Monthly Archives: March 2023

Avatar Agents Show Homes to Virtual Buyers?

Imagine: Future buyers will create an avatar and take an agent-guided 3D virtual tour – but the virtual agent’s answers, while correct, will be AI-generated by ChatGPT.

SAINT-HUBERT, Quebec, Canada – ChatGPT’s ability to write text is a hot commodity in real estate, but as the technology “learns” over time, its application will venture into other real estate arenas, including virtual tours.

A Canadian company, Urbanimmersive, has already announced plans for online virtual tours that include a computer-generated real estate agent who can answer buyers’ questions. The company says it just integrated ChatGPT into its plans, and it will offer the “UiMeet3D Greeting Bot” for virtual tours.

The technology is cutting edge but, like all cutting-edge technology, can become the real estate norm in the not-so-distant future.

If it performs as imagined, a homebuyer couple could take a virtual 3D tour together even if they’re living in different cities. While inside the home, their avatars can talk to each other as they walk from room to room. Using their web cameras, their buyer avatars are generated from their computer cameras, so they’ll literally be able to see each other’s faces as they discuss the house.

But they won’t be alone. The next high-tech change is a virtual real estate agent who can give them a tour. However, that agent isn’t real, even though it can answer most of their questions and make suggestions thanks to ChatGPT. The agent’s name to Urbanimmersive is “UiMeet3D Greeting Bot.”

According to Urbanimmersive, UiMeet3D Greeting Bot can answer limited questions based on curated information selected by the clients. Over time, though, future virtual tours will likely come closer and closer to a real agent. Currently, the Bots come equipped with a lot of information, including property descriptions, neighborhood details and 2D floor plans. With permission, the Bot can use this information to provide buyers answers to a wide range of questions, such as the number of rooms, square footage, nearby schools and public transportation options.

The UiMeet3D Greeting Bot can also provide information on a potential agent’s services and experience.

Urbanimmersive says its ultimate goal is to “equip the UiMeet3D Avatar Greeting Bot with a highly personalized and intuitive interactive experience for viewers, exploring its 3D environments, provide a highly informative guided tour of home” and significantly enhance its lead generation capabilities.

“Going forward, businesses that build a substantial … organized and structured data set would be the ones that would leverage the most AI integration, such as ChatGPT,” says Ghislain Lemire, CEO of Urbanimmersive.

© 2023 Florida Realtors®


Mortgage Rates Hit Lowest Level in 6 Weeks

At 6.32%, the average 30-year, fixed-rate mortgage declined from last week’s average 6.42% – a ray of hope for buyers seeking to secure a home this spring.

WASHINGTON – The average long-term U.S. mortgage rate inched down this week to its lowest level in six weeks, just as the spring buying season gets underway.

Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate fell for the third straight week to 6.32%, from 6.42% last week. The average rate a year ago was 4.67%.

The recent decline in mortgage rates is good news for prospective homebuyers, as many were pushed to the sidelines during the past year as the Federal Reserve cranked up its main borrowing rate nine straight times in a bid to bring down stubborn, four-decade high inflation.

Also helping buyers, home prices appear to be leveling off. The national median home price slipped 0.2% from February last year to $363,000, marking the first annual decline in 13 years, according to the National Association of Realtors.

One thing that hasn’t gotten much better is the supply of homes.

“Over the last several weeks, declining rates have brought borrowers back to the market, but as the spring home buying season gets underway, low inventory remains a key challenge for prospective buyers,” said Sam Khater, Freddie Mac’s chief economist.

Rising borrowing costs can add hundreds of dollars a month in costs for homebuyers and put the brakes on the housing market. Before surging 14.5% in February, sales of existing homes had fallen for 12 straight months to the slowest pace in more than a dozen years.

In 2022, 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, the National Association of Realtors reported earlier this year.

The average long-term rate hit 7.08% in the fall – a two-decade high – as the Federal Reserve quickly cranked up its key lending rate with multiple jumbo hikes in a bid to cool the economy and stymie persistent, four-decade high inflation.

In their latest quarterly economic projections, the policymakers forecast that they expect to raise that key rate just once more – from its new level of about 4.9% to 5.1%, the same peak they had projected in December.

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. Investor 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.

Treasury yields have fluctuated wildly since the collapse of two mid-size U.S. banks two weeks ago. The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, was 3.57% Thursday, but had been above 4% early in March.

The rate for a 15-year mortgage, popular with those refinancing their homes, fell this week to 5.56% from 5.68% last week. It was 3.83% one year ago.

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


4 Fla. Neighborhoods ‘Best Places to Live’ in U.S.

Using national and local data, a company that helps parents connect with high schools and colleges named Tampa and Orlando areas to its top 25 “best places to live.”

TAMPA, Fla. – Four neighborhoods in Florida were named among the best places to live in the United States in a new study.

Niche, a platform that connects parents and students with schools and colleges, analyzes cities and communities around the United States using federal and local government data. It then compares its findings to resident ratings.

And what the analysis for 2023 showed is that two communities in Tampa and two in Orlando were among the top 25 neighborhoods in the country. No Miami-Dade or other South Florida cities were mentioned.


The study, which examines metrics in the areas of public schools, housing, crime and safety, nightlife, diversity and whether the neighborhoods are family-friendly, highlighted the waterfront neighborhood of Hyde Park-Spanishtown Creek near downtown Tampa (No. 4) and nearby Harbour Island (11).

The median home price in Hyde Park is $469,284, and the median rent is $1,673, while the median home price in Harbour Island is $498,990 and average rent is $2,348. This beachfront Florida town was just voted one of the best small towns in the U.S.


In Orlando, Niche praised the more affordable North Quarter community (8), where the median home price is $171,100 and median rent is $1,423 and Audubon Park (20), which has a median home price of $342,693 and a median rent of $1,644.

The best neighborhood in the country, Niche reports, is the Philadelphia suburb of Chesterbrook.

Niche also broke down the top 25 cities to live in, calling Cambridge, Massachusetts, the best city in the country. No Florida cities made the list.

The study also listed the best places to live in South Florida, and Pinecrest was named the best neighborhood in Miami, up from No. 2 last year. Brickell, 2022’s best neighborhood, dropped to No. 4, after Coral Gables (2) and Coconut Grove (3).

Pinecrest scored highly in the areas of public schools, diversity, being good for families and nightlife (yes, we’re a bit puzzled by that one as well). It earned good ratings regarding crime and safety and only faltered in the area of housing. Niche reports the median cost of a home in Pinecrest is $937,600. This is not exactly easy affordable living.

The rest of the top 10 cities in the Miami area include a few Broward neighborhoods: Palmetto Bay (5); Highland Beach (6); Weston (7); Parkland (8); Rio Vista in Fort Lauderdale (9); and Key Biscayne (10).

These Florida spots, one in the Keys, made the best beaches list. Miami was snubbed.

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


Crypto Lesson: No Easy Path to Wealth

NEW YORK (AP) – A software developer twice invested his savings in cryptocurrencies, only to lose it all. But he still promotes it to the Black community and would like to get back in himself.

A recent college graduate and a single mom are dabbling hopefully in bitcoin after attending a crypto workshop sponsored by rapper Jay-Z at the public housing complex where the hip-hop star grew up.

But a former executive at a cryptocurrency exchange feels disillusioned by the false promise of crypto helping her family in Ethiopia’s war-torn Tigray region.

All were drawn by the idea of crypto as a pathway to wealth-building outside of traditional financial systems with a long history of racial discrimination and indifference to the needs of low-income communities. But crypto’s meltdown over the past year has dealt a blow to that narrative, fueling a debate between those who continue to believe in its future and skeptics who say misleading advertising and celebrity-fueled hype have drawn vulnerable people to a risky and unproven asset class.

The collapse of two crypto-friendly banks so far this year, Silvergate Capital Corp. and Signature Bank, complicates the picture. Their failure was a setback for crypto companies that relied on the banks to convert digital currencies to U.S. dollars. Yet the crisis bolstered Bitcoin, the oldest and most popular digital currency, by reinforcing a distrust in the banking system that helped give rise to cryptocurrencies in the first place.

Mariela Regalado, 33, and Jimmy Bario, 22, neighbors at the Marcy Houses complex in Brooklyn, started putting $20 or $30 into bitcoin every two weeks or so after attending “Bitcoin Academy,” a workshop sponsored last summer by Jay-Z and Jack Dorsey, co-founder of Block Inc., the parent company of mobile payment system Cash App.

“I don’t see it as something that’s going to, you know, take me out of Brooklyn and buy me a $2 million mansion in Texas,” said Regalado, an educational consultant and mother of a toddler. “But if it happens, I’m all for it.”

Only a small minority of the U.S. population owns cryptocurrency, but adoption increased during the COVID-19 pandemic as low interest rates made borrowing money and investing in risky assets more attractive. Prices peaked in 2021, and a constellation of apps, exchanges and even ATM-like crypto machines made buying digital coins easy.

But the drawbacks of crypto played out dramatically after prices cratered in 2022, wiping out millions in investments and leading to a cascade of bankruptcies and layoffs at crypto exchanges, lenders and other companies. Along with its volatility, crypto lacks protections such as deposit insurance since it’s not controlled by any single institution. Largely unregulated, the industry is susceptible to scams, hacks and fraud.

Cryptocurrencies are built on decentralized ledgers – usually blockchain – allowing peer-to-peer transactions without a middleman like a bank or government. That continues to appeal to many people who face barriers to traditional wealth-building avenues such as homeownership, college education, or the stock market, said Terri Bradford, a payment specialist at the Kansas City Federal Reserve, who has researched crypto’s popularity among many Black investors.

“It doesn’t appear that a whole lot of people are dissuaded from crypto even though we have observed what has happened,” Bradford said.

According to Pew Research Center polls in 2021 and 2022, some 20% of Black, Hispanic and Asian U.S. adults have bought, traded or used cryptocurrency, compared with 13% of white adults. Bradford’s research, which examined data from Pew Research Center and the Board of Governors of the Federal Reserve System, found that Black investors are more likely to own crypto than stocks or mutual funds, while the opposite is true for white investors.

Black and Latino crypto enthusiasts have formed social media groups, written books and organized summits to promote minority developers in the space and champion blockchain technology’s potential to create more equitable systems in finance and beyond.

