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Category Archives: Florida Real Estate News (Reprinted with permission Florida Realtors. All rights reserved.)

NAR Installs 2022 Leadership

The national association’s 2022 president, Leslie Rouda Smith, is a broker associate from Dallas, Texas. President-elect Kenny Parcell is a broker-owner from Utah.

WASHINGTON – The National Association of Realtors® (NAR) installed Leslie Rouda Smith as 2022 president during its recent 2021 Realtors® Conference & Expo. She was NAR’s 2021 president-elect and 2020 first vice president.

A broker associate at Dave Perry-Miller & Associates in Dallas, Rouda Smith specializes in residential and ranch and country real estate alongside her husband, Brian, and their children, all of whom are Realtors. She has been a Realtor for 36 years and has served on NAR’s Board of Directors since 2009, including several years on the Executive Committee.

Kenny Parcell, NAR’s 2022 president-elect, has been a Realtor for 24 years and is broker-owner of Equity Real Estate Utah. He served as NAR’s vice president of government affairs in 2018 and as its 2016 vice president for Region 11, which encompasses Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming. Parcell was president of the Utah Association of Realtors in 2011 and its 2013 Realtor of the Year.

Tracy Kasper is NAR’s 2022 first vice president. She has nearly three decades of real estate experience and is broker-owner of Berkshire Hathaway HomeServices Silverhawk Realty in Boise Valley, Idaho. Kasper chaired NAR’s 50th Anniversary of RPAC Implementation Group in 2018.

Nancy Lane is NAR’s 2022 treasurer. A Realtor for more than two decades, she’s principal broker at Lane-Harkins Commercial Real Estate LLC in Flowood, Mississippi, specializing in commercial brokerage.

Shannon King is 2022 vice president of association affairs. She’s been a Realtor since 2000 and is broker-owner of Island Living Homes, a boutique firm in Kailua on the island of Oahu, Hawaii. King is also vice president of NAR’s 2022 Executive Committee.

Kaki Lybbert is NAR’s 2022 vice president of advocacy. A Realtor for 27 years, she’s been buying and selling real estate with Century 21 Judge Fite in Denton, Texas, since 1997.

Charlie Oppler is NAR’s 2022 immediate past president. A Realtor since 1981, he is the CEO of Prominent Properties Sotheby’s International Realty, which operates 15 offices across northern and central New Jersey. Oppler was NAR’s 2021 president, 2020 president-elect and 2019 first vice president.

NAR 2022 regional vice presidents

  • Kimberly Allard, Braintree, Massachusetts. Region 1: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont
  • Frank Jacovini, Philadelphia, Pennsylvania. Region 2: New Jersey, New York and Pennsylvania
  • J. Russ Boyce, Waldorf, Maryland. Region 3: Delaware, District of Columbia, Maryland, Virginia and West Virginia
  • Brian Copeland, Nashville, Tennessee. Region 4: Kentucky, North Carolina, South Carolina and Tennessee
  • Ryan Brashear, Augusta, Georgia. Region 5: Alabama, Florida, Georgia, Mississippi, Puerto Rico and the U.S. Virgin Islands
  • Pete Kopf, Cincinnati, Ohio. Region 6: Michigan and Ohio
  • Erik Sjowall, Madison, Wisconsin. Region 7: Illinois, Indiana and Wisconsin
  • Bart Miller, Rapid City, South Dakota. Region 8: Iowa, Minnesota, Nebraska, North Dakota and South Dakota
  • Brenda Oliver, Odessa, Missouri. Region 9: Arkansas, Kansas, Missouri and Oklahoma
  • Logan Morris, Leesville, Louisiana. Region 10: Louisiana and Texas
  • Rick Southwick, Ogden, Utah. Region 11: Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming
  • Dale Chumbley, Camas, Washington. Region 12: Alaska, Idaho, Montana, Oregon and Washington
  • Pat “Ziggy” Zicarelli, Tarzana, California. Region 13: California, Hawaii and Guam

© 2021 Florida Realtors®

https://www.floridarealtors.org/news-media/news-articles/2021/11/nar-installs-2022-leadership

Oct. Home Starts Dip 0.7% – but Permits Jump

While construction fell in Oct. – builders blame supply and labor issues – a 4% increase in building permits suggest developers expect an increase in housing starts.

SILVER SPRING, Md. (AP) – Construction of new homes in the U.S. fell 0.7% in October, but a big jump in the number of permits last month points to anticipation by builders that supply chain problems that have dogged them for much of the year will soon ease.

October’s decline put home construction at a seasonally adjusted annual rate of 1.52 million units, which is an increase of 0.4% from the rate at this time last year, the Commerce Department reported Wednesday. September’s number was also revised down to 1.53 million units from 1.56 million units.

But in a positive sign of future activity, applications for building permits jumped 4% from September to 1.65 million and are up 3.4% from October of last year.

Single-family home starts fell 3.9% from September to October and are down more than 10% from last year. Apartment construction has helped offset some of those declines, with starts of buildings with five or more units rising to 470,000 in October, an increase of 6.8% from September’s 440,000. Apartment construction starts are up nearly 40% over this time last year.

Construction activity by region saw modest declines in the Northeast, South and West, while the Midwest came in 5.6% higher in October.

Low interest rates and a desire for more space have lured buyers into the market, but rising costs for materials and a years-long shortage of supply have pushed prices up. Economists and builders say demand remains strong, even as the median price for a new home is about 20% higher than a year ago.

A monthly survey of builder sentiment by the National Association of Home Builders and Wells Fargo showed sentiment improved to 83 in November from a reading of 80 in October, which was also an increase over September’s 76. The index hit a record reading of 90 last November.

The Commerce Department issues its report on new home sales for October later this month. In September, it reported that sales of new homes jumped 14% in September to the fastest pace in six months as strong demand helped offset rising prices.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

https://www.floridarealtors.org/news-media/news-articles/2021/11/oct-home-starts-dip-07-permits-jump

Florida Realtors Wins NAR Platinum Global Award

The award honors the most active Realtor associations working internationally. The fifth-year-in-a-row win allows Florida Realtors to apply for Diamond status next year.

SAN DIEGO – The National Association of Realtors® (NAR) honored Florida Realtors® with a Platinum Global Achievement Award for its activity in developing and promoting the state’s international real estate market. It’s the fifth year in a row that Florida Realtors has achieved the honor.

It also qualifies Florida Realtors to apply for the highest honor awarded by NAR next year, the Global Diamond Award. If successful, Florida would be the first state association in the U.S. to receive the Diamond Award.

“Florida Realtors’ Global Business Committee’s goals are to provide resources to our local global councils, promote Florida real estate to international buyers and provide a platform that helps Realtors engage and connect with real estate professionals all over the world,” says Christel Silver, CIPS, chair of the 2021 Florida Realtors Global Business Committee. “We’re excited about Florida Realtors’ continually expanding global program and are honored to be recognized by NAR.”

NAR’s Global Achievement Program Awards recognize the most active associations in global business. Among over 130 global business councils nationwide, each of these organizations has demonstrated “exceptional commitment to building members’ awareness of the global and multicultural business opportunities in their local markets.”

 Participating councils are divided into four status classifications based on their level of activity: Silver, Gold, Platinum and Diamond. Councils are evaluated in five focus areas: Business Plan, Marketing & Communication, Events/Education, Outreach and Benchmarking.

 “We’re very proud to have NAR recognize Florida Realtors with the Platinum Global Achievement Award, and we encourage members to join us,” says Florida Realtors Director of Global Business Maria Grulich, CIPS, AHWD. “At Florida Realtors, we work as a global family. The teamwork is amazing, and I applaud all the people who give their time and talent to make Florida Realtors’ international programs such a success. We encourage our members to join our global family. Global family teamwork is what makes us shine.”

For more information on the association’s global outreach initiatives, visit Florida Realtors’ website.

© 2021 Florida Realtors®

https://www.floridarealtors.org/news-media/news-articles/2021/11/florida-realtors-wins-nar-platinum-global-award

Hyperlocal Content Ideas to Show You’re the Local Expert

In marketing content, a hyperlocal focus says, “I’m a friend who can help you navigate and love this community.” Start by keeping up with all neighborhood events.

SAN FRANCISCO – Engaging content is the key to optimizing digital marketing – but real estate professionals also need to make sure that content is valuable and hyperlocal so that it stands out from the competition.

Part of the process is keeping up-to-date on neighborhood events, which means monitoring sources, including online events and local newspaper calendars. Consider adding those events to a weekly or monthly newsletter to increase your digital presence and engagement.

Secondly, real estate agents can create their own community events by finding ways to invite the community to their office or active listings by being creative. It could be a themed event, such as having a haunted house and inviting guests to come for treats.

Communities constantly change, and hyperlocal info can include business openings and updates about the local market, such as awards granted to local companies.

Also present local real estate market data garnered from trusted sources, such as the National Association of Realtors® or Florida Realtors®.

Among other things, agents should reshare news from the local chamber of commerce, regional business journal publications and community groups. Subscribe to each of their publications to keep up-to-date with what is going on.

Another way to stay current: Set up Google Alerts and have it present headlines that include their city and neighborhood. Agents should also pay attention to information put out by their brokers, mentioning when the brokerage is mentioned in the press or receives corporate accolades or does something in the community, such as the time Realtors across Florida cleaned up local waterways in July.

Source: Inman (11/09/21) Arana, Santiago

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

https://www.floridarealtors.org/news-media/news-articles/2021/11/hyperlocal-content-ideas-show-youre-local-expert

Why Did ‘Zillow Offers’ Fail? Sellers Say It Offered Too Much

FRONT RANGE, Colo. – The collapse of online real estate giant Zillow’s venture into home buying and selling, announced Nov. 2, can be traced, in one small part, back to its overeagerness to invest in Colorado’s red-hot real estate market.

The company bought hundreds of homes in Front Range (85 miles west of Denver) this summer, mostly in August and September, often paying more than what sellers were asking.

Now the company, as it folds its ill-fated Zillow Offers business of flipping homes with a promise to investors to unload roughly 18,000 homes across the country, is selling more than 500 homes in 10 Front Range counties, and more homes it purchased in October are hitting the market every day.

Zillow is slashing prices for those homes. Nearly all the properties are priced well below what the company paid only a few months – or even weeks – ago.

“It’s pretty crazy to watch, isn’t it?” said Michael DelPrete, who teaches a class on real estate technology at the University of Colorado Boulder’s Leeds School of Business.

But with inventories of for-sale homes at all-time lows and demand still peaking as buyers pay record prices across Colorado, brokers and real estate industry veterans don’t expect Zillow’s fire sale to have much impact on the market, even if the company sells them all in bulk to institutional investors.

It’s like we won a mini lottery

Kyle Barnes listed the Castle Rock home he and his wife purchased in 2013 for sale in early August. They also submitted their home to Zillow Offers, as well as instant-buying market leader Opendoor Technologies Inc.

After a detailed in-person inspection by Zillow, a remote inspection by Opendoor and a week on the market, the offers landed. A family using a real estate agent offered $575,000, which was slightly more than the Barnes’ asking price.

Opendoor offered $546,500. Both those included fees of around 5%. Zillow’s offer came in at $626,000, with only a 1% fee.

Barnes accepted the Zillow offer and a couple days before they were scheduled to close, the company announced it was abandoning its nascent home buying and selling the flipping business.

“Our fear was that Zillow would not close. We were freaking out,” said Barnes, who was closing on a house his family was building the day after closing the sale of their Castle Rock home.

But the deal closed, despite what Barnes called “a lot of last-minute stuff and disorganization by Zillow.” The money landed in his bank on Nov. 4, just as scheduled.

“It felt like this was a rare gold rush moment where we just got fortunate,” Barnes said. “It’s like we won a mini lottery.”

Barnes said he’s chatted with agents and friends about Zillow’s strategy in buying his home for so much more than what he was asking – and even more than the company’s own “Zestimate” value.

“I thought either they are so much smarter than I am and they have this magic formula and they are forecasting the market. I mean, maybe Zillow can afford to sit on a home and wait. Maybe they know something is going to happen,” Barnes said. “Or the alternative is that they were making mistakes.”

‘Unintentionally’ paying higher prices

It turns out, Zillow was making mistakes.

In the three months preceding Sept. 30, Zillow spent $1.2 billion on 3,032 homes, which compared to $186 million for 583 homes in the same period of 2020. With a Zillow Offers loss of $245 million for the third quarter of 2021, the company estimates it lost about $81,000 on every one of those 3,032 homes. (The company reported a net loss of $328 million for the second quarter.)

The company has 1,956 homes in Florida, 1,543 homes in Texas and 1,309 homes in California. Nearly 5,000 more homes across the country make up 49% of its remaining properties.

The company says it is under contract to buy another 9,000 homes in the final months of 2021 and expects to sell about 5,000 homes by year’s end, generating up to $2.1 billion in revenue but losing up to $365 million in the final quarter of this year. That will put Zillow’s losses from its home buying and selling business at close to $600 million in the final half of 2021, roughly $10 million a month.

