Gerry Wolff




Study: Florida property taxes average compared to other states


WASHINGTON – March 1, 2017 – The average American household spends $2,149 on real estate property taxes each year, plus another $402 for residents of the 27 states with vehicle property taxes. With such high costs, it's no surprise that about $11.8 billion in property taxes go unpaid each year, according to the National Tax Lien Association.

To determine who pays the most relative to their state, WalletHub, a personal-finance website created a 2017 Property Taxes by State report.

Overall, Florida ranks near the middle for property taxes – No. 27 out of 50 states – even though it's one of only a handful of states without a personal income tax. In addition, WalletHub looked at vehicle property taxes paid each year, and Florida is one of the 24 states that don't charge any vehicle tax.

  • Real-estate property tax rank: No. 27
  • Vehicle property tax rank: No. 1
  • Real estate tax on median state home value: $1,686
  • Real estate tax on median U.S. home value: $1,894
  • Vehicle property tax on best-selling car: $0.00

© 2017 Florida Realtors


Will immigration reform impact
Florida real estate?


ORLANDO, Fla. – March 1, 2017 – Orlando real estate broker Rosana Almeida, who specializes in sales to international buyers, met with investors in Mexico last year, but said the business climate there isn't ripe for a return this year.

Potential buyers at a sales expo three months ago in Mexico City raised concerns about purchasing real estate in a country with shifting travel, immigration and trade policies, Almeida said. Brazilian buyers have voiced similar concerns, she added.

"People are asking more questions than they used to," said the longtime agent, who surveyed her agents. "They ask: 'If I buy a property in Florida, can I have a different kind of green card?' And I tell them one thing has nothing to do with another."

Supporters of President Donald Trump say his experience with foreign capital in real estate ventures will benefit the U.S. Others, though, question whether his policies will send a message that the U.S. is not as friendly to people from other countries as it had been in the past.

Without question, said Margaritaville Orlando Resort Partner James Bagley, vacation home buyers from other countries have become more cautious about spending time and money in Florida and the U.S. as a whole.

"The international market is very sensitive to political overtures, and there's a growing sense of caution," Bagley said. "When political leaders create an atmosphere of populism and nationalism, our international visitors take note. And as people become cautious, they put the brakes on their wallet."

Orlando, and Florida in general, are among the few U.S. markets that have been flush with international buyers. Last year, the state garnered 22 percent of U.S. purchases made by foreign buyers, according to the National Association of Realtors. With foreign buyers purchasing an estimated $102 billion of U.S. real estate in 2016, the market is sizable.

Foreign buyers have helped hoist Florida's real estate market into recovery at a slightly faster rate than domestic buyers, according to a study by Trulia. The state's homeownership rate for foreign-born buyers increased 5 percent during a five-year period that ended in 2014, a greater increase than 41 other states. Meanwhile, Florida's homeownership rate for buyers from the United States increased by just 4 percent during that time.

For now, Bagley said, traffic and sales have not changed markedly, "but we're getting a lot of questions on the sales floor."

"Obviously, our Mexican clientele is cautious," Bagley said. "They want to understand what the new administration policies mean for them."

A strong dollar and rebounding home prices have already begun to diminish the state's star power among international buyers. Even though Florida was still the top state for those buyers last year, the Sunshine State's share of U.S. sales to foreign buyers slid to 22 percent last year from 31 percent five years earlier, according to reports by the National Association of Realtors.

In Celebration, LaRosa Realty agent Victor Nawrocki said Central Florida's appeal to foreign buyers is particularly important because they typically purchase second homes, and those aren't essential if times get tough.

"I'm taking a wait-and-see attitude myself," said the agent based in Osceola County. "But anytime there's uncertainty, people get concerned. If the economy crashes, their second home is the first thing to go."

Almeida and other real estate agents say it's too early to tell if President Trump's select travel bans, tougher immigration policies and proposals to increase trade tariffs could impact Central Florida's slice of the international real estate market. She said she expects to know more after upcoming visits to countries including Colombia in March, Brazil in April and Europe in May.

Orlando real estate agent Theodora Uniken Venema said she caters to buyers from the Netherlands, and they are more interested in bottom-line returns on investment than currency exchange-rate fluctuations and rhetoric about foreign policy.

"They've been investing in the U.S. for 400 years," she said. "They come to U.S. for opportunity. There are tax advantages regardless of whether the dollar is high or low. For commercial investors, the numbers have to work. They don't care what the media says or what's on CNN."

Trulia Chief Economist Ralph McLaughlin said international buyers are likely to be "spooked" by the uncertainty around immigration and travel policies, even though their decisions are based more on the movement of capital than immigration.

"Thus far, there are few, if any, signs that the federal government will restrict movement of dollars into the U.S.," McLaughlin said. "In fact, the new administration is more concerned about the movement of capital leaving the country."

Copyright © 2017 The Orlando Sentinel (Orlando, Fla.), Mary Shanklin. Distributed by Tribune Content Agency, LLC.


Florida ranks high in master-planned community home sales


SARASOTA, Fla. – Jan. 17, 2017 – Florida continues to be a national leader in home sales within master-planned communities. The state posted 11 communities on John Burns Real Estate Consulting's list of the top-selling master-planned communities in the country. Florida trailed only Texas, which had 16 communities, and California was third with eight.

Florida, Texas and California also account for 60 percent of the top 20 master-planned communities in terms of total home sales volume, according to a new report from real estate research firm RCLCO.

Affordability, at least in some cases, and demographics are two key reasons why Florida is such a hotbed for master-planned communities.

For example, Ave Maria in Naples, which ranked No. 35 on the John Burns Top 50, has seven active neighborhoods with prices starting in the low $200s. And the first age-targeted neighborhood at FishHawk Ranch, No. 47, has been a success.

