Monthly Archives: February 2023

Economists Postpone Date for a 2023 Recession

Due to a “surprisingly resilient economy,” 58% of survey economists still predict a recession this year, but half as many think it will happen in the first quarter.

WASHINGTON (AP) – A majority of the nation’s business economists expect a U.S. recession to begin later this year than they had previously forecast, after a series of reports have pointed to a surprisingly resilient economy despite steadily higher interest rates.

Fifty-eight percent of 48 economists who responded to a survey by the National Association for Business Economics envision a recession sometime this year, the same proportion who said so in the NABE’s survey in December. But only a quarter think a recession will have begun by the end of March – half the proportion who had thought so in December.

The findings, reflecting a survey of economists from businesses, trade associations and academia, were released Monday.

A third of the economists who responded to the survey now expect a recession to begin in the April-June quarter. One-fifth think it will start in the July-September quarter.

The delay in the economists’ expectations of when a downturn will begin follows a series of government reports that have pointed to a still-robust economy even after the Federal Reserve has raised interest rates eight times in a strenuous effort to slow growth and curb high inflation.

In January, employers added more than a half-million jobs, and the unemployment rate reached 3.4%, the lowest level since 1969.

And sales at retail stores and restaurants jumped 3% in January, the sharpest monthly gain in nearly two years. That suggested that consumers as a whole, who drive most of the economy’s growth, still feel financially healthy and willing to spend.

At the same time, several government releases also showed that inflation shot back up in January after weakening for several months, fanning fears that the Fed will raise its benchmark rate even higher than was previously expected. When the Fed lifts its key rate, it typically leads to more expensive mortgages, auto loans and credit card borrowing. Interest rates on business loans also rise.

Tighter credit can then weaken the economy and even cause a recession. Economic research released Friday found that the Fed has never managed to reduce inflation from the high levels it has recently reached without causing a recession.

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


CFPB Shuts Down Majestic Home Loans

Owned by RMK Financial, the lender was shut down for repeated offenses, notably lying to military families applying for VA loans.

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) permanently banned RMK Financial Corporation, which does business as Majestic Home Loans.

In 2015, CFPB issued an agency order against RMK for, among other things, sending advertisements to military families that led the recipients to believe the company was affiliated with the United States government. Despite the 2015 order, the company engaged in a series of repeat offenses, including disseminating millions of mortgage advertisements to military families that deceptively used fake U.S. Department of Veterans Affairs (VA) seals, the Federal Housing Administration (FHA) logo, and other language or design elements to falsely imply that RMK was affiliated with the government, CFPB says.

In addition to the ban, RMK will also pay a $1 million penalty that will be deposited into the CFPB’s victims relief fund.

“Even after the 2015 law enforcement order, RMK continued to lie to military families by falsely implying government endorsement of its home loans,” said CFPB Director Rohit Chopra. “Our action reflects our commitment to weed out repeat offenders, and we are shutting down this outfit for good.”

CFPB says the company sent millions of mortgage advertisements to military families with deceptive representations or contained inadequate or impermissible disclosures in violation of the 2015 order, the Consumer Financial Protection Act, the Mortgage Acts and Practices Advertising Rule, and the Truth in Lending Act.

CPFB allegations against RMK

  • Tricked military families about the government’s role in sending the advertisements or providing the loans: RMK sent advertisements that misrepresented that RMK was, or was affiliated with, the VA or the FHA.
  • Deceived borrowers about interest rates and key terms: RMK’s advertisements illegally disclosed a simple annual interest rate more conspicuously than the annual percentage rate, illegally advertised unavailable credit terms, and used the name of the homeowner’s current lender in a misleading way.
  • Falsely misrepresented loan requirements and lied about projected savings from refinancing: RMK’s advertisements misrepresented that the benefits available to those who qualified for VA or FHA loans were time limited. Additionally, RMK’s advertisements misrepresented that military families could obtain VA cash-out refinancing loans without an appraisal and without incurring the cost of an appraisal, that an appraisal was not a condition of qualifying for VA cash-out refinancing loans, and that no minimum credit score and no income verification were required to qualify for VA cash-out refinancing loans. Finally, RMK’s advertisements misrepresented the amount of monthly payments, the annual savings under the advertised loans, and the cash available in connection with the advertised loans.

Additional VA loan information

Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

© 2023 Florida Realtors®


One Office Market Seeing Uptick? Satellites

Wakefield Research survey: Mid-size businesses are setting up satellite offices rather than ordering employees back, “bringing the company to them.”

NEW YORK – A study released this week by lease accounting software company Visual Lease found that 70% of the senior real estate executives polled say their clients are looking for more office space as a part of their real estate strategy for 2023. Whether the study represents wishful thinking or a finger on the pulse of something few can touch right now, that optimism flies in the face of the conventional fear that empty commercial office spaces haven’t come close to seeing the bottom yet.

According to new data from real estate giant Cushman & Wakefield plc, which has 400 offices in 60 countries, vacant office space throughout the U.S. is projected to grow to 1.1 billion square feet by the end of this decade. Those numbers were up 688 million square feet from pre-pandemic numbers when remote work became the norm.

The Visual Lease survey, conducted by Wakefield Research, sees things differently. Visual Lease CEO Robert Michlewicz attributes that to mid-sized businesses that instead of ordering remote employees to come back to the office are opening new extended offices to “bring the company to them.”

“As an example, financial services companies are a fast-growing sector in lease portfolios, and they’re looking for more opportunities to lease satellite locations to maintain business continuity,” he said. “Many companies have moved to a hybrid or remote-first plan that requires fewer people coming to their hubs and less of a need for square footage at prime locations.

Meanwhile, according to The Wall Street Journal and data from Trepp, companies are not only trying to figure out what to do with empty office space but also struggling to pay for it. The data shows the delinquency rate on office loans increased by a quarter percentage point to 1.83% last month. It’s the largest increase since December 2021. One of the issues may be that companies behind on their office loans are reeling from the fact that they don’t even know what they’re paying for.

The most jarring number from the Visual Lease survey was that 71% of private companies don’t know how much their office leases cost their businesses. Michlewicz believes that recent accounting mandates and the ability to hire companies like his to manage property leases will positively change that statistic. He says the issuance of global lease accounting standards, IAS 16 and ASU 842, which took effect in 2019, “brought lease portfolios to the balance sheet.”

Lease awareness and remote office space or not, many larger companies have given up on bringing their employees back to the home office. For example, Papa John’s International Inc. announced this month that it would be dumping its 140,000-square-foot Louisville, Kentucky, corporate headquarters. The company told employees they will still continue to work in the city, just not at that office.

Papa John’s spokesperson Harrison Sheffield told the Courier-Journal, “Since returning to the office, we have, like other companies, been engaging with team members to figure out what is this new normal that some of us are still building and what works best for team members to support their particular functions. … And a physical location has a role to play.”

Visual Lease’s Michlewicz says these types of office space changes have been coming for a while.

“The ground has been shifting under their feet for a few years” as companies try and get a sense of what their office space needs will be. “They’re looking for more flexibility than they’ve had before, including demanding shorter-term leases.”

© 2023 Benzinga.com – Benzinga does not provide investment advice. All rights reserved.


5 Fla. Metros Lead in Buyers’ Online Searches

1 in 4 buyers searching for a home via Redfin’s website considered homes in other metros. Fla. remains a top choice, and Miami returned to the No. 1 spot.

SEATTLE  – More U.S. buyers are considering out-of-city moves. Overall, fewer buyers are in the market this year and total numbers are down; but of those still searching, a higher percentage are looking outside their home city.

Redfin says a record one-quarter (24.9%) of its website users nationwide looked outside their metro area in January to find a new home as remote work and elevated housing costs drove homebuyers to seek other options.

One year ago, 22.8% of buyers searched in outside metro areas; before the pandemic, it was 18%.

Of the top 10 “desired cities” in the study, five are in Florida with Miami taking the No. 1 spot for the first time since August 2022. Other Florida cities on the top 10 “desirability” list include Tampa, Cape Coral, Orlando and North Port-Sarasota.

January inflow interest in Florida cities

  1. Miami: 7,200 inflow searches compared to 11,400 in 2022
  2. Sacramento, Calif: 6,200 compared to 7,200 in 2022
  3. Las Vegas: 5,700 compared to 6,900 in 2022
  4. Phoenix: 5,500 compared to   9,900 in 2022
  5. Tampa: 5,200 compared to 7,500 in 2022
  6. Dallas: 4,400 compared to 7,300 in 2022
  7. Cape Coral: 4,200 compared to 5,500 in 2022
  8. Orlando: 3,800 compared to 1,700 in 2022
  9. North Port-Sarasota: 3,800 compared to 5,300 in 2022
  10. Houston: 3,700 compared to 2,900 in 2022

The typical Miami home sold for $470,000 in January compared with the $383,000 national median, but they still tend to be less expensive than the places people are coming from. The typical home in New York, the top origin for homebuyers relocating to Miami, sold for $650,000 in January.

“A lot of buyers have flocked into coastal Florida from out of town over the last several months,” says Elena Fleck, a Redfin agent in Palm Beach. “Buyers moving in from places like New York and San Francisco are helping the local market recover from last fall’s housing downturn. They’re not nearly as fazed by high mortgage rates because homes here are so much less expensive than their hometowns, and they get larger lots, pools, nice weather and lower taxes.”

© 2023 Florida Realtors®


Younger Parents Moving in with Their Kids

Middle-aged adults often take in older parents facing health problems, but the “reverse boomerang” effect helps with both childcare and living expenses.

NEW YORK – Approximately one-quarter of Americans aged 25 to 34 lived with parents or older relatives as of 2021, the fastest-growing segment in multigenerational households, according to data from Pew Research Center.

Most of this group is adult children moving back in with their parents, but a significant number of older adults are moving in with millennials, according to Richard Fry, a senior researcher at Pew. Some parents aren’t waiting for retirement or urgent health care needs to move in with adult children.

Known as the reverse-boomerang effect, changing attitudes about family life often drive the moves, researchers said, along with high housing costs and the challenge of finding affordable child care.

After bottoming out at 12% of Americans in 1980, multigenerational living made a comeback in recent years; in 2021, nearly one in five Americans lived in multigenerational homes, according to Pew.

Housing market challenges also factor in. In 2022, 14% of all homebuyers set up multigenerational homes, up from 11% in 2021, according to the National Association of Realtors®. The pandemic drove increased demand for multigenerational homes, in part because complexes built for older adults had an increased risk of infection and they banned visits during lockdowns.

Source: Wall Street Journal (02/22/23) Adedoyin, Oyin

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


Is a Virtual Assistant Worth Considering?

A virtual assistant may be the answer to “all this paperwork is slowing me down.” The cost is often reasonable for tasks like data entry, scheduling, bookkeeping, etc.

NEW YORK – When real estate professionals work with clients and show properties, back-end tasks sometimes start to pile up at the office.

Virtual assistants (VAs) may be able to help. They work remotely as business support, and can complete repetitive, time-consuming tasks in areas like data entry, website upkeep, bookkeeping and scheduling.

It’s often cost effective because it means the more highly skilled and trained staff – including brokers and agents – can hand off the tasks that demand less skills and focus more time on high-ticket work, such as strengthening relationships, advancing the business and finalizing sales.

Other areas suitable for outsourcing with VAs include telemarketing, cold-call outreach and tenant management.

When it comes to call management, agents no longer have to spend time calling potential customers back, especially when doing so frequently results in getting voicemail. With 24-hour service offered by many VAs, clients can get calls returned in any part of globe.

Real estate teams that spend more than a couple hours per week on tedious, time-consuming tasks should likely consider outsourcing to a VA.

Source: Realty Biz News (02/22/2023)

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


Breaking Into the Luxury RE Niche: 4 Tips

High-end clients want luxury agents – or at least agents that look like they are. Your personal brand should suggest luxury as you attend charity events or galas.

NEW YORK – Before focusing on the luxury market, real estate professionals need to analyze their current personal brand to make sure it speaks to high-end shoppers. If it does not, it should be updated.

Their branding includes a focus on everything, including a professional website that’s easy to navigate and has professional headshots. It also includes social media platforms. The simple goal: Create a brand that attracts the type of buyers and sellers and agent would like to work with.

Once done, agents should research local charity events and galas, and select a few to attend. The goal here is to make an impression. These events enable agents to give back to the community while also meeting potential clients, initiating conversations, and laying the foundation for new client relationships.

Another strategy is to co-list a luxury property with an already established luxury real estate professional. This lets agents gain marketing insight into the luxury arena.

Agents should also seek innovative ways to set themselves apart from their rivals, such as earning designations that also help them gain new skills.

For instance, the Institute for Luxury Home Marketing offers a Certified Luxury Home Marketing Specialist (CLHMS) designation, while The Institute’s GUILD’s recognition is available to luxury real estate professionals who have closed a minimum of two transactions of at least $1 million in the residential market and previously received the CLHMS designation. These sales must be made within a two-year period.

Source: RISMedia (02/16/23)

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


Inflation Optimism Takes Hit After Latest Report

A favored Fed report showed a slow-but-steady monthly inflation drop until this week. The Commerce Dept. reported a 0.6% Dec.-Jan. rise, up from 0.2% Nov.-Dec.

WASHINGTON (AP) – The Federal Reserve’s preferred inflation gauge rose last month at its fastest pace since June, an alarming sign that price pressures remain entrenched in the U.S. economy and could lead the Fed to keep raising interest rates well into this year.

