Monthly Archives: May 2020

Property Insurance Has Changed – and Often Costs More

A homeowner’s property insurance cost is based on a wide range of factors, including location, construction details and even the insurance company’s costs. Overall, however, a number of Fla. homeowners will see their coverage costs go up as some of those details change.

ORLANDO, Fla. – The cost of a single home’s property insurance is based on a wide range of factors, including location, construction details and even a property insurance company’s costs. Overall, however, a number of Florida homeowners will see the cost of their coverage or their shared cost for certain repairs go up as some of those details change.

With hurricane season only three days away, many homeowners will analyze their policies to see if they need to make changes. Here are some of the things they’ll find this year, in a list compiled by the South Florida Sun Sentinel:

Roof damage: Each property insurance policy is different, but insurers are generally offering less coverage for roofs over a certain age, which can be as little as 10 years. In some cases, they’ve also changed the amount of money a homeowner can expect to collect following a hailstorm or hurricane.

“You don’t get a free roof,” Jeff Grady, president and CEO of the Florida Association of Insurance Agents, to the Sun Sentinel. “The customer has to decide whether to make that claim.”

Some policies that once included “full replacement cost” for a damaged roof have started to offer “Actual Cash Value.” The former might give a homeowner with a 12-year-old roof a completely new one if it sustains covered damage; the latter will pay the homeowner only the current market value of a 12-year-old roof. The homeowner would be forced to pick up the additional cost. Not all companies have changed to “Actual Cash Value,” and some who have allow homeowners to pay an additional premium and get the “full replacement cost” coverage.

The change, in part, is a reaction to roof repair companies that would use “whole new roof” as a default assessment since insurance companies were footing the bill. In some cases they went door-to-door enticing homeowners with promises of a free roof.

Non-weather water damage: How will a policy cover water damage? It depends many times on the source of that water. In general, only a flood insurance policy covers rising water, while a property insurance policy covers falling water, such as a damage from a strong storm.

However, coverage of water damage coming from inside the house – broken dishwasher lines that soak cabinets or water lines that soak ceilings – has changed in many policies.

“Stung by increases in such water damage claims over the past decade, most insurers now limit water damage coverage to $10,000 for homes built more than 30 years ago, while some companies offer no water damage coverage at all unless policyholders pay extra, according to the Boca Raton-based Cronin Insurance Agency,” reports the Sun Sentinel article.

Florida-owned Citizens Property Insurance Corp. caps water damage at $10,000, though that cap is lifted for homeowners willing to work with the contractors Citizens selects.

Rebuilding costs: Most U.S. homes (three out of five) don’t have enough insurance to cover their loss if a home is completely destroyed – about 20% less than needed, according to CoreLogic.

Determining the amount to insure can be tricky, but the first step is to make sure an insurer has the home’s proper details – the correct square footage, for example, number of bedrooms, flooring description, etc. An appraiser could help, and there are currently a number of software tools too.

“Ordinance of law” endorsement: Many Florida homes aren’t built to current – and more stringent – building codes. If it takes $2,000 to repair damage but $5,000 to bring the repaired part up to current building codes, a homeowner could get stuck paying the difference.

Many insurers offer an “ordinance or law” endorsement that, for more money, will cover any upgrades to current building codes – many times with a set limit to the extra amount insurance will pay, such as 25%.

Inflation Guard Coverage: Construction costs go up with inflation and demand, but property insurance policy payouts don’t rise with them unless a policy has “Inflation Guard Coverage.” A related option – Enhanced Replacement Coverage – assumes that the cost of raw materials could rise substantially following a major event, such as a hurricane. With “Enhanced Replacement Cost Coverage,” a policy offers more protection following a widespread disaster.

Flood insurance: Property policies don’t cover homeowners for flood, which is generally considered water rising up from the ground rather than rain falling from above.

While the National Flood Insurance Program was once the only viable flood insurer accepting by mortgage lenders, a number of Florida companies have started offering private coverage that may be accepted.

Windstorm coverage: For many homeowners, windstorm coverage – sometimes called hurricane coverage – is separate from their general policy but packaged together. However, the details vary, such as the deductible a homeowner will be expected to pay following major damage from a hurricane. In general, windstorm policies cost more if an owner opts for a low deductible.

Parametric insurance: A fence, shed or pool screening likely isn’t covered by a general property insurance policy, and parametric insurance picks up the gap. It can also cover the deductible a homeowner might be expected to pay for things like windstorm coverage.

Homeowners who want as much protection as possible – items not included so far – can probably find it. Some even cover things like the cost of a hurricane evacuation, including gas, food and lodging.

Source: Ron Hurtibise, South Florida Sun Sentinel

© 2020 Florida Realtors®

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Listing Isn’t Good for Pets? 95% of Their Owners May Move On

A Realtor.com survey found that two-thirds of pet owners would even forego a dream home if it couldn’t easily accommodate their pets.

