Monthly Archives: September 2018

U.S. mortgage rates up; 30-year at 7-year high, 4.72%

WASHINGTON (AP) – Sept. 27, 2018 – Long-term U.S. mortgage rates are up for the fifth straight week, with the key 30-year rate reaching its highest level in more than seven years.

Costs for would-be homebuyers continue to climb. Mortgage buyer Freddie Mac said Thursday that the average rate on 30-year, fixed-rate mortgages jumped to 4.72 percent from 4.65 percent last week. The average benchmark rate has risen from 3.83 percent a year ago.

The average rate on 15-year, fixed-rate loans increased to 4.16 percent this week from 4.11 percent last week.

The Federal Reserve signaled its confidence in the economy on Wednesday by raising a key interest rate for a third time this year, forecasting another rate hike before year’s end.

The strong economy and anticipation of more short-term rate hikes by the Fed are helping drive the increase in mortgage rates.

Economists believe the country is on track for annual growth this year of around 3 percent. That would be the best performance since 2005, three years before the 2008 financial crisis pushed the U.S. into the worst recession since the 1930s.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week.

The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates.

The average fee on 30-year fixed-rate mortgages was unchanged from last week at 0.5 point. The fee on 15-year mortgages also remained at 0.5 point.

The average rate for five-year adjustable-rate mortgages rose to 3.97 percent from 3.92 percent last week. The fee slipped to 0.3 point from 0.4 point.

Copyright © 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Homeowners’ lack of flood insurance costs billions

WASHINGTON – Sept. 27, 2018 – In the aftermath of Hurricane Florence, a new problem is surfacing: The shrinking number of households that have flood insurance.

Flood damage is not included in a standard homeowners’ insurance policy. If a mortgage lender does not require a borrower to obtain it, the onus then falls on the homeowner to seek it out. For some, the extra money to do so may make this unlikely. As of April 2017, the average annual premium for a policy through the National Flood Insurance Program was $878.

Fewer than 10 percent of households in North Carolina had federal flood insurance, according to estimates from Milliman, an actuarial firm. An estimated $20 billion to $30 billion in losses occurred due to flood and wind damage from Hurricane Florence’s wrath on the Carolinas last week, according to CoreLogic, a real estate data firm. Insured loss covered by the NFIP is estimated to be just a fraction of that – between $2 billion and $5 billion. About 85 percent of the residential loss is uninsured, according to the report.

The number of policies purchased through the National Flood Insurance Program has dropped over the past decade, according to a report from the Urban Institute. The total is now just over 5 million. As flood risks heighten, that leaves a lot of homeowners at risk.

Forty-three percent of homeowners wrongly assume damage from heavy rain flooding is covered under their standard insurance policy, according to the 2016 Consumer Insurance Survey, conducted by the Insurance Information Institute.

But in reality, special circumstances are required to get a standard insurance policy to kick in for such damage. For example, if hurricane-force winds caused roof damage that then leads to water damage within the home, insurance will most likely cover repairs. However, if a nearby river crests due to heavy rainfall and causes the flooding, a standard policy will likely not cover the damage.

The NFIP has been struggling to pay off claims over the past few years and has faced several lapses or near-expirations as Congress assesses how to continue funding it. Private flood insurance only accounts for about 15 percent of all flood premiums nationwide, with the NFIP providing the remainder. The National Association of Realtors (NAR) has renewed its call for a strengthened NFIP, along with a robust private market. The NFIP is currently authorized until Nov. 30.

“The National Association of Realtors remains focused on ensuring Congress and the White House enact long-term reauthorization and reforms to strengthen the program’s sustainability,” NAR President Elizabeth Mendenhall said in a statement. “Flooding is the most common disaster in the United States, one that affects Americans in communities both coastal and inland every year.”

Source: “Home Insurance Covers Damage from a Volcano But Not a Flood,” MarketWatch (Sept. 24, 2018) and “Many Enlist, But Flood Coverage Still Falls Short,” Mortgage News Daily (Sept. 21, 2018)

© Copyright 2018 INFORMATION, INC. Bethesda, MD (301) 215-4688

NAR: Pending home sales dip 1.8% in August

WASHINGTON – Sept. 27, 2018 – Pending home sales fell slightly in August and have now decreased on an annual basis for eight straight months, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, decreased 1.8 percent to 104.2 in August from 106.1 in July. With last month’s decline, contract signings are now down 2.3 percent year-over-year.

Lawrence Yun, NAR chief economist, says that low inventory continues to contribute to the housing market slowdown. “Pending home sales continued a slow drip downward, with the fourth month over month decline in the past five months,” he said.

“Contract signings also fell backward again last month, as declines in the West negatively impacted overall activity,” he said. “The greatest decline occurred in the West region where prices have shot up significantly, which clearly indicates that affordability is hindering buyers and those affordability issues come from lack of inventory, particularly in moderate price points.”

According to the third quarter Housing Opportunities and Market Experience (HOME) survey, a record high number of Americans believe now is a good time to sell. “Just a couple of years ago about 55 percent of consumers indicated it was a good time to sell; that figure has climbed close to 77 percent today.”

Added Yun, “With prices having risen so quickly, many consumers were deciding to wait to list their homes hoping to see additional price and equity gains. However, with indications that buyers are beginning to pull out, price gains are going to decelerate and potential sellers are considering that now is a good time to list and bring more properties to the market.”

Yun pointed to year-over-year increases in active listings from data at® to illustrate a potential rise in inventory. Columbus, Ohio, Seattle-Tacoma-Bellevue, Wash., San Diego-Carlsbad, Calif., Providence-Warwick, RI-Mass. and Nashville, Tenn. saw the largest increase in active listings in August compared to a year ago.

When it comes to rising mortgage rates, Yun believes that while rising rates are always a deterrent to potential buyers, it should not lead to a significant decline. “We have two opposing factors affecting the market: the negative impact of rising mortgage rates and the positive impact of continued job creation. This should lead to future homes sales staying fairly neutral,” said Yun. “As long as there is job growth, rising mortgage rates will hinder some buyers; but job creation means second or third incomes being added to households which gives consumers the financial confidence to go out and make a home purchase.”

Yun expects existing-home sales this year to decrease 1.6 percent to 5.46 million, and the national median existing-home price to increase 4.8 percent. Looking ahead to next year, existing sales are forecast to rise 2 percent and home prices around 3.5 percent.

August pending home sales regional breakdown

The PHSI in the Northeast dropped 1.3 percent to 92.7 in August, and is now 1.6 percent below a year ago. In the Midwest, the index slid back 0.5 percent to 101.6 in August and is also 1.1 percent lower than August 2017.

Pending home sales in the South dipped 0.7 percent to an index of 121.3 in August, however, that number is 1.3 percent higher than a year ago. The index in the West decreased 5.9 percent in August to 89.1 and plummeted 11.3 percent below a year ago.

© 2018 Florida Realtors®

New state program to help some homeowners after Irma

TALLAHASSEE, Fla. – Sept. 27, 2018 – A new program launched by the state Department of Economic Opportunity (DEO), called Rebuild Florida, is providing $616 million to help people rebuild their homes damaged by Hurricane Irma.

The state’s first Rebuild Florida center for disaster recovery aid for homeowners recently opened in Marathon. Other centers will soon be set up in Monroe, Miami-Dade, Broward, Brevard, Collier, Lee, Polk, Orange, and Duval counties.

“We know that many families across the state are still struggling, even one year after Hurricane Irma,” said Cissy Proctor, executive director of DEO. “For those whose homes were destroyed or are still damaged, please go online to or visit a Rebuild Florida center opening near you to register for assistance. Our Rebuild Florida team will guide homeowners through every step of the process and help them repair and rebuild their homes.”

Residents simply need to bring identification to a center by Dec. 23, and case managers will help them register for the program.

“The first phase is dedicated to repairing and replacing homes of low-income families in the most impacted communities,” Proctor said.

Rebuild Florida will also have buses traveling the state beginning in October.

“We are going to bring new meaning to building strong, building resilient and building better,” said State Rep. Holly Raschein, R-Key Largo. “This is an opportunity for our residents to apply for resources, that is what we need.”

Source: Miami Herald (09/24/18) Filosa, Gwen

© Copyright 2018 INFORMATION, INC. Bethesda, MD (301) 215-4688

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What a Fed rate hike means for you, at any age

NEW YORK – Sept. 26, 2018 – No matter your age, what the Federal Reserve does to interest rates will most likely affect you.