Friday’s report from the Commerce Department showed that consumer prices rose 0.6% from December to January, up sharply from a 0.2% increase from November to December. On a year-over-year basis, prices rose 5.4%, up from a 5.3% annual increase in December.

Excluding volatile food and energy prices, so-called core inflation rose 0.6% from December, up from a 0.4% rise the previous month. And compared with a year earlier, core inflation was up 4.7% in January, versus a 4.6% year-over-year uptick in December.

The report also showed that consumer spending rose 1.8% last month from December after falling the previous month.

Pressure on for more interest-rate hikes

January’s price data exceeded forecasters’ expectations, confounding hopes that inflation was steadily decelerating and that the Fed could relent on its campaign of rate hikes. It follows other recent data that also suggested that the economy remains gripped by inflation despite the Fed’s strenuous efforts to tame it.

Last week, the government issued a separate inflation measure – the consumer price index – which showed that prices surged 0.5% from December to January, much more than the previous month’s 0.1% rise. Measured year over year, consumer prices climbed 6.4% in January. That was well below a recent peak of 9.1% in June but still far above the Fed’s 2% inflation target.

Since March of last year, the Fed has attacked inflation by raising its key interest rate eight times. Yet despite the resulting higher borrowing costs for individuals and businesses, the job market remains surprisingly robust. That is actually a worrisome sign for the Fed because strong demand for workers tends to fuel wage growth and overall inflation. Employers added a sizzling 517,000 jobs in January, and the unemployment rate fell to 3.4%, its lowest point since 1969.

“Reaccelerating price pressures, coupled with a still-strong labor market that is restoring incomes and is supporting demand, will keep the Fed on track to hike rates further over coming meetings,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

The Fed is thought to monitor the inflation gauge that was issued Friday – the personal consumption expenditures price index – even more closely than it does the government’s better-known CPI.

Typically, the PCE index shows a lower inflation level than CPI. In part, that’s because rents, which have soared, carry twice the weight in the CPI that they do in the PCE.

The PCE price index also seeks to account for changes in how people shop when inflation jumps. As a result, it can capture emerging trends – when, for example, consumers shift away from pricey national brands in favor of less expensive store brands.

The consumer price index showed a worrisome rise from December to January: It jumped 0.5% – five times the November-to-December increase.

Likewise, the government’s measure of wholesale inflation, which shows price increases before they hit consumers, accelerated 0.7% from December to January after having dropped 0.2% from November to December.

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


Commercial Brokers Open to Off-Market Deals

NEW YORK – As commercial real estate investors face a reset in property values, finding off-market deals is becoming increasingly more attractive. Investors expect that they will get a better deal if they don’t have to compete for properties through a bidding process, in addition to enjoying a more straightforward path to a closing, according to Russel Ingrum, vice chairman of capital markets at real estate services firm CBRE.

Off-market deals have always been highly sought after because investors believe that opportunities that haven’t been widely distributed and/or marketed offer more attractive pricing, said Daniel Herrold, senior vice president at real estate brokerage and advisory firm Northmarq.

But interest in such deals has been gaining further momentum since the Federal Reserve started raising rates last year, according to Aaron Jodka, director of research|U.S. capital markets, with real estate services firm Colliers. Owners with properties to sell shifted to off-market sales strategies as deals began falling out of contract and buyers walked away, he said.

“These types of deals have increased due to the risk of fully marketing a property that doesn’t sell,” Jodka noted, adding that some owners worry about marketability of their asset if it’s been marketed extensively and still fails to sell.

While there has always been tremendous investor interest in off-market opportunities, until recently, they’ve been few and far between because there was so much liquidity in the marketplace that owners were unwilling to entertain the idea when they could receive 50 competing bids, noted Ben Harris, senior vice president for investor relations and fund manager at CRG, the real estate investment and development arm of Chicago-based real estate and construction firm Clayco.

“In recent quarters, though, there has been progressively less liquidity in the market as interest rates increased,” he said, adding that with sales volume down, private off-market transactions are becoming more available.

Meanwhile, off-market deals also provide buyers with better timeframes and more flexibility if they are facilitating a 1031 exchange, said Kevin Crook, director of acquisitions with Los Angeles-based Investors Management Group (IMG), a real estate sponsor focused on multifamily assets nationwide.

“We have also found these transactions to be more personal in that buyer and seller can more easily cooperate in regard to the other party’s motivations,” he said. And at a time when property values are declining and price discovery is clouded, sellers might actually prefer that, noted Ingrum.

However, if sellers agree to an off-market transaction right now, they will probably want the buyer to remove the financing risk from the equation and will have little tolerance for adjustments to the pricing once it’s been agreed upon, Ingrum said. As a result, investors that can close all-cash deals and eliminate financing risk have an advantage in securing off-market sales.

In addition, owners willing to sell their assets at a time when values are declining usually have a motivation to sell, such as personal financial need or an upcoming loan maturity, so they are looking for a qualified buyer who can offer speed of execution and transaction certainty, according to Herrold.

Kevin Crook of IMG noted that his firm’s established reputation has been a big advantage in securing off-market acquisitions as sellers are most comfortable working with investors who have solid track records for closing deals and owning and operating properties.

Challenges remain

Identifying potential off-market deals has always been a challenge for investors who find these deals in various ways, ranging from sourcing them from their network of commercial real estate broker relationships to independently making cold calls to owners of properties they would like to acquire, according to Herrold. But while local government records provide property ownership information, many properties are owned by LLCs, making actual owners difficult to identify and contact. Third-party services, such as CoStar and skip-tracing software, such as LLC Lookup and phone lookup software services, may be able to provide property owner identity and contact information noted Herrold. “But it’s never easy.”

Meanwhile, Ingrum noted that investment sales brokers know all of the assets in their markets and most of the owners. The key to finding a good asset match is for the buyer to clearly define what they are looking for so the sorting process can take place, he said. “Once that happens, the universe is narrowed down to a manageable list of what is possible.”

IMG uses available industry tools, such as Yardi Matrxi and CoStar, to perform in-depth market and property-level data analysis; but ultimately, Crook said he learns about potential off-market opportunities through personal relationships.

These have always been hard to come by because most owners believe they’ll get a higher price if the property is full marketed, Crook noted.

“We know the value and returns we need on any particular deal, so oftentimes we’re happy to give the seller his price so we don’t have to go through a long and protracted bidding process,” he said. However, “today’s challenge for sourcing off-market deals is that without a bidding process, sellers do not fully appreciate how much value they’ve lost over the past six to nine months. Right now, a true market offer is likely to be rejected because the seller won’t accept today’s new values.”

In fact, getting buyers and sellers on the same page when it comes to pricing is the biggest challenge in today’s market, according to Crook. Interest rate hikes have impacted values in some key markets by 12 to 20% over the last year, he noted.

“Whether the property is fully marketed or negotiated off-market, sellers are quite surprised at the loss of value due to the cost of debt and rising cap rates.”

As a result, sales velocity is down considerably year-over-year and isn’t expected to pick up until sellers accept the new value paradigm.

© 2023 Penton Media


Why Do Home Prices Rise as the Market Deflates?

MIAMI – Many prospective homebuyers sent a strong message at the start of 2023: They are done trying to buy homes in South Florida, as annual sales nosedived in January in Miami-Dade and Broward counties.

For residents patiently waiting to buy a bigger house here or move to a different neighborhood for better quality of life, the regional housing slowdown after two years of rapid growth is expected to bring price relief later this year, real estate experts said.

In Miami-Dade, total existing home sales plummeted by 47% in January, to 1,402 transactions from 2,645 sales a year ago, according to Miami Association of Realtors’ monthly sales report released Tuesday. Broward, meanwhile, experienced a similar crash in closed home deals. Closings fell by 39%, to 1,552 sales from 2,559 in January 2022.

Still, sellers in both counties remained stubborn, therefore home prices rose last month compared with a year ago. In Miami-Dade, the median sales price of a single-family home was $545,000, up from $520,000 in January 2022. The midpoint price of a condominium was $400,000 compared to $360,000 a year ago.

In Broward, single-family home prices last month jumped to $540,000 from $500,000 in January 2022, and condo prices were $269,900, a boost from $240,000.

“Prices are robust,” said Eli Beracha, real estate professor and director of Florida International University’s Tibor and Sheila Hollo School of Real Estate. “Normally we see lower deals and prices. The reason why we see that is because there’s not much inventory. Because interest rates went up so fast, there are fewer sellers who are choosing to upgrade.”

A decline in regional January home sales activity reaffirms what experts like real estate analyst Jack McCabe predicted – that we would see a gradual correction in the South Florida housing market that’s been overheated for the past couple of years. However, the demand for a very tight supply of homes for sale continues to boost year-over-year prices.

The big question is will demand slack enough for annual home prices to fall?

Monthly trends show the market going south but in a zig-zag fashion. Although sales have been falling since October, midpoint prices advanced between December and last month.

Today, Miami-Dade has four months of inventory of single-family homes and condos. Broward has three months of inventory of single-family homes and 3.1 months of supply of condos. In both counties, those inventory levels fall below a balanced market of six to nine months of inventory.

No matter, the housing cooldown that’s finally underway comes as good news for buyers waiting on the sidelines. Although prices remain higher compared to last year, month-to-month sales prices show a consistent decline in South Florida. In Miami-Dade, median sales prices have fallen from $575,000 in October 2022 for single-family homes and from $395,000 in November 2022 for condos.

Prices continue to fluctuate monthly in Broward, too.

Certain condo sellers are finally caving in and accepting offers 15% below the asking price, said David Siddons, a real estate agent with Douglas Elliman. Sales prices are expected to fall for condos priced between $500,000 and $3 million since most buyers within this part of the market are either investors or people who depend on financing.

“All of the sellers are going to have to wake up,” Siddons said. “Some sellers are not just moving.”

The forecast for housing prices remains clouded with uncertainty. Although monthly prices have been volatile in Miami-Dade since last fall, Siddons said he expects them to remain strong. Why? Many single-family home buyers keep coming from out of state – think New York and California – and many of them continue to buy South Florida houses and condos with cash.

In fact, nearly half of home deals in January – just over 40% – were cash purchases in Miami-Dade and Broward, much higher than the 29% national average.

South Beach resident Christina LaBuzetta moved into her new condo in June 2022. She has lived in this highly desirable part of Miami Beach since the early 2000s, and considers much of the real estate there and throughout Miami to be “overpriced.”

“It’s very hard,” she said. “Imagine the people that work in the hotels and restaurants. They must have a hard time because of the long commutes from where they have to live. It’s too expensive here for somebody that’s living on a working wage.”

Like many Miami-Dade residents, LaBuzetta is concerned about the city’s protracted housing affordability crisis and what it means for the area’s economic future.

“It’s the economy of supply and demand,” she said. “It’s what we’re living with.”

While prices may slightly drop year-over-year at some point in 2023, Beracha predicted they won’t fall by much. He said South Florida needs between five to 10 years’ worth of new housing construction at the pace homes are being built today. And higher interest rates since early last year have slowed home building.

“We still have a severe housing shortage,” FIU’s Beracha said. “The housing shortage is not going to be resolved any time soon.”

© 2023 Miami Herald. Distributed by Tribune Content Agency, LLC.


Jan. New-Home Sales Surge 17.1% in the South

Overall, Jan. new-home sales rose 7.2%, but the South’s 17.1% carried the three other areas that saw a decline. The Northeast saw the biggest drop at 19.4%.

WASHINGTON – Sales of newly built, single-family homes in January increased 7.2% to a 670,000 seasonally adjusted annual rate from an upwardly revised reading in December, according to new data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

However, the data also breaks the U.S. down into four geographic areas, and the South – which includes Florida – saw sales up 17.1%. It was the only area to see an increase and the strong numbers largely drove the total new-home sales data into positive territory.

The Northeast saw the biggest drop in new-home sales, down 19.4%; they declined 6.9% in the Midwest and 7.3% in the West.

According to the National Association of Home Builders (NAHB), the positive sales numbers are only part of the story, noting that the sales aren’t necessarily as profitable as they were during times of high demand because many builders offered homebuyer incentives.

“The latest HMI (Housing Market Index) survey shows 57% of builders are using incentives to bolster sales, including providing mortgage rate buy-downs, paying points for buyers and offering price reductions,” says Alicia Huey, chairman of NAHB. “Buyer incentives along with stabilizing mortgage rates during the month of January increased the pace of new home sales for the month.”

“Even though new home sales edged higher in January, the recent uptick in mortgage rates would imply continued weakness in the coming months,” says Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “In terms of affordability, the median price is down for the third straight month and is down compared to a year ago.”

A new home sale occurs when a sales contract is signed or a deposit is accepted, but the home can be in any stage of construction: not yet started, under construction or completed. The number is seasonally adjusted each month – a mathematical way to even out normal changes in demand through the year. The January reading of 670,000 units is the number of homes that would sell if the same pace continued for the next 12 months.

New single-family home inventory declined in January but remained elevated at a 7.9 months’ supply. A measure near a 6 months’ supply is considered balanced. Completed, ready-to-occupy inventory is up 115% year-to-year but still only 17% of total inventory.

In January, the median price for a new home was $427,500, down 8.2% month-to-month. It was the third straight monthly decline after peaking at 496,800 in October.

© 2023 Florida Realtors®


Average Mortgage Rate Jumps to 6.5%

It’s the highest average for the 30-year, fixed-rate loan since Nov. when it peaked at 7.08%. Last week it averaged 6.32%; one year ago it averaged 3.89%.

