Monthly Archives: October 2019

Weather-Related Property Damage Broke Record in 2018

Mother Nature hit housing harder than usual last year. Hurricanes, wildfires and hail led to a 17% increase in catastrophic insurance claim damages, a study finds.

NEW YORK – Last year set a record for weather-related losses to property, according to the LexisNexis’ Home Trends Report. More than half of all catastrophic claims in 2018 centered in four states: California, Colorado, Florida and North Carolina.

The Disaster Relief donation, which NAR will distribute, helps support those affected by a disaster, such as the recent flooding in Texas and wildfires in Calif.

Hurricanes, wildfires and hail prompted a 17% increase in the severity of catastrophic claims among insurers last year, the study shows. Some of the biggest weather-related events that shaped 2018 included hurricanes Florence and Michael, as well as several California wildfires.

Catastrophe claims comprised more than 30% of all peril claims in 2018.

“In the context of increased volatility and severity of weather-related events, this year’s report provides key insight into alarming by-peril trends,” says George Hosfield, senior director of home insurance at LexisNexis Risk Solutions. “It is extremely important for home insurers to stay informed of the challenges outlined in this report, especially the volatile and dynamic nature of weather-related loss trends in recent years.”

Fire losses have continued to rise since 2012. Fire losses accounted for nearly 40% of catastrophe claims in 2018, the highest level in a decade.

Last year also marked the worst year on record for wind severity, up 15%. The increase was blamed on hurricane devastation in North Carolina and Florida. September 2018 proved to be 17 times costlier than a typical September in North Carolina due to Hurricane Florence.

Hail also caused plenty of damage in 2018. Colorado had the highest costs in losses due to hail, but Texas continued to have the highest number of hail claims (29% of its total claim volume).

Source: “LexisNexis Home Trends Report,” LexisNexis (October 2019)

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Legal Q&A: Loud Contractors In the Condo Next Door

The neighbors went out of town to avoid contractor reconstructions, but they make a lot of noise and work late at night. What laws govern this kind of noise?  

FORT LAUDERDALE, Fla. – Question: Our neighbors are remodeling their condo while they are out of town. Their contractors are rude, loud and messy, and we have smelled a strong odor from the paint fumes. They seem to work at all hours. I don’t want to be a

Be sure to take the time to research the community, talk to residents, review the condominium documents and study other data.

bad neighbor, but it is getting overwhelming. What can we do? – Wendy

Answer: It is never wholly smooth when a neighbor is having work done to their home. At best, it is a minor nuisance and, at worst, a nightmare. While your neighbor has the right to remodel their home, it must happen in a way that minimizes the disruption to those around them.

Your first step is to bring this to the attention of your out-of-town neighbors. Call their cell or send an email if you have that information. Most people want to do the right thing, and since they are out of town, it is likely they do not know what is going on. If this is not possible or does not work, your next step would be to report the problem to the property manager.

In my experience, most property managers will take steps to enforce contractor time restrictions and will call out workers who make a mess. The manager will first try to educate the contractor on the community rules. If that does not produce results, your community should hold the owner responsible for their contractor’s carelessness. While it can be easy for your neighbor to blow off your concerns, few will ignore fines caused by their contractor.

If the problem continues, or your property manager refuses to take action, you will need to seek help from the legal system. Everyone has the right to enjoy their home, and you can request an injunction and compensation from the courts to stop the problem. The lawsuit can be based on privately enforcing your condo’s rules, or by suing for the “nuisance” caused by your neighbor.

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

© 2019 Sun Sentinel (Fort Lauderdale, Fla.), Gary M. Singer. Distributed by Tribune Content Agency, LLC.

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Study: More Older Adults Struggle with Housing Costs

Over the next 20 years, the 80-plus age group will be the fastest-growing in the U.S., and 1 in 3 will spend 30% or more of their income on housing.

NEW YORK – Households in their 80s will be the fastest-growing age group over the next two decades, according to a recent study

The housing industry is monitoring older American’s evolving housing needs. In 2012, 27M household heads are 65 or older. In 2017 it was 31M; by 2013 it will be 34%.  

by the Joint Center for Housing Studies of Harvard University.

The study also found an increase in the number of cost-burdened older Americans – ones forced to spend more than 30% of their income on housing.

“Within the next decade, some 18 million adults will be in their 80s – many living alone and on limited incomes,” according to the report. “The need for affordable, accessible housing and in-home supportive services is therefore set to soar.”

The number of cost-burdened households age 65 and over rose by more than 200,000 between 2016 and 2017 to a new high of nearly 10 million. Of those, about 5 million were severely burdened, which means they spend more than half of their incomes on housing. Of this group, about 54% are cost-burdened renters and 26% are cost-burdened homeowners.

Since the homeownership rate is higher for older Americans, the number of cost-burdened homeowners totaled 6.3 million compared to 3.6 million cost-burdened renters.

“While many households now of retirement age have the means to age in place or move to other suitable housing, a record number are cost-burdened and will have few affordable housing options as they age,” the report says. “In addition, many older renters are less well-positioned than homeowners because they have lower cash savings and wealth. Providing the types of housing and neighborhoods needed by an aging population depends on concerted action by both the public and private sectors. Commitments to create age-friendly communities and the recent funding of affordable housing construction for older adults are promising starts.”

Source: HousingWire (10/17/19) Smith, Maleesa

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1 in 5 Americans Say They’ve Lived in a Haunted House

In a survey, 23% of Americans said they’ve lived in a haunted house and an additional 20% may have. 

SANTA CLARA, Calif. – Nearly 60% of people who have lived in a haunted house didn’t know it was haunted before they moved in, according to realtor.com’s, fourth annual Haunted Real Estate Report.

In a Halloween-season publicity move, the iBuyer’s listing ads will include info on unusual electrical fields, unexplained movements and feelings of being watched.

The survey of 1,000 people across the United States was conducted by Toluna Research through online interviews.

Some of the spooky findings

  • 43% of respondents may have had a ghost roommate.
  • 58% of respondents said they have never lived in a haunted home
  • 23% of respondents said they have lived in one (58% had no idea it was haunted before moving in, but 37% did and decided to go for it anyway.)
  • 20% think they may have lived in one.

What made you think your house was haunted?

  • 65% said strange house noises made them think so
  • 52% saw strange shadows in the house
  • 48% said items moved on their own
  • 47% said certain rooms felt haunted
  • 46% said they felt a touch
  • 44% said the home had hot and cold spots

“Moving into a new home is a really exciting time, but finding out that your new abode has an unwanted guest can definitely put a damper on the celebration,” says Nate Johnson, realtor.com’s chief marketing officer. “We conduct this survey annually and it’s always interesting to see the results. This year, we were surprised by how many people had unknowingly moved into a haunted house at some point in their lives, and even more so by how many people knew and decided to move in regardless.”

Would you move into a haunted house?

When asked if they would ever consider moving into a haunted house, 54% of respondents said there was no way, while 21% were prepared to brave any spooky happenings plaguing the house, and 21% were on the fence and responded with “maybe.”

Interestingly, survey responses weren’t that different if the homebuyer didn’t actually buy the home. When asked what they would do if they inherited a haunted house, 51% said they would sell it immediately, but 23% would try to flush the ghosts out by renovating the home; 20% are willing to take the risk and simply move in, while 6% said they’d tear the place down.

A ghost next door?

While only one in five respondents (21%) were okay living in a haunted house, almost half of them (43%) were willing to live next door to one. Still, 31% aren’t willing to risk it even if the house next door is haunted.

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More Millennials Using VA Loans In 3 Florida Cities

The number of VA-backed loans rose 2.3% year-to-year in September, with millennials much of the reason. Of the top, 10 VA-loan cities in the U.S., three are in Florida.

WASHINGTON – Millennials increasingly use Veterans Affairs (VA) loans to become homeowners. The number of loans backed by the Department of Veterans Affairs rose 2.3% year-to-year in September, led by a 14% jump in the number of mortgages to

A look at the top things today’s younger buyers are looking for in house. (Example: Even though they eat out more, they still want an amazing kitchen.)

millennial veterans and active-duty military personnel, according to a report by Veterans United, one of the nation’s largest VA lenders.

Of the top U.S. cities for millennial VA borrowers over the year, three are in Florida: Fort Walton Beach-Crestview-Destin (No. 5), Jacksonville (No. 7) and Tampa-St. Petersburg-Clearwater (No. 8).

