Monthly Archives: June 2019

Lenders must accept private flood insurance policies after July 1

WASHINGTON – June 18, 2019 – The threat to home closings during a National Flood Insurance Program (NFIP) shutdown may be muted or nonexistent should Congress fail to extend the program in the future. After July 1, a federal law forces mortgage lenders to accept private coverage if it satisfies criteria outlined in the Biggert-Waters Flood Insurance Reform Act of 2012.

In February, five federal regulatory agencies – the FDIC, Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, National Credit Union Administration and Farm Credit Administration – issued a joint final rule to implement provisions of the Act, which outlines the new private flood insurance mandate and the steps insurance companies and mortgage lenders must follow.

The rule, which takes effect July 1, 2019:

  • Implements the Biggert-Waters Act requirement that regulated lending institutions accept private flood insurance policies that satisfy criteria specified in the Act
  • Allows institutions to rely on an insurer’s written assurances in a private flood insurance policy stating the criteria are met
  • Clarifies that institutions may, under certain conditions, accept private flood insurance policies that do not meet the Biggert-Waters Act criteria
  • Allows institutions to accept certain flood coverage plans provided by mutual aid societies, subject to agency approval

Private flood insurance could be offered as a stand-alone policy or as an endorsement attached to a full property insurance policy. Lenders won’t have to verify that a flood policy or endorsement is acceptable, providing it includes the following endorsement: “This policy meets the definition of private flood insurance contained in 42 U.S.C. 4012a(b)(7) and the corresponding regulation.”

However, the law also allows a lender to do its own due diligence if it prefers not to rely on the statement.

A full copy of the 90-page order is posted on the U.S. Department of the Treasury’s Office of the Comptroller of the Currency website.

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A ‘blooper room’ listing photo can doom an entire sale

NEW YORK – June 18, 2019 – Some real estate pros use the term “blooper room” to describe problematic spaces that turn off potential buyers to an otherwise ideal home. With sometimes hundreds of online possibilities, buyers can scroll through photos and nix a home in only a few seconds – even homes that might be perfect for them if a single room’s photo hadn’t enticed them to go on to the next listing.

Apartment Therapy recently spoke with some real estate pros about rooms that could potentially be a listing’s blooper room:

  • A dated kitchen
    If the kitchen is out-of-date and clearly requires an entire renovation, buyers will likely pass on the property, even if they love the rest of the house. You don’t have to pay thousands to bring it up-to-date, however. Just a few upgrades may move it past blooper room status. In a dark, dingy kitchen, for example, some fresh paint on the cabinets may freshen it and lighten the entire space up.
  • A dark basement
    An uninviting, gloomy basement can be a spooky turnoff. “Your first step should be to paint everything white with a waterproof paint (in case of potential water challenges that could potentially arise),” says Ian Wolf, a real estate pro with Douglas Elliman in New York City. “Even if it’s an unfurnished basement, this will clean and brighten the space.”
  • A random small room
    Some homes may have a cramped space that seems too small to be anything useful. That can cause buyers to hesitate, particularly if the area is un-staged and empty. “Paint it white, declutter, invest in lighting and remove old carpeting,” says Susan Abrams, a real estate pro with Warburg Realty in New York City. “You might want to convert that small or dark room into a walk-in closet to make it have more value to a potential buyer.”
  • A blah laundry room
    The laundry room is an important space in the house to many home shoppers, and a depressing laundry room could be your listing’s “blooper room.” Laundry rooms can often feel like cramped spaces, so brightening up the space is even more important. Buyers want “that bright-white, tiled temple that evokes cleanliness, order and control,” says Debbie Weiss, a real estate pro with Keller Williams Santa Monica. “They want the bottles of Tide lined up just so, and a pile of snow-white towels stacked on the folding table – and they want them on upper floors.”

Overall, most real estate pros say many “blooper rooms” in a house can be solved with a fresh coat of white or off-white paint.

Source: “Why Real Estate Agents Are Warning Homeowners About ‘Blooper Rooms’,” Apartment Therapy (June 16, 2019)

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Activists want to stop landlords from turning away ex-cons

CHICAGO – June 18, 2019 – Some cities are taking up ordinances that would prohibit landlords from denying people housing on the basis of a criminal conviction.

Illinois’ Cook County Board of Commissioners’ recent approved an ordinance to help people with criminal convictions more easily get housing in the Chicago area, and that win is adding momentum to activists’ efforts.

Advocates in almost a dozen U.S. cities are currently campaigning for “fair-chance housing ordinances” that would prevent landlords from denying applicants with prior convictions, according to a Curbed.com report.

Beyond new laws, advocates also want to change the public’s perception of people who have once been incarcerated since more than 600,000 people are released from confinement each year – and individuals recently released or paroled from prison are more likely to be homeless.

Activists claim that criminal records prevent ex-cons from getting approved for an apartment or housing, and 80% of formerly incarcerated people said they had difficulty accessing housing after release, according to a report from the Ella Baker Center. The study found that it didn’t matter what they were convicted for or how long ago it happened. In addition, formerly incarcerated people said that moving in with family had the potential to cause problems, since their family could also be forced to move.

In 2016, the Department of Housing and Urban Development (HUD) weighed in on the issue by declaring in a policy memo that it was illegal for property owners to deny housing on the basis of a criminal conviction. The HUD memo said the 1968 Fair Housing Act prohibits landlords from discriminating in a way that results in a “disparate impact,” which HUD says applies to criminal records just it does for other protected classes.

HUD’s guidance is not law, but it could influence federal court decisions. It has been cited in helping ordinances get approved in cities like San Francisco; Detroit; Newark, N.J.; and Kansas City, Mo.

“It’s definitely gaining traction,” says Marie Claire Tran-Leung, a lawyer at the Shriver Center on Poverty Law. “You’re seeing efforts underway in a lot of different jurisdictions. The [HUD] guidance helped, too, because it really helped make the point that people who are coming back home are subject to a lot of stigma and need strong protections against discrimination.”

Source: “The Fight for Fair Chance Housing Ordinances,” Curbed.com (June 12, 2019)

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May home construction slips 0.9%

WASHINGTON (AP) – June 18, 2019 – U.S. home construction slipped a bit in May as a sharp drop in single-family construction was only partially offset by a rise in apartment building.

The Commerce Department said Tuesday that construction was started at a seasonally adjusted annual rate of 1.27 million homes and apartments, a decline of 0.9% from April when construction starts had risen a strong 6.8 %. Applications for building permits, a good sign of future activity, edged up 0.3% in May to an annual rate of 1.29 million.

Construction of single-family homes fell 6.4% in April while construction of apartments rose 10.9%.

Falling mortgage rates are expected to help boost home construction and sales in coming months and help offset such problems as a shortage of building lots and a lack of skilled construction workers.

The latest National Association of Home Builders/Wells Fargo survey showed builder confidence dipped to a still solid reading of 64 in June, down from 66 in May. Sentiment levels have held in a range of the low- to mid-60s for the past five months.

“Despite lower mortgage rates, home prices remain somewhat high relative to incomes, which is particularly challenging for entry-level buyers,” said Robert Dietz, chief economist for the home builders.

The May report on construction starts showed declines in every region of the country except the South where building starts rose by 11.2%. Construction took the sharpest fall in the Northeast, declining 45.5% while starts were down 8% in the Midwest and 2.4% in the West.

Residential construction has been a drag on the economy over the past year, but economists are forecasting that it will turn around in the coming months with home construction boosting growth in the second half of this year and into next year, spurred by falling mortgage rates.

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Brokers: Get focused agent training on specific topics

C2EX (Commit to Excellence) isn’t only a testing tool, it also teaches. If an agent weakness is identified, they can tap into one of 10 modules, such as “Client Service.” https://c2ex.realtor

 

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Fed likely to leave rates alone but signal readiness to cut

WASHINGTON (AP) – June 18, 2019 – Jerome Powell has tantalized the financial world with the prospect that the Federal Reserve he leads may soon cut interest rates for the first time in over a decade.

Probably not quite yet, though.

When the Fed issues a policy statement Wednesday and Powell holds a news conference, the message will likely echo the theme the chairman struck in a speech early this month: That the Fed will act if it thinks the Trump administration’s trade conflicts are threatening the U.S. economy.

Powell’s remarks were seen as a signal that the Fed will likely cut rates later this year, and the stock market surged in response.

Yet economists say when – or even whether – the Fed eases credit this year will depend on a host of factors that are hard to predict. Will Trump’s trade wars be resolved before they inflict real damage on the economy? Will the job market remain resilient? Will inflation finally edge close to the Fed’s target level?

Investors collectively envision a Fed rate cut by July and possibly further cuts after that. Some are even betting on a rate cut this week. Many economists, though, think the Fed will wait until September at the earliest to announce its first drop in its benchmark short-term interest rate since 2008 and might not cut again in 2019. A few Fed watchers foresee no rate cut at all this year.

The Fed is meeting this week against the backdrop of President Donald Trump’s trade war with China, with its escalating tariffs and counter-tariffs on each other’s products. The trade war has magnified concern and uncertainty for businesses and investors about whether and how much the economy will suffer.

The U.S. manufacturing sector, in particular, is weakening. On Monday, the Federal Reserve Bank of New York reported that an index it compiles of manufacturing in New York state plunged this month into negative territory – to its lowest point since 2016. The index reflects manufacturing conditions in the state.