WASHINGTON – The average long-term U.S. mortgage rate jumped this week to its highest level since November. Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate rose to 6.5% from 6.32% last week. The average rate a year ago was 3.89%.

The average long-term rate reached a two-decade high of 7.08% in the fall as the Federal Reserve continued to raise its key lending rate in a bid to cool the economy and quash persistent, four-decade high inflation.

At its first meeting of 2023 earlier this month, the Fed raised its benchmark lending rate by another 25 basis points, its eighth increase in less than a year. That pushed the central bank’s key rate to a range of 4.5% to 4.75%, its highest level in 15 years.

Fed Chair Jerome Powell noted at the time that some measures of inflation have eased, but appeared to suggest that he foresees two additional quarter-point rate hikes this year. Minutes from that meeting released Wednesday mostly corroborated that view, but a series of strong economic reports in recent weeks has some analysts forecasting more than two rate increases this year, to a range of 5.25% to 5.5%.

While the Fed’s rate hikes do impact borrowing rates across the board for businesses and families, rates on 30-year mortgages usually track the moves in the 10-year Treasury yield, which lenders use as a guide to pricing loans. Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Federal Reserve does with interest rates can also influence the cost of borrowing for a home.

The big rise in mortgage rates during the past year has battered the housing market, with sales of existing homes falling for 12 straight months to the slowest pace in more than a dozen years. January’s sales cratered by nearly 37% from a year earlier, the National Association of Realtors (NAR) reported on Tuesday.

For all of 2022, NAR reported last month that existing U.S. home sales fell 17.8% from 2021, the weakest year for home sales since 2014 and the biggest annual decline since the housing crisis began in 2008.

Higher rates can add hundreds of a dollars a month in costs for homebuyers, on top of already high home prices.

The rate for a 15-year mortgage, popular with those refinancing their homes, climbed this week to 5.76% from 5.51% last week. It was 3.14% one year ago.

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


Tech and RE: Big Changes Now, More on the Way

In general, technology simplifies complicated tasks. It’s doing that now with writing, and it’s expected to soon speed up the mortgage-approval process.

NEW YORK – Real estate already uses automation technology for various applications, including machine-learning algorithms that can identify homeowners likely to put their property up for sale in the immediate future.

Chatbots can also engage with clients or prospects on an agent’s website, and receive answers to routine inquiries without having to wait for a human response.

Looking ahead, home-lending approval automation will likely expand. The increasing refinement of algorithms and neural networks that drive artificial intelligence will shorten the mortgage approval process and, as a result, enable buyers to close on a property faster and with fewer bureaucratic obstacles.

These technologies’ effectiveness hinges on feeding them the most accurate information possible. Tech has always had a GIGO problem, or “Garbage in, garbage out.”

Ultimately, agents should remember that the tech upgrades’ ultimate goal isn’t to write or make better decisions – it’s to give agents more free time to concentrate on other areas of their business.

Source: Realty Biz News (02/17/2023) Shepardson, Ben

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


Judge: Disability Testers Can Sue Without Visits

A Fla. woman sued a Maryland hotel claiming its website didn’t mention disabled guest options. A court said that’s OK even if the tester never planned to visit.

BALTIMORE – A disabled person with no intention of visiting Baltimore may nevertheless sue a hotel in the city for allegedly violating a federal law requiring that it provide on reservation websites details of its accommodations for disabled guests, a federal appeals court ruled Wednesday.

In its published decision, the 4th U.S. Circuit Court of Appeals said someone merely visiting the sites to test a hotel’s compliance with the Americans with Disabilities Act (ADA) has standing to bring a lawsuit if a violation is subsequently alleged.

In such cases, the “tester” has allegedly been deprived a statutory right to information and thus suffered an “informational injury” that gives them standing to sue the hotel regardless of their travel plans, the 4th Circuit said in its 3-0 ruling.

The court’s decision revives Deborah Laufer’s claim that Sleep Inn & Suites Downtown Inner Harbor owned by Naranda Hotels LLC violated the ADA’s Hotel Reservation Regulation provision by not listing its accommodations for disabled guests on its websites provided by booking services, such as booking.com and expedia.com.

U.S. District Judge Stephanie A. Gallagher had dismissed Laufer’s lawsuit, saying the Floridian lacked standing because she had no intention of visiting Baltimore, where her federal claim was filed.

But the 4th Circuit said the plaintiff’s intent is irrelevant when the challenge is based on information the defendant was legally required to provide.

The appeals court likened Laufer’s claim of informational injury to the claim by Sylvia Coleman, a Black woman who posed as a would-be tenant of Havens Realty in Virginia and alleged she was falsely told no apartments were available for rent, in violation of the 1968 Fair Housing Act. In 1982, the U.S. Supreme Court held in Havens Realty Corp. v. Coleman that she had standing to sue despite her lack of intent to rent because the law barred falsely telling someone due to their race that housing was unavailable.

“It matters not that Laufer is a tester who may have visited Naranda’s hotel reservation websites to look for ADA violations in the form of noncompliance with the Hotel Reservation Regulation, and without any plan or need to book a hotel room, just as it mattered not that the Black plaintiff in Havens Realty was a tester who ‘may have approached (defendant Havens Realty) fully expecting that (she) would receive false information (in contravention of the Fair Housing Act), and without any intention of buying or renting a home,’” 4th Circuit Judge Robert B. King wrote, quoting from the Supreme Court decision.

“Crucially, although the Hotel Reservation Regulation is designed ‘to reasonably permit individuals with disabilities to assess independently whether a given hotel or guest room meets his or her accessibility needs,’ nothing in the Hotel Reservation Regulation or elsewhere in the ADA expressly requires an intention to book a hotel room to prove a discriminatory failure to provide accessibility information,” King added in sending Laufer’s claim back to district court.

Laufer’s attorney, Thomas B. Bacon of Orlando, Florida, said the 4th Circuit issued “a positive decision that helps civil rights advocates under the Americans with Disabilities Act.”

Steven J. Parrott, Naranda Hotels’ attorney, said no decision has been made regarding an appeal. He voiced confidence that his client, which denies the alleged ADA violation, would be victorious in district court.

“We think we have a good chance to win on the merits,” said Parrott, of counsel at DeCaro, Doran, Siciliano, Gallagher & DeBlasis LLP in Bowie.

Laufer, who often uses a wheelchair due to difficulty walking, alleges that Sleep Inn & Suites Downtown Inner Harbor’s reservation websites fail to sufficiently “identify and describe accessible features in the hotels and guest rooms” as required by the Hotel Reservation Regulation. Because she uses a wheelchair, Laufer says she needs passageways free of obstruction; wide doorways; and door knobs and faucets low enough to reach while sitting.

Laufer seeks a court order that the hotel comply with the ADA’s Hotel Reservation Regulation and an award of attorney’s fees and court costs.

Naranda Hotels has denied the alleged ADA violation.

Laufer has filed similar federal lawsuits against hotels nationwide, with varying success on the standing issue.

The Boston-based 1st U.S. Circuit Court of Appeals, like the 4th, has ruled that Laufer has standing despite having no intention of visiting the cities where the hotels she sued are located. But the New Orleans-based 5th and Denver-based 10th Circuit Courts of Appeals have ruled she lacks standing as a mere tester.

King was joined in the Richmond, Virginia-based 4th Circuit’s opinion by Judges Stephanie D. Thacker and Pamela A. Harris. The 4th Circuit rendered its decision in Deborah Laufer v. Naranda Hotels LLC, No, 20-2348.

The 1st Circuit’s decision affirming Laufer’s standing has been appealed to the U.S. Supreme Court. The justices have not decided whether they will hear the appeal in Acheson Hotels LLC v. Deborah Laufer, No. 22-429.

Copyright © 2023 BridgeTower Media. All rights reserved. © Copyright, 2023, The Daily Record (Baltimore, MD)


Climate Change: Miami’s 1st Settlers Had It Right

MIAMI – Miami isn’t known for its majestic mountains. The tallest peaks in the South Florida landscape, in fact, are a series of landfills. The highest point south of Lake Okeechobee is the dump at Monarch Hill Renewable Energy Park, better known as Mount Trashmore, which towers 225 smelly feet above northern Broward County.

But there are natural bumps and ridges of limestone that gradually rise and fall along the length of South Florida. In Miami-Dade County, the tallest of these slopes soar to the dizzying height of about 20 feet above sea level. At these alpine altitudes, you’ll find strange things not seen anywhere else in Miami: mountain biking trails, underground cave systems, even houses with basements.

Miami-Dade County’s most intriguing high points

The highest points in Miami-Dade County are unmarked and largely unnoticed. But high ground has played an outsized role in the history of South Florida’s development – and, more importantly, offers clues about how climate change could shape the region’s future. Starting with its real estate market.

The scientists who study South Florida’s limestone ridges say there’s a warning hidden in the rock beneath our feet. All of it formed underwater, at a time when South Florida was at the bottom of a shallow sea. Now, sea levels are rising. One day – it’s hard to pinpoint when – even our highest ground may be underwater once again.

“Everybody thinks this is a God-given sea level,” said Harold Wanless, who heads the University of Miami’s geology department. “There’s nothing special about where the sea level is right now.”

As the tides inch higher and flooding becomes more common, more developers and homebuyers are starting to seek out land at higher elevations. The past also provides a lesson there: High ground has long been some of the most desirable real estate in Miami.

That’s why Miami-Dade County’s highest ground is home to the oldest houses in Miami and some of the earliest evidence of human settlement south of Lake Okeechobee. “High ground is essentially where settlers were forced to live until the Everglades began to be drained in the early 1900s,” said Paul George, resident historian at HistoryMiami.

But as housing prices rise, some community groups are warning about the risk of climate gentrification, a process that pushes out poor residents living in higher and drier neighborhoods to make way for wealthier renters and buyers who want a home that’s safe from flooding.

“The climate-driven component of gentrification is creating a situation where it’s raising the cost of living, it’s really squeezing people and it’s forcing them out,” said Paul Namphy, lead organizer and political director at the Family Action Network Movement (FANM), a community advocacy group based in Little Haiti.

Homeowners on the high ground

Waterfront properties, despite being vulnerable to hurricanes and sea rise, are still some of the most desirable and expensive real estate in South Florida. But in recent years, buyers and renters have become more interested in high ground, and government agencies have given them more tools to research their homes’ elevation and flood risk.

Miami-Dade County publishes extremely detailed elevation data online. The data comes from lidar drones, which fly overhead bouncing laser beams off the ground to map the county’s topography. The Miami Herald consulted this data to identify the county’s highest points for this story.

Broward and Palm Beach counties don’t publish the same level of detailed data, but county records and research carried out by the county highpointers, a niche group of hobbyists who travel the U.S. climbing the highest points in every county, confirm that Broward’s natural highest point is 29 feet above sea level at Pine Island Ridge and Palm Beach’s highest point is about 50 feet above sea level somewhere in Jupiter, within the gated community of The Bluffs. Florida’s highest point is 345-foot Britton Hill in Walton County in the Florida Panhandle.

Move over, Everest climbers. The rarest peaks to scale may be in Miami-Dade County.

Potential homebuyers and renters can also use the National Oceanic and Atmospheric Administration’s Sea Level Rise Viewer, a free tool that lets you see what parts of your neighborhood might flood – or sink beneath the water – under future climate change scenarios.

Reid Grier, the president of a senior care company called Right at Home, consulted NOAA’s Sea Level Rise Viewer when he bought a home near Coral Gables at one of the highest points in Miami-Dade County in November 2020. As Grier raised the hypothetical sea levels by one foot, then two, then 10, he saw water surge in from the coasts and spill out of canals. But the water didn’t touch his future home, which is built 20 feet above sea level.

“It essentially showed our block being one of the few remaining pieces of land above water,” Grier said.

Grier has family in Houston and he saw the destruction after Hurricane Harvey flooded the city in 2017. He didn’t want to buy a house that faced the same risk. “The fact that we are far enough away from the coast and outside of any flood risk area,” said Grier, “it just gives us peace of mind.”

A.J. Barranco, a lawyer who has lived at another one of the county’s highest points in Coconut Grove since 1978, learned just how valuable elevation can be during a major hurricane. Barranco’s house is perched on a limestone bluff overlooking South Bayshore Drive, which protected it when Hurricane Andrew struck in 1992 and created a storm surge along the coast of Biscayne Bay.

“The houses down below me were all flooded. There were sailboats on South Bayshore Drive,” Barranco recalls. His front lawn was strewn with debris – oars, life vests, sails, flippers and so on. But his house, built 22 feet above sea level, was untouched except for a little flooding in the basement. “I’ve always felt very fortunate being this high up,” he said.

But others, like David and Michelle Diaz, only found out they were living at one of the county’s highest points when a Miami Herald reporter came knocking at their door. They bought their Kendall home 22 feet above sea level in 2020. “I had no idea,” said David, “but that’s pretty cool. Perhaps in the future, if we ever sell this house, we can use that as a selling point.”

The climate gentrification debate

Some research suggests that sellers are starting to do just that.

In 2018, a team of Harvard researchers led by then-design professor Jesse Keenan studied housing prices in Miami-Dade County and found that property values were rising faster for houses at higher elevations than for houses at lower elevations. They coined the phrase “climate gentrification” to describe how wealthy buyers and renters, hoping to avoid sea level rise and flooding by moving to homes on higher ground, could drive up housing costs and displace longtime residents in elevated neighborhoods like Little Haiti.