But crypto companies also sought to capture a broader market of retail investors through lucrative sponsorship deals with celebrities and sports teams, many aimed directly at Black and Hispanic consumers by touting crypto as an economic equalizer.

Coin Cloud, a company that makes ATMs for cryptocurrencies and which has filed for bankruptcy, launched an ad featuring movie director Spike Lee deriding “old money” as “exploitative,” “oppressive” and “white,” and crypto as “positive” and “inclusive.”

Tonantzin Carmona, a Brookings Institute fellow who researches crypto’s impact on minority communities, said that for inexperienced investors, this sort of high-profile hype easily obscures crypto’s drawbacks.

Carmona considers crypto’s marketing to racial minorities part of a legacy of “predatory inclusion” in the tradition of payday loans and subprime mortgages – risky services that promise access to financing that would otherwise be out of reach.

“You’ll have a marginalized group, a community that has been historically excluded from accessing products, services, opportunities, and all of a sudden they’re told that they will get access to maybe some type of alternative,” Carmona said. “But this access often comes with conditions that undermine the benefits or that will reproduce insecurity for these very same communities.”

Rahwa Berhe first started investing in crypto while studying alternative financial products during a master’s degree program at the University of Washington in Seattle. The Chicago native tried to forge a career in crypto, leading a compliance team for digital assets at an exchange for four years, only to feel isolated as a Black woman.

“It’s like you took all the tech bros and the finance bros and put them together. I didn’t know where I fit in,” Berhe said.

Her disillusion deepened when crypto couldn’t help her family in Tigray during the conflict there from 2020 to 2022 because the lack of infrastructure and access to electricity made transfers impossible. When she tried to point out these realities to some in the crypto community, she was dismissed as “negative” by social media posters breezily celebrating that the hashtag #eth, for Ethiopia, was introducing people to the digital coin Ether.

Berhe now works with a Stanford University research lab exploring how decentralized web tools can be applied to archiving Africana artifacts. As for cryptocurrency, she is done for now.

“It was great until it wasn’t,” Berhe said.

Crypto advocates argue minority communities deserve access to a potentially lucrative asset class that isn’t going away. Many believe another boom is inevitable and liken last year’s collapse to the dotcom bust of the 2000s, which, far from dooming the tech industry, only weeded out bad actors and bolstered winners like Amazon.

Andre Mego, Bitcoin Academy’s program manager, said crypto is an accessible way to teach financial literacy to a community where many find concepts like wealth-building investment abstract and out of reach. At the end of the summer workshop, participants were each gifted $1,000 in bitcoin, most of them through Cash App, which launched bitcoin trading in 2018.

“When we talk about accessibility, that provides motivation. Because for anybody thinking about investment, they could think, ‘That’s a big thing in the future. That’s something that I have to save up so much money for. I don’t know if I’m allowed to do this. Am I even part of this conversation?” Mego said.

Bario said Bitcoin Academy’s workshop at the Marcy Houses complex was his first meaningful introduction to personal finance, though he graduated last spring with a degree in economics from Lafayette University. Growing up, he said, investing was not a realistic possibility in his family, which relied on income from his father, who worked as taxi driver back in Honduras.

“I always thought, as soon as you get your money, it’s time to spend it – as soon as you get that Friday paycheck,” said Bario, who now works as a soccer coach.

Omid Malekan, who teaches a course on blockchain and cryptocurrency at Columbia Business School, said he hopes the latest crash will disabuse people of the idea that crypto is a reliable avenue for getting rich quick. But Malekan said the crypto industry needs more diversity, not less, and that young Black and Hispanic people should be encouraged to pursue careers in developing a technology he believes will be the future of finance.

“The people who are attracted to crypto because of the way the technology works and because of the promise of a more global, more accessible financial system – those people, it takes more than just prices going down to scare them away,” Malekan said.

Tyrone Norris, the software developer, said he learned to be cautious about how to buy crypto the hard way. Growing up in Washington, D.C., Norris studied computer programing in high school and took college courses, but never graduated because he couldn’t afford to go full time. He has worked as a contractor, moving around the country and never owning a home or accessing a workplace retirement plan.

When Norris first decided to invest in crypto, he poked around on exchanges and chose MANA, a token powering the 3D virtual world Decentraland, because it shared his ex-girlfriend’s name and he saw it as a sign. He went all in, emptying his bank account of $4,000. When his MANA investment doubled, he started betting on whichever coins he thought would be most lucrative. But one exchange turned out to be scam, and another based in New Zealand lost millions in a hack. Norris’s investment went to zero, but two years later, he got back in the game with another $5,000. Again, he watched it soar, then crash as the 2022 “crypto winter” set in.

“I was a rookie – I didn’t understand what I was doing. I was putting my crypto into dangerous places,” Norris said.

For now, he is taking a break from software development to focus on building a crypto-backed hip-hop gaming project. Norris said he has no regrets because investing introduced him to the possibilities of the blockchain.

“I come from nothing,” he said. “I don’t come in expecting anything to be fair.”

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.


Staging a Listing? Don’t Forget Lighting

Effective lighting can make poor home staging look better and good home staging look great. Lights should match the home’s style and highlight its best features.

NEW YORK – Lighting is a key consideration for real estate agents and homeowners. Sellers planning to list their home should take time to weigh how they plan to light and stage their property during showings.

The most popular types of lighting include recessed lighting, which involves cutting holes in the ceiling so the lighting is flush with the ceiling; chandeliers, sconces, other ceiling or wall-mounted fixtures; and under cabinet lighting.

Which one is best? For the most desirable lighting, ensure the style matches the rest of the décor. Also factor in how much flexibility is available and the type of bulb used, especially as LED bulbs gain in popularity.

Lighting projects are rarely feasible as do-it-yourself efforts, so it often pays to have a design professional help homeowners decide where to put lights for maximum effect.

Agents should also know the latest lighting trends and understand the impact that lighting has on the look and feel of the property so they can effectively advise clients and help them find potential lighting and staging professionals.

Source: RISMedia (03/27/23) Lapp, Tina

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


DeSantis Signs ‘Live Local Act’ Into Law

Gov. DeSantis signed SB 102, the broad-based pro-housing bill backed by Florida Realtors, into law on Wed. It “does so many amazing things,” says Pres. Mike McGraw.

NAPLES, Fla. – Gov. Ron DeSantis signed Senate Bill 102, known as the “Live Local Act,” on Wednesday morning. The bill creates a comprehensive, statewide workforce housing strategy to increase affordable, attainable housing options for Florida workers who hope to live in the communities they serve. The governor signed the legislation following a press conference held at Founders Square in Naples.

“Thank you to Gov. Ron DeSantis, Senate President Kathleen Passidomo, House Speaker Paul Renner, Senator Alexis Calatayud and Representative Demi Busatta Cabrera for their leadership and hard work in making this historic affordable housing initiative a reality,” said 2023 Florida Realtors® President G. Mike McGraw, a broker-associate with RE/MAX Central Realty in Apopka. “Far too many hard-working Floridians cannot afford to live in a home near where they work. SB 102 tackles this problem in a multi-faceted way that will make the dream of homeownership possible for more Floridians and lower the cost of rents throughout the state.”

Gov. DeSantis described the bill as “the largest ever support for housing in state history” that will help Floridians live the communities where they work. “This bill has $711 million for projects through the Florida Housing Finance Corp.,” he said. “I think it doubles what the Legislature did last year (for housing) and that was at a 15-year high.”

During the press conference, legislative leaders, state officials and others spoke about SB 102’s passage and how it will help Floridians.

“When I moved to Naples 43 years ago, the community was talking about the lack of housing for our workers,” said Senate President Kathleen Passidomo, R-Naples, the Live Local Act sponsor. “It was a problem then and it’s a problem today – and not just for southwest Florida but the entire state of Florida. As the governor said, the free state of Florida is attracting so many people to move here and that has just exacerbated the problem. The Live Local Act is an amazing, 106-page bill of ideas and suggestions on how we can provide affordable, safe housing for our workers. We have so many things in this bill, there’s something for everyone; so that we believe, from day one, there will be a big impact on the lack of housing for our citizens.”

Florida needs more affordable housing, and no single solution can solve that problem. As a result, SB 102 makes a number of changes that, taken as a whole, should help Florida take a major step forward in solving the current housing challenge.

Among other things, the new law provides additional money for Florida Realtors’ top priority in 2022, the state’s Hometown Heroes Program by appropriating $100 million more to the effort. It also widens eligibility from career-based assistance to income-based down payment assistance. Previously, maximum loans were $25,000; under SB 102, that rises to $35,000.

Detective Frank Jones with the Collier’s County Sheriff’s Office shared his personal experience with the Hometown Heroes Program. He moved from Illinois to join the sheriff’s office, he said, and, “I’ve been doing this almost 36 years. And I’m so glad I received this Hometown Heroes loan to buy my new home. Because of this program, I was able to purchase my home in the community I serve. That’s huge – because you’re not only seeing people at their worst moments, but you also get to see them at their good moments, too.”

For more information on the new law, see “Fla. Legislature Passes ‘Live Local’ Housing Bill.”

© 2023 Florida Realtors®


Know the Fundamentals of Content Marketing?

Dear new Realtors: Solid, well-placed content can grow your business – but where do you start? The overall goal is to get a regular audience to trust you.

NEW YORK – Real estate agents who know the fundamentals of content marketing can grow their business.

The process starts with creating and distributing valuable, pertinent and consistent content. The goals are to draw and keep a clearly defined audience through trust, and to impel profitable customer action.

Agents employ content marketing to establish themselves as authorities, produce leads, cultivate relationships with potential clients, and enhance their search engine rankings.

Content is key: Creating appropriate content starts with defining the target audience and selecting the most relevant topics for that audience. Agents should also focus on the most suitable type of content that target audience prefers, whether it’s blog posts, infographics, podcasts, videos or something else.

The next step: Create a content calendar that outlines what to produce and when to publish it, followed by a promotional strategy.

Finally, agents should make sure it’s working by tracking the results via analytics tools and tweaking the strategy based on the results.

Source: Realty Biz News (03/03/2023) Cioppa, Cali

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


$2.8B Will Fight Homelessness in Florida

HUD is sending $116M in Continuum of Care awards to Fla. so 313 agencies can help people in temporary shelters and encampments move into stable housing.