Economists say the central bank is nearly certain to raise what’s called the federal funds rate by a quarter of a percentage point Wednesday to a range of 2 percent to 2.25 percent, the third such increase this year.

An increase creates a ripple effect for rates on a variety of loans and investments.

Higher rates can mean different things to people, depending on where they are in life. In general, for people borrowing money, it means life is getting more expensive. For savers, it means slightly bigger rewards. Here’s a look at some of the effects:

For 20-somethings

What’s rising even faster than college tuitions? The financing costs to pay for them.

Student-loan rates have been climbing along with the yield on the 10-year Treasury note, which has risen above 3 percent. Undergraduate students taking out federal direct loans this school year will pay a fixed 5.05 percent interest rate. That’s a significant jump from the 4.45 percent rate of the prior school year, and it’s the highest since 2009-10, when it was 5.6 percent.

The rate is fixed, so direct federal loans taken out for the 2018-19 academic year will keep the 5.05 percent rate. But the Fed is expected to raise rates again in December and maybe another three times in 2019. Long-term rates would also rise, so student loans taken out next year will likely have a higher rate.

Interest rates for private loans are already traditionally higher and will likely rise as well.

Additionally, it’s easy in your 20s to start to slide down the slippery slope of credit card debt. Try to resist because carrying a balance is only going to get more expensive ahead.

Credit card rates are most sensitive to changes in the federal funds rate, almost directly matching the rate change with a 1.92-point increase since late 2015 when the Fed began to hike rates, said Nick Clements, co-founder of, a financial information website.

If the Fed raises rates again Wednesday, Clements estimates the average household that carries credit card debt month to month will pay over $150 in extra interest per year compared with before the rate hikes began. MagnifyMoney estimates 122 million Americans carry credit card debt month to month.

For young(ish) workers – 30s and 40s

It’s a busy time financially – people in this age group may be focused on paying down debts such as auto loans, mortgages and student loans while also trying to stoke their savings.

Pay off any variable-rate debts ASAP. That means paying down credit cards, home equity lines of credit and student loans from private lenders as quickly as possible before these borrowing costs rise.

To put this in perspective, since the Fed began raising rates, the average credit card rate has jumped from 15.78 percent to 17.32 percent; the average home equity line of credit has climbed from 4.75 percent to 6.08 percent, according to And those with adjustable rate mortgages expecting a rate reset this year will see the rate jump to 5.25 percent or more.

Speaking of mortgages, because interest rates are on an upward trajectory, new mortgage debt will also most likely be getting more expensive.

The fed funds rate and mortgages don’t always move in lockstep for a number of reasons. But since late 2015, the average 30-year fixed mortgage rate has increased from approximately 3.9 percent to 4.6 percent, as of Sept. 13.

If you are looking for a mortgage, shop around for the best rate. If you have an adjustable rate mortgage that is expected to reset higher soon, consider refinancing to a lower fixed-rate now.

Meanwhile, members of this group should also save for retirement and build up their emergency savings. For the latter, consider banking online, where you can find numerous savings accounts with rates around 2 percent.

For near-retirement or retired – 50, 60, 70 and beyond

Huzzah. Savers are finally earning more on their cash – if only just a bit.

The national rate for a 12-month CD is 0.45 percent, according to the Federal Deposit Insurance Corp. That sounds like a pittance of interest, but it’s double the rate from a couple years ago.

Rates for longer-term CDs are also rising, and the national rate for a five-year CD is up to 1.11 percent from 0.87 percent a year ago.

Such low figures mean many savers still aren’t keeping up with inflation, but analysts expect rates to continue trending higher. Savers can also typically find better rates at online banks than at traditional ones – they sometimes even match the rate of inflation, which was 2.7 percent last month. For a three-year CD, several online banks offer rates at that level or slightly higher.

Now on to those investments you worked so hard on.

Higher interest rates hurt investors with bond funds in their 401(k) accounts, at least in the short term. A rise in rates makes the bonds sitting in a bond fund’s portfolio suddenly less attractive, when compared against newly issued bonds that are paying more in interest. That causes those bonds’ prices to drop, and the dynamic has caused many of the most popular bond funds to lose money this year.

The largest bond fund by assets is down 2.1 percent through Monday, for example. But those funds will also be earning more in interest thanks to the higher rates and should be able to offset those losses in the long run, as long as rates rise gradually.

Stock funds should also feel an effect, and emerging-market funds have been among the biggest losers recently. But as long as the rise in rates is due to a strengthening economy, rather than fears about a surge in inflation, analysts say stock funds should be able to hold steady. That’s because a better economy usually spells higher corporate profits.

AP Logo Copyright © 2018 The Associated Press, Sarah Skidmore Sell and Stan Choe, AP business writers. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Hurricanes make us poorer but don’t slow the economy

HAGERSTOWN, Md. – Sept. 26, 2018 –Hurricanes impose huge losses of wealth and initially slow regional economies, but over time they can be a tonic that creates more prosperous communities. After Florence, resort areas along the coast and thriving commercial areas inland are likely to rebuild quickly, but poorer, rural inland communities may be left to languish.

Initial estimates of the destruction from the storm range from $17 billion to $22 billion but may go much higher. The sums paid out to homeowners will only be a fraction of losses because many homeowners’ policies do not include flood coverage and often contain high deductibles for hurricane damage.

As hurricanes go, Florence could be among the 10 most costly to hit the United States, but it won’t be near the top of the list. When Katrina hit New Orleans in 2005, the figure was $161 billion, and last year, Maria hit Puerto Rico and Harvey trounced Texas with losses of $90 billion and $125 billion.

Florence’s path includes valuable beach homes, hotels and attractions and inland activities vital to the national economy – Boeing, Daimler and Volvo factories halted production ahead of the storm.

Hurricanes hitting those areas provide opportunities to start over and replace with larger and more modern facilities. After Hugo (1989) and more recent storms hit the Outer Banks, smaller beach homes on large plots were replaced by structures with more bedrooms and baths and attractive kitchens that could more comfortably accommodate large families and command higher rents. Insurance settlements permitted owners of aging restaurants and amusements to reinvest in more attractive businesses.

This increased the value of the shoreline and nearby shopping malls and other businesses. It permitted owners who were inadequately insured to more easily borrow to rebuild or recoup some of their losses by selling land at better prices.

Seventy percent of the flood damage imposed by Harvey, which hit Texas last year, was not insured. Many homeowners took their chances with the weather and got burned or were not aware that ordinary homeowners’ policies often don’t cover flooding. Many moderate–income families and smaller businesses are struggling and may never find the money to rebuild.

In some rural areas, far from coveted beachfront and big employers, the values of property and homes were well below the regional and national averages before the storm. Those communities may never adequately recover – land values, if anything, will lag further and permanently.

It seems homeowners and businesses buy insurance immediately after a hurricane, become complacent as storm memories fade and then get caught when disaster strikes again. Communities hit by Florence are ripe for a repeat for such tragic situations.

The National Flood Insurance Program has about 134,000 policies in place in North Carolina – covering fewer than 15 percent of residences and down 3.6 percent from 2013.

Storms temporarily depress regional economies, but not as much as folks think – a lot of activity gets shifted around. Folks evacuated, factories closed and movie theaters lost a lot of patronage ahead of Florence, but inland shelters hired staff; fleeing evacuees purchased gas and groceries; hardware stores did a robust business in sandbags, emergency pumps and the like, and livestock producers piled up on feed and fuel to keep their animals safe in barns.

When the storm passes, lost production at aircraft and auto factories will be made up and the rebuilding of homes and commercial establishments will have profound multiplier effects for the local economy.

On net, storms tend to subtract from gross domestic product in the early months and add to it in later months – leaving the economy, on balance, with few overall effects after a year.

We are poorer – property and wealth are destroyed. Payouts from insurance companies reduce shareholder value. Uninsured property owners in more attractive locations may get a lift in land values, but those gains do not fully compensate for ruined residential and commercial structures.

Those who plan ahead – buy enough of the right insurance and don’t build on the shore or flood plains unless their business interests absolutely require – generally recover. Investors from outside the region get opportunities to bring in new capital to improve local economies.

Those who take their chances with the weather lose. They get saddled with bigger mortgages or too little money to rebuild and broken lives.

Copyright © 2018 The Herald–Mail, Peter Morici, Deseret News. All rights reserved.

U.S. home prices rise at slowest pace in nearly a year

WASHINGTON (AP) – Sept. 25, 2018 – U.S. home prices rose in July at the slowest pace in 10 months as climbing mortgage rates become a more significant factor for a growing number of prospective buyers.