Zillow paid big for those homes, often paying more than listing price.

In a Nov. 2 letter to shareholders, the company said “unintentionally purchasing homes at higher prices” led to the failure of its Zillow Offers, which was launched in 2017 with plans to become a heavyweight in the world of home buying and selling.

The company began buying homes in Denver in 2018 and expanded to Fort Collins and Colorado Springs in 2019.

“We have determined that this large scale would require too much equity capital, create too much volatility in our earnings and balance sheet, and ultimately result in far lower return on equity than we imagined,” reads Zillow’s letter to investors announcing the end of its home buying and selling business. “We have been unable to accurately forecast future home prices at different times in both directions by much more than we modeled,” reads the letter, describing the challenges of global pandemic and the “supply-demand imbalance” that spiked home prices in recent months.

Wall Street is not pleased. Zillow’s stock is trading around $64 a share, down from around $103 a share before the Nov. 2 earnings statement.

‘Like Christmas,’ but not for buyers

For those few lucky sellers, Zillow made it “feel like Christmas,” said Brian Anzur, the president of the board for the South Metro Denver Realtors Association.

But buyers don’t see Zillow as Santa.

Anzur would walk home-hunting clients through a Zillow-owned home and they would be amazed, he said. And not with the house.

“They’re going ‘How much are they asking?’” Anzur said. “The market is crazy in Colorado compared to other places in the country, but it’s not stupid. It can see value. If you bring a property to the market that is simply priced too high, the market tends to ignore it.”

Which is what is happening to Zillow as the company steadily decreases asking prices for hundreds of homes it overpaid for across the Front Range.

Anzur recently brought clients to a Zillow-owned home in the south metro area that was priced about $75,000 over similar properties in the neighborhood. The property next door, he said, was blighted; no grass, peeling paint and rusting barbecues in the dirt.

“Zillow could not see that. They see beds, baths, square footage and locations,” Anzur said. “Their algorithm really fell short in evaluating other things that are important to purchasers.”

For many years, real estate brokers have had to educate sellers and buyers who click over to Zillow’s Zestimate tool that provides often-incorrect values.

“Now we have the company behind the Zestimate saying ‘We just didn’t get it right,’” Anzur said.

Not great for consumers

Milford Adams, the chair of the Denver Metro Association of Realtors board of directors, said he is unaware of a real estate investment trust or other corporation ever releasing hundreds of homes into the Denver market in a matter of months.

Adams said it was hard to determine if Zillow was influencing prices by paying above-listing prices for homes because just about every recent home sale in metro Denver has been above asking price “for a while.”

“So Zillow is certainly not the only buyer paying above asking,” Adams said.

And Zillow was diverse in its acquisitions. Its portfolio of more than 500 homes on the Front Range is spread across many neighborhoods. So selling those, even in bulk, will not likely impact a regional, or even neighborhood market, Anzur said.

DelPrete, with CU’s Leeds School, expects Zillow’s exit from flipping homes to lure institutional investors eager to secure a swath of hot-market housing – either for renting or selling – in a single deal.

“That is not great for consumers or Coloradans,” DelPrete said.

Unless, of course, Zillow plans to sell each of the homes to individual buyers. The company has reduced the price for just about every home it is selling in the Front Range.

“But that’s not what Zillow has talked about,” DelPrete said. “They have talked in public about selling to those institutional investors. Those large investors, they are in a position of power here. They are in the business of buying homes and renting them out and they’ve been doing that for years and they do it profitably. They are not going to overpay for these homes.”

On Nov. 10, the Wall Street Journal reported that Zillow had reached a deal to sell 2,000 homes in 20 markets to Pretium Partners, a New York hedge fund that planned to offer the properties for rent. The report said Zillow received “market price for the properties.”

Institutional investment in real estate is common in Colorado. The National Association of Real Estate Investment Trusts, or Nareit, shows 128 REITs owning 8,734 properties in Colorado. Those properties include nearly 3,200 billboards, 1,200 communication towers and a mix of shops, health care facilities, storage facilities, apartment buildings, resorts and office buildings.

REITs own 3,139 single-family homes in Colorado, the trade group said.

Catastrophic pricing failure

DelPrete, who studies the online iBuying phenomenon that Zillow hoped to tap with Zillow Offers, said the online company’s high-priced purchases of homes this summer marks “a catastrophic pricing failure.”

“They made a systemic mistake,” he said, noting that Zillow bought more homes in the third quarter of 2021 than it had purchased in the previous three quarters combined. Other instant buying companies, like market-leader Opendoor Technologies Inc. and its smaller rival Offerpad Solutions Inc., saw the market cooling in July and began reeling in the prices they paid for homes, DelPrete said. Zillow kept buying at a record clip, paying prices well above listing.

“It was like brake lights on the highway, but Zillow was in the passing lane going 80 mph and they didn’t see the brake lights or simply ignored them,” DelPrete said.

Both Opendoor and Offerpad, which offer online tools and programs for swift home buying and selling, last week reported record revenue in the third quarter. Both publicly traded companies are active in the Front Range, with Opendoor owning more than 350 homes in 10 counties and Offerpad owning roughly 20 in the region.

Most of Opendoor’s and Offerpad’s purchases in the Front Range, unlike Zillow, were from last year or early 2021.

Offerpad, which launched in 2015, told investors on Nov. 10 it was expanding into new markets after buying 2,753 homes and selling 1,673 homes in the three months ending Sept. 30. The company’s third-quarter revenue grew 190% over the same period in 2020, reaching $540 million.

Opendoor, which launched in 2014 and is the largest iBuying company, with nearly 18,000 homes in 44 markets, told investors on Wednesday it had purchased 15,181 homes and sold 5,988 homes in the third quarter of 2021, with revenue for the three months reaching $2.3 billion, up 91% from the previous quarter.

DelPrete warns against reading the collapse of Zillow’s home-flipping business as a sign that instant buying is a failed enterprise. He’s not quite ready to say Amazon-styled click-to-buy home purchasing is the future though.

“It’s still too early to tell. iBuying is new – and the path to profitability and sustainability is uncertain,” he said. “But just because Zillow can’t, doesn’t mean it can’t happen.”

What is the game plan?

Patrick Muldoon, whose Muldoon Associates brokerage works in both Colorado Springs and Pueblo, remembers seeing Zillow buying homes in his region this summer and fall.

“They were making offers on properties locally where I was saying ‘What is the game plan here?’ They were in neighborhoods where everything was $475,000 to $490,000 and they come in at $520,000 to $530,000. It just didn’t make a lot of sense,” said Muldoon. “We thought maybe it was just here but, obviously, they were doing that everywhere.”

Muldoon, like DelPrete, doubts Zillow will be negotiating thousands of individual deals for the properties it hopes to sell, and even if it does, it is unlikely to have an impact on the Front Range real estate market.

“We have far higher demand than we have properties for sale so I wonder if even several hundred homes hitting the market is enough property to even make a blip on the housing shortage we have been dealing with for years now on the Front Range,” Muldoon said.

There are a lot of factors clouding the Colorado real estate market right now as demand peaks, prices soar and the inventory of for-sale homes reaches record lows. Inflation, which hit a 30-year high in October, could pinch homebuyer budgets. Interest rates could climb as the Fed maneuvers around that inflation. If interest rates climb, Zillow might look pretty smart having shed thousands of for-sale homes from its portfolio.

“Sure, maybe Zillow lost money and maybe they made bad decisions, but did the company get out when the getting out was good?” Muldoon said. “We could be six months from now looking back and saying ‘Wow, did they see this coming?”

© Copyright 2021 Clear Creek Courant, Colorado Community Media. All rights reserved. This story is from The Colorado Sun, a journalist-owned news outlet based in Denver and covering the state.

https://www.floridarealtors.org/news-media/news-articles/2021/11/why-did-zillow-offers-fail-sellers-say-it-offered-too-much

NAR’s Board Approves New Guidance for MLS Listings

According to NAR, the changes create greater transparency for consumers and “more explicitly state’ the spirit and intent of the NAR Code of Ethics and policies regarding information about commissions and broker participation in the marketplace.” Policies take effect Jan. 1.

CHICAGO – The National Association of Realtors® (NAR) announced that it adopted changes to its guidance for local Multiple Listing Service (MLS) broker marketplaces, saying the updates “reinforce greater transparency for consumers.”

According to NAR, the changes ensure disclosure of the compensation offered to buyers’ agents, make sure a search results list doesn’t exclude results based on the amount of compensation offered to buyers’ agents, and reinforce a rule that buyers’ brokers don’t represent their services as free.

The NAR Board of Directors adopted the changes to take effect Jan. 1, 2022.

“Grounded in our commitment to act in the best interests of buyers and sellers, we regularly review and update our guidance for local broker marketplaces to continue to advance efficient, equitable and transparent practices,” says NAR President Charlie Oppler. “These latest changes more explicitly state what is already the spirit and intent of the NAR Code of Ethics and local broker marketplace guidance regarding consumer transparency and broker participation.”

MLS changes adopted

  • Reinforce that local marketplace participants don’t represent their brokerage services as free. While Realtors® have always been required to advertise their services accurately and truthfully, this change creates a bright line rule on the use of the word “free” that NAR says is easy to follow and enforce.
  • Ensure disclosure of compensation offered to buyer agents. NAR says this change improves transparency for Realtors’ existing duties and practices to talk with clients about the services they provide and how they’re compensated.
  • Ensure listings aren’t excluded from search results based on the amount of compensation offered to buyer agents. NAR says this wording change reiterates a Realtor’s existing duty to inform clients about all relevant properties that meet their criteria.

“This is another example of NAR constantly evolving to ensure pro-consumer, pro-competitive marketplaces for buyers and sellers, and brokers,” Oppler says. “NAR is proud to be affiliated with the hundreds of local broker marketplaces around the country and will continue to tirelessly pursue changes that improve the real estate experience for all Americans.”

© 2021 Florida Realtors®

https://www.floridarealtors.org/news-media/news-articles/2021/11/nars-board-approves-new-guidance-mls-listings

In Marketing Listings, What Makes a Home a Smart Home?

A property is “smart” if it has an internet connection and at least 3 “smart” items. That’s not very expensive to create now and 33% of U.S. homes are considered smart.

SAN DIEGO – Smart homes and smart connected technology was discussed in San Diego at the National Association of Realtors® (NAR) convention and trade show, during a session led by Craig Grant, CEO of The Real Estate Technology Institute & RETI.usm and Brandon Doyle, a practicing Realtor® from Maple Grove, Minnesota.

“A Realtor doesn’t have to invest a lot of money into making a house a smart home,” said Grant. “Just having a few devices in specific categories – such as certain lighting, security cameras, or appliances – qualifies a home to be a smart home.”

If a property has a reliable internet connection and “smart” items in at least three categories, it is considered a smart home. Realtors can then market the home as such, making it a more attractive commodity for both buyers and sellers.

“These homes were once only for the ultrarich, but we’ve gone from only super-wealthy people like Bill Gates having these products to every home now having at least one or two smart items,” said Doyle. “Amazon basically lets you have a lot of these for free because they know it’s like a gateway drug and they’ll get you to buy other devices.”

Both Grant and Doyle noted that 33% of homes today already meet the requirements to be called a smart home and that number is expected to climb to 54% by 2023. Currently, 26% of baby boomers have smart home technology within their residences, 49% of Generation Xers, and 77% of millennials, according to their presentation.

The popularity of smart home products, like lighting systems, carbon monoxide detectors and digital thermostats, have grown in popularity in part because they’re being built with ease of use in mind. Complexities and difficulties to access products like a smart refrigerator for example, have largely been eliminated.

“Smart-home technology can now be used by seniors and those with disabilities to assist them in day-to-day activities,” said Grant.

Many buyers and sellers want to age in place, and Grant said it can benefit Realtors to educate older buyers regarding how smart products, and how they can help make life easier. Some smart home devices can help users remember to eat or take medications, allow family or caregivers to interact remotely or send notifications in case of a fall or injury They can even offer voice-activated assistance with curtains or shades, or visual assistance for the blind or hearing impaired.

While smart home technologies and advancements provide a number of conveniences, Grant stressed there are concerns and risks to these luxuries.

“Some of these come with a default password, and if that password isn’t changed, you open yourself to a hacker having access,” he cautioned. “In other cases, some smart devices are always listening or recording.”

Grant says users should go to the devices’ settings and disable these features in order to safeguard privacy.

Both speakers agreed that Realtors have an obligation to know the rules and requirements in regard to selling a smart home. They added that Realtors should explain all hazards and possibilities to clients – whether buyers or sellers – such as violating privacy laws or failing to disclose whether or not a product is included after a home sale.

On the whole, Grant and Doyle said smart home technologies should impart security, convenience, energy efficiency, a cost savings and comfort, and stressed that while there are some risks, the positives overwhelmingly outweigh the negatives.

