida-based insurers reported more than $1 billion in operating losses in 2021. Insurers say the industry is being torn apart financially by severe weather claims, roof replacement claims, contractor fraud, and excessive litigation.

More than 100,000 lawsuits were filed against Florida insurers last year. Florida accounts for 76% of all property insurance litigation in the country, state insurance regulators said last year.

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


Average Weekly Mortgage Rates Soar Past 4.5%

At 4.67%, this week’s average rate for a 30-year, fixed-rate mortgage is up from last week’s 4.42% and notably higher than 3.18% one year ago.

WASHINGTON (AP) – Average long-term U.S. mortgage rates rose again this week as the key 30-year loan rate vaulted over 4.5% and attained its highest level since the end of 2018.

Against a backdrop of inflation at a four-decade high, the increases in home loan rates come a few weeks after the Federal Reserve raised by a quarter point its benchmark short-term interest rate – which it had kept near zero since the pandemic recession struck two years ago – to cool the economy. The central bank has signaled potentially up to seven additional rate hikes this year.

The developments mean that mortgage rates likely will continue to rise over the year.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year loan this week rose to 4.67% from 4.42% last week. That’s a sharp contrast from last year’s record-low mortgage rates of around 3%. A year ago, the 30-year rate stood at 3.18%.

The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, jumped to 3.83% from 3.63% last week.

Home prices are up about 15% over the past year and as much as 30% in some cities. Homes available for sale have been in short supply even before the pandemic started two years ago. Now higher prices and rising loan rates will make it even harder for would-be buyers as the spring homebuying season gets underway.

The government reported Thursday that an inflation gauge closely monitored by the Fed jumped 6.4% in February compared with a year earlier, with sharply higher prices for food, gasoline and other necessities squeezing Americans’ finances. That figure was the largest year-over-year rise in 40 years – since January 1982. Excluding volatile prices for food and energy, so-called core inflation increased 5.4% in February from 12 months earlier.

Robust consumer demand has combined with shortages of many goods to fuel the sharpest price jumps in four decades. Measures of inflation will likely worsen in the coming months because Thursday’s report doesn’t reflect the consequences of Russia’s invasion of Ukraine, which began on Feb. 24. The war has disrupted global oil markets and accelerated prices for wheat, nickel and other key commodities.

Squeezed by inflation, U.S. consumers increased their spending by just 0.2% in February, down from a much larger 2.7% gain in January.

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


New SW Fla. Home Comes with Alligator in the Bedroom

A new Babcock Ranch home came with an alligator squatter in the main bedroom. The reptile was quickly evicted.

BABCOCK RANCH, Fla. – In a scene straight out of a horror movie, an 11- to 12-foot alligator was found hanging out in the master bedroom of a newly built southwest Florida home. The bizarre discovery was made this month in Babcock Ranch, where homes sell for as much as $1.5 million. The community is northeast of Fort Myers.

A man installing window blinds stumbled on the alligator – tucked in the corner of a spacious room that, luckily, had tile flooring.

It took two professional trappers to pull the alligator out through a patio door – after the sliding glass was removed.

Video shows the reptile went into a death roll multiple times, something that is typically reserved for subduing prey. When the alligator calmed down, three men dragged it to the front yard to be loaded into a vehicle.

It’s believed the alligator was seeking shelter from a cold front and found a laundry room door to crawl through, project manager Matthew Goodwin told McClatchy News.

“The wind closed the door and he was trapped. He went into every room and made his mark,” Goodwin said, noting he was called by a construction manager to come see something “important.”

“I go look in … (the) house and there was the 12-foot gator!”

News of the discovery prompted a lot of jokes on social media, including references to bad roommates and unbelievable insurance claims.

“If home prices weren’t scary enough, can you imagine this inside?” WINK weather personality Matt Devitt wrote on Facebook.

“Welcome to Florida where dinosaurs show up to open houses,” Anthony Champney posted.

“Free pet with purchase of home. What a deal,” Mark Costa said.

Video shows a pond sits behind the home, which may be where the alligator was residing before it sought an upgrade. The gator was released in a wilderness area by the trappers, Goodwin said.

© 2022 The Charlotte Observer. Distributed by Tribune Content Agency, LLC.


Judge OKs $83M for Condo Tower Property Loss

Compensation for 98 deaths after the Champlain Towers South collapse must still be determined, but owners will split $83M for property they lost.

SURFSIDE, Fla. – People who owned units in a Florida oceanfront condominium building that collapsed last year will divide $83 million for property losses, with the compensation for families over the 98 deaths still to be determined, a judge ruled Wednesday.

The money for owners of the 136-unit Champlain Towers South building will come from sale of the now-vacant beachfront land as well as insurance policies, officials said. Unless they opt out, the owners who take the deal will relinquish their rights to sue individually but also could avoid an assessment because of the loss.

“It gives them certainty. These people need certainty and they need to carry on,” Miami-Dade Circuit Judge Michael Hanzman said before approving the deal at a hearing. “Maybe it’s not 100% of value, but it’s pretty close. I think it’s an outstanding result.”

Champlain Towers South, a 12-story condo in Surfside, Florida collapsed without warning early on June 24. The settlement is part of a lawsuit arguing work on an adjacent luxury condo building, known as Eighty Seven Park, damaged and destabilized an aging building already in dire need of major structural repair. The defendants associated with Eighty Seven Park deny any negligence or wrongdoing.

The cause of the collapse remains unknown, although the building was in the midst of a 40-year inspection and engineers had pointed out some serious structural flaws previously. The National Institute of Standards and Technology is the main investigative agency in a probe that could take many months.

Under the agreement Wednesday, each unit owner will be paid a share based on their ownership portion of a condominium unit and for personal items that were lost. It does not include money for wrongful death claims arising from the 98 fatalities, which will be settled later after input from court-appointed experts.

“We have 98 people who lost their lives and we need to keep this case in perspective,” Hanzman said.

Some family members of those died questioned why the property owners get the first chunk of guaranteed money.

“Loss of life is extremely more valuable than losing property,” said Martin Langesfeld, whose sister and brother-in-law were killed. “We believe it is completely unfair.”

Yet Alfredo Lopez, who survived the collapse with his family, said the settlement does not begin to compensate owners for the true value of their former units.

“We are surviving victims. We will be getting a fraction of what our homes were worth,” Lopez said.

The Surfside site where the building once stood will be put up for auction in the coming weeks, attorneys said. One offer for about $120 million has been on the table for months, but there may be others as the auction approaches.

Hanzman said the deal approved Wednesday is contingent on the land sale going through. It is possible the sale could be for a higher amount.

The city of Surfside, meanwhile, is creating committees led by Champlain Towers South families to organize an anniversary event this June and to consider how to construct a permanent memorial to the victims who died.

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


Highest Home Price Rises in Kid-Friendly Neighborhoods

Millennials now make up the most homebuyers, and since many move with children in tow, prices in kid-friendly areas are rising faster than the general metro area.

NEW YORK – Home values are growing fastest in areas with the highest share of kids, reflecting the impact millennial house hunters are making on family-friendly neighborhoods with a shortage of homes for sale. A record number of millennials will reach key age milestones for homebuyers over the next two years, which may accelerate price gains even further.

The top 10% of ZIP codes with the largest share of kids in each county analyzed saw an average of 21.3% growth from October 2020 to October 2021, compared to 17.6% in ZIP codes with the smallest share of kids. That trend started in 2013, which, not coincidentally, was the year the oldest millennials turned 32, the age when many new parents buy their first homes. That’s the median age of first-time home buyers and one year older than the median age of fathers with newborns.

“As millennials go, so goes the housing market, and we are seeing now, as millennials age, that they are looking for homes that fit the needs of growing families,” said Zillow economist Nicole Bachaud. “Millennial demand has helped push up home prices in areas with the most children. Competition for homes in these family-friendly areas should intensify in the coming years as more millennials reach the key age of 32, adding to the affordability squeeze.”

Zillow analyzed 421 U.S. counties representing 71% of the country’s population. ZIP codes with more residents under 18 years old are associated with higher home value growth in nearly two-thirds of the counties studied. Many of the counties where this relationship does not hold true are vacation destinations, where part-time residents have unconventional housing demands.

Home value growth in these family-friendly areas began to outpace nearby ZIP codes in 2013, and the correlation between kids and home value growth has been nearly perfect for each year since 2017.

That first wave of early-30s millennials had the benefit of discounted home prices as a result of the Great Recession; home values in these family-friendly ZIP codes were hit particularly hard between 2008 and 2011, in the midst of the nationwide housing crash. Today’s first-time homebuyers are encountering a much different market, especially as home price growth has reached record highs during the pandemic.

The snowball of millennials reaching peak age for first-time homebuyers has grown during the past nine years, and is about to turn into an avalanche. Nearly 200,000 more Americans will turn 32 this year than did so in 2021 – the biggest jump since the transition from Generation X to millennials in 2013 and even more will do so in 2023. This demographic reality should fuel even faster price growth in family-friendly ZIP codes over the next two years, making saving for a down payment even more challenging for first-time buyers.

This effect is strongest in counties that encompass the cities of Norfolk, Virginia; Washington, D.C.; Portland, Oregon; Austin, Texas; and Seattle. Counties where this trend does not hold true include those encompassing Galveston, Texas; Santa Barbara, California; and Ocean City, New Jersey.

Copyright © 2022 BridgeTower Media; © Copyright, 2022, The Mecklenburg Times (Charlotte, NC). All rights reserved.


RealTrends 500: Largest Brokerages By Sides, Volume

The 2022 survey is based on 2021 data. No. 1 for sides is HomeServices of America Inc. (388,098). For sales volume it’s Compass: $251,019,336,511.

NEW YORK – Which brokerages are emerging as the giants in the real estate space? The RealTrends 500 report ranks the performance of the top residential real estate brokerage firms each year. The 2022 survey is based on 2021 data.