“There has been a question in real estate circles for years about when millennials are going to start buying,” says Chris Birk, director of education for Veterans United, and some young buyers are jumping in sooner than their peers because of VA loans, he says. “They don’t have to spend years saving for a down payment,” he notes.

VA loans allow qualified veterans and service members to purchase a home with no down payment and no mortgage insurance.

Borrowers aged 23 to 38 comprised 211,276 loans – a 34% share of mortgages backed by the VA from September 2019 to September 2018. The total number of VA loans issued during that time period was 624,332. The number of borrowers between the ages of 23 to 38 who took out a VA loan during that time is up 30% from a year earlier.

Millennials and Generation Z (those younger than 23) buyers comprised 45% of all VA purchase loans during the last fiscal year.

The top 10 cities for millennial and Gen Z buyers using a VA loan

  1. Jacksonville, N.C.
  2. Killeen-Temple-Fort Hood metro area, Texas
  3. Oklahoma City
  4. El Paso, Texas
  5. Fort Walton Beach-Crestview-Destin metro area, Florida
  6. Austin-Round Rock, Texas
  7. Jacksonville, Florida
  8. Tampa-St. Petersburg-Clearwater metro area, Florida
  9. Augusta-Richmond County, Georgia
  10. Las Vegas

Source: Veterans United Home Loans and “VA Mortgage Lending Increased 2.3% Led by Millennials,” HousingWire (Oct. 23, 2019)

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New Homes Sales Fall 0.7% in September

The slight Sept. decline follows a  7.9% surge in August. And while month-to-month new-home sales dropped, they’re 15.5% higher than they were in Sept. 2018.

WASHINGTON (AP) – U.S. new home sales fell slightly in September with all regions of the country except the Midwest showing declines.

The Commerce Department reported Thursday that sales of new homes fell 0.7% last month following a big 6.2% surge in sales in August. Homes were sold at a seasonally adjusted annual rate of 701,000, 15.5% higher than a year ago.

Many economists had expected sales to keep rising in September, reflecting declining mortgage rates and ultra-low unemployment.

However, the housing industry is combating a variety of factors that are holding back growth ranging from a shortage of construction workers to a lack of available land for new homes.

The median price of a new home fell 7.9% last month to $299,400, down from an August price of $325,200.

The only region to post a sales gain was the Midwest where sales rose 6.3%. Sales in the West fell 3.8% and were down 2.8% in the Northeast and a slight 0.2% in the South.

The National Association of Realtors reported Wednesday that sales of previously owned homes , the biggest part of the market, fell 2.2% in September with rising prices and lower inventories blamed for the decline.

Homeowners in both the existing sales market and the new market have had to face a shortage of available properties this year, especially at the lower-priced end of the market.

The inventory of new homes for sale fell 0.6% in September to 321,000, or a 5.5-months supply at the September sales pace.

Copyright 2019 The Associated Press, Martin Crutsinger. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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RE Groups Criticize Lenders’ Focus on Debt-to-Income Ratios

Realtors, bankers and builders issued a joint statement saying many factors should be used to determine a borrower’s risk of default – not just DTI ratios. “Credit history, cash reserves, property equity and liquid assets also help to paint a more complete picture.”

WASHINGTON – The National Association of Realtors, Mortgage Bankers Association, National Association of Home Builders and the American Bankers Association issued a joint statement about regulators’ “single-minded focus” on a mortgage qualification measure known as the debt-to-income ratio (DTI).

“The discussion on mortgage risk has been colored by a single-minded focus on just one factor that lenders use to examine a borrower’s likelihood to repay a mortgage: the debt-to-income ratio,” the letter said. “Yes, the DTI is important. But it is just one of many considerations lenders use in combination when evaluating whether a borrower can and will repay a loan.”

The importance placed on DTI should be more in line with other qualifications, the groups said.

“Other factors including credit history, cash reserves, property equity and liquid assets also help to paint a more complete picture of a borrower’s true credit profile and the true risks assumed by a lender,” they added.

The amount of cash a borrower has is a better indicator than DTI, the groups said. The average “front end” ratio, measuring income compared to the debt incurred by the new monthly mortgage payment, was 24% in September, according to Ellie Mae data. The average “back end” ratio, measuring all recurring debt including housing payments, stood at 37%.

At the start of the year, the average front end ratio was 26%, and the average back end ratio was 39%.

Source: HousingWire (10/22/19) Howley, Kathleen

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Mortgage Rates Rise to 3.75% – a 3-Month High

Rates still remain low in a year-to-year comparison – less than a percentage point below their 4.9% level at this time last year.

WASHINGTON (AP) – U.S. long-term mortgage rates rose slightly this week to their highest point in 12 weeks, though they remain far below their levels of a year ago.

Mortgage giant Freddie Mac said Thursday that the average rate for a 30-year fixed mortgage rose to 3.75% from 3.69%the previous week. That’s down from 4.9% at the same time last year and by historic standards is very low.

Lower rates have helped reinvigorate the housing market, which stumbled last year. Sales of existing homes reached a 17-month high in August, though they fell modestly in September. New home sales jumped 15.5% in September from a year earlier. Single-family home construction has also ticked up.

The average rate on a 15-year mortgage moved up to 3.18% from 3.15% a week ago.

Freddie Mac surveys lenders across the country between Monday and Wednesday each week to compile its mortgage rate figures. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates.

The average fee on 30-year fixed-rate mortgages was 0.5 point, while the average fee for the 15-year mortgage was also 0.5 point.

The average rate for five-year adjustable-rate mortgages rose to 3.4% from 3.15% last week, while the feed was 0.3 point.

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FHFA Clearinghouse Offers Chinese and Spanish Translations

The home buyer/seller resource offered by Fannie Mae, Freddie Mac and government agencies plans to continue expanding the number of language translations offered.

WASHINGTON – The Federal Housing Finance Agency (FHFA), Freddie Mac  and Fannie Mae announced the addition of traditional Chinese language resources to the Mortgage Translations clearinghouse. The clearinghouse already offers translations in Spanish.

According to a media release, the goal for a Chinese translation is to “help consumers whose primary language is Chinese to gain confidence and improve their ability to navigate the mortgage and homebuying process.”

Mortgage Translations launched in October 2018. It’s goal is to provide a centralized source of industry-standard resources to assist lenders, servicers, housing counselors and other real estate professionals serve borrowers with limited English proficiency.

According to the U.S. Census Bureau’s 2015 American Community Survey, 4.8 million Chinese-Americans currently live in the U.S. They make up one in four (23%) of the overall Asian American Pacific Islander community – the fastest-growing population demographic and projected to become the largest minority population.

“FHFA will continue to work with Fannie Mae and Freddie Mac on the Language Access Multi-Year Plan, which may include adding more translated mortgage documents to the Mortgage Translations website,” says Sandra Thompson, FHFA deputy director, Division of Housing Mission and Goals.

The FHFA, Freddie Mac, and Fannie Mae collaborated with industry experts, consumer advocates and other government agencies, such as the Consumer Financial Protection Bureau, to translate the online collection of mortgage documents, educational materials. It also includes a glossary, which FHFA says should be “particularly helpful in standardizing translations across the mortgage industry.”

FHFA says three additional languages commonly spoken by limited-English-proficiency households – Vietnamese, Korean, and Tagalog – will be added to the Mortgage Translations clearinghouse in the coming years.

© 2019 Florida Realtors®

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Opportunity Zones’ Tax Breaks Off to a Sluggish Start

For investors, Opportunity Zones offer one of the best real estate tax breaks ever – but so far they’ve only raised 15% of the total private capital predicted.

NEW YORK – Opportunity Zones may be one of the biggest real estate tax breaks ever offered, but a study finds that investors have hesitated to take advantage.

The tax breaks – which spawned from the 2017 federal tax overhaul – aim to spur economic growth in nearly 9,000 designated low-income communities across the country. Investors who hold onto Opportunity Zone investments for 10 years receive the greatest tax breaks.

Last fall, Treasury Secretary Steven Mnuchin predicted that Opportunity Zones would attract more than $100 billion in private capital.