© 2021 Florida Realtors®

https://www.floridarealtors.org/news-media/news-articles/2021/11/marketing-listings-what-makes-home-smart-home

NAR Approves Policy Changes at Its 2021 Convention

NAR’s board and delegate body met in back-to-back meetings Monday. In addition to MLS changes, it focused on governance, financing, taxation, legal actions and more.

SAN DIEGO – On Monday, the National Association of Realtors®’ (NAR) Board of Directors and the NAR Delegate Body met in back-to-back meetings – the final day of the 2021 Realtors Conference and Expo that took place in San Diego. The groups made a number of changes.

National governance

The two groups approved nine “sweeping” changes to NAR governance policy, including new qualifications for NAR volunteer leaders and a newly constituted Board of Directors and Executive Committee. The recommendations that required a change to the Constitution & Bylaws then came before the NAR Delegate Body.

The recommendations were the work of a multi-year presidential advisory group, appointed in 2018 and charged with creating a more efficient and transparent governance operation for the 1.5 million-member organization.

MLS policy

Directors approved six recommendations of the Multiple Listing Issues and Policies Committee designed to “create transparency for consumers and bring consistency in services for brokers nationwide.” The policies take effect Jan. 1, though MLSs could implement them earlier if they choose.

NAR posted expanded information about its MLS policy at nar.realtor/mls. At nar.realtor, you’ll also find an expanded “MLS Best Practices.” New voluntary practices for MLSs, which didn’t require approval by the Board of Directors, focus on rule enforcement, data, and governance.

Realtors Relief Foundation fundraising

NAR’s board approved a budget adjustment request from Treasurer Nancy Lane that NAR provide a second year of fundraising support for the Realtors Relief Foundation (RRF). A successful 2021 fundraising campaign met its $8.5 million goal. Since inception, NAR has provided all administrative support for RRF, reflecting NAR’s commitment to the importance of its charitable work – more than 17,000 families in need at the time of a disaster.

Defining employer-employee relationships

The board voted to support a clear joint-employer standard that defines the employer-employee relationship, provides business relationship predictability, and does not result in one business entity bearing employment liability for another business entity’s employees unless it exerts substantial direct and immediate control over those employees.

The Business Issues Policy Committee recommended the policy in response to legislation called the “Protecting the Right to Organize (PRO) Act,” which was introduced primarily to provide gig workers with greater rights and protections. The legislation has a few provisions NAR is monitoring, including an expansion of the current joint-employer standard that could impact real estate brokerage franchisors.

NAR campaign rules

The board amended the Campaign and Election Rules Manual to include a process for evaluating Eligible Candidates and Elected Officers who no longer meet the criteria set forth in the manual.

Specifically, it amended the Campaign and Election Rules Manual to require the President-Elect’s appointees for Vice President of Association Affairs and Vice President of Advocacy to:

  • Complete an application for NAR Elected Office
  • Meet the required criteria set forth in Section C.1 of the manual
  • Submit to the same audit and review process as potential candidates for NAR elected office and require the Candidate Audit Work Group to report the results of its review to the President-Elect by March 15

There will be no public announcement of these appointments until this process has been completed.

Federal finance and housing policy

Approved a motion supporting suspension of the Federal Housing Administration (FHA) anti-flip rule until Dec 31, 2025. Suspending the rule will increase the pool of homes available to FHA borrowers and improve their chances to become homeowners. The board acknowledged concerns regarding protecting the FHA borrower and the finances of FHA as it relates to properties being resold within 90 days. The suspension end date of Dec. 31, 2025, aligns with the belief that the market will have a chance to normalize within the proposed timeframe and the pool of available homes will increase.

Federal taxation

The board reinforced NAR support for existing law that allows the use of all self-directed retirement vehicles – including but not limited to those that invest in real property.

Proposed tax law changes would, if passed, “represent an unjustified overreaction to perceived abuses,” the directors said with their vote; such a proposal would financially harm investors who have relied on present law and would harm the real estate sector by removing a significant avenue for investment in real property.

The board also approved a motion calling for NAR to oppose tax-law enforcement policies that, if enacted, would require banks and other financial institutions to provide certain account-holder information to the Internal Revenue Service (IRS). Directors said such a requirement – in pursuit of high-income and high-wealth individuals suspected of not reporting all their taxable income – is an overreach. It would saddle individuals with extra tax-compliance costs and loss of time responding to fruitless requests. It’s also a privacy risk and could include the theft of confidential information.

Legal action

The board approved six Legal Action Committee motions, including that the association purchase a Patent Infringement Liability Policy for NAR, Realtor association-owned MLSs, and state and local associations, and that NAR provide funding in: 

  • An Iowa case to oppose a plaintiff who seeks to expand a listing broker’s responsibilities as “possessor” of a listed property.
  • A Missouri case supporting real estate professionals who face accusations that they violated copyright on architectural home design and related technical drawings owned by the plaintiff. Should the plaintiff prevail, real estate professionals nationwide could be threatened with copyright infringement claims over the creation of floorplans in connection with property listings.
  • New Jersey Realtors’ support of a real estate brokerage’s appeal in a suit in which the plaintiff claims salespeople are misclassified as independent contractors. The issue of independent contractor status in the real estate industry is of national concern, and the board agreed that supporting the case is important in order to preserve the ability of real estate professionals to continue to be classified as independent contractors.

Local bylaws

The board amended the Mandatory Bylaw Provisions for Local Associations to define “good standing” as it relates to Realtor association membership. Changes “concisely express the privileges and obligations of Realtor members,” and assist associations by more clearly defining the behaviors that can lead to Realtor member disciplinary actions.

It also amended the Code of Ethics and Arbitration Manual to provide guidance for virtual ethics and arbitration hearings.

Professional standards

The board amended Standard of Practice 12-1 to clearly prohibit members from advertising their services as “free” unless the members will receive no compensation from any source for the services.

It also amended NAR’s Local and State Association Ombudsman Services policy to authorize ombudsmen and ethics mediators to hear disputes involving the public trust.

© 2021 Florida Realtors®

https://www.floridarealtors.org/news-media/news-articles/2021/11/nar-approves-policy-changes-its-2021-convention

Inflation Driving Investors to Commercial Real Estate

NEW YORK – Inflation appears to be providing another tailwind for investors looking to increase allocations to commercial real estate. But is the promise of commercial real estate as an inflation hedge all it’s cracked up to be?

According to Bureau of Labor Statistics estimates, the consumer price index rose 5.4% in September, the fifth straight month in which the inflation rate was five percent or greater. Views remain mixed on whether higher inflation could be transitory – caused by a combination of reopening economy and a choked supply chain – or whether more long-term inflationary pressures are at play.

“I think it is transitory, but inflation could be stickier than people think and continue into 2022,” says Richard Barkham, PhD, global chief economist, head of global research and head of Americas Research at CBRE. Barkham expects inflation to drop back once some of the supply side issues contributing to price increases improve as more people return to the workforce.

One of the common selling points for commercial real estate investment is that the asset class provides a good hedge against inflation because it generates cash flow. Owners also have the ability to raise rents along with rising inflation – in fact some leases have automatic CPI adjustments built in. Higher revenues also correlate to higher property values.

However, experts caution that the concept of commercial real estate as an inflation hedge in investment portfolios is sometimes misunderstood, and certain properties are better positioned in environments with rising prices than others.

“Commercial real estate doesn’t give you instantaneous protection against all unexpected blips in inflation,” says Barkham. “However, if you look at a longer period of five, seven or 10 years, generally speaking, the values of real estate will go up with inflation.” Real estate does keep pace with rising inflation reasonably well with higher prices that flow through to rents, although that is not true of all sectors, he adds.

Industry research supports the argument that real estate assets provide protection against inflation. According to Nareit, dividend increases for REITs have outpaced inflation as measured by the Consumer Price Index in all but two of the last 20 years. In 2002, dividend growth failed to edge out inflation by just half a percentage point. The only other time in recent history dividend growth fell below inflation was just after the financial crisis in 2009. Over the 20-year period, average annual growth for dividends per share were 9.6% (or 8.9% compounded) compared to 2.1% (2.2% compounded) for consumer prices.

Comparing private CRE vs public REITs

Berkadia recently introduced a new white paper that assesses inflation and risk in real estate. In particular, the research compared performance of private commercial real estate, equity REITs and the stock market.

One of the key findings of the research for the post-Great Financial Crisis (GFC) period studied is that higher inflation tends to help private commercial real estate returns, while hurting REIT and stock returns. In addition, when comparing individual property types, privately held apartments and industrial delivered the strongest risk-adjusted performance.

The Berkadia research introduces the inflation ß (beta) concept that takes into account the sensitivity of returns to changes in the inflation rate. The inflation ß quantifies the implied marginal rise or decline in excess returns given a rise in the inflation rate. For example, an asset with inflation ß of 2 implies that for a 1% rise in inflation, excess returns will rise by 2%. Essentially, as measured by inflation ß, some property types have a more favorable (or unfavorable) inflation sensitivity than others.

The Berkadia research found a post-GFC inflation ß for private commercial real estate that was 1.20, whereas equity stocks had an inflation ß of -2.49 and equity REITs had an inflation ß of -5.27.

In simple terms, rising inflation tends to imply rising returns for private commercial real estate, notes Noah Stone, an economic analyst at Berkadia. One of the suspected reasons for that outperformance is the difference in liquidity. The illiquidity of privately held real estate is likely to protect values more during times of inflation, he says.

The Berkadia research also showed that apartments have the strongest risk-adjusted performance during both times of moderate (2-5%) and high inflation (5+%), whereas industrial has the strongest risk-adjusted performance during time of low inflation (0-2%).

“In our view, there is no one property type that is a loser. All of them are winners when you look at risk-adjusted returns, but definitely apartments and industrial outperformed on a risk-adjusted basis,” says Stone.

It is important to note a number of variables can impact an owner’s ability to capture inflation increases, such as supply and demand and the lease structure.

“In terms of the apartments, the short-term leases are more flexible and allow for quick and rapid responses that allow landlords to capture rent increases when faced with exogenous factors like inflation,” says Dori Nolan, senior vice president, National Client Services at Berkadia.

Some owners will structure leases with periodic rent increases, or even link rent increases to increases in the CPI. Industrial will provide very good short-term and long-term inflation hedging, particularly as demand is so strong right now. In the past, retail has been quite good at delivering short-term inflation protection, because retailers are usually quick to incorporate price changes into their business models.

“I don’t know that retail would be able to do that now, because physical retail has been highly impeded by internet retail,” says Barkham. Office will offer some longer term inflation hedging protection, but in the short term the sector has been weakened by demand factors, he adds.

Another factor to consider is that property types are impacted differently by inflationary pressures on the operating expense side. Although shopping centers and office buildings can pass expenses through to tenants as common area maintenance costs, owners will bear some of the cost on assets that are not fully occupied. In addition, those property types that also have operating businesses, such as seniors housing and hospitality, are more directly impacted by rising costs. Labor costs in particular have been a bigger concern for operators of hotels and assisted living/memory care facilities.

Inflation influences CRE strategies

Cadre is one investment management firm that is factoring inflation into decisions on portfolio construction. “From a blanket perspective, we’re in the camp that there is inflation that is here to stay, at least in the immediate and short-term of the next 12 to 24 months,” says Dan Rosenbloom, managing director and head of investments at Cadre, a tech-centric real estate investment management company. Cade also believes that there will be a run-up in asset values with some properties that will be better positioned to capture it.

Multifamily is one asset type that Cadre is leaning into more so than others

“When we’re buying multifamily, we have to look at the basis and the cost per unit. During an inflationary time, like we’re seeing now, costs will go up. So, your basis looks more compelling related to what replacement cost would be,” says Rosenbloom. The question is if inflation starts to happen, can investors actually capture that income? “This is where market selection and asset selection become really important. You need someone who understands not only the macro, but the micro markets that you are investing in,” he says.

For example, Cadre recently purchased an apartment property in Austin where rents in that particular submarket are being marked up by about 20% for leases that are rolling. “What we are seeing in that market is that wages are going up or people that are coming in have jobs where they can afford those increases,” he says.

Investors also need to watch out for medium-term hiccups in the economy due to inflation, cautions Barkham. If the Fed thinks inflation is transitory, it won’t be very aggressive in trying to control it. However, if the Fed thinks inflation is going to be something more than transitory, then there could be a sharp rise in interest rates, which will be quite damaging to real estate in the short term. These are all factors playing out that impact scenarios for short-term inflation protection, he says.

© 2021 Penton Media

https://www.floridarealtors.org/news-media/news-articles/2021/11/inflation-driving-investors-commercial-real-estate

HUD Keeping FHA Premiums High at Least a Little Longer

An FHA report finds stability and suggests premiums – money paid by borrowers to offset future loan troubles – should be lowered. But HUD wants a “cautionary approach.”