Trump is expected to meet with President Xi Jinping of China at a Group of 20 nations summit in Japan at the end of this month. The Fed may want to see whether that meeting produces any breakthrough in the U.S.-China trade war before deciding whether the economy requires an interest rate cut.

“I think any Fed move this week would be premature,” said Sung Won Sohn, an economics professor at Loyola Marymount University in Los Angeles.

Still, some Fed watchers think that in the policy statement the central bank will issue Wednesday, it will replace a reference to being “patient” about rate changes to some new phrasing that would hint at a forthcoming rate cut should it decide the economy needs it. When the Fed adjusts its key short-term rate, it influences rates on everything from mortgages to credit cards to home equity lines of credit and can help stimulate the economy.

Analysts expect the Fed’s description of the economy to note signs of a slowdown.

“I think the Fed will talk about the weakening labor market and softness in business investment to acknowledge that growth has downshifted,” said Mark Zandi, chief economist at Moody’s Analytics. “The statement will reinforce the message that Powell has already articulated that the economy is slowing and the trade war will pose an additional threat if it escalates.”

Most analysts say they think economic growth has slowed sharply in the current April-June quarter to around a 1.5% annual rate, only half the pace of the past year.

Unemployment remains at a 50-year low of 3.6%, though job growth slowed to just 75,000 in May, a possible sign that some employers have become more cautious about hiring.

Trump, gearing up for his 2020 re-election campaign, has been escalating his public attacks on the Fed, a highly unusual move that has raised concern that he is undermining the Fed’s independence as a central bank. The president has asserted that under Powell’s leadership, the Fed hurt the economy by tightening credit too much last year and by failing to lower rates since then.

In television interviews last week, Trump insisted that the Fed’s policies have been “very destructive to us” and argued that the economy and the stock market would be performing far better under a looser interest-rate policy. When Powell has been asked about Trump’s attacks on the Fed, he has replied simply that the central bank will do whatever it thinks best for the economy regardless of political pressures.

Though most analysts think the Fed will cut rates at least once before the year ends, others foresee no changes at all this year, especially if the U.S.-China trade war is resolved and the economy and the job market appear solid.

“If there is a rate cut this year, I think it will be much later in the year, and I don’t see more than one cut,” said David Jones, an economist and veteran Fed watcher. “I just think the Fed would like to stick with what they’ve got. They are solidly in neutral at the moment.”

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Get over staging fright to help sell a home

NEW YORK – June 18, 2019 – For Joe Hayden, a real estate agent in Louisville, Kentucky, staging is on his must-do list for sellers.

“Staging is so important,” says Hayden, who’s been in the business for more than 12 years. “We want buyers to be able to create an emotional relationship to the house and think it’s their home.”

That’s even more relevant at a time when most people begin house-hunting on their smartphones.

A seller’s listing photograph has to be “amazing” because that’s the first engagement people have with their property, Hayden says. “But all the great photos won’t mean a lot unless the subject is presented in the best light.”

According to the National Association of Realtors®‘ (NAR) 2019 home staging study, 83% of buyers’ agents said staging made it easier for prospective owners to see the properties as their future homes. About half of sellers’ agents reported staging a home helped increase the dollar value offered by buyers anywhere between 1% to 20%.

“Every single home must get staged,” Hayden says.

Tips for presenting your home in the best light

De-clutter and clean
De-cluttering and cleaning top the list of home-improvement tasks Realtors recommend to their clients, according to the NAR study.

Without spending a ton of money, get your house clean, “from ceiling to floor, and wash the windows from both inside and outside,” says Caroline Harmon, trends and style analyst for retailer Lowe’s. “It will give your whole house a fresh pop. The more you can de-clutter or simplify, the easier it will be to sell your house.”

De-cluttering goes beyond removing your coffee pot or slow cooker from the kitchen counter. It means hiding garbage cans and pet litter; organizing coat closets, pantry and fridges; making sure toilets are clean and the lids down; and wiping off fingerprints and streaks on stainless steel appliances.

Depersonalize
The No. 1 advice Hayden gives to sellers: “Get out of the seller mind-set and pretend you are a buyer and objectively criticize your own home as a buyer. Think of those things that will block someone from having a relationship with the house,” he says. “A trophy case stacked to the ceiling doesn’t mean anything to the buyer.”

The idea is to allow buyers to have that “blank canvas” so they can envision themselves living there, Harmon says.

“Everybody takes pride in their home,” says Candace Hutchison, a professional stager for 13 years. “What we want to do is move your story out and create a story that speaks to a broader audience.”

Light and color
The play of light and color also is critical. “You want the house to look as bright as possible,” Hutchison says. “Psychologically, it really appeals to buyers. If you have dark curtains, take them out. … You don’t want any light bulb that’s amber in color. You want one that’s a bright daylight bulb.”

Making sure that lights work and match in each room is important. It also is critical to replace those compact fluorescent lamp (CFL) bulbs that take a long time to brighten, says Hayden, the Louisville real estate agent.

The use of accent pillows to match, say, a brown sofa or a new bed set, especially in the master bedroom, also helps, Hutchison says. In the bathrooms, even small ones, put in white fluffy towels that cost less than $10 apiece and some baskets with rolled towels, bath salt or pretty soaps.

“You want to dress it up and create that high-end hotel feel and a feeling that this could be a retreat,” she says.

Plants work wonders as people seek “that feeling of nature inside,” Lowe’s Harmon says. “It makes them feel calm and relaxed.”

Furniture
It’s critical to rearrange the furniture in a room so that people don’t see the back of a couch when they walk in, Hayden says. “You want to have … a path to navigate the house without walking into a barrier.”

Hutchison says she often moves furniture, turning a chair to face a sofa so that pieces are “in a conversation with each other” instead of all pointing toward the TV. “It’s a real subtle invitation to address the family and not the TV.”

Cost
Homeowners can spend $200 to $500 buying a few planters, cleaning supplies, light bulbs and such things as trim baseboard paint or storage bins, Lowe’s Harmon says.

The median dollar value spent on home staging was $400, the study shows.

“Just don’t go out and spend $3,500 to repaint the house or have a new carpet,” Hayden says. “Somebody might want a different color. You could just give a credit to the buyer.”

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The new frontier for ‘healthy’ homes? Ventilation

NEW YORK – June 17, 2019 – Indoor air quality is one of the top five environmental risks to public health, say researchers, and most people spend 90% of their time indoors – homes, office buildings or other structures.

That makes ventilation the “new frontier for making houses healthy,” according to Carl Seville of SK Collaborative, a green building consulting and certification firm, in a recent Forbes.com article.

There’s reason for the added attention: Recent studies have shown that indoor air is polluted with lead, dust mites, radon, pests, carbon monoxide, pet dander, mold and secondhand smoke, according to the National Environmental Education Foundation. Ventilation in the form of bathroom fans and kitchen range hoods can help remove some of the bad air from homes, but older homes specifically may be prone to pollutant leaks.

Some homeowners are taking it to the extreme. A new 9,500-square-foot home in San Francisco, for example, was built in 2018 by Troon Pacific and has hospital-grade air filtration via a Zehnder whole-house ventilation system. It changes all of the air in the home every two hours.

Some builders are supplying new homes with a whole-house vacuum system to ensure all areas are allergen- and dust-free. The system costs around $10,000. Part of the reason is that builders are constructing newer homes more tightly than they did in the past. As such, newer homes may be more energy-efficient, but their tightness may be keeping fresh air out.

Some homeowners are turning to heat recovery ventilation (HRV) and energy recovery ventilation (ERV) systems. They both essentially pull out bad air and replace it with good air using different methods. Mid-size HRV systems cost between $600 to $1,100; mid-size ERVs cost $150 to $200 more, according to Forbes.com.

Source: “Why You Should Take Home Ventilation Seriously,” Forbes.com (May 28, 2019)

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Some tiny home owners think they’re a bit too tiny

CHICAGO – June 17, 2019 – Over the last few years, some homeowners have swapped out spacious digs for 300-square-foot homes, favoring simplicity and lower costs. The tiny-home trend has played out on reality TV shows and throughout the media.

But a new trend is emerging in the tiny-home movement – and it’s making a not-so-tiny splash.

Buyers of tiny homes increasingly favor larger styles of the small dwellings, and they’re opting for higher-end finishes that move overall costs higher, realtor.com reports. Some buyers want more space for their own enjoyment. Others are turning tiny homes into vacation homes or renting them out for added income.

The newest tiny homes are coming with stainless steel appliances, solar panels, built-in TVs, and upgraded cabinetry, according to Mark Stemen, a professor who teaches sustainability at California State University in Chico, Calif. These upgraded tiny homes are fetching more than $200,000 – not too far from the median price for an existing single-family home, which is $267,300 as of April, according to the National Association of Realtors®.

The higher prices are prompting lenders to step in, and banks are offering mortgage loans to help buyers afford the properties as prices on tiny residences rise.

“The tiny-house movement is expanding to meet the desires and needs of the people who are in it and joining it every day,” says Coles Whalen, a marketing director at Simple Life. “It’s adapting to accommodate the needs of people who are tired of spending money on square footage they’re not using, but they may want slightly more [room].” Simple Life is creating tiny-home communities in the South and recently debuted a pricier two-bedroom model that is about 540 square feet.

Tiny homes traditionally are about 20 feet long and 8 feet wide. However, some companies are responding to buyers’ desire for more space. The firm Cumming is showing off 30-foot plans, and the owner, Dan Louche, says he’s even getting requests for 40-foot models. “Are you still interested in a tiny house?” he says is his response to the larger home requests.