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) announced $2.8 billion in Continuum of Care (CoC) Competition Awards salted for thousands of local homeless service and housing programs across the United States.

Florida will receive $115,822,733 of that funding to be distributed among 313 state providers. A complete list of the Florida recipients and the amount each will receive is posted on HUD’s website.

In announcing the funding, HUD Secretary Marcia L. Fudge noted the Biden Administration’s continued commitment to address homelessness, as reflected in All In: The Federal Strategic Plan to Prevent and End Homelessness. The plan’s goal: Reduce homelessness by 25% by 2025 and ultimately end it.

“Working with our local partners, these Continuum of Care program grants, deliver communities the resources they need,” says Fudge. “Together we can work toward a world where homelessness is a brief and rare occurrence, and every person has access to a safe, affordable and stable home so that they and their families can thrive.”

The CoC program is the largest source of federal grant funding for homeless services and housing programs servicing people experiencing homelessness.

In August 2022, HUD issued the Notice of Funding Opportunity (NOFO) for the fiscal year 2022 CoC competition awards. Included in the $2.8 billion of total awards, approximately $80 million was made available for non-competitive Youth Homelessness Demonstration Program (YHDP) renewal and replacement grants. The 2022 awards also include over $52 million for new projects that will support housing and service needs for survivors of domestic violence, dating violence, sexual assault and stalking.

The announcement builds on a $315 million package of resources HUD awarded in January 2023 to help communities provide housing and supportive services to people in unsheltered settings and people experiencing homelessness in rural areas.

© 2023 Florida Realtors®


NAR: Pending Sales Up for 3rd Straight Month

Pending sales – homes under contract but not yet sold – rose 0.8% month-to-month in Feb. with only the Western region seeing a decline.

WASHINGTON – Pending home sales grew in February for the third consecutive month, according to the National Association of Realtors® (NAR).

Of the four U.S. regions in the pending-sale breakdown, only one – the West – failed to see a monthly gain. However, all regions saw a pending-sales decline year-to-year.

The Pending Home Sales Index (PHSI) – a forward-looking indicator based on contract signings – improved 0.8% to 83.2 in February. Year-over-year, pending transactions dropped by 21.1%. An index of 100 is equal to the level of contract activity in 2001.

“After nearly a year, the housing sector’s contraction is coming to an end,” says NAR Chief Economist Lawrence Yun. “Existing-home sales, pending contracts and new-home construction pending contracts have turned the corner and climbed for the past three months.”

Pending home sales regional breakdown

  • The Northeast PHSI rose 6.5% from last month to 72.5, a drop of 17% from February 2022.
  • The Midwest index improved 0.4% to 84.9 in February, a decline of 16.5% year-to-year.
  • The South PHSI grew 0.7% to 99.3 in February, down 21.7% year-to-year.
  • The West index decreased 2.4% to 64.6, shrinking 28.4% compared to February 2022.

“The affordable U.S. regions – the Midwest and South – are leading the recovery,” Yun says. “Mortgage rates have improved in recent weeks after the federal government guaranteed the status of most mortgages amidst uncertainty in the financial market. While access to commercial mortgage loans could become increasingly difficult, residential mortgage loans are expected to be more readily available.”

© 2023 Florida Realtors®


Citizens Insurance Seeks 14.2% Rate Hike

Increases vary by county and property, but only a few condo owners could see a discount. Some Panhandle and non-coastal counties may see the biggest increase.

TALLAHASSEE Fla. – Citizens Property Insurance Corp. leaders approved a proposal Wednesday that would raise average rates by 14.2% this year as they continue to push policies into the private insurance market. The Florida Office of Insurance Regulation must still approve the proposal for it to take effect.

Citizens is operated by Florida and the state’s “insurer of last resort.” It’s generally sold to property owners who cannot find affordable coverage elsewhere.

“For the economic well-being of the people of Florida, as well as for the good of Florida’s insurance market, Citizens must return to truly being that insurer of last resort for our state,” Citizens President and CEO Tim Cerio said to Citizens board members before they made the decision to increase rates, according to the News Service of Florida. “We must charge actuarially sound rates, and we must not be competitive with the private market.”

Citizens saw its policy count skyrocket from 569,868 on March 31, 2021, to 1,223,204 as of Friday, adding 13,000 policies in one week alone, as private insurers drop customers and increase rates due to financial troubles. Cerio said Citizens expects to top 1.5 million policies by the end of this year.

In December, the Florida Legislature passed legislation to help Florida’s insurance market, but “this isn’t a quick fix. It’s going to take time,” says Citizens Board of Governors Chairman Carlos Beruff.

Citizens prepared a 2023 rate kit, which provides members of the media with information about its 2023 rate filing, including county-by-county estimates for specific policy types and frequently asked questions.

High-profile takeaways from the proposed rate hikes

  • The only group of people likely to see their cost of Citizens decline is single-family homeowners who hold Multiperil HO6 policies, which mostly cover condominiums. Thirty-five Florida counties have at least one HO6 policyholder who should save money under the proposed change.
  • Counties in the coastal Panhandle and a few inland counties in South Florida will see some of the biggest increases.
  • Under Multiperil HO3 policies – generally single-family homes – two counties will see an average increase greater than 20%: Monroe and Taylor.
  • Under Wind-Only HW2 policies – also single-family homes – eight counties will see average increases greater than 20%, with Charlotte County the highest at an average 28.4%, followed by Gulf County (24.1%) and Lee County (23.3%).
  • Under Multiperil HO6 policies – generally condos or other limited-coverage-area units – three counties will see average increases over 20%, including Highlands (20.4%) and Martin (20.0%). Hendry County has only one HO6 policy, but that homeowner will see an increase of 46% if the proposed rate hike is approved.
  • The Wind-Only HW6 policies – also condo-type units – will see the greatest number of average increases over 20%. However, 37 counties don’t have any units using this type of coverage. Of the rest, almost all increases are greater than 20% except for Gulf (11.2%), Levy (18.4%), Miami-Dade (18.9%), Nassau (19.1%), Pasco (17.5%) and Santa Rosa (19.3%) counties.

Florida insurers rated by policy number on Dec. 31, 2022

  1. Citizens Property Insurance Corp: 1,142,624
  2. Universal Property & Casualty Insurance Co.: 606,129
  3. State Farm Florida Insurance Co.: 589,380
  4. American Bankers Insurance Company of Florida: 331,471
  5. ASI Preferred Insurance Corp: 289,583
  6. Castle Key Indemnity Co.: 287,111
  7. American Integrity Insurance Company of Florida: 278,911
  8. First Protective Insurance Co.: 239,517
  9. Tower Hill Insurance Exchange: 201,509
  10. Heritage Property & Casualty Insurance Co.: 169,425

Source: Florida Office of Insurance Regulation

© 2023 Florida Realtors®


Boomers Pass Millennials in Share of Homebuyers

NAR study: In 2022, boomers made up 39% of buyers (29% in 2021) while millennials made up only 28% (43% in 2021). The main reason? Boomers had more money.

WASHINGTON – As a percentage of all homebuyers, the share of baby boomers has surpassed millennials last year, according to the latest study from the National Association of Realtors® (NAR).

The 2023 Home Buyers and Sellers Generational Trends report examines the similarities and differences of recent homebuyers and sellers across generations, and the latest report found that the combined share of younger boomers (58 to 67 years old) and older boomers (68 to 76 years old) rose to 39% in 2022, up from 29% the year prior.

Younger millennials (24 to 32 years old) and older millennials (33 to 42 years old) have been the top group of homebuyers since 2014, but their combined share fall from 43% in 2021 to 28% last year.

“Baby boomers have the upper hand in the homebuying market,” says Dr. Jessica Lautz, NAR deputy chief economist and vice president of research. “The majority of them are repeat buyers who have housing equity to propel them into their dream home – be it a place to enjoy retirement or a home near friends and family. They are living healthier and longer and making housing trades later in life.”

2022 generational traits of homebuyers

  • Of all buyers, 26% were first-timers, the lowest since NAR began tracking the data and a decrease from 34% in 2021, with 70% of younger millennials and 46% of older millennials first-time buyers. Only 21% of Gen X (43 to 57 years old) and 9% of younger boomers were first-time purchasers.
  • Generation Z – ages 18 to 23 – made up 4% of homebuyers, a slight increase from 2% in 2021. Nearly one in three Gen Z buyers – 30% – moved directly from a family member’s home into homeownership. Finding a location convenient to friends and family was most important to them.

    “As the youngest generation of homebuyers and sellers, it’s encouraging to see Gen Z entering the market,” Lautz says. “Their desire for homeownership is strong, and many are relying on family support systems to help make their first real estate purchase.”

  • Gen X made up 24% of total buyers. They had the highest median household income of any generation ($114,300), followed by older millennials ($102,900).
  • In addition to buying, baby boomers also made up the largest group of home sellers.

Among all generations, sellers typically remained in their home for 10 years before selling, up from nine years last year. On average, younger millennials stayed in their homes for four years; older boomers sold their homes after 16 years.

All generations agreed that the most common reason to sell was to be closer to friends and family. Older generations were also more likely to sell due to retirement, while younger generations cited the desire for a larger home and job relocation as top reasons to sell.

On average, people moved farther distances. Overall, buyers moved a median of 50 miles when relocating, the highest ever recorded and up significantly from 15 miles last year. Younger generations moved shorter distances, with younger and older millennials each typically moving 15 miles away. Younger boomers moved the farthest (90 miles), followed by older boomers (60 miles) and the silent generation (50 miles).

Other study takeaways

  • Overall, buyers expected to live in their homes for 15 years, up from 12 years in 2021. For younger millennials, the expected duration was only 10 years compared to 20 years for younger and older boomers. But Gen Z expected to remain in their newly purchased home for 19 years.
  • Almost nine out of 10 buyers (86%) relied on a real estate agent. The number was highest among younger boomers (90%) and Gen X (88%).
  • Buyers from all generations agreed about the top reasons for using an agent: help finding the right home to purchase (49%), negotiating the terms (13%) and the price (11%) of a sale. Younger (14%) and older (12%) millennials were most likely to want their agent to help with paperwork.
  • 76% of buyers would use their agent again or recommend their agent to others, a consistent number across all generations.
  • Most saw the home as good investment: 88% of all buyers, 74% of younger millennials and 77% of older millennials considered it “better than or about as good a financial investment as stocks.”