The S&P CoreLogic Case-Shiller 20-city home price index increased 5.9 percent in July compared with a year earlier, down from a 6.4 percent annual gain the previous month.

Home prices are rising at twice the rate of wages, which has likely contributed to a cooling in the market this year. Sales of existing homes have dropped 1.5 percent in the past 12 months. Mortgage rates last week reached their highest level since May.

“Coupled with mortgage rate increases, higher prices are stifling home sales as more buyers are priced out of the market,” Danielle Hale, chief economist at, said Tuesday after the report was released.

Las Vegas, Seattle and San Francisco reported the biggest annual gains, with all three cities seeing double-digit increases. Yet in 15 of 20 cities, price gains were smaller in July than in the same month a year earlier.

The combination of rising home prices and higher mortgage rates has made homes less affordable, even as a strong job market and some signs of higher pay have lifted demand.

The average 30-year mortgage rate rose to 4.65 percent last week, according to mortgage giant Freddie Mac. That is up from 3.83 percent a year ago.

Any rate below 5 percent is very low by historical standards, but many homeowners locked in rates below 4 percent in the past five years. That means they would have to accept a higher rate to buy a new home. Plenty of homeowners are choosing to remodel their current homes instead.

Home prices in 12 of the 20 cities in the Case-Shiller index have rebounded from the housing slump and have reached new heights. Four of the cities that are still below their housing bubble peaks are seeing strong price gains: Las Vegas, Miami, Phoenix and Tampa. The other four are seeing modest increases: Washington, D.C., Chicago, New York and Atlanta.

The number of homes for sale remains limited, which has sparked bidding wars in many cities. However, the supply crunch may be easing: There were 1.92 million homes for sale at the end of August, up from just 1.87 million a year ago.

Copyright © 2018 Associated Press, Christopher Rugaber, AP economics writer. All rights reserved.

Buyers resort to fraud to obtain loans

NEW YORK – Sept. 25, 2018 – Prices are up, interest rates are rising, and it’s tough for a lot of people to qualify to buy a home. So what do some of them do?

A growing number of them are faking it.

According to mortgage fraud researchers, income misrepresentations on home-loan applications were up 22.1 percent in the second quarter of this year compared with the same period in 2017.

Ominously, most of it is not traceable to criminals trying to bilk lenders out of tens or hundreds of thousands of dollars through traditional loan swindles. Rather, it’s increasingly what researchers call “bona fide” borrowers who don’t have the incomes to qualify but are determined to get a home mortgage, even if they have to mislead the lender.

How’s this happening? The Internet makes it easy. Researchers say many applicants can now go online and find sites that will help them create customized pay and employment records, sometimes even confirmable by a phone call by the loan officer to an “employer” that doesn’t exist.

Or they borrow thousands of dollars for their downpayment but swear to the lender that it’s an interest-free present from a cousin or a brother, documented with a genuine-looking gift letter using a form obtainable online.

It’s all part of one of the least-reported issues in the real-estate market of 2018: Home-purchase mortgage frauds are on the rise and posing cat-and-mouse challenges to major players, including banks and big investors such as Fannie Mae.

Here’s a quick overview:

Overall fraud in mortgage applications jumped by 12.4 percent from a year ago, according to realty analytics firm CoreLogic, which has access to a massive national database of loan applications and issues periodic reports on the subject.

Falsifying income is the fastest-growing form of application fraud, but other types of misrepresentations also are on the rise, including occupancy fraud, where applicants tell lenders they plan to live in the house they are buying but instead rent it out, sharply raising the risk of default and loss for the unsuspecting lender.

Fannie Mae recently warned lenders via several alerts about a loan-fraud technique in which applicants claim to work for specific companies and provide income and employment information that appears to be bullet-proof but turns out to be totally bogus.

Applicants frequently claim to have been students immediately prior to their current employment. This makes it difficult or impossible for lenders to pull tax transcripts from the IRS for the year spent as a “student.”

Applicants also claim salaries that appear to be high for their age or experience. Fannie Mae has seen the scam mainly in California, but CoreLogic says it is now spreading across the country.

Bridget Berg, CoreLogic’s senior director of fraud solutions, said the increase in fraud by home-purchase applicants is partially a “function of what’s going on in the real-estate market” large numbers of would-be buyers squeezed out by rising prices, frustrated by not being quite able to afford what they want, and motivated to “embellish” or simply make stuff up.

Berg noted, however, that although “fraud risk” as measured by her company’s research is on the rise and troubling, it still represents a small fraction of total loans being originated just under 1 percent.

George Souto, a loan officer with William Raveis Mortgage in Middletown, Connecticut, says that although he doesn’t see many applications containing outright fraud, he does encounter situations in which applicants make overly generous estimates of their incomes. These applicants don’t do this with the purpose of defrauding the lender, but because the income they report to the IRS is lower than their actual earnings before tax deductions for expenses.

But other lenders say too many borrowers don’t see scrupulous truth on mortgage applications as all that important. Joseph Metzler of Mortgages Unlimited in St. Paul, Minnesota, says they “feel it’s OK to pad information or leave it out, to improve their chances of getting approved.”

But it’s not. It’s bank fraud and comes with serious potential penalties, including fines and imprisonment.

Copyright © 2018 Global Data Point; Governance, Risk & Compliance Monitor Worldwide. All rights reserved. Provided by SyndiGate Media Inc.

U.S. consumer confidence increased in September

NEW YORK – Sept. 25, 2018 – The Conference Board Consumer Confidence Index® increased in September, following a large improvement in August. The Index now stands at 138.4, up from 134.7 in August.

The Present Situation Index improved marginally from 172.8 to 173.1, while the Expectations Index that gauges attitudes about the short-term future surged from 109.3 last month to 115.3 this month.

“After a considerable improvement in August, consumer confidence increased further in September and hovers at an 18-year high,” said Lynn Franco, director of economic indicators at The Conference Board. “The September reading is not far from the all-time high of 144.7 reached in 2000. Consumers’ assessment of current conditions remains extremely favorable, bolstered by a strong economy and robust job growth.

“The Expectations Index surged in September, suggesting solid economic growth exceeding 3.0 percent for the remainder of the year. These historically high confidence levels should continue to support healthy consumer spending and should be welcome news for retailers as they begin gearing up for the holiday season.”

Current conditions

Consumers’ assessment of current conditions held steady in September. Those stating business conditions are “good” increased from 40.5 percent to 41.4 percent, while those saying business conditions are “bad” declined marginally from 9.3 percent to 9.1 percent.

Consumers’ assessment of the labor market was somewhat more favorable. Those claiming jobs are “plentiful” increased from 42.3 percent to 45.7 percent, but those claiming jobs are “hard to get” increased from 12.1 percent to 13.2 percent.

Short-term conditions

Consumers’ optimism about the short-term outlook improved considerably in September. The percentage of consumers anticipating business conditions will improve over the next six months increased from 24.4 percent to 27.6 percent, while those expecting business conditions will worsen declined, from 9.9 percent to 8.0 percent.

Consumers’ outlook for the labor market was also more upbeat. The proportion expecting more jobs in the months ahead increased from 21.5 percent to 22.5 percent, while those anticipating fewer jobs decreased from 13.2 percent to 11.0 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement declined from 25.4 percent to 22.6 percent, but the proportion expecting a decrease declined marginally, from 6.9 percent to 6.5 percent.

The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen. The cutoff date for the preliminary results was September 14.

© 2018 Florida Realtors®

One-stop virtual home-shopping tours?

GAINESVILLE, Fla. – Sept. 25, 2018 – A Gainesville-based homebuilder is seeking to streamline the process of finding the perfect home by offering prospective buyers virtual-reality tours.

Barry Rutenberg and Associates of Arthur Rutenberg Homes – which has built at least 1,000 homes in Alachua County over nearly five decades – has stepped up its game recently by providing an immersive home shopping experience.

Homebuyers can try on the virtual reality goggles to view up to 50 Arthur Rutenberg model homes nationwide while walking around a model home in Gainesville. The homebuilder started offering the virtual tours because it has the potential to reduce driving time for buyers, said Brenda Banks, vice president of sales and marketing.

“It isn’t unusual for our buyers to drive to Naples, Sarasota, or even the Carolinas to tour our homes. Now, they don’t need to travel any further than our model in Gainesville,” she said.

Homebuilders have also been using drones to help people survey properties before buying, Banks added.

Despite making the decision process a little easier, the company does not expect virtual reality tours to replace the real thing.

“People still like to look and feel,” Banks said.

She noted it could one day be possible for potential buyers to request a customized virtual tour before having a homebuilder make them a custom-built home.