So far, however, Opportunity Zone funds have raised less than 15% of their goals, according to an analysis by San Francisco accounting firm Novogradac & Co. The firm reviewed 103 funds that were created to invest in Opportunity Zones. Those funds have raised a combined $3 billion of the $22.7 billion they’re seeking, The Wall Street Journal reports.

“Every manager I talk to is saying gaining traction is slower than expected,” says John Lettieri, chief executive of the Economic Innovation Group, a nonpartisan think tank.

One investor concern: The length of time they have to commit to revitalizing an area. It’s 10 years to achieve the maximum benefit, Chris Loeffler, chief executive of Caliber Cos., says Caliber has raised about $50 million towards its $500 million goal.

Housing analysts say that investors have been slow to embrace Opportunity Zones because regulations are not yet finalized. In addition, the markets pegged for revitalization are new for many investors. The Treasury Department released its second set of guidelines this spring.

“As investors continue to learn more about this policy, the amount of capital flowing to new and expanding businesses in those communities will only increase,” a Treasury spokesman says.

California has the most opportunity zones in the country at 374, according to a study by ATTOM Data Solutions, which analyzed 3,073 federal opportunity zone areas. Following California, Florida has the most at 317; Texas has 164; Pennsylvania has 154; North Carolina has 145; and Tennessee has 138.

Source: “Opportunity-Zone Funds Are Off to a Slow Start, Lagging Behind Heady Expectations,” The Wall Street Journal (Oct. 22, 2019) [Log-in required.]

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NAR Issues Scam Warning Over Invite to Its Annual Conference

Be on the lookout for a fraudulent email. The subject line says “Register for the 2019 Realtors Conference,” but the sender is altappraisal@comcast.net.

SAN FRANCISCO – The National Association of Realtors® (NAR) issued a warning to members: Be on the lookout for a fraudulent email with the subject line “Register for the 2019 Realtors Conference.”

While the email appears to be from NAR, the “from” email address says it’s actually sent by altappraisal@comcast.net.

If you receive the email, NAR encourages you to take a screenshot of it and file a report about it to the FBI IC3 website. Do not click on the links. After you take the screenshot, delete the email.

If you already received and clicked on the email, alert your IT department immediately to protect your devices from malware.

NAR says it has reported the email scam to the FBI.

While the email appears legitimate, one sign that the email’s fraudulent is that the subject line does not include the registration mark (®) after the word Realtors®. Emails from NAR always include the mark.

However, an “®” following “Realtor” doesn’t guarantee that an email is legit. Scammers may also include it, so recipients should always verify emails using the “from” address and other information.

© 2019 Florida Realtors®

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Economists: An Unseen Force Holds Back Affordable Housing

Study: Builders lost workers, went bankrupt or got absorbed during the recession. That led to a drop in competition and potential loss of 150K new homes each year.

WASHINGTON – According to a working paper by economists Luis Quintero and Jacob Cosman of Carey Business School at Johns Hopkins, the number of builders that controlled 90% of a typical market fell by a quarter between 2006 and 2015 – and this drop in competition cost the country about 150,000 additional homes per year, all else being equal.

The change in the makeup of builders also influenced prices. They found that home prices grew more than twice as fast from 2013 to 2017 as they would have if the market hadn’t consolidated during the recession.

According to Quintero and Cosmans’ theory, having only a few builders controlling many markets exacerbated the nation’s affordable housing crisis. With fewer competitors, builders face less pressure to beat out rival projects and can time their efforts to produce fewer homes while charging higher prices.

However, industry experts attribute this consolidation to issues like the scarcity of land, rising labor costs, restrictive zoning, NIMBYISM (or not-in-my-backyardism) and the financial markets.

The National Association of Home Builders reports that mergers among large home builders boosted the market share of the top 20 builders to 29% last year from 21% in 2008. While many may not consider the housing market an oligopoly given the thousands of builders across the country, oligopolies in housing are fundamentally different due to “location, location and location.”

Quintero says that buyers shop for homes in a narrowly defined town, suburb, neighborhood or other market. And in some of those areas, the only competitors that matter are those operating within the same market.

Jenny Schuetz, an affordable housing expert at the Brookings Institution, praised the analysis. “If zoning and other local permitting processes are complicated, land is expensive and the time needed to develop a project is long, then only large, well-capitalized, politically savvy developers will be able to build.”

Source: Washington Post (10/17/19) Van Dam, Andrew

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Upscale Touches Can Make Cookie-Cutter Homes Stick Out

While unusual elements may turn off some buyers, classic elements used in a unique way generally have mass appeal. One example: A herringbone-pattern wood floor.

NEW YORK – Cookie-cutter homes and apartments look similar to their competition, making it harder for a single listing to stand out. But developers and designers suggest some ways to make one abode seem better than its identical twins.

“Everybody’s looking at what everybody else is doing,” says Jonathan Miller, president of Miller Samuel Real Estate Appraisers & Consultants, to The New York Times. An apartment can be “really nice and special and unique – and not dissimilar to the other five places you just looked at.”

To stand out, designers and developers use materials, finishes and tech they believe will get noticed, including:

  1. Herringbone patterns: Intriguing floors may be one way to lure buyers, designers say. Planks of wood flooring are often in parallel lines. But flooring installed in zig-zag patterns with herringbone or chevron details is getting noticed, as the look provides a flooring update, designers say. With herringbone, the ends are cut at a right angle and have a woven effect. The technique can be applied in other rooms, too, such as in bathrooms – or as an accent wall in the living room or even a backsplash in the kitchen.
  1. Marble: Marble is popping up all over homes, from kitchen countertops to stove hoods and bathrooms. “Calacatta, a gray-veined marble quarried in Carrara, Italy, remains the go-to-choice,” The New York Times reports. The polished stone is increasingly being “honed,” which has a softer sheen, making marble less flashy than it has been in the past.
  1. Smart-home tech: A cookie-cutter home with great technology stands out. Homeowners can check the temperature or security of their home from their phones. The lighting and curtains can be controlled through an app. A marketing team called Centrale is recommending Nest Learning thermostats for the apartments in Ceruzzi Properties in East Midtown, N.Y. The smart thermostats have occupancy sensors that will turn the heat or air conditioning on or off based on whether someone is in the room. “It doesn’t make sense to manually operate thermostats anymore,” says Tariq Mahmood, director of construction for Ceruzzi’s New York division.

Source: “Six Must-Haves Needed to Seduce Buyers,” The New York Times (Oct. 18, 2019)

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Fla. Pays Off Sugar Lease to Build Algae-Fighting Reservoir

State will pay sugar grower $2.4M to end a 1,234-acre land lease. A reservoir leading to the Everglades should help lessen blue-green algae in Central Fla. rivers.

TALLAHASSEE, Fla. – Florida will pay $2.4 million to a sugar grower as part of an effort to clean and shift water south from Lake Okeechobee through the Everglades.

Gov. Ron DeSantis and the Florida Cabinet – Chief Financial Officer Jimmy Patronis, Agriculture Commissioner Nikki Fried and Attorney General Ashley Moody – agreed Tuesday to pay $1,940 an acre to New Hope Sugar Co., a subsidiary of Florida Crystals, to terminate a 1,234-acre lease of state-owned land. The land is to be part of a project that involves building a reservoir in the Everglades Agricultural Area.

“This is clearing the way now to be able to do this reservoir,” DeSantis said after the Cabinet meeting. “If we had not done that, then it would have been delayed and delayed. It’s going to be hard enough to get the (U.S.) Army Corps on this (project), that delays on our part would have been bad.”

The money, which will come from the state’s Everglades Trust Fund, is a required termination fee for New Hope and is expected to save the state about $16 million in construction costs by advancing the timeline for a stormwater management area linked to the reservoir, Department of Environmental Protection Secretary Noah Valenstein said.

“Every year that there is a delay in construction projects, what we’ve been seeing is a 3% increase in costs,” Valenstein said.

Valenstein said with the lease termination approved, the first of three phases of the stormwater management area could begin in late fall if the project is approved by the U.S. Army Corps of Engineers.

The lease included a notice requirement that would have prevented the state from getting the land until at least three years after receiving a permit from the Army Corps. But Florida Crystals agreed to waive the requirement.