Source: Business Observer (Florida) (01/13/2017)  © Copyright 2017 INFORMATION, INC.


Builders predict big expansion in construction


WASHINGTON – Jan. 17, 2017 – Construction of single-family homes is expected to gradually rise this year, as a growing economy, solid employment gains and rising household formation buoys builders' forecasts.

Last year, the National Association of Home Builders projected 1.16 million total housing starts in 2016, which was up nearly 5 percent from the previous year. Now NAHB is forecasting a 10 percent increase in single-family production for 2017 and a 12 percent rise for 2018.

Still, there will be pressing challenges as builders look to increase their supplies this year.

"While positive developments on the demand side will support solid growth in the single-family housing sector in 2017, builders in many markets continue to face supply-side constraints led by the three Ls – lots, labor and lending," says NAHB chief economist Robert Dietz. Sixty-four percent of builders reported "low" or "very low" lot supplies. "The industry needs to recruit more workers and get more land in the pipeline, but it will take time."

Builders are particularly facing challenges building $200,000-range entry-level homes. Regulatory requirements comprise nearly 25 percent of the cost of a new home, which has made construction on lower-cost homes more difficult, Dietz says.

Nevertheless, townhome construction, which tends to appeal to younger buyers, is already showing significant growth, comprising 12 percent of all single-family starts, Dietz notes.

"As millennials age, that is a big potential base to expand the home buyer market," adds Frank Nothaft, CoreLogic's chief economist.

While higher mortgage rates may soften demand this year, builders remain upbeat. NAHB forecasts mortgage interest rates to average 4.5 percent in 2017 and then 5.3 percent in 2018.

"Higher mortgage rates will be offset by stronger wage gains and job growth, which suggests that housing demand will increase this year," says David Berson, chief economist for Nationwide Mutual Insurance Co. "The question is: How much will supply go up?"

Many metro areas nationwide are seeing solid job growth, dropping mortgage delinquency rates, and strong housing price gains, Berson notes. He says demand has been exceeding supply and likely will continue to do so in 2017. That could put more pressure on home prices, however.

"If there aren't enough homes on the market, that will be a problem," Berson syas. "Price gains need to moderate. We can't have 6, 7, or 8 percent gains. That is not sustainable."

Source: National Association of Home Builders  © Copyright 2017 INFORMATION, INC.


Floridian consumer confidence bumps lower in April


GAINESVILLE, Fla. – April 29, 2016 – Consumer sentiment fell 3.5 points in April to 90.6, according to the latest University of Florida (UF) consumer survey – the lowest since October and lower than the previous 12-month average.

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

Perceptions about personal financial situations now compared with a year ago showed the greatest decline in this month's reading: a 5.8-point change from 84.2 to 78.4.

"The decline in the perception of personal finances explains around one-third of the overall change in the index," says Hector H. Sandoval, director of the Economic Analysis Program at UF's Bureau of Economic and Business Research.

"The biggest drop was in those 60 and older, but this lower perception is shared in general by all Floridians," he adds.

The only component that increased focused on big-ticket purchases. Perceptions as to whether it's a good time to buy a big-ticket item, such as an automobile or appliance, inched up seven-tenths of a point to 102.1. Expectations of personal finances a year from now went down by 4.2 points to 101.5.

Both short- and long-run outlooks about the U.S. economy declined. Expectations of U.S. economic conditions over the next year decreased 3.3 points to 86.2; expectations of U.S. economic conditions over the next five years dropped 5.1 points to 84.9.

"Most of the pessimism in April stems from expectations about future conditions, which account for 70 percent of the drop in the consumer sentiment index," Sandoval says. While unfavorable views of the future were shared by all Floridians independent of their gender, age and income level, the sharpest declines were seen among those 60 and older and those with incomes less than $50,000.

Florida's unemployment rate declined again in March from 5.0 to 4.9 percent, according to the latest employment report. The number of jobs added in March statewide was up 234,300 year-to-year but only 3,000 month-to-month.

"Notably, this is the smallest monthly gain since May 2012," Sandoval says.

Professional and business services gained the most jobs this month, followed by education and health services; and the trade, transportation and utilities industry.

In the week ending April 16, the number of people in the U.S. filing for unemployment insurance fell to its lowest level since November 1973. The latest information for Florida also shows an important reduction in the initial claim of unemployment benefits during April.

© 2016 Florida Realtors®


People’s Trust limits water damage coverage


DEERFIELD BEACH, Fla. – April 29, 2016 – Deerfield Beach-based People's Trust Insurance has become the latest property insurer in Florida to exclude coverage of water damage on homes over 40 years old. Instead, the company offers $10,000 in limited water damage coverage as an option.

The company blamed the decision on sharp increases in non-weather-related water damage claims and losses.

The change took effect April 15 for new People's Trust customers and will begin on June 15 for renewing customers.

Attorneys who represent policyholders in suits against insurance companies criticized the changes, saying they'll leave customers unable to afford to repair their homes after a major water emergency. Major drainage pipe breaches, they say, often cause tens of thousands of dollars in damage to floors, walls, ceilings and contents.

People's Trust notified agents of the change this month and is sending notices to renewing customers, spokeswoman Michelle Ubben said by email.

Responding to questions about the exclusion, People's Trust said in an emailed statement: "Our new approach for policy sub-limits on older homes was needed in order to keep rates affordable and protect the financial strength of the company to ensure that we have the financial resources to be here when our policyholders need us most – whether it is after a storm or a true household emergency."

The exclusion removes water damage – including penetration through roofs or walls and discharge from plumbing, heating, air conditioning units, sprinkler systems or household appliances – as a covered peril for any home more than 40 years old.