RealTrend’s Top 10 brokerages ranked by closed transaction sides

  1. HomeServices of America Inc.
    2021 transaction sides: 388,098
  1. Realogy Brokerage Group
    2021 transaction sides: 376,892
  1. eXp Realty
    2021 transaction sides: 355,627
  1. Compass
    2021 transaction sides: 224,067
  1. Hanna Holdings Inc.
    2021 transaction sides: 124,016
  1. Redfin
    2021 transaction sides: 76,680
  1. HomeSmart
    2021 transaction sides: 56,679
  1. United Real Estate
    2021 transaction sides: 48,840
  1. @properties
    2021 transaction sides: 46,031
  1. Fathom Realty
    2021 transaction sides: 38,434

A full list of all rankings by sides is posted on RealTrends website.

RealTrend’s Top 10 brokerages ranked by closed sales volume

  1. Compass
    2021 sales volume: $251,019,336,511
  1. Realogy
    2021 sales volume: $246,052,872,000
  1. HomeServices of America Inc.
    2021 sales volume: $198,739,502,598
  1. eXp Realty
    2021 sales volume: $132,373,314,489
  1. Redfin
    2021 sales volume: $52,503,000,000
  1. Douglas Elliman Realty
    2021 sales volume: $51,031,187,364
  1. Hanna Holdings Inc.
    2021 sales volume: $35,625,185,300
  1. HomeSmart
    2021 sales volume: $25,162,914,396
  1. @properties
    2021 sales volume: $23,931,729,431
  1. William Raveis
    2021 sales volume: $21,000,445,000

A full list of all rankings by sales volume is posted on RealTrends website.

Source: “2022 RealTrends,” Realtrends.com

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


Find Your Real Estate Niche by Specializing

Realtors who specialize in a niche market create a road map for their career. It makes many decisions easier – where to market, how to market, etc.

NEW YORK – A specialization is one way for real estate professionals to stand out.

Ben Caballero, founder and CEO of HomesUSA.com, works directly with home builders to sell new homes. RealTrends has also named him the No. 1 real estate agent in the country based on transaction sides and sales volume every year since 2013.

“[Real estate] specialization is just like having a road map,” says Caballero. “If you can’t define what you’re wanting to do in the real estate business and you’re going to take it as it comes to you, you’re just driving without a destination.”

Prior to embarking on a specialization, however, agents need to take time to learn the ins and outs of their market, refine their craft, understand trends and data, and build a network.

They should also consider their passion when determining and developing a specialization. Potential specialization paths can include sports and entertainment real estate, new condo developments, restaurant properties, single-family rentals, ranches and land. Caballero estimates the real estate industry has at least 45 specializations.

Jordan Stuart, director of Sports and Entertainment at Keller Williams, says a mentor can be a helpful resource and someone to help connect agents to more people in the industry.

Agents who specialize say it’s essential for real estate pros to conduct research when selecting an area of specialization, including reading books by entrepreneurs, performing online research, and talking to industry insiders.

Kofi Nartey, founder and CEO of Globl Red, says “awareness around the brand” is essential because “that’s where your marketing comes into play, your outreach comes into play.”

Source: Inman (01/28/22) Dickerson, Lillian

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


Proof that Prices Won’t Fall? The New-Home Market

BOSTON – Emerson Claus has been building houses for 45 years. But he has never faced delays like he is now trying to get basic building materials. “I had a client ask me to add a door,” he says at a job site outside Boston. “We just waited six months to get it.”

“That’s a door in a frame,” Claus says, exasperated. “That’s kind of crazy.” He says appliances can be even worse. “A dishwasher, if you can find the model you want right now, you might wait a year for it.”

By one estimate, the U.S. is more than 3 million homes short of the demand from would-be homebuyers. Pandemic-related supply chain problems aren’t helping. They’re adding tens of thousands of dollars in cost to the typical house. But the roots of the problem go back much further – to the housing bubble collapse in 2008.

“What I call a bloodbath happened,” says Claus. It was the worst housing market crash since the Great Depression. Many homebuilders went out of business. Claus was building houses in Florida when the bottom fell out.

“A lot of my tradespeople found other work, went and got retrained for new jobs in law enforcement, all sorts of jobs,” says Claus. “So the workforce was somewhat decimated.”

A few years later, as Americans started buying more homes again, building stayed below normal. And that slump in building continued for more than a decade. Meanwhile, the largest generation, the millennials, started to settle down and buy houses.

And that’s the main reason we’ve ended up millions of homes short – builders for many years just weren’t building enough to keep up with demand. That lack of supply has pushed home prices to record levels – up nearly 20% last year alone.

Gradually, though, many homebuilding companies recovered. Claus is now the president of the Home Builders and Remodelers Association of Massachusetts. Before COVID hit, he had a crew of nine full-time workers again. That’s not counting the many subcontractor electrician, roofing and plumbing companies he works on homes with.

“We always need guys,” says Rene Landeverde, Claus’ foreman. He’s originally from El Salvador, and for the past 10 years he has helped Claus and other local builders find a lot of other workers to hire and train. “I’ve been bringing guys to companies, like maybe 200 guys in my whole construction experience.”

But then the pandemic hit. Things shut down and some of those workers left. Now, with unemployment so low, Landeverde can’t find people to hire like he used to.

“It’s a lot harder,” he says. “They’ve been finding other work.”

Claus says that’s made it more difficult for builders to respond to the surge in demand for homes during the pandemic.

“If I had twice as many guys, I would still not have enough,” says Claus, who now has five employees. “And my subcontractors, they’re all hurting for people.”

There’s another very big roadblock to home construction.

“Land,” says Claus. “I was just trying to buy a piece of land to build five homes on it. Unfortunately, that land went to somebody else that may put one or two on it.”

Claus says he wants to build more attached townhouses, or smaller homes on less land. That’s what many first-time homebuyers can afford to buy. But in many places, zoning rules won’t let you buy land and divide it up – you can only build one house with a big yard.

Zoning challenges

Overly restrictive zoning is a big problem nationally, says Robert Dietz, the chief economist with the National Association of Home Builders. “In certain neighborhoods you simply cannot build townhouses.”

“You have to build single family units on lots that are bigger than the market wants,” Dietz says. “This is not a free market choice. It’s a government-imposed rule.”

He says that in many parts of the country, the classic NIMBY (not in my back yard) opposition stops higher-density units from being built. Existing homeowners who don’t want more traffic and more homes in their neighborhood keep what he says are outdated, exclusionary zoning rules in place.

So to make a profit, builders like Claus are left doing renovations or tear downs – buying an older home, knocking it down, and building a bigger, more expensive new one.

“We are seeing a lot of knockdowns,” Claus says. “But it doesn’t add to the housing stock. You’re replacing something, you’re not adding to it, so the net effect isn’t the best.”

Changes in zoning can make a big difference. Some states and towns have been changing the rules to allow in-law rental apartments to be built onto existing houses. These are called accessory dwelling units, or ADUs.

“Twenty percent of remodelers indicate in the last year they’ve undertaken an ADU project, and the typical one can cost anywhere between $100,000 and $200,000,” Dietz says. That’s good for the supply of rental housing, which is also very tight. But Dietz says we also need a lot more homes for people to buy.

“That could be a townhouse,” he says. “It could be a single-family detached home on a small lot that’s roughly 1,800 to 2,100 square feet, that’s appropriate for effectively a newly married couple that’s moving out of their first apartment and is getting into their first rung of homeownership.”

Right now, Claus says that because of the restrictive zoning rules, he doesn’t have any new home projects lined up that will put a house like that in a place there wasn’t a home already.

Copyright © 2022 NPR, © KNOW Minnesota Public Radio, Copyright © 2022 APM. All rights reserved.


DeSantis: We Need to ‘Do More’ on Insurance

More needs done to fix Fla.’s property insurance market, and the governor expects the Legislature to “have another bite of the apple very, very shortly.”

TALLAHASSEE, Fla. – Gov. Ron DeSantis expects lawmakers to make changes in Florida’s troubled property-insurance system sometime this year, at the latest after the November elections.

DeSantis did not include property insurance issues as part of a special session that he called Tuesday on congressional redistricting, leaving a decision on insurance to legislative leaders. But he said more legislative action is needed after lawmakers passed a property insurance bill in 2021.

The House and Senate could not reach agreement on an insurance plan during this year’s regular session, which ended March 14. Property insurers have sought major rate increases and shed customers to reduce financial risks, with two insurers recently placed into state receivership.

“There is going to be a need to do more legislative reforms, and we were very clear about that during the (2022) session,” DeSantis said during a state Cabinet meeting Tuesday. “You know, we may have another bite of the apple very, very shortly. But we need to just understand that there is going to be a need for the Legislature to do more.”

DeSantis told reporters after the meeting that any changes “will not wait until the actual session in 2023. It will be done this year.”

Insurance Commissioner David Altmaier told DeSantis and Cabinet members his office is taking steps to help address roof-damage claims, which insurers say play a major role in the financial problems. Also, he said the market is approaching a “critical couple of months,” as insurers purchase reinsurance – backup coverage that plays an important role in such things as hurricane claims.

“Reinsurance companies don’t mind paying claims. They do mind paying claims that are three times as much as they thought that they were going to be,” Altmaier said. “That makes Florida not an attractive place for them to deploy their capital. And that’s a bad outcome for consumers as well.”

In 2021, lawmakers approved changes that included a new formula to limit fees of attorneys who represent homeowners in lawsuits against insurers and a reduction from three years to two years in the time to file claims. They also passed a proposal aimed at preventing roofing contractors from advertising to spur homeowners to file insurance claims, though a federal court has blocked that part of the law on free-speech grounds.

The law also allowed larger rate increases for customers of the state-backed Citizens Property Insurance Corp., which is often able to charge less than private carriers.

Last week, Citizens President and CEO Barry Gilway projected his company could have more than 1 million policies by the end of this year, as it adds roughly 5,500 policies a week. As of last week, Citizens had 801,341 policies, up from 570,000 a year ago.

In this year’s session, the Senate wanted to take a more aggressive approach than the House in trying to bolster private insurers. For example, the Senate proposed allowing new deductibles of up to 2% on roof-damage claims – an outgrowth of complaints by insurers that questionable, if not fraudulent, roof claims are driving up costs. As an example, under the Senate proposal, a homeowner with $300,000 in overall coverage could have faced a $6,000 deductible to replace a damaged roof.