 “When we saw the governor’s expedited schedule, we knew our support would be integral to the success of the EAA reservoir project’s new timeline,” Gaston Cantens, vice president of corporate relations for Florida Crystals, said in a statement. “We then contacted the state with a solution, offering to waive the state’s contractual obligations to a three-year termination notice in order to facilitate immediate access to the land needed to move the project forward early. Agriculture has been an active partner in Everglades restoration for more than 25 years, and we are proud to continue our successful collaboration with today’s action.”

State lawmakers approved the roughly $1.6 billion reservoir project in 2017. The reservoir is aimed, at least in part, at helping reduce the amount of polluted water going from Lake Okeechobee into the St. Lucie and Caloosahatchee rivers, which have faced major problems with toxic blue-green algae.

Audubon Florida Executive Director Julie Wraithmell said the stormwater management area and reservoir “will help reconnect Florida Bay to its historic freshwater source in Lake Okeechobee.”

“After the recent seagrass die-offs that we saw in 2015 in Florida Bay and the multi-year toxic harmful blooms that we’ve seen in the northern estuaries, there is really no time to waste in increasing our capacity to send more clear freshwater south to where it is needed the most,” Wraithmell said.

Valenstein said the 2017 law set aside $30 million that can be used to fund the New Hope lease termination.

The district applied for permits from the Army Corps in June and August for the stormwater-treatment area component of the reservoir project. The Army Corps is expected to build the reservoir, while the district constructs the water-cleansing treatment area.

The 2017 law, spearheaded by then-Senate President Joe Negron, R-Stuart, allows Florida to issue up to $800 million in bonds for the reservoir, with the rest of the funding coming from the federal government.

The bill capped annual state funding at $64 million and placed the reservoir on state-owned land rather than private farmland in the Everglades Agricultural Area.

Source: News Service of Florida, Jim Turner

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$600K Grant to Help Study Impacts of Red Tide

How much did last year’s red tide hurt the state? NOAA will study the total cost of red tide, including hits to human health, real estate, fishing and restaurants.

TALLAHASSEE, Fla. – A federal agency has set aside $600,000 to study the socioeconomic impacts of red tide blooms here, like the one that gripped Southwest Florida from the fall of 2017 until this past spring.

The National Oceanic and Atmospheric Administration, or NOAA, is putting more than $10 million in total this fiscal year toward studying and better understanding algae blooms in places like Southwest Florida, the Great Lakes, California, Alaska and New England.

The grant will be awarded in the coming months and is one of 12 new research projects around the country aimed at better predicting, responding to and understanding the impacts of harmful algal blooms like red tide.

“NOAA is funding the latest scientific research to support environmental managers trying to cope with increasing and recurring toxic algae that continue to affect environmental and human health and coastal economies,” said NOAA’s Steven Thur. “Improved understanding of these coastal (harmful algal bloom) threats will lead to better bloom observation and prediction, and help to mitigate effects along the U.S. coast.”

Red tide is caused by the organism Karenia brevis and is naturally occurring in the Gulf of Mexico, although many water quality scientists say nearshore blooms can be fed by nutrient pollution from agriculture and developed areas.

A particularly nasty red tide bloom that started in October 2017 and lasted until earlier this year killed hundreds of dolphins and sea turtles, millions of pounds of fish and eels and a whale shark.

The study will focus on the obvious losses to hoteliers and restaurants as well as more difficult aspects of economic impacts.

“A lot of us, when we think about red tide and the economic impact, the first thing you think about is people in the tourism industry and their losses and the folks in the restaurant business who had empty tables for months,” said Shelton Weeks, chair of Florida Gulf Coast University’s department of economics and finance as well as an affiliate professor at the school’s new Water School. “It’s going to capture those costs plus it’s going to include the health and human costs. If you think of the people who had respiratory illnesses, it’s going to consider that. It will even look at the opportunities lost.”

FGCU is not involved at this point in the project.

Some factors are much more difficult to calculate, Weeks said, which is why the study is needed.

“We don’t really know the costs of people with respiratory issues who missed work but didn’t go to the doctor,” he said. “How do you measure that?”

Jim Beever with the Southwest Florida Regional Planning Council said the study will look at things like lost beach visits.

“You’re looking at things which didn’t happen because the red tide was occurring,” Beever said. “People couldn’t go to the beach safely, which reduces the economic activity of going to the beach – which is one of the most lucrative activities in Florida.”

The bloom shut down coastal economies tied to tourism, fishing (commercial and recreational), real estate and restaurants.

“People weren’t fishing, so there were losses from commercial fishing not occurring and people not chartering guides to go out fishing and party boats and all of that,” Beever said. “Realtors and people in the real estate industry were saying people were looking to move to this area and deciding not to because of the red tide. People were trying to sell houses that didn’t sell.”

Beever said news of red tide impacted other areas of Florida because national perception seemed to be that all of the state was inflicted.

“The news of a red tide, the way they put it in national media, often leads to other parts of the state being impacted even though those areas aren’t being impacted,” Beever said. “(Like the 2010 BP oil spill) we had economic impacts even though no oil ended up on our shores.”

© 2019 Journal Media Group, Chad Gillis

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Americans’ Commute Times Expand to Record High

Feel as if you spend all your time in the car? You’re not alone. In 2018, the average commute time rose to 27 minutes as more buyers moved to new exurb communities.

WASHINGTON – Consumers spend more time getting to work. On average, Americans’ one-way commute times rose to just over 27 minutes in 2018 – a record high according to U.S. Census Bureau data.

The average American has added about two minutes to their one-way commute since 2009 – 20 more minutes per week for commuting, and, over a year, 17 additional hours on the road just getting to and from work.

Compared with 1980, American workers have lost nearly an hour a week in commuting. The average American worker spent 225 hours – the equivalent of nine calendar days – commuting in 2018.

“Rising commute times reflect the challenges of life in many metropolitan areas where new housing isn’t being built fast enough,” The Washington Post reports. “As a result, many workers are forced out to far-flung suburbs and exurban areas in search of affordable homes. … Rising commute times are likely to spur more workers and employers to experiment with remote work.”

The census data shows a growing share – albeit still relatively small at this point – of Americans who telecommute and working from home. In 2018, about 5% of the workforce telecommuted.

Source: “Nine Days on the Road. Average Commute Time Reached New Record Last Year,” The Washington Post (Oct. 7, 2019)

© Copyright 2019 INFORMATION INC., Bethesda, MD (301) 215-4688

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Florida Lawmakers Focus On Climate Change

Gov. DeSantis and a crop of younger lawmakers have led to a new interest in the changing environment, and a specific focus on the impact of rising seas in Fla.

TALLAHASSEE, Fla. – On Monday, Florida lawmakers dug into issues involving climate change and greenhouse gas emissions, phrases mostly kept under wraps by state Republican leaders before last year’s elections.

Senate Infrastructure and Security Chairman Tom Lee, a Thonotosassa Republican and former Senate president, said the shift in the GOP is in part a reflection of a younger generation of conservatives, including Gov. Ron DeSantis and incoming House Speaker Chris Sprowls, who “aren’t so much in denial about some of these issues.”

Lee’s committee on Monday heard from several academic experts and the governor’s chief resilience officer, Julia Nesheiwat, on the environmental challenges ahead for the state, which has a large part of its population within 20 miles of the coast. Nesheiwat said her job is building a statewide strategy over the next couple of years that prepares Florida for the economic, physical and environmental impacts of climate change.

“These aren’t issues that are just 10, 20 years, it’s happening now, we’re seeing it now as we speak,” she told committee members. “This is a very dire and urgent issue that I think we need to address.”

Lee said he set up the panel discussion to honor the thoughts of the young conservatives and to acknowledge the state needs to consider the changing environment as it plans for the future.

“We’re putting tens of billions of dollars a year into infrastructure in this state, and these are 50-, 100-year assets,” Lee said. “We ought to be doing what we can to make sure that we’re building them at an elevation or planning in an environment that is relevant to what this world might look like as time passes.”

Nesheiwat said the state, which could become a national leader on the issues, hasn’t been idle. She said in the past four to five years a number of state agencies have been working on mitigation efforts tied to the changing environment. She said, for example, the Department of Environmental Protection has spent about $313 million on resilience efforts and coastal protection.

Sen. Jose Javier Rodriguez, a Miami Democrat who continues to wear the black rainboots he donned for last two legislative sessions to raise awareness about climate change, said it’s good that lawmakers are talking about the issue. But he said there needs to be discussion about causes of the changing climate.