New customers will be able to purchase $10,000 in water damage coverage as an option, and renewing customers will see the limited coverage automatically added to their next year's policies but can opt to remove it for a premium discount, Ubben said.

Water damage will be covered as before for homes 40 years old or newer, but policyholders will be able to "opt for the new coverage terms in order to enjoy a significant savings on their premiums," People's Trust said.

State insurance regulators approved the coverage changes in February after reviewing income and loss data submitted by the company.

In adding the exclusion for homes over 40, People's Trust joins other Florida companies, including Federated National, Tower Hill, Heritage, United Property & Casualty and Southern Oak.

Ubben said People's Trust, like many insurers in Florida, has experienced sharp increases in non-weather-related water damage claims over the past few years.

The number of such claims by People's Trust policyholders increased by 61 percent between 2014 and 2015, from 3,697 to 5,941, according to data provided by the company. Of the 2015 claims, at least 2,253 resulted in losses of $10,000 or more. Meanwhile, the company's policy count grew just 12 percent, from 135,006 to 151,552, between 2014 and 2015.

Lawsuits filed against People's Trust also rose sharply in recent years – from 78 in 2013 to 751 in 2015, state records show.

The effect of the water damage exclusion is likely to be felt more strongly in South Florida, where homes are older than the state average and where insurers say a disproportionate amount of water damage claims originate. About 43 percent of all People's Trust policies were in the tri-county area at the end of 2014, according to data submitted by the company to state regulators.

The changes come as property insurers are raising premiums and cutting costs in response to sharp increases in water damage claims and related litigation.

Coverage restrictions sought by state-run Citizens Property Insurance Corp. – and approved by state regulators in March – prompted a rush of identical requests by private insurers. Citizens has warned of steep rate increases in South Florida, including 10 percent annual rate increases in Miami-Dade County, if remedies aren't found.

Citizens is creating an optional managed repair program inspired in part by programs in place at People's Trust, Florida Peninsula and Heritage. Managed repair programs keep costs lower for policyholders who agree to report damages to insurance companies first and allow the companies to control who makes the repair.

Like Heritage and Florida Peninsula, Citizens plans to contract with an outside company to manage the program. People's Trust is unique because it created an affiliated company, the Rapid Response Team, to directly handle the repairs.

Increased water damage claims at People's Trust occurred despite the managed repair program.

Miami-based insurance agent Dulce Suarez-Resnick said she understands the need for companies to lower costs by imposing the water damage exclusion. "People's Trust was giving it away [with lower premiums] and it was just a matter of time before it caught up to them," she said.

But attorneys who represent homeowners were critical.

Joe Ligman, a Miami-based attorney, said limiting coverage to $10,000 for homes over 40 "is a joke as the burst pipe and collapsed drain pipe case are usually far greater in damage value than $10,000."

Ely Levy, based in Hollywood, said, "What is even more troubling about the exclusion of all water losses is that the carriers pitch this to consumers like it will be beneficial for them when that is hardly the case."

Kenneth Duboff, based in North Miami, said many homeowners probably won't become aware of the change until "one day a burst pipe that has been hidden behind a wall or underneath the floor suddenly causes thousands of dollars worth of damage." He added, "That type of catastrophe is exactly what a homeowner's insurance policy should cover and the homeowners would reasonably expect to be insured against."

Consumers who expect various companies' insurance offerings to be more or less the same are in for a surprise, said Lee Jacobsen, vice chair of the Florida Justice Association's property insurance legislative committee. "The pendulum has swung lately to [state regulators] letting companies do what they please," he said, "and it's only after a storm hits that we're going to realize what's been taken away."

© 2016 the Sun Sentinel (Fort Lauderdale, Fla.), Ron Hurtibise. Distributed by Tribune Content Agency, LLC.


Flood insurance solution takes big step forward


WASHINGTON – April 29, 2016 – Property owners who opt to purchase flood insurance in the private market rather than through the National Flood Insurance Program (NFIP) may do so under current rules, but they may be charged higher rates if they want to return to NFIP coverage.

But there's hope for a change: H.R. 2901, the "Flood Insurance Market Parity and Modernization Act," unanimously passed the U.S. House of Representatives Thursday. It now goes to the Senate for consideration. If approved by the Senate, it then needs President Obama's signature to become law.

The National Association of Realtors® (NAR) backs the bill, which was introduced by two Florida representatives.

"NAR is grateful to Congressmen Dennis Ross (R-Fla.) and Patrick Murphy (D-Fla.) for their leadership on this important issue," said NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida.

"Realtors know that a robust National Flood Insurance Program is important for protecting consumers and ensuring property sales can move forward in 20,000 communities nationwide," says Salomone. "For many, the NFIP offers the only source of coverage that meets federally related mortgage requirements and protects properties in the 100 year floodplain."

But "consumers who wish to purchase insurance in the private market should have the freedom to do so," he adds. "This legislation will help foster a vibrant private flood insurance market while giving consumers the flexibility to return to the NFIP at a reasonable cost if they choose to."

Under current regulations, the NFIP requires homeowners to keep a minimum amount of flood insurance coverage to enjoy the program's lowest rates. If a homeowner leaves NFIP and opts for coverage from a private insurer, NFIP currently considers it a "break" in coverage, even if the private insurance product offers comparable coverage for the property. That "break" in coverage can then lead to higher rates for returning customers.

Sometimes consumers return to the NFIP when a private insurance product goes up in price or is no longer available. H.R. 2901 would change this by clarifying that private flood insurance that meets state law will be considered continuous coverage. If the bill becomes law, property owners could then move seamlessly between the NFIP and private insurance markets without a risk of arbitrary rate increases.