SANTA CLARA, Calif. – While buyers may not buy a home specifically with their pet in mind, 95% will ignore a listing if it doesn’t easily accommodate furry family members, according to a survey by realtor.com.

In addition, more than two-thirds of pet-owning homebuyers would forgo their perfect home if it created any kind of problem accommodating a pet.

“The results of this survey reinforce that our pets are our family and an important part of what makes a house a home,” says Nate Johnson, chief marketing officer of realtor.com.

The results are based on an online survey conducted in March of more than 2,000 people who planned to purchase a home in the next 12 months, and it’s fairly consistent with a similar survey realtor.com done in August 2018.

Of those surveyed, 82% of the respondents identified themselves as pet owners. Dogs were the most common pet (61%), followed by cats (45%), fish (12%) and birds (9%).

Of those pet-owning homebuyers, nearly 95% said that their pets’ needs would be at least a somewhat important consideration during their home search. Approximately 84% ranked their animals’ needs “extremely important” or “very important” in their home-search (55% and 29%, respectively; less than 5% said their needs were unimportant.

The focus on pets held true regardless of a homebuyer’s age: 96% of 18- to 34-year-olds, 97% of 35- to 54-year-olds and 87% of 55+ buyers said their animal would be at least a “somewhat important” factor during their home search.

And it wasn’t just dogs and cats. While 87% of dog and cat owners said their pets’ needs were extremely important or very important during their home search, 89% of bird owners, 85% of fish owners, 80% of reptile owners, 79% of rodent owners and 74% of horse owners, indicated their pet would factor into their decision.

For two-thirds of pet-owning buyers (68%), their pets play such an important role that they’d “forgo an otherwise perfect home.” Those aged 35 to 54 were most likely to pass (72%), compared with 66% of buyers between the ages of 18 to 34 years old and 51% of those 55+. People with children (71%) felt more strongly that the home needed to accommodate their pet than people without children (59%).

Homebuyers were asked to rank the three home features they considered most important for their pets. The top five features were: A large yard (38%), any outdoor space (29%), a garage (24%), a dog run (22%), close proximity to outdoor spaces (21%) and large square footage (20%).

© 2020 Florida Realtors®

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Fla. Court: Homestead Exemption OK Even if Renting Rooms

A state appeals court ruled that a Florida homeowner’s residence retained its homestead protection even if the late owner rented out three of the four bedrooms.

TALLAHASSEE, Fla. – A state appeals court ruled on Wednesday that a Florida homeowner’s residence retained its homestead protection even if the late owner rented out three of the four bedrooms.

A three-judge panel of the 2nd District Court of Appeal overturned a Pinellas County probate ruling that said 75% of the residence did not have homestead protection after the death of owner Richard James Anderson. Creditors, who had liens of $38,551 against Anderson, argued that the rented portions of the home did not retain homestead protection.

A probate judge ruled that 75% of the property was subject to the claims of creditors, rather than the entire home going to Anderson’s heirs intact.

Anderson’s son, Richard James Anderson II, appealed the probate-court decision.

The appeals court cited longstanding court rulings about the state’s homestead property laws to overturn the probate-court decision.

“Although he rented out three individual bedrooms in the home, the decedent, along with the renters, had access to the common areas of the home. Neither the common areas nor the rented bedrooms can be severed from the residence by an imaginary line, and each area is not ‘lawfully conveyable as an independent parcel,’” according to the 10-page ruling, written by Judge Darryl Casanueva and joined by judges Daniel Sleet and Samuel Salario.

“A single-family residence that constitutes homestead is typically not subject to dividing. Therefore, the renting of the three bedrooms did not eliminate the homeowner’s claim of homestead exemption to the entire property.”

Source: News Service of Florida

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Mortgage Rates Hit Record Low – Third Time this Year

At 3.15%, the median 30-year, fixed-rate mortgage set another record. It’s down from last week’s 3.24% and the lowest since Freddie Mac started tracking in 1971.

WASHINGTON (AP) – Long-term U.S. mortgage rates fell this week as the key 30-year home loan marked an all-time low for the third time in the last few months since the coronavirus outbreak took hold.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year loan tumbled to 3.15% from 3.24% last week. It was the lowest level since Freddie started tracking rates in 1971. A year ago, the rate stood at 3.99%.

The average rate on the 15-year fixed-rate mortgage declined to 2.62% from 2.70% last week.

Spurred by the fall in borrowing rates, demand for home purchases by prospective buyers has rebounded from a decline of 35% in mid-April to an 8% increase as of last week, Freddie economists noted.