But the House rejected the idea, which would have led to increased out-of-pocket costs for homeowners who need to replace damaged roofs.

DeSantis said Tuesday he supported the Senate efforts.

“Now, what the Senate was working on, we were very supportive of that. But basically, that ran into a brick wall in the House,” DeSantis said. “And so, if the House is willing to entertain it, then they should absolutely do it.”

DeSantis said he’s optimistic about insurance changes after talks with incoming Senate President Kathleen Passidomo, R-Naples, and incoming House Speaker Paul Renner, R-Palm Coast. Both will move into the leadership posts after the November elections.

“I am pretty confident, through my conversations with both Senator Passidomo and Speaker-designate Renner, that this will absolutely become a reality,” he said.

Current Senate President Wilton Simpson, R-Trilby, told reporters on March 11 the Senate had a “pretty good bill” on property insurance and that there’s a chance lawmakers would be called back to Tallahassee as “we have many companies going out of business.” But those comments followed Simpson saying the property insurance changes made during the 2021 session need time to take hold.

House Speaker Chris Sprowls, R-Palm Harbor, made similar comments when asked about the insurance situation after the regular legislative session ended March 14.

“What I would also ask people to remember is that we just passed an incredibly significant reform last session,” Sprowls told reporters. “It did things like amend the attorney fee statute for the first time, I think, in 100 years.”

The special session on redistricting will be held from April 19 to April 22.

Source: News Service of Florida


Feds Tracking Large and Small PPP Loan Fraud

NAPLES, Fla. – A Naples property management company accused in lawsuits of a multimillion-dollar embezzlement scheme may have violated federal law when it applied for $245,000 in federal COVID-19 relief funds, according to legal experts.

American Property Management Services (APMS) allegedly swiped more than $200,000 from Naples’ Eagle Creek community association in fall 2019, according to a complaint the association would later file with state regulators in October 2020. But when APMS sought a loan from the Paycheck Protection Program in April 2020, the application required it to certify that it was not “engaged in any activity that is illegal under federal, state or local law.”

That certification means federal authorities can prosecute companies if they were involved in criminal activity when they applied for a PPP loan, even if – like APMS – they weren’t under investigation at the time, said attorney Jonathan E. Green, a partner at the multinational law firm Arnold & Porter who has tracked cases of fraud in the relief program.

“That’s exactly the type of false certification that could be prosecuted as PPP fraud,” Green said in an interview.

APMS’s loan application was approved on April 15, 2020, and the loan was forgiven in November of that year. An attorney for APMS did not respond to a request for comment.

The company repaid the funds it allegedly took from Eagle Creek and settled with the state Department of Business and Professional Regulation for a $1,000 fine in June 2021, without admitting guilt. APMS has still not paid that fine.

And that was not the end of APMS’s legal problems.

In January, dozens of community associations in Lee and Collier counties sued APMS, accusing the firm of hijacking their bank accounts. The HOAs’ lawyer, Jason Mikes, said last week that APMS took at least $8 million from his clients, based on bank records obtained during the civil suit. The property firm has denied the allegations in legal filings.

The Commodore Club condo association filed a separate $100,000 suit claiming APMS owners Orlando Miserandino Ortiz and Lina Posada facilitated fraud, breach of contract and embezzlement at that community – allegations the company has also denied. A letter to Commodore Club residents provided to this news organization claimed APMS concealed its embezzlement by providing forged bank statements to the community’s board.

“We are in communication with the Secret Service and local authorities,” the letter said. “We are not alone.”

The Secret Service is one of several federal agencies that have investigated PPP fraud cases, Green said, though the focus of their inquiry into APMS is unknown. A spokesperson for the Secret Service said the agency does not comment on the existence or absence of specific investigations.

No criminal charges have been brought against APMS or its owners.

PPP fraud investigators look at firms of all sizes

While federal prosecutors have focused on large-scale fraud, they have also gone after smaller fish. In September 2021, the Department of Justice charged Brighton, Mass., spa owner Aticha Jittaphol with lying on applications for $5,066 in PPP loans and $2,000 in other pandemic relief funds. Her crime, according to prosecutors, was that she made a false statement on her application by certifying that her business was not involved in illegal activity, when it was actually a front for prostitution.

The charge carries a maximum penalty of five years in federal prison. Jittaphol has agreed to plead guilty, serve 36 months of probation and pay back the money, and is scheduled to be formally sentenced in June.

PPP fraud claims in SW Florida

Southwest Florida business owners charged with PPP fraud include a Lehigh Acres couple who allegedly used the funds to buy a home in North Carolina and Fort Myers roofer Casey Crowther, who was sentenced to 37 months in prison.

Amber and Anthony Bruey, the Lehigh Acres couple, pleaded guilty but have not yet been sentenced. Crowther was found guilty at trial but has appealed his conviction, arguing in a court filing that he used the PPP money properly.

Nick Schwellenbach, a senior investigator with the Washington, D.C.-based government accountability nonprofit Project on Government Oversight, said the allegations against APMS should prompt the federal government to review its loan.

“This is sort of the problem when people aren’t truthful and there is no verification on the front end of the process,” Schwellenbach said. “The [Small Business Administration] and its Office of Inspector General should say, ‘Hey, this looks like a red flag. Maybe we should look at this loan recipient more carefully now.’”

In April 2020, the Small Business Administration launched the PPP program following the passage of the Coronavirus Aid, Relief, and Economic Security Act. The program was designed to help businesses stay afloat during the early stages of the pandemic by offering forgivable loans to cover payroll costs.

The federal government automatically audits only those PPP loans that top $2 million but has the right to audit any loan to make sure it was obtained legally. The program relied largely on self-certification by businesses to determine eligibility, Schwellenbach said, meaning that many small loans have not been well vetted.

Companies were not required to keep employees on staff after the loan terms ended, meaning that APMS’s closure this year would not have violated the program’s rules, Schwellenbach said.

The Naples Daily News / The News-Press has filed a Freedom of Information Act request with the federal Small Business Administration for records of APMS’s loan application but has not yet heard back.

$76 billion in PPP loans could be fraud

Researchers at the University of Texas at Austin estimated in an August 2021 paper that 15% of loans given during PPP’s first 13 months – totaling $76 billion – showed indicators of potential fraud. Samuel Kruger, an assistant professor of finance at UT Austin and one of the paper’s co-authors, said the need for an emergency response to the economic damage of the pandemic gave scammers an opportunity to exploit.

“The original PPP, the very first round in April 2020, was inspired by a really panicked state of the economy,” Kruger said in an interview. “Trying to get money out as quick as possible.”

© 2022 Journal Media Group. Breaking news reporter Michael Braun contributed to this report.


Free CE Course: Master Your Market with SunStats

Florida Realtors economist: You don’t have to be an economist to sound like one. Get CE credit by creating local-data charts and graphs that market your business.

ORLANDO, Fla. – Florida Realtors®’ members have exclusive access to SunStats, the powerful housing-statistics program that creates individualized charts and graphs that show customers why they should work with you. SunStats is a research tool that puts information into easy-to-understand infographics that can be shared with clients and team members via print, email or social media.

Unsure about data and new technology? A new two-hour webinar will show you how to access, interpret and share SunStats information and prove you’re the local market expert.

In addition, the course has been approved for Continuing Education (CE) credit. There is no limit to the number of members who can attend.

It’s also free. Florida Realtors Leadership Team decided to offer “Master Your Market with SunStats” without any costs to all members once during each quarter of 2022.

After taking “Master Your Market with SunStats,” attendees will be able to:


  • Create unique, local charts showcasing market trends to educate team members
  • Create custom infographics for listing appointments that win over even the most skeptical clients
  • Help clients decide whether to buy or sell based on data-driven observations about their local real estate market
  • Help buyers decide where they prefer to live based on geographic areas, property types home prices, market trends and other key factors
  • How to share your local data images on print media, social media or through custom emails

“Master Your Market with SunStats” 2022 dates

April 28: 9:30-11:30 AM

Sept. 27: 1:00-3:00 PM

Nov. 17: 9:30-11:30 AM

Registration is now open for the next course on April 28. Registration information for future courses will be announced later.

After registering, you’ll receive a confirmation email containing information about joining the webinar.

Webinar Speaker: Stephanie White, ABR, CRB, CRS, RCE

Stephanie White is CEO of the Mobile Area Association of Realtors. She’s worked in real estate since 1995 and served in multiple Florida cities as a Realtor, broker, owner, education director, and real estate instructor.

White has served on or chaired many committees and in many leadership roles on a local and statewide level. She remains involved in RPAC and Women’s Council of Realtors. She’s passionate about teaching and helping agents and brokers have that “aha” moment, when they realize there may be a better way to skin that cat. She teaches from experience, having worn so many hats in the real estate profession.

Jennifer Warner is a Florida Realtors economist and the Director of Economic Development

© 2022 Florida Realtors®


NAR: Big Housing Increase in Biden Budget

The president’s budget is mainly a request to Congress, but a 34% increase for HUD suggests an emphasis on the need for more affordable housing.

WASHINGTON – President Joe Biden requested historic funding for housing supply in his federal budget proposal for the fiscal year that begins Oct. 1, 2022. The White House released the proposal on Monday.

A requested 34% increase over last year for the Department of Housing and Urban Development (HUD) includes $50 billion in grants and loans to increase the supply of affordable housing. It includes $32 billion for the Housing Choice Voucher Program and nearly $2 billion in funding for the HOME Investment Partnership to create more affordable homeownership opportunities.

“This unprecedented investment demonstrates how seriously the White House views the supply crisis,” says Shannon McGahn, the National Association of Realtors®’ (NAR) chief advocacy officer. “We worked with the administration and Congress over the past year on comprehensive policy proposals, and now a consensus is growing across Washington that decisive action is needed.”

In 2021, NAR commissioned a report on housing supply, which confirmed a shortage of nearly 6 million residential housing units nationwide. “NAR’s report became the center of conversation on housing supply, and our policy recommendations are showing up in proposed legislation in Washington and around the country,” McGahn says.

To close the supply gap, NAR says it supports new funding for affordable housing construction, preserving and expanding tax incentives to renovate distressed properties, converting unused commercial space to residential, and encouraging and incentivizing zoning reform.