“That’s two, maybe three years away,” she said.

Source: Gainesville Sun (09/21/18) Smithson, Daniel

© Copyright 2018 INFORMATION, INC. Bethesda, MD (301) 215-4688

CoreLogic: Strong economy boosts homeowner equity in 2Q 2018

IRVINE, Calif. – Sept. 24, 2018 – CoreLogic released its National Homeowner Equity Insights Report for Q2 2018: it notes that much of the country is seeing “homeowners emerge from the negative equity trap.”

U.S. homeowners with mortgages (which account for roughly 63 percent of all properties) have seen their equity increase by 12.3 percent year-over-year, representing a gain of nearly $981 billion since the second quarter of 2017, according to CoreLogic. About 221,000 residential properties regained equity compared with the first quarter of 2018.

Equity improves nationwide

Additionally, the average homeowner gained $16,200 in home equity between the second quarter of 2017 and the second quarter of 2018. While home equity grew in almost every state in the nation, western states experienced the most significant increases. California homeowners gained an average of approximately $48,800 in home equity, and Washington homeowners experienced an average increase of approximately $41,100 in home equity

From the first quarter to the second quarter of 2018, the total number of mortgaged homes in negative equity decreased 9 percent to 2.2 million homes or 4.3 percent of all mortgaged properties. Year-over-year, the number of mortgaged properties in negative equity fell 20.1 percent from 2.8 million homes – or 5.4 percent of all mortgaged properties – in the second quarter of 2018.

“Homeowner properties continued to increase in value this quarter with homeowners gaining an average of $16,200 in home equity wealth,” said Dr. Frank Nothaft, chief economist for CoreLogic. “When aggregated across all homeowners that totals almost $1 trillion in gains in home equity wealth. This wealth gain will support additional consumption spending and home improvement expenditures in coming years.”

Negative equity, often referred to as being underwater or upside down, applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in a home’s value, an increase in mortgage debt or both. Negative equity peaked at 26 percent of mortgaged residential properties in the fourth quarter of 2009, based on the CoreLogic equity data analysis which began in the third quarter of 2009.

The national aggregate value of negative equity was approximately $279.8 billion at the end of the second quarter of 2018. This is down quarter over quarter by approximately $5.5 million, from $285.3 billion in the first quarter of 2018.

“Negative equity levels continue to drop across the US with the biggest declines in areas with strong price appreciation,” said Frank Martell, president and CEO of CoreLogic. “Further, the relatively low level of shadow inventory contributes to the chronic shortage of housing supply and price increases in many markets.”

However, among those metro areas experiencing negative equity, Miami, Fla. may be hurting the most, with the negative equity share of all mortgages standing at 11.4 percent year over year.

The Homeowner Equity Insights report is published quarterly with coverage at the national, state and Core Based Statistical Area/Metro level and includes negative equity share and average equity gains, according to CoreLogic.

© 2018 Florida Realtors®

What businesses must know when starting back after storm

NEW YORK – Sept. 24, 2018 – Many small business owners whose companies were hit by Hurricane Florence are embarking on an uncertain path to recovery.

While these owners are still trying to assess the damage to their companies, and what they will get from their insurers, they also need to reach out to customers, vendors and employees to maintain those relationships. They need to see whether they are capable of getting the business running again, even on a limited basis. If they need loans, the sooner they apply, the better.

Here are five things owners need to know about recovering from a disaster:

There may be no fast or easy answers

Small business owners may find themselves waiting and wondering how bad the damage is. Storms like Florence and last year’s Hurricane Harvey can linger for days and cause severe flooding, making a quick assessment very difficult.

But even when owners are in limbo, they can take steps to help the business survive. Many owners with insurance make their first calls to their agents or carriers. Equally important is to let customers and vendors know that the plan is to reopen. If possible, a sign on a store saying, “We’ll be back” can help. Employees should be reassured that the boss intends to get them back to work — but an owner also needs to be honest if a recovery will be prolonged or uncertain.

Owners also should think about how their business may change in response to the disaster. While Matt Stephens, who evacuated to Atlanta before the storm began Thursday, waited to hear how his Wilmington financial planning business fared, he prepared himself and colleagues at The Wealth Plan Co. for clients’ post-storm needs. Instead of investments, he expected them to be asking about recovery help.

“I’m doing some research now about (Federal Emergency Management Agency) grants, disaster loans, and claiming flood insurance so I’ll be prepared to advise clients in the aftermath,” he said. His company was able to keep operating because its evacuated staffers have laptops in hand and all their data stored online.

The company may be ready to work, but the customers aren’t

Toby Cahoon’s pest control company in Holly Ridge was ready to return to work despite some damage to its building, but flooding and downed trees and power lines prevented staffers from getting to many customers. And B&T Pest Control’s services were in demand because rain and flood waters bring out bugs and pests.

Cahoon contacted customers — those who had working phones or email — and assured them they would get service as soon as streets were safe. In the meantime, he said, “we will start servicing some customers in the areas we can get to and increase that service area as we are able.”

Getting back to work as soon as possible, even in limited circumstances, can save a company following a disaster. After Hurricane Katrina in 2005, many companies in parts of New Orleans that were spared from flooding discovered their customers were not so lucky and had fled. Some companies were able to recover; like Cahoon they did what work they could.

Companies may have to wait in line

Owners that did not line up contractors and building supplies retailers before Florence struck could be scrambling for help to rebuild. They may be tempted to sign up the first contractor they can reach.

Do not do that, suggests Jack Plaxe, owner of Security Consulting Alliance, a company that advises business on disaster preparation and recovery.

“Talk to them, vet them,” he said. “The last thing you want to do is hire a contractor who can’t do the job.”

Recovery can be more complicated than owners expect, Plaxe said. For example, getting a generator can be more complex than simply driving up to a hardware store. Some companies first need an electrician to come in and assess what their needs are, Plaxe said.

Ultimately, those who plan ahead make out better in a disaster. Even after an unexpected disaster like a tornado, companies that have forged relationships with people who can help will be in the best position to rebuild, Plaxe said.

Applying for a disaster loan

Owners who believe they will need a disaster loan from the Small Business Administration (SBA) should begin the application process as soon as possible. Companies will need to supply financial and other records; if they have been destroyed, it will take time to replace them.

The SBA sets up web pages for specific disasters; this is the link for Florence. It is possible to apply for disaster loans online, and the SBA may also have a disaster recovery center business owners and homeowners can visit. One has been set up in Greenville. The address is SBTDC Regional Service Center at East Carolina University, 300 East First Street, Willis Building.

Where to get info

Before or after a disaster, business owners can get information about how to recover (and if it is beforehand, how to mitigate their physical and economic damage). Federal government resources include:

State and local governments and chambers of commerce may also have information and resources to help businesses recover. 

Copyright © 2018 Cooke Communications LLC – Rocky Mount Telegram, Joyce M. Rosenberg, Associated Press writer

Are HOA board members immune from lawsuits by condo residents?

STUART, Fla. – Sept. 24, 2018 – Question: We live in an HOA and purchased a single-family home with a three-car garage. At settlement, we were given three electronic “clickers,” or garage door openers. The openers included a button for the community entrance gates. The HOA Board is changing the entrance gate access to windshield stickers and want to charge us for the third sticker. We object to paying for a third sticker when we pay HOA dues and have three garages. We think three clickers entitle us to three stickers. Is it legal for the HOA to charge residents for a third sticker under these circumstances? – KC, Stuart

Answer: Thank you for your question. Although we do not have the benefit of reviewing your specific HOA documents, as a general statement, it would seem logical that since the developer-built houses with three-car garages, then it would have assumed that people would have three cars. This is why you were given three garage door/community gate remote controls. If your Board is now changing the system and is providing you with only two stickers and charging for the third sticker, it would seem to be wrong based upon the history of the community and the fact you were previously provided with three remote controls. Most communities give a certain limited number for free and charge when people want more beyond what is reasonable. In this case, three should be reasonable based upon the set of facts you provided.

Question: I serve on a Board of a condominium. Without getting into too much detail, recently, the Board members were sued by a resident who claims the budget we passed last year was somehow inappropriate. I was under the impression Board members were immune from lawsuits like this. – RK, Fort Pierce

Answer: First, I would not panic about being sued. Unfortunately, it is a fairly common occurrence that Board members are brought into lawsuits as defendants. As a Board member, your association should have insurance to cover such claims. The insurance carrier should step in and provide you with an attorney to represent you in the lawsuit. Second, as a Board member, you do have a fair amount of protection for holding you liable under most circumstances.