A do-it-yourself 20-foot tiny home traditionally costs about $15,000 to $20,000, including materials but not labor, Louche says. Prices have been moving upwards to around $65,000 to $75,000 for a standard 28-foot finished tiny home, but the costs are going even higher for those who desire more upgrades.

For example, Tiny Heirloom in Portland, Ore., is selling customized models that can range from $89,000 to $220,000. One model includes a motorized deck that retracts in 30 seconds.

Source: “As Tiny Homes Spread Across the Nation, They’re Getting Bigger – and Pricier,” realtor.com® (May 23, 2019)

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Rental scams so common that some owners police Craigslist

NORFOLK, Va. – June 17, 2019 – Frank Ramaekers III has turned away people who have paid to stay in his beach rental homes in Virginia Beach. The problem? They hadn’t paid him, they’d sent their money to a scammer on Craigslist.

Ramaekers said it’s difficult to turn away families with their cars packed full of luggage, beach chairs, umbrellas and toys. He asks where the crestfallen vacationers booked and the answer is always the same – Craigslist.

“Last year, I had an individual rent one of our homes for $2,000 for the month of July …” he said. “It was all done through Craigslist and it was 100% a scam. They showed up and said they’re ready to check in.”

During the same month, a man and his family came all the way from Panama and claimed to have rented the home. The man became upset and aggressive when he found out he couldn’t stay at the house and had lost his money, but the house was occupied by other renters at the time, said Ramaekers.

“I immediately knew they got scammed,” he said.

Craigslist and vacation rental websites like Airbnb have made it easy for homeowners to rent their properties, and for consumers to find them. But the increase in Internet listings has brought more fake listings posted by scammers. Virginia Beach property owners, for example, are more often finding scam victims, who thought they had booked a bargain online, waiting at their doors.

After learning that their money is gone and their vacation ruined, many say: “I knew it was too good to be true.”

All of Ramaekers’ beach houses, and most of those he manages, are rented through Airbnb and Vacation Rental by Owner (VRBO), a vacation rental website owned by HomeAway, and have keypad door locks. He’s been renting and managing properties over the last five years and is now responsible for six houses in Virginia Beach.

Two summers ago, Ramaekers came across a man checking out one of the properties and claiming to have it rented later that summer. Turns out, he was a victim of a scam on Craigslist. In addition to surprise guests, Ramaekers regularly receives emails from people interested in renting the houses, sometimes saying they saw the ad on Craigslist. Those are the lucky ones who avoided losing their money, he said.

It’s usually the same story – people looking for a cheap rental rate.

On Craigslist, a rental place might be listed at $200 a night, Ramaekers said. “It’s (actually) triple that during the summer. It’s unheard of. That’s what happened. They see these reduced prices and then wire the money and the wired money goes to an account somewhere,” he said.

Ramaekers used to report fake ads to Craigslist, to have them taken down. They would be posted with photos and text taken right from his own listing.

“I used to, but they just pop right back up. I quit. It would take me a couple hours to do it,” he said. “I started to do it frequently, and then it would come up under a couple days’ time under a different name, different titles and different profile photo.”

Liz DeBold Fusco, the northeast press secretary for Airbnb, said the company hears about many fraudulent situations and recommends that renters stay on trusted sites for all transactions and communications to ensure those sites can help with potential disputes.

“We see this specifically around major events when there is a surge of demand for guests looking to book for something,” she said. Some scammers claim their “rentals” are managed by Airbnb or send renters to mock-up Airbnb pages. On the Airbnb site, potential hosts are screened and are required to provide a full name, date of birth, photo, phone number, payment information and email address before they can create a listing. Sometimes hosts are required to provide government IDs.

VRBO representative Francesca Faris said the site verifies user accounts and conducts background screenings on homeowners and property managers. She did not specify how the site attains the identity verification.

Atlanta resident Tom LoPresti and his wife have rented four vacation properties in Virginia Beach through VRBO over the past four years. The couple had two people show up at different times last year to the same house in Old Beach, having driven from out-of-state and thinking that they had booked the spot through Craigslist.

“They spent $1,000 on seven nights for the beach house that sleeps 12 people? That should have been a flag,” LoPresti said.

A group of friends looking for a place to stay for the Something in the Water music festival in late April showed up at Virginia Beach resident Josh Lippoldt’s rental house in Virginia Beach. They booked through a fake listing on Craigslist, and Lippoldt had to turn them away because the property was occupied, otherwise he would have rented to them.

“I felt really bad for them,” he said.

Last year, a woman from Germany contacted Lippoldt and asked about her extended reservation in the fall. She had paid $1,200 for a two-month stay through Craigslist.

“She started getting mail sent there. She actually stopped by before her rental date and said she was renting it for two months …” he said.

Lippoldt also has had problems with fraudulent rental listings on residential real estate platform Zillow. One scammer kept posting one of Lippoldt’s vacation houses for rent on the site.

“I had so many inquiries on that. … They put it up for rent for $3,000 a month,” he said. “I had a lot of people coming in that weekend showing up to my door. They wanted to be the first people. One person offered three months’ rent in advance. I told my neighbor Zillow is a problem now.”

Zillow spokesman Viet Shelton said the company’s systems flag any suspicious listings with fraudulent patterns of incorrect grammar, capitalization or unusual price points. Users can report listings, which are then investigated and possibly taken down, and in some cases, users are banned. Craigslist did not immediately respond to request for comment from The Virginian-Pilot.

Unlike other rental owners who have found people outside their doors, Denise Holden found renters inside her vacation rental house in the Old Beach area. It’s the only time she’s ever had issues with renters, having used VRBO, and said the two brothers from Pennsylvania came for Something in the Water.

Her biggest questions: How were they able to get the address and find the key? She said she asked, but was so shocked at the time that she didn’t remember what they said. She allowed the two to stay in the house as long as they paid the maid.

“I don’t know if the scammer got a hold of the information letter (with the key location) by hacking the HomeAway website or if someone who previously stayed there gave away that information,” she said. She has since put a keypad lock on the door.

Linda Keuhn, public affairs officer for the Virginia Beach Police Department, said a police officer will respond to a call in situations like these.

“Obviously if there is an active dispute going on, we will help mediate that. Often times people are not exactly sure what their rights, or legal responsibilities, are,” she said in an email. “We offer as much advice as we can, and will take a report if the circumstances necessitate that.”

Keuhn said the department’s Economic Crimes Division receives periodic calls about rental scams but that there hasn’t been an “overwhelming number of cases.”

The department’s advice: As a renter, don’t use Craigslist, research the rental homeowner and verify the listing through communication and reviews before paying any deposits, and don’t make cash or check payments. For hosts, list properties using a reliable rental company and use a keypad door lock with a combination code that is changed between bookings.

Some vacation rental owners have made it a habit to regularly check Craigslist listings, scanning them for any sign of their properties.

“I try to do it once a month,” LoPresti said. “When I’m sitting at my computer, I’ll scroll through it.”

Virginia Beach resident Martin Ton, who has rented vacation properties at the North End for around 20 years, reports fake listings of his properties nearly every week and created his own Craigslist listing to combat the scammers.

“I copied the picture and put a watermark on it and said, ‘Scam. If you see this on Craigslist, do not rent this.’ “

Some vacation rental owners believe Craigslist should be shut down or at least make it less time-consuming to report a fraudulent listing. The company could also help verify listings by requiring users to input a verification code from a postcard sent to the listed properties, Ton said.

LoPresti said he didn’t know what the platform could do, but he believes more fraudulent listings will pop up as more vacation rentals are added to the market.

“I think it’s only going to get worse, because in the last few years, we have five times as many listings as we did when we first started. When I first started, we were one of 600 and now we’re one of 3,000. Now that you have a greater number of people doing it, you’re going to have a greater opportunity for it.”

© 2019 The Virginian-Pilot (Norfolk, Va.), Briana Adhikusuma. Distributed by Tribune Content Agency, LLC.

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Why aren’t boomers downsizing their homes?

NEWARK, N.J. – June 17, 2019 – It’s always been a sort of final chapter of the American dream: Get married and have kids. Buy a house. Move to a bigger house. Downsize to a smaller one. But a growing number of aging baby boomers are saying, “No, thanks” to downsizing, choosing instead to remain in the same sprawling houses in which they raised kids and created lifelong memories.

“We’re just not seeing that much downsizing,” says Alexandra Lee, a housing data analyst at Trulia, a real estate research firm.

While many older Americans are still stepping down to smaller homes, they’re doing so later in life. The trend is contributing to a housing supply shortage across much of the country.

A more modest home typically means less upkeep and a potential financial windfall as a big chunk of the proceeds from the sale of the larger property can help bolster retirement nest eggs. Boomers, however, are defying the traditional bounds of advancing age just as they rebelled against the establishment in the 1960s and work- and family-centered values in the 1970s in favor of self-fulfillment.

“They have refused to follow what the traditional expectations were,” says Barbara Risman, a sociology professor at the University of Illinois at Chicago.

There are other forces at work. Boomers, generally those age 54 to 73, are working longer and putting off retirement. Many of their millennial children are living with them well into adulthood. And there’s a dire shortage of less expensive, entry-level houses across the country, pushing up prices in that category and making the trade-off less appealing.

Fifty-two percent of boomers say they’ll never move from their current home, according to a Chase bank survey of 753 boomer homeowners released earlier this year. Chase doesn’t have comparable data from an earlier period. An Ipsos/USA TODAY poll of 45- to 65-year-olds in 2017 found 43% anticipated remaining in their current residence through their retirement, possibly indicating the share of non-downsizers is rising.