Biden’s proposal now moves to Congress.

“A president’s budget is a wish list of policy goals and ambitions,” McGahn says. “Many changes will be made to this plan, but it is good news that the White House sees this issue for what it is – a crisis – and many in Congress on both sides of the aisle agree. The next step is that Congress will hold hearings on this budget proposal.”

McGahn says NAR “will continue to work with lawmakers and encourage an all-hands approach to the supply shortage so that the American dream is achievable for all Americans.”

According to NAR’s policy team, they’re still analyzing Biden’s full $5.8 trillion budget request and will have a comprehensive report soon.

© 2022 Florida Realtors®


Floridians Grew More Confident in Feb.

4 of 5 components tracked by UF rose. Attitudes about the one-year-from-now economy saw the biggest gain, even in the face of inflation and rising interest rates.

GAINESVILLE, Fla. – Consumer sentiment among Floridians ticked up 1.7 points in March to 69.7 from a revised figure of 68 in February, even as the same index for the U.S. reached a new decade low, according to the University of Florida’s (UF) monthly study.

Among the five components that make up the index, four increased and one decreased.

Current conditions: On the one hand, perceptions of personal financial situations now compared to a year ago decreased slightly, seven-tenths of a point from 63.5 to 62.8.

On the other hand, opinions on whether it’s a good time to buy a big-ticket item, such as refrigerators, cars or furniture, increased 3.8 points from 53.6 to 57.4, the greatest increase of any reading this month.

Future expectations: Attitudes about Florida in March 2023 rose in all three categories in March.

Expectations of personal finances a year from now increased 2.6 points from 81 to 83.6. Similarly, the one-year expectation for U.S. economic conditions increased 2.1 points from 68.3 to 70.4, while expectations of U.S. economic conditions over the next five years increased 1 point from 73.6 to 74.6.

The optimistic expectations were shared by almost all Florida demographic groups with the exception of higher-income Floridians – those with an annual income above $50,000 – who showed some pessimism about the U.S. five years into the future.

“The increase in consumer confidence in March was primarily due to improvements in Floridians’ spending intentions and expectations of personal finances a year from now,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research. “Interestingly, these expectations contrast with the current inflation outlook, which threatens to strain household budgets as the price of goods and services continues to rise.”

Fueled by a sharp increase in gasoline prices, the annual rate of inflation reached 7.9% in February, another four-decade high.

“With the summer travel season rapidly approaching, the prospect of higher gas prices at the pump may influence travel plans and cause some people to reduce their driving, a worrying development for Florida’s tourism industry,” Sandoval adds.

On the bright side, Florida’s labor market has remained robust, with strong demand for workers across all major industries. According to the latest Florida jobs report, the unemployment rate in February fell to 3.3%, down 0.2% from January. In line with these trends, the number of workers filing for unemployment benefits in Florida has remained at record-low levels in recent weeks.

“Russia’s invasion of Ukraine added new economic uncertainty and fresh disruptions to the global economy, which is still recovering from the COVID-19 pandemic,” Sandoval says. “Although it is unclear whether the crisis in Ukraine will have any direct impact on Florida’s economy, aside from raising energy prices, we expect consumer sentiment to remain weak in the coming months.”

Conducted Feb. 1 through March 24, the UF study reflects a demographic cross section of Florida. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2, the highest is 150.

© 2022 Florida Realtors®


Case-Shiller: Jan. Home Prices Surged a Record 19.1%

The increase follows 18.9% in Dec. Top increases in the 20-city index included No. 1 Phoenix (up 32.6%), followed by Tampa (up 30.8%) and Miami (up 28.1%).

NEW YORK – The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 19.2% annual gain in January – up from 18.9% in the previous month.

The 10-City Composite annual increase was 17.5%, up from 17.1% in the previous month, and the 20-City Composite posted a 19.1% year-over-year gain, up from 18.6%.

Phoenix, Tampa and Miami saw the highest year-over-year gains among the 20 cities in January. Phoenix led the way with a 32.6% year-over-year price increase, followed by Tampa with a 30.8% increase and Miami with a 28.1% increase. Sixteen of the 20 cities had higher price increases in January 2022 than they did the month before.


Before seasonal adjustment, the U.S. National Index posted a 1.1% month-over-month increase in January, while the 10-City and 20-City Composites both posted increases of 1.4%.

After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.6%, and the 10-City and 20-City Composites both posted increases of 1.8%.

In January, all 20 cities reported increases before and after seasonal adjustments.

“Home price changes in January 2022 continued the strength we had observed for much of the prior year,” says Craig J. Lazzara, managing director at S&P DJI. “All three composites reflect a small acceleration of price growth for January 2022.

Lazzara says the rate of price increases seemed to be moderating last fall – still rising but at a slower pace. “Even that modest deceleration was on pause in January,” he says. “The 19.2% year-over-year change for January was the fourth-largest reading in 35 years of history.

“The strength in home prices continues to be very broadly based. All 20 cities saw price increases in January 2022, with prices in 16 cities accelerating relative to December’s report. January’s price increase ranked in the top quintile of historical experience for 19 cities, and in the top decile for 17 of them.”

Prices were strongest in the South (up 26.6%) and Southeast (up 26.5%), but every region continued to log strong pricing gains.

“The macroeconomic environment is evolving rapidly,” says Lazzara. “Declining COVID cases and a resumption of general economic activity has stoked inflation, and the Federal Reserve has begun to increase interest rates in response. We may soon begin to see the impact of increasing mortgage rates on home prices.”

© 2022 Florida Realtors®


New-Home Market Was Broken Before Pandemic

Builders once kept up with demand, but Great Recession cutbacks and worker losses created major problems exacerbated by new pandemic-created challenges.

NEW YORK – Almost every real estate economist has said for years that “We need more new homes” to end problems such as rising home prices and housing for low-incomes Americans.

However, the housing market continues to face low inventory and high home prices, and experts continue to hope that home builders can increase supply. The lack of new-home inventory doesn’t just impact the new-home industry – it also pushes more buyers into the existing-inventory home market.

But builders haven’t been able to keep up. They point to supply chain disruptions. Lennar says those disruptions have slowed quarterly production cycles by two weeks for two consecutive quarters.

“The ability to actually build and deliver homes has been slowed by the supply chain that is all but broken, by the workforce that is short in supply, and the intense competition for scarce entitled land assets. Therefore, the supply of homes has remained quite limited and is not prone to overbuilding,” according to Lennar Executive Chairman Stuart Miller.

Similar reports were delivered by Texas-based builder D.R. Horton and Georgia-based PulteGroup to their investors. Their reports acknowledged the challenge of skyrocketing lumber costs, weakened labor forces, and issues sourcing building materials and appliances.

“Just about every housing analyst and housing economist right now agrees that we need to add more housing, and it’s not just single-family housing – we need to build more townhouses, more missing middle duplex type housing, and more apartments,” says National Association of Home Builders Chief Economist Robert Dietz. “There’s no single scalable solution that’s going to solve the problem. It’s going to require years to fix the problem, and buyers will be priced out in the process.”

Redfin Deputy Chief Economist Taylor Marr says inflated lumber costs and supply chain issues have increased the cost of building a home by 22% over the past year alone. Dietz also points to the costs associated with inflation, which reached 7.9% in February, making it harder for privately owned home builders to secure the loans they need to withstand higher material costs and the financial risk that comes with increasing completion timelines.

Source: Inman (03/28/22) McPherson, Marian

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


First-Time Buyers Don’t Want Elevators, Golf Courses

A study of top-demanded and least-demanded items to first-time homebuyers also found that many want hardwood floors – but not cork or bamboo.

CHICAGO – A laundry room tops the wish list of first-time home buyers, according to the recent report What Home Buyers Really Want, 2021 Edition, released by the National Association of Home Builders. The study asked first-time buyers to rate more than 200 home features.

10 features first-time buyers want most

  • Laundry room: 83% (45% essential, 38% desirable)
  • Ceiling fan: 81% (46% essential, 35% desirable)
  • Exterior lighting: 81% (34% essential, 47% desirable)
  • Double kitchen sink: 80% (38% essential, 42% desirable)
  • Hardwood floors: 80% (37% essential, 43% desirable)
  • Walk-in pantry: 80% (34% essential, 46% desirable)
  • Drinking water filtration: 78% (37% essential, 41% desirable)
  • Patio: 78% (31% essential, 47% desirable)
  • Security cameras: 78% (30% essential, 48% desirable)
  • Kitchen space for eating: 77% (35% essential, 42% desirable)

First-time home buyers also ranked several home features much lower on their priority list. According to the survey, these are the ones low on their list of desired amenities.

Features most first-time buyers don’t want

  • Elevator: 46%
  • Golf course: 42%
  • Glass walls: 41%
  • Cork floors: 40%
  • Bamboo floors: 36%
  • Pet washing station: 36%
  • Daycare center: 35%
  • Wine cellar: 34%
  • Roof partially/completely covered by plants: 34%
  • In-law suite: 32%

Source: “What First-Time Home Buyers Really Want,” National Association of Home Builders’ Eye on Housing blog (March 22, 2022)

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


How Will Higher Interest Rates Affect You?

WASHINGTON (AP) – Americans who have long enjoyed the benefits of historically low interest rates will have to adapt to a very different environment as the Federal Reserve embarks on what’s likely to be a prolonged period of rate hikes to fight inflation.

Record-low mortgage rates below 3%, reached last year, are already gone. Credit card interest rates and the costs of an auto loan will also likely move up. Savers may receive somewhat better returns, depending on their bank, while returns on long-term bond funds will likely suffer.

The Fed’s initial quarter-point rate hike in its benchmark short-term rate won’t have much immediate impact on most Americans’ finances. But with inflation raging at four-decade highs, economists and investors expect the central bank to enact the fastest pace of rate hikes since 2005. That would mean higher borrowing rates well into the future.

On March 16, the Fed’s policymakers collectively signaled that they expect to boost their key rate up to seven times this year, raising its benchmark rate to between 1.75% and 2% by year’s end. The officials expect four additional hikes in 2023, which would leave their benchmark rate near 3%.