“The unfortunate thing is that the bar is so low, we lost a decade under (former) Gov. (Rick) Scott and the prior leadership,” Rodriguez said after the meeting. “It’s great that we’re talking about (it) … but the way resilience is defined, it excludes dealing with the causes of climate. The obvious next step is also to try to see what we can do on energy policy.”

The meeting reflected a continued change in tone from the Republican-dominated state Legislature. During Scott’s two terms as governor, concerns about the impact of climate change were not a high priority. The Scott administration halted work on a statewide climate action plan started under former Gov. Charlie Crist, now a congressman, and had an unwritten policy banning the terms climate change and global warming. Scott was elected to the U.S. Senate in November and was succeeded by DeSantis.

DeSantis wasted little time changing the narrative after gubernatorial win. One of his first actions after taking office was to issue an executive order on water quality. The order directed the Department of Environmental Protection to make decisions based on the best available science and to create an Office of Resilience and Coastal Protection to help communities prepare for the effects of sea level rise.

Lee said it’s still too early to predict a full “paradigm shift” among lawmakers or what legislation could come from the 2020 session. But he said discussions are needed on issues from septic tanks and drainage to coastal construction and road planning.

“I do think we’re headed in that direction,” Lee said. “I think reality is going to set in. And if it doesn’t, it’s going to hit us right in the face.”

During the 2019 legislative session, two Senate committees unanimously backed a Democratic-sponsored bill that sought to require sea-level projection studies for some state-financed construction in coastal areas. But a House version of the bill never appeared before a committee.

However, Rep. Chris Sprowls last month took on the climate issue after being formally chosen by his House Republican colleagues to become speaker after the 2020 elections.

“Florida’s prosperity is inextricably tied to our environment,” Sprowls, a Palm Harbor attorney, said at the time. “Our beaches and our water are among our state’s chief economic assets, and as the trustees of our state, we have an obligation to protect and enhance those assets. We need to stop being afraid of words like ‘climate change’ and ‘sea level rise.’”

Sprowls said conservatives can “recognize that our environment matters without banning our air conditioners or closing our supermarkets or scrapping our cars.”

Source: News Service of Florida, Jim Turner

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Study: Sellers Stressed Over Time and Money Uncertainty

Sellers don’t like home showings or making repairs, but they say their greatest stress comes from uncertainty – the aspects of a sale that they can’t control.

SEATTLE – When it comes to selling a home, factors that are hard for sellers to control – like uncertainty about timing and price – cause the most stress, according to the 2019 Zillow Group Consumer Housing Trend Report. Almost everyone considers a home sale stressful – 95% according to the report.

However, the primary stress isn’t juggling family and a life while keeping the house ready for last-minute showings, sellers said the two biggest causes of stress revolve around the things they can’t control.

Most sellers list their home based on the time they think it will take to sell, and 56% of sellers said the “Will it sell on time?” question caused stress. In addition, 53% fear the home won’t sell for the price they expect, and 52% said they stressed over something falling through during the selling process.

One reason timing and financing can be stressful for many home sellers is because 64% of them plan to buy a new home after selling their old home, a stress factor specifically cited by 51% of home sellers.

More than half (52%) of home sellers also worry about improvements needed to prepare a home for the marketplace, maintaining to get a home ready to sell. Maintaining a market-ready home is stressful for 43% of sellers, and 39% stress about leaving the home for tours and open houses.

Younger or less experienced home sellers feel the greatest stress. Younger sellers are more likely to worry about leaving the house during tours and open houses than older sellers, and Generation Z or millennial home sellers are more likely to feel stressed over their lack of control over the selling process.

“The two most stressful questions when selling a home – what price it will sell for, and how long it will take – are top of mind from the very beginning of the home selling process” because they could have a big financial impact, says Skylar Olson, director of economic research at Zillow. “Those outcomes could ultimately be the difference between retiring now or six months later, or having to pay a new mortgage and rent in a temporary home.”

The uncertainty and unpredictability of the traditional home selling process causes many home sellers to hit a breaking point – previous research found that more than one-third of home sellers cry when selling a home, and more Americans are stressed out by selling a home than they are by planning a wedding or getting fired.

© 2019 Florida Realtors®

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NAR Study: Public Transit Adds Value to Nearby Homes

Residential properties within a half mile of public transit had 4% to 24% higher median sale prices between 2012 and 2016, the study found. Commercial values saw per-square-foot sales-price increases between 5% and 42%.

CHICAGO – Neighborhoods located within a half-mile of public transit services outperformed those farther from public transit based on a number of factors, according to a report released Monday, “The Real Estate Mantra – Locate Near Public Transportation” – a joint project from the National Association of Realtors® (NAR) and the American Public Transportation Association (APTA).

The report shows that commercial and residential real estate market sales thrive when residents have mobility options. Residential properties within these areas had 4% to 24% higher median sale prices between 2012 and 2016; commercial values in four of the regions saw median sales prices per square foot increase between 5% and 42%.

Transit-oriented areas also helped residents. The report found an average annual savings of $2,500 to $4,400 in transportation costs for the typical household. For some the savings is in even greater – one in four households close to transit doesn’t own a vehicle, according to the study.

“The results of our report, conducted over multiple years alongside the American Public Transportation Association, should reiterate to policymakers at all levels of government the importance of investing in modern, efficient infrastructure that facilitates growth and helps our nation keep pace in a rapidly evolving world,” Oppler said. He spoke at a joint press conference Monday alongside New York State Association of Realtors President Moses Seuram and Paul P. Skoutelas, president and CEO of APTA, which represents public and private sector transportation entities.

The study explored seven metropolitan regions that provide access to heavy rail, light rail, commuter rail and bus rapid transit: Boston; Hartford, Conn.; Los Angeles; Minneapolis-St. Paul, Minn.; Phoenix; Seattle; and Eugene, Ore. The seven sample areas were examined by residential and commercial sales performance, rent, neighborhood characteristics, local government interventions and housing affordability.

“Public transportation is a valuable investment in our communities, our businesses, and our country,” Skoutelas said, not just because it helps residents get to work and school but also because it makes areas more attractive for relocating companies.

But high demand and constrained supply have put upward pressure on neighborhoods with high-frequency public transportation. NAR has made it a priority to address affordability and supply issues, and Skoutelas said APTA is a partner in that effort.

“As the conversation surrounding housing affordability continues,” Skoutelas said, “public transportation agencies are critical allies in working with elected officials and community leaders in the effort to increase housing opportunities and maximize value around stations.”

© 2019 Florida Realtors®

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New Scam Has Realtors Listing Land the Seller Doesn’t Own

With fake ownership papers in hand, S. Fla. scammers hired a Realtor to list their bargain-priced vacant land, apparently hoping to steal a buyer’s deposit or cash at closing.

CORAL GABLES, Fla. – In an unusual new scam, criminals apparently forged ownership deeds for currently vacant land, contacted a Realtor, and listed it for sale in the MLS.

According to Dianne Regalado Kammerer, director of sales with Coldwell Banker Residential Real Estate in Coral Gables, the forged ownership papers were not high quality but they did the trick in at least two cases she discovered.

While the “not high quality” ownership docs could be a red flag to listing agents going forward, though, even high-quality ownership docs could become common if some professional scammers see the ruse as a viable way to steal money.

“The scam involves an imposter owner/seller reaching out to the agent via email and text asking to list their lot as soon as possible and for a very reasonable if not below market price,” Kammerer says. “The communications involved poorly falsified documents, texts, emails and phone calls.”

The scam appears to focus on vacant land in the hopes that a quick sale can happen before the true owners finds out about it – but that tripped up the scammers this time. Kammerer says they discovered the scam when a true owner showed up with proper ownership credentials and demanded that the broker removed the “For Sale” sign from their property.

“We only found the second lot scam … by pulling our office lot/vacant land listings from matrix and checking with each listing agent,” Kammerer says.

The scam’s success appears to rely on two factors: A buyer willing to close quickly on a piece of land that appears to be a bargain, and the original owner not discovering the charade until the scammer has taken the closing money and disappeared. There have been no reports so far of scam successes, and it’s unclear how the scammers hoped to hide their crime from closing agents – but they may have been trying to collect only the deposit before disappearing.

The scam would appear to have more legitimacy to a buyer because it doesn’t just appear on a website such as Craigslist, it also appears in the MLS.