WASHINGTON – In an annual report to Congress, the Department of Housing and Urban Development finds that the Federal Housing Administration (FHA) loan program is on solid financial footing – at least for now. However, a potential uptick in problem mortgages has pushed HUD to keep mortgage insurance premiums high for now, even though a drop would save FHA borrowers money.

The report also found a large correlation between FHA loans and first-time buyers, which make up 84.61% of FHA-endorsed loans.

The Mutual Mortgage Insurance Fund (MMI) supports FHA’s single-family mortgage insurance programs, as well as mortgages insured under the Home Equity Conversion Mortgage (HECM) reverse mortgage program. For the first time since 2015, its capital ratio – a percentage of the money that can operate almost as insurance to cover FHA loans that default – increased 1.93 percentage points to 8.03%.

A ratio that high suggests that HUD is more than prepared for potential bad loans, and it usually leads to HUD lowering the amount collected from FHA borrowers for the MMI. However, this year, HUD is dragging its heels. It says it’s “well positioned” to withstand future economic events and endure the outcomes from the pandemic-induced delinquencies that remain in forbearance or are seriously delinquent. However, HUD also appears unwilling to lower the MMI payments in case that’s incorrect.

“The strength of the fund is a promising sign and solidifies the important role FHA fulfills in making homeownership a reality for first-time homebuyers and those with lower incomes.” says U.S. Department of Housing and Urban Development Secretary Marcia L. Fudge. “Managing the strong fiscal health and performance of the FHA program is a top priority, and I am encouraged to see the MMI Fund remain resilient through the events of the past year. Looking ahead, we will ensure FHA is well positioned to provide broad and equitable access to homeownership.”

Highlights from FHA’s FY 2021 report

  • As of September 30, 2021, FHA had active insurance on more than 7.8 million single family forward and reverse mortgages, with a total unpaid principal balance of more than $1.2 trillion.
  • The percentage of first-time homebuyers using FHA insurance reached a new high of 84.61% of total FHA forward mortgage purchase endorsements in FY 2021.
  • The share of mortgages insured by FHA to minority borrowers reached almost 42%. FHA served double the percentage of Black and Hispanic borrowers compared to those served through mortgage originations by the rest of the housing market this past fiscal year.
  • FHA’s forward mortgage portfolio achieved solid performance with a stand-alone capital ratio of 7.99% as of Sept. 30, 2021, an increase of 1.68 percentage points over the previous year.
  • The Home Equity Conversion Mortgage (HECM) reverse mortgage portfolio saw a significant improvement in its valuation. It has a stand-alone capital ratio of 6.08% as of Sept. 30, 2021, compared to a negative 0.78% capital ratio from the previous year.

© 2021 Florida Realtors®

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Leave a Lasting Impression: A Guide to Closing Gifts

A closing gift isn’t just a gift – it’s a “remember me the next time you want to buy or sell a house.” The best ones show that you understand a buyer’s wants and needs.

NEW YORK – For real estate agents and clients, closing day is a rewarding moment, both financially and emotionally.

It’s also time to thank clients by choosing a gift.

An agent’s closing gift should remind clients that they listened to their wants and needs and care about their future in their new home. But in addition to showing clients that they’re appreciated, they should also leave a lasting impression that suggests the agent will maintain the relationship they formed during the buying and selling process.

Agents should give something that clients can use or benefit from that fall within the agency’s budget. If working in a luxury market, for example, the agent should provide a gift to the client that reflects that market, as well as the makeup of their home. If the client is new to the area, consider something that welcomes them to the neighborhood, such as a $50 gift card to a local restaurant or a uniquely local experience that helps acclimate them to their new neighborhood, town or city. Agents can spend a bit more money on a gift for a luxury home, but don’t exceed $100.

Closing gifts can also be written off as a tax deduction, but there are rules.

Other gift ideas include custom return address stamps, local gift cards or memberships, video doorbells, subscription boxes, yard games, recipes, home decor and gift baskets, or contracting services from landscapers.

Source: RISMedia (11/04/21) Brown, Paige

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

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NAR Files Court Response to DOJ Agreement Dispute

In Sept., NAR filed a petition asking the Dept. of Justice to change or drop its opposition to an agreement announced earlier. On Fri., it reacted to DOJ’s response.

WASHINGTON – The National Association of Realtors® (NAR) and the U.S. Department of Justice (DOJ) continue to disagree over the terms of a settlement that appeared finalized until DOJ backed out.

In September, NAR filed a petition seeking DOJ’s response. On Monday, NAR filed a “Response to the Government’s Opposition to NAR’s Petition.” Inman News posted a copy of NAR’s response on its website.

At the heart of the DOJ-NAR dispute is a settlement agreement over various multiple listing service (MLS) policies, which DOJ approved in November 2020. DOJ later announced that it was backing out of that agreement. In response, NAR called the department’s attempt to withdraw – after NAR had begun to implement the terms – “a breach of the agreement and the law.”

“The DOJ action should be considered null and invalid based on legal precedent alone,” NAR President Charlie Oppler said when submitting September’s petition. “The DOJ must be governed by principle, and NAR simply expects the department to live up to its commitments.”

Oppler said NAR remained committed to “advancing and defending independent and local real estate organizations that provide for greater economic opportunity and equity for small businesses and consumers of all backgrounds and financial means.”

The response submitted Monday rebuts many points made by DOJ and includes previous court cases that NAR says back up its case.

NAR creates “Competition in real estate” web tools

A webpage from NAR, called “Competition in real estate,” focuses on the way the current MLS system encourages competition and serves consumers.

“Multiple Listing Services (MLSs) are independent broker marketplaces that focus exclusively on residential real estate in local real estate markets,” the webpage explains. “Access to inventory and free advertising, as well as the practice of the listing broker paying the buyer brokers’ commission, incentivizes participation in these local real estate marketplaces and creates the largest, most accessible and most accurate source of housing information available to consumers. That levels the playing field among brokerages, allowing small brokerages to compete with large ones, and provides for unprecedented competition among brokers, including different service and pricing models.”

© 2021 Florida Realtors®

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Commercial: Expect More Mixed-Space Development

Even commercial sectors hit hardest by COVID-19 are showing signs of life. Given tight residential markets, though, office-to-housing conversions are a hot topic.

SAN DIEGO – Economic and real estate experts in San Diego for the National Association of Realtors®’ (NAR) convention, discussed the latest data and insights pertaining of the commercial market’s future.

NAR Chief Economist Lawrence Yun opened the, “Commercial Economic Issues & Trends Forum,” which was moderated by Moses Hall, 2021 Commercial Economic Issues and Forum chair.

According to Yun, the economy improved over the past year, following the worst of the pandemic – and retail is facing a surprising recovery given the rising demand for online shopping. The office sector is starting to recuperate. It’s happening at a modest pace due to job growth and because some workers are heading back to the office.

“The demand for apartments in general is rising, especially in the Sun Belt states,” Yun said. “Whenever you have job growth, the demand for apartments also increases.” Strong apartment rental demand has stimulated rent growth, especially with new leases, with rents rising over 10%.

“When housing prices increase quickly, that leads to a boost in the rental demand,” Yun added. But “many renters, unfortunately, have been priced out of buying a house.”

While the rental market has done well, the office sector has seen little development over the last two years, attributed largely to more work-from-home opportunities. Although Yun says offsite working has declined significantly, overall remote work is still elevated, especially when compared to pre-pandemic levels. Because many employers still allow teleworking options, offices all over the country have seen very little activity since the start of the COVID-19 pandemic.

Turner Levison, co-founder and CEO of CommisionTrac and senior account executive at Yardi Systems, a property management platform, agreed that a number of office spaces are underutilized. Levison said that vacant space presents an opportunity for businesses and large companies to use the areas for other needs.

“Seventy-eight percent of people believe the office is still vital,” Levison said. “Now, that’s not to say people still plan to go into the office five days a week like we used to.”

Levison suggested office building owners consider some type of hybrid workspaces for unused areas. Such a setup, he said, would accommodate evolving tenant needs and future office desires.

Levison encouraged tenants to embrace telework, because it could lead to a chance to craft office space that “fosters increased in-person and remote productivity while serving as the hub for enhanced culture.”

A recent NAR study – Analysis and Case Studies on Office-to-Housing Conversions – explores the feasibility of converting office buildings into housing, especially multifamily housing, taking into account a given market area’s potential for office-to-housing conversion, market fundamentals, a building’s physical condition and layout, and zoning regulations.

The study found that 22 out of 27 metros or submarkets heavily impacted by the pandemic have market conditions that make office-to-housing conversions possible. Among the largest commercial markets, the highest potential for office-to-housing conversions are in New York, Chicago, Los Angeles and Boston; the least potential appears to be in Washington, D.C. and San Francisco.

“Class B office buildings” have the most likelihood for conversion to an apartment building, according to the report.

Yan Khamish, managing director of CrowdStreet, an online commercial real estate investment marketplace, took the stage last and discussed another report titled, “Office, Mixed Use and Redevelopment Case Study,” which touts the positive results for these kinds of real estate combinations. Mixed development use, according to Khamish, yields lucrative results.

Khamish said that mixed-use development has had consistent large gains since 2014 with no indications of a slowdown.

“Multifamily, mixed use and industrial are leading the way,” he said.

Khamish said corporate real estate is a hedge against inflation, and he added that sponsors and investors are seeking growth states with low or no state tax demand.

© 2021 Florida Realtors®

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First Time Ever: Inflation Soars as Mortgage Rates Plunge

The last time inflation rose as mortgage rates fell? Never. But the world is awash with cash, and that holds down mortgage rates, says Wells Fargo senior economist.

NEW YORK – Contradiction? Kerfuffle? Chaos?

Freddie Mac’s 30-year fixed plunged 11 basis points to 2.98% last week, even as the nation’s inflation rate jumped to 6.2%.

When was the last time this happened? Exactly never.

Traditionally, mortgage rates move up with inflation, says Richard Green, director of USC’s Lusk Center for Real Estate.

“This has happened at no other time in history,” Green said. “We are living in a world of uncertainty.”

The yield for the 10-year Treasury Inflation-Protected Securities, or TIPS, was at an all-time low price of negative .57, Green observed. TIPS are indexed to inflation to protect investors from a decline in the purchasing power of their money, according to Investopedia.

This is the lowest Freddie’s rates have been since Sept. 23.

It’s important to note Freddie’s 30-year weekly rate survey was completed prior to the Labor Department’s Wednesday inflation announcement, and rates could bounce back up. For example, the 10-year Treasury rate – which the 30-year fixed closely follows – jumped 10 basis points to 1.56% after the Labor Department’s announcement.

So, how did mortgage rates manage to go down again with price inflation all around us?

The world is awash with cash, which is holding down mortgage rates, said Mark Vitner, senior economist at Wells Fargo Bank. “The U.S. government has spent $5.4 trillion since the beginning of the pandemic. The Fed has added $4.3 trillion to its balance sheet. (U.S. households) have $2.3 trillion in excess savings. And the U.S. acts as an anchor, pulling in money from overseas as (investment returns) are so low overseas.”

Inflation pressures are demand driven, experts say. As we return to normalcy, consumers want goods, but the shelves are empty. Experts differ, however, as to whether this is transitory inflation or whether this is going to be around for a long time.

When COVID-19 hit, the world sort of stopped. And it wasn’t just manufacturing.

“States haven’t issued truck driver’s licenses in the last few years,” said Ted Tozer, senior fellow at the Milken Institute of Housing Policy and former Ginnie Mae president for seven years under President Barack Obama. “The supply chain problem is like a traffic jam trying to get flowing again.”

Vitner thinks we are currently at the peak of supply disruption, although supply issues “will dog the economy until the middle of the decade,” he said.

The number of workers in the supply chain may improve to about 3 million jobs over the next six months, said Tendayi Kapfidze, U.S. Bank’s head of economic analysis. He pointed to a recent report that the U.S. labor force grew by 500,000 jobs.

Will mortgage rates continue to stay under control or will they go up, up and away with inflation trends?

“It would not be an absurd notion to think rates might fall a little bit,” said Jacob Channel, senior economist at Lending Tree. But rates eventually will go back up. Channel sees mortgage rates rising to the 3-4% range next year.

Tozer thinks there’s a delicate dance ahead as the Federal Reserve starts tapering its pandemic-era bond-buying program. The Fed has been purchasing $120 billion of treasury bonds per month, including $40 billion in mortgage securities.

“The key is how much tapering will trigger higher rates,” said Tozer. The next question is how will government borrowing affect inflation? “Deficit spending could trigger mortgage rates to go up.”

Will you lose your ginormous run-up in home appreciation? Will home prices pop?

Mortgage underwriting standards remain stringent since the Great Recession and the mortgage meltdown days.

“Credit underwriting has been so strict it’s hard to see a bubble,” said Vitner.

What’s the next shoe to drop?

“It’s really murky right now,” Kapfidze said.

© Copyright 2021 Press-Telegram. Jeff Lazerson is a mortgage broker.