Sales of existing homes plunged 17.8% in April, the slowest pace since 2011, reflecting the economic damage from the virus that shut down wide swaths of business and social life. The normally busy spring homebuying season has been upended. At the same time, home prices have been rising.

Bleak economic data, meanwhile, continues to pour in. A government report Thursday showed that the U.S. economy shrank at an even faster pace in the first three months of the year than initially estimated. Economists expect a far worse outcome in the current April-June quarter.

The government also reported that 41 million Americans have applied for unemployment benefits since the outbreak intensified in March, though not all are still unemployed. An estimated 2.1 million filed for benefits last week despite the gradual reopening of businesses around the country.

In a glimmer of hope, the overall number of people currently drawing jobless benefits fell for the first time since the crisis began, from 25 million to 21 million, suggesting that some companies are starting to rehire.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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56% of Consumers Unafraid of In-Person Real Estate Events

Survey: Most buyers seem ready to move forward with deals. In general, more people feared COVID-19’s effect on society (61%) than how it might impact them.

WASHINGTON – Despite the ongoing COVID-19 pandemic, 56% of consumers said they’d attend an open house or take a home tour without hesitation, according to the Back To Normal Barometer from research company Engagious. Additionally, nearly half of respondents to the survey say they would return to activities such as taking a cruise, attending a live sporting event, or staying at a hotel.

However, an even greater number – 61% – are concerned about the overall public health crisis and the U.S. economy, a sign that consumers are more hopeful about their personal circumstances than they are about the country in general.

“People are concerned about societal impacts rather than how [COVID-19] affects them personally,” said Jon Last, president of Sports & Leisure Research Group, a marketing research consultancy based in White Plains, N.Y., and a co-creator of the barometer. “And they feel the same about the economy.”

Engagious presented the survey findings – Back To Normal Barometer, a biweekly survey that measures consumer interest in a variety of industries and activities during the COVID-19 pandemic – to the National Association of Realtors® (NAR) last week.

The panel also asked survey respondents who weren’t ready to go to an open house yet about the conditions that would make them feel safe enough to do so again. According to Rich Thau, president of Engagious and co-creator of the barometer, they would need specific assurances, including the approval of a COVID-19 vaccine (47%) and assurances from the local health department that touring open houses would be safe (45%).

“Two things that are critical are a certificate stating that [an area] has been properly sanitized according to established protocols, and that the certificate has been issued by a local authority,” Thau said.

The real estate-related findings come from a national online survey earlier in May of 1,040 buyers and sellers. The goal was to provide insights about how consumers want to safely navigate residential real estate transactions during the COVID-19 pandemic.

Consumer safety measures

Gina Derickson, research director of Engagious, expanded on the precautions that are important to consumers: People want to know that cleaning has been done before they enter an establishment. They want to see professional cleaners rather than staff (or homeowners) working on high-touch surfaces like doorknobs and elevator buttons. And the right products and right wording are important. People prefer terms like “sanitized” and “disinfected” over “cleaned” on signage.

According to Derickson, respondents also saw a risk difference associated with open houses depending on whether they were a buyer or a seller, with the selling side viewed as having a higher risk.

Sellers, Derickson explains, are perceived as having less control over who comes into the home and the surfaces people touch. On the other hand, respondents believe that buyers can better avoid COVID-19-related dangers and have a good sense of what a clean home looks like.

But both buyers and sellers agreed on one thing: Agents are crucial in helping them navigate the open house process.

“Buyers and sellers depend on agents to inform them and enforce compliance,” Derickson said. “They want the agent to tell them what to do, and they want vetting to make sure the home is safe.”

In analyzing the survey results, Thau said real estate agents matter more than ever on both sides of the transaction: 58% of sellers and 58% of buyers say the buying and selling of real estate is an essential service, and 62% of sellers and 54% of buyers say a real estate agent’s guidance is especially valued during the pandemic.

Don’t rely completely on virtual tours

A majority of buyers and sellers say they’re comfortable with technology and conducting business on a computer, as well as taking online tours of homes, Thau said, and 55% of buyers say virtual tours are great for vetting which homes they would seriously consider purchasing – but that number dropped quite a bit when asked if a virtual tour was an acceptable substitute for an actual tour. Despite the drop, though, two out of five buyers would consider buying a home without a visit.

Thau offered tips to enhance the value of a virtual tour, such as including a tour of the neighborhood or providing written information about home improvements the seller has made. He found that 54% of buyers and 55% of sellers believe it’s important to have a real estate professional help buyers navigate virtual homebuying options.

In traditional in-person home tours, both buyers and sellers see value in precautions, such as providing sanitary wipes, limiting visitors to two to four at a time, providing hand sanitizer and requiring masks, gloves and shoe coverings. Thau also noted that buyers and sellers see hand sanitizer, sanitary wipes and visitor limitations as precautions that will need to remain in place over the long term.