In response, the City of Miami passed a resolution directing the city manager to study climate gentrification and dedicated $4 million from the Miami Forever Bond to address the issue.

Gentrification has been happening in Little Haiti for decades, according to Namphy, the FANM organizer. But growing interest in high ground real estate has sped things up. “What we’re seeing is a climate component grafted onto an already existing gentrification process,” he said.

Climate gentrification became a rallying cry for local activists protesting the Magic City development in Little Haiti. Plaza Equity Partners plans to build 18 acres of apartments, hotels, shops and office space on the northern edge of a limestone ridge, where the elevation ranges from 10 to 17 feet above sea level.

The issue came up again in more recent protests against the Sabal Palm Village development eight blocks south. “The climate gentrification discussion is definitely front and center in both of those conversations,” Namphy said.

But in South Florida, development waves are as difficult to stop as the tides.

Elius Louima, 82, lives in between the Magic City and Sabal Palm Village development sites, in a house 18 feet above sea level – one of the highest points in Little Haiti. He moved there from the Bahamas in 1977 and has been renting his current house since 1985. He loves the neighborhood not for its elevation but for its community. “When you go out, neighbors look after you,” he said. “People are nice to each other.”

Louima said he started noticing new high-rises being built nearby around 2019, a year after the climate gentrification paper was published. He’s seen his rent rise from $400 to $1,000 a month since he moved in. “It used to be low,” he said. “Now everything’s going up.”

But, in Miami at least, the whole concept of climate gentrification is divisive. One common critique is that it’s hard to tell climate gentrification apart from regular gentrification. No one argues that rents aren’t rising in Little Haiti and forcing some residents out, but some researchers say they’re rising for reasons that have nothing to do with climate change. The neighborhood has cheap land, it’s close to the center of Miami, and nearby neighborhoods like Wynwood and the Design District have already gone through major cycles of gentrification.

“The thing is, you cannot distinguish the Magic City project in Little Haiti from the traditional gentrification process in Wynwood,” said Han Li, an assistant professor in the UM Department of Geography and Regional Studies who published an in-depth analysis of Miami-Dade County housing prices last year that critiques Keenan’s climate gentrification paper.

“As rents have risen in Wynwood and the Design District, people are running to Little Haiti and Little River to save money,” said Devlin Marinoff, a managing partner at DWNTWN Realty Advisors, a brokerage that is selling property five blocks from Louima’s house in Little Haiti. “I get calls daily about Little River and Little Haiti.”

Marinoff said the elevation of these neighborhoods still isn’t top of mind, at least for developers. “It does come up from time to time when we’re working on a deal, but I haven’t yet seen a situation where it affected the value or whether or not a deal was going to get done,” he said.

But that could change. Marinoff said he’s seen flood insurance rates quadruple for some of his commercial properties in low-lying neighborhoods. “At some point I would imagine that’s going to have an effect on the bottom line,” he said. “Has it at this point been a reason to break a deal? Not yet. Do I think that’s on the horizon? Absolutely.”

The historic value of high ground

Seeking out high ground was once a no-brainer in South Florida, according to HistoryMiami’s Paul George. In addition to the settlements they built along the Miami River, the Tequesta also lived on high ground near the Deering Estate and dry pine islands in the Everglades. Before the Everglades were drained, many of Miami’s wealthiest residents and early developers built on Dade County’s highest points to keep their properties safe from flooding.

Susana Baker lives in a Mediterranean revival mansion built in 1924 by a fruit farmer and Design District developer named Theodore V. Moore (known in his era as Florida’s “Pineapple King”). The house sits on a slight hill in Buena Vista 19 feet above sea level, which counts as high ground in Miami-Dade County.

“You can tell he was very wealthy because he purposefully made sure his home was on a hill,” said Baker. “So when there’s flooding, everyone else gets flooded, but we don’t.”

The same is true of Ralph Munroe, a wealthy yacht designer and the first commodore of the Biscayne Bay Yacht Club who in 1891 built The Barnacle – the oldest house still standing in Miami-Dade County – on a limestone hill in Coconut Grove. Although the property slopes down to the water, Munroe put his home on high ground 18 feet above sea level.

Some of South Florida’s earliest modern development happened on high ground. The county’s first public library and one of its first schools were built in 1894 in Lemon City, a community built in what is now Little Haiti. When Henry Flagler built his railroad connecting Miami to the rest of the U.S. in 1896, he sent surveyors through South Florida to find the highest ground.

“That’s where they ran the railroad,” said George. “You just can’t operate a railroad on low ground that’s flooded.”

The construction of the railroad and nearby hotels gave some of Miami’s earliest black residents an opportunity to build homes on high ground, George said. Many of the black Bahamian and American workers who worked on these projects settled nearby on relatively high ground in what is now Little Haiti, Wynwood, Overtown and Coconut Grove – the neighborhoods where some of their descendants are grappling with gentrification today.

But, over the past century, George said South Floridians have become less concerned about building on high ground. After 1909, as canals were dug and the Everglades drained, it opened up new, once-flooded land for developers to build on.

“That’s why so much of Miami-Dade County and Broward County and parts of Palm Beach are 6 feet high or less,” said Wanless, the UM geology professor. “They were former wetlands, and then we drained the wetlands, lowered the water level and built the ground up to about 6 feet above sea level.”

The majority of Miami-Dade County – 56% – is 6 feet or less above sea level, according to county elevation data. Most of that land has been paved over and developed. The Southeast Florida Regional Climate Compact expects sea levels to rise 3 to 8 feet over the next century, putting these low-lying areas at risk.

“As sea level further rises, they’re going to flood more easily, they’re going to drain more slowly, king tides are going to get at them more frequently and storm surges are going to be increasingly devastating,” Wanless said.

High ground may be temporary haven

If rising tides force South Floridians to retreat from the coasts and low-lying areas, the remaining high ground could become even more valuable. But even that haven may not last forever.

In the near term, coastal retreat might involve developers building high-rises on high ground and local governments focusing their infrastructure spending in those areas, according to Keenan, who is now an associate professor of sustainable real estate at Tulane University. Cities like Miami would shrink to a smaller area built around pockets of high ground.

“That [high ground] is where you invest your first infrastructure dollars, and on the periphery is where those dollars begin to evaporate,” Keenan said.

A 2018 study from the Rand Corporation concluded that Miami-Dade County could avoid flood damage by “directing future growth toward areas of naturally higher ground.” Over the next 20 years, that development strategy would reduce the amount of property at risk from flooding by more than $100 million, the think tank calculated. A drive along the beachfront shows that idea hasn’t been embraced yet in South Florida.

High ground homeowners sometimes joke that if sea levels keep rising, their houses might become beachfront property.

“Maybe my descendants will inherit a private island one day,” said Grier, the senior care company president. Even if the ocean rises 14 feet by 2120 in line with NOAA’s extreme worst-case climate projections, Grier’s house, built 20 feet above current sea levels, will at least stay above water.

But it’s not clear how valuable a private island in flooded South Florida would be for future generations. Even the homes at the county’s highest points rely on streets and infrastructure built at lower elevations, which are vulnerable to just a few feet of sea level rise.

“You’re not going to have roads to get around on. You’re not going to have sewage treatment facilities. You won’t have garbage pickup. You won’t have a source of fresh water,” said Wanless. “All those things are the unfortunate reality of the future, and it won’t wait until sea levels have risen 20 feet.”

In other words, even the people who live on Miami’s highest ground have a reason to care about the 3 to 8 feet of sea level rise the Southeast Florida Climate Compact expects over the next century – and the uncertain level of sea rise South Florida will experience in the years that follow, depending on how quickly humanity cuts its carbon emissions.

“Everybody needs to understand that we’re all going to be impacted by this,” said Yoca Arditi-Rocha, executive director of the CLEO Institute, a nonprofit climate advocacy group based in Miami. “Obviously, the most vulnerable are feeling the disproportionate impact, but at the end of the day, we’re all going to feel it.”

This climate report is funded by Florida International University, the Knight Foundation and the David and Christina Martin Family Foundation in partnership with Journalism Funding Partner. The Miami Herald retains editorial control of all content.

© 2023 Miami Herald. Distributed by Tribune Content Agency, LLC.


Credit Scores Evolved, Improved Access to Credit

NEW YORK (AP) – A low credit score can hurt your ability to take out a loan, secure a good interest rate, or increase the spending limit on your credit card. Some reasons for a low score are out of your control – such as unexpected medical debt or a lack of credit history.

Credit rating agencies are working to improve access to credit by giving people more time to pay medical bills before the debt appears in reports, and by removing other debt completely.

They’re also making it easier to count rent, utility payments, and other recurring bills – a boon for those who need credit the most.

What is a credit score and why is it important?

Put simply, a credit score is a formula that lenders use to decide how likely you are to pay back a loan. If you’re considered a risky bet, you will pay more to borrow or may not be able to borrow at all.

The factors that go into calculating your score are complicated, and advocates say it’s a positive that ratings agencies have started making it easier for consumers to prove that they’ll able to pay back money they borrow. It’s especially important for so-called “thin file” consumers – those with a lack of extensive credit history, who are often younger or with lower income.

“I do see that efforts are being made in order to equalize the credit score,” said Rosalyn Glenn, a financial advisor at Prudential who focuses on expanding financial access. “For instance, adding rental payments to credit reports, because there is a segment of the population that rents and does not own. That’s exciting – because the score can give them an opportunity for better rates on things like insurance and loans. I do believe progress is being made there.”

What’s happening with medical debt?

After conducting industry research during the pandemic, the three most-used credit rating agencies found that consumers with medical expenses were just as likely to be creditworthy as those without.

Effective July of last year, paid medical collection debt is no longer included on consumer credit reports, and the time period before unpaid medical collection debt appears is now a year, up from six months. That gives people more time to work with insurance and healthcare providers to pay off the debt.

In the first half of 2023, Equifax, Experian and TransUnion will also remove medical collection debt under $500 from credit reports.

When Jonnathan Alvarado, 25, was in a car accident this past year, he knew health expenses wouldn’t be the only hit to his finances. A landscaping contractor in Plainfield, New Jersey, who prides himself on careful financial behavior, Alvarado faced knee surgery at the beginning of his busiest work season, which hurt his productivity.

Alvarado said he only realized in retrospect the consequences for his access to credit. Even after insurance, Alvarado still owed in the vicinity of $1,200, which he took several months to pay off. During that time, his credit score dropped to 680, still considered good, but lower than it had been. When he finished paying the debt, it jumped to 775, the highest it had ever been.

It was only when Alvarado looked into what caused the decline and rebound that he learned the lingering medical debt had been responsible.

“A difference of almost a hundred points,” Alvarado said. “I would have paid it off sooner, if I had known.”

David Anthony, 43, who drives a service truck in Baltimore, only learned that medical debt was dragging his credit down when an employer pointed out the high interest rate he was paying on an auto loan. After looking into his score, Anthony disputed certain medical bills, some of which had been paid, eventually bringing his score up from the 500s to above 700.

“I got a great loan on the cars that I have now,” he said. “That first car – it was a 17% interest rate. That’s what raised the red flag to my employer.”

Anthony is now down to a single-digit interest loan.

How else can I increase my credit score?

Although consumers have long been able to add rent and utility bill payments to their credit files, the bureaus have made these additions easier and less costly in recent years.

Experian, for example, has an option for consumers to opt into a service, “Experian Boost,” that counts these kinds of payments without charging a fee. (In some other cases, companies may charge the renter or landlord for the trouble of filing the additional information in credit reports, since it isn’t automatically included as a matter of course. Those who use the program often see an increase in their scores.)

“You’re making a payment once a month for a service you receive – very much like getting a loan,” said Rod Griffin, financial health advocate at Experian. “What we found in our research was that those kinds of pieces of information do indicate that a person may be a better credit risk than their report might show if they have very little credit.”

For people with thin credit files or scores below 680, Experian sees an average increase in the neighborhood of 19 points, according to Griffin. Others might see their scores increase 12 or 13 points. About two-thirds of people see an improvement in their scores, but the tool helps even those who don’t build a longer credit history, Griffin said.

To use the tool, you give Experian permission to capture your monthly payment history and bank information – whether that’s a cellphone plan, water bill, streaming service subscription, or rent.

For Brandon Reese, 41, a financial planner in Dallas, Texas, it made sense for him to help his 20-year-old daughter, a nursing student in San Antonia, opt in. “When she first opened a line of credit, her score dropped,” he said. “But with this, we were able to get it about 15% higher.”

Reese said he also advises his retired clients to use the programs.

“For older people, they have low credit scores, too, because they’ve paid everything off,” he said. “So their credit goes down. But now – Verizon, AT&T. Hulu, the Disney bundle, Netflix, your gas bill – fintech companies can justify those as payment histories.”

Tech companies that provide similar services to Experian Boost, either at low or no cost, have proliferated.

“That is now one of the number one things we encourage people to do,” said Silvio Tavares, CEO of VantageScore, another provider of national consumer credit scores. Like FICO, VantageScore uses the credit reports compiled by Equifax, Experian, and TransUnion to calculate a rating of credit-worthiness using its own algorithm. “If you’re engaging in credit-worthy behavior – like paying rent and utilities on time, you want to include that.”

How do I opt in?