Earlier this year, NAR wrote to members of the House Financial Services Committee and asked them to support the bill, H.R. 2901. It later passed the committee by a unanimous vote, clearing the way for Thursday's vote on the House floor. NAR, along with members of the SmarterSafer coalition, also urged urge House Speaker Paul Ryan (R-Wis.) to bring the bill up for a vote.

NAR President Tom Salomone praised the bill's passage, calling it a step forward for reform of the broader flood insurance system.

© 2016 Florida Realtors®


In 9% of U.S. markets, an all-cash sale costs more


IRVINE, Calif. – April 28, 2016 – All-cash buyers of single-family homes and condos nationally paid 23 percent less per square foot than all homebuyers – but cash buyers in 9 percent of local housing markets paid a premium price per square foot, according to RealtyTrac's Q1 2016 U.S. Cash & Institutional Investor Housing Market Report.

In Florida, Naples made RealtyTrac's top five list of local markets where cash buyers paid more for a home than buyers who took out a mortgage – an average 3.9 percent more. In addition, Cape Coral-Fort Myers ranked eighth nationally with cash buyers paying 1.5 percent more.

"While large institutional investors and other cash buyers continue to shrink as a share of U.S. home sales, these buyers still typically beat out traditional buyers using financing – in some cases even when they submit a lower offer for a home," says Daren Blomquist, senior vice president at RealtyTrac.

Blomquist says that cash buyers often focus on properties in poor condition, which is another reason the average cash sale tends to be lower than other property sales.

"Markets where we see the opposite – with cash buyers actually paying a premium price per square foot – could be in danger of overheating," Blomquist adds. "In most markets, cash buyers act as an anchor for home values, but in these exceptions to the rule, cash buyers are acting as an oversized sail, catching more wind and pushing home price appreciation to a potentially precarious pace."

In the South Florida market, however, cash buyers continued to enjoy discounted prices compared to other buyers.

"Due to a loosening of credit with more loan options, low interest rates, along with an increase in first home buyers, the share of cash sales dropped 10 percent in each of our three South Florida counties year over year," says Mike Pappas, president and CEO at The Keyes Company in South Florida. "Even though the investor market has also diminished, cash investors are able to secure a 20 percent discount in purchase price over a traditional buyer in Broward County and a 15 percent discount in Palm Beach County, while the cash buyer discount in Miami-Dade County is at 5 percent."

Nationwide all-cash buyers purchased single family homes and condos for a median $91 a square foot in the first quarter of 2016, a discount of 23 percent below the median $118 per square foot for all home purchases.

Markets with biggest cash buyer discounts

Among 99 metropolitan statistical areas with at least 1,000 single family home and condo sales in the first quarter of 2016 with sufficient home price and loan data, cash buyers realized the biggest discounts in:

  • Baltimore (58.2 percent discount)
  • Harrisburg, Pennsylvania (52.0 percent discount)
  • Akron, Ohio (50.2 percent discount)
  • Birmingham, Alabama (49.3 percent discount)
  • Columbia, South Carolina (48.3 percent discount).
  • Cleveland, Ohio (47.4 percent discount)
  • Memphis, Tennessee (43.7 percent discount)

Markets where cash buyers paid a premium

  • Honolulu (6.6 percent premium)
  • Seattle (5.2 percent premium)
  • San Francisco (4.8 percent premium)
  • Naples, Florida (3.9 percent premium)
  • San Diego (2.5 percent premium)
  • San Jose, California (2.2 percent premium)
  • Los Angeles (2.2 percent premium
  • Cape Coral-Fort Myers, Florida (1.5 percent premium)
  • Oxnard-Thousand Oaks-Ventura, California (0.2 percent premium)

Institutional investors

Institutional investors – entities that purchase at least 10 single family homes and condos in a calendar year – accounted for 2.6 percent of all single family home and condo sales in the first quarter, down from 4.0 percent in the previous quarter and down from 3.4 year-to-year. The first-quarter drop was the 11th consecutive quarter where the institutional investor share of sales decreased on a year-over-year basis.

The share of institutional investor home purchases in the first quarter of 2016 decreased from a year ago in 87 of the 110 metro areas (78 percent)

Markets with highest share of institutional investors

  • Birmingham, Alabama (9.9 percent sold to institutional investors)
  • Augusta, Georgia (7.4 percent)
  • Memphis, Tennessee (7.0 percent)
  • York-Hanover, Pennsylvania (6.9 percent)
  • Atlanta (6.7 percent)

Biggest year-over-year increases in institutional investors

  • Birmingham, Alabama (up 582 percent)
  • Knoxville, Tennessee (up 98 percent)
  • Crestview-Fort Walton Beach, Florida (up 94 percent)
  • Pittsburgh, Pennsylvania (up 85 percent)
  • Albuquerque, New Mexico (up 84 percent)
© 2016 Florida Realtors®


Housing costs may prompt a population shift


ORLANDO, Fla. – April 27, 2016 – More residents of some of the nation's priciest areas are heading to new cities where housing costs are lower. High-priced areas like San Diego, Silicon Valley and some parts of Washington, D.C., are seeing fewer new residents.

On the other hand, lower-cost cities like Las Vegas, Phoenix and parts of Florida are seeing population gains, according to new U.S. Census data.

"Available and affordable housing may be the new piece in the continued gains in the Sun Belt counties," says William Frey, a demographer at the Brookings Institution. "The housing market is motivating some of the growth in Nevada as well as Florida, and maybe for Arizona too."

Arizona's Maricopa County – which includes Phoenix – saw its largest population gain in a decade in 2015. The county added 78,000 residents, Census data shows. Also, in Clark County, Nev. – which includes Las Vegas – the population grew by 46,000 last year, the county's largest uptick since 2007. Utah County, Utah – which includes Provo – saw a 14,000 jump, its largest gain since 2009.