Chair Jerome Powell hopes that by making borrowing gradually more expensive, the Fed will succeed in cooling demand for homes, cars and other goods and services, thereby slowing inflation.

Yet the risks are high. With inflation likely to stay elevated, in part because of Russia’s invasion of Ukraine, the Fed may have to drive borrowing costs even higher than it now expects. Doing so potentially could tip the U.S. economy into recession.

“The impact of a single quarter-point interest rate hike is inconsequential on the household budget,” said Greg McBride, chief financial analyst for Bankrate.com. “But there is a cumulative effect that can be quite significant, both on the household budget as well as the broader economy.”

Here are some questions and answers about what the rate hikes could mean for consumers and businesses:

I’m considering buying a house. Will mortgage rates go steadily higher?

They already have in the past few months, partly in anticipation of the Fed’s moves, and will probably keep doing so.

Still, mortgage rates don’t necessarily rise in tandem with the Fed’s rate increases. Sometimes, they even move in the opposite direction. Long-term mortgages tend to track the rate on the 10-year Treasury note, which, in turn, is influenced by a variety of factors. These include investors’ expectations for future inflation and global demand for U.S. Treasurys.

Global turmoil, like Russia’s invasion, often spurs a “flight to safety” response among investors around the world: Many rush to buy Treasurys, which are regarded as the world’s safest asset. Higher demand for the 10-year Treasury would lower its yield, which would then reduce mortgage rates.

For now, though, faster inflation and strong U.S. economic growth are sending the 10-year Treasury rate up. The average rate on a 30-year mortgage, in turn, has jumped almost a full percentage point since late December to 4.42%, according to mortgage buyer Freddie Mac.

How will that affect the housing market?

If you’re looking to buy a home and are frustrated by the lack of available houses, which has led to bidding wars and eye-watering prices, that’s unlikely to change anytime soon.

Economists say that higher mortgage rates will discourage some would-be purchasers. And average home prices, which have been soaring at about a 20% annual rate, could at least rise at a slower pace.

But Odeta Kushi, deputy chief economist at First American Financial Corporation, notes that there is such strong demand for homes, as the large millennial generation enters its prime home-buying years, that the housing market won’t cool by much. Supply hasn’t kept up. Many builders are struggling with shortages of parts and labor.

“We’ll still have a pretty robust housing market his year,” Kushi said.

What about other kinds of loans?

For users of credit cards, home equity lines of credit and other variable-interest debt, rates would rise by roughly the same amount as the Fed hike, usually within one or two billing cycles. That’s because those rates are based in part on banks’ prime rate, which moves in tandem with the Fed.

Those who don’t qualify for low-rate credit cards might be stuck paying higher interest on their balances, and the rates on their cards would rise as the prime rate does. Should the Fed decide to raise rates 10 times or more over the next two years – a realistic possibility – that would significantly boost interest payments.

The Fed’s rate hikes won’t necessarily raise auto loan rates as much. Car loans tend to be more sensitive to competition, which can slow the rate of increases.

Will I be able to earn more on my savings?

Probably, though not likely by very much. And it depends on where your savings, if you have any, are parked.

Savings, certificates of deposit and money market accounts don’t typically track the Fed’s changes. Instead, banks tend to capitalize on a higher-rate environment to try to thicken their profits. They do so by imposing higher rates on borrowers, without necessarily offering any juicer rates to savers.

This is particularly true for large banks now. They’ve been flooded with savings as a result of government financial aid and reduced spending by many wealthier Americans during the pandemic. They won’t need to raise savings rates to attract more deposits or CD buyers.

But online banks and others with high-yield savings accounts will likely be an exception. These accounts are known for aggressively competing for depositors. The only catch is that they typically require significant deposits.

If you’re invested in mutual funds or exchange-traded funds that hold long-term bonds, they will become a riskier investment. Typically, existing long-term bonds lose value as newer bonds are issued at higher yields.

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


U.S. Consumer Confidence Moves a Bit Higher

In a switch from the Fla. sentiment index released the same day, Americans were more optimistic about current conditions in March – but less so about future conditions.

BOSTON – Americans grew a bit more optimistic in March, though the uptick is about the here-and-now more than expectations for the future. The Conference Board Consumer Confidence Index increased slightly this month, after a decrease in February.

The Index now stands at 107.2, up from 105.7 in February.

The Present Situation Index component of the broader index – based on consumers’ assessment of current business and labor market conditions – surged 10 points higher to 153.0 from last month’s 143.0. However, the Expectations Index – based on consumers’ short-term outlook six months in the future for income, business and labor market conditions – declined to 76.6 from 80.8.


“The Present Situation Index rose substantially, suggesting economic growth continued into late Q1,” says Lynn Franco, senior director of economic indicators at The Conference Board. “Expectations, on the other hand, weakened further with consumers citing rising prices, especially at the gas pump, and the war in Ukraine as factors. Meanwhile, purchasing intentions for big-ticket items like automobiles have softened somewhat over the past few months as expectations for interest rates have risen.

“Nevertheless, consumer confidence continues to be supported by strong employment growth and has been holding up remarkably well despite geopolitical uncertainties and expectations for inflation over the next 12 months reaching 7.9% – an all-time high. However, these headwinds are expected to persist in the short term and may potentially dampen confidence as well as cool spending further in the months ahead.”

Present situation

Consumers’ appraisal of current business conditions improved in March:

  • 19.6% of consumers said business conditions were “good,” up from 17.6%.
  • 22.1% said business conditions were “bad,” down from 25.1%.

Assessment of the labor market:

  • 57.2% said jobs were “plentiful,” up from 53.5% – a new historical high.
  • 9.8% said jobs are “hard to get,” down from 12.0%.

Expectations six months from now

Consumers’ optimism about short-term business conditions:

  • 18.7% expect business conditions to improve, down from 21.3%.
  • 23.8% expect business conditions to worsen, up from 19.9%.

Attitudes were mixed about the short-term labor market outlook:

  • 17.4% expect more jobs to be available in the months ahead, down from 19.4%.
  • Conversely, 17.7% anticipate fewer jobs, down from 19.6%.

Consumers were also mixed about their short-term financial prospects:

  • 14.9% expect their incomes to increase, up from 14.7%.
  • 13.7% expect their incomes to decrease, up from 13.0%.

Toluna conducts the monthly Consumer Confidence Survey. The cutoff date for the preliminary results was March 23.

© 2022 Florida Realtors®


A Home’s Architecture Isn’t Protected ‘Free Speech’?

Claiming he had a “free speech” right to tear down a mansion and build the mid-century modern home of his dreams, a Palm Beach man went to court. He lost in appeals and the U.S. Supreme Court refused to reconsider that decision.

TALLAHASSEE, Fla. – The U.S. Supreme Court on Monday refused to take up an appeal by a telecommunications entrepreneur who contended his First Amendment rights were violated when plans for a mansion were rejected in Palm Beach.

The court, as is common, did not explain its reasons for turning down the case filed by Donald Burns, who applied in 2014 to tear down a 10,063-square-foot oceanfront home and replace it with a larger mansion with a “mid-century modern” design, according to court documents.

Burns filed a federal lawsuit after Palm Beach’s Architectural Review Commission turned down the plan. He went to the Supreme Court after a sharply divided panel of the 11th U.S. Circuit Court of Appeals last year rejected arguments that his First Amendment rights had been violated.

In a petition filed in November, Burns’ attorneys wrote that the proposed design “communicated that his new home would be clean, fresh, independent and modern – a reflection of his evolved philosophy of simplicity in lifestyle and living with an emphasis on fewer personal possessions, and communicated his message that he was unique and different from his neighbors. The traditional style of his home no longer reflected his views or his identity.

“Architectural design, especially the design of one’s own home, is an expressive form of art that can – and for Burns’ proposed design, should – be entitled to robust First Amendment protection,” the petition said.

But attorneys for the town disputed that the case presented First Amendment issues and urged the Supreme Court to reject it. A brief filed by the town last month said Burns sought to build a nearly 20,000 square-foot home.

“Petitioner’s ongoing effort to invoke fundamental constitutional rights in an otherwise straightforward zoning case involving the municipal denial of a new, oversized house on an undersized lot in accordance with stated architectural review criteria fails to present any grounds for review by this (Supreme) Court,” the brief said. “This court has never reviewed zoning criteria with the higher level of scrutiny given fundamental rights protected by the First Amendment.”

Burns sold the home as the lawsuit played out, but he continued to have standing to pursue it because of “significant financial damages,” according to the petition filed by his attorneys.

Burns drew support at the Supreme Court from two libertarian organizations, the Goldwater Institute and the Cato Institute, and from the National Association of Home Builders of the United States.

The groups argued in friend-of-the-court briefs that architecture is a form of expression protected by the First Amendment, citing famed architects such as Frank Lloyd Wright.

“This court has never specifically addressed the status of architecture as expressive conduct,” attorneys for the home builders association wrote. “Amicus (the association) believes that architecture is expressive conduct protected by the First Amendment, no different than other mediums portraying or otherwise involving architecture, such as Edward Hopper’s painting ‘House by the Railroad’… or the Simon & Garfunkel song, ‘So Long Frank Lloyd Wright.’”

© 2022 The News Service of Florida. All rights reserved.


Dear Shannon: Ethics Complaint Based on Iffy Info?

Can guessing lead to an ethics complaint if a buyer later finds out it’s wrong and makes a formal complaint? I thought a nearby development might be a new mall but it was actually a manufacturing plant.

ORLANDO, Fla. – Dear Shannon: I’m a homebuilder and I showed one of my new houses to a buyer. The buyer then asked me about nearby construction and its future use. I said, “I really don’t know, but I think it’s the beautiful new mall proposed for this area.”

After closing, the buyer found out it was not a beautiful new mall – it was a manufacturing plant. The buyer says they never would have purchased the property had they known that a manufacturing plant was going to be built so close. Now the buyer filed an ethics complaint against me claiming that I failed to determine a pertinent fact.

I gave an honest answer to the buyer. I didn’t know what was being built at the time. I did know that other builders were planning on building a large mall somewhere in the area. I was just trying to be helpful, so, I guessed.