The lesson for Realtors is to confirm ownership documents before listing land in the MLS.

The lesson for landowners is to keep tabs on their property. While it’s not always easy to drive past property weekly to see if there’s a “For Sale” sign near the road, they should try a regular Google search using the property’s address as a search term. If the property is listed on sites such as Zillow or realtor.com, it should come up in the search.

They could also consider setting up Google Alerts using the address.

© 2019 Florida Realtors®

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‘Family Office’ Investors Focusing More on Real Estate

As a possible economic slowdown looms, the people who invest money for ultra-rich families are buying more real estate as a hedge against any possible downturn. 

NEW YORK – Adjusting to market volatility and girding for a recession, some family offices (investment firms that work for extremely high-worth families) in the U.S. are hedging their bets by shrinking their exposure to hedge funds and boosting their exposure to real estate.

That’s one of the key findings of a recently released 2019 report on family offices compiled by UBS and Campden Wealth Research. Principals and executives at 360 family offices around the world were questioned for the report, with one-third of them based in the United States. Nearly three-fourths of the family offices surveyed invest in real estate.

Globally, the report says, real estate experienced the biggest lift in portfolio allocations for family offices, accounting for an average of 17% of the pie. Meanwhile, family offices around the world trimmed their investments in hedge funds, bringing the total portfolio share down to an average of 4.5%, according to the report.

“We have been getting out of equities and putting money into bonds and real estate. We are also putting money aside to make purchases if there is a crash,” an unidentified family member of a single-family office in North America told the UBS and Campden researchers.

Should you take the plunge on a rental property? Experts offer a qualified yes, provided you do your homework. Here are some things to consider before diving in.

Close to one-fifth of family offices in North America will likely raise their real estate allocations on a net basis in 2020, forecasts Rebecca Gooch, director of research at Campden Wealth. She notes that direct investment in real estate represents 14% of the average portfolio of a North American family office. Real estate generated an average return of 11% for family offices in North America, the report shows. Among North America-based family offices, commercial real estate made up 56% of real estate investments and residential constituted 44%.

Falling out of favor among some family offices are hedge funds, with an average portfolio allocation of 6% among North American family offices, according to the UBS-Campden Wealth report.

“Family offices have doubts about hedge funds’ ability to protect wealth during economic downturns, and they dislike what some deem to be relatively high fees when compared to performance,” the researchers wrote.

Raphael Sidelsky, chief investment officer at W5 Group LLC, a single-family office with investment teams in New York City, Miami and Switzerland, says that within the real estate sector, his firm is focusing on co-living spaces and micro-apartments to capitalize on the rise of the “shared economy,” as well as the lack of supply versus pent-up demand.

Last year, W5 Group took a minority stake in German co-living operator Quarters, which recently embarked on a $300 million expansion in the United States. Over the next three years, W5 Group and Medici Living Group, the parent of Quarters, plan to develop 1,300 co-living units across the country. In conjunction with the Medici Living Groupjoint venture, W5 Group said in September that it bought a majority interest in The Highline at Union Market, a 315,000-sq.-ft., mixed-use project in Washington, D.C. where one-third of the residential units will be Quarters co-living apartments.

“Real estate sits between bonds and equities in the risk-return spectrum and should be an element of all well-constructed portfolios,” Sidelsky says. “High-quality real estate in a sector with strong demand, without excess supply that is not over-leveraged, can withstand an economic downturn well and then provide upside during a recovery.”

“We have a long-term investment mindset and are hands-on investors, so direct deals where we control our destiny are paramount,” he adds.

There seems to be a trend of family offices shifting away from investing in real estate funds and switch toward making direct investments or co-investments in real estate, says Scott Kapp, a partner with law firm DLA Piper whose clients include family offices.

“In the past, family offices may have only invested through a fund or a fund of funds,” Kapp says. “Today, there is significant interest in direct deals and co-investment, as family offices have sought to reduce fees paid to increase their overall risk-adjusted returns and to have greater control over their investments.”

While family offices tend to concentrate on real estate verticals such as industrial, multifamily and office, some are taking greater risks in hopes of achieving higher returns through investment in retail properties, Kapp notes.

For his part, Phil Marra, U.S. real estate funds leader at professional services firm KPMG LLP, says family offices are chasing core or core-plus real estate investments that can produce good cash flow while simultaneously being able to ride out a recession, but they’re also hunting for opportunistic investments that can deliver enticing returns. Preferred real estate sectors for family offices include logistics and warehousing, data centers and multifamily, he says.

Fretting about “catching the falling knife” as this real estate cycle winds down, family offices generally are embracing lower risk investment strategies, Marra says. As such, the beleaguered retail sector largely remains on the sidelines for family offices, except for grocery-anchored centers, according to Marra.

“Retail developers and operators haven’t found the right mix yet to intrigue investors to come back into that marketplace,” he says. “That’s going to continue until we see a recession and then see prices drop where there could be enough price depreciation that’ll allow people to enter that market.”

Marra characterizes family offices as “smart money” investors who are proceeding cautiously as the current real estate cycle wanes.

“We are seeing family offices want to do more deals,” he says. “But in those deals, they want to have more control over the selection and the operation, given the timing of this market. They want to make sure that they don’t make a mistake and overextend in a particular market or product type.”

© 2019 Penton Media, John Egan

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Unconventional Mortgage Loans Making a Comeback

In 2018, unconventional mortgages hit their highest level since 2008 – but they were still only 3% of 2018’s loans compared to 39% in 2006.

NEW YORK – The number of unconventional mortgages last year reached the highest level since the 2008 crisis – but they still comprised less than 3% of loans made in all of 2018 compared with 39% in 2006 right before the housing bust.

Moreover, many of today’s loans are only slightly unconventional, says Inside Mortgage Finance’s Guy Cecala. He says most lenders are still required to make a good-faith effort to determine that a borrower has the “ability to repay.”

Lenders that underwrite unconventional mortgages also usually try to offset risk, and they do that by using a large down payment to counter the risk of a high debt-to-income ratio, limited documentation, or an interest-only loan.

Loans that trigger negative amortization no longer exist, and interest-only loans are being used once again as short-term loans for largely affluent people who are buying costly homes with a hefty down payment, notes Cecala.

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Start-Up Tampa iBuyer Inspecting Its Homes for Ghosts

In a Halloween-season publicity move, the iBuyer’s listing ads will include info on unusual electrical fields, unexplained movements and feelings of being watched.

TAMPA, Fla. – The real estate platform Bungalo – an iBuyer that fixes and flips homes exclusively online – says it wants to make home buying a bit less scary. It announced the addition of an added step to its home inspection process – a paranormal scan of its properties.

In a marketing ploy timed for Halloween, each of the 23 homes it has listed for sale on the Bungalo platform in Tampa has the report. The service says paranormal scans will also be conducted in Charlotte and Dallas. Buyers will have access to the reports’ findings on Bungalo’s website.

The firm call them “paranormal inspection reports,” and it will use a third party to scan properties for ghosts. Inspectors will report on activities such as unusual electrical fields, unexplained movement, and even just feelings of being watched.

“[We want to make sure] customers move in with confidence and certainty,” says Bungalo President Deb Bradley. “We inspect each home on our platform meticulously to guarantee zero unwanted surprises, and this October, this includes surprises of the supernatural kind. … Performing paranormal inspections in addition to our usual home inspections gives our buyers added peace of mind knowing that they’re making the right choices with the most important purchase of their lives.”

Source: “True Story: Real Estate Platform Is Now Inspecting Homes for Ghosts,” Forbes.com (Oct. 10, 2019) and Bungalo

© Copyright 2019 INFORMATION INC., Bethesda, MD (301) 215-4688

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Q&A: Can Seller Remove Fixtures from House We’re Buying?

A buyer getting ready to close discovered that items had been removed – items they thought went with the house, such as bathroom mirrors and lighting.

FORT LAUDERDALE, Fla. – Question: We are getting ready to close on our new house and discovered that the seller removed several things we thought we were buying, including the bathroom mirrors and a chandelier. Can they do this? – Anonymous

Answer: Property is divided into two main categories. “Real property” refers to land and everything permanently attached to it, such as your house, driveway, roof, and trees. Everything else is called “personal property.”

Unfortunately, the law, like life, is never that simple.