On the other hand, cities that have traditionally been the leaders in population gains, such as Los Angeles; San Diego; Brooklyn, N.Y.; Silicon Valley; and suburban areas of Washington, D.C., are seeing smaller population growth. Santa Clara County – the location of Silicon Valley – saw 22,000 new residents in 2015, down from 25,000 in 2014 and the lowest number since 2006. In Silicon Valley, the median home price is also $950,000, the highest in the nation.

Source: "High Housing Costs Driving Population Shifts?" RISMedia (April 24, 2016)

© Copyright 2016 INFORMATION, INC.


Reverse mortgages safer but still have pitfalls


DETROIT – April 26, 2016 – Across the nation, a sticky subgroup of foreclosure cases involve reverse mortgages.

These are loans usually taken out by seniors – like the one taken out by the mother of Lela Whitfield, a Detroit woman who spent two years battling banks, Fannie Mae and attorneys to keep her late mother's house – which are heavily promoted in advertising and aimed at persuading older Americans to borrow using the equity in their homes. The attraction? Generally, there is nothing to be repaid until the borrower dies, moves out or sells the home.

Consumer groups have long railed against reverse mortgages, saying they were often misrepresented by eager salespeople, setting heirs of the borrowers up for shocking balances due on houses that children assumed they'd inherit debt-free.

Now, such groups as AARP and Consumers Unions – publisher of Consumer Reports magazine – are saying that safeguards added in recent years to reverse mortgages have earned them qualified approvals.

The May issue of Consumer Reports says 76 million baby boomers are "moving into the eligible age range for reverse mortgages." Many who failed to save enough for retirement may be tempted by the ready cash that springs from this type of loan. The magazine goes on to say that, despite the troubled history of reverse mortgages, they are now subject to tougher rules, including tighter borrowing limits and stricter financial requirements.

The National Reverse Mortgage Lenders Association has maintained that reverse mortgages are legitimate tools that can help those 62 and older ease the financial burden that often exists for some after they retire.

Still, the magazine says there remain plenty of ways a reverse mortgage can go wrong that can leave heirs or even a surviving spouse in financial straits and at risk of eviction. It also says that "at Consumer Reports we believe more reforms are needed."

In Detroit, "the biggest problem we're seeing with mortgages is the reverse mortgage problem," said Ted Phillips, executive director of the nonprofit United Community Housing Network, which battles on behalf of homeowners facing foreclosure.

After a borrower receives what feels like a windfall of free money from a reverse-mortgage lender, "they still have to keep the taxes current, still have to maintain the house, and still have to pay the insurance, which often is off the charts in Detroit," said Phillips, who along with the Housing Network's staff of lawyers and advisors helped to keep nearly 2,000 homes occupied by Detroiters from being lost to foreclosure in 2015, he said.

For more information: National Reverse Mortgage Lenders Association.

© 2016 Florida Realtors®


Home prices rise at solid pace even with flat sales


WASHINGTON (AP) – April 26, 2016 – U.S. home prices continued their steady upward march in February as buyers competed for a limited number of available properties.

The Standard & Poor's/Case-Shiller 20-city home price index rose 5.4 percent that month compared with a year earlier, according to a report released Tuesday. That's down slightly from January's 5.7 percent rise.

Prices are rising even as sales have leveled off in recent months. The number of homes for sale last month was 1.5 percent lower than a year earlier. That's pushed buyers to act quickly, with homes on the market just 47 days in March, according to the National Association of Realtors.

Svenja Gudell, chief economist at real estate website Zillow, said the problem is particularly acute for first-time buyers and those looking at mid-level homes.

"Heading into spring, buyers looking for the most expensive homes will find somewhat softening prices, a larger selection of homes to choose from and more limited competition," she said. "Entry-level and mid-market buyers – typically the housing market's bread and butter – are likely to face stiff competition, rapidly rising prices and very limited inventory. The patience of many buyers will be tested in coming months."

The highest year-over-year gains were in Portland, Oregon; Denver; and Seattle, three cities with rapid job gains, driven by burgeoning software and technology companies.

Home prices jumped 11.9 percent in February from a year earlier in Portland, 11 percent in Seattle and 9.7 percent in Denver.

Despite low mortgage rates and steady job gains, Americans have been cautious about buying homes this year. Sales of existing homes rose 5.1 percent in March to an annual pace of 5.33 million, partially rebounding from February's steep fall. But purchases were just 1.5 percent higher than a year earlier.

And new home sales fell 1.5 percent in March to a seasonally adjusted annual rate of 511,000, the government said Monday. That's below the long-term rate of 650,000 a year.

The lack of available homes can be self-perpetuating problem. Many homeowners don't list their houses for sale if they see few properties that they can buy. Others do not have enough equity in their homes to afford a down payment on a purchase.

New home building hasn't yet filled the gap. Home construction fell 8.8 percent in March, the biggest drop in five months, to an annual pace of 1.09 million single-family homes and apartments.

Rising prices may make it harder for many Americans to buy a house, though that is partly offset by low mortgage rates. The average rate nationwide on a 30-year mortgage was 3.59 percent last week, according to mortgage buyer Freddie Mac.

The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The February figures are the latest available.

Copyright © 2016 The Associated Press


A top selling point: The ability to age in place


WASHINGTON – April 25, 2016 – As the U.S. population ages, the demand for age-in-place home features will continue to grow. The population of Americans 65 and older is estimated to rise to 73 million by 2030, according to U.S. Census Bureau data.

As such, more home shoppers will be looking for homes that allow them to age in place comfortably, or homes that they can adapt after they move in. Contractors say they've already seen a boom in this side of their business, and a few words about a listing's age-in-place attributes might appeal to a wider range of buyers.