To include alternative credit information on your report, you have several options. One is to opt-in to ExperianBoost or Ultra FICO by going to the companies’ websites and granting permission for them to access your checking, savings, or money market accounts. This will allow the credit bureau or scoring company to analyze your spending, saving, and consistent payment histories. While other financial tech platforms provide similar services, these two options do not charge fees.

Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission. The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.


NAR Releases New ‘That’s Who We R’ Ads

Why hire a Realtor? NAR has a long-running advertising campaign to answer that, with its fifth series of ads focusing on the ways Realtors are “here for it all.”

WASHINGTON  – The National Association of Realtors® (NAR) unveiled the fifth release of ads for its “That’s Who We R” national advertising campaign.

The new theme is “here for it all.” It focuses on the many things Realtors do to make the dream of property ownership a reality for their clients. Created by Havas Chicago, the ads attempt to make a clear distinction between Realtors and non-member agents and “do-it-yourself” tech platforms. They do that by “showcasing the value, partnership and professionalism Realtors provide throughout the journey – whether it’s a first home, the next home or a home for their business.”

“As a former agent and Realtor, I know the dedication, expertise and professionalism required during the often long, complex and emotional process,” says Victoria Gillespie, NAR chief marketing and communications officer. “I’m excited that these spots allow us to authentically demonstrate the Realtor difference in action, with clients and within their communities.”

The new spots take viewers through various property buying experiences. They leverage a diverse set of characters, locations and real estate situations – residential and commercial – that work together to be relatable at scale. The spots also show Realtor involvement and volunteerism, supporting the communities in which they live and work.

“Whether it is your first time or your third time, the journey to property ownership can be stressful, even without changing market conditions and unexpected challenges,” says Myra Nussbaum, president and chief creative officer, Havas Chicago. “We chose to focus on the personal, relationship-building moments that go beyond home search apps or showings. Viewers will see a variety of stories with real, surprising moments, such as moving closer to friends or relatives, or finding the right space for a growing family. No matter the experience, the stories emphasize Realtor expertise and the value they bring to their clients.”

Now in its fifth year, the “That’s Who We R” campaign will be seen through a fully-integrated campaign across a multitude of modern touchpoints, including broadcast and streaming platforms, online and terrestrial audio, social media and branded content partnerships.

In addition to paid media led by Havas Media, NAR will again launch a full suite of new advertising and social media assets created in conjunction with 2023 campaign imagery and messaging for its members and Realtor associations to leverage locally.

New ad spots from the 2023 “That’s Who We R” campaign


  • Chair: 30 seconds / 15 seconds
    A furniture maker is ready to invest in a showroom. His commercial agent, a Realtor, uses neighborhood expertise, contacts and legwork to find a storefront that sets the business up for success. This spot also highlights how Realtors are passionate community members and volunteers.
  • Courtyard: 30 seconds / 15 seconds
    Empty nesters are ready to say goodbye to their single-family home in the suburbs, and they turn to their trusted agent, a Realtor, to bring them closer to their grown daughter and her family in the city.
  • Dog: 30 seconds / 15 seconds
    A city-dwelling couple adopts a four-legged family member and quickly realizes they need a Realtor to help find a home with plenty of room for their fast-growing pup to roam.
  • Donut: 30 seconds / 15 seconds
    A food truck owner learns that one of her customers is a commercial Realtor and realizes that her dream of owning a brick-and-mortar bakery is within reach. This spot also highlights how Realtors are advocates for housing rights and neighborhood issues.

Visit ThatsWhoWeR.realtor for more information on NAR’s “That’s Who We R” national advertising campaign.

© 2023 Florida Realtors®


NAR: Jan. Sales Down 0.7% as Prices Rise 1.3%

The U.S. has now seen home sales drop 12 months in a row, even as median sales prices continue to rise along with the number of for-sale homes on the market.

WASHINGTON – It’s officially one full year – 12 months in row – for home prices declines in the U.S., according to the National Association of Realtors® (NAR).

Month-over-month sales were mixed among the four major U.S. regions NAR tracks. The South and the West saw increases, while the East and Midwest experienced declines. Year-of-year, all four regions recorded declines.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – slid 0.7% from December 2022 to a seasonally adjusted annual rate of 4.00 million in January. Year-over-year, sales retreated 36.9% – down from 6.34 million in January 2022.

“Home sales are bottoming out,” says NAR Chief Economist Lawrence Yun. “Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”

Total housing inventory registered at the end of January was 980,000 units, up 2.1% from December and 15.3% year-to-year (850,000). Unsold inventory sits at a 2.9-month supply at the current sales pace, unchanged from December but up from 1.6 months in January 2022.

“Inventory remains low, but buyers are beginning to have better negotiating power,” Yun says. “Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.”

The median existing-home price for all housing types in January was $359,000, an increase of 1.3% from January 2022 ($354,300), as prices climbed in three out of four U.S. regions while falling in the West. It marks 131 consecutive months of year-over-year increases, the longest-running streak on record.

Properties typically remained on the market for 33 days in January, up from 26 days in December and 19 days in January 2022. Still, a majority of new listings (54%) were on the market for less than a month.

Almost one in three buyers were first-timers (31%) in January, a percentage unchanged since December but up from 27% in January 2022.

All-cash sales accounted for 29% of transactions in January, up from 28% in December and 27% in January 2022.

Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in January. That number is also unchanged from December but down from 22% in January 2022.

Distressed sales – foreclosures and short sales – still make up a very small portion of the market and were 1% of sales in January, unchanged both month-to-month and year-to-year.

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.32% as of February 16. That’s up from 6.12% from the previous week and 3.92% one year ago.

Single-family and condo/co-op sales: Single-family home sales declined to a seasonally adjusted annual rate of 3.59 million in January, down 0.8% from 3.62 million in December and 36.1% from one year ago. The median existing single-family home price was $363,100 in January, up 0.7% from January 2022.

Existing condominium and co-op sales were at a seasonally adjusted annual rate of 410,000 units in January, unchanged from December but down 43.1% from the previous year. The median existing condo price was $320,000 in January, an annual increase of 5.2%.

“Realtors help consumers realize the American dream of property ownership, both residential and commercial,” says NAR President Kenny Parcell. “A Realtor possesses trusted expertise and a thorough understanding of local market conditions that prove valuable throughout the entire real estate transaction.”

Regional breakdown: Existing-home sales in the Northeast retracted 3.8% from December to an annual rate of 500,000 in January, down 35.9% from January 2022. The median price in the Northeast was $383,000, up 0.3% from the previous year.

In the Midwest, existing-home sales slid 5.0% from the previous month to an annual rate of 960,000 in January, declining 33.3% from one year ago. The median price in the Midwest was $252,300, up 2.7% from January 2022.

Existing-home sales in the South rose 1.1% in January from December to an annual rate of 1.82 million, a 36.6% decrease from the prior year. The median price in the South was $332,500, an increase of 3.4% from one year ago.

In the West, existing-home sales elevated 2.9% in January to an annual rate of 720,000, down 42.4% from the previous year. The median price in the West was $525,200, down 4.6% from January 2022.

© 2023 Florida Realtors®


U.S. Wants More Info on Nursing Home Owners

The Biden Admin. wants tighter regulation over private equity investors that have more than a 5% ownership block in facilities enrolled in Medicare of Medicaid.

NEW YORK – A 5% ownership block in a commercial real estate sector would rarely cause a blip on the government radar.

But that’s not the case with America’s nursing homes and senior care facilities. After initially threatening to do so in February 2022, the Biden administration is proposing rules requiring more transparency about the owners, managers and contractors at nursing homes. And the consensus is that the small private equity ownership block is his primary target.

In the new proposal, nursing homes enrolled in Medicare or Medicaid would have to disclose whether a facility’s direct or indirect owners are private equity companies or real estate investment trusts (REITs).

If you want to be part of the Medicare and perhaps the Medicaid system, you must abide by the information requests that are made to you, Health and Human Services Secretary Xavier Becerra said.

The move comes as criticism mounts regarding private equity investment in the nation’s nursing homes, tiny or not. A study by the University of Pennsylvania’s Atul Gupta, New York University’s (NYU) Sabrina T. Howell, University of Chicago’s Constantine Yannelis and NYU Ph.D. candidate Abhinav Gupta summarized that after a nursing home’s purchase by a private equity firm, residents’ short-term mortality rate jumped by 10%.

The study was conducted by analyzing Medicare and Medicaid data covering more than 18,000 U.S. nursing homes between 2004 and 2019. During those 15 years, 1,700 facilities were purchased by private equity firms.

Earlier this year, National Public Radio (NPR) charged that some nursing home owners had moved money from their facilities through corporate arrangements they claim are widespread and legal. NPR found that most don’t own their buildings and outsource essential services such as nursing staff, management and medical supplies to affiliated companies, referred to as “related parties.”

NPR reported that nursing homes pay the related parties more than $12 billion per year, with federal regulators not knowing how much the owners charge above the cost of services and how much ends up in owners’ bank accounts.

The new rules proposed by the Biden administration would negate the hidden process to open books relating to how money is spent at each nursing home.

The real estate investment trust (REIT) Welltower Inc., which buys senior healthcare facilities, is using Americans’ retirement dollars to fund the acquisitions in Meadville, Pennsylvania, according to Jacobin magazine.

Branded as “a leading voice of the American left, offering socialist perspectives on politics, economics and culture,” Jacobin also reported that Welltower “doubled down on acquiring lower-cost senior apartments and squeezing residents on fixed incomes,” according to the magazine’s review of the company’s regulatory filings.

See also: Medical Properties Trust (MPW) Soars 8% In One Day: What In The World Happened?

At November’s HLTH forum, Adaeze Enekwechi, an operating partner at healthcare-focused private equity firm Welsh, Carson, Anderson & Stowe, and a former head of health programs for the Obama administration’s Office of Management and Budget, shot back at the criticism. While admitting that failures occur among private equity-backed or -owned companies, a “Gordon Gekko-like” focus on stripping businesses for immediate profit is not done in the dark and signals the end of any firm’s “solid reputation.”

“With the harsh spotlight on (price to earnings) PE, any instance of (failure) tends to get magnified. However, we’re not sitting in our respective roles looking for businesses we can tear apart,” Enekwechi said. “A lot of that, I think, is coming from people who don’t really have a deep understanding of the motivations, the incentives, how we think about assets (during) identification and ultimately an investment.”

The Biden administration, which hopes to impose the new rules by this summer, claims that by making facility ownership and oversight more transparent, nursing home residents and their families will be more empowered to make informed decisions about care.

© 2023 Benzinga.com – Benzinga does not provide investment advice. All rights reserved.


Spring Buying Season Finds Fairly Stable Market

According to Zillow’s Jan. market analysis, four Fla. metros saw higher year-to-year price gains than the nation yet also higher month-to-month price decreases.

SEATTLE – On the cusp of the 2023 spring home buying season, the market appears somewhat stable, according to Zillow. Home sales are ticking up and price declines leveling off as buyers prepare for the spring sales season.

However, sellers have not joined the fray in great numbers, and the inventory of for-sale homes remains low.

The typical U.S. home value was nearly flat from December to January, slipping just 0.1% to $329,542, or 4.1% below the peak value set in July 2022, Zillow claims. Still, prices have increased 6.2% year-to-year, and they’re 39% higher than before the pandemic.

According to the latest report, Zillow’s home-value estimate tool finds that the four Florida metros studied showed stronger price increases year-to-year than the rest of the nation. However, they also showed a greater month-to-month price drop than the rest of the U.S.

How Zillow adjusted Florida home values

  • Miami-Fort Lauderdale: Up 12.8% year-to-year, down 0.2% month-to-month, December to January
  • Tampa: Up 8.2% year-to-year, down 0.5% month-to-month
  • Orlando: Up 8.4% year-to-year, down 0.8% month-to-month
  • Jacksonville: Up 9.3% year-to-year, down 0.9% month-to-month
  • National numbers: Up 6.2% year-to-year, down 0.1% month-to-month

According to Zillow, buyers are returning to the market but fewer homeowners are listing their homes. The company had 230,000 new listings in January but claims it was “by far the lowest total in Zillow records that begin in 2018” – 17% fewer than the previous record low in January 2022 and 30% lower than the 2018-2021 average of about 330,000.

The 825,000 homes on the market in January was the second-lowest total in several years, and about 450,000 fewer than were ever on the market in January 2020.

© 2023 Florida Realtors®


Fla.’s Jan. Housing: Median Prices, Inventory Up

Florida Realtors: Jan. closed single-family sales fell 32.5% as inflation, higher interest rates eroded demand, but for-sale inventory rose 134.2% to a 2.8-months’ supply.

ORLANDO, Fla. – Continuing trends from the final few months of last year, Florida’s housing market started 2023 with higher median prices and more inventory (active listings) in January compared to a year ago, according to Florida Realtors®’ latest housing data.

However, inflation and still rising interest rates above 6% continued to erode buyer demand: Closed sales of single-family homes statewide last month totaled 14,766, down 32.5% year-over-year, while existing condo-townhouse sales totaled 6,078, down 40.7% from January 2022, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

According to Florida Realtors Chief Economist Dr. Brad O’Connor, the decline in sales is not surprising since interest rates remain twice as high as a year ago; however, he notes the January drop in sales “is the smallest year-over-year decline we’ve had since last October.”

O’Connor also pointed out that the level of closed statewide sales for existing homes and condo-townhouse properties in Florida in recent months is tracking just below the level of sales the state experienced four years ago, prior to the pandemic.