I told the buyer upfront that I didn’t know, so doesn’t this cover me? – Guessing

Dear Guessing: Okay, so I really like your impulse to be helpful. It’s probably one of the characteristics that makes you an outstanding Realtor®. However, that’s not really how this works. Telling the buyer you don’t know doesn’t provide protection for you when the next thing you say is an incorrect speculation about a pertinent fact that you probably should have clarified before sharing.

It’s okay to say, “I don’t know.” However, if you follow that up with an incorrect guess, then this could be an issue under Article 2 of the Code of Ethics.

Article 2 states: Realtors® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. Realtors® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law.

In this case, the buyer had a question about construction nearby. This question concerned a pertinent fact relating to the property or transaction. Your competence in the real estate industry required you to know the answer or, if you didn’t know the answer, you probably should have considered telling the buyer you would to try to get the answer. (see Case Interpretation #2-7: Obligation to Determine Pertinent Facts) Remember: Always be the source of the source of information.

You started with, “I don’t know,” but then went on to tell the buyer a guess. The buyer was reasonable in relying on your answer, which unfortunately turned out to be incorrect. This was obviously a big deal to the buyer and it is a potential issue under Article 2.

Shannon Allen is an attorney and Florida Realtors Director of Local Association Services
Note: Advice deemed accurate on date of publication

© 2022 Florida Realtors®


Q&A: What’s Considered a ‘Material Alteration’?

A condo board replaced trees with grass and concrete. They cited sidewalk damage, but it changed the common area’s aesthetic. Did they need a vote by owners before doing this?

NAPLES, Fla. – Question: The board of our condo association has removed several trees in our community and replaced them with concrete, rock, and grass. Their stated purpose for the tree removal is that the roots are growing out of control causing the sidewalk and pavement to lift and crack.

This replacement of the trees with grass or concrete has changed the entire aesthetic of the shared common area property of the community, for the worse in many owners’ opinions. Is the board allowed to remove these trees without a vote of the owners? – L.G., Plantation

Answer: Whether or not the board can change the common area landscaping without a vote of the owners comes down to whether or not the change is considered routine maintenance or if such change constitutes a “material alteration.”

If the change is considered routine maintenance, then it is within the board’s purview to make those decisions without a member vote.

Under Section 718.113(2)(a), Florida Statutes, “there shall be no material alteration or substantial additions to the common elements or to real property which is association property, except in a manner provided in the declaration as originally recorded or as amended under the procedures provided therein. If the declaration as originally recorded or as amended under the procedures provided therein does not specify the procedure for approval of material alterations or substantial additions, 75 percent of the total voting interests of the association must approve the alterations or additions before the material alterations or substantial additions are commenced.”

Therefore, you will first need to review your governing documents to determine if the issue of material alterations is addressed, and if so, what the requirements are.

If your governing documents are silent, then a vote of the owners would be required, and 75% of the total voting interests must approve a material alteration (a threshold that is often very difficult to meet for most associations).

With regard to what changes are considered material alterations or substantial additions to the common elements or association property, the seminal case in Florida is Sterling Village Condominium Association, Inc. v. Breitenbach, which was decided by the Fourth District Court of Appeals in 1971. In Sterling Village, the court stated that changes were material alterations when such changes “palpably or perceptively vary or change the form, shape, elements or specifications of a building from its original design or plan, or existing condition, in such a manner as to appreciably affect or influence its function, use, or appearance.”

This is still the test used today. When it comes to landscaping in particular, there are dozens of arbitration cases that establish that landscaping changes are almost always considered maintenance unless they changed the “scheme” of the landscaping.

For example, in the event that the trees in your community were removed and replaced with new, smaller trees or a different type of tree, this would not likely rise to the level of a material alteration. However, the fact that the trees have been replaced with concrete, rock, or grass would seem to change the landscaping scheme in such a way that it appreciably affects or influences its function, use, or appearance, and would therefore be a material alteration.

It is possible that such action would have required a membership vote under those circumstances. Please note, however, that the courts have often given great deference to the “business judgment rule” in this context, meaning that as long as the board is acting reasonably and in good faith in their decision-making, their decisions will be upheld.

For example, if the board received advice from landscape professionals (saying) that the trees must be removed and new ones cannot be planted there, its decision is more likely to be upheld under the business judgment rule.

Avi S. Tryson, Esq., is 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. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

© 2022 Journal Media Group


Occupied Property, Part 2: Selling Homes with a Tenant

Tenant-occupied property confuses many Florida Realtors Legal Hotline callers. This article should help. It explains a seller’s (landlord) rights and obligations to buyers if a property is sold subject to a tenancy.

ORLANDO, Fla. – The first article in this three-part series focusing on tenant-occupied homes offered advice to help Realtors when they first take a listing. This article focuses on contract language and the required steps once respective parties arrive at an agreement.

Many Florida Realtors Legal Hotline calls focus on tenant-occupied property, and the questions usually arise from a failure to understand the parties’ obligations and rights. The information below should help.

What are a seller’s (aka landlord) obligations to a buyer if a property is sold subject to a tenancy?

For the purposes of this article, the language in the Florida Realtors/Florida Bar (FR/Bar) residential contract is analyzed. If you’re using the Florida Realtors Contract for Residential Sale and Purchase (CRSP) document, it’s addendum W. Rentals should be attached to the contract to clarify the parties’ obligations with regards to rentals.

Paragraph 6 of the FR/Bar Contract

Paragraph 6 of the FR/Bar contract addresses occupancy and possession of the property at closing. It states that the seller shall deliver occupancy and possession of the property to the buyer free of tenants, occupants and future tenancies unless paragraph 6(b) is checked.

Therefore, paragraph 6(b) should be checked if a tenant is in place or a future tenant expected.

This paragraph also clarifies that the seller will disclose the facts and terms of any third party (i.e. tenant) occupancy to the buyer in writing, along with a copy of the lease(s) or any occupancy agreement (i.e. seasonal or short-term vacation rental) within five (5) days after the effective date. If the buyer doesn’t like the terms of the occupancy, the buyer has an option to terminate the contract within five (5) days after receiving this information from the seller.

So what does this mean?

As a listing agent selling property subject to a tenancy, you should make sure the seller has access to copies of any leases at the time you take the listing to make sure this information is readily available by the time you need it.

As a buyer’s agent, keep an eye on the calendar. It helps buyers if you follow up with a request for the lease information as the contract deadline draws near.

Standard 18(D) of the FR/Bar Contract

But wait, that’s not all! In addition to the requirements under paragraph 6, the seller also has obligations under Standard 18(D) of the contract.

Standard 18(D) reveals the additional information the seller must provide to the buyer prior to and at the time of closing. This will be addressed in Part 3 of this series.

Meredith Caruso is Associate General Counsel for Florida Realtors
Note: Advice deemed accurate on date of publication

© 2022 Florida Realtors


My Buyer’s Full-Price Offer Was Rejected?

As this seller’s market continues to run wild throughout Fla., many people are asking what laws or contract terms come into play if a seller rejects a buyer’s offer even though it included all the terms the seller requested.

ORLANDO, Fla. – When a seller markets real property for sale, they typically describe what they’re looking for in an offer. The most common item is a list price, although there can be  additional terms, like whether they will accept a financing contingency, and, if so, what type(s).

Ultimately, the amount of detail they include is up to them. But what happens when a buyer submits an offer giving them everything they seek, but the seller rejects that offer?

Listing broker

When a seller retains a listing broker to help market their property, they often negotiate a listing agreement. If they enter into a Florida Realtors® Exclusive Right of Sale Listing Agreement, Section 3 (Price and Terms) allows the parties to insert a list price, financing terms, and seller expenses. These terms are more important than many people realize because they tie into Section 8(d). This section provides that “Broker’s fee (commission) is due … if Seller refuses or fails to sign an offer at the price and terms stated in this Agreement.”

Therefore, in our scenario where the offer meets all the terms but the seller rejects it, the commission is due.

This doesn’t mean the broker is obligated to demand the commission. In most cases, the listing firm will keep marketing the property until the seller finds a different buyer they want to work with. However, if the seller’s rejection of the offer is part of their broader attempt to walk away from the listing agreement, the listing broker is more likely to demand the commission.

Either way, per the Florida Realtors form listing agreement, the brokerage firm has completed the task they were hired to do and is entitled to commission.


From a buyer’s perspective, they’re entitled to have the offer presented, since the listing licensee must present “all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing.” Fla. Stat. 475.278(2)(e) and (3)(a)(8). Please note that in the event the listing broker has a no brokerage relationship with the seller (as is common in limited service listings, for example), they are not obligated to present the offer.

However, once the offer is submitted, it’s completely up to the seller whether to accept, reject, counter, or ignore the offer. In rare cases, there could be an issue with deceptive marketing, although the buyer would need additional facts that show dishonesty – not just a seller change of heart – once offers start rolling in.

Cooperating brokers

A cooperating broker would typically look to an offer of compensation in the multiple listing service for commission. To earn the commission, they need to be the procuring cause of a sale that closes. Since the offer was rejected (not even close to a closed sale), the cooperating broker would not be entitled to the offered compensation.

There’s one final agreement to review. Sometimes, a buyer and brokerage firm will enter into a Florida Realtors Exclusive Buyer Broker Agreement. When does a buyer owe commission under that agreement? Section 7 provides that it’s due when “Buyer or any person acting for or on behalf of Buyer contracts to acquire real property as specified in this Agreement.” In this scenario, the offer was rejected, so the buyer’s brokerage firm is not yet entitled to commission under the agreement.

Joel Maxson is Associate General Counsel for Florida Realtors
Note: Advice deemed accurate on date of publication

© 2022 Florida Realtors®


Insufficient Flood Insurance Impacts $4.5B in FHA Loans

HUD: A 2020 audit found at least 31,500 of the loans that year in designated special flood hazard areas didn’t maintain the required flood insurance coverage.

WASHINGTON – The Department of Housing and Urban Development’s Office of Inspector General (HUD) uncovered in a new audit many properties nationwide that are underinsured for flood disasters and could be exposing homeowners and the Federal Housing Administration (FHA) to higher financial risk.