According to "Aging in Place Survey Report," a recent study by HomeAdvisor, repair contractors reported the top five universal design (aging in place) projects:

  • Adding grab bars in a home, such as the bathroom or bedroom
  • Adding a ramp to a home's entrance
  • Widening doorways
  • Adding a bathroom on a home's first floor
  • Adding lever handles on the doors

In addition, the contractors say home automation is growing in popularity with the aging population because it makes life easier, including all-in-one remote controls and smart phone apps that control temperature, light and other elements of the home.

The age-in-place benefit isn't limited to older adults, however, and owners aren't waiting until retirement to make age-in-place renovations. Of survey respondents who used a contractor for aging-specific projects, 56 percent were under the age of 65.

Source: "Aging-in-Place Options Most Popular with Baby Boomers," The Washington Post (March 14, 2016)

© Copyright 2016 INFORMATION, INC.


New-home sales fall in March – third straight month


WASHINGTON (AP) – April 25, 2016 – Americans stepped back from buying new homes in March, the third straight monthly decline as sales plunged sharply in the Western states.

New-home sales slipped 1.5 percent last month to a seasonally adjusted annual rate of 511,000, the Commerce Department said Monday. That rate has steadily dropped from 519,000 in February and 521,000 in January. Sales plummeted 23.6 percent in the West, which has been prone to volatile swings in sales as one of the nation's priciest housing markets.

The market for new housing developments has gotten off to a rocky start. Sales are still running slightly ahead of the year-to-date pace in 2015, yet supplies of new construction are mounting in a possible sign that demand is lower than many builders had hoped.

Sales were flat in the Northeast and rose in the Midwest and South. Prices dipped with sales declining in Western states where land often commands a higher premium. The median new-home sales price fell 1.8 percent from a year ago to $288,000.

The market's stalling momentum comes amid an incomplete recovery from the housing crash of almost a decade ago. New-home sales are significantly below the half-century average of more than 650,000. Subprime mortgages helped propel sales as high as 1.28 million in 2005, but the debt resulting from that peak led to series of foreclosures that triggered the Great Recession at the end of 2007.

The recent unevenness in real estate has also been seen in sales of existing homes.

The National Association of Realtors said last week that sales of existing homes rose 5.1 percent in March to a seasonally adjusted annual rate of 5.33 million, a partial rebound after a sudden drop in February.

Fewer existing properties are being listed for sale, causing prices to rise. The number of listings has dipped 1.5 percent over the past 12 months, despite a foundation of demand caused by lower mortgage rates and healthy hiring levels.

Builders still anticipate sales growth, although they have become slightly more cautious in recent months.

The National Association of Home Builders/Wells Fargo builder sentiment index has held at 58 for the past three months. Readings above 50 indicate more builders view sales conditions as positive. Still, the component of the index looking at current sales prospects fell in the April report released last week.

Sales have been aided by mortgages rates staying close to historic lows.

The average 30-year fixed-rate mortgage was 3.59 percent last week, according to mortgage buyer Freddie Mac.

Copyright © 2016 The Associated Press


‘Love It or List It’ couple sues reality show


RALEIGH, N.C. – April 22, 2016 – A Raleigh, N.C., couple is suing the producers of HGTV's "Love It or List It," along with building contractors, claiming renovations done to their home on the show left it in disrepair.

The show follows designer Hilary Farr as she makes renovations to an owner's home while Canadian real estate professional David Visentin finds them a new house. In the end, the owner must choose whether to keep their renovated home or list it and buy the new property.

In the couple's lawsuit, Deena Murphy and Timothy Sullivan allege that the flooring in their home was left "irreparably damaged" after the HGTV renovation. The suit claims duct work left holes in the floor that were covered with low-grade industrial carpeting; some surfaces were left unpainted, and windows were painted shut. The show also did not use a licensed architect for the renovation plans, and the couple was never shown any houses for sale by a licensed North Carolina real estate agent who could have brokered the sale of a new home, the suit says.

The couple is also suing Canadian production company Big Coat TV and North Carolina contractor Aaron Fitz Construction, the company hired to complete the renovations. The HGTV episode featuring Murphy and Sullivan aired in April.

"The show is scripted, with 'roles' and reactions assigned to the various performers and participants, including the homeowners," the lawsuit alleges. "Big Coat's purported agreement admits that it is in the business of television production, not construction. The homeowners' funds essentially pay the cost of creating a stage set for the television series."

The lawsuit says the couple was asked to deposit $140,000 into a fund for the production company. The funds go to paying contractors and subcontractors.

"We are aware of the lawsuit," Big Coat TV CEO Maria Armstrong said in a statement. "Because this matter involves ongoing litigation, we feel that making a comment would be inappropriate at this time. However, we do intend to vigorously defend what we consider to be false allegations."

Source: "HGTV's 'Love It or List It' Sued," Cox Media Group (April 18, 2016) and "'Love It or List It' Homeowners Sue Over Raleigh Renovation," The News & Observer (April 17, 2016)

© Copyright 2016 INFORMATION, INC.


Marketing insights:
Why do Americans buy homes?


NEW YORK – April 20, 2016 – For more than half of Americans, the main reason to buy a home is simply because they want a place to call their own, according to the "Homebuyer Insight Report" recently released by Bank of America (BofA).

"Homebuyers today are motivated by both emotional and practical reasons," says D. Steve Boland, BofA's consumer lending executive. "Nearly all want more space, but a majority of homebuyers – especially those purchasing their first home – are also looking for a place to call their own, put down roots and make memories. They value the emotional benefits of owning a home as much as financial ones."