“High mortgage rates are not only affecting homebuyers,” he says. “They’re also discouraging some potential sellers from listing their homes for sale, as well – particularly those who would be selling their primary residence and would therefore have to finance their next home at these higher rates.

“As a result, the level of new listings we’ve seen in recent months has been below normal and that trend also continued into January. New listings of existing single-family homes for sale were down 4.8% compared to a year ago. Over in the townhouse and condo category, the year-over-year decline in new listings was more modest at 2.4%. It’s important to remember that while these high interest rates are discouraging some potential sellers from listing their homes for sale, that’s not the case for all sellers.”

In January, the statewide median sales price for single-family existing homes was $389,990, up 4% from the previous year; for condo-townhouse units, it was $310,000, up 8.8% over January 2022. The median is the midpoint; half the homes sold for more, half for less.

“The ratio of active buyers to active sellers is the most important factor determining housing prices,” O’Connor says. “When this ratio is high, you have widespread bidding wars that drive up prices. That’s what we experienced from mid-2020 until the midpoint of last year. With mortgage rates dousing our hot demand levels over the course of the past year, that ratio has fallen – and therefore price growth has cooled off. However, because these high mortgage rates have discouraged potential buyers and potential sellers, this shift in the ratio of active buyers to active sellers has only resulted in the slowing of overall home price growth, not a full reversal.”

“While we’re seeing positive signs that for-sale inventory is beginning to increase in many local markets across the state, we have quite a way to go before we are back to pre-pandemic inventory levels – which keeps upward pressure on prices,” says 2023 Florida Realtors® President G. Mike McGraw, a broker-associate with RE/MAX Central Realty in Apopka. Also, it’s important to remember that Florida had a shortage in housing supply even before the pandemic – so returning to those levels still means we’re falling short of a balanced market for buyers and sellers.”

Statewide inventory in January was higher than a year ago for both existing single-family homes, increasing by 134.2%, and for condo-townhouse units, up 90%. The supply of single-family existing homes was at a 2.8-months’ supply while existing condo-townhouse properties were at a 3.1-months’ supply last month.

To see the full statewide housing activity reports, go to the Florida Realtors Newsroom and look under Latest Release or download the January 2023 data report PDFs under Market Data.

© 2023 Florida Realtors®


Hurricane Deductibles Aren’t Just for Hurricanes

Higher deductibles usually kick in for hurricane damage, but a policy often includes tropical storms that have been downgraded from hurricane status.

MAITLAND, Fla. – Hours after Tropical Storm Nicole passed through Sharon Kidd’s neighborhood, the homeowner was surprised to hear an oak tree smash through her attic and bedroom ceiling.

“The sun was shining,” Kidd said. “The rain had stopped. We were just sitting there with no power, then the whole house shook.”

Kidd was even more surprised when her insurance company, USAA, sent her a check for the damage to her nearly 2,600-square-foot home in south Maitland, minus $12,440. The company was charging her a hurricane deductible, which with her policy meant 2% of the value of her home.

“That’s crazy,” Kidd said. “It was a tropical storm when it hit.”

But Mark Nation, an attorney with Morgan & Morgan who specializes in home insurance claims, says what USAA did was perfectly legal. He said the tropical storm designation “isn’t going to matter. It was still a hurricane.”

Virtually all homeowner’s insurance policies have a hurricane deductible, typically equivalent to some percentage of the value of the property. What many homeowners might not know is exactly when damage is considered to be caused by a hurricane.

According to Florida statute 627.4025, once a storm has been declared a hurricane by the National Weather Service, all of the destruction it causes is hurricane damage, even if it weakens. What’s more, the deductible goes into effect for any damage that happens within 72 hours of the last hurricane watch or warning issued anywhere in the state.

“If it hits the Keys and you’re in the Panhandle, you’re done.” Nation said. “It’s hurricane damage.”

Nation said he often gets people in his office complaining about the deductible being applied unfairly. “People have tried to wriggle out of this many different ways,” he said. “I have to tell them, ‘I’ve already tried all of this … Don’t get mad at me because I know the law.’”

Jeff Brandes, a former state senator from St. Petersburg who played a key role in property insurance issues while in the Legislature, said the law keeps premiums down.

The law, created in 1995, was meant to give residents incentives to take as much precaution as possible when there is a storm, Brandes said. “Do I think everyone understands that? No, but it was conceptually designed that way.”

Without it, insurance premiums would increase even more than the double-digit percentage hikes of recent years, he added.

Samantha Bequer, communications director for the Office of Insurance Regulation, confirmed the law as written and said her office encourages all homeowners to review their deductible policies carefully.

Kidd, who has lived in her home for 20 years, says she and her husband have crews working on the repairs now.

“If we had been aware at the outset how the law was worded, we would never have expected insurance to cover all of it,” she said. “We would have just been more ready to move on.”

© 2023 Orlando Sentinel. Distributed by Tribune Content Agency, LLC.


Best Way to Simplify Complicated Ideas? Infographics

Some concepts like “How to buy a home” are complicated. Infographics save agents time by laying out interweaving multiple steps in an easy-to-read format.

NEW YORK – How do I buy a house? How do I stage my home? What are the hidden costs of home buying?

Realtors® spend a lot of their time explaining things to clients who need to understand the whole real estate process, with the constant danger that they’ll bail and find another agent who can do it better. To help the “explain this to me” part, real estate businesses increasingly budget for infographics as a tool to help convince potential clients to close a sale.

Infographics are visual representations that convey a specific topic and illustrate trends and processes.

While buying or selling a home looks fun before you start, in reality it involves much paperwork and can be quite complicated. As a tool, infographics can help Realtors relay valuable information to potential clients in a more understandable, visual and compelling way.

The four main types of infographics used by Realtors for marketing are:

  • Statistical
  • Informational
  • Process
  • Hybrid

A statistical infographic uses graphs or charts to make complex data sets more enticing and engaging for clients.

An informational infographic is a visual presentation about a particular topic containing relevant facts and details. It can include a wide range of topics, including news, listings and tips.

A process infographic, which often includes a timeline, shows detailed procedures to help guide clients through the different real estate processes.

Hybrid infographics are a combination of any of the other three infographics.

Making your own infographics is now easier, cost-effective and less time-consuming. In the past, Realtors needed to hire professional graphic artists to create infographics for them, but now they can use several free and professionally-made slide templates to make infographics themselves.

However, Florida Realtors® also offers a library of infographics that members can use as an included benefit of membership. They can be downloaded, shared in social media channels and used for one-on-one marketing. A tool allows members to search by function.

For a list of available infographics and more information, visit Florida Realtors’ website.

Source: KHTS AM-1220 (02/16/23)

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


HOA Enforcement Policies: Is There a Limit?

Residents expect HOAs to enforce rules and often empower them to fine and suspend homeowners. But laws and rules keep HOAs from being all-powerful.

MIAMI – Community associations’ abilities to fine and suspend unit owners who refuse to comply with their rules and restrictions are essential for the viability of the home/condo-owner association model for private residential enclaves. Without such enforcement and lien rights, individual owners would be able to flout the rules, avoid paying their dues, and even become a nuisance to their neighbors with no regard whatsoever for any potential consequences.

However, Florida law and associations’ own governing documents place a number of reasonable checks on enforcement actions against unit owners.

A recent ruling by Florida’s Second District Court of Appeal demonstrates the potential legal liabilities and costs for associations that fail to meet the mandated prerequisites for the imposition of fines as well as suspensions from community amenities or board seats.

The decision stemmed from a dispute between unit-owner Dale L. Gillis and the Jackson Shores Townhomes Association in Sebring, Fla. In early December 2017, the day after conducting a site inspection of association property and finding violations on Gillis’s property, the property manager for the community sent a violation letter informing him that he owed a fine of $100 for the alleged violations. The letter also included an invoice for the $100 fine with instructions indicating payment was due by the end of the month.

Gillis responded by objecting to the fine, but eventually the association suspended his access to community amenities and removed him from the board of directors based on his refusal to pay. He filed suit against the association, but it prevailed after a non-jury trial.

Apparently undeterred, Gillis then filed for and was granted an appeal before the Second DCA. In the subsequent unanimous opinion, the appellate panel focuses on pertinent provisions of Florida law and the association’s own governing Declaration of Covenants.

The association’s governing document calls for an initial written notice of any violations to be issued to owners after 10 days. After which, if the violation is not cured as soon as practicable by the owner, the association may impose a fine.

Florida law provides that fines or suspensions may not be imposed without at least 14 days’ written notice and a hearing before a committee of at least three members appointed by the board who are not officers, directors, or employees of the association, or the spouse, parent, child, brother, or sister of an officer, director, or employee. This grievance committee must then approve the proposed fine or suspension by majority vote, otherwise it may not be imposed.

The appellate panel agreed with Gillis that the fine was imposed without meeting the requirements of the association’s own governing declaration nor Florida law. The property manager imposed the fine one day, rather than 14 days, after the violations were discovered, and the fine had not been approved by either the association’s board of directors or its grievance committee.

The appellate court was not swayed by the association’s contention that the fine was proper because it had sent a second letter to Gillis in February of 2018 advising him that he had 14 days to contest it. In reversing the lower court’s final judgment for entry of one in favor of Gillis, the appellate court concluded that Florida law requires 14 days’ notice and an opportunity for a hearing in front of the grievance committee before a fine may be imposed. The association, however, failed to comply with both the 14 days’ notice and the hearing requirements.

The lesson for community associations

The lessons from this case should be extremely clear for all Florida community associations and property managers. Circumventing Florida law as well as the checks that are typically found in associations’ own governing documents can lead to disastrous legal and financial consequences.

As the prevailing party, Gillis will likely be entitled to be awarded attorney’s fees and costs, which can easily mount to significant sums in appellate cases. These costs, which presumably will far exceed the $100 fine that the association sought, will come from the association’s coffers and ultimately be borne by the community’s owners.

This will probably be an expensive lesson in fining and enforcement procedures for Jackson Shores, but it comes with no fees attached for all other associations. Bypassing the required notice and approval process for association fines and suspensions can be a recipe for serious legal and financial liabilities, and enforcement actions should only be taken under the guidance of highly qualified and experienced association legal counsel.

© 2023 Miami Herald. Distributed by Tribune Content Agency, LLC. Eduardo J. Valdes is a shareholder with the law firm of Siegfried Rivera who focuses on community association law.


Another Insolvent Insurer Heads to Receivership

United Property & Casualty Ins. Co. is insolvent, and the company cites higher-than-expected losses from Hurricane Ian. Fla. is taking steps to place it in receivership.

TALLAHASSEE, Fla. – State regulators moved forward Thursday with placing United Property & Casualty Insurance Co. (UPC) into receivership after higher-than-expected losses from Hurricane Ian helped push the insurer into insolvency.

Interim Insurance Commissioner Michael Yaworksy sent a letter to state Chief Financial Officer Jimmy Patronis to trigger a process that leads to seeking court approval to place the St. Petersburg-based insurer into receivership, according to documents posted on the Office of Insurance Regulation website. United Property & Casualty agreed to the move.

United Property & Casualty has faced deep financial problems for months, including announcing in August that it would exit Florida’s troubled homeowners’ insurance market. On Feb. 1, Tampa-based Slide Insurance Co. picked up 72,000 of United Property & Casualty’s policies.

In a Feb. 10 filing with the federal Securities and Exchange Commission, parent company United Insurance Holdings Corp. said United Property & Casualty was expected to be placed into receivership because of insolvency.

“United was deemed insolvent on February 6, 2023, because if all of the assets of United, if made immediately available, would be insufficient to discharge all of the liabilities of United. … (The Office of Insurance Regulation) has determined that United is operating in an unsound condition that is hazardous to policyholders, creditors, stockholders and the public,” Virginia Christy, director of the office’s Property & Casualty Financial Oversight unit, said in an affidavit attached to Yaworsky’s letter.

The move to place United Property & Casualty in receivership is another blow to Florida’s property-insurance market. The state placed six insurers into receivership in 2022 because of insolvencies.

United Property and Casualty had about 135,000 policies in Florida before Slide took over the 72,000 policies, according to a document filed Feb. 6 at the Securities and Exchange Commission.

The Office of Insurance Regulation letter and accompanying documents do not detail plans for remaining United Property & Casualty customers. The state-backed Citizens Property Insurance Corp. has provided policies to many homeowners who lost coverage because of last year’s insolvencies.

While Slide took over the 72,000 policies, it is not liable for claims filed before Feb. 1 by former United Property & Casualty customers. The insolvency and receivership likely will lead to the Florida Insurance Guaranty Association needing to step in to help pay United Property & Casualty claims.

The agency was created to handle claims of insolvent companies and can collect assessments on policyholders throughout the state to cover the costs.

Christy’s affidavit Thursday detailed years of concerns by regulators about United Property & Casualty’s financial condition. It said the insurer had net underwriting losses of more than $35 million each year since 2017.

In July 2022, the company notified regulators that its financial rating had been downgraded to a level below what is required by the mortgage-industry giants Fannie Mae and Freddie Mac, which look at whether homes are insured by financially sound companies. That led to regulators placing United Property & Casualty in a new program that involved Citizens Property Insurance serving as a backstop.

A Dec. 5 order from the Office of Insurance Regulation for what is known as “public administrative supervision” said United Property & Casualty had been unable to obtain reinsurance – critical backup coverage – for the 2023 hurricane season. It said the insurer planned to cancel all remaining policies May 31, before the start of the season.