Board members of a condominium and homeowner’s associations owe the association a fiduciary duty, just as if you were on a board of a corporation. I do not know the specific issues in the lawsuit you are dealing with, but the resident suing you must prove you breached your fiduciary duty. Under Florida law, breach of fiduciary duty requires the existence of a fiduciary duty, and the breach of that duty such that it is the proximate cause of the plaintiff’s damages. Suing a director for breach of fiduciary duty requires something more than alleging the director had a fiduciary duty that was breached, as the law starts with the presumption that a director is immune from liability. In order to be subject to liability, the director must have not only breached his or her duties as a director, but that breach also must rise to the level of criminal activity, fraud, self-dealing, unjust enrichment or other improper personal benefit. It also is well-settled absent evidence of the foregoing behavior, directors of condominium associations are not personally liable for the decisions they make in their capacity as directors.

Florida law requires directors of a condominium association discharge their duties in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances and in a manner they reasonably believe to be in the best interests of the corporation (i.e., the Association). This is known as the “business judgment rule,” which is a standard originally created to determine if a director of a corporation breached his or her fiduciary duty to the stockholders. Under this rule, corporate directors and officers generally do not violate their fiduciary duty, absent actual wrongdoing in the form of fraud, self-dealing or unjust enrichment. To determine if a director’s actions fall under the business judgment rule, Florida Courts look at (1) whether the association has the contractual or statutory authority to perform the relevant act and (2) the decision is reasonable.

I hope this helps you, but without knowing more about the particular allegations being made against you, I cannot give you any specific advice. I would speak to your attorney about the details of the lawsuit and what specifically is being alleged against the Board members in your case.

The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, Adamczyk, DeBoest & Cross, PLLC or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

Editor’s note: Attorneys at Goede, Adamczyk, DeBoest & Cross, PLLC., respond to questions about Florida community association law. The firm represents community associations throughout Florida and focuses on condominium and homeowner association law, real estate law, litigation, estate planning and business law.

Copyright © 2018 Journal Media Group, Harris B. Katz is managing partner of the law firm Goede, Adamczyk, DeBoest & Cross, PLLC.

Fla. license renewal deadline is Sept. 30

Mortgage rates rise again – 30-year at 4.65%

WASHINGTON (AP) – Sept. 20, 2018 – Long-term U.S. mortgage rates are up for the fourth consecutive week, with the key 30-year rate reaching its highest level since May.

Costs for would-be homebuyers continue to climb. Mortgage buyer Freddie Mac said Thursday that the average rate on 30-year, fixed-rate mortgages jumped to 4.65 percent, from 4.60 percent last week. The average rate has increased from 3.83 percent a year ago.

The average rate on 15-year, fixed-rate loans rose to 4.11 percent this week from 4.06 percent last week.

The primary factors driving rates higher include the strong economy, trade tensions between the U.S. and other countries, and the U.S. government stepping up sales of its debt, according to Freddie Mac chief economist Sam Khater.

The expanded U.S. debt sales suppress Treasury bond prices and push their interest rates higher. The yield on the key 10-year Treasury note has been running above 3 percent, approaching a seven-year high. The yield jumped to 3.08 percent Wednesday, from 2.96 percent a week earlier. It held at 3.08 percent Thursday morning.

The higher mortgage rates “represent continued affordability challenges for prospective buyers – especially first-time buyers,” Khater said.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week.

The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates.

The average fee on 30-year fixed-rate mortgages was unchanged from last week at 0.5 point. The fee on 15-year mortgages also remained at 0.5 point.

The average rate for five-year adjustable-rate mortgages edged down to 3.92 percent from 3.93 percent last week. The fee rose to 0.4 point from 0.3 point.

AP Logo Copyright © 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Fla. housing market: Positive trends continue in Aug. 2018

ORLANDO, Fla. – Sept. 20, 2018 – Florida’s housing market
reported more sales, more new listings and higher median prices in August compared
to a year ago, according to the latest housing data released by Florida
Realtors®. Sales of single-family homes statewide
totaled 26,273 last month, up 4.2 percent compared to August 2017.

“August marked the second month in row that Florida’s
housing market experienced a rise in new listings, which is a good sign for
potential homebuyers,” says 2018 Florida Realtors President Christine Hansen,
broker-owner with Century 21 Hansen Realty in Fort Lauderdale. “New listings
for existing single-family homes rose 6.6 percent compared to a year ago and
new listings for condo-townhouse properties increased 4.1 percent from last August.

“At the same time, the median time for a sale to go to
contract is getting shorter: For single-family homes, it was 36 days, down 2.7
percent; for condo-townhouse properties, it was 46 days, down 6.1 percent. With such a quick turnaround time to
contract, a Realtor with local expertise can help buyers and sellers navigate
the market.”

August marked the 80th consecutive month (over
six and a half years) that the statewide median sales prices for both
single-family homes and condo-townhouse properties rose year-over-year. The
statewide median sales price for single-family existing homes was $254,290, up 6.0
percent from the previous year, according to data from Florida Realtors
Research Department in partnership with local Realtor boards/associations. Thestatewide median price for
condo-townhouse units in August was $185,000, up 8.8 percent over the year-ago
figure. The median is the midpoint; half the homes sold for more, half for

According to the National Association of Realtors (NAR), the
national median sales price for existing single-family homes in July 2018 was #212121;background-color:>

Looking at Florida’s condo-townhouse market, statewide
closed sales totaled 10,365 last month, up 6.6 percent compared to a year ago.
Closed sales data continued to reflect fewer short sales and foreclosures in
August: Short sales for condo-townhouse properties dropped 18.8 percent and
foreclosures fell 28.9 percent year-to-year; while short sales for single-family
homes declined 34.2 percent and foreclosures fell 30.1 percent year-to-year.
Closed sales may occur from 30- to 90-plus days after sales contracts are

“The dominant story across Florida’s housing markets over
the past couple of years has been the shortage of single-family homes for sale,
but in the July numbers, instead of the usual year-over-year decline, we saw
that inventory was virtually unchanged from the level we reported for July of
2017,” says Florida Realtors Chief Economist
Dr. Brad O’Connor. “So the question is, is this the beginning of a trend? According
to the newly released August data from Florida Realtors, it very well could be.

As of August 31, we found
that the statewide inventory of single-family homes was up 4.5 percent compared
to the same point in time last year, marking the first tangible year-over-year
increase we’ve seen in end-of-month inventory in over three-and-a-half years.Should single-family inventory levels continue to
rise, especially in the price tiers where demand is the greatest, we can
probably expect some acceleration in sales growth and more modest rates of
price growth.

According to Freddie Mac, the interest rate for a 30-year
fixed-rate mortgage averaged 4.55 percent in August 2018, up from the 3.88
percent averaged during the same month a year earlier.

To see the full statewide housing activity reports, go to Florida
Realtors Research & Statistics section
Realtors also have access to local market stats (password protected) on Florida
Realtors’ website.


NAHB: Latest tariff increases will hurt housing

WASHINGTON – Sept. 20, 2018 – The Trump administration imposed more tariffs – $200 billion worth – on Chinese goods this week, and homebuilders say this latest round of tariffs could greatly affect the costs of housing construction.

The levies will go into go into effect Sept. 24. The tariffs will start at 10 percent and then increase to 25 percent on Jan. 1.

“President Trump’s decision to impose 10 percent tariffs on $200 billion worth of Chinese imports, including $10 billion of goods used by the residential construction sector, could have major ramifications for the housing industry,” says Randy Noel, chairman of the National Association of Home Builders (NAHB). “With housing costs on the rise, this action translates into a tax increase on housing that will rise even more significantly on Jan. 1 when the tariff rate jumps to 25 percent.”

Noel says that the increase comes in addition to a current 20 percent tariff on softwood lumber imports from Canada that “have already added thousands of dollars to the price of a typical single-family home.”

The Trump administration has been imposing tariffs to pressure China to change its longstanding – and what it feels is unfair – trade practices with the U.S. A Foreign Ministry spokesman is reportedly in talks to help settle the dispute, The New York Times reports.

The potential tariff impact to the housing industry also comes on the heels of another report that a labor shortage within the building industry is prompting homebuilders to raise their home prices. Economists have been calling for homebuilders to build more housing because tight inventories of for-sale homes plague many markets.

Source: “DealBook Briefing: Trump’s Trade War Finally Hits Consumers,” The New York Times (Sept. 18, 2018) and National Association of Home Builders

© Copyright 2018 INFORMATION INC., Bethesda, MD (301) 215-4688

Legal QandA: Can a neighbor rescind permission for a pathway?