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NAR Economist Yun: Housing Market May Normalize in 2022

Forecasts always include caveats that may upend predictions, but NAR’s Lawrence Yun says the market is hot right now – and he sees more of the same in 2022. While next year’s sales may not surpass 2021 numbers, he expects a banner year compared to those before the pandemic.

SAN DIEGO – The outlook for the residential real estate market, which performed exceptionally well during the height of the pandemic, continues to be promising, according to NAR Chief Economist Lawrence Yun, speaking during the National Association of Realtors® (NAR) convention.

“All markets are seeing strong conditions and home sales are the best they have been in 15 years, Yun said. “The housing sector’s success will continue – but I don’t expect next year’s performance to exceed this year’s.”

An unknown, he said, is how remote work opportunities will play out in the future, and he advised the industry to keep that in mind.

“We are only in the first innings of work-from-home options,” Yun said. “People have not fully digested the work-from-home-flexibility model yet in determining home size and locational choice.”

Even though there may be a decline in sales in 2022, Yun still forecasts that home sales will outdo pre-pandemic levels. His prediction, he noted, is based on an anticipation of more inventory in the coming months. That supply will be generated, in part, from new housing construction – already underway – as well as from the conclusion of the mortgage forbearance program, which in turn will cause a number of homeowners to sell.

“With more housing inventory to hit the market, the intense multiple offers will start to ease,” Yun said. “Home prices will continue to rise but at a slower pace.”

The job market struggled during the pandemic but turned a corner and continues to make incremental progress, Yun said. Since the nation emerged from lockdown, 18 million jobs have been created. At 4.6%, the unemployment rate implies the U.S. economy should be back to normal – however, the country still faces an employment shortage, he added. There are 4 million fewer jobs now than the number before COVID-19.

Forecasts for 2022 depends a bit on U.S. location. Some areas of the nation are thriving and fully recovered, Yun said – places like Idaho and Utah. Both states currently having more jobs now than at the beginning of the pandemic.

While real estate has thrived, Yun says signs suggest that a more normal and predictable market is on the horizon. Home sales surged over the past year in an uncharacteristic manner, with many receiving multiple bids after only being on the market for a short period. However, the 2022 housing sector will settle down, though at above pre-pandemic levels.

Yun projected that mortgage rates, currently at 3.0%, will increase to 3.7% in the coming months, a rise he attributes to persistent high inflation. Home prices rose by 12% on average in 2020 and 2021, while inflation rose 3%.

“Rising rents will continue to place upward pressures on inflation,” he said. “Nevertheless, real estate is a great hedge against inflation.”

© 2021 Florida Realtors®

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Do Phone Apps Organize Your Business? What If You Die?

Currently, Apple permits iPhone users’ survivors to delete data without reading, but a new “Legacy Contact” feature will allow them to designate data inheritors.

NEW YORK – A coming feature for iPhones and iPads will soon make it easier to share your data after death.

Apple rolled out its Legacy Contacts features to its developers test update for iOS 15 and iPadOS.

With the feature, users can designate a contact (or multiple) as a Legacy Contact. In the event of the user’s passing, the designated Legacy Contacts can quickly request access to the deceased’s iCloud data.

Apple has not specified when it will roll out the next update for iOS 15.

Other platforms provide similar tools to allow friends or family members to access your accounts if a user dies. On Facebook, for example, users can appoint a legacy contact to look after a “memorialized” version of their account. Friends and family can also request deleting an account for loved ones who have passed.

On Twitter, friends and family can request the deletion of the account for a deceased loved one, but there are no options to gain access to the account after death.

There are other steps users can take to organize their digital life before they die. Along with creating Legacy Contacts, iOS users can build a digital checklist of all their accounts with passwords, and lock down their smartphone.

Copyright 2021, USATODAY.com, USA TODAY

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Is a Flipped Home Better than ‘As Is’? Maybe, Maybe Not

Buyers may find a newly flipped home more appealing because much of it feels new – but not all flips are the same. An inspection is highly recommended.

NEW YORK – Not all houses are created equal. In any given price range, every property you’re going to look at will have its pros and cons. This applies even more so if you’re considering a home that was recently renovated by a flipper.

You certainly don’t need to avoid properties that are being flipped, but there are some things to watch out for if you’re looking at one.

House flipping is hardly new. But as real estate prices skyrocketed over the last 12-18 months, many people saw an opportunity to earn a quick buck by buying property, fixing it up, and reselling as the market pushed the value ever higher.

Experts warn that flipped houses can sometimes be more trouble for the post-flip buyers, however, especially at lower price points.

“There’s always been an issue with fix and flips with the quality of them,” said Stephanie Fix, a Realtor with RE/MAX Professionals in Denver. “The margins are so slim these days with these investors that they’re really cutting a lot of corners.”

That reality came to the forefront recently as Zillow exited the home flip market. The online real estate giant made a big push to boost its iBuying platform in the last year, but ultimately decided it overpaid for too many properties and went into loss-cutting mode earlier this month.

Flip warning signs

Fix said that a shoddy flip isn’t always obvious, but finishes that seem off can sometimes point to bigger construction quality problems. She said she recently toured a house that she could tell was flipped because a kitchen drawer was blocked by the refrigerator and the dishwasher wasn’t installed properly.

“If those things are missing, cosmetic, on the surface that I mentioned, that tells me to be wary of what’s behind the walls,” Fix said. “Most of the things that are dangerous, you can’t always see with your eyes.”

Alterations that seem rushed on the surface could indicate bigger problems, like electrical work that isn’t up to code or plumbing that wasn’t installed correctly. Addressing issues like that can become costly, especially if you haven’t factored them into your budget.

What to do if buying a flipped house

It’s crucial to work with a knowledgeable Realtor if you’re considering a house that’s being flipped, Fix said. “An experienced agent is probably going to have a better eye than the buyer,” she said

When she tours a house that she suspects is being flipped, she’ll check the title’s chain of custody to see who owned the home previously, and will reach out to other agents in her network to see if anyone has experience buying from the flippers.

You can easily tell if the home is a flip by looking at the property records. If the home is back on the market just a few months after being purchased by a new owner, odds are it’s a flip.

At the height of the pandemic real estate boom, many buyers were waiving inspections and other contingencies in their contracts to make their offers more attractive. Fix said that’s an especially bad idea on flipped properties.

“These guys typically don’t permit things,” she said, so getting an experienced inspector to go take a thorough look at the property is crucial. “It’s going to be really important to do your sewer and separate roof inspections.”

Bottom line

Flipped houses may seem up-to-date on the surface, but shiny new finishes can sometimes mask shoddy work. If you’re looking at a property that is being flipped, you’ll want to be sure to get it thoroughly inspected before you close, and set aside money for any problems that may crop up as a result of renovations that were done on a tight budget.

© Copyright, 2021, The Press of Atlantic City. All rights reserved.

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Veterans Day Legislation Targets GI Bill Racial Inequities

WASHINGTON – For Veterans Day, a group of Democratic lawmakers is reviving an effort to pay the families of Black service members who fought on behalf of the nation during World War II for benefits they were denied or prevented from taking full advantage of when they returned home from war.

The new legislative effort would benefit surviving spouses and all living descendants of Black WWII veterans whose families were denied the opportunity to build wealth with housing and educational benefits through the GI Bill.

Since 1944, those benefits have been offered to millions of veterans transitioning to civilian life. But due to racism and discrimination in how they were granted through local Veterans Affairs offices, many Black WWII veterans received substantially less money toward purchasing a home or continuing their education.

The Senate bill was introduced Thursday by Sen. Rev. Raphael Warnock of Georgia, the son of a WWII veteran.

“We’ve all seen how these inequities have trickled down over time,” Warnock said, adding that the bill “represents a major step toward righting this injustice.”

A House version was introduced last week by Rep. Jim Clyburn of South Carolina, the Democratic majority whip, and Rep. Seth Moulton of Massachusetts.

“This is an opportunity for America to repair an egregious fault,” said Clyburn. “Hopefully it can also begin to lay a foundation that will help break the cycle of poverty among those people who are the descendants of those who made sacrifices to preserve this democracy.”

Moulton, a Marine veteran who served four tours during the Iraq War, said: “There are a lot of Black Americans who are feeling the effects of this injustice today, even though it was originally perpetrated 70 years ago.”

“I think that restoring GI Bill benefits is one of the greatest racial justice issues of our time,” he said.

The legislation would extend the VA Loan Guaranty Program and GI Bill educational assistance to Black WWII veterans and their descendants who are alive at the time of the bill’s enactment. It would also create a panel of independent experts to study inequities in how benefits are administered to women and people of color.

Lawrence Brooks, who at 112 years old is the oldest living U.S. veteran, was drafted to serve during WWII and assigned to the mostly-Black 91st Engineer General Service Regiment. The Louisiana native, who has 12 grandchildren and 23 great-grandchildren, always believed that serving his country was the only way he could leave behind his life as the son of sharecroppers, said his daughter, Vanessa Brooks.

But after he was discharged in August 1945 as a private first class, he did not realize his dream of going to college, working instead as a forklift driver before retiring in his 60s. “He always wanted to go to school,” his daughter said.

And when he bought his home, he used his retirement fund, not GI Bill benefits, she said.

President Franklin D. Roosevelt signed the Servicemen’s Readjustment Act into law in 1944, making generous financial subsidies available to 16 million WWII veterans pursuing higher education and buying their first homes. Irrespective of race, veterans who served more than 90 days during the war and had been honorably discharged were entitled to the benefits.

But after returning from the war, Black and white veterans faced two very different realities.

Because the GI Bill benefits had to be approved by local VA officers, few of whom were Black, the process created problems for veterans. This was particularly acute in the Deep South where Jim Crow segregation imposed racist barriers to homeownership and education. Local VA officers there either made it difficult for Black veterans to access their benefits or lessened their value by steering them away from predominantly white four-year colleges and toward vocational and other non-degree programs. Meanwhile, the nation’s historically Black colleges and universities saw such a significant increase of enrollment among Black veterans that the schools were forced to turn away tens of thousands of prospective students.

Sgt. Joseph Maddox, one of two WWII veterans Moulton and Clyburn named their bill after, was denied tuition assistance by his local VA office despite being accepted into a master’s degree program at Harvard University.

“When it came time to pay the bill, the government just said no,” said Moulton, who himself attended Harvard on the GI Bill. “It actually is pretty emotional for vets who have gone through this themselves and, like myself, know what a difference the GI Bill made in our lives.”

The bill is also named for Sgt. Isaac Woodard, Jr., a WWII veteran from Winnsboro, South Carolina, who was brutally beaten and blinded by a small-town police chief in 1946 after returning home from the war. The acquittal of his attacker by an all-white jury helped spur the integration of the U.S. armed services in 1948.

In contrast to the treatment of Black veterans, the GI Bill helped homeownership rates soar among white veterans in a post-war housing boom that created a ripple effect their children and grandchildren continue to benefit from today.

Of the more than 3,000 VA home loans that had been issued to veterans in Mississippi in the summer of 1947, only two went to Black veterans, according to an Ebony magazine survey at the time.

The Federal Housing Administration’s racist housing policies also impacted Black WWII veterans, undoubtedly fueling today’s racial wealth gap. Typically referred to as redlining, Realtors and banks would refuse to show homes or offer mortgages to qualified homebuyers in certain neighborhoods because of their race or ethnicity.

Preliminary analysis of historical data suggests Black and white veterans accessed their benefits at similar rates, according to Maria Madison, director of the Institute for Economic and Racial Equity at Brandeis University, who has researched the impact of racial inequities in the administration of GI Bill benefits.

However, because of institutional racism and other barriers, Black veterans were more limited in the ways in which they could use their benefits. As a result, the cash equivalent of their benefits was only 40% of what white veterans received.

After adjusting for inflation and for market returns, that amounts to a difference in value of $170,000 per veteran, according to Madison. Her ongoing research seeks to put a dollar amount on the wealth loss to Black families caused by racism and GI Bill inequities.

Black WWII veterans who were lucky enough to have gained full access to GI Bill benefits succeeded at building good lives for themselves and their families, said Matthew Delmont, a history professor at Dartmouth College. It’s a clear argument, he said, for why the new legislation is necessary.

“Because the GI benefits weren’t distributed more evenly among Black veterans, we lost an entire generation of Black wealth builders,” Delmont said. “After the war, we could have had even more doctors, lawyers, teachers and architects.”

Dovey Johnson Roundtree, a Black woman who was a WWII veteran, attended Howard University’s law school with GI Bill benefits. She then became a nationally known Washington criminal defense attorney who played a pivotal role in the desegregation of bus travel.

And WWII veteran Robert Madison, who served as a second lieutenant in the U.S. Army, credited his GI benefits for his success as a renowned architect.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Morrison reported from New York City. Stafford reported from Detroit. Both are members of the AP’s Race and Ethnicity team.