Many boomers are staying in their longtime homes and communities because they’re deferring retirement. About 20% of Americans 65 and older are working or looking for jobs, up from 12.1% in 1996, Labor Department figures show. Older people are staying in the workforce because they’re healthier and will need bigger nest eggs to finance longer retirements, according to Jennifer Schramm, senior strategic policy adviser for the AARP Public policy Institute. Also, many older workers’ retirement savings were hammered a decade ago, she says.

Jeff Levy, 58, an insurance broker who lives in a 3,900-square-foot, four-bedroom house in the upscale Memorial section of Houston, plans to work into his 70s. “Our home is less than one mile from my office,” he says. “Downsizing and moving further away from the office is not attractive.”

Levy’s wife, Shelly, 55, wouldn’t mind moving to a high-rise that offers more security and “turnkey” services at some point. “What do we do with this big space?” she says. But Shelly, a legal assistant, adds they would prefer to stay in Memorial and the few condominiums there cost about the same as their house.

Plus, the Levys want to have the house available for visits from their two adult children and, eventually, grandchildren. “I am looking forward to the day when our children have kids, and they come to our house and play in their parents’ room,” Jeff says.

Staying active

The tendency to age in place is also rooted in boomers’ better health and desire to stay active.

“Baby boomers don’t want to become old in a way that has negative connotations,” Risman says. “Remaining in one’s old house is part of remaining in the prime of one’s life longer.”

Even when they retire, boomers are staying engaged through volunteer work and other activities, says Phyllis Moen, a sociologist at the University of Minnesota. “They are in the space opening up for the first time in history between the career-and family-building years and the frailties associated with old age,” Moen says.

Boomers’ penchant to stay in their long-time homes is likely playing a role in low housing supplies, says Danielle Hale, chief economist of realtor.com. The crunch has improved since last year, but housing stocks are still well below normal levels.

To be sure, many aging Americans are moving to traditional retirement havens like Florida and Arizona. But even among those who plan to move, 43% want their next home to be the same size as their current one, and 22% want it to be larger, according to a January survey of 50- and 60-year-olds by Del Webb, which builds communities for age 55-plus Americans.

Trulia analysts believe older Americans are simply deferring downsizing. Both in 2005 and 2016, 5.5% of households 65 and over moved, with that share evenly split between those moving to single-family and multifamily homes, according to a Trulia analysis of Census Bureau data. But in 2016, the youngest age at which seniors moving to multifamily homes began to outnumber those moving to single-family houses was older (late 70s) than it was in 2005 (early 70s).

Downsizing, but not yet

Jim Peet, 70, of Plymouth, Minnesota, may seriously consider selling his 3,300-square-foot house but not until he’s 80. Peet, a retired information technology professional, and his wife, Kathee, flirted with downsizing several years ago, largely to reduce maintenance hassles, but found that a condo in downtown Minneapolis would cost more than their house. They also shopped for a similar-sized house in Tallahassee, Florida, but backed out after realizing they didn’t want to be so far from their family.

In fact, their kids and grandchildren generate a consistent hive of activity in their house. “It’s just so comfortable to entertain people,” Peet says. “The kids run from the living room to the kitchen – I love watching them.”

Peet, who uses a walker because of a spine-related injury, also appreciates the support of decades-long neighbors. Recently, he says, a neighbor helped him when he fell from a chair.

Other reasons many boomers are staying where they are:

·Millennial kids in the house
Millennials have lived with their boomer parents longer than prior generations as those graduating college between 2008 and 2010, in particular, struggled to launch their careers. In 2016, 16.1% of senior households had younger generations living with them, up from 14.4% in 2005, according to Trulia and Census figures.

·Starter home crunch
The housing supply shortage is especially curtailing the inventory of the kind of smaller, less expensive homes that boomers may target, Hale says. That makes it harder to find a compact house and pushes up its price, reducing the net profits of any downsizing. From 2012 to February 2019, the bottom third of homes with the lowest prices appreciated an average 8.03% a year, versus 6.39% for mid-level homes and 5.01% for the most expensive units, according to a Trulia analysis.

·Many upgrading, not selling
Many boomers put off renovations during and after the housing crash because they couldn’t take out home equity loans as prices plunged, says Amy Bonitatibus, chief marketing officer for Chase Home Lending.

Now that home prices have more than recovered from a skid in prices, the Chase survey showed nearly nine in 10 boomers are looking to make improvements. As a result, many boomers are focused on upgrades rather than downsizing.

Many boomers have finally paid off their mortgages and don’t want to start making house payments again.

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Opportunity Zones: Real estate dominates the tax breaks

WASHINGTON – June 17, 2019 – Members of Congress who pushed for the Opportunity Zones provision in the 2017 federal tax law said it would help businesses and entrepreneurs in low-income communities. The tax break rewards investors for spending capital gains on businesses or real estate in more than 8,000 economically distressed neighborhoods selected by governors.

The incentive will unlock new private investment for communities where millions of Americans face the crisis of closing businesses, lack of access to capital and declining entrepreneurship, said a bipartisan congressional group Sens. Tim Scott (R-S.C.), Cory Booker (D-N.J.), and Reps. Pat Tiberi, an Ohio Republican, and Ron Kind, a Wisconsin Democrat in announcing the idea.

But almost two years after the tax break became law, and almost two months after the Trump administration clarified how private equity firms, venture capitalists and other investors can qualify for the tax break, only a handful of people have started funds that focus on operating businesses. Many still are trying to figure out how to satisfy both the Internal Revenue Service and investors eager for high returns.

Meanwhile, real estate-focused funds already have raised billions. And real estate companies are cashing in.

For example, Kushner Companies, the family business of President Donald Trump’s son-in-law, Jared Kushner, has been buying up property in the zones, according to the Associated Press.

Confusing U.S. Treasury Department rules held business-focused funds back, said John Lettieri, president and CEO of the Economic Innovation Group, a public policy group in Washington, D.C., that lobbied for Opportunity Zones. Now that the agency has issued more guidance, Lettieri said, Opportunity funds that are geared toward investing in local businesses are going to proliferate.

But the tax break always has been easier to apply to real estate.

The truth is, it’s a tax break that’s place-based, said Napoleon Wallace, a former deputy secretary of the North Carolina Department of Commerce and a founding partner of Opportunity North Carolina, a group that helps expedite deals in the state.

An uneasy alignment

The Opportunity Zones tax break is several incentives in one. Investors defer paying income taxes on capital gains that they invest in special funds that, in turn, invest in real estate or businesses in the zones. After five years, investors get a tax break on those gains. After seven years, the tax break increases.

And most important, after 10 years, they can pocket any money they earn from their zone investment-tax-free.

Brian Phillips is an entrepreneur who is confident he can find promising tech start-ups that are already in a zone or willing to move to one. But last year, when Phillips was considering creating an Opportunity Zones fund focused on businesses, he was kind of the only one.

Investors had to wait until the April release of Treasury guidelines to learn how businesses would qualify as being in a zone for tax purposes. The guidelines said businesses need to perform at least half their services in a zone, pay half their wages in the zone, or generate half their income from a mix of property and management functions in a zone.

Yet despite the new clarity, investing in businesses remains more complicated than investing in real estate.

Buildings, by definition, stay put. And while 10 years is a long time to own a building, a property that’s delivering good returns after five years likely will still be a good investment in 10, said Michael Kressig, an Opportunity Zones expert and partner at Novogradac, an accounting and consulting firm.

Businesses, on the other hand, can change a lot in 10 years. They might fail, get acquired, go public, move or radically change their business model. It is contrary to your normal kind of private equity, or venture capital, investment-hold periods to think about holding something for 10 years, Kressig said.

There’s not much fund managers can do to control the business cycle, and it’s difficult to delay business decisions such as whether to relocate until the 10-year mark.

Many fund managers have sort of landed on the understanding that this is a best-efforts proposition, Kressig said, and so I can’t and I’m not going to promise an investor that they’re going to get 100% of these tax benefits.

Investors still could make money if a growing company leaves a zone, said Chris Schultz, CEO of LaunchPad, a chain of coworking spaces that also makes venture investments. If a company is moving out of a zone, presumably it’s because something very good is happening, he said. LaunchPad is setting up a $20 million opportunity zone fund focused on start-ups in mid-sized cities.

Business-focused funds also may face more technical difficulties than real estate funds do. For example, while a real estate fund can be set up to focus on a single project, Phillips fund has to spread investments over several companies to soften the blow to investors in case any of the companies fails.

The real estate (opportunity) fund is not that much different from what these real estate companies have been doing for a long, long time, said Phillips, now managing partner of an opportunity fund called the Pearl Fund.

For him, however, setting up a fund was uncharted territory. Phillips worked with Kressig and a lawyer to come up with a workable structure. Its challenging, but I tell everyone to please note, it is doable, he said.

He hopes this year to raise $25 million and spend it on up to 25 early-stage companies either in or willing to relocate to zones within a three-hour drive of New York City. Once the money is spent, hell raise another fund.

Making it work

Venture capitalists and public equity firms still have a good pitch for investors. Phillips is looking for start-ups growing so fast they could increase his original investment 10 times over, or more.

The relative tax benefits are actually better for investing in operating businesses, particularly those with heavy capital assets, said Jonathan Tower, managing partner at Arctaris, an impact investment fund manager based in Boston.