“Owning a home is more than just a financial investment. It’s a symbol of stability, independence and community that helps people build their lives and achieve their dreams,” says NAR President Kenny Parcell.

“Whether you’re a first-time homebuyer or an experienced investor, Realtors have the expertise and knowledge needed to provide valuable advice and help you make informed decisions about your purchase.”

The full study is available on NAR’s website. It costs $19.95 for members and $199.95 for non-members.

© 2023 Florida Realtors®


Study: High Number of Buyers Still Move State-to-State

In Feb., the number of buyers searching listings outside their state dropped 3.6% year-to-year – but those looking locally fell 14.4%. 5 Fla. metros are top go-to spots.

SEATTLE – The number of home searchers looking to relocate to a new metro fell 3.6% year-to-year in February, according to a report from Redfin – but that’s less than a 14.4% drop looking to relocate within their current metro. And once again, Florida and other Sun Belt states sparked the most interest.

Rising mortgage rates dented buyer demand in general, but it’s had little impact on where buyers wish to move. In some cases, buyers moving from high-cost metros, such as the San Francisco Bay area, can compensate for higher interest rates by buying a home in less costly metro areas, such as many in Florida. High rates don’t impact those buyers as much because they’re getting a cheaper house and possibly pocketing some proceeds from a home sale in a more expensive area.

Additionally, some relocating homebuyers have a non-negotiable reason for their move, such as a better job or to be closer to family. High rates are less likely to deter those buyers than ones simply considering a different house within the same town.

Buyers moving to a new metro

Of the buyers nationwide seeking a home, one in four (25.1%) looked to relocate to a new metro in February. A year earlier, it was 22.9%. Before the pandemic, it was roughly 18%.

For state-to-state movers, five of the top 10 go-to destinations are in Florida.

Top 10 go-to metro areas

  1. Miami
  2. Phoenix
  3. Las Vegas
  4. Sacramento, California
  5. Tampa
  6. Orlando
  7. Cape Coral
  8. Dallas
  9. North Port-Sarasota
  10. Houston

Popularity is determined by net inflow – how many home shoppers looked to move into an area rather than out of that area.

The typical home in popular go-to destinations is less expensive than the typical home they want to leave behind. The typical Miami home sold for $485,000 in February, for example, compared with $640,000 in New York, the most common origin for its incoming homebuyers.

Top 10 move-out metro areas

  1. San Francisco
  2. New York
  3. Los Angeles
  4. Washington, D.C.
  5. Chicago
  6. Boston
  7. Seattle
  8. Denver
  9. Hartford
  10. Portland

© 2023 Florida Realtors®


Supreme Court Will Hear Disability Activist Lawsuit

The U.S. Supreme Court will consider whether a Fla. woman who filed over 600 lawsuits against hotels has “standing” to sue since she never planned to visit them.

WASHINGTON (AP) – The Supreme Court will decide whether a disabled activist can file disability rights lawsuits against hotels she doesn’t intend to visit.

The high court said Monday it would decide a case involving Deborah Laufer. Laufer, who lives in Florida, has filed over 600 federal lawsuits against hotel owners and operators, according to a Supreme Court filing.

Laufer has a vision impairment, uses a cane or wheelchair to get around, and has limited use of her hands, according to court documents. Her lawsuits contend that the websites of accommodations, generally small hotels and bed-and-breakfasts, are not clear enough about whether they are accessible to people with disabilities.

Under the federal Americans With Disabilities Act (ADA), hotels must identify and describe their accessible features including guest rooms in sufficient detail.

Laufer’s lawsuits and lawsuits by other self-appointed “testers” have divided federal appeals courts. The question is whether Laufer and others have suffered an injury that gives them the ability to sue, called “standing.” Some courts have ruled that people who never intend to visit the accommodations they are challenging can nonetheless sue. Other courts have declined to allow the lawsuits.

The case the court agreed to hear involves the Coast Village Inn and Cottages in Wells, Maine. A federal trial court dismissed Laufer’s lawsuit alleging the hotel’s website contained insufficient information on disability accommodations. But a federal appeals court allowed the case to go forward.

The hotel currently has a notice at the top of its website that reads: “Please Note: Unfortunately, we do not have the capabilities to provide pet-friendly or ADA compliant lodging. We apologize for the inconvenience!”

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


Belt Tightening? Six Cost-Cutting Tips

When sales decline, agents look for ways to trim pennies – but it’s not always a smart move to cut back on some expenses. Consider how it could impact business.

NEW YORK – In market slowdowns, real estate agents need ways to save money without negatively impacting business growth.


  • Buy a coffeemaker to cut back on the time and expense of going out for coffee.
  • Invest in a reliable document management system. It will eliminate paper and printing costs – and it’s good for the environment.
  • Use creative promotions, like a “free seminar for first-time homebuyers (or sellers).” Also look for co-marketing partnerships working with other local businesses.
  • Negotiate necessary expenses, such as brokerage fees, multiple listing service fees and marketing costs. Shop around, compare prices and negotiate with all vendors to get the best possible terms.
  • Take advantage of free and inexpensive online resources, like apps and tools.
  • Network strategically. Attend the events most likely to lead to potential clients and business partners.

Source: Inman (03/22/23) Davis, Darryl

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


Consumers Grew a Bit More Confident in March

The confidence index rose from 103.4 (Feb.) to 104.2, with future outlooks rosier than current ones. Many consumers plan to cut down on “highly discretionary” spending.

BOSTON, Mass. – The March Consumer Confidence Index from the Conference Board increased slightly to 104.2 – up from 103.4 in February.

However, attitudes about the future improved more than attitudes about today.

The Present Situation Index – consumers’ assessment of current business and labor market conditions – decreased to 151.1 from 153.0 last month, a 2.9-point increase.

The Expectations Index – consumers’ short-term outlook for income, business and labor market conditions – ticked up to 73.0 from 70.4 in February for a 2.6-point decrease. According to the Conference Board, the number has been below 80 for 12 of the past 13 months, which often indicates an upcoming recession.

“Driven by an uptick in expectations, consumer confidence improved somewhat in March, but remains below the average level seen in 2022 (104.5),” says Ataman Ozyildirim, senior director, economics at The Conference Board. “The gain reflects an improved outlook for consumers under 55 years of age and for households earning $50,000 and over.”

Jobs have started to worry some Americans as interest rates rise and the economy threatens to contract.

“While consumers feel a bit more confident about what’s ahead, they are slightly less optimistic about the current landscape,” says Ozyildirim. “The share of consumers saying jobs are ‘plentiful’ fell, while the share of those saying jobs are ‘not so plentiful’ rose. The latest results also reveal that their expectations of inflation over the next 12 months remains elevated – at 6.3%.”

In a special question this month, the Consumer Confidence Survey asked about consumers’ about their spending plans on services over the next six months. Overall, they plan to spend less on highly discretionary categories, such as playing the lottery, visiting amusement parks, going to the movies, personal lodging and dining.

But consumers say they’ll spend more on less discretionary categories, such as healthcare, home auto maintenance and repair, and economical entertainment options, such as streaming services.

Present situation

Consumers’ assessment of current business conditions worsened in March:

  • 18.4% said business conditions were “good,” up slightly from 18.0%.
  • But 19.3% said business conditions were “bad,” up from 17.4%.

Consumers’ appraisal of the labor market was less favorable:

  • 49.1% said jobs were “plentiful,” down from 51.2%.
  • 10.3% said jobs were “hard to get,” about the same as last month.

Expectations for six months in the future

Consumers became slightly less pessimistic about the short-term business conditions outlook in March:

  • 15.5% of consumers expect business conditions to improve, up from 14.6%.
  • 18.5% expect business conditions to worsen, down from 21.6%.

Consumers’ assessment about the short-term labor market outlook was also a bit more positive:

  • 15.0% expect more jobs to be available, up from 14.5%.
  • 19.9% anticipate fewer jobs, down from 21.2%.

Consumers’ short-term income prospects was, on balance, less upbeat:

  • 14.9% expect their incomes to increase, up from 14.4% last month.
  • On the other hand, 13.6% expect their incomes will decrease, up from 11.6% last month.

© 2023 Florida Realtors®


Case-Shiller: Prices Still Up – but Not as Much

Jan. prices rose 3.8% compared to 5.6% in Dec., in part due to up-and-down mortgage rates. But Miami ranked No. 1 with a 13.8% jump, with Tampa No. 2 at 10.5%.

NEW YORK – The S&P CoreLogic Case-Shiller Indices for January 2023 finds that home prices continue to go up, but the rate of those increases continues to slow.

In some metro areas, prices are down, notably West Coast markets that include San Francisco, San Diego, Portland and Seattle.

“2023 began as 2022 had ended, with U.S. home prices falling for the seventh consecutive month,” says Craig J. Lazzara, managing director at S&P DJI. “The national composite declined by 0.5% in January, and now stands 5.1% below its peak in June 2022. On a trailing 12-month basis, the National Composite is only 3.8% ahead of its level in January 2022, a result also reflected in our 10- and 20-City Composites (both up 2.5% year-over-year).”


The Index, which covers nine U.S. census divisions, reported a 3.8% annual price gain in January, down from 5.6% in the previous month.

The 10-City Composite annual increase came in at 2.5%, down from 4.4% in the previous month. The 20-City Composite posted a 2.5% year-over-year gain, down from 4.6% the previous month.

Miami, Tampa and Atlanta again reported the highest year-over-year gains among the 20 cities in January. Miami led the way with a 13.8% year-over-year price increase, followed by Tampa in second with a 10.5% increase, and Atlanta ranked third with an 8.4% increase.


Before seasonal adjustment, the U.S. National Index posted a 0.5% month-over-month decrease in January, while the 10-City and 20-City Composites posted decreases of 0.5% and 0.6%, respectively.

After seasonal adjustment – a tinkering of the numbers to fairly compare months without their normal seasonal variations – the U.S. National Index posted a month-over-month decrease of 0.2%, while both the 10-City and 20-City Composites posted decreases of 0.4%.