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Residents Win $35M in HOA Lawsuit Against Developer

It took four years, but a 55-plus Poinciana community of 5K residents won a class action lawsuit against the developer over issues related to amenity ownership and use.

POINCIANA, Fla. – Thousands of residents in a 55-plus Poinciana neighborhood have been awarded nearly $35 million in a civil case after a state judge ruled that a developer was charging improper homeowners’ association fees.

“It’s been a long battle,” said Lita Epstein, chairman of the Poinciana Community Development District.

The class-action suit has been in the courts since 2017 and includes more than 5,000 residents of Solivita, which is part of the massive Poinciana development in Polk and Osceola counties.

The judgment, issued Nov. 2 by Polk County Circuit Judge Wayne Durden, could mean as much as $10,000 to each of the residents, and even more once interest is calculated, said Carter Andersen, an attorney for the plaintiffs.

The case began in 2015 when the developer Avatar Properties proposed a bond measure to sell a clubhouse, pools and a tennis court to the resident-run CDD for $73 million. But a valuation of the amenities by a certified appraiser found them only to be worth roughly a quarter of that.

In the course of reviewing the proposal, attorneys found what they believed to be improper fee collections by the developer. According to the lawsuit, residents of Solivita were not only required to pay HOA fees but also two separate fees to the Solivita Club, which maintained the amenities and was owned by the developer Avatar. It was a subsidiary of AV Homes, which was purchased by home builder Taylor Morrison in 2018.

An unsigned email from Taylor Morrison said because of the litigation the company would not comment. Andersen says the developer has told him it plans to appeal the ruling.

Epstein, 68, had lived in Solivita since 2005. She ran for the CDD board in 2016 on a platform opposing the deal. “I was the lone voice against it for a while,” she said.

Due to her position, Epstein was not a litigant in the lawsuit.

Avatar had proposed using one of the club fees to finance the bond sale to the CDD. But lawyers argued that the fee of about $86 per month per household was already a violation of Florida statutes regarding HOAs.

The Florida Homeowners Association Act prohibits developers from creating deed restrictions that generate perpetual profit for mandatory memberships. “(I)n this case, the illegal club membership amounted to over $5 million per year in the most recent years,” Andersen wrote in an email to the Sentinel.

Andersen said the fees qualified as mandatory since the developer had cited failure to pay them as a cause in foreclosure cases in the community.

The bond was approved by the CDD but formally withdrawn by the developer in 2018 after a community uproar.

While the fees went back to the early 2000s, plaintiffs were only able to ask for the return of fees going back to 2013 because of the statute of limitations.

Norm Gundel, 69, was one of three named plaintiffs on the suit. He says he is thrilled with the judge’s ruling, which he says will be a boon to the community.

“It saves every homeowner in the community approximately $1,000 per year, and refunds those same illegal fees all of the way back through April 2013,” he said.

Andersen and his co-attorneys have two other lawsuits for similar violations pending, one on behalf of the residents of the Bella Lago Club in Osceola County and one for the residents of the Lakeland subdivision of Terralargo.

“We believe that the judges in those two other cases will come to the same conclusion – because Judge Durden decided the legal issues just right,” Andersen said.

Gundel says that, though the road was difficult, he recommends residents in similar battles stick it out together.

“Fighting injustice against a huge company is very difficult,” he said. “[The other named plaintiffs] and I could not have done this without the support of many other Solivita community members.”

© 2021 Orlando Sentinel. Distributed by Tribune Content Agency, LLC.

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Survey: Sellers Waiting Out Pandemic Are Ready to List

Owners who postponed selling during the pandemic – perhaps waiting for a sign that price increases were slowing – appear ready to list their home within the next six months. Many, however, plan to overprice it – and they expect bidding wars to push the final price even higher.

SANTA CLARA, Calif. – Homeowners have had all the usual reasons to sell over the past two years – marriages, deaths, children, etc. – but many hunkered down during the pandemic, and some feared the housing market because selling might be easy but finding a new home? Not so much.

A survey conducted by HarrisX for realtor.com, however, suggests that many of those people might be planning to list their home in 2022, with 65% of them planning to do so this winter and spring. The survey of 2,583 consumers was conducted online in September-October 2021.

Many sellers, however, want to set an asking price higher than they think their home is worth, and they expect buyer bidding wars.

“The pandemic has delayed plans for many Americans, and homeowners looking to move on to the next stage of life are no exception,” says George Ratiu, manager of economic research for realtor.com.

“Buyers should be ready for high asking prices and offer deadlines as seller expectations of the upcoming market are greater than in the spring, but an increase in new sellers could mean some relief from the inventory crunch,” he says, saying price growth has moderated some, and many sellers will likely wait until after the holidays to make a move.

However, early 2022 home listers may have an advantage, he adds. “As buyers race against the clock of rising mortgage rates, sellers who price their homes in line with today’s market and stick to their plans will likely see their expectations met.”

When will sellers list?

  • Among homeowners who seem prepared to enter the market in the next year, 65% will do so within six months, including 19% who have already listed their home.
  • Compared to the spring (76%), more prospective sellers (93%) have already taken steps toward listing their home, including working with an agent (28%).
  • More than one-third of prospective sellers (36% each) have researched the value of their home and others in their neighborhood, and started making repairs or decluttering.

Top reason for selling? More time at home during COVID

  • Compared to the spring (15%), nearly two-times as many prospective sellers (33%) want different home features.
  • With more sellers having children at home this winter (65%) than in the spring (43%), family considerations are a top reason behind homeowner decisions to enter the market: 37% of prospective sellers say their home no longer meets their family’s needs and 32% want to move closer to friends and family.
  • The rise in remote work is also a key driver: 23% of sellers want a home office and 19% don’t need to live near work, up from 6% in March.

Seller expectations

  • Nearly half of today’s prospective sellers want to take advantage of the current market and think they can make a profit (45%), nearly doubling from the spring (24%).
  • When asked about current market impacts, 42% said they plan to list their property for more money than they think it’s worth, and 29% will push for a quick close.
  • Compared to the spring, more prospective sellers anticipate buyer bidding wars, more offers above asking price, and more buyers willing to forgo contingencies like inspections and appraisals.

Price range changes

  • Sellers with homes at the core of the market ($351,000-$750,000) remained the same over March (29%). However, more sellers plan to list in the $500,000-$750,000 price range.
  • More than three-quarters (77%) of prospective sellers would be willing to accept a lower offer to close quickly versus just over half in March (54%).
  • Compared to spring sellers, a higher number plan to take alternative routes to moving out, such as living with family initially (19%) or temporarily renting their home back from the buyer (29%).

“For homeowners who do feel ready to sell, getting pricing right from the start is key to a fast and successful home sale in any market – take the Goldilocks approach,” says Lexie Holbert, home and living expert at realtor.com.

© 2021 Florida Realtors®

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Zillow Sells 11% of Its iBuyer Inventory to an Investor

The firm sold about 20% of the homes Zillow Offers currently owns to an investment firm, leaving it about 7,800 – but it goes up to 16,000 after pending sales close.

NEW YORK – Zillow Group has sold around 2,000 homes across 20 U.S. markets from its defunct house-flipping program to the Pretium Partners investment firm. Sources say Pretium intends to rent out its new acquisitions.

Zillow said earlier that it plans to sell about 9,800 properties it owns, plus another 8,200 it was under contract to buy.

The real estate company expects to see a loss of 5% to 7% on these sales, and sources say Zillow received market price for the properties in its deal with Pretium.

Zillow recently announced the closure of its iBuying business because it could not accurately guess future home prices and was sustaining excessive financial losses. Pretium, which owns roughly 70,000 single-family homes, will operate them as rentals.

“We continue to invest in communities and improve access to housing throughout the U.S.,” a Pretium spokesperson said following the announcement.

Other major rental-home investors, including Invitation Homes and American Homes 4 Rent, are also reportedly considering a bid for some of Zillow’s remaining housing inventory. Zillow anticipates that the full dismantlement of its home-flipping business will likely take place over multiple quarters.

Source: Wall Street Journal (11/10/21) Parker, Will

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Airbnb Updating Its App and Adding Translations

It will be easier for international visitors to book short-term rentals. Airbnb will soon give renters a translation option that includes more than 60 languages.

NEW YORK – Airbnb is making it easier for international travelers to book their stays as the United States reopens its borders to foreign travelers.

The short-term rental platform’s engine will automatically translate reviews and list descriptions in more than 60 languages. The feature is set to launch before the end of the year.

The U.S. travel ban dropped Monday, allowing vaccinated travelers from dozens of nations to enter. Data from Airbnb shows this change is already causing interest in U.S. travel to surge. During the week after Oct. 15, when the United States announced it would drop its ban, the number of nights booked by foreign guests in the USA jumped 44%.

The translation engine is one of more than 50 upgrades the short-term rental platform introduced Tuesday. Some of the features aim to make finding the perfect vacation spot easier for travelers with disabilities and remote workers.

Accessibility review

Through Airbnb’s Accessibility Review, employees ensure that hosts follow through on the accessible features they promise on their listings.

Hosts submit photos of step-free access or wide doorways that accommodate people who use wheelchairs to Airbnb employees for review. Airbnb employees have confirmed 100,000 accessibility features in 25,000 homes, according to the company.

More flexible searches

Airbnb expanded the date range in which guests can search for stays from six to 12 months. Guests have used the “I’m Flexible” feature more than 500 million times, according to Airbnb.

The app will include four new categories of “unique stays” that guests can search for: off the grid, ski-in/ski-out, luxe and offbeat homes.

Verified Wi-Fi

The pandemic has given more workers the ability to do their job from anywhere, which means they rely on Wi-Fi more than ever. In a 7,500-person survey, Airbnb found one-third plan to live somewhere else while working remotely more often than before than pandemic.

Airbnb guests have used the Wi-Fi filter while searching for stays more than 288 million times, according to the company. Hosts can have their internet speed verified through the app.

“You can be confident that you won’t miss a Zoom or a favorite streaming show from your Airbnb,” Airbnb said.

Upgraded trips tab

The “trips tab” on Airbnb will soon include a countdown to arrival, check-in details, current and upcoming reservations and suggestions for personalized experiences.

Copyright 2021, USATODAY.com, USA TODAY

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Creating an Effective Real Estate Newsletter

The first step in building a strong newsletter that boosts marketing efforts? Think about your preferred readers – their desires, needs and interests.

NEW YORK – An email newsletter marketing campaign can build a stable roster of fans who consider that Realtor their go-to person when they want to buy or sell a home.

The first step toward creating an effective real estate newsletter is to consider the audiences’ needs and expectations. This may include people interested in buying homes in a particular neighborhood, former buyers who need DIY home improvement or decorating tips, or customers interested in renting.

The newsletter should then be directed only to the inboxes of people interested in its subject.

To personalize the newsletter, agents should include dynamic content – things like personalizing name fields and locations, as well as using real estate browsing history to feature listings the readers are following.

Agents should write in a conversational tone. It gives readers the impression that the information addresses them directly. To get readers to actually open the email, agents should try adding a call to action in their subject line, something exciting and relevant to readers.

Agents should deliver the newsletter delivery at a time when readers are more likely to open it, and keep that timing consistent. It helps if readers know when to expect the next newsletter’s next edition.

The marketing system also needs to be maintained. Agents should periodically check and remove inactive email accounts and segment audiences based on their interest. One option that can help with segmenting is to use quizzes or other methods to define audiences.

Newsletters and email marketing are permission-based, so don’t purchase email lists from third parties or send emails to people who didn’t agree to receive digital correspondence.

Branding is essential, so agents should always include their logo and company colors. Layouts and typography should also be consistent, and the writing style should reflect corporate values and the core message of the website, social media and email communications. 

Source: Realty Biz News (09/29/2021) Butler, Mihaela Lica

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NAR’s 2021 Buyer-Seller Report: Moving Earlier, Selling Quicker

WASHINGTON – Why did buyers and sellers choose to buy or sell this year? Many wanted to live closer to family and friends, and a similar number wanted a home with more space.

In a strong sign of a seller’s market, most earned their full asking price and went under contract in just one week.

Further sales figures appear in the National Association of Realtors®’ 2021 Profile of Home Buyers and Sellers, a yearly report – now in its 40th year – that analyses demographics, preferences and experiences of buyers and sellers across America.

Jessica Lautz, vice president of demographics and behavioral insights at NAR, says both buyers and sellers “have been driven by the desire to be close to family and friends, as well as the need for a larger home” during the pandemic. A bullet-point list of top findings by category is posted on NAR’s website.

Of those sellers who also became buyers, many traded up to bigger, more expensive and often newer homes, with 46% purchasing a larger home and 28% one of the same size.

Relocating to be closer to family didn’t start during the pandemic, but Lautz says the COVID-19 outbreak accelerated that trend. In past years, convenience to work and affordability had ranked as top factors for reasons to move.