An audit of FHA-insured loans from 2020 found that at least 31,500 of the loans serviced that year in designated special flood hazard areas did not maintain the required flood insurance coverage. That amounts to at least $4.5 billion in loans that did not have adequate coverage from the National Flood Insurance Program.

In the audit, HUD’s OIG found some loans had private flood insurance instead of the required NFIP coverage, insurance that did not meet the minimum required amount, or no coverage at all during the calendar year of 2020.

HUD’s OIG called for lenders to provide evidence of sufficient flood insurance coverage for the loans in question and develop a better way to detect loans that do not maintain the required flood insurance “to avoid potential future costs to the FHA insurance fund from inadequately insured properties.”

Source: HUD.gov

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


Associations Can’t Stop Owners From Taping Meetings

Condo Q&A: While statutes say unit owners have the right to record or videotape meetings with a quorum, the association can adopt reasonable rules about it.

STUART, Fla. – Question: Our condominium association has monthly meetings of the board of directors. At the last several meetings, a member who is not a fan of the board has started filming the board meetings and is threatening to post the videos on his personal website where this member routinely complains about the board. Can the association stop this person from filming the meetings or posting these videos on the internet? What if I or any other person do not want to be video recorded? Does this person need my consent to record me? — A.P., Treasure Coast, FL

Answer: No, the Association cannot stop the unit owner from recording association meetings and likely cannot prevent the unit owner from posting the videos on their website or anywhere else on the internet, but the association can adopt reasonable rules and regulations regarding the filming at the meetings. Section 718.112(2)(c), Florida Statutes, provides that meetings at which a quorum has been obtained must be open to all unit owners and goes on to state that unit owners have the right to record or videotape meetings. This same provision of the Statute required the Division of Florida Condominiums, Timeshares, and Mobile Homes to adopt reasonable rules and regulations regarding a unit owner’s right to record meetings.

The Division has since adopted regulations that state unit owners who record association meetings may only use audio and video equipment and devices that do not produce distracting sounds or light emissions.

Additionally, the Division allows condominiums to adopt their own reasonable rules and regulations. Such rules and regulations may include requiring all recording equipment to be assembled and placed in position in advance of the start of the meeting, preventing the unit owner from moving around the room or meeting area to facilitate the recording or requiring unit owners to provide advanced notice to the board of their intention to record the meeting. Associations may adopt these restrictions as part of the association’s rules and regulations. The Co-Op and Homeowners Acts also provide for the same right to record meetings and allow those types of associations to also adopt reasonable rules regarding recording at meetings.

Both the Statute and Division’s rules are silent regarding what restrictions exist, if any, regarding what a unit owner may do with the recordings they make of association meetings. While an association could try to adopt a rule that states unit owners may not post videos of the association’s meetings online, the enforceability of such a rule is questionable and is likely unenforceable. The best policy for the board and any other individual in attendance at an association meeting that is being recorded is to not say or do anything that you would not want to be posted on the internet for everyone to see.

Finally, while it is true that Florida is a two-party consent state which generally requires both parties’ consent to having the conversation being recorded, this is likely not required for the recording of association meetings. There are general exceptions to the Wire Taping Statute that allows a person to record public events where the person being recorded does not have a reasonable expectation of privacy. While I am not aware of any legal cases where a court has applied this standard to the recording of association meetings, I would not be surprised if a court held these types of recordings fell within the exception.

Furthermore, the Legislature has specifically authorized such recordings without requiring the consent of the board of directors or other individuals in attendance. I would suggest that if you do not want to be part of the recording as an audience member, making sure to sit behind the person recording the meeting would likely prevent you from physically appearing in the recording. Another option is to see if virtual attendance is an option in your community as it would allow you to attend and participate without having to be at the meeting in person.

Christopher I. Miller, Esq., is an attorney with the Law Firm Goede, DeBoest & Cross, PLLC. 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. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

Copyright © 2022 Journal Media Group, Treasure Coast Palm


Experts: Lock in Mortgage Rate Now

Rates likely will continue to rise. An Oct. Bankrate survey says that among homeowners who’ve had a mortgage since before the pandemic, 74% have not refinanced.

WASHINGTON – When the Federal Reserve indicated in December that it would be raising short-term interest rates to slow inflation – which had reached four-decade highs – it prompted a steady rise in mortgage rates.

Between the Fed announcement in December and its approval of a one-quarter percentage-point hike, mortgage rates for a 30-year fixed loan rose to almost 4% in early March from 3.3%.

Recently, the 30-year fixed-rate mortgage topped 4% for the first time since May of 2019, according to Freddie Mac. And it likely will rise further as the Fed is projecting six more rate hikes this year.

For homeowners looking to refinance, there is no time like the present, experts say. Is it smart to refinance right now?

“While the next few weeks will be unpredictable as markets continue to churn, the outlook is for mortgage rates to rise even higher,” says Nadia Evangelou, senior economist and director of forecasting for the National Association of Realtors (NAR). “And my advice is to lock in a rate right now if they (homeowners) feel financially secure.”

Potential borrowers should keep in mind that mortgage rates remain historically low, she added.

Among homeowners who’ve had a mortgage since before the pandemic, 74% have not refinanced, according to an October Bankrate survey.

“If you haven’t had the chance to refi at this point in time now, this is sort of like your last chance to do it at these types of rates,” says Lindsey Bell, the chief markets and money strategist for Ally, a financial services firm.

The higher mortgage rates also are likely to further diminish the purchasing power of first-time homebuyers who are already contending with a small pool of available homes and double-digit price increases.

Nationally, home prices increased 19% year over year in January, according to CoreLogic. And since the beginning of the year, nearly 6.3 million households have been priced out, two million of whom are millennials households, says Evangelou.

The war in Ukraine adds an element of uncertainty to the market which could have an impact on mortgage rates, says Evangelou.

“Uncertainty typically makes investors move from stocks into the safety of bonds, pushing down Treasury yields and mortgage rates,” she says. “In addition, the spread of a new COVID-19 variant could also slow down the economy and keep mortgage rates low.”

Would the higher mortgage rates bring down home prices?

The housing market will continue to remain competitive due to low existing inventory, according to Sam Khater, Freddie Mac’s chief economist. He expects the spring homebuying season to be marked by high prices.

It generally takes time for mortgage rates to affect prices, says Daryl Fairweather, the chief economist at Redfin.

“We would expect to see the impact on prices in about three months,” Fairweather says. “Prices likely won’t go down, but they could likely stagnate.”

Copyright © 2022 The Augusta Chronicle. All rights reserved.


House-hunting Blues

JACKSONVILLE, Fla. – The process of buying a house can put your life on pause.

There are so many things you can’t do when going through the process of buying a new home. Free time can be absorbed by scrolling through Zillow listings or touring places with real estate agents.

If you are relying on financing, you are advised not to make any other big purchases – like a car or furniture – during the buying process or open a new line of credit because it may affect your credit score.

For Abby Denmark, she found herself wary of making any major changes while house hunting. She even postponed planning her wedding to her partner of four years, Ryan Norton, in order to focus their energy and financing on securing a place to live.

That was a year ago.

Denmark’s story is similar to many in the country, but particularly those looking to buy homes in the Jacksonville area.

Part of this trend is a lack of inventory on the market, according to Florida Housing Coalition CEO Jaimie Ross. Between labor shortage and supply chain issues, homes aren’t being built as fast as they were in 2019 or 2020.

Another part of the equation, however, is the record-setting rates at which investors and investment companies are buying homes.

Last year, investors bought nearly one in seven homes sold in America’s top metropolitan areas, the most in at least two decades, according to a recent Washington Post report.

In the Jacksonville metro area, 22% of homes purchased were bought by investors. This is double the rate of the 11% of homes purchased by investors in 2015.

Jacksonville is the No. 4 metro area in which investors bought the highest percentage of homes, following Atlanta and Chicago, at 25% each, and Miami at 24%.

To those in the Jacksonville Real Estate Investors’ Association (JaxREIA), an education and networking nonprofit with over 400 active members, it’s a good time to be buying and flipping homes, said JaxREIA President Mike Grandjean.

“For a lot of investors, the strategy is dictated by the time and the property,” Grandjean said. “Now is a pretty good time to be flipping property. You’re still going to be having some people buying and holding [to rent], but I think the times kind of dictate that a little bit.”

Grandjean said investors are selling and renting at about a 50-50 rate right now, whereas in a more “stabilized market,” he typically sees closer to a 70-30 or 60-40 split in favor of investors buying property to rent it.

“Now is a good time to be flipping,” he said, “and that’s not a bad thing for those first-time homebuyers.”

Grandjean described real estate investors as enhancing current inventory on the market so houses that might not qualify for financing meet the necessary standards.

“It refreshes the market,” he said.

Unfortunately for those buyers, real estate is appreciating at nearly 20% a year, which can easily price people out of the market.

Ross described investment purchases as “a big part of the affordable housing crisis.”

“The best thing you can do is to get into stable housing,” Ross said. “I think it’s only going to get harder. [Renting] is just not very stable.”

A year in the making

As a first-time homebuyer, Denmark, 28, said the competition she experienced in the market had her teetering back and forth between wanting to purchase a home or settling on renting in order to live with her partner, Norton, who moved in with his parents after being priced out of his apartment in Riverside in December 2020.

Denmark, a patient care technician at Ascension St. Vincent’s Riverside Hospital, said it felt impossible to compete in the housing market at times because she and Norton work full time and couldn’t tour homes fast enough.

“It was disappointing too because Jacksonville is such a cool place and people who want to enjoy the culture and they’re being priced out of it,” Denmark said. “You could be the cruddiest house in the nicest neighborhood or the nicest house in the cruddiest neighborhood.”

At one point, the couple was so disheartened by the housing market that they considered finding a place to rent together instead and delaying their dreams of homeownership but decided against it because it would cost them more money in the long term.

“The only way for middle-class Americans to accrue wealth is to buy a home and own property,” said Norton, who works for a specialty medical equipment company. “And renting for $2,500 a month… you’re just never going to own that, you know?”

Denmark said she found it hard not to take being priced out of potential home purchases personally.