Tower is planning to raise over $500 million for an Opportunity Zones fund and spend it on up to 25 primarily industrial and manufacturing companies, including some that he’ll shepherd through mergers and acquisitions with other companies.

Finding good deals in distressed communities will be a challenge for real estate and business investors alike. But Schultz and Phillips are confident they’ll strike enough deals to spend their initial funds. Arctaris is particularly well-positioned, as the company has been investing in low-income areas for a decade.

Arctaris approach is somewhat unique, however. Traditional private equity is not used to select companies based on their place, Tower said, and they probably don’t have as good deal-sourcing relationships in those areas.

The Arctaris Opportunity Zone fund also includes a $15 million guarantee from the national Kresge Foundation, which focuses on cities that will help protect investors if the fund loses money. Funds focused on small businesses unlikely to grow rapidly may need a guarantee, or some other risk-reduction mechanism, to attract investors.

The Community Reinvestment Fund USA, a Minneapolis-based not-for-profit that issues loans to entrepreneurs underserved by traditional banks, is considering creating an opportunity fund that will invest in businesses such as small food and beverage manufacturers and expanding child care centers, said Keith Rachey, senior vice president of development and community advancement for the fund.

Rachey is hoping to raise between $50 million and $100 million that would be spent on up to 100 businesses nationwide. Were heavy into the feasibility piece of this right now, he said.

Part of the challenge is finding business owners who are willing to relinquish full ownership.

Can we find enough small businesses in these areas that would be willing to give up a portion of their equity, for a period of time? he wondered. It may be possible for business owners to buy back the company once the opportunity investment period ends, he said. He’s also wondering if his fund will need to be bolstered with a guarantee.

Phillips, of the Pearl Fund, said that he believes Opportunity Zones investment will occur in waves. The first wave is all the things you’ve seen with real estate investing, because it’s easy, he said. But once the best property deals have been secured, such investments will slow, and business investments will accelerate, he said.

Eventually, he said, business and real estate investors will work together to secure office, warehouse or manufacturing space for growing companies.

Lettieri said that the real estate and business sides are working together already.

Every commercial real estate investor wants a tenant, Phillips said.

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Quicken Loans paying $32.5M in suit over faulty FHA loans

NEW YORK – June 17, 2019 – Quicken Loans has agreed to pay $32.5 million to settle claims that the lending giant resold faulty mortgages to the Federal Housing Administration. After the announcement of the agreement Friday, the lawsuit was dismissed by a federal judge.

In the lawsuit, the federal government accused Quicken Loans of not properly vetting FHA-insured loans by verifying borrowers’ income. Quicken Loans also allegedly used improper appraisals to issue larger mortgages, according to the lawsuit. Since the loans were insured by the FHA, Quicken Loans was paid even if the borrower defaulted.

Quicken Loans officials have denied any wrongdoing. The company did “nothing wrong” except pay for losses involving “human error,” Vice Chairman Bill Emerson told the Detroit Free Press. “Resolution is the right term, not settlement,” Emerson said, adding that the error was a 0.02% rate on some $108 billion in FHA-related lending since 2007.

Quicken Loans is one of the nation’s largest FHA lenders and will continue to remain in the FHA program.

“All parties fully understand the important role the FHA program plays in helping middle-class Americans access home financing, and this resolution allows the parties to move ahead together with that mission and to ensure their future relationship,” former federal judge Gerald Rosen, who was involved in mediation in the case, said in a statement. “The parties worked diligently and in good faith to mediate for a solution to resolve their differences and to put the dispute behind them.”

Source: “Quicken Loans to Pay $32.5M to Settle Lawsuit Over Bad Loans,” Associated Press (June 14, 2019) and “Quicken Loans to Pay $32.5 Million to Resolve Mortgage Suit,” Detroit Free Press (June 14, 2019)

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Inexpensive ways to stage a home like a pro

WASHINGTON – June 6, 2019 – If you’re selling your house, the place has to look its best so buyers can see its potential and imagine themselves living there. That’s what home staging is all about.

A professional home stager will cost between $50 and $150 per hour, says Jessica Page, a broker with Innovative Real Estate in the Denver area.

The good news is that you can get it done for a lot less money. Page and real estate veteran Jennifer Radice of Coldwell Banker Residential Real Estate in Boca Raton, Fla., share these expert tips for staging your home at almost no cost:

Stash personal items

Packing away your personal stuff, such as pictures, sports memorabilia, even religious items, is one of the easiest, cheapest things you can do to stage your house.

“The reason you want to depersonalize your home is because you want buyers to view it as their potential home,” Page says. Prospective buyers may have a hard time envisioning themselves in the house if they’re surrounded by photos of your family.

“Pictures are extremely distracting,” says Radice.

Besides, when trying to attract a buyer, “you want the buyer’s agent to enjoy showing the home,” Radice says, because even if a particular buyer isn’t interested, the agent might represent someone who would be a good match.

Clear away clutter

Decluttering is another simple way to get buyers to focus on the bones of the house.

“After years of living in the same home, clutter collects in such a way that may not be evident to the homeowner. However, it does affect the way buyers see the home, even if you do not realize it,” Page says.

Radice recommends clearing off kitchen and bathroom countertops.

“If you have kids, get rid of the toys all around the house,” Radice says. “For all you know, the buyers could be empty nesters.”

She suggests packing that stuff in boxes and neatly stacking them in a corner of the garage. Anything extra should go in a small storage unit. Even better, ask a friend or relative to stash your items at no charge.

Rearrange, paint rooms and give them purpose

Rearrange the rooms in your home and make sure each room has a distinct purpose. Page suggests touring builders’ models to see how the rooms are furnished.

“Builders are experts on preparing their product for prospective buyers,” she says.

If your home has been painted recently, you’re ahead of the game. If not, take a paintbrush to the rooms that need it most. Sellers who paint the interior of their home will see a large return on the investment, Page says.

Scrub and deodorize

No one wants to visit a dirty house, especially prospective buyers. So make sure your house is squeaky clean.

“When buyers see an unkempt home or smell something when they first walk in, they become turned off immediately,” Page says. “They can rarely see past it to look at all of the great features in the home.”

Radice suggests having the house professionally cleaned so that everything is spotless. She also recommends baking cookies in the oven, bringing cinnamon sticks to a slow boil in a pot of water or using air freshener before each showing. Ridding the home of litter boxes is a must.

Enhance curb appeal

“Curb appeal is just as important as cleaning the inside of the home,” Page says. “It’s the buyer’s first impression of your home.”

Mow the lawn, make sure the sidewalk and driveway are free of clutter and debris, and make sure the house number is easy to see. You may need to pressure-clean your driveway and sidewalk.

Another valuable low-cost solution? Mulch. “It makes everything look trim and neat,” Radice says.

Copyright © 2019 Capital Gazette Newspapers, Melissa Neiman

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Mortgage rates drop due to Wall Street’s tariff fears

WASHINGTON – June 6, 2019 – A threat of Mexican tariffs could help homebuyers. Worried investors moved more money into bonds, which nudged the average 30-year fixed-rate mortgage down to 3.82% – a decline from last week’s 3.92%, the first to break below the 4.0% barrier.

A year ago, the average fixed-rate mortgage rate was 4.54%.

The average rate for 15-year, fixed-rate home loans also declined, dropping to 3.28% from last week’s 3.46%.

The recent sharp drop in mortgage rates hasn’t unlocked savings just for those looking to purchase a home – homeowners may also benefit. About 5.9 million borrowers could see their rates drop by at least 75 basis points by refinancing their mortgages, according to Black Knight, a mortgage software and analytics firm – 2 million more in the past month alone.

That’s the largest population of eligible borrower candidates in nearly three years for savings. The savings could add up to about $271 per month per borrower. If rates drop another quarter point, Black Knight estimates that 7 million borrowers could then potentially benefit from refinancing their home mortgage.

“When we factor income into the equation, we see that it takes 22% of the median income to purchase the average-priced home,” says Ben Graboske, president of Black Knight’s data and analytics division. “That’s the lowest payment-to-income ratio in more than a year as well, and far below the long-term average of 25.1%.”

Source: “As Mortgage Rates Plunge, Millions More Homeowners Can Benefit From Refinancing,” CNBC (June 3, 2019) and Black Knight, via Information Inc.

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Builders release list of their top legislative priorities

WASHINGTON – June 5, 2019 – Nearly 700 builders from across the U.S. converged on Capitol Hill today for the National Association of Home Builders (NAHB) 2019 Legislative Conference. While there, members plan to urge lawmakers to support policies that will increase their ability to build quality, affordable housing and keep the housing recovery moving forward.

“With housing affordability near a 10-year low, we’re sending a loud and clear message to members of Congress that there is an urgent need to implement innovative solutions to ease the nation’s affordability woes and enable more families to achieve homeownership or have access to suitable rental housing,” says NAHB Chairman Greg Ugalde.