The 2021 NAR report comprises a year of research on buyers and sellers who purchased or sold a home during the COVID-19 pandemic. In addition to various other findings, the pandemic likely spurred occupants to shorten their home stay, as tenure in the home decreased to eight years from 10 years, according to the report – the largest single-year change in home tenure since NAR began collecting such data.

In general, buyers expected to live in their homes for a median of 12 years, while 18% said that they were never moving. Historically, tenure in the home has been six to seven years, but it increased to nine to 10 years following the Great Recession.

“Home sellers have historically moved when something in their lives changed – a new baby, a marriage, a divorce or a new job,” says Lautz. “The pandemic has impacted everyone, and for many this became an impetus to sell and make a housing trade.”

The market over the last year saw homes reach record-high prices, paving the way for sellers to secure maximum profits on transactions as buyers grappled with historically high housing costs. As a result, most homebuyers typically paid 100% of the seller’s asking price, with one out of three (35%) paying more than the asking price. That 100% median is the highest recorded since 2002.

Home sellers sold their homes for a median of $85,000 more than their originally purchase prices, a jump from $66,000 last year.

Buyers’ challenges

“Buyers moving quickly during the pandemic, coupled with all-time-low inventory, led to a decline in time on market to the shortest ever recorded, which was just one week,” says Lautz. “Only a quarter of home sellers offered incentives to entice potential buyers, down from nearly half of all sellers the year prior.”

On average, buyers said finding a home to purchase took eight weeks, unchanged from last year, with 43% of buyers saying virtual property tour options were useful. For a second straight year, buyers said that finding the right home was “the most difficult task” in the homebuying process.

The first step taken by 41% of recent buyers? They looked online for properties but 19% said the first step involved contacting an agent.

Agents role in home buying

Most buyers and sellers eventually turned to a real estate agent or broker to assist in their home transaction: 87% of buyers purchased their residence through an agent or broker, and 7% bought directly from a builder or builder’s agent. Among home sellers, 90% worked with an agent, while 7% opted for-sale-by-owner sellers; less than 1% sold via an iBuyer.

Almost half of all buyers (47%) found their agent thanks to a referral by a friend, neighbor or relative, and 13% used an agent that they had already worked with on a past transaction.

Three out of four buyers (73%) of buyers interviewed only one real estate agent during their home search, and almost all (90%) said they would use that agent in the future or recommend the agent to others.

For sellers, 68% became acquainted with their agent via a referral or had used the agent before, and 82% said they contacted only one agent before finding “the right agent” to sell their property.

Of sellers who also planned to buy another home, 53% used the same agent for both transactions, and 89% would recommend that agent for future residential dealings. Typically, sellers have recommended their agent twice since selling their property, though 27% referred their agent four or more times since selling their home.

“Realtors stepped up in a tremendous way during this pandemic – both in helping sellers list and sell properties, as well as in aiding buyers in finding their dream home during a time of such scarce inventory,” says NAR President Charlie Oppler.”

First-time homebuyers

The share of first-time homebuyers increased from 31% to 34% – the largest jump since 2017. The typical first-time buyer was 33 years old, the same as in 2020. But the typical repeat buyer’s age continued to climb, reaching an all-time high of 56 years old this year.

“As home prices increase, generally first-time buyers are hit hardest because they have no previous home on which to draw equity,” says Lautz. “Furthermore, in the current environment, these buyers also face soaring rent prices and high student debt balances, which make it extremely difficult to save for a down payment.”

One out of four (28%) of first-time buyers used a gift or loan from friends or family to make a down payment on a home, and 29% said saving for a down payment was the most difficult step in the entire buying process. For repeat buyers, 56% used equity generated from the sale of a primary residence toward their down payment. For first-time buyers, the typical down payment was 7%; for repeat buyers, it was 17%.

Fewer married homebuyers

NAR cites a “notable revelation in the report” – the slight decline in married homebuyers. This year’s data showed that 60% of recent buyers were married, but that share has fallen from a high of 81% in 1985.

However, the share of single women buyers increased to 19% from a recent low of 15% in 2014. The shares of single men and unmarried buyers remained at 9%, respectively.

© 2021 Florida Realtors®

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NAR 3Q Sales: Prices Up Double Digits in 4 Out of 5 Metros

Prices rose in 99% of the 183 markets NAR measures quarterly, and 16% (to $363,700) overall. Of the top 10 metros for year-over-year price gains, five are in Fla.

WASHINGTON – In the third quarter of 2021, strong buyer demand and limited housing supply led to median sales prices rising for existing single-family homes in all but one of 183 markets measured by the National Association of Realtors® (NAR).

NAR’s latest quarterly report found that four out of five (78%) of 183 markets saw double-digit year-over-year price increases, though that’s fewer than in the second quarter (94%). Three metro areas saw price gains over 30% year-to-year – but again, fewer than the number in the previous quarter.

“Home prices are continuing to move upward, but the rate at which they ascended slowed in the third quarter,” says Lawrence Yun, NAR chief economist. “I expect more homes to hit the market as early as next year, and that additional inventory, combined with higher mortgage rates, should markedly reduce the speed of price increases.”

The median sales price of single-family existing homes climbed 16% from one year ago to $363,700, a slower pace in comparison to the preceding quarter (22.9%). All four major regions had double-digit year-over-year price growth, led by the Northeast (17.5%), followed by the South (14.9%), the Midwest (10.7%) and the West (10.3%).

Five of top 10 year-to-year price gains in Fla. metros

The markets with the highest year-over-year price gains were:

  1. Austin-Round Rock, Texas (33.5%)
  2. Naples-Immokalee-Marco Island, Fla., (32.0%)
  3. Boise City-Nampa, Idaho (31.5%)
  4. Ocala, Fla. (29.7%)
  5. Punta Gorda, Fla. (27.5%)
  6. Salt Lake City, Utah (26.2%)
  7. Phoenix-Mesa-Scottsdale, Ariz. (25.8%)
  8. Sebastian-Vero Beach, Fla. (25.7%)
  9. Port St. Lucie, Fla. (24.9%)
  10. New York-Jersey City-White Plains, N.Y.-N.J. (24.5%)

“While buyer bidding wars lessened in the third quarter compared to early 2021, consumers still faced stiff competition for homes located in the top 10 markets,” says Yun. “Most properties were only on the market for a few days before being listed as under contract.”

The most expensive markets in the third quarter were San Jose-Sunnyvale-Santa Clara, Calif. ($1,650,000); San Francisco-Oakland-Hayward, Calif. ($1,350,000); Anaheim-Santa Ana-Irvine, Calif. ($1,100,000); Urban Honolulu, Hawaii ($1,047,800); Los Angeles-Long Beach-Glendale, Calif. ($860,900); San Diego-Carlsbad, Calif. ($850,000); Boulder, Colo. ($769,400); Seattle-Tacoma-Bellevue, Wash. ($708,400); Bridgeport-Stamford-Norwalk, Conn. ($658,900); and Boston-Cambridge-Newton, Mass.-N.H. ($657,800).

In the third quarter, the average monthly mortgage payment on an existing single-family home – financed with a 20% down payment, 30-year fixed-rate loan – rose to $1,214, a $156 year-to-year increase. With the price of a typical existing single-family home growing by $50,300, the mortgage payment climbed even as the average mortgage rate in the third quarter fell to 2.92% from 3.01% one year ago.

Among all homebuyers, the monthly mortgage payment as a share of the median family income increased to 16.6% (14.9% in 3Q, 2020). For first-time buyers, the typical mortgage payment on a 10% down payment loan increased to 25.2% of the median family income (22.6% one year ago). A mortgage is considered affordable if the payment amounts to no more than 25% of the family’s income.

“For the third quarter – and for 2021 as a whole – home affordability declined for many potential buyers,” says Yun. “While the higher prices made it extremely difficult for typical families to afford a home, in some cases the historically-low mortgage rates helped offset the asking price.”

A family typically needed an income of more than $100,000 to affordably pay a 10% down payment mortgage in 17 markets, matching the prior quarter. In 83 markets, a family typically needed an income of less than $50,000 to afford a home (85 markets in the prior quarter).

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Average Mortgage Rates Dip Below 3% Again This Week

The fear of rapidly rising mortgage rates appears exaggerated, as this week’s 30-year, fixed-rate mortgage averaged 2.98% compared to last week’s 3.09%

WASHINGTON (AP) – Average long-term mortgage rates in the U.S. fell this week, as the key 30-year rate again retreated below the 3% mark.

Mortgage buyer Freddie Mac reported Wednesday that the average rate on the benchmark home loan declined to 2.98% from 3.09% last week. Last year at this time the rate stood at 2.84%.

The rate for a 15-year loan, a popular option for homeowners refinancing their mortgages, fell to 2.27% from 2.35% last week.

Rates remain historically low, though limited inventory and rising prices are leaving many potential homebuyers on the sidelines.

Freddie Mac economists attributed the latest decline in mortgage rates to a recent rally in prices in the Treasury bond market, which saw yields on key Treasurys falling to their lowest level since July. Long-term bond yields, which can influence rates on mortgages and other consumer loans, generally fall when bond prices rise.

Last week the Federal Reserve announced that it would keep its main borrowing rate near zero but begin dialing back the extraordinary stimulus it has provided since the coronavirus pandemic erupted last year. The Fed said it will start reducing its $120 billion in monthly bond purchases in the coming weeks, by $15 billion a month, citing an improving economy and escalating concern that an inflation spike now seems likely to persist.

The central bank’s action comes as higher prices for just about everything – food, rent, heating oil, autos and other necessities – have burdened households. Fueling the spike in prices has been robust consumer demand, which has run into persistent supply shortages from COVID-related factory shutdowns in China, Vietnam and other overseas manufacturers.

The worsening surge of inflation for bedrock necessities is setting many Americans up for a financially difficult Thanksgiving and holiday shopping season. The government reported Wednesday that prices for U.S. consumers jumped 6.2% in October compared with a year earlier – leaving families facing the highest inflation rate since 1990. From September to October, prices jumped 0.9%.

Inflation is eroding the strong gains in wages and salaries that have flowed to U.S. workers in recent months, posing a political threat to the Biden administration and congressional Democrats and intensifying pressure on the Fed as it considers how fast to withdraw its efforts to boost the economy.

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Tenant Screeners Can’t Compare Names and Draw Conclusions

Screening tenants is okay but only if based on valid data. A CFPB rule, backed by HUD, says relying on “same name comparisons” is a fair housing violation.

WASHINGTON – The CFPB issued an advisory opinion affirming that consumer reporting companies, including tenant and employment screening companies, violate the law if they engage in shoddy name-matching procedures.

CFPB didn’t explain why it thinks some tenant screeners’ algorithms might base part of a review on a check of people with the same name. However, regulators said they’re concerned about disqualifying an applicant from rental housing or a job simply because they have the same name as another individual with negative information in their credit history.

Specifically, the CFPB affirmed that the practice of matching consumer records solely through the matching of names is illegal under the Fair Credit Reporting Act.

CFPB says the risk of mistaken identities from name-only matching is likely to be greater among Hispanic, Black and Asian communities because there is less surname diversity in those populations.

“When background screening companies and their algorithms carelessly assign a false identity to applicants for jobs and housing, they are breaking the law,” says CFPB Director Rohit Chopra. “No one should lose out on a job or an apartment because of sloppy and illegal matching. Error-ridden background screening reports may disproportionately impact communities of color, further undermining an equitable recovery.”

Federal Trade Commission Chair Lina M. Khan says it’s discrimination “based on careless errors.”

In the United States, most landlords and employers rely on tenant screeners and employment background checks when deciding whether to accept a rental application or offer someone a job. Some of the companies providing these services are subsidiaries of the nationwide credit reporting agencies, while others are newer entrants to the background screening industry. Because of the scale of background screening activity, even low error rates can harm significant numbers of consumers.

The CFPB says that federal courts have consistently found that the use of name-only matching procedures – when a consumer reporting company uses only first and last name to determine whether a particular item of information relates to a particular consumer, without using other personally identifying information such as address, date of birth or Social Security number – does not assure maximum possible accuracy of consumer information.

The advisory opinion does not create a safe harbor to use insufficient matching procedures involving multiple identifiers. Other practices, for instance the same name combined with a date of birth, could also lead to cases of mistaken identity.

CFPB says it will be working with the Federal Trade Commission to root out illegal conduct in the background screening industry. Background screening companies found in violation of the Fair Credit Reporting Act can be liable for civil penalties, restitution for victims, damages, and other relief.

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Cybersecurity and Real Estate: You Need Protection Now

Good cyber hygiene keeps potential attacks from becoming successful security breaches. Cybercrime’s cost is projected to rise 15% per year for five years.

NEW YORK – Cybercrime increased across all industries and is projected to cost 15% each year for the next five years, reaching $10.5 trillion annually by 2025.

According to Tansey Soderstrom, president of the Orlando Regional Realtor Association, it’s essential for real estate businesses and clients to develop good cyber hygiene practices, such as not clicking on unknown attachments or links, not using public Wi-Fi and not using weak passwords.