Survey: Top emotional triggers for buyers

  • Want a place to call their own: 52%
  • Always something they wanted to do: 43%
  • Want to put down roots: 31%
  • A place to make memories: 28%

Influential financial factors

  • Better than paying rent: 37%
  • Saved enough money: 26%
  • Have a steady job: 21%
  • Good time to buy a home: 15%

What does homeownership mean to you?

  • Security: 60%
  • Family: 58%
  • Responsibility: 58%
  • Happiness: 57%

Source: "The Top Reasons Why Americans Buy Homes," (April 13, 2016)

© Copyright 2016 INFORMATION, INC.


Missing ingredient for millennials:
A downpayment


WASHINGTON (AP) – April 20, 2016 – Short of savings and burdened by debt, America's millennials are struggling to afford their first homes in the face of sharply higher prices in many of the most desirable cities.

Surveys show that most Americans under 35 lack adequate savings for downpayments. The result is that many will likely be forced to delay homeownership and to absorb significant debt loads if they do eventually buy.

Steadily rising home values in recent years have eclipsed pay increases, making it especially difficult to buy in major growth areas for jobs, such as San Francisco, Denver and Seattle.

Nationally, 37 percent of millennial renters have saved nothing at all for a downpayment, according to a survey of 30,000 renters being released Wednesday by Apartment List, a company specializing in rental home searches. At the same time, 79 percent of millennial renters say they aspire to own a home, illustrating a troublesome gap between expectations and financial realities.

Even those diligent enough to set aside money are still short the cash to buy a home.

Among larger metro areas, millennial renters who are saving have put aside an average of just $5,830. This marks less than one-fifth the savings needed for the typical 20 percent downpayment on a starter home costing $175,000. The lack of savings raises doubts about whether the under-35 crowd will also delay marriage and children, said Andrew Woo, a data scientist at Apartment List.

One possibility – already evident in some markets – is that first-time buyers are making smaller downpayments and paying mortgage insurance or slightly higher interest rates on mortgages. Excess housing debt roughly a decade ago inflated a housing bubble and then triggered a market crash that led to the worst economic downturn since the Great Depression more than 80 years ago.

"A lot of millennials are not saving enough for a 20 percent downpayment for a home," Woo said. "What does that do for our financial system – especially since we had the financial crisis less than 10 years ago? Are we willing to let homebuyers be highly leveraged like they were before?"

Millennials not only entered a job market still healing from the downturn but also arrived with high student debt burdens, with averages approaching $30,000. Fifty-three percent of homebuyers under 35 last year said that student loans had delayed their purchases, according to a survey released last month by the National Association of Realtors.

Based on home prices, many millennials won't be able to buy homes in the next five years with their accumulated savings. Assuming a 20 percent downpayment, it would take 20.5 years in San Francisco, 11.4 years in Denver, 8.2 years in Seattle and seven years in the Boston area.

Not all areas were so out of reach. In such metro areas as Philadelphia, St. Louis and Cincinnati, the required savings for those who have put aside money would take less than two years.

Some buyers are pursuing alternatives that allow substantially lower downpayments. Programs such as Fannie Mae's HomeReady let buyers put down as little as 3 percent. But only buyers who earn less than 80 percent of a metro area's median income are eligible.

The program has aided first-time buyers in places such as Washington, D.C., where millennial renters with savings are still almost nine years shy, on average, of having enough money for a 20 percent downpayment on a starter home in the region.

"It's just absolutely critical – people either wouldn't be able to secure a good rate or able to buy altogether," said David Toaff, a loan officer at First Home Mortgage in Bethesda, Maryland.

Copyright © 2016 The Associated Press


Florida’s housing market: New listings, median prices rise in March



Existing-home sales spring ahead in March

ORLANDO, Fla. – April 20, 2016 – Florida's housing market reported higher median prices, more new listings and fewer all-cash closed sales in March, according to the latest housing data released by Florida Realtors®. Statewide closed sales eased last month amid tighter inventory: Single-family home sales totaled 23,758, remaining relatively the same (down 0.6 percent) from March 2015.

"Many Florida homeowners have been able to rebuild home equity due to strong price growth, but that can also pose a challenge for first-time buyers and move-up buyers," says 2016 Florida Realtors President Matey H. Veissi, broker and co-owner of Veissi & Associates in Miami. "However, new listings rose in March, which is good news for potential buyers. New listings for existing single-family homes rose 5.6 percent compared to a year ago while new listings for townhouse-condo properties are up 2.6 percent."

Meanwhile, sellers received more of their original asking price at the closing table. Sellers of existing single-family homes in March received 95.8 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 94.5 percent (median percentage).

The statewide median sales price for single-family existing homes last month was $209,500, up 10.3 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. Thestatewide median price for townhouse-condo properties in March was $155,000, up 3.3 percent over the year-ago figure.

March marked 52 months in a row that statewide median sales prices for both single-family homes and for townhouse-condo properties rose year-over-year. The median is the midpoint; half the homes sold for more, half for less.

According to the National Association of Realtors (NAR), thenational median sales price for existing single-family homes in February 2016 was $212,300, up 4.3 percent from the previous yearthe national median existing condo price was $198,900.In California, the statewide median sales price for single-family existing homes in February was $446,460; in Massachusetts, it was $309,000; in Maryland, it was $235,206; and in New York, it was $235,000.

Looking at Florida's townhouse-condo market, statewide closed sales totaled 10,076 last month, down 7.1 percent compared to March 2015. However, the closed sales data reflected fewer short sales and cash-only sales in March: Short sales for townhouse-condo properties declined 39.3 percent while short sales for single-family homes dropped 33.2 percent. Closed sales may occur from 30 to 90-plus days after sales contracts are written.