“It’s money,” she said. “Like this is our future, this is money to consider for my daughter. It’s not like we’re deadbeats, and somehow this market isn’t wanting people like that to succeed.”

Norton said they looked in the Fruit Cove, Lakeshore and Ortega areas to find a family-friendly home with enough space for their artistic hobbies. He estimated that, on an average week for the last year, they would see 15 or 20 houses of interest and most of them were off the market again before they could even schedule a showing.

“The few experiences we had where we were getting close were just so disappointing,” Denmark said. “The house before this last house was like a bad breakup. Like no one compares to that house, and I don’t even want to date anymore.”

A year after starting their home search, Denmark and Norton hope to close on their first property at the end of the month.

Grandjean said he could see a clear effect this market and investment purchases were having on first-time homebuyers.

“You’re competing with not just mom and pop investors but Wall Street investors for the inventory that is out there,” he said.

The sheer number of investment companies doing business in Florida is inflating the market and driving up the costs while also being more competitive than individual buyers are able to be for the houses that do go on the market.

Duval County Property Appraiser Jerry Holland noted these sales affect overall values by creating “a greater demand for homes when they are for sale.”

“It drives the price up,” Holland said. “The investor market is definitely paying into higher prices because of the demand.”

San Francisco-based Opendoor, a digital residential real estate company that makes cash offers on homes to repair and resell, is one of these types of investment companies. The company has purchased 413 homes in Duval County alone since 2020.

Low inventory breeds more competition

A Sept. 1 Comprehensive Market Analysis for Jacksonville from the U.S. Department of Housing and Urban Development labeled the supply of homes for sale as “tight,” noting supply fell to about a 1.4-month inventory during August 2021, “down from 2.4- and 3.2-month supplies during August 2020 and August 2019, respectively.”

Grandjean estimated the supply is closer to under one month now.

“We’re looking at low inventory,” Grandjean said. “In a stable market, there is about six months’ worth of inventory, and we’re below one month. I think it’s just as hard for an investor to compete as well.”

New and existing home sales increased 9% during the 12 months ending August 2021, the HUD report also said, with an average price increase of 17%.

“First-time homebuyers can’t compete with investors,” Ross said. “That doesn’t mean there are no opportunities. I wouldn’t want people to give up hope. Now is a good time for homebuyers because interest rates, although they’re going up, are low comparatively … Even though the interest rates have risen, they’re around 4%. My first home was about 11% in the ‘70s.”

Ross said first-time homebuyers have other advantages and opportunities they can take advantage of, including the State Housing Initiatives Partnership (SHIP) program, which she said will have more funding than last year, and downpayment and closing cost assistance programs, among others.

“Prices are only going up at this point,” Holland said. “If you are on the fence and want to purchase, now is the time to purchase. It may be another five or six years or more before you see another dip in the prices.”

Investors target lowest-income areas

Overwhelmingly, the north and west areas of Jacksonville experience the highest rates of investor purchasing, with the 32209 ZIP code seeing 54% of homes going to investors. The area encompasses neighborhoods like Moncrief, Grand Park, Mid-Westside and New Town.

Most of the homes in this ZIP code have some of the lowest-income residents in Jacksonville with a median annual income of just over $25,000, compared to a city average of about $55,000, according to the most recent U.S. Census Bureau data.

Other investor-heavy areas for buyers include Arlington, Ortega, Springfield and West Jacksonville.

“When investors own your property, these are big corporations,” Ross said. “They really aren’t looking at you as a family or individuals. They’re just looking at the market. It’s very hard for a family in a rental unit owned by an unnamed corporate entity to have stability and to know that they are going to be able to afford a lease next year.”

As Jacksonville’s population steadily increases, apartment occupancy follows, and rental prices increase, too. This makes people want to get into the market, Holland said. And the cycle of competition continues.

“People are willing to offer more to be able to get the home, and sellers are very interested in cash sales,” he said. “A lot of the investor market is cash sales and being able to buy the home quicker.”

For the appraiser’s office, this means home values are changing more frequently as a result of the supply and demand.

“At some point, the market will, as it always does, take a dip,” Holland said. “We’re not anticipating any time soon, but if interest rates go up, the demand may go down, and that may dip.”

Copyright © 2022 The Florida Times-Union. All rights reserved.


Why Social Media Is Crucial to Real Estate Agents

NAR: Social media is a top source of quality leads, say 47% of real estate firms; and 66% of first-time home buyers are millennials, who widely use social media.

CHICAGO – The majority of prospective home buyers go online to conduct their home search, and the online market is also involved in most closings. A recent study from the National Association of Realtors (NAR) found that social media has become a key part of attracting clients and closing deals.

NAR estimated that 47% of real estate businesses quote social media as the best source of quality leads, and 66% of first-time home buyers are millennials, who widely use social media. As a result, real estate professionals should seek to leverage these platforms and audiences to convert them into closings.

When clients are happy with an agent’s service and home showings, they may be motivated to inform their social media networks, but not necessarily the agent. It is essential for agents to provide ways for clients to voice their opinions and feedback directly via specific forms, posts, and message integration.

Real estate agent Kelsey Charles says, “Analyzing online discussions on social media with the keywords you associate with your brand as a real estate agent can help you develop a deep understanding of your customers’ attitudes and perceptions.”

Promoting posts online through paid advertising is also essential for reaching a wider audience. Boosted Facebook posts will be seen by people even if they don’t have an agent’s page on their radar, and the same for Instagram and LinkedIn.

Having quality content online is also important, as well as being aware of the market and social media trends. Virtual showings and tours continue to be popular. 

Source: Inman (03/22/22) Kennedy, Victoria

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


Real Estate Trends to Watch This Spring

Realtor.com: Home sellers may continue to hold the upper hand, but buyers may be more sensitive to price increases; and more inventory could enter the market.

SANTA CLARA, Calif. – Home sellers will likely continue to hold the upper hand this spring, says a realtor.com® housing report that also uncovered upcoming trends.

Buyers are likely to become more sensitive to price increases. Mortgage rates are on the rise and are expected to continue to increase this year. As home shoppers face higher borrowing costs, they may need to tighten their budgets or even step back from the market as home prices increase as well. That could help to moderate price trends, realtor.com says. The trend occurred last year, even when mortgage rates were at historical lows but home prices were climbing by double-digit annual gains. In early May 2021, the number of sellers who made price adjustments rose by 17.8% compared to the start of the year.

More inventory will likely hit the market. Buyers may see the benefit of a greater housing supply. Still, the number of homes for sale is expected to remain historically low this year, though more options are likely to become available. Builders are adding more homes to the inventory. Also, more homes typically come on the market during the spring season. Realtor.com notes that based on historical trends, by mid-August the number of sellers with actively listed homes usually rises 17.4% over the beginning of the year. If that trend holds true, it could mean more options for buyers and more competition for home sellers.

Sellers may face trade-offs. Homeowners who have to sell and buy could face a dilemma: If they hold out for peak asking prices on their home, they also could end up paying a premium for the home they buy, realtor.com says. Listing prices usually reach their highest levels in the summer. But home seller-buyers who delay will face more competition from other sellers and the possibility of missing out on buying opportunities.

“We all know that homes are selling lightning-fast right now,” says Rachel Stults, managing editor at realtor.com. “But that doesn’t necessarily mean your house will sell itself. Before you list your home this spring – or any other time this year – make sure you’ve taken steps to get it ready, including cleaning and decluttering, getting cost estimates on repairs you might need to make, and talking to agents to see who would be a good fit for your needs. No matter when you decide to list, whipping your home into shape beforehand will help you sell faster and for more money.”

Source: Realtor.com

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


Pending Home Sales Dwindle 4.1% in February

Tight inventory took a toll: Feb. is the 4th consecutive month of decreases for NAR’s pending sales index, which is down 5.4% year-over-year.

WASHINGTON – Pending home sales slipped in February, marking four consecutive months of transaction decreases, according to the National Association of Realtors® (NAR). Three of the four major U.S. regions saw contract signings fall month-over-month, with the Northeast being the only area that reported an increase. All four regions registered a decline in year-over-year contract activity.

The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, waned 4.1% to 104.9 in February. Year-over-year, transactions dropped 5.4%. An index of 100 is equal to the level of contract activity in 2001.

“Pending transactions diminished in February mainly due to the low number of homes for sale,” said Lawrence Yun, NAR’s chief economist. “Buyer demand is still intense, but it’s as simple as ‘one cannot buy what is not for sale.’”

Along with climbing home prices, Yun added that now buyers must grapple with rising mortgage rates and noted that shoppers will likely want to lock in before rates increase further.

“It is still an extremely competitive market, but fast-changing conditions regarding affordability are ahead,” he said. “Consequently, home sellers cannot simply bump up prices in the upcoming months but need to assess the changing market conditions to attract buyers.”

As of February 2022, higher mortgage rates and sustained price appreciation has led to a year-over-year increase of 28% in mortgage payments.

“The surge in home prices combined with rising mortgage rates can easily translate to another $200 to $300 in mortgage payments per month, which is a major strain for many families already on tight budgets,” Yun said.

Yun forecasts mortgage rates to be about 4.5% to 5% for the remainder of the year and expects about a 7% reduction in home sales in 2022 compared to 2021.

“Home prices themselves are still on solid ground,” he added. “They may rise around 5% by year’s end and we should see much softer gains in the second half of the year.”

Realtor.com®’s Hottest Housing Markets data in February showed that of the largest 40 metros, the most improved markets over the past year were Orlando-Kissimmee-Sanford, Fla.; Miami-Ft. Lauderdale, Fla.; Nashville-Davidson, Tenn.; Indianapolis, Ind.; and San Diego-Carlsbad, Calif.

February Pending Home Sales Regional Breakdown

Month-over-month, the Northeast PHSI rose 1.9% to 85.0 in February, a 9.2% drop from a year ago. In the Midwest, the index decreased 6.0% to 99.7 last month, down 5.2% from February 2021.

Pending home sales transactions in the South declined 4.4% to an index of 127.2 in February, down 4.3% from February 2021. The index in the West slid 5.4% in February to 90.0, down 5.3% from a year prior.

© 2022 Florida Realtors®