But in the Feb. 10 Securities and Exchange Commission filing, United Property & Casualty’s parent company said the insurer had been hit harder than expected in Hurricane Ian, which made landfall Sept. 28 in Southwest Florida as a Category 4 storm before crossing the state.

United Property & Casualty had expected gross losses of $660 million from Hurricane Ian, but the actual losses were $864 million. After factoring in reinsurance, the higher-than-expected net loss was $145 million as of Dec. 31, the Securities and Exchange Commission filing said.

“As a result of the increased net losses incurred by UPC … UPC is expected to be insolvent as of December 31, 2022,” the Feb. 10 filing said. “Accordingly, the company has notified the Florida Office of Insurance Regulation of UPC’s material impairment.”

© 2023 The News Service of Florida. All rights reserved.


Slowdown Hits Zillow, Redfin Profits in 2022

Year-end earnings reports from Redfin and Zillow showed substantial losses after mortgage rates almost doubled – the “scenario we feared would happen.”

SEATTLE – Seattle’s real estate tech companies are feeling the effects of the cooling housing market on their bottom lines. Despite cutbacks and layoffs in 2022, year-end earnings reports from Zillow and Redfin showed substantial losses and declines in gross profit.

The results reflect the chill that hit the housing market last year, as interest rates shot up and kept many prospective homebuyers from shopping. Nationwide, the number of home sales dropped 18% from 2021 to 2022, according to the National Association of Realtors.

The market shift was “the scenario we had feared could happen,” Zillow CEO Rich Barton told investors Wednesday. “Thirty-year mortgage interest rates nearly doubled … meaningfully slowing turnover and home-price appreciation in the housing market.”

Both Seattle-based companies faced plummeting share prices and financial challenges while attempting to flip houses over the last two years.

Zillow, which operates a listing site and sells exposure on its site to real estate agents, reported a net loss of $101 million in 2022. That was a vast improvement from 2021 when the company shuttered its house-flipping business, began laying off a quarter of its staff and reported a year-end loss of $528 million.

Redfin, a listing site and brokerage with agents on staff, followed suit in late 2022, closing down its home-flipping division and laying off 13% of its staff. Redfin reported a net loss of $321 million in 2022, more than double its $110 million loss in 2021. The company reported a $62 million net loss in the properties portion of its business, which primarily included the flipping operation, RedfinNow.

Redfin is still working to offload 19 remaining homes, CEO Glenn Kelman told investors Thursday. The company sold a total of 2,044 RedfinNow homes in 2022, according to SEC filings.

Redfin’s total revenues increased 19% year over year to $2.3 billion. At the same time, its gross profits declined 29%.

Zillow saw total revenues decline about 8% from 2021 to 2022. Gross profit declined 12%.

In a sign of the sluggish market last fall, Zillow reported revenue from its mortgage business dropped 65% in the fourth quarter of 2022, compared to the same time in 2021. Revenue from Premier Agent, its advertising business, declined 20% in the fourth quarter, although the company said that still outperformed expectations.

Both companies’ share price took a hit last year after peaking in February 2021. And both laid off workers in 2022. Zillow’s head count dropped by nearly 2,300 employees from the end of 2021 to the end of 2022. Redfin’s dropped by about 900. The cuts leave Zillow and Redfin with almost matching workforces, 5,700 and 5,600 respectively.

Kelman, Redfin’s CEO, said facing the “near-death experience of trading at $3 or $4 a share” last fall led Redfin to examine a core part of its business: employing real estate agents. Unlike Zillow, Redfin has long defended its practice of directly employing agents, despite the higher costs of paying for employees, HR and training.

But this year, Redfin will lean more on partner agents who work at traditional brokerages and get referrals from Redfin in exchange for paying Redfin a referral fee when a sale closes. The company plans to boost the share of homebuyers working with non-Redfin agents from 37% in 2022 to 42% in 2023. That will increase profits and limit future layoffs, Kelman said.

Citing geographic concentration as an issue, Kelman said Redfin will also focus on growing outside of the West Coast. “When we do hire someone, it’s going to be in states like Texas, Georgia and Florida,” he said.

Barton told investors Wednesday Zillow is focused on building what they call a “super app” to encourage homebuyers and sellers to use Zillow products throughout the process of buying or selling a home.

“After a year of significant people-related and other expense reductions in 2022, we are now investing during a tough housing market while others retrench,” Barton and CFO Allen Parker wrote in a letter to shareholders.

As for the broader housing market, which began to pick up a bit in January?

“We aren’t out of the woods yet,” Barton said.

© 2023 The Seattle Times. Distributed by Tribune Content Agency, LLC.


Who Owns the Copyright on an AI Image or Text?

LOS ANGELES – We’re witnessing a massive revolution in artificial intelligence (AI). Tools like ChatGPT, Midjourney, Stable Diffusion, Dall-E and Copilot allow users to generate text, imagery, computer code and other content based solely on natural language prompts.

The creativity, detail and human-like quality of the AI outputs are astonishing, leading to widespread excitement, fear, and ire, as thinking machines force us to question long-held assumptions about the supposed uniqueness of human ingenuity and ponder whether AI is bringing us closer to utopia, human obsolescence, or something in between. Thankfully, this is just a law blog, so we can leave these existential questions about the coming singularity for an episode of Black Mirror.

The legal implications of AI are varied, evolving, and complex, but the focus of this post is AI’s intersection with intellectual property – in particular, the IP and IP-adjacent issues raised by AI’s input – i.e., the content used to train AI. (A different set of issues relate to the IP protection, or lack thereof, afforded to the output of AI. We’ve previously blogged about the output issue, which is not the focus of this post.).

The fundamental question is this: Do content creators have the right to authorize or block AI systems from collecting and using their content as training data? This question implicates not only complex issues of law but important matters of public policy. What rules around AI will optimally “promote the Progress of Science and useful Arts,” the prime directive of the U.S. Constitution’s copyright mandate?

These questions are at the center of two class action lawsuits brought against generative AI providers accused of ingesting content without permission. Both cases were filed in the United States District Court for the Northern District of California by the same lawyers (the Joseph Saveri Law Firm and Matthew Butterick). A third lawsuit brought by Getty Images in the United Kingdom raises similar claims.

By establishing the legal parameters of AI machine learning, these disputes have the potential to profoundly impact the acceleration, adoption, and quality of AI systems. Below is a summary of the three lawsuits followed by a discussion of some key legal issues – namely, copyright, web scraping, and copyright preemption – likely to be fiercely litigated in these cases.

Three new AI cases

1. Doe v. GitHub, 22 Civ. 6823 (N.D. Cal. Nov. 10, 2022)

In the first action, a putative class of developers sued GitHub (a popular open-source code repository), OpenAI (owner of GPT-3, the language model behind ChatGPT) and Microsoft (GitHub’s owner and OpenAI’s lead investor). The action targets Copilot, a subscription-based AI tool co-developed by GitHub and OpenAI using GPT-3 that “promises to assist software coders by providing or filling in blocks of code using AI.”

The developers claim that the defendants used copyright protected source code, which the developers posted to GitHub under various open-source licenses, as training data for Copilot.

The complaint asserts various causes of action, including violations of the “copyright management information” section of the Digital Millennium Copyright Act (for removing CMI from the source code), 17 U.S.C. § 1202; and breach of contract (for failing to provide attribution, copyright notices, and a copy of the source code’s open-source license). Interestingly, the complaint does not allege straight copyright infringement.

Based on the current schedule, the deadline for the defendant’s response – likely, a motion to dismiss – is January 26, 2023. The developers’ opposition is due March 9, 2023, and the reply is due April 6, 2023.

2. Andersen v. Stability AI et al., No. 23 Civ. 201 (N.D. Cal. Jan. 13, 2023)

The second case, brought by three visual artists, targets generative art AI tools Stable AI (the developer behind Stable Diffusion), MidJourney (a popular image generator) and Deviant Art (developer of the DreamUp app).

Similar to the GitHub case, the artists allege that the defendants used the artists’ works without permission to train AI systems, which then use the machine learning to generate new, and allegedly infringing, derivative works. Unlike the GitHub case, the complaint against the AI art generators asserts claims for copyright infringement (under both direct and vicarious theories of liability).

Interestingly, the copyright claims take aim at the ability of certain tools to create art “in the style of” a particular artist. Defendants have not yet appeared in this brand new case.

3. Getty Images v. Stable Diffusion

On January 17, 2023, stock image licensor Getty Images announced that it was filing its own lawsuit against Stability AI in the United Kingdom. At the time of publication, the complaint was not yet available. But in a press statement, Getty Images argued that “Stability AI unlawfully copied and processed millions of images protected by copyright and the associated metadata owned or represented by Getty Images absent a license to benefit Stability AI’s commercial interests and to the detriment of the content creators.”

Getty further stated that it offers licenses “related to training artificial intelligence systems in a manner that respects personal and intellectual property rights” but that, instead of obtaining one, Stability AI pursued its own “stand-alone commercial interests.” Getty Images suggested the complaint would include claims for copyright infringement and unlawful web scraping.

Copyright and fair use

Copyright will be central to all three cases, even if it is not a direct claim in the GitHub case.

In the United States, copyright subsists in original works of authorship fixed in tangible media of expression. This covers all the content at issue in the three lawsuits, including visual designs, photographs, and source code. Putting aside contractual or other rights that may protect these works (more on this below), the extent to which AI generators may use copyright protected works without permission likely will come down to a question of fair use. The determination of that question almost certainly will involve an examination of three landmark fair use cases. Each has obvious import to the issue of unauthorized machine learning.

1. The Authors Guild v. HathiTrust (2d Cir. 2014) and Google (2d Cir. 2015)

In two cases, an authors’ rights organization and group of individual authors sued Google and several research libraries for copyright infringement after they scanned and indexed millions of copyright protected books for the purpose of making the books searchable online. The Second Circuit found fair use in both cases. It did not matter that millions of copyright protected works were used without the permission of their authors or that Google sought to monetize these works.

In HathiTrust, the court held that “the creation of a full-text searchable database is a quintessentially transformative use” because it does not “supersede the objects or purposes of the original creation,” but rather adds “something new with a different purpose and a different character.”

In the case against Google, the court held that “Google’s making of a digital copy to provide a search function … augments public knowledge by making available information about [p]laintiffs’ books without providing the public with a substantial substitute for matter protected by the [p]laintiffs’ copyright interests in the original works or derivatives of them.”

The HathiTrust court rejected the authors’ argument that the libraries’ unauthorized use of their books deprived the authors of a licensing opportunity, holding that “the full-text search function does not serve as a substitute for the books that are being searched,” so it was “irrelevant that the Libraries might be willing to purchase licenses in order to engage in their transformative use (if the use were deemed unfair).” (Disclosure: Our firm represented The Authors Guild in these cases.)

2. Oracle v. Google (U.S. 2021)

In this case, Oracle, which owns the copyright in the Java programming language, sued Google for copyright infringement based upon Google’s unauthorized use of roughly 11,500 lines of code from Java SE, which were part of an application programming interface (API), to build Google’s Android mobile operating system. The lawsuit considered whether the API code was subject to copyright protection and whether, if it was, Google’s use constituted fair use.

The Supreme Court held that, even assuming that the API code is copyrightable (the Court did not answer the question), Google’s use of the API code was fair use. The Court looked closely at the nature of the API code, finding that its purpose – allowing programmers to access other code – distinguished it from other more “expressive” code and favored fair use. The Court also found that Google’s use of the API code to reimplement a user interface was transformative because it would further the development of computer programs, thereby fulfilling copyright’s prime directive.

3. Andy Warhol v. Goldsmith (2d Cir. 2020), cert granted

In this case, the Supreme Court is considering the application and continued viability of fair use’s “transformative use” test, which the Supreme Court established nearly thirty years ago in Campbell v. Acuff-Rose. In 1981, photographer Lynn Goldsmith took a photograph of Prince. Andy Warhol created a series of silkscreen prints and illustrations based on the photograph. Warhol’s works made some visual changes to the photograph, but they remained “recognizably derived” from the original.

Goldsmith sued the Andy Warhol Foundation for copyright infringement. Reversing the district court, the Second Circuit held that that the Warhol series was not sufficiently transformative to constitute fair use. The Foundation appealed, and the Supreme Court agreed to hear the case. Both the factual context of the case – an artistic take of a pre-existing work – and the broader doctrinal question – the delineation or replacement of the transformative use test – could have significant implications for cases considering the inputs and outputs of AI systems.

Web scraping

AI has a rapacious appetite for information. But where and how do AI systems get their treasured input? Do AI systems need permission from content owners to collect and use their content as training data? Should they need permission?

Fortunately, there is a mountain of helpful precedent in the realm of web scraping – the act of harvesting content from websites for use in third-party applications. Unfortunately, the law governing web scraping is nuanced and fact intensive, implicating numerous overlapping legal doctrines.

Complaints against web scrapers frequently include claims under the Computer Fraud and Abuse Act (“CFAA”) (for gaining unauthorized access to a computer system), breach of contract (for violating terms of service), trespass to chattels (for entering virtual property without permission), copyright infringement (for reproducing protected content), and unfair trade practices.

Outcomes in web scraping cases are mixed. As a general matter, web scraping has been a critical component, and unavoidable reality, of web development since the beginning of the Internet. Most platforms tolerate, and sometimes even embrace, web scraping, and typically have taken legal action only when scrapers engage in abusive conduct by circumventing technical controls, over-taxing a platform’s servers, or using a platform’s own data to compete directly against it.