Builders’ list of key housing issues

  • Workforce and immigration
    A chronic labor shortage is resulting in higher construction costs, increased home prices and lower economic growth, according to NAHB. It’s urging lawmakers to create a new, market-based guest worker program for the construction sector that will complement ongoing vocational training efforts and help fill labor gaps. Lawmakers were also encouraged to increase funding for job training programs to prepare individuals for careers in home building.
  • Trade policy
    Builders asked lawmakers to call on the administration to end tariffs on imports of softwood lumber, steel, aluminum and a wide variety of other goods used by the home building industry that, with the additional cost of tariffs, needlessly raise housing costs. NAHB also called on Congress to ensure swift ratification of the United States-Mexico-Canada Agreement, which holds the potential to lift the housing economy.
  • Housing finance reform
    Uncertainty about the housing finance system stymies investment and slows the housing market, NAHB says. It called on Congress to pass bipartisan housing finance legislation that would reform the current system and provide certainty to the marketplace, while maintaining an appropriate level of government support for housing in all economic and financial conditions.
  • Low-Income Housing Tax Credit
    To help spur production of affordable rental housing, NAHB urged lawmakers to pass the Affordable Housing Credit Improvement Act. Introduced in the House and Senate earlier this week, the bipartisan legislation would improve the Low-Income Housing Tax Credit by establishing a permanent minimum 4% credit floor for acquisition and bond-financed projects. NAHB says this would provide more flexibility in financing projects and significantly increase unit production.
  • National Flood Insurance Program
    To continue the stability and growth of the housing market, it is essential that the National Flood Insurance Program (NFIP) remains available, affordable and financially stable. NAHB called on lawmakers to pass a long-term NFIP reauthorization.
  • Building energy codes
    NAHB urged Congress to require any code or proposal supported by the Department of Energy to have a payback period of 10 years or less.
  • Cluster mailboxes
    NAHB says the U.S. Postal Service (USPS) instituted a de facto mandate requiring mail delivery to cluster mailbox units in new residential developments. NAHB says that any USPS reform effort should not be funded by home builders and homeowners. It urged House lawmakers to co-sponsor a House resolution (H. Res. 23) that calls on the USPS to preserve delivery of mail to the home or business.

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Deals can die over petty buyer-seller disputes

CHICAGO – June 5, 2019 – Homebuyers and sellers sometimes disagree over seemingly frivolous issues – but the issues don’t seem quite as frivolous if they jeopardize a sale.

Realtor.com recently interviewed real estate professionals and asked about common petty issues that can pop up in a transaction.

  • Missing cover plates
    Agents said they hear “missing cover plates” a lot. “One of the funniest – and most annoying – requests I get is for sellers to replace missing cover plates on light switches and outlets,” Amy Berglund, a real estate professional in Denver, Colo., said. “Usually they’re missing in places such as laundry rooms and basements – think places that aren’t used that much. It is an incredibly affordable fix.”
  • Missing blinds
    Jen Horner, a real estate professional in Salt Lake City, knows this gripe well. The buyer makes an offer, but on the final walk-through, they’ll notice the seller took the blinds, rods and drapes with them. “When looking at a property, buyers incorporate window dressings into their overall impression of the house,” she said. “And if they are not clearly excluded in the contract, window dressings belong to the home. Most of the time, the seller will agree to replace or reimburse the missing items. But if a seller refuses, we’ve seen it become a contentious issue that threatens the entire deal – even though you’ve made it to the walk-through.”
  • An attempt to get freebies
    Sometimes buyers set their sights on seemingly little things inside the home that belong the seller and try to get them for free. “During a 2017 sale of a $1.2 million home in Utah, and after months of negotiations, the deal literally came down to a last-minute ask for a foosball table worth about one hundred bucks,” Horn said. “Through some professional real estate therapy on both sides, we were able to avoid this final barrier and close on the property. Most importantly, both the buyer and seller were pleased with the outcome.”

But the foosball incident taught Horn that completing an agreement between a buyer and seller can sometimes come down to “seemingly very small terms” in the contract.

“These types of issues, which might seem petty on the surface, are oftentimes rooted in buyers and sellers psychologically wanting to feel like they got a final win before the deal closes.”

Source: “6 Surprisingly Petty Issues That Can Sabotage a Home Sale,” realtor.com® (May 28, 2019)

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The essential guide to hurricane preparedness

ORLANDO, Fla. – June 5, 2019 – Until Hurricane Michael hit Florida’s Panhandle last year, that area of the state was considered less vulnerable than the eastward parts that jut out into the Atlantic Ocean’s preferred path for big storms.

Hurricane season begins on June 1st and lasts six months, with storm threats typically peaking in August and September. But a major storm can target any part of Florida at any time.

Hurricane knowledge

First, know your hurricane facts and understand common terms used during hurricane forecasts. Storm conditions can vary on the intensity, size and even angle.

Tropical depressions are cyclones with winds of 38 mph. Tropical storms vary in wind speeds from 39-73 mph while hurricanes have winds 74 mph and greater.

Storm terms

  • Tropical storm watch: Tropical storm conditions are possible in the area.
  • Hurricane watch: Hurricane conditions are possible in the area. Watches are issued 48 hours in advance of the anticipated onset of tropical storm force winds.
  • Tropical storm warning: Tropical storm conditions are expected in the area.
  • Hurricane warning: Hurricane conditions are expected in the area. Warnings are issued 36 hours in advance of tropical storm force winds.
  • Eye: Clear, sometimes well-defined center of the storm with calmer conditions.
  • Eye wall: Surrounding the eye, contains some of the most severe weather of the storm with the highest wind speed and largest precipitation.
  • Rain bands: Bands coming off the cyclone that produce severe weather conditions such as heavy rain, wind and tornadoes.
  • Storm surge: An often underestimated and deadly result of ocean water swelling as a result of a landfalling storm, and quickly flooding coastal and sometimes areas further inland.

Hurricane forecasts

Predicting a tropical cyclone’s path can be challenging – there are many global and local factors that come into play. Forecasters’ computers take huge amounts of data and try to predict where the storm will go and usually are 2-3 days out. This is where you hear the terms “computer models” and “spaghetti models” being used. Generally, the forecast track or path is given using the average consensus of these models.

The National Hurricane Center has the most up-to-date information on tropical cyclone developments, forecasts and weather alerts, discussions analyzing the data and more.

Hurricane kits

It’s important to create a kit of supplies you could take with you if forced to evacuate. This kit will also be useful if you are able to stay in your home but are affected by the storm, such as through a power loss. One common trend seen when hurricanes are approaching is a wide-spread panic. If you prepare a kit ahead of time, you can alleviate a lot of the potential stress of a very chaotic situation.

Recommended hurricane kit items

  • Non-perishable food (enough to last at least 3 days)
  • Water (enough to last at least 3 days)
  • First-aid kit (include prescription medication)
  • Personal hygiene items and sanitation items
  • Flashlights (have extra batteries)
  • Battery operated radio
  • Waterproof container with cash and important documents
  • Manual can opener
  • Lighter or matches
  • Books, magazines, games for recreation
  • Special needs items: pet supplies and baby supplies, if applicable
  • Cooler and ice packs
  • An evacuation plan

Securing a home

  • Cover all windows with hurricane shutters or wood. Note: While tape can prevent glass from shattering everywhere, it does not prevent the window from breaking
  • If possible, secure straps or clips to securely fasten your roof to the structure of your home.
  • Trim all trees and shrubs, and clear rain gutters.
  • Reinforce garage doors
  • Bring in outdoor furniture, garbage cans, decorations and anything else not tied down
  • If winds become strong, stay away from windows and doors, and close, secure and brace internal doors.

Power outages

In the event a storm leaves you without power, there are a few things to consider:

  • Gas: Make sure your car’s tank is full far in advance of an approaching storm. Most people wait until the last minute, rush to get extra gas for cars and generators, and gas stations can run out.
  • Money: ATMs can run out of money if everyone tries to use them quickly, and they can shut down completely if the power goes out.
  • Cell phones: Charge cell phones pre-storm and limit use if the power goes out.
  • A/C: Try to prevent as much light from entering and warming the house by covering up windows on the inside. If you have back-up or battery-operated fans, don’t run them unless you’re in the room.
  • Water: Fill bathtubs and large containers with water for washing and flushing only.
  • Food: Turn your fridge temperature down and/or freeze any food or drinking water that can be frozen if you expect a power outage.

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What I did for love? 1 in 4 adults moved

NEW YORK – June 4, 2019 – About a quarter of adults say they’ve moved for the person they loved to pursue a romantic relationship at some point in their lives, a new survey shows. It’s likely to pay off too, couples report.

Men are slightly more likely to relocate than women (27% versus 23%, respectively), and millennials are more willing to make a move for love than other generations, according to a survey of about 1,000 adults from HireAHelper, a moving and relocation firm.

But relocating for a relationship can be tricky. A third of adults say that the toughest part of the process was making up their mind whether to move for a romantic relationship. That was followed by the actual moving process. Homesickness was another commonly cited issue – the difficulty of movers adjusting to life in a new area and leaving their old lives behind, the survey found.

Men tended to have a more difficult time deciding to move than women (38% of men compared to 28% of women) and managing changes to the relationship after the move (13% versus 11%). Women found it more difficult to find housing in their new location (13% versus 7%).

But for most, the move was worth it. Almost three quarters who said they moved for a romantic partner are still together or were together for more than a year after the move, according to the survey. Two in three said they have no regrets about moving for a significant other. Not surprising, couples still together tend to be the happiest about their choice to move, but even when relationships didn’t last, many adults still said they were happy about their decision to relocate. Just over one-half of people who were together 6 months or less after relocating for a partner said they’re still glad they made the move, the survey found.

About 44% of adults said they’d be more willing to move for love if they had a long-distance partner. But in some cases, there may be a distance to how far that love will go: 46% said they would only be willing to move within their own city or state to be closer to a romantic partner; 44% said they’d be open to moving across state lines or even further.

Over two-thirds of adults (68%) would need to be together at least six months before even discussing a relocation, and 30% would be willing to make a decision in less time. However, 12% said they wouldn’t move for a romantic partner at all.