"Overall, statewide inventory levels essentially held steady in March; however, beneath the surface, we can see that active listings in the most affordable price tiers are continuing to decline," says Florida Realtors Chief Economist Brad O'Connor. "These declines are being offset by the growth in the upper price tiers, particularly in the luxury market. The active inventory of homes listed for over $1 million, for instance, was up 18.3 percent year-over-year among single family homes and 38.6 percent among condos and townhouses."

Inventory was at a 4.5-months' supply in March for single-family homes and at a 6.3-months' supply for townhouse-condo properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.69 percent in March 2016, down from the 3.77 percent average recorded during the same month a year earlier.

© 2016 Florida Realtors®


Graphically show the benefit of no Florida income tax

In the Carolinas, over 40% of each state's budget is generated through an income tax - another reason to choose Fla. A U.S. Census Bureau map illustrates the difference.


First-time buyers save longer and buy bigger


NEW YORK – April 19, 2016 – As the peak home buying season begins, first-time homebuyers are prioritizing their long-term residential needs, according to the inaugural Bank of America Homebuyer Insights Report.

Seventy-five percent of first-time buyers would prefer to bypass the starter home and purchase a place that will meet their future needs, even if that means waiting to save more, and 35 percent plan to retire there.

In reality, three-quarters of experienced buyers said they sacrificed something the last time they bought a home, including travel (46 percent) or a new car (37 percent), and 32 percent said they sacrificed some of the features they would have liked in their dream home.

Additionally, buyers who have a plan in place for purchasing a home are more willing to consider a starter home than "someday" buyers who know they want to buy a home in the future but don't have a plan for doing so (41 percent vs. 23 percent). Seventy-seven percent of "someday" buyers would prefer to wait and move into a nicer home in the future.

"Every day, we talk to clients who are motivated to purchase a home for many reasons, including the pride of ownership and desire to establish roots in a community," said D. Steve Boland, consumer lending executive for Bank of America. "Today's aspiring homebuyers want to be selective and believe they should wait until they can afford to buy a home they'll live in for years to come.

"They're also realistic about the need to save for a downpayment. In the end, we look holistically at our clients' life priorities so they can fully understand the personal ramifications of what is perhaps the most significant financial transaction they will ever make."

The Bank of America Homebuyer Insights Report explores the attitudes, behaviors and preferences of the modern homebuyer. Based on a national survey of more than 1,000 adults ages 18 and older who want to buy a home in the future, the report reveals what homebuyers want in a home, their catalysts for making the home purchase and the unique preferences of first-time and millennial buyers, defined as those between ages 18 and 34.

© 2016 NewsRx LLC  


The hottest buzzwords in listing ads


NEW YORK – April 19, 2016 – Home listings that contain "barn door" – a rustic sliding door for rooms – sold for more than 13 percent above the expected value and 57 days faster, according to a new study.

Words like "shaker cabinet," "farmhouse sink" and "subway tile" also helped homes to sell faster and for higher values.

In a new analysis by Zillow, researchers looked at more than 60 keywords used in more than 2 million real estate listings between January 2014 and March 2016 to learn which buzzwords resonated most with homebuyers today. They are:

  • Barn door: 13.4% (the percent of homes that sold for above-expected values)
  • Shaker cabinet: 9.6%
  • Farmhouse sink: 7.9%
  • Subway tile: 6.9%
  • Quartz: 6%
  • Craftsman: 5.4%
  • Exposed brick: 4.9%
  • Pendant light: 4.6%
  • Frameless shower: 4.6%
  • Heated floors: 4.3%
  • Stainless steel: 4.2%
  • Granite: 4.1%
  • Backsplash: 4.1%
  • Tankless water heater: 4%
  • Outdoor kitchen: 3.7%

Source: "Using These Keywords in Your Listing Could Sell Your Home Faster," MarketWatch (April 16, 2016)

© Copyright 2016 INFORMATION, INC.


HELOCs are back – but are they safe?


NEW YORK – April 18, 2016 – As home values steadily improve, more homeowners become comfortable with tapping into their home equity through a home equity line of credit (HELOC).

According to CoreLogic Inc., there has been a significant increase in lenders offering HELOCs, with more than $156 billion in credit recently extended. HELOC lending is up 24 percent from 2014 and more than 200 percent from 2010, when home equity borrowing hit its lowest point.

However, loan volume, while strong, still doesn't measure up to the level of activity that peaked in 2006, just before the Great Recession.

KeyBank's list of best practices for owners considering a HELOC

  • "Be assured that HELOCs are a safe and workable way to access cash to finance remodeling and free up finances for other use such as paying tuition," the bank says.

But it notes that some homeowners took advantage of their easy-to-tap home credit before the housing meltdown, leading them to owe far more on their homes than their market value after it declined.

  • Know the difference between a HELOC and a home equity loan.

A home equity loan is a lump sum typically borrowed for a major one-time expense, such as consolidating bills or a one-time home renovation project. Loan payments are made in equal amounts over an established period of time, just as they are for a primary mortgage.

A HELOC accesses home equity on an as-needed basis, a bit like writing a check that's funded through existing home equity rather than a checking account. It's best suited for ongoing needs such as home upkeep or to manage the costs of a life-changing event.

HELOC payments are based on the amount of money accessed from the line of credit. An owner may be approved for access to $20,000 in home equity, for example, but only tapped into a small percentage of that amount.

Talk to a tax attorney or accountant for perspective on whether HELOC payments are tax deductible, KeyBank suggests.

  • Talk to various lenders about their HELOC and home equity loan products and get a good understanding of interest rates (variable or fixed) and repayment schedules.
  • Relationships can make a difference. Working with a lender that already handles your mortgage, car payment or deposits might make a diffe

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