The owner of a newly inherited home lost a lawsuit years earlier and still owes money, but the simplest way to shield a home from legal creditors is to live in it.

Certain items can fall into both categories depending on how they are used. “Fixtures” are items that can be moved but have been attached to a house. Examples of fixtures include appliances, ceiling lights, and window dressing.

With other items, it can be even less clear, such as the ones you mentioned. When you buy a house, you also get the fixtures, but determining what is a fixture can be tricky. A bathroom mirror that is glued to the wall is clearly a fixture, but a framed mirror hanging from hooks is questionable. When a dispute occurs, the court will look at the specifics of each situation, along with the intent of the buyer and seller, to decide whether something is a fixture.

It is much better to avoid this issue entirely by listing each questionable item on the purchase contract, along with whether it is staying or going. If the item is being taken by the seller, the contract should also direct whether a standard quality replacement is being made. The contract should specify, for example, that the heirloom chandelier in the hallway will be replaced with a ceiling light that matches the others in the home, or simply that it is excluded from the sale. The standard contracts in circulation have a section just for this purpose ready to be filled in, but sadly, I often see them left blank.

Assuming that your purchase contract is silent on this issue, you will need to communicate with your seller to try to work this out. A small credit at closing may be an appropriate solution.

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

© 2019 Sun Sentinel (Fort Lauderdale, Fla.), Gary M. Singer. Distributed by Tribune Content Agency, LLC.

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NAR: Net Neutrality Important to Realtors

Net neutrality means internet providers must supply all data at constant speeds. A D.C. court ruled the FCC can nix it – but it also said states may enact laws.

WASHINGTON – A District of Columbia Circuit Court of Appeals’ decision earlier this month affirms that internet service providers may institute pay-to-play policies – giving priority to content providers who pay a fee – and largely upheld the Federal Communications Commission’s rollback of net neutrality rules.

5G could blow away current cellphone speeds, but NAR says the rule may also allow tenants to boosts signals yet not pay building owners more for a rooftop lease.

The National Association of Realtors® (NAR) has long opposed the repeal of net neutrality, saying such a move could negatively impact real estate professionals’ ability to reach a wider audience online. If a large online real estate ad company’s listings load more quickly, consumers would be less likely to visit slow-loading websites hosted by smaller brokers and agents.

However, part of the court’s ruling leaves room for state and local governments to develop and implement their own internet regulations, which the FCC attempted to prohibit. This presents a possibility: Real estate professionals and other small-business owners can remain protected by some form of net neutrality law on the state or local level, even if such laws aren’t recognized federally.

Without net neutrality, internet service providers such as Comcast, AT&T and Verizon can restrict the content consumers see. NAR’s policy is to support “legislative and regulatory efforts to ensure that broadband providers adhere to net neutral practices,” according to an FAQ at nar.realtor.

NAR supports seven net neutrality-related principles:

  1. Consumers are entitled to access the lawful internet content of their choice.
  2. Consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement.
  3. Consumers are entitled to connect their choice of legal devices that do not harm the network.
  4. Consumers are entitled to competition among network providers, application and service providers, and content providers.
  5. Network providers should not discriminate among internet data transmissions on the basis of the source of the transmission as they regulate the flow of network content.
  6. Broadband providers must be transparent about the service they provide and how they run their network.
  7. These principles should apply to both wireless and wired networks.

Net neutrality protections were first implemented under the Obama Administration on the theory that internet users should be able to control what content they view and what applications they use on the internet. However, the FCC voted to repeal net neutrality in 2017 and banned states from passing their own rules.

Soon after the FCC’s decision, multiple state attorneys general, internet industry groups, and nonprofit organizations filed suit, calling the FCC’s ruling unlawful.

It’s unclear whether the latest court ruling will be appealed. Even though the ruling leaves no federal regulations in place to prevent internet providers from blocking or slowing access to websites or charging for higher-quality service, experts say this removes a major roadblock for states to defend their laws in court, The Los Angeles Times reports.

Source: “Appeals court upholds net neutrality repeal but rules FCC can’t block state laws” (The Hill, Oct. 1, 2019), “Upholding FCC’s repeal of net neutrality rules, court opens door for California to enforce its own” (Los Angeles Times, Oct. 3, 2019), “FCC Rollback of Net Neutrality Rules Is Partly Upheld by Appeals Court” (The Wall Street Journal, Oct. 1, 2019), and REALTOR® Magazine

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Florida Realtors Disaster Relief Fund Gives $50K in Aid

The Disaster Relief donation, which NAR will distribute, helps support those affected by a disaster, such as the recent flooding in Texas and wildfires in California.

Realtors helping others in times of need is what this charity is all about. Learn how to give and receive.

ORLANDO, Fla. – Florida Realtors® Disaster Relief Fund approved a $50,000 contribution to help Realtors affected by recent disasters, such as the flooding in Texas and the wildfires in California.

The $50,000 donation will be given to the National Association of Realtors® (NAR) Realtor Relief Fund (RRF), which will distribute it to those who need help.”

Since Hurricane Andrew hit South Florida in 1992, Florida Realtors® has had a disaster relief program to assist the Realtor family in times of distress. For Andrew alone, the fund awarded more than $300,000 in grants to members and their families who suffered property damage in the storm.

Florida Realtors Disaster Relief Fund efforts were reactivated in 2004 and 2005 after Florida was hit by nine different storms. During that time, the Disaster Relief Fund awarded over $2 million in grants to aid Realtors, their real estate employees, Realtor board/associations and association staff.

However, Florida Realtors Disaster Relief Fund efforts don’t stop at Florida’s border. In 2005, the Disaster Relief fund sent $150,000 to help Hurricane Katrina victims, and the Fund continues to send assistance around the country to victims of wildfires, tornadoes, out-of-state hurricanes and flooding.

The Fund is an IRS recognized 501(c)(3) charity and accepts monetary donations online and by check.

For more information or to donate, visit the Florida Realtors Disaster Relief Fund page on the website.

© 2019 Florida Realtors

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State Regulators Dissolve Property Insurer Effective Nov. 1

Up to 94,000 Fla. homeowners must find a new insurance company. Regulators shut down Florida Specialty Insurance Co. after its surpluses fell below state mandates.

TALLAHASSEE, Fla. – Thousands of South Florida homeowners are scrambling to find new insurance coverage after state insurance regulators dissolved Florida Specialty Insurance Co. for allowing its surplus to fall below the state’s minimum threshold, among other issues.

Florida Specialty was one of small number of companies operating in Florida that catered to mobile home owners.

All of the company’s policies will be canceled at 12:01 a.m. Nov. 1.

The company was ordered into receivership “for purposes of liquidation” by a Leon County Circuit Court on Oct. 2, according to the Florida Department of Financial Services, which was appointed as receiver.

For the next few weeks, existing policies will be underwritten by the Florida Insurance Guaranty Association. Claims for damages incurred until the company was dissolved can be filed until Oct. 1, 2020.

As of June 30, the company had 93,770 policies statewide, including 35,804 multiperil, dwelling/fire and wind-only mobile home policies, according to a database maintained by the Florida Office of Insurance Regulation. The company insured 9,223 homes in Broward, Palm Beach and Miami-Dade counties, including 1,974 mobile homes.

Policyholders began receiving letters on Oct. 2 from the state Division of Rehabilitation and Liquidation advising them to contact their insurance agents as quickly as possible to ensure their coverage is not interrupted.

State law allows mortgage lenders to “force place” high-cost insurance coverage when homeowners with mortgages fail to maintain continuous coverage.

Agents, companies and policyholders are “scrambling” to get Florida Specialty’s customers placed with other carriers, said Jay Neal, president and CEO of the Fort Lauderdale-based insurance watchdog organization, Federal Association for Insurance Reform.

Some customers likely will end up going to the state-owned insurer of last resort, Citizens Property Insurance Corp., Neal said. Others might be pursued by other companies that market to mobile home owners, including American Traditions Insurance Co., which had 75,880 mobile home policies as of June 30.

State insurance regulators sought the dissolution of Florida Specialty Insurance after learning of a number of reporting irregularities, according to an affidavit by the Office of Insurance Regulation’s chief assistant general counsel.