“Overall, Americans are fairly open to the idea of moving for love, and a quarter of adults have actually done so,” the survey researchers note. “And most people who relocate to pursue a romantic relationship … [find] resettling nearer to a romantic partner has a solid chance of succeeding, sustaining and paying off even when you don’t stay together.”

Source: “2019 Survey: Moving for Love Is Likely to Pay Off,” Hire a Helper (May 2019)

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New blogs: How to pair AirPods, how to get more leads

Florida Realtors Tech Helpline blog: How to pair AirPods with any device. Form Simplicity’s latest blog: How to turn happy homeowners into lead generators.

https://www.techhelpline.com/how-to-pair-airpods-with-any-device/

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Congress extends flood insurance through Sept.

WASHINGTON – June 4, 2019 – The National Flood Insurance Program (NFIP) that millions of people rely on has gotten another temporary extension, as members of Congress renew efforts to work out a long-term proposal.

The NFIP extension through the end of September was tucked into a $19 billion disaster aid package the U.S. House approved in a 354-58 vote Monday evening. It now heads to President Donald Trump, who is expected to sign it.

This is the 12th temporary extension in two years. U.S. Sen. Bill Cassidy has led a bipartisan group of senators in calling for a long-term solution, rather than the piecemeal approach Congress has taken since September 2017, when the last major authorization ended.

“This ridiculous process has created significant uncertainty and anxiety for homeowners, renters, and small business owners in our states,” the senators wrote in a joint letter last month.

House and Senate leaders from both parties have expressed optimism about the long-term talks. U.S. House Minority Whip Steve Scalise, R-Jefferson, said he believes a five-year agreement can be hashed out in the coming months before the program faces its next deadline.

In Cassidy’s letter, senators called for a broader overhaul that factors in more accurate risk assessments, affordability components, mitigation funding and other improvements, including addressing “repetitive loss properties” through buyouts, elevations and other flood-proofing measures.

Repetitive loss properties are those for which NFIP has paid at least two claims of more than $1,000 in any 10-year period since 1978. At 7,223 properties, Louisiana has significantly more than any other state with damages totaling $1.22 billion between 1978 and 2015, according to an analysis from the nonpartisan Natural Resource Defense Council.

The program provides flood coverage to more than 5 million policy holders across the country, but it also faces resistance among lawmakers who question its costs and efficiency.

The Government Accountability Office has included the NFIP on its “high risk list” because it hasn’t struck a sustainable balance between keeping insurance affordable and maintaining the program’s solvency, leading to premium rates that “in many cases do not reflect the full risk of loss and produce insufficient premiums to pay for claims.”

The NFIP had to borrow money from the Treasury to help cover major disasters, after the program became mired in debt following Hurricane Katrina in 2005.

The disaster aid package, which includes funding for more than three-dozen states that have experienced floods, wildfires, hurricanes and other disasters in the past year, was blocked from passing three times while Congress was on a week-long recess. Three Republicans who acted to block the legislation said they wanted a recorded voice vote in the Democrat-controlled chamber.

© 2019 The Advocate, Baton Rouge, La., Elizabeth Crisp. Distributed by Tribune Content Agency, LLC.

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$19.1B disaster aid bill ready for president’s signature

WASHINGTON – June 4, 2019 – A federal disaster-relief package, long sought by Florida officials and Panhandle residents recovering from the ravages of Hurricane Michael, received approval Monday from the U.S. House after three earlier attempts were blocked.

The 354-58 vote, which came after the House returned from a 10-day holiday recess, sends the $19.1 billion package to President Donald Trump. The Senate backed the measure 85-8 on May 23.

The money will originally intended to help Florida’s Panhandle recovery after Category 5 Hurricane Michael made landfall Oct. 10, 2018, and caused massive damage. But as the two political partiesin Washington bickered, and as days became weeks and months, additional disasters occurred, from flooding in Arkansas and Iowa to tornadoes in Ohio. As a result, the disaster-relief package ballooned from $7.8 billion.

After the Senate approved the disaster-relief bill, the House tried to pass it three times by “unanimous consent,” a move that does not require most members to be present. But Republican lawmakers blocked the bill each time while the House was in recess.

U.S. Rep. Neal Dunn, a Republican from Panama City, expressed frustration Monday with his GOP colleagues who blocked the measure, which includes $1.2 billion to rebuild Tyndall Air Force Base, one of the storm-battered region’s biggest economic drivers.

“Some of you will say your principles require a recorded vote, even though the contents of this bill have been known for months and debated for months,” Dunn said. “In fact, we had a chance to vote on the amendments to it just two weeks ago. For those upset at the cost, OK, spending in Washington is a problem, but are you actually willing to make an empty gesture about balancing the federal budget on the backs of Americans who have lost everything? Are you willing to force the airmen of Tyndall, the Marines at Camp Lejeune, to halt the work to repair their bases because they ran out of money over a month ago?”

Dunn added that the package he “hammered” Congress to approve for nearly eight months also assists Florida’s agriculture industry, which suffered nearly $1.5 billion in damages from Michael. Most of the agriculture damage was to Northwest Florida’s timber industry, which isn’t covered by federal crop insurance or other programs.

“Are we willing to bankrupt them? Because a no vote today does exactly that,” Dunn said.

State Agriculture Commissioner Nikki Fried issued a statement after the vote expressing thanks for the bill’s approval but also noting that the 2019 hurricane season has already begun and debris from Michael has increased the threat of wildfires.

“This disaster recovery is long-overdue – but, better late than never,” Fried said. “I’m thankful that the Panhandle communities will finally be on the path to recovery.”

U.S. Rep. Mario Diaz-Balart, a Republican from Miami, said the funding package will also assist “unmet housing, business and infrastructure needs” in the region.

The funding includes $1.4 billion for Puerto Rico, including $600 million for nutritional assistance.

U.S. Rep. Chip Roy, a Texas Republican who was one of the three congressmen – U.S. Reps. John Rose, R-Tenn., and Thomas Massie, R-Ky. were the others – who blocked the bill from being approved through unanimous consent, said it was important that Congress vote on the measure.

Roy also continued to express concern with the amount being spent.

“I am still troubled we’re poised to spend $19 billion that is not paid for when we are racking up $100 million an hour in national debt,” Roy said. “At some point, before it is too late, Congress will get serious about restraining out-of-control spending. We’ve racked up approximately $24 billion in additional debt since the recess. At least today we’re voting.”

U.S. Rep. Tom Cole, R-Okla., while supporting the relief package that will help more than 40 states, expressed displeasure that Congress couldn’t reach a deal to include $4 billion Trump sought for the southern border.

The bill also reauthorizes the National Flood Insurance Program through Sept. 30, 2019.

Source: News Service of Florida, Jim Turner

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$4.4T plan could make mortgages more affordable – or less

NEW YORK – June 3, 2019 – Few homeowners or real estate agents worry about mortgage-backed securities (MBS) – a Wall Street concern – but a change in MBS rules could have a big impact on future homebuyers.

In the mortgage industry, banks and other companies lend money to people who want to buy a home. They then take that mortgage and sell it to entities, though Fannie Mae and Freddie Mac are the biggest players and guarantee nearly half of U.S. residential mortgages. Once sold, the banks have more money to lend to more homebuyers.

Fannie and Freddie, in turn, turn the loans into mortgage-backed securities, which operate similarly to stocks in which individual investors buy them in exchange for an expected return. After this happens, Fannie and Freddie have more money to buy mortgages from banks.

But a new rule for mortgage-backed securities will virtually eliminate the distinction between bonds issued by Fannie Mae and Freddie Mac. It allows market participants putting mortgage bonds together to deliver loans backed by Fannie Mae, Freddie Mac or both when they settle trades in what the industry calls the to-be-announced (TBA) market.

The aim is to improve market liquidity, mitigate investor risk, and potentially make home loans more affordable nationwide. The TBA market is the most liquid of the MBS markets and second only to Treasuries in daily volume. In fact, volume in 30-year Fannie Mae TBAs this year through April averaged about $150 billion a day, the most since 2012.

Traditionally, Freddie Mac bonds have traded at a discount compared to Fannie Mae securities, but the Federal Housing Finance Agency (FHFA) says that by allowing both Fannie Mae and Freddie Mac TBA eligible pools to be delivered into the new uniform MBS, the trading value disparity between the securities will decrease while the overall liquidity of the TBA market is enhanced.

Skeptics, however, worry that the change could actually increase mortgage rates rather than lower them.

Two securities with broadly similar characteristics – such as the same coupon, average credit score and maturity, for instance – may be valued at vastly different prices if the prepayment speeds on the underlying mortgages turn out to be dissimilar. Should speeds diverge, critics suggest that investors may start to favor either Fannie’s or Freddie’s mortgages over the other and begin trading them separately again. That would result in a three-way split of the market among Fannie Mae, Freddie Mac and uniform securities, reducing overall liquidity of the mortgage market in the process.

To prevent problems, FHFA is releasing quarterly prepayment monitoring reports and has established so-called CPR bands that Fannie Mae and Freddie Mac pools must fall within to be considered in alignment.

On the other hand, perhaps both skeptics and proponents are both wrong and, once the dust settles, mortgage borrowers won’t see much difference at all.

Source: Bloomberg (05/30/19) Maloney, Christopher; Boston, Claire; Gillen, David

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Sellers: Want to make more money? Don’t move out

SEATTLE – June 3, 2019 – A recent report finds that the average vacant home sells for $11,306 less and sits on the market six more days than comparable occupied homes.