Agents and brokers should create complex passwords that combine numbers, letters and symbols, and those passwords should be changed regularly for data security. They should even consider using a password manager and the “generate password” feature to ensure strong passwords.

Before submitting legal documents and proprietary information online, real estate professionals should double check that the URL isn’t associated with a bogus website. One way to determine that a website is fake? A misspelled URL.

Real estate professionals should also look for the padlock symbol on websites, indicating that site is secured by a TLS/SSL certificate that encrypts user data.

Some hackers send homebuyers a spoofed email that appears to come from a legitimate source with instructions for last-minute changes to the wiring instructions. As a result, agents should ask clients to confirm wiring instructions by phone.

Other tip: Hire an attorney to write a disclosure that warns clients of the possibility of transaction-related cybercrime.

Source: RISMedia (10/26/21) Soderstrom, Tansey

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RE Agents Prepare for Foreign Buyers’ Return as Travel Ban Ends

MIAMI – The gates are opening, and residential agents in major U.S. markets such as New York and Miami are preparing for a resurgence of foreign buyers.

Prospective buyers who have been sitting on the sidelines since the pandemic began last year are setting up appointments with their agents in the U.S. now that the travel ban has been lifted on Monday for 33 countries, including some in the European Union, the United Kingdom, China, Canada, Mexico, Brazil and India.

Foreign purchases of U.S. homes plummeted from April 2020 to March 2021, according to the National Association of Realtors, down 27 percent to $54.4 billion, compared to the previous year.

While those buyers were absent, housing prices skyrocketed and inventory fell to record lows in some cities.

Broker Enzo Rosani, a partner with Barnes International in Miami who works primarily with European clients, said his buyers are coming to South Florida “all at once” now that the ban has lifted. He’s been preparing for them by finding them short-term rentals and setting up showings and appointments at sales centers. His clients are looking at condos priced from about $700,000 to $2 million and up.

Supply is a problem, especially as Miami enters its high season. In South Florida, single-family home sales have soared over the past year and a half, with many locals now priced out of the market and opting for condos.

“The market is super intense and inventory is low,” Rosani said, citing a heightening of bidding wars. He’s been setting up as many showings as possible to give his clients options. “Europeans hate [bidding wars]. As soon as they feel rushed, it’s a turnoff.”

Craig Studnicky, broker and CEO of International Sales Group in South Florida, said “every single Realtor” in the region has been hearing from their international clients, particularly from Canada, Colombia and Peru.

“I think they’re going to be mostly disappointed with the lack of supply of houses,” Studnicky said. “There’s just not that much to buy, so they’re going to be highly frustrated with that reality. But there are condos to buy.”

Brokers have also been traveling outside the U.S. to showcase new condo developments.

Edgardo Defortuna, president and CEO of the Miami-based brokerage and development firm Fortune International Group, said his agents have been traveling to promote preconstruction projects in Mexico, Chile, Argentina and Peru.

Foreigners immediately began booking their flights to major U.S. cities when the White House announced the Covid-19 border restrictions for fully vaccinated international visitors would be lifted Nov. 8.

Brown Harris Stevens broker Martha Kramer noticed her phone buzzing with notifications, her clients abroad telling her they were eager to set up appointments to view New York City listings in person.

“These are people who are used to traveling, who are not used to being told you cannot travel to XYZ,” Kramer said. She likened the last year and a half, for them, to being in a prison.

While some travel exemptions allowed visitors to the U.S., many clients like hers had gone nearly two years without physically touring listings, opting instead to make deals virtually, sight unseen.

That was especially the case for those looking to lock down purchases of primary residences, some brokers said. Yet, when it came to investment properties and pieds-à-terre, buyers preferred to wait. With border restrictions now lifted, it’s expected that those buyers will be making major money moves.

Charlie Attias, a top broker at Compass in New York City, started prepping months ago for the wave of buyers he’s expecting. The appointments he has lined up are unheard of at this time of year, when the sales market in the city usually slows amid the holiday season. Several of his clients are coming to view listings between Christmas and New Year’s.

The arrival of international buyers comes as the Manhattan residential sales market is on fire, with the third quarter the busiest in decades. Though activity accelerated, supply remained higher than usual, so prices held steady.

Stan Ponte, Sotheby’s International Realty’s senior global real estate advisor in New York, called the return of foreign buyers the “perfect puzzle piece” that could change that. They could soak up inventory and put pressure on prices to drive them upward.

While he doesn’t have dozens of appointments scheduled in the next few weeks, the number (which he declined to specify) is enough for him to say that the influx is only beginning.

“We know it’s happening, and we’re ahead of it,” Ponte said. “Every article is talking about the overall economic impact of foreign travel. When those things are happening, real estate happens.”

Status quo

Some brokers, on the other hand, suggested that the lift in travel restrictions wouldn’t change the fact that many serious buyers were already OK with purchasing homes virtually, said Hala Adra, a broker in one of Compass’ D.C. offices. Ongoing visa backlogs are also an issue of concern, Hala said, adding that some clients had visa appointments delayed until 2022.

“For me, Nov. 8 is [just] a date,” Adra said. “We’re still going to see a delay of international people coming physically here, unless they’re here on a student visa, or it’s facilitated by the international organization they work for here. If they’re coming on their own, the schedule for the appointment at their local embassy is delayed.”

In Los Angeles, brokers aren’t expecting a massive wave of international buyers, but are expecting activity to pick up – especially in the ultra-luxury market.

Unlike New York and Miami, the L.A. market hasn’t been affected by a major loss of international buyers over the last few years, given that most real estate is snapped up by domestic clients, said Compass broker Ari Afshar.

Afshar said he’s been talking with international brokerages, but has had “mixed signals” in expected U.S. buying activity.

“I think it’ll be a wait and see,” he said.

Stephen Shapiro, who leads L.A. luxury brokerage Westside Estates Agency, said he’s not expecting a massive influx of buyers, as his clients have always mostly been from the U.S.

“We focus on local buyers,” he said. “When an international buyer does come in, we’re prepared to service them.”

Los Angeles has never experienced the same share of international buyers as New York or Miami, brokers agreed. Eastern time is generally preferable for both Asian and European buyers, and South American investors have tended to gravitate toward Miami.

Still, ultra high-net-worth buyers from abroad have historically flocked to L.A. neighborhoods like Beverly Hills, Holmby Hills and Brentwood, and international buyers could return to that high-end housing market.

Some brokers have already seen an increase in activity. Douglas Elliman has had high-net-worth buyers from Russia and Japan express interest in high-end properties in these neighborhoods, according to Stephen Kotler, who leads the brokerage’s West Coast operations.

Compass broker Carl Gambino, who also operates in New York and Miami, agreed. He expects international buyers will start to swarm L.A.’s ultra-luxury market this month.

While many foreign buyers weren’t able to travel to the U.S. since last March, domestic buyers took over, especially in states that include Florida and Texas. That could now change.

“We have had essentially an American market for the past five, six years. It has been red, white and blue all the way,” said Dora Puig, a top luxury broker in Miami Beach. “I just think we’re going to get a tsunami of foreigners coming to the market. I told my team, ‘brace yourselves.’”

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Homes Sell at Fast Pace for 8th Month in a Row in Oct.

SANTA CLARA, Calif. – New housing data shows 2021’s home sales broke a yearly record in October, even as fall sales activity followed steadier seasonal pattern, according to Realtor.com®’s latest Monthly Housing Report.

With last month marking the eighth straight month of buyers snatching up homes more quickly than the fastest pace in previous years and fewer new sellers entering the market than last year, inventory took a slight step back from recent months’ improvements.

“The year may be winding down, but 2021’s feverish pace of home sales continues to hit new records. Despite returns to more typical pre-COVID seasonality, which means a slower fall versus summer season, October housing data suggests that demand is still unseasonably high,” said Realtor.com Chief Economist Danielle Hale.

She added, “A number of factors could be enabling buyers to persist, including rising mortgage rates and surging rental prices. Looking at the bigger picture of the pandemic, increased adoption of technology could be playing a key role in helping buyers move further along in the process virtually. With these ‘serious searchers’ – some of whom have been planning to buy since before the pandemic – better prepared to jump on new listings quickly and keeping inventory tight, mismatched supply and demand will continue to challenge buyers eager to move on to the next phase of life.”

2021’s feverish pace of home sales hits eighth month record

Fall buyers have a few more days to make decisions relative to the competitive spring and summer, but home shoppers still need to be prepared to act quickly. In each month from March-October 2021, the typical U.S. home spent fewer days on market than in the fastest-selling month in 2016-2020.

Additionally, homes sold within a month or less in nearly one-quarter of the 50 largest U.S. markets, while buyers in just four metros saw an increase in time on market in October.

The typical U.S. home spent 45 days on market in October, moderating slightly from last month’s pace (43 days.) However, homes still sold more quickly than in any October in recent history, including 2020 (-8 days) and 2019 (-21 days).

Relative to national time on market in October, homes sold at a faster pace in the 50 largest U.S. metros in October, at an average of 39 days (-8 days year-over-year).

The South continued to lead in yearly declines in time on market (-10 days) by region and in terms of the top five fastest selling metros compared to last year, which were: Miami (-31 days), Raleigh (-30 days), Jacksonville (-17 days), Orlando (-17 days) and Memphis (-16 days).

Inventory improvements stall 

The number of homes for sale in the U.S. continues to lag, reflecting the mismatch of strong buyer demand with more typical fall seller activity levels. While October saw fewer new sellers than last year, a number of factors suggest that buyers are still relatively active, including the record-fast home sales pace. Additionally, on realtor.com, every month in 2021 since January has seen a higher number of pending listings – where the seller has already gone under contract with a buyer – than active listings, or those without a contract.

With buyers still searching, the majority of for-sale homes already under contract and fewer new listings coming onto the market in October, active inventory took a step back from yearly improvements seen since June.

The active inventory gap from last year shrunk slightly in October (-21.9%) over last month (-22.2%), but saw a smaller improvement than from June (-43.1%) to July (-33.5%). Compared to 2019, there are fewer than half (-51.9%) as many homes for-sale nationwide.

Nationally, new listings declined 2.3% from 2020 in October, with the biggest drops registered in the northeast (-8.5%) and west (-8.0%). While big metros saw smaller new seller declines than last month, new listings remain 11.6% lower in 2017-2019.

From February-October of this year, the supply of actively-listed homes on realtor.com was outpaced by pending inventory, or listings that are under contract. This is the opposite of what occurred in a typical month from 2017-2019. Although the gap is shrinking from the peak difference seen in May (197,355), there were still 5,975 more pending than active listings nationwide in October.

Across the 50 biggest U.S. markets, active inventory declined by an average of 20.5% year-over-year and new listings were down 4.8% in October.

More new sellers entered the market than last year in over one-third (17) of big metros, with newly-listed homes posting double-digit gains in Austin (+15.3%), Memphis (+14.8%), Buffalo, N.Y. (+10.7%) and Jacksonville, Fla. (+10.3%).

However, there were fewer new sellers than last year in the majority of big metros in October, with new listings declining at a double-digit pace in markets like Raleigh (-15.8%). With the typical Raleigh home selling in just 19 days, the metro’s supply of active inventory remains at less than half of last year’s levels (-50.7%).

Sellers continue to ask for near-record high prices as home price gains continue

For the third straight month, the U.S. median listing price remained near record-highs and steadily increased at a strong single-digit pace in October. Price gains continue moderating from the double-digit pace seen earlier this year, a potential indication that the housing market is transitioning toward a more sustainable long-term growth pace. However, the spring and summer frenzy has made a lasting impact on affordability challenges as buyers continue to quickly buy up the tight inventory of existing homes, fewer new sellers enter the market and the new home supply gap widens.

The U.S. median listing price was $380,000 in October, remaining near July’s record-high for the third month in a row. National listing price growth also held steady at a high single-digit pace, up 8.6% year-over-year in October.

National listing price growth has been moderating from the double-digit pace seen earlier this year. However, this largely reflects a shift in the mix of for-sale inventory, with yearly median listing price growth for a typical 2,000 square-foot single family home still at double-digits in October (+16.7%). Additionally, the share of sellers making listing price adjustments[1] still lags behind 2018-2019 levels, despite growing 0.8% year-over-year in October.

The 50 largest U.S. markets saw a slight uptick in annual listing price growth in October, increasing by an average of 5.2% versus last month’s rate of 4.1%. The western (+9.7%) and southern regions (+9.4%) led the nation in annual listing price gains, up by at least 18% in metros like Austin (+35.2%), Las Vegas (+27.2%), Tampa (21.8%), Orlando (+20.0%) and Denver (+18.3%).

Methodology: Realtor.com’s housing data as of October 2021. Listings include active inventory of existing single-family homes and condos/townhomes for the given level of geography; new construction is excluded unless listed via the Multiple Listing Service (MLS). Price adjustments are defined as home listings that had their price reduced in October 2021. Listings that had their prices increased during the month are excluded.

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