Although the company’s second-quarter financial statement reported holding a surplus of $10.03 million – about $30,000 over the required $10 million – state regulators determined the company misrepresented a $1.5 million deferred tax asset. It also listed $8.6 million it said was recoverable from a reinsurer as a receivable, but the reinsurer told the state that it disputes owing the money, the affidavit said.

The company also violated state law by continuing to sell policies after it knew or should have known that it was insolvent, the affidavit said.

But in a motion filed Tuesday, Florida Specialty challenged the state’s determination that it was insolvent and asked the court to reconsider appointment of a receiver and order the state to immediately rescind notices of cancellation.

Neal said it appears the state rushed to judgment on the dissolution and could have saved all of the company’s policyholders a lot of trouble by letting another insurer take over the remainder of their policy terms, or finding another company to take over Florida Specialty. Similar solutions have eased customers’ transitions from failed companies in the past, he said.

“There are a lot more questions than answers,” Neal said. “There has to be a pretty good reason why this had to slam to a halt by Nov. 1. The Legislature needs to find out what happened and why.”

State Insurance Commissioner David Altmaier, in a prepared statement, said regulators worked with the company for more than a year to try and help it develop a viable business plan. “While we never want to see an insurer go into receivership, the good news is that we have a safety net in place to protect consumers,” the statement said.

© 2019 the Sun Sentinel (Fort Lauderdale, Fla.), Ron Hurtibise. Distributed by Tribune Content Agency, LLC.

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20K Hurricane Michael insurance claims Still Not Settled

It’s been a year since Category 5 Michael hit Florida’s Panhandle, and 17% of claims remain unsettled even though the pay process shouldn’t take more than 90 days.

MEXICO BEACH, Fla. – It’s been a year since devastation hit Florida’s Panhandle by way of Hurricane Michael. The City of Mexico Beach was leveled. Homes and businesses throughout the community were strewn into piles of rubble.

A year later, more than $6.9 billion in insurance losses have been reported to the Florida Office of Insurance Regulation.

Florida saw 148,347 insurance claims including residential, commercial, flood and business interruption reports.

Under Florida law, residential property insurers are supposed to pay their claims within 90 days of the claim being made and agreed upon by the insurance company. However, the law also allows insurance companies to take months to give the claimant an estimate.

More than 15,000 of the 20,484 insurance claims from the Panhandle that are still open come from Bay County, which is home to those hardest hit by Hurricane Michael. The county started with 88,830 insurance claims, 17% of which still remain open.

Of the claims closed, commercial property has received the least attention. Only 62.4% of business claims have been closed in the 365 days since the haurricane.

Insurance companies saw 98,321 residential claims from people who call the Panhandle home. Nearly 85% of those claims so far have been closed.

Florida CFO Jimmy Patronis, who is originally from the Panhandle, has been pushing legislators and insurance companies to create more efficient recovery resources following Hurricane Michael.

Florida Insurance Regulation Commissioner David Altmaier released a memo in June reminding insurance companies of the thousands of claims still open following the Category 5 hurricane.

“Policyholders have the right to expect prompt, efficient and fair claims adjustment service, especially after a catastrophic loss,” Altmaier said in the memo. “The Office demands nothing less. Insurers should therefore concentrate their resources and energy on reaching out to policyholders with open Hurricane Michael claims and taking all actions necessary to bring the claim to closure as quickly as possible.”

St. Petersburg-based insurance attorney Charles Gallagher said there are options for those in the Panhandle still waiting for their claims to be resolved.

“The short version is that the courts are the main resource,” Gallagher said. “Most policies have an appraisal clause very much like arbitration. What happens is that the policyholder evokes the clause, meaning they appoint someone as their appraiser and the insurance companies do the same. If the two can agree on an estimate, then it’s taken care of. If they can’t agree, they’d appoint a judge to take the two estimates and decide the amount of the loss.”

An insured person may also file a civil remedy which, according to Gallagher, gets the ball rolling for filing a lawsuit against an insurer.

As for a reason why there are still so many claims waiting to be processed, Gallagher guesses that it’s simply a matter of wading through the thousands of claims with not enough insurance employees able to assess the damage.

“My guess would be that there is just a large mass of claims creating a backlog of work for insurers,” Gallagher said. “They’ve cut off FEMA loss of use money. If your property is uninhabitable, you’re out of luck essentially.”

If you’re a policyholder, Gallagher said you may get to the front of the line if you trigger the clause.

“It shows that it’s a time-sensitive thing and your claim has to be acted upon before other folks,” he said.

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Bidding Wars Were Disappearing? They Bounced Back

In August, every U.S. home sold had an average of three offers, according to NAR’s latest survey – a figure that has stayed fairly consistent since October 2015.

CHICAGO – Homebuyers shouldn’t assume bidding wars are a thing of the past. In August, every home sold had an average of three offers, according to the 2019 Realtors® Confidence Index Survey. That figure has stayed mostly consistent since October 2015, when the National Association of Realtors (NAR) started tracking such data.

Buyer competition tends to be highest during April and May, NAR says, but low mortgage rates are propelling a strong fall homebuying season, even as fears of a slowing economy mount.

Realtors nationwide report an increase in buyer traffic lately – excluding those in North Dakota and Illinois – the survey shows. Realtors in Idaho, Wyoming and Wisconsin report the strongest buyer activity.

U.S. properties were typically on the market for 31 days in August, with 49% of homes sold in August on the market for less than a month, according to NAR’s existing-home sales report. Realtors also report low inventory and interest rates as the main issues facing transactions in August.

“As expected, buyers are finding it hard to resist the current (interest) rates,” NAR Chief Economist Lawrence Yun says about recent strength in existing-home sales. “The desire to take advantage of these promising conditions is leading more buyers to the market.”

Overall, 73% of contracts settled on time from June to August – but 74% of contracts contained contingencies, with the most common ones pertaining to home inspections, getting an acceptable appraisal and obtaining financing.

Source: “Nearly Three Offers for Every Home Sold,” National Association of REALTORS®’ Economists’ Outlook blog (Oct. 1, 2019)

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Could New Alternative Loans Lead to Another Crisis?

In a new mortgage plan, a company buys homes for people with low credit and allows them to start earning equity through rent payments. But if home prices unexpectedly fall, renters may walk away, new owners might face foreclosure and companies could collapse.

NEW YORK – A growing number of alternative mortgage products help consumers with shoddy credit become homeowners without a sizable down payment or through lease-to-own contracts. However, mortgage applicants must still have steady incomes.

Divvy Homes, for example, is a startup offering to purchase property on behalf of clients, rent the home back to the clients, and let them build up equity toward purchasing the property in the future. Some companies will make an all-cash offer on behalf of a client in hot markets. This gives consumers a way to purchase the house they want, even if they don’t have the funds yet.

However, some housing analysts worry that the growth of alternative mortgages could create a scenario that’s similar to the one that led to the 2008 housing crisis, when a high number of homeowners could not afford their properties and defaulted on their loans.

According to some alternative mortgage companies, though, new technology will help prevent such scenarios. The Wall Street Journal reports that these companies use technology to calculate the best price to purchase the homes on behalf of their clients. Their algorithms show what the property will likely be worth over time, and the systems also weigh the creditworthiness of potential buyers.

Critics worry about the algorithms’ long-term accuracy and wonder what would happen if an unforeseen external force pushes the market price of a rent-to-own home lower, even if only for a short time. If successful, these companies could eventually have a significant number of U.S. properties in their portfolio.

Divvy currently operates in limited markets: Cleveland, Memphis and Atlanta. The company will purchase a home with cash on the client’s behalf. The buyers put 1% to 2% down and must undergo credit and financial checks to qualify for the program. If approved, they’re able to move in with a three-year lease.

Divvy charges monthly rent, but the payment is higher than it likely would be for a standard, similar rental property. That extra amount goes toward equity to purchase a home. After three years, the consumer will own about 10% of the home and can usually qualify for a mortgage. Divvy targets homes in the $100,000 to $400,000 range.

“We looked nationwide and saw homeownership rates declining year over year,” Nicholas Clark, Divvy’s co-founder and chief technology officer, told the Journal. “This works for married couples with a family looking to buy their first home who don’t have enough saved up to qualify for a mortgage or who have a credit hiccup to repair.”

Source: “Startups That Offer New Paths to Homeownership,” The Wall Street Journal (Sept. 22, 2019) [Log-in required.]

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