Before seasonal adjustment, 19 cities reported declines in Jan. with one exception: Miami reported an increase of 0.1%. After seasonal adjustment, 15 cities reported declines while Miami, Boston, Charlotte and Cleveland had slight increases.

“Miami (up 13.8% year-over-year) was the best performing city in January, extending its winning streak to six consecutive months,” says Lazzara. “Tampa (up 10.5%) and Atlanta (up 8.4%) continued in second and third place, with Charlotte (up 8.1%) not far behind.”

Lazarra calls continued weakness in some West Coast cities one of the month’s most interesting aspects. “San Diego and Portland joined San Francisco and Seattle in negative year-over-year territory,” he says. “It’s therefore unsurprising that the Southeast (up 10.2%) continues as the country’s strongest region, while the West (down 1.5%) continues as the weakest.

© 2023 Florida Realtors®


Commercial RE Braces for a Tough Credit Market

NEW YORK – A firestorm among the banking sector, including the failures of Silicon Valley Bank and New York’s Signature and infusions of capital into First Republic Bank and Credit Suisse, has real estate investors scrambling to figure out what this all means for accessing debt.

“Our house view is that there is certainly a more constrained credit market, at least temporarily,” says Michael Riccio, senior managing director and co-head of national production at CBRE Capital Markets. “However, it is still fairly early, and every lender is trying to determine how they are going to react to this change in the market,” he says.

Some real estate pros credit the federal government for moving quickly to prevent a bigger systemic crisis and returning some sense of stability, albeit precariously. A joint statement issued by the Treasury Department, Federal Reserve and FDIC said that it would fully protect depositors of both Silicon Valley Bank and Signature Bank. “Our view is that it may be contained because of what the federal government has done. So, we’re thinking that there might not be widespread collateral damage,” adds Riccio.

Yet the turmoil is already reducing liquidity in the commercial real estate capital markets. Lenders are expected to err on the side of caution with more conservative underwriting. That pullback is already evident in the past week with spreads that have widened across most lender groups – commercial mortgage-backed securities (CMBS), debt funds and banks. And CMBS issuance has ground to a halt due to the volatility in the market.

“After the closures of SVB and Signature Bank, it seems almost inevitable that commercial real estate (CRE) credit spreads will increase and lending liquidity will decrease over the short run,” says JP Verma, senior product director, banking solutions at Trepp. “However, there are still several questions that don’t have an easy or immediate answer, such as whether lending liquidity is drying up, how lending spreads are reacting, and how long this fallout will last.”

The sector may not have helped its own cause with reports that a run of New York City real estate investors pulling money out of Signature Bank contributed to its failure. The bank also had been one of the largest players in New York City lending with $35 billion in loans to the sector on its balance sheet.

Meanwhile, according to CoStar, at least four REITs – Cousins Properties, Alexandria Real Estate Equities, Paramount Group and Hudson Pacific Properties – reported that they face risk because of dealings with Silicon Valley Bank or its parent, SVB Financial Group.

A silver lining to all the doom and gloom is that when risk increases, as it has in recent days, investors often flock to safe investments like Treasury bonds, which pushes down yields and increases their price, notes Verma. This in turn should result in lower losses on bond sales, which is a positive for commercial real estate borrowers, as this means that mortgage rates that had spiked in recent months could now decrease.

Banks conserve capital

Banks are coming off a record year of commercial real estate loan originations in 2022. According to Trepp, banks originated $479.1 billion in loans – nearly 60% of the total origination volume among all sources. With the current issues on top of a high interest rate environment, banks are likely to pull back, assess portfolio risk and focus on protecting deposits.

“I think 2023 definitely will be a slower year for banks. Banks are very focused on funding at the moment. Deposit growth is not nearly as strong as it was in 2022. So, that in and of itself will cause banks to be a bit more cautious from a lending perspective,” says Johannes Moller, CFA, FRM, a director and ratings analyst in the financial institutions group at Fitch Ratings.

The capitol spigot is not turned off completely. Banks likely will reserve capital for customers that have existing relationships, especially their depositors, Moller adds. In addition, banks are apt to have different appetites for property types based on current portfolio concentrations, as well as supply and demand dynamics in the markets where they active.

Taking some of the recent bank turmoil out of the equation, the larger money center banks were already more constrained in real estate lending both late last year and the beginning of 2023. In comparison, regional and community banks remained very active.

“We did an awful lot of our business with that group of banks last year,” notes Riccio.

Anecdotally, Riccio is still hearing that some banks have strong balance sheets and good liquidity. While they may underwrite a little more conservatively because there may be more concern about a possible recession ahead, they are still in the market and have plenty of money to lend, he says.

Strong commercial real estate fundamentals may help counter some of the current turmoil. From a high level, asset and credit quality metrics for commercial real estate are strong for banks, notes Moller. According to the Mortgage Bankers Association, delinquencies on commercial and multifamily mortgages held by banks and thrifts was below 0.5% as of the fourth quarter of 2022. When taking a closer look at some of the leading indicators – such as criticized or classified loans – there has been a modest uptick in areas such as office, but levels even overall are still well below long-term averages.

“Banks are not starting to wave red flags, but they are mentioning that there is some degree of concern around the ability of their borrowers, specifically these office properties, to be able to perform long term given the dynamic we’re seeing from work from home,” says Moller.

More conservative lending is not good news for borrowers with looming loan maturities. According to Trepp, there are more than $60 billion in fixed-rate loans that will soon require refinancing at higher interest rates. Additionally, there are more than $140 billion in floating-rate CMBS loans that will mature in the next two years, according to Goldman Sachs.

“Floating-rate borrowers will have to reset interest rate hedges to extend their mortgage at a higher cost and these hedges have become very expensive,” says Verma. Delinquencies also are expected to rise, especially for the floating-rate loan borrowers. Office properties in particular is expected to be hard hit due to falling values and softening demand related to hybrid and remote work.

Monitoring CRE lending risk

Banks are the largest holders of commercial real estate mortgages in the U.S., holding roughly 40% of total commercial and multifamily outstanding debt. Banks also have indirect real estate exposure through their lending to non-bank financial institutions. However, much of that risk is concentrated in smaller banks. The largest banks in the U.S. have very modest exposures to this asset class, at an average of about 5% of assets, according to Fitch.

“Commercial real estate has always been more the domain of small banks, and it’s why small banks fail,” says Julie Solar, a group credit officer Fitch Ratings’ Credit Policy Group.

Within the Fitch-rated U.S. bank universe, the agency has four banks on Rating Outlook Negative (RON). In addition to Signature Bank, the other three banks are Dime Bank, New York Community Bank and M&T Bank Corp. M&T Bank is the only one with a RON due to real estate exposure. Relative to peers, M&T has high exposure to hospitality loans, which warrants keeping an eye on even though the hotel sector has been recovering since the pandemic, notes Moller.

Another factor that could weigh on bank liquidity is stress testing. Comprehensive Capital Analysis and Review stress testing is a set of forward-looking requirements used by the regulators to oversee banks’ capital adequacy, capital distribution and capital planning processes under various economic scenarios, including a severely adverse macroeconomic stress scenario provided by the regulators themselves. These tests tend to focus on capital adequacy rather than on liquidity and over the last several cycles, all the participants (mostly large banks) have been passing the stress tests, notes Verma. Results from the annual stress tests are typically released in June.

Banks will be applying fairly adverse hypothetical scenarios for their stress testing models, which include a 40% reduction in commercial real estate values and a projected loss rate of 9.8%. Even under these stress test scenarios, banks are still well capitalized, notes Solar.

“Over the last handful of years, the stress tests continue to demonstrate the resiliency of the large U.S. banks that participate,” she says. Banks also have much greater liquidity as compared to levels heading into the Great Financial Crisis.

That said, asset quality is probably unsustainably low, adds Solar. Over the last three years, there have only been 85 basis points in cumulative losses related to commercial real estate loans. Those losses will inevitably increase given the higher interest rates, expectations for lower property values and slowing economy that will make it more difficult for borrowers.

“Where you will see the most pain will be smaller banks that are going to be more concentrated,” she says.

© 2023 Penton Media


Fla. Legislature Passes ‘Live Local’ Housing Bill

An exhaustive pro-housing bill – one of Florida Realtors’ top priorities – passed the Legislature on Friday. It now needs only Gov. DeSantis’ signature to become law.

TALLAHASSEE, Fla. – On Friday, the Florida Legislature passed SB 102, a comprehensive housing bill and one of Florida Realtors®’ top priorities during the 2023 session.

Florida Senate President Kathleen Passidomo (R-Naples) created and strongly backed the bill, called the “Live Local” plan. On social media, Florida Realtors also thanked Speaker of the House Paul Renner (R-Palm Coast) and Rep. Demi Busatta Cabrera (R-Coral Gables) for their efforts in getting the bill passed.

“The Live Local plan … is the product of my discussions with stakeholders over a number of years,” Passidimo said when introducing the bill in January. “With their advice and input, we are tackling this complex issue from all angles – from incentivizing private sector investment, to increasing state funding, to common sense reductions in regulations, this plan will improve options for both homeownership and affordable rental units in communities across our state.”

No single solution exists for solving Florida’s affordable housing shortage, and the bill does not take a single approach. Any change that might help boost housing and provide shelter for Floridians was considered, and the final version passed on Friday is comprehensive.