FORT LAUDERDALE, Fla. – Sept. 20, 2018 – Question: I live in a gated community with zero lot lines between houses. About 12 years ago, I asked my neighbor if he would be interested in putting a gravel path from the front to the back between our properties, as it is impossible to grow grass in this shaded area and it got muddy. His response was: “Do whatever you want. I never go on that side of the house.”

Now he decided to send a certified letter telling me that part of the path is on his property, and he wants it removed, or he will consult an attorney. Do I have to remove it? – Barry

Answer: You have two issues at play here. The first is whether you need to remove the path from his property, and the second is where his property line is. We will address the second issue first.

The legal concept of “adverse possession” states that if someone uses someone else’s property under certain conditions, he or she becomes owner of the property. The reasoning behind this is that all property is supposed to be productive, and if someone takes over and works abandoned property, he or she will eventually own it. To become owner of the path, your use of it would need to fulfill five conditions. Possession must be hostile, actual, exclusive, open/notorious and continuous.

In non-lawyer talk, this means use of the property would need to be without his permission, actually used only by you and in no way hidden for a specific period, usually between seven and 10 years. It is important to note that you can become owner of someone else’s property only if all of the conditions are met. In your case, since he permitted you to put in the path, your neighbor will not lose his ownership of his part to you, even though you met the other conditions.

Now, we will have to determine whether you need to remove the path. The short answer is no, you do not need to, but he can if he wants to.

In a nutshell, your neighbor gave you a “license” or permission to put the path over a portion of his property and made no requirement that you remove the gravel if he changed his mind. Since it appears he has now changed his mind, something he has the right to do, he can remove the path to his property line, plant a tree over it, or do whatever he wants with it, as long as it is within community rules.

This issue is not that much different from your right to carefully prune back your neighbor’s tree limbs if they cross onto your property.

About the writer: Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He practices real estate, business litigation and contract law from his office in Sunrise, Fla. He is the chairman of the Real Estate Section of the Broward County Bar Association and is a co-host of the weekly radio show Legal News and Review. He frequently consults on general real estate matters and trends in Florida with various companies across the nation.

Copyright © 2018 Sun Sentinel (Fort Lauderdale, Fla.), Gary M. Singer. Distributed by Tribune Content Agency, LLC.

It’s no illusion: American garages are getting bigger

DETROIT – Sept. 20, 2018 – Lorraine Dillon couldn’t fit her enormous GMC Yukon SUV into her itty-bitty garage on St. Paul Street in Grosse Pointe, Michigan. So builder Al Shaheen made the entrance bigger.

“The garage had to be usable,” said Dillon, 72, whose husband drives a Chevrolet Suburban. “We didn’t have enough length to the driveway to park a car without blocking the sidewalk.” And she’s not alone.

“American cars have never been bigger and they’ve never been taller. But they can’t get much wider,” said Eric Noble, a product development consultant and professor of vehicle technology at ArtCenter College of Design in Pasadena, California. “The only thing that has grown as fast as American vehicles are American waistlines.”

The consumer shift to pickups and large SUVs has created a niche business in garage remodeling as people try to make space for vehicles that may comfortably seat eight people and still have room for storage.

“We’ve moved from a 7-foot garage door height to 8-foot. It’s difficult to fit them not only into garages but into parking spaces,” Noble said.

Vehicles become adult toys

Dustin Collier, a builder based in Traverse City, Michigan, said his garage project clients consist mostly of people in their 50s and 60s.

“Vehicles are just taller. You might be able to fit a Ford F-150 into a garage with nothing on its roof, but if you have lights or anything up there, it’s cutting things close,” he said. “Our busiest time is in the spring, when everybody gets their taxes back. We get calls in the fall, too, because people are trying to get ready for winter. I see a lot of four-door pickup trucks. They just don’t fit.”

Collier sees people spend $3,000 to $12,000 “trying to make things right.” While the 8-foot height is the new standard on garages, he builds as high as 12 feet now to accommodate the popular roof racks.

“People are all about their toys now,” Collier said. “The trucks are jacked up in the air with big tires.”

Improvements may run as high as $20,000 for some.

“People are adding on to garages to make them wider, doing additions, adding rooms to the back and making garages longer,” said builder William Pachota, based in Livonia, Michigan

“You need clearance and peace of mind. People are buying bigger vehicles. Families. All income levels. People really like a cathedral ceiling in the garage these days.”

He, too, sees a jump in business between Labor Day and Thanksgiving.

Architect Jon Sarkesian of Royal Oak, Michigan, has been designing renovations for three decades and says the trend toward expansion has been steady and growing. A lot of families end up tearing down a detached garage if they can’t add space as needed. “People always bring up car size during the design process now.”

Even Erich Merkle, U.S. sales analyst for Ford Motor Co., said his dad can’t fit his F-150 into the garage, so he parks it in the driveway. Attempts to fix the problem have left some in the field perplexed.

“I’ve actually had homeowners ask that the rear wall be extended out a few feet. Or I’ve seen it done where they just design the change so that the hood of the vehicle slips into a little cubby,” said Tim Kubinec, an architect based in Chesterfield, Michigan. “The cubby hole enlargement for the hood of a vehicle surprises me. It’s just an odd way to accomplish the goal. Why not move the whole wall out? I don’t like being involved in projects that look goofy, but that’s sometimes what people want.”

Truck, SUV sales boom

After everything has been done to make garages larger, families have taken an additional step to maximize space by turning to garage interior organizers.

“We had a client who could barely fit a car in their garage, they had so much stuff. We were able to organize it where they didn’t have to get rid of anything, and now they could fit their GMC truck and Acadia SUV in there,” said Tom Francis, owner of West Michigan Garage Interiors based in Grand Rapids.

“We’ve been doing this 11 years. We used to see only people 55 years old and older. Now clients in their 40s are calling,” he said.

Francis doesn’t do construction. He comes in to create space when everything else is done. He installs 16-inch deep cabinets instead of 24-inch deep cabinets more often then he used to – because of the larger vehicles in smaller garages, to allow car doors to open more easily without bumping the walls. “It’s just all about space. Cabinet space takes advantage of the walls. I mean, there’s a reason Ford is getting out of making cars. We see it.”

In August, the F-series pickup, long the best-selling vehicle in America, grew 6.3 percent to 81,839 units for the month. Overall, Ford’s SUVs saw a 20 percent sales increase, while car sales declined 21 percent. Fiat Chrysler’s Ram truck and van brand enjoyed a 26.5 percent sales increase.

Passenger cars dropped below 30 percent of the market in August for the first month ever, according to Cox Automotive. A few years ago, they made up half of industry sales.

Copyright © 2018,, USA TODAY; Phoebe Wall Howard, Detroit Free Press–W7YS5lLg/article.cfm

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Aug. housing construction up 9.2% – but permits slide

WASHINGTON (AP) – Sept. 19, 2018 – U.S. home construction rebounded in August at the fastest pace in seven months but applications for new building permits plunged, sending mixed signals for an industry that has been struggling with rising lumber costs.

Housing starts increased 9.2 percent in August to a seasonally adjusted annual rate of 1.28 million units, the Commerce Department reported Wednesday. Housing starts had declined 0.3 percent in July and 11.4 percent in June. The increase was the biggest since a 10.2 percent advance in January.

Application for building permits, considered a good indication of future activity, fell by 5.7 percent in August after a 0.9 percent rise in July. Permit applications have been down four of the past five months.

Builders have struggled this year to deal with rising costs for lumber, land and labor. The National Association of Home Builders estimates that lumber prices have shot up by about $7,000 per home since the start of 2017, largely due to tariffs the Trump administration has imposed on imports of Canadian softwood lumber.

The strength in August was led by a 29.3 percent surge in apartment construction, a volatile category which had fallen by 3.7 percent in July and 16.6 percent in June. The bigger single-family category saw an increase of 1.9 percent in August following a gain of 1.1 percent in July and a fall of 9.3 percent in June.

The home builders group reported Tuesday that its index for builder sentiment held steady at 67 in September, a level that is consistent with further increases in home construction. The sentiment number may be firming after having slipped this year from its recent high in late 2017.

Economists are hopeful that housing will rebound from its recent slowdown, helped by low unemployment and strong overall economic growth.

Copyright © 2018 The Associated Press, Martin Crutsinger. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Photographer sues Zillow for $81M over photo copyrights

PALM DESERT, Calif. – Sept. 19, 2018 – Photographs posted on the internet enjoy the same U.S. copyright protections as the written word, and the “Who owns the photos?” question can create problems in real estate listings.