The common law rules that have emerged around web scraping provide useful guidance in assessing the boundaries of AI content ingestion, and the cases that established those rules will undoubtedly play an important role in the recently filed AI cases.

But the more interesting and vexing question is one of policy: Will we as a society benefit more by restricting or maximizing the public data sources available to AI systems? Should publicly available information be open for AI consumption because it will make the tools that much better, or should folks be able to control whether their data is ingested notwithstanding the potential disservice to the public interest?

In a recent ruling rejecting CFAA claims that LinkedIn brought against a web scraping competitor, the Ninth Circuit recognized this important policy question:

We agree with the district court that giving companies like LinkedIn free rein to decide on any basis who can collect and use data – data that the companies do not own, that they otherwise make publicly available to viewers, and that the companies themselves collect and use – risks the possible creation of information monopolies that would disserve the public interest.

Copyright preemption

A doctrine less sexy than fair use – but no less significant to the issues raised by unauthorized AI machine learning – is copyright preemption. As suggested by the web scraping cases discussed above, copyright is not the only tool available to protect content.

Online content is frequently published on websites governed by terms of service, and those terms typically purport to restrict commercial use and web scraping of their content. When someone collects and uses content in violation of those terms, the argument goes, it is a breach of contract, even if the use would not constitute copyright infringement (because the use is licensed or fair use, for example). Copyright preemption is often an important defense to that claim.

Section 301(a) of the Copyright Act provides: “all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright … are governed exclusively by this title.”

Based on this statute, courts have frequently dismissed unjust enrichment, right of publicity, and other state law claims as preempted by the Copyright Act. If a claim is held preempted, the defendant then may assert the panoply of defenses available under the Copyright Act, including express or implied license, lack of copyrightability and fair use.

Are claims for breach of contract based upon use of content in violation of terms of service preempted by the Copyright Act? Sometimes yes, sometimes no. Courts have really struggled with this question. In many cases, including in the Second Circuit, the outcome turns on whether the breach claim is found to include any “extra elements that make it qualitatively different from a copyright infringement claim.”

In Briarpatch Ltd., L.P. v. Phoenix Pictures, Inc., 373 F.3d 296 (2d Cir. 2004), for example, a contractual promise to pay has been found to constitute an “extra element” that precludes copyright preemption.

The Second Circuit found no such “extra element” in ML Genius Holdings LLC v. Google LLC (2d Cir. 2022). In that case, song lyrics website Genius.com sued Google for scraping and displaying its lyrics in search results, allegedly in violation of Genius’ terms of service. Genius did not (and could not) sue for copyright infringement because Genius does not hold the copyright to the lyrics. However, Genius’ terms of service prohibit users from commercially reproducing or distributing any portion of the content posted to Genius. Genius sued Google for breaching these terms, but the Second Circuit held that the claim was preempted, finding the breach claim was not “qualitatively different from a copyright claim.”

Genius petitioned the Supreme Court to review the decision, arguing that “[t]he circuits are intractably split” on the Copyright Act’s preemption of breach-of-contract claims. In response, Google argued that Genius is improperly attempting to use its terms of service to “invent new rights” that are equivalent to, and preempted by, copyright. On December 12, 2022, the Supreme Court invited the U.S. Solicitor General to file a brief sharing it views on the case, signaling a possible grant of certiorari.

Depending on the outcome of the anticipated fair use defenses, Genius (especially if SCOTUS grants cert) and other copyright preemption cases may play a pivotal role in determining the viability of state law claims arising from the collection and use of publicly available data for AI machine learning.

Closing thoughts

This is all happening extremely fast. A few years ago, AI-generated works were strictly the domain of cutting-edge artists, academics, and copyright scholars. Suddenly, in the last few months, AI tools have become ubiquitous – not just for experimentation and media hype, but for commercial use, education, and beyond.

The law always struggles to keep up with technology, and AI is no exception. When I started drafting this post, I wrote in hypotheticals – i.e., “it is only a matter of time before artists sue one of these tools for copyright infringement.” Mid-post, news of the Stability Diffusion case hit. Then Getty Images announced its lawsuit. Like AI, the questions were no longer academic.

Given the speed of AI’s development, AI’s never-ending need for “more input,” and the profound impact that AI already has had and increasingly will have on the creative industry, I have no doubt that this is just the beginning.

While new technology brings a certain level of uncertainty, we are fortunate to have centuries of precedent to draw upon to help us navigate the coming onslaught. Hopefully, in establishing the rules of the road for AI content ingestion, policymakers and courts will consider the impact their decisions will have not just on private parties before them, but on society’s overriding interest in “Progress of Science and useful Arts.”

This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

© Mr. Jeremy Goldman, Frankfurt Kurnit Klein & Selz, 2029 Century Park East, Los Angeles

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Why Do People Move to – and Leave – Fla.?

Florida Realtors economist: More people still move into the Sunshine State than leave it, and United Van Lines’ analysis of its customers unveils some of their motives.

ORLANDO, Fla – What goes up must come down, but what goes in doesn’t always go out – or at least that’s true for Florida’s shipments, according to the United Van Lines 2022 National Mover Study.

Florida is an “inbound state” for residents, classified as having more than 55% of its shipments headed into the state versus leaving it. Other full-service van lines and U-Haul agree with this label. Movers headed to Florida using United Van Lines, though, tend to be older, wealthier and relocating for retirement.

Nonetheless, the movement goes both ways. And there are differences in the breakdowns of shipments by age, income and the reason for moving when comparing those headed inbound and outbound.

Reason for moving

In-migration typically demonstrates a desirable location and healthy economy. United Van Lines states the top two reasons for interstate moves are “New Job” or “Company Transfer” followed closely by “Closer to Family.”

But that’s not the case for Florida.

In the 2022 study, 38% of United Van Lines movers to Florida relocated for retirement. The second highest reason? Lifestyle change at 28%. These were the top two reasons in 2021 as well.

On the other hand, those leaving Florida are motivated by the usual main drivers, moving for family (46%) and new jobs (28%).

A grain of salt may be required when considering age and income since the share of movers using a full-service van line may not be in proportion to all movers. Think about it: Which consumers are more likely to afford and require full service? Nonetheless, let’s explore if there’s a difference between moving inbound and outbound.

Age of movers

Over 69% of United Van Lines’ movers headed to Florida are older than 55, and nearly 39% are 65 or older. Yes, plenty of baby boomers are headed to Florida, but other generations are moving in as well.

Headed out, approximately two in three (66%) were older than 55. So, while those with more revolutions under their belt are moving in, some are also moving out.

An article in the Washington Post reminds readers that millennials aren’t kids or 20-somethings from the last decade; they’re now those in the 30-something category. Despite a lower percentage of inbound (10.18%) compared to outbound (11.58%) for those aged 35 to 44, using the shipment counts in each direction reveals that the amount headed in is higher than those leaving.

While United Van Lines highlights the movement of retirees to Florida, 30-somethings, those younger and older and anywhere in between, have contributed to Florida’s population growth.

Movers’ income

Nearly half (48%) of United Van Line movers coming into Florida reported an income of $150,000 or more. Of those headed out of the state, 37% said the same.

More movers with an income under $75,000 – measured by both percentage and number – headed out of Florida than arrived to the state via United Van Lines.

There is an obvious appeal of higher incomes headed to the state. Yet to continue its reputation as a low-cost-of-living state full of economic opportunities, warm weather and beautiful beaches, Florida must plan for movers of all types.

It’s easy to understand the motivation of movers headed in. Job opportunities, housing affordability, and interest rates will impact how many find moving to Florida feasible in 2023. And no matter the movement direction, Realtors can support buyers and sellers with their local market expertise.

Erica Plemmons is an economist and Florida Realtors Director of Housing Statistics

© 2023 Florida Realtors®


Marketing: How Many Social Sites? One? Two? More?

Is limited marketing time for social media best spent domineering one site, such as Facebook, or developing a lighter presence on many social media sites?

NEW YORK – Real estate professionals may have good results focusing on a particular digital marketing channel, but Angela Boyer-Stump, senior global real estate advisor and licensed salesperson at Sotheby’s International Realty – Bridgehampton Brokerage, prefers an omnichannel approach. This means she launches listings on social media and YouTube, followed by email marketing.

“In case someone doesn’t see the listing on social media, they may find it on my weekly blog in their email,” she explains.

It’s also worthwhile for agents to know where their audience members are most active online.

We noticed that many people in our database are not on social media, such as Instagram and Facebook, so we’ve tailored our LinkedIn content to advertise significant sales and local market updates to our network,” says Jennifer Gilson, a real estate agent at Golden Gate Sotheby’s International Realty.

Gilson has also found that digital strategies are not one-size-fits-all: “Each property is different, so you’ll have to adjust your story and strategy.”

Meanwhile, today’s video marketing can include catchy intros, beautiful shots and unique editing.

“For my high-end sales, I use a videographer that has experience in drone work and indoor and outdoor videoing,” says Boyer-Stump.

Gilson says she’s found positive results from mixing lifestyle and property content in her videos.

Agents should also consider highlighting behind-the-scenes footage and insights. This can be achieved by posting photos or videos on social media, or sharing with an exclusive email list.

Source: Inman (11/14/22)

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


Changing Market: More VA-FHA Loans, Cash Sales

31% of U.S. Dec. sales were for cash, though Fla. percentages ran as high as 52% in West Palm Beach. VA and FHA loans also rose in most Fla. metro areas studied.

SEATTLE – Roughly one-third (31.2%) of U.S. home purchases were  cash sales in December, according to a report from Redfin. That’s up from 28.8% one year earlier but down from an eight-year high of 31.9% hit in November. Florida, however, largely saw a higher percentage of cash sales in the six metro areas studied.

The share of U.S. cash sales remains elevated above pre-pandemic levels because mortgage rates are high, averaging 6.36% in December. Buyers are motivated to use cash because the can avoid high interest on a loan.

On a pragmatic level, monthly mortgage payments have risen about 25% year-to-year due to mortgage-rate increases throughout most of 2022.

The typical monthly mortgage payment is up about 25% from a year ago, when rates were around 4%.

However, mortgage rates began to drop a bit during the last two months of 2022. As a result, the percentage of cash sales also declined in November and December.

All-cash purchases are common in two notable scenarios: When mortgage rates are high and when the housing market is competitive. The latter explains why the prevalence of all-cash purchases shot up in late 2020 and remained elevated throughout 2021.

FHA and VA loans

In December, FHA loans made up 16% of mortgaged home sales – the highest portion since the start of the pandemic. Nearly one in six (15.6%) mortgaged home sales nationwide used an FHA loan, up from 12.5% a year earlier – the highest share since May 2020.

VA loans have also become more common, with 7.1% of homebuyers who took out a mortgage in December using one. That’s up from 6.2% a year earlier and the highest share since July 2020.

FHA loans – and VA loans, to a smaller extent – became increasingly prevalent in the second half of 2022 as the overall housing market cooled considerably due to rising mortgage rates and buyers gaining more negotiating power. Plus the year-to-year figures are being compared to 2021 during the ultra-competitive pandemic housing market.

The share of mortgaged home sales using an FHA loan fell to a record low of 10.4% in April 2022, while VA loan usage bottomed out in March and April 2021 at 5.5%.

FHA-financed buyers are more likely to get their offers, which tend to include small down payments, accepted in a cool market where there is little to no competition from other buyers. In a hot market, sellers often choose cash buyers or those using conventional loans, believing those deals are more likely to close quickly and efficiently.

“Buyers are successfully using FHA loans more often now because sellers are eager to jump on any offer they get when their home sits on the market and gets just one or two showings a week,” says Redfin Senior Economist Sheharyar Bokhari. “That means buyers with less money in the bank are finally able to win homes.”

But it’s not all good news, adds Bokhari. FHA buyers “are getting accepted because the market is slow, and the market is slow because high rates and prices make it unaffordable for a lot of people.”

Still, conventional loans remain the most common type of mortgage: 77.3% of December’s mortgaged home sales used a conventional loan, down from 81.2% a year earlier, for the lowest level since June 2020.

Cash, VA and FHA loan changes in Florida

Dec. 2022 year-over-year cash sale percentages

  • Fort Lauderdale: 43.5%, up from 40.4%
  • Jacksonville: 45.3%, down from 47.8%
  • Miami: 45.0%, up from 39.7%
  • Orlando: 37.7%, down from 39.6%
  • Tampa: 39.1%, down from 41.1%
  • West Palm Beach: 52.0%, up from 51.4%
  • National: 31.2%, up from 28.8%

Dec. 2022 year-over-year FHA loan percentage changes

  • Fort Lauderdale: 18.2%, up from 13.9%
  • Jacksonville: 15.3%, up from 10.5%
  • Miami: 15.0%, up from 11.7%
  • Orlando: 16.9%, up from 11.9%
  • Tampa: 18.2%, up from 11.9%
  • West Palm Beach: 15.8%, up from 12.1%
  • National: 15.6%, up from 12.5%

Dec. 2022 year-over-year VA loan percentage changes

  • Fort Lauderdale: 4.4%, up from 3.2%
  • Jacksonville: 20.7%, up from 16.3%
  • Miami: 2.5%, up from 1.9%
  • Orlando: 6.7%, up from 5.6%
  • Tampa: 9.9%, up from 9.2%
  • West Palm Beach: 3.6%, up from 3.6%
  • National: 7.1%, up from 6.2%

© 2023 Florida Realtors®