Broad changes in SB 102

  • Funding: The $811 million in total funding includes $252 million to SHIP (State Housing Initiatives Partnership) and $259 to SAIL (State Housing Initiatives Partnership Program). Going forward, it includes $150 million a year to SAIL for 10 years (total of $1.5 billion)
  • Hometown Heroes: It expands the Hometown Heroes Program strongly backed by Florida Realtors in the 2022 session of the Florida Legislature. SB 102 adds to the program by appropriating $100 million more. It also widens eligibility from career-based assistance to income-based down payment assistance. Previously, maximum loans were $25,000; under SB 102, that rises to $35,000.
  • Tax credits: It raises community contribution tax credit programs limits, which encourage Florida businesses to make donations towards community development and housing projects for low-income Floridians.
  • Private-sector investment: Encourages private investment in affordable housing through a new corporate tax donation program. Businesses can contribute to SAIL instead of paying portions of corporate and insurance premium taxes, up to $100 million a year. It also provides a small refund on sales taxes for building materials used by developments financed through the FHFC (Florida Housing Finance Corporation) and provides additional gap financing to workforce housing programs that may face construction hardships.
  • Property tax exemptions: The bill creates three new property tax exemptions:
    — It allows counties and municipalities to offer a property tax exemption to property owners who dedicate units for affordable housing at extremely-low-income, very-low-income or both.
    — It provides a property tax exemption for land owned by a nonprofit leased for at least 99 years as affordable housing for extremely-low to moderate-income people.
    — It authorizes a local-option property-tax exemption to property owners who dedicate units for affordable housing for extremely low income and/or very low income Floridians. 
  • Missing Middle exemption: Creates a new “Missing Middle” property tax exemption for new or recently rehabilitated developments that set aside at least 70 current market rate units into affordable units.
  • Local government regulations: Under the bill, a local government cannot regulate the use, density or height (with some exceptions) of an affordable housing development if a proposed rental project is multifamily or mixed-use residential and in any area zoned for commercial, industrial or mixed use. It also defines, by percentages, what types of multifamily projects qualify. A local government cannot require an authorized development to obtain a zoning/land use change, special exception, conditional use approval, variance or comp plan amendment for use, density, or height.
  • Public property: It encourages the use of public property for affordable housing and allows for expedited permits and development orders for local governments.
  • Rent control: It removes provisions in current law that allowed local governments to impose rent control under certain limited circumstances. Under SB 102, rent control is banned under all circumstances.
  • Advertising affordable-housing land: Requires local governments to publish online their inventory of local government-owned property that may be suitable for affordable housing development. It also encourages local governments to consider “best practices”  it requires technical assistance to help facilitate the use of public property.

“This is one of the most significant and transformative affordable housing bills seen in Florida since the Sadowski Act was passed in 1992,” says Florida Realtors Vice President of Public Policy Andy Gonzalez. “Not only does it allocate hundreds of millions of new dollars to the state’s affordable housing programs, it does so in a balanced way, prioritizing both homeownership and rental opportunities equally.”

© 2023 Florida Realtors®


LinkedIn Launches AI to Expand Agent Content

As a business social media site, LinkedIn encourages online networking. To push that effort, it’s adding AI-written content that incites conversations.

NEW YORK – The worldwide artificial intelligence (AI) market, valued at $136 billion, is impacting various sectors, including real estate.

LinkedIn intends to merge AI technologies into its platform to better serve users. The company will develop “collaborative articles” driven by AI-based content to encourage conversations among creators on the platform, for example.

The AI will suggest potential topics and reach out to creators who fit the parameters of the topic. Those creators will then be prompted to contribute and add their own personal experiences, insights and research. The AI starts things off so people in the LinkedIn community can contribute and engage with the subject matter.

People who successfully participate can earn badges and other perks.

Other benefits of AI for real estate agents include the ability to generate graphics, create strong listings and optimize contact databases. AI can categorize contacts based on certain criteria and create a schedule for when and how often agents should reach out to them. Once agents have a system in place, they need to make sure that no relationship gets overlooked, and that they’re regularly scheduling lunches, coffee outings and other social meetings that build professional relationships.

Furthermore, AI can help agents create SEO-rich content (search engine optimization) and using local keywords. When agents use AI, it will study their website, look at how people interact with it, and analyze how other websites successfully engage users.

Source: Realty Biz News (03/13/2023) Shepardson, Ben

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


Fake Property Insurer Stole Homeowners’ Money

U.S. Attorney’s Office: A Pensacola man created a fake insurance company, sold policies, kept premiums, and led homeowners to falsely believe they had coverage.

PENSACOLA, Fla. – An insurance company is permanently shut down after dozens of clients paid over $4.8 million for policies that were fake, federal officials said. Instead of buying insurance for his clients, John Thomas, 52, of Pensacola, Florida, deposited their money into his bank account, according to court documents.

Through the years-long scheme, he used his clients’ money to buy a Pensacola Beach condo, real estate in Utah, a Lexus and more, court documents show.

Thomas Insurance LLC clients were misled into believing they were insured because Thomas gave them what appeared to be real insurance policy documents after they paid him, according to prosecutors. The documents, however, were fake, prosecutors said.

Now, Thomas has been sentenced to 14 years in federal prison for wire fraud and money laundering, the U.S. Attorney’s Office for the Northern District of Florida announced in a March 22 news release. A judge also ordered him to pay more than $8.3 million in restitution as part of his sentencing, the release said.

“The victims in this case suffered significant loss and pain as a result of this deception, never knowing they were without insurance coverage until disaster struck,” Sherri E. Onks, FBI special agent in charge of the agency’s Jacksonville division, said in a statement.

McClatchy News contacted Thomas’ attorney for comment on March 23 and didn’t immediately receive a response.

67 victims defrauded in fake insurance scheme

From September 2013 to February 2021, Thomas defrauded at least 67 people by selling them fake commercial property insurance, commercial flood insurance, general liability insurance and more, according to an indictment.

“By not purchasing insurance with the premiums paid by his clients, (he) caused approximately $2,262,956.74 in unpaid claim losses caused by hurricane, fire and liability claims,” the indictment says.

Thomas emailed these clients fake certificates of insurance that were supposed to show their valid insurance policy had been written and issued, according to the indictment. He faked the information on the certificates, including policy numbers, expiration dates and insurance limits, the indictment says.

Google reviews of Thomas’ now permanently closed business show a few negative reviews, including from one individual who wrote that he’d stolen more than $5,000 from them. Other reviews reference the federal charges against him.

Another individual wrote that Thomas’ business “does not answer or return phone calls once they have your money.”

The FBI and the Florida Department of Financial Services jointly investigated the case against Thomas, according to the release.

© 2023 The Charlotte Observer. Distributed by Tribune Content Agency, LLC.


Will Bank Turmoil Create Mortgage Challenge?

Buyers may need to shop around for a mortgage. If clients pulled money from a regional bank or deposits went down, the bank may make it harder to qualify.

NEW YORK – Banking center unrest could make it more difficult for some consumers to get a mortgage loan or a loan for other big-ticket items.

Real estate agents report increased hesitancy among buyers, even compared with recent months when mortgage rates hit record highs. Before the recent banking tumult, consumers were under pressure after borrowing costs rose dramatically over the past year as the Federal Reserve lifted rates.

But to the extent banks are “having difficulty getting deposits, they’re going to have to cut back on lending, which they’ve already started to do,” says Jack Ablin, a founding partner of wealth-management company Cresset Wealth Advisors LLC. “Someone who wants to refinance a mortgage or buy a boat or fund a kitchen remodel – they’re going to have a more difficult time.”

It isn’t only the credit crunch that could cause consumers to delay big purchases, says Steven Blitz, chief U.S. economist at TS Lombard. It’s also a loss of confidence and a reluctance to take a financial leap when the landing spot is a moving target.

Consumers uncertain about their personal finances or the broader state of the economy might reconsider a major financial decision, and whether waiting might be the more prudent move at the moment.

Blitz says more consumers are asking, “Am I going to go now and take out a first mortgage and buy a house?”

Source: Wall Street Journal (03/21/23) Rubin, Gabriel

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


Russian Oligarch Hunt Impacts Foreign Investors

The U.S. sanctioned many Russians who now cannot buy U.S. real estate. But identifying corporate ownership is tricky, and FinCEN is looking at all foreign buyers.

WASHINGTON – On January 25, 2023, the Financial Crimes Enforcement Network (FinCEN) issued an alert that could significantly impact the acquisition of commercial real estate (CRE) in the U.S. by foreign individuals and entities.

The new alert complements ongoing U.S. government efforts to isolate sanctioned Russian elites, oligarchs, and their proxies. It builds on a June 28, 2022, joint alert by FinCEN and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) advising financial institutions to be aware of individuals or entities attempting to circumvent U.S. export controls related to the ongoing conflict between Russia and Ukraine.

The U.S. CRE market presents unique challenges for financial institutions in detecting sanctions evasion. Some methods of sanctions evasion identified by FinCEN include:

  • the use of pooled investment vehicles
  • the role of shell companies and trusts
  • the involvement of third parties
  • inconspicuous CRE investments that provide stable returns

FinCEN identified red flags involving CRE, including, among others:

  • Use of an offshore private investment vehicle to purchase CRE that includes foreign nationals (particularly family members or close associates of sanctioned Russian elites and their proxies) as investors.
  • Reluctance to provide the identity of the ultimate beneficial owners.
  • Presence of multiple limited liability companies, corporations, partnerships, or trusts that are involved in a transaction with ties to sanctioned Russian elites and their proxies, and the entities name variations.

Financial institutions are required to have appropriate risk-based compliance procedures for conducting ongoing customer due diligence that include, but are not limited to:

  • Understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile.
  • Conducting ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information. Certain financial institutions are required to identify and verify the identity of beneficial owners of legal entity customers, subject to certain exclusions and exemptions.

Will history repeat itself?

As a result of the recent Chinese balloon incident and the purchase by a Chinese national of farmland near U.S. military bases, at least 11 state legislatures are proposing to limit or ban the acquisition of real estate by foreign entities and individuals. For example, the Texas Senate has proposed legislation that would prohibit ownership of any type of real property in Texas by any individual or entity from Russia, China, Iran or North Korea.

The proposed legislation brings to mind the Aliens Land Laws, which were a series of state laws adopted by 15 states in the 19th and 20th centuries prohibiting Chinese, Japanese, and other foreign individuals and entities from purchasing and leasing real estate in the U.S. Ultimately, these Alien Land Laws were ruled unconstitutional by the U.S. Supreme Court in 1952. The proposed Texas legislation will be watched closely and likely will be challenged again.


In light of the proposed legislation in Texas and other states and the recent FinCEN Alert, it is vital for financial institutions as well as brokers and sellers in any CRE transaction to have a rigorous compliance check to ensure there are no violation of laws or regulations that could result in an enforcement action.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

© Mondaq Ltd, 2023. Mr. Thomas Brooks, Lewis Brisbois Bisgaard & Smith LLP, 633 West Fifth Street, Suite 4000, Los Angeles, California


Bank Crisis’ Silver Lining: Inflation Reduction

WASHINGTON (AP) – The Federal Reserve is getting some unwanted help in its drive to slow the U.S. economy and defeat the worst bout of inflation in four decades: a cutback in bank lending.