A meticulous California photographer who registers all his photos with the U.S. Copyright Office and requires limited licensing contracts from listing agents is suing Zillow for copyright infringement, according to The American Genius.

California photographer George Gutenberg claims copyright violations and alleges that Zillow “scrapes images from Multiple Listing Services (MLSs) rather than using listing data syndicated to them.” He’s asking the court for “an amount to be proven or, in the alternative, at Plaintiff’s election, an award for statutory damages against Defendant in an amount up to $150,000.00 for each infringement pursuant to 17 U.S.C. §504(c), whichever is larger.”

If the court agrees to the $150,000-per-photo price, Gutenberg could be awarded as much as $81,450,000.

In addition to registering photos with the copyright office, Gutenberg also has his listing-agent clients sign an agreement, in which they agree to a “limited license to use the photographs for up to one-year purposes of marketing the property.” The agreement “expressly states that it is not transferrable and prohibits third party use without permission from Gutenberg.”

Gutenberg is represented by Mathew Higbee of Higbee and Associates, which issued a statement about the case to The American Genius. The statement says that Gutenberg’s clients “understand that they are permitted to use his photographs for the limited purpose of promoting their real estate listing,” and that the photos are allowed on the MLS only “for the life of the listing.” They are to be “immediately removed when the listing is sold or otherwise taken off the market.”

Gutenberg currently claims that he knows of no clients who syndicated copyrighted photos directly to Zillow or broke their signed licensing agreement with him. As a result, he’s holding Zillow responsible.

The Higbee statement to The American Genius says that “it appears that Zillow … copies millions of photographs per day off of the MLS in an effort to build what they refer to as their ‘Living Database of All Homes’ … at the expense of creators and rights holders such as Mr. Gutenberg who depend on payment of reasonable licensing fees by those who exploit their works.”

Source: The American Genius, Sept. 17, 2018, Lani Rosales

© 2018 Florida Realtors® Luxury market picks up speed

SANTA CLARA, Calif. – Sept. 19, 2018 – Luxury home sales continued to break records as prices hit double-digit gains in 20 major counties, according to the 2018 Luxury Home Index released today. Additionally, the number of sales at or above the $1 million mark rose 6 percent over last year.

The Luxury Home Index analyzes the luxury price tier, defined as the top 5 percent of all residential sales, in 90 U.S. counties.

Demand for luxury homes remains strong
The pace of sales for luxury homes remains strong. The combined median age of inventory in the 90 luxury markets surveyed was 121 days, down nine days or 6.9 percent year-over-year. Additionally, two-thirds of luxury markets are seeing inventory move faster than this time last year.

In 50 of the 90 counties analyzed, the luxury tier currently has an entry point of at least $1 million, while 70 markets continue to see yearly price growth.

“The conditions in the luxury segment are quite different from the market overall – it’s really a tale of two markets,” says Danielle Hale, chief economist for “Although U.S. median listing prices show signs of slowing growth, luxury prices are moving in the opposite direction in many places. For the second consecutive month, we’ve seen more markets with double-digit, entry-level luxury price growth than in the past four years.”

Sarasota stays on top
Since March, Sarasota, Fla. has remained the nation’s fastest-growing luxury market, with sales prices up 21 percent since last June. Half of all luxury homes in Sarasota sold within 165 days – 22 percent faster than the previous year. Queens, N.Y.; Santa Clara, Calif.; Boulder, Colo.; and Naples (Collier County, Fla.) rounded out the top five counties, each seeing yearly price growth between 13 and 15 percent.

Miami’s luxury market starts heating up
Recent trends in Miami’s luxury segment suggest that the luxury entry point could break the $1 million mark for the first time this fall. After declining for 24 months in a row, Miami luxury prices finally saw growth this January and have now reached the highest price gains since July 2015. Miami’s luxury market is currently growing at 2.2 percent year-over-year.

Other surrounding South Florida counties, including Broward, Collier, Lee, and Palm Beach, saw similar declines in recent years, but many of them have outpaced the rest of the country since early last year with yearly price growth between 5 and 13 percent.

Other U.S. markets
Northern California luxury markets continue performing well, with seven counties in the top 20 fastest growing markets, all of which saw double-digit growth in June. San Francisco, Sonoma, and Santa Clara – up 10, 13, and 15 percent, respectively – are showing there is still room for growth. On the other hand, San Mateo, Sacramento, San Luis Obispo, and Santa Cruz are holding steady.

There’s a hot streak in Davidson and Williamson counties, both part of the greater Nashville area, which grew 12 and 11 percent, respectively. Both saw double-digit growth in June, after steadily gaining momentum since 2016. Half of all luxury homes sold in 61 days in Davidson County, putting it among the nation’s 10 fastest-moving luxury markets.

Seattle (King County, Wash.) luxury grew by 13 percent in June compared to the same time last year, pushing its luxury entry point to $1.5 million. This marks Seattle’s 11th consecutive month of growth between 12 and 14 percent. As the market’s growing tech scene funnels in a more affluent crowd, more buyers can afford pricier homes, which may push demand – and prices – higher.

© 2018 Florida Realtors®

The first step in landing clients? Gain their trust

IRVINE, Calif. – Sept. 19, 2018 – A study conducted by Kelton Global on behalf of Purplebricks, a real estate brokerage, found that many consumers don’t automatically trust Realtors. Only 1 in 10 (11 percent) said that Realtors are trustworthy.

However, in the U.S. South, 1 in 4 (22 percent) said that Realtors are not trustworthy. Midwesterners were a bit more optimistic – only 17 percent believe that Realtors can’t be trusted – but the profession’s reputation is worse in the Northeast (25 percent don’t trust Realtors) and the West (27 percent don’t trust Realtors.)

Teachers and doctors lead the trustworthy pack with 91 and 90 percent of Americans believing the respective professions to be the most trustworthy. Conversely, professions ranked at the bottom of Americans’ coffers of trust, in order, are bankers (14 percent), journalists (11 percent), real estate agents (11 percent), car salespeople (6 percent) and politicians (4 percent).

However, two-thirds (67 percent) of Americans feel that bankers – in spite of recession activity over the past decade – are more trustworthy than journalists (54 percent) or lawyers (53 percent).

“Transparency is an increasingly valued attribute in today’s culture in light of public mistrust across a number of professions,” says Jonathan Adler, chief marketing officer at Purplebricks. “The fact that the public places more trust in financial institutions than their local real estate experts is quite telling.”

Other findings

  • Millennials are more trusting than older generations across a variety of professions. When compared to boomers, millennials are more trusting of journalists (59 percent vs. 50 percent), insurance salespeople (58 percent vs. 44 percent) and politicians (29 percent vs. 13 percent).
  • There’s a gender gap when it comes to trusting a variety of professions, as more men than women describe doctors (40 percent vs. 33 percent), bankers (17 percent vs. 12 percent) and journalists (13 percent vs. 8 percent) as completely trustworthy.
  • Two-thirds (68 percent) of Americans say they cannot trust car salespeople, while around half (49 percent) say the same about those who sell insurance.

© 2018 Florida Realtors

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The best cities to own rental property in Fla.

TAMPA, Fla. – Sept. 18, 2018 – Florida rental rates continue to climb, but a data analysis by Forbes found that Tampa and Orlando still offer Florida investment opportunities – good places to buy and own rental property.

Tampa, despite its rising home prices, still has plenty of neighborhoods where investors can find properties at affordable prices and rent them out for $1,405 to $1,527 per month on average.

Another one of Tampa’s perks is its economic prospects. According to Bureau of Labor Statistics data, U.S. nonfarm employment rose about 1.6 percent from 2017 to 2018, versus a 2.3 percent increase in Tampa. In addition, Tampa’s population has risen by 12 percent since 2013, one of the highest rates in the nation.

Jacksonville also ranked high as another city with strong job and population growth, as well as great affordability. The city has one of the highest average rental yields in the country, plus a top-notch healthcare system and flourishing biological sciences sector.

Its population has grown about 8 percent from 2013 to 2018, while the median home price is $210,000 versus the national average of $278,900. The city’s rent increased 2.6 percent year-over-year on average.

Finally, Orlando stands out in regard to employment and population growth. From summer 2017 to 2018, employment increased 4.3 percent – almost three times the U.S. average growth rate. Its population surged by 14 percent from 2013 to 2018, and rent grew 2.3 percent in the last year.

Rent yield in Orlando is also much higher than in most other cities.