“Although vacant homes are easy for buyers to tour at their convenience, the fact that the sellers have already moved on is often a signal to buyers that they can take their time making an offer,” says Redfin Chief Economist Daryl Fairweather, the sponsor of the study.

“It’s also likely that sellers who are in a comfortable enough financial situation to own a property that’s sitting empty aren’t as motivated to get the highest possible price for their home as sellers who need the cash from their first home in order to buy the next one,” he adds.

According to the analysis, vacant homes sold for less money in every housing market studied, but the amount varied by location. The biggest discount was seen in relatively affordable inland areas, while the price differential was smaller in the expensive West Coast markets.

Source: HousingWire (05/20/19) Lloyd, Alcynna

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Coming soon: Florida Realtors’ new dynamic website

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The American dream makes a comeback

CELEBRATION, Fla. – June 3, 2019 – After Teresa and Mark Taunton short sold their $535,000 four-bedroom dream home in Celebration, Florida, at the end of the real estate meltdown in 2011, buying another house was the last thing on their minds.

“It makes you feel you could somehow end up in the same position,” says Teresa, 57, describing the anxiety the couple experienced after selling their house for less than what they owed the bank. “We were just so leery of everything.”

But in late February, five years after they were officially allowed to make another home purchase, they closed on a modest ranch house for less than half the price of their former Orlando-area unit and just minutes away.

“We were really tired of renting,” Teresa says. Of their new house, she adds, “It’s comfortable. It’s home.”

With rent, “You’re looking at (shelling out) $20,000 to $30,000 a year, and you have nothing in return,” Mark adds.

There are signs that a growing number of Americans who lost homes to foreclosure or a short sale during the housing crisis are emerging from their post-crisis bunkers and buying again or planning to do so in the near future.

The trend could allow millions of so-called boomerang buyers to build wealth again through homeownership. It also could provide support to a housing market that has sputtered lately. Existing home sales are down 6.6% so far this year compared with the year-ago period, according to the National Association of Realtors® (NAR).

“I think the next phase of the housing recovery will be partly driven by people in the prime age group” of 35 to 64 that have been hesitant to buy again after losing homes in the crisis, says Kwame Donaldson, an economist with Moody’s Analytics.

Young people largely have fueled the housing recovery so far. In March, first-time home buyers made up 33% of all existing home sales, up from 30% a year earlier, according to NAR. But from the fourth quarter of 2017 to the fourth quarter of 2018, the homeownership rate jumped from 58.9% to 61.1% for 35 to 44-year-olds, the largest increase on record for any age group, and from 69.5% to 70.1% for 45 to 54-year-olds, Census Bureau figures show.

Donaldson says he believes the leap for 35- to 44-year-olds was largely spurred by boomerang buyers who were 27 to 36 during the depths of the crisis.

Housing crisis hit less qualified

The housing bust was caused by lenders who doled out subprime mortgages to Americans who couldn’t qualify for conventional loans. Many of the mortgages required low interest-only payments initially that ballooned after a few years. The model worked as long as home prices kept soaring, allowing homeowners to refinance. It unraveled when prices plunged and the Great Recession caused millions of people to lose their jobs and fall behind on their mortgage payments.

From 2006 to 2014, there were 7.3 million housing foreclosures and 1.9 million short sales, according to CoreLogic, a housing research firm. After a foreclosure, a prospective buyer must typically wait seven years to qualify for a mortgage guaranteed by Fannie Mae or Freddie Mac. The wait can be three years in certain circumstances, or for a Federal Housing Administration loan, but people who wait seven years generally benefit from higher credit scores and lower interest rates.

A short seller generally must wait three years to buy again.

Of 2.8 million former homeowners whose foreclosures, short sales or bankruptcies dropped off their credit reports from January 2016 to November 2018, 11.5% have obtained a new mortgage, according to a study by credit rating agency Experian for USA Today.

Fifty-three percent of the remaining 2.5 million had prime or super-prime credit scores in November, notes Experian Vice President Michelle Raneri. “That’s 1.3 million people who have really good credit,” she says. “Maybe they don’t realize they would qualify now.”

Some economists say many of those affected who wanted to become homeowners again already have done so. “I’m less convinced this is going to move the market,” says Ralph McLaughlin, deputy chief economist of CoreLogic.

Michael Fratantoni, chief economist of the Mortgage Bankers Association, says young people will be a far greater force in the housing market than prime-age boomerang buyers the next few years. There are about 31.7 million 24- to 38-year-old renters in the U.S., according to CoreLogic.

But Moodys’ Donaldson notes that the typical pay of middle-aged Americans is 14% higher than the U.S. average, making them particularly good candidates to buy homes. Those who lost houses were financially and psychologically scarred, he says, and many could take longer than three- or seven-year waiting periods before feeling comfortable enough to make a purchase.

In the Denver area, some boomerang buyers tour homes but then get cold feet and pull back before reentering the market months later and finally buying, says Jessica Reinhardt, a broker at RE/MAX Alliance.

A NerdWallet survey, conducted for USA TODAY in January, found that 6% of Americans who lost a home due to a financial event the past decade plan to buy one this year. But a whopping 39% intend to buy over the next three years and 58% say they’ll purchase within five years. Nearly one-third said they’re afraid to own a home again.

Losing the ‘American dream’

The Tauntons, of Celebration, could have bought another house in 2014 when the three-year waiting period after their short sale ended. But, “the memory was still sore,” Mark says. “You’re still in the middle of what you lost.”

They lost the house they bought in 2005 in which they raised the five children of their blended family and that symbolized their attainment of “the American dream,” as Mark puts it. They had their own pool and the Disney-owned community sported a movie theater and spa, among other amenities.

They kept current on their mortgage even after Mark lost his job as manager of an exclusive men’s designer clothing store in the depths of the recession in 2008. But when their monthly payment jumped from $2,300 to $3,500 in 2010, they were on the verge of falling behind. Their lender advised them to stop making payments so they could get a loan modification, but it never came.

“We did everything right,” Mark says, noting they had never missed a payment. “It was traumatic.”

While they rented four apartments and homes, they squirreled money away and started thinking about buying again last November. Besides wanting to amass a retirement nest egg, they grew weary of renting because “you didn’t get to know your neighbors,” Teresa says.

This time, they resolved to spend no more than $250,000, rejecting several of the more lavish houses they visited. “You never want to go through that again,” says Mark, who is now a high school teacher.

Teresa, an accountant, asked lots of questions and took meticulous notes, and the couple provided extensive documentation. Last time, “The mortgage company made it so easy,” she says.

The couple, who used most of their savings to buy their previous house, “qualified for much more than the home” they purchased this time, says their Redfin agent, Mike Moore.

They made a down payment of 5% on the $247,000 house, giving them a monthly payment of $1,640. While they worry about getting hurt by another crash, “I feel a whole lot better about a $240,000 house than a $535,000 house,” Mark says. “I feel like I can still control it.”

Economy, wage growth aid buyers

There are concerns for boomerang buyers. Nationally, home prices have climbed 53% since their 2012 bottom and are now 11% above their 2006 peak, according to the S&P CoreLogic Case-Shiller index. That raises worries about another potential bubble and could keep already-wary former homeowners from making a purchase. But credit standards are much tighter now, “so there are fewer risky loans out there,” says Skylar Olsen, director of economic research for real estate site Zillow. “The national market is not headed towards a bubble popping,” she says.

In fact, home price increases have moderated since last year and mortgage rates have fallen even as wage growth has accelerated, creating a positive backdrop for boomerang and other buyers, Fratantoni says.

The economy’s steady recovery the past nine years has been a godsend for Art Fernandez, of Davie, Florida. In 2007, he and his wife Leanette leveraged an interest-only mortgage to buy a 10,000-square-foot house around the corner from their more modest home, seeking both their dream house and a sure-fire investment in the go-go years. They bought even before selling their existing house.

But the housing market seemed to crash the week they closed, Fernandez says, leaving them owing more on both homes than they were worth. Soon, Leanette had to leave her job as a mortgage broker and Art, a retail theft prevention manager, was laid off. They lost the first house through foreclosure and the second in a short sale. “It was very, very difficult,” Fernandez, 42, says.

But while they rented for three years, he got another theft-prevention job, as well as a part-time gig as a real estate broker. Leanette became a travel and lifestyle blogger.

When they decided to buy a 2,200-square-foot house in 2017 for $355,000, “It was like we had three full-time jobs,” Fernandez says. “We were confident and ready to find our ‘forever home.'”

In some areas hit hardest by the housing crisis, boomerang purchases are picking up, brokers say. In Las Vegas, Thomas Blanchard, managing broker of Orange Realty Group, estimates that 15% to 20% of sales handled by his firm are to boomerang buyers, up from 1% to 2% a few years ago.

In the Miami area, boomerang buyers make up four in 10 purchases, estimates Sonia “Gaby” Martinez, broker and owner of Xtreme International Realty. Sharply rising rents in Las Vegas and Miami are prodding more ex-homeowners to buy again, the brokers say.

Some want to do so before climbing prices make it impossible.

Kimberly Velasquez, 43, of Parker, Colorado, lost her four-bedroom, $320,000 house to foreclosure in 2011. After renting and going through a divorce, she decided to buy a $380,000 townhouse last August as soon as the foreclosure came off her credit report. Denver-area home prices have more than doubled since 2011.

“I decided I needed to do it now,” she says, “or it would be to the point where I’d be priced out of ever being able to buy a home.”

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