The upheaval in the financial system that’s followed the collapse of two major U.S. banks is raising the likelihood that lending standards will become sharply more restrictive. Fewer loans would mean less spending by consumers and businesses. That, in turn, would make it harder for companies to raise prices, thereby reducing inflationary pressures.

At the same time, some economists worry that the slowdown might prove so severe as to send the economy sliding into a painful recession.

On Wednesday, the Fed raised its benchmark interest rate for the ninth time in just over a year. The central bank’s policymakers are struggling with a persistently high inflation rate that has bedeviled American households and heightened the uncertainties overhanging the economy. At roughly 6%, U.S. inflation remains well below last year’s peak yet is still far above the Fed’s 2% annual target.

But the Fed also signaled that it might be nearing the end of its rate hikes. In part, that is because a decline in bank lending could help the central bank achieve its overarching goal of slowing the economy and taming inflation.

Speaking at a news conference Wednesday after the Fed’s announcement, Chair Jerome Powell suggested that stricter lending standards, resulting in a pullback in loans, could have the same slowing effect on inflation that a Fed hike can.

“It doesn’t all have to come from rate hikes,” Powell said. “It can come from tighter credit conditions.”

Similarly, after the European Central Bank raised its own benchmark rate by a substantial half percentage point last week, its president, Christine Lagarde, said the ECB was not locking itself into a preset plan for rate hikes and that future rate decisions would be made on a meeting-to-meeting basis.

Anxieties surrounding the European banking system “might have an impact on demand and might actually do some of the work that might otherwise be done by monetary policy,” Lagarde said just days after two major U.S. banks collapsed and the Swiss banking giant Credit Suisse required a rescue by its rival UBS.

Indeed, if Europe were to experience a credit crunch, analysts say, last week’s ECB rate hike might be its last for a while.

ECB officials have said their banks are “resilient” and have strong enough capital buffers and cash to cover whatever deposit withdrawals they face. European supervisors have applied international standards, requiring more ready cash on hand. By contrast, U.S. regulators exempted all but the very largest U.S. banks. Silicon Valley Bank was one of those exempted banks.

And when loans are more expensive and harder to qualify for, consumers, who drive most of the U.S. economy’s growth, are less likely to spend.

Gregory Daco, chief economist at the consulting firm EY-Parthenon, said he thinks a significant credit squeeze would have “slightly more” of an economic impact than the quarter-point rate hike the Fed announced Wednesday.

Edward Yardeni, an independent economist, said he would estimate that the impact would be even larger – the equivalent of a full percentage point hike by the Fed.

Inflation could slow as a result, helping the central bank accomplish its long-standing goal. But the toll on economic growth could be substantial, too. Most economists have said they expect a recession to occur in the United States by the second half of this year. The main question is how severe it might be.

Signs of a possible credit crunch in the United States had begun to emerge even before Silicon Valley Bank collapsed on March 10, raising worries about the stability of the financial system. In the face of rising rates and a deteriorating economic outlook, banks were already becoming stingier about approving loans to businesses at the end of 2022, according to a Fed survey of bank lending officers.

And bank “commercial and industrial” loans to businesses dropped last month for the first time since September 2021, according to the Fed.

Since then, the stress on banks has only grown. Silicon Valley Bank, which had been the nation’s 16th biggest bank, failed after accumulating huge losses on its bond portfolio that led worried depositors to withdraw their money. Two days later, regulators shut down New York-based Signature Bank.

The Federal Deposit Insurance Corporation, which insures bank deposits up to $250,000, said that banks were sitting on $620 billion of paper losses in their investment portfolios at the end of last year. That was largely because higher interest rates had sharply reduced the value of their holdings in the bond market.

Powell declared Wednesday that the banking system is “sound” and “resilient.” Yet fear remains that more depositors will pull their money out of all but the biggest American banks, intensifying pressure on financial institutions to lend less and conserve cash to meet withdrawals.

Cash-short banks were still lining up this week to borrow money from the Fed. The Fed said Thursday that emergency lending to banks fell slightly in the past week – to $164 billion – but remained high.

More than $110 billion in borrowing went through a longstanding program called the “discount window.” That was down from a record $153 billion the week before. Banks can borrow from the discount window for up to 90 days. In a normal week, they only borrow about $5 billion that way.

The Fed also lent nearly $54 billion over the past week from a special lending facility it set up two days after the Silicon Bank failure. That was up from nearly $12 billion the week before – when the program was just getting set up.

Banks with less than $250 billion in assets account for about half of all business and consumer lending and two-thirds of home mortgages, noted Mark Zandi, chief economist at Moody’s Analytics.

“Credit is really the grease that oils the U.S. economy and allows it to function and grow at a stable pace,” Daco said. “Without credit – or with slower credit growth – we’re likely to see businesses be more hesitant when it comes to investment decisions, when it comes to hiring decisions.”

A tightening of bank credit, he said, “noticeably increases the risk of a recession.”

Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission. AP Business Writer David McHugh in Frankfurt and AP Economics Writer Christopher Rugaber in Washington contributed to this report.


Florida Realtors’ Tech Wins National Awards

Form Simplicity and Tech Helpline won 2023 HW Tech100 awards for “the most innovative technology companies serving the mortgage and real estate industries.”

ORLANDO, Fla. – Florida Realtors®’ Form Simplicity and Tech Helpline have both been recognized as individual winners of the 2023 HW Tech100 Real Estate awards from HousingWire, a leading source for U.S. mortgage and housing news.

Form Simplicity is also featured as one of the “Top 5 Transaction Management” systems listed on the 2023 Tech 200, an analysis of the best-in-class technology products for the real estate industry by real estate consulting firm T3 Sixty.

“These honors and recognition from a highly respected and influential trade news organization and a top consulting firm validate the hard work and dedication of everyone who works for both Form Simplicity and Tech Helpline,” says 2023 Florida Realtors President G. Mike McGraw, a broker-associate with RE/MAX Central Realty in Apopka. “It also shows the impact of continuous innovation as Florida Realtors strives to make sure every real estate professional who uses Form Simplicity and the Tech Helpline has what they need to succeed in business.”

The Tech100 Real Estate award recognizes 100 technology companies “that are changing the home sales process forever – from home search to lead management solutions, and remote closing to transaction management software,” according to HousingWire. It identifies the residential real estate brokerage industry’s best-in-class tech products designed to help brokers, teams and agents, helping them grow and streamline their businesses. T3 Sixty selected leading products from 78 companies for the 2023 Tech 200.

Wholly owned and operated by Florida Realtors, Form Simplicity serves the real estate industry by providing an end-to-end, digital real estate transaction management solution to expedite real estate transactions – more deals and less paperwork. It gives real estate agents and brokers tools to create, manage, share and store transactions digitally in the cloud, the key to fully digital transactions that can be created and edited on mobile devices.

Tech Helpline is real estate’s No. 1 tech support service, accessible to 750,000 members across the U.S. and Canada. It offers easy-to-understand technical advice and friendly customer service. In addition to serving Florida Realtors, Tech Helpline offers its service to other Realtor Associations and organizations, Multiple Listing Services (MLSs) and real estate brokerage firms.

© 2023 Florida Realtors®


Google Local-Ad Expansion Can Help RE Agents

70 types of service businesses, including real estate agents, can more easily target ads to consumers whose search terms seem to match a Realtor’s services.

NEW YORK – Google expanded its Local Services Ads by introducing a wider and more versatile toolset. This service now allows agents to incorporate advertising products and services whenever someone uses the Google search engine to look for local answers.

Google’s local-ad option now encompasses more than 70 types of service businesses, as well as storefront businesses. As a result, real estate agents have greater ability to advertise their services at the top of Google Search results.

Moreover, the service is cost effective. Its pay-per-click format means agents need pay only if a user contacts them via the local ad.

Google also improved its booking feature. It now gives prospects essential information that works to direct them to the agent’s marketing channel. That info includes detailed data about the real estate agency, reviews or testimonials from past clients, and agency-based photos.

In addition, Google enhanced its booking features by allowing prospective customers to place calls, send messages or book appointments without navigating away from the ad.

Finally, Local Ad Services now features performance tracking, including the ability to listen to call recordings left by prospects.

All the new features are accessible on desktops, Android devices and iOS devices to better help real estate professionals leverage their strengths within specific neighborhoods.

Source: Realty Biz News (03/20/2023) Shepardson, Ben

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


FEMA Realtor Webinars to Explain Risk Rating 2.0

How does flood insurance Risk Rating 2.0 calculate NFIP premiums? What is covered? FEMA will host free webinars to help Fla.’s Realtors understand the process.

ORLANDO, Fla. – The Federal Emergency Management Agency (FEMA) changed its risk rating system under the National Flood Insurance Program (NFIP) and called the update “Risk Rating 2.0: Equity in Action.”

Prior to 2.0, a home’s flood insurance cost was based on that area’s flood zone and elevations. Under 2.0, however, the flood risk is one factor used to create a final price quote. Neighboring properties may be quoted different rates depending on a number of factors, including things like storm mitigation efforts one homeowner might have taken.

To help Realtors in Florida understand how Risk Rating 2.0 works, FEMA has scheduled three free Zoom webinars, called the “National Flood Insurance Program (NFIP) Introduction to Risk Rating 2.0 – Equity in Action for Real Estate Professionals.”

“We’re excited to share the National Flood Insurance Program online webinar/presentations with Florida Realtors®’ professional members,” says Floodplain Management and Insurance Taskforce Leader Deborah Parker. “Statistics show that as little as one inch of water can cause approximately $25,000 of flood damage to a home. FEMA continues to provide training for real estate professionals because they have personal relationships with homeowners and homebuyers.”

The three Zoom sessions will each last for one hour – 45 minutes for the presentation and 15 minutes for questions and answers. There is no cost to join, but participation is limited to 300 attendees, and some members may be cut off from attending any single webinar if attendance exceeds that number. Should demand remain strong, however, FEMA will schedule additional webinars.