Source: Forbes (09/15/18) DePietro, Andrew

© Copyright 2018 INFORMATION INC., Bethesda, MD (301) 215-4688

How do Realtors use technology? NAR survey finds out

WASHINGTON – Sept. 18, 2018 – At last month’s inaugural Innovation, Opportunity & Investment Summit in San Francisco, the National Association of Realtors® (NAR) released a survey focused on Realtors’ day-to-day use of technology and analyzed the ways technology continues to change how Realtors and real estate businesses operate.

According to the 2018 Realtor Technology Survey, Realtors have spent countless hours and millions of dollars advancing real estate technologies and keeping up with the latest trends in order to further their business.

The survey found that Realtors continue to find the most value in technology tools that increase efficiency and enhance remote-work capabilities. The three most valuable technology tools Realtors used in their businesses, excluding email and cell phones, were:

  • Local MLS websites/apps (64 percent)
  • Lockbox/smart key devices (39 percent)
  • Social media platforms (28 percent)

Realtors are also becoming more familiar with smart home and internet connected devices and stay in touch with the latest trends buyers want in their homes. The survey found that Realtors are most familiar with:

  • Security devices (19 percent)
  • Home-connected wearable devices (12 percent)
  • Home comfort devices (12 percent)

When asked what additional technology tools Realtors would like to see their broker provide in the future, respondents most wanted to see:

  • Predictive analytics (36 percent)
  • CRM tools (35 percent)
  • Transaction management software (25 percent)

According to the survey, 41 percent of Realtors were somewhat satisfied with MLS-provided technology and about 29 percent were extremely satisfied with their MLS’s technology offerings. Only two percent of respondents do not use any of the technology tools or services their MLS offers.

The tech tools that have given respondents or their agents the highest number of quality business leads in the last year were:

  • Social media (47 percent)
  • Their MLS site (32 percent)
  • Their brokerage’s website (29 percent)
  • Listing aggregator sites (29 percent)

The 2018 Realtor Technology Survey was based on data collected in March 2018. The survey was e-mailed to NAR members, including Realtor brokers, managers and agents, and generated 2,525 usable responses.

© 2018 Florida Realtors®

N.C. will test mitigation as a tool to lessen hurricane damage

RALEIGH, N.C. – Sept. 18, 2018 – Five years ago, encouraged by home builders and an anti-regulatory zeal, lawmakers in North Carolina joined other states in weakening building code requirements.

It’s a decision they may regret as Hurricane Florence wreaks havoc in the Carolinas.


The legislature in 2013 increased the amount of time between updates to its building code from three years to six. That means that updates that set new standards for elevating the floors in flood-prone homes aren’t in effect, according to the Federal Alliance for Safe Homes Inc., a non-profit disaster safety organization.

In 2015, state regulators also eliminated a requirement that storm shutters be permanently anchored.

Called out

The Insurance Institute for Business & Home Safety called out North Carolina for the changes in a report issued earlier this year and lowered the state’s score in an assessment of building codes in hurricane-prone states.

“This change means the state residential code will always be one or two cycles behind the latest national model codes,” the report said. South Carolina, also under threat from Hurricane Florence, considered similar legislation lengthening the cycle between building code adoption from three years to six, but it did not advance, according to the report.

“By not keeping pace you are shifting the cost to the consumer and they don’t even know it,” Leslie Chapman-Henderson, president of the Tallahassee, Fla.-based Federal Alliance for Safe Homes said in a phone interview. “If you invest on the front end, it is going to cost a little more, but you can avoid the losses altogether in most cases.”

Recommended codes are issued every three years by the International Code Council, a Washington-based nonprofit that brings together builders, engineers, local code officials and other experts to translate the latest science into updated model building codes. Safety advocates and insurers encourage states to follow those model codes.

Push by builders

Chapman-Henderson said the shift in North Carolina reflected a push from builders, who argue that new codes make houses more expensive, reducing demand.

Teri Edwards, executive officer of the Carteret County Home Builders Association in Morehead City, said the move to increase the amount of time between code updates came as regulators and permit officers were having trouble keeping pace with code makers’ model code updates. Still, she said, cost was also a factor.

“We aren’t going to hurt anybody,” Edwards said by phone. “We want to make sure we aren’t changing codes just for the sake of changing codes.”

The National Association of Home Builders points out that other states, including Utah, Michigan and Minnesota, have also legislated a six-year cycle.

“The six-year cycle is reasonable in that the codes have matured over the past 20 years, especially as it relates to structural design,” the trade group said in an emailed statement.

Code council

Dominic Sims, the chief executive officer of the International Code Council that issues the model codes every three years, disagrees, calling six years an “arbitrary” length of time that “doesn’t make much policy sense.”

“We are going to make sure the best science is available every three years in the hopes state governments and local jurisdictions make the right decision,” Sims said in an interview. “I think the safe thing to say is staying current with building codes is a good practice.”

The Insurance Institute for Business & Home Safety report found that other storm-prone states have been easing their building codes even as the effects of global warming escalates amid increasing anti-regulatory sentiment among state officials, and the desire to avoid anything that might hurt home sales.

“While no single meteorological, physical, or economic attribute is responsible for the damage caused by these events, evidence shows that strong, well-enforced building codes reduce loss and facilitate recovery,” the group said in their report.

North Carolina’s 2013 decision means that code requiring at least one foot of elevated space known as “free board” in certain residential homes in flood prone areas won’t be in effect. In 2015, the North Carolina Building Code Council deleted a requirement that shutters in areas subject to high winds be permanently installed, according to the Insurance Institute.

While many homes were built before the new codes would have taken effect, without them houses rebuilt after the hurricane will not be required to use the most up-to-date codes, said Debra Ballen, general counsel and a senior vice president at the Insurance Institute.

“The expectation is there are going to be a lot of things that go down. A lot will be destroyed by storm surge,” Ballen said. “We want to have those homes built to the best possible, most modern codes.”

Copyright © 2018 Cooke Communications LLC – The Daily Reflector, Ari Natter Bloomburg

Time to upgrade to iPhone XS or Max?

NEW YORK – Sept. 18, 2018 – Apple’s new iPhone XS and XS Max aren’t just similar to last year’s iPhone X in design; they also are fairly close in price – expensive at $999 or more.

With both phones available for preorder, carriers are starting to advertise offers to lure customers to get Apple’s latest on their respective networks by offering hundreds of dollars off.

All four major carriers have aggressive promotions to get you to switch and add lines to their networks. In the case of the iPhone XS and XS Max, AT&T, T-Mobile and Verizon are each offering up to $700 off a second iPhone XS or XS Max if you add a new line.

While we’re focusing here on Apple’s newest iPhones, the $700 discount also can be applied to purchase other iPhones, such as the 8 or 8 Plus or X (while they’re still around). So, for example, you could get a 64GB iPhone 8 or 8 Plus for free (the cheaper of the two devices purchased will be the one getting discounted).

Note: The $700 discount isn’t applied up front when you buy it but is instead doled out over 24 or 30 months (depending on your carrier). This is similar to how the carriers offer some trade-in discounts and is how they keep you locked into their systems.

For those planning to stay on their current network, here are options:

  • AT&T: As of this printing, AT&T hadn’t announced any additional discounts on top of its add-a-line deal.
  • Verizon: Verizon will be offering a “guaranteed” $100 minimum trade-in with the purchase of an iPhone XS, XS Max, 8, or 8 Plus on a Verizon payment plan, with the discount being doled out over 24 months. While those with recent iPhones, such as the X, will get a sizable trade-in value (up to $630 for the X), Verizon’s offer ensures older devices such as the iPhone 6 Plus, 6, SE and 5S will still get $100 off even though the Verizon trade-in site lists those phones’ values as less than $100. In the case of the 6, SE and 5S, that’s better than what Apple offers.
  • T-Mobile: T-Mobile will similarly be generous on trade-ins, offering $300 when trading in the iPhone 8, 7 Plus or 7 (a better deal than Apple for the 7 Plus and 7) and $200 when trading in a 6S Plus and 6S (both better than Apple). Older iPhones, all the way down to the original, will get $100 off when trading in for phones in good working condition.
  • Sprint: Instead of offering big money off for adding a new line, the company is offering the 64GB iPhone XS for free (and the XS Max for just $4.17 a month). You’ve got to have an eligible trade-in and sign up for the company’s 18-month Flex lease plan. Larger-capacity versions of the XS and XS Max also are available in this deal, but they require upfront down payments. Sprint is offering $100 to each new line that switches, hoping to provide more incentive to give its network a shot.

Copyright © 2018,, USA TODAY, Eli Blumenthal