Webinar dates

  • March 29, 2023: 10-11 a.m. ET
  • April 5: 10-11 a.m. ET
  • April 19: 10-11 a.m. ET

Webinar agenda

  • The NFIP today
  • What has changed
  • What has not changed
  • Transition of current policies
  • Resources
  • Questions and answers

To join a ZoomGov meeting:


Meeting ID: 160 343 9176

Passcode: 143832

Members can also attend by phone. Info on the numbers to call with the United States or nationally can be found on the Zoom for Government website.

© 2023 Florida Realtors®


Mortgage Rates Drop Again to Average 6.42%

Last week, the average 30-year, fixed-rate mortgage averaged 6.6%. It’s the second weekly drop and a dash of hope for anxious spring homebuyers.

NEW YORK – The average long-term U.S. mortgage rate fell for the second straight week which, combined with moderating home prices, could give house hunters a break and the housing market a boost as the spring buying season begins.

Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate fell to 6.42% from 6.6% last week. The average rate a year ago was 4.42%.

Even though financial markets remain jittery over recent bank collapses and the Fed raised its benchmark lending rate by another 25 basis points Wednesday, some economists think there may be light at the end of the tunnel for the downtrodden housing market.

“On the homebuyer front, the news is more positive with improved purchase demand and stabilizing home prices,” said Sam Khater, Freddie Mac’s chief economist. “If mortgage rates continue to slide over the next few weeks, look for a continued rebound during the first weeks of the spring homebuying season.”

Last year’s big rise in mortgage rates – which can add hundreds of dollars a month in costs for homebuyers – chilled the housing market. Before surging 14.5% in February, sales of existing homes had fallen for 12 straight months to the slowest pace in more than a dozen years.

In 2022, 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, the National Association of Realtors reported earlier this year.

But recently there has been some good news for those seeking to move: The national median home price slipped 0.2% from February last year to $363,000, marking the first annual decline in 13 years, according to NAR.

The average long-term rate hit 7.08% in the fall – a two-decade high – as the Federal Reserve cranked up its key lending rate in a bid to cool the economy and stymie persistent, four-decade high inflation.

In their latest quarterly economic projections, the policymakers forecast that they expect to raise that key rate just once more – from its new level of about 4.9% to 5.1%, the same peak they had projected in December.

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. Investor 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.

Treasury yields have fluctuated wildly since the collapse of two mid-size U.S. banks two weeks ago, with the 10-year falling to 3.47% Thursday. The 10-year yield reached 5.07% before the bank collapses, its highest level since 2007.

The rate for a 15-year mortgage, popular with those refinancing their homes, also came down again this week, to 5.68% from 5.9% last week. It was 3.63% one year ago.

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


Attom: 2022 Home Flipping Up, Profits Down

Higher interest rates took a bite out of profits, even as home-flipping hit its highest rate in 15 years. But Orlando ranked high for both flips and profits.

IRVINE, Calif. – Attom’s 2022 U.S. Home Flipping Report finds that 407,417 U.S. single-family homes and condos were flipped in 2022 – up 14% from 2021 and up 58% from 2020, hitting the highest point since at least 2005.

Of all 2022 U.S. home sales, investors purchased 8.4%, or close to one in 10. That’s an increase of 5.9% compared to 2021 and 5.8% in 2020.

But 2022 profit margins are another story, according to Attom. Gross profit margins on home flips sank to their lowest level since 2008 following the second major drop in two years.

Homes flipped in 2022 typically generated a gross profit of $67,900 nationwide – the difference between the median sales price and the median amount originally paid by investors. That’s down 3% from $70,000 in 2021 and translates into just a 26.9% return on investment (ROI) compared to the original acquisition price. It’s down from 32.6% in 2021 and 41.9% in 2020.

Attom calculates the ROI without accounting for mortgage interest, property taxes, renovation expenses and other holding costs.

Investors saw profit margins drop for the fifth time in the past six years, largely because the median value of the homes flipped rose more slowly than the median price they paid to purchase properties – 12% versus 17%.

“Last year, home flippers throughout the U.S. experienced another tough period as returns took yet another hit. For the second straight year, more investors were flipping but found no simple path to quick profits,” says Rob Barber, chief executive officer at Attom.

Barber says returns have hit a point where “they could easily be wiped out by the carrying costs during the renovation and repair process, which usually accounts for 20 to 33% of the resale price.”

Only one Florida city made Attom’s list of top cities for home flipping growth – Orlando – which also topped the list for ROI.

Among the 25 largest increases in annual flipping rates in metros with a population of at least 200,000, 20 were in the South and West. They were led by Burlington, Vermont (rate up 283.7%); Prescott, Arizona (up 183.1%); Bremerton, Washington (up 182.7%); Jackson, Mississippi (up 176%) and Honolulu, Hawaii (up 172.6%).

Honolulu also topped the list of flipping rate increases for metros with at least 1 million people, which includes Orlando:

  1. Honolulu: Up 172.6%
  2. Sacramento, California: Up 116.4%
  3. Atlanta: Up 94.3%
  4. Minneapolis: Up 72.8%
  5. Orlando: Up 72.2%

The only metro areas with fewer home flips in 2022 were New Orleans (down 8.2%) and Green Bay Wisconsin (down 2.9%).

Nationally, the percentage of flipped homes purchased with financing decreased in 2022 to 35.2%, down from 35.9% in 2021 and from 41% in 2020.

2022 return on investment

The gross profit margin on the typical home flip fell to 26.9% – the smallest investment return since at least 2005. The ROI on median-priced home flips dropped 15 percentage points since 2020 and 24 points since 2016.

Margins fell as the median nationwide resale price on flipped homes increased just 12.3% – from $285,000 in 2021 to $320,000 – in 2022. But the price investors paid for homes rose 17.3%.

The typical home-flipping investment return decreased from 2021 to 2022 in 168 (77%) of the 218 metro areas analyzed.

In metros with at least a million people, Orlando also ranked in the top 5 for returns on investment in 2022 compared to 2021:

  1. Cleveland: ROI up from 26.8% in 2021 to 41.4% in 2022
  2. New Orleans: Up from 54.1% to 64.6%
  3. Cincinnati: Up from 38.4% to 47.4%
  4. Honolulu: Up from 5.7% to 7.4%
  5. Orlando: Up from 17.6% to 18.7%

Other 2022 home flipping takeaways

•Flips took an average of 164 days (about 5 ½ months) to complete, up from 152 days in 2021 but down from 182 days in 2020.

•8.4% of 2022 flips were sold to buyers using a Federal Housing Administration (FHA) loan – up slightly from 8% in 2021 but below 13.9% in 2020.

•More than 200 counties had a home flipping rate of at least 10% in 2022

 “While declining margin is certainly a cause for caution, it is important to remember that these numbers are somewhat backward looking in that they reflect dispositions of properties that were acquired in 2021 or early 2022 amidst the Covid-induced bidding wars in many locales,” says Maksim Stavinsky, co-founder and president of Roc360.

“On the other hand, it is encouraging that investors were able to clear in excess of four hundred thousand properties – the most ever – in an environment of rising interest rates, without a meaningful increase in project timelines,” he adds.

© 2023 Florida Realtors®


Feb. New-Home Sales Rose 1.1%

Sales rose month-to-month but are down 19% year-to-year, with Feb.’s sales falling solidly into the “not good news but not bad news” category.

WASHINGTON – Higher mortgage rates and home prices, as well as increased construction costs contributed to lackluster new home sales in February, but signs point to improvement later in the year.

Sales of newly built, single-family homes in February increased 1.1% to a 640,000 seasonally adjusted annual rate (the number of homes that would sell in one year at the current month’s rate) from a downwardly revised reading in January, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

However, new home sales are down 19% year-to-year.

“The lack of existing home inventory means demand for new homes will rise as interest rates decline over the coming quarters,” says Alicia Huey, chairman of the National Association of Home Builders (NAHB). However, Huey also notes builders’ ongoing challenges, including “higher interest rates, elevated construction costs and access to critical materials like electrical transformers.”

NAHB Chief Economist Robert Dietz says February’s data “points to an increase for the monthly pace of single-family construction starts later in 2023 given a rise in builder sentiment and an increase for sales of homes not yet started construction.”

Dietz’s top concern, though, is possibly tighter credit conditions stemming from recent bank problems. He says that could impact acquisition, development and construction loans for smaller builders.

New single-family home inventory fell for the fifth straight month. The February reading indicated an 8.2-months’ supply at the current building pace. A measure near a 6 months’ supply is considered balanced. However, single-family resale home inventory stands at a reduced level of 2.5 months.

The median new-home sale price rose in February to $438,200, up 2.5% year-to-year, based largely on elevated costs of construction. A year ago, roughly 15% of new-home sales were priced below $300,000; that share is now just 10%.

On a year-to-date basis, new home sales fell in all regions: Down 29.2% in the Northeast, 21.3% in the Midwest, 7.3% in the South and 40.6% in the West.

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

© 2023 Florida Realtors®


New RE Idea: Affordable Senior Housing

A senior-housing project aimed at middle-class adults gives them an option other than “dying in my house.” The Mass. prototype charges only $1,800 per month.

NEWTON, Mass. – The developer 2Life Communities broke ground March 6 on a senior housing project that’s affordable to middle-class residents. Monthly rents will be as low as $1,800 at the $100 million development in Newton, Mass.

Comparable independent living communities in the Boston region charge $4,200 a month, according to the National Investment Center for Seniors Housing & Care.

The entrance fee at the affordable community starts at $395,000, which is about one-third the entrance cost at other senior housing facilities. Plus when a resident leaves or dies, 80% of the fee will be refunded to them or family members.

Almost all of the project’s 174 units have been reserved with deposits, says Amy Schectman, 2Life’s chief executive.

The senior housing industry is closely watching the project to see whether some of its money-saving efforts are exportable. For example, 2Life serves group dinners only three nights a week and requires residents to volunteer 10 hours a month.

The high costs of development, labor, meal services, transportation and programming have made it very difficult to cut rents at the U.S.’s 1.8 million senior housing units, which provide a range of care from just meals and programming for adults who live in their own apartments to skilled nursing and memory care.

Efforts to offer affordable housing have been made even more difficult since the pandemic because senior housing initially was crushed by soaring costs and a nosedive in occupancy.

Source: Wall Street Journal (03/07/23) Grant, Peter

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