Thau also included a caution for agents in reference to in-person tours: 38% of buyers and 48% of sellers said they’d consider legal action if they contracted COVID-19 after a showing. And 29% of buyers and 41% of sellers said they’d still consider suing even if they had signed a release. However, 58% of buyers say they’re willing to waive their right to sue.

Agents expected to offer COVID-19 guidance

According to Thau, what matters the most to buyers and sellers about in-person tours is the real estate agent, who is expected to know and enforce health-related safety rules: 64% of buyers and sellers state that agents should understand state and local protocols for COVID-19 safety and provide guidance, and 63% of buyers and 64% of sellers say that if someone in the home is not following health protocols during a visit, they expect the real estate agent to address it.

Buyers and sellers also said it’s important for an agent to know how to close a real estate transaction electronically, and a majority of both indicated that agents add value to an online search. Helping buyers uncover valuable information about a property, helping them sift through online listings, and providing more in-depth pictures and videos of properties were among the ways agents could be of service to clients.

While 40% of buyers and 52% of sellers stated that they wouldn’t need to meet their real estate agent in person to buy or sell a home, they did place a premium on oral communication – 70% of buyers and 66% of sellers said they felt more comfortable talking on the phone or talking via Skype, FaceTime, Zoom or a similar app that allows face-to-face communication – much higher numbers than those who felt comfortable communicating by email or text.

What this means, Thau said, is that agents really matter during the pandemic. “Agents’ value has gone up tremendously as a result of the pandemic,” he said. “People need reassurance.” And he offered this advice: “Know the protocols, follow them, and don’t be afraid to enforce them.”

Source: National Association of Realtors®

© 2020 Florida Realtors®

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NAR: April Pending Sales Drop 21.8% – Likely the Bottom

The expected drop still makes the industry pause, but NAR Economist Yun says “activity will rise as states reopen and more consumers feel comfortable about homebuying.”

WASHINGTON – Pending home sales decreased in April, making two straight months of declines thanks to the COVID-19 pandemic, according to the National Association of Realtors® (NAR). Every major region experienced a drop in month-over-month contract activity and a decline in year-over-year pending home sales transactions.

The Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – fell 21.8% to 69.0 in April. Year-over-year, contract signings shrank 33.8%. An index of 100 is equal to the level of contract activity in 2001.

April’s pending home sales numbers reflected the greatest decline since NAR begin PHSI in January 2001.

“With nearly all states under stay-at-home orders in April, it is no surprise to see the markedly reduced activity in signing contracts for home purchases,” says Lawrence Yun, NAR’s chief economist.

However, Yun also thinks April will be the lowest point for pending contracts, while the month of May, consequently, will be the lowest point for closed sales.

“While coronavirus mitigation efforts have disrupted contract signings, the real estate industry is ‘hot’ in affordable price points with the wide prevalence of bidding wars for the limited inventory,” he says. “In the coming months, buying activity will rise as states reopen and more consumers feel comfortable about homebuying in the midst of the social distancing measures.”

NAR’s latest Flash Survey found that 34% of Realtors said they successfully completed nearly all aspects of transactions while adhering to social distancing procedures – a sign that buyers are growing more comfortable with pandemic safety guidelines. As a result, Yun improved his last housing prediction for 2020.

“Given the surprising resiliency of the housing market in the midst of the pandemic, the outlook for the remainder of the year has been upgraded for both home sales and prices, with home sales to decline by only 11% in 2020 with the median home price projected to increase by 4%,” Yun says. “In the prior forecast, sales were expected to fall by 15% and there was no increase in home price.”

Although each of the four indices is down on a month-over-month basis, an encouraging development is that the rates of declines are lower in the Midwest, South and West, compared to the drops seen in March 2020.

The Northeast PHSI sank 48.2% to 42.6 in April, 52.6% lower than a year ago. In the Midwest, the index dropped 15.9% to 72.0 last month, down 26.0% from April 2019.

Pending home sales in the South fell 15.4% to an index of 87.6 in April, a 29.6% decrease from April 2019. The index in the West slipped 20.0% in April 2020 to 57.1, down 37.2% from a year ago.

© 2020 Florida Realtors®

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‘Clean Criminal Background’ in Ads? Expect to Be Sued

Lawsuits cost a ton of money even if you prevail, and aggressive lawyers are filing lawsuits against property managers and landlords that ban all rental candidates with a criminal history. It’s not strictly illegal, but a HUD statement says it likely violates the Fair Housing Act.

ORLANDO, Fla. – While the Department of Housing and Urban Development (HUD) has federal oversight over Fair Housing Act violations, property managers and investment homeowners often have more trouble with another group – private law firms. And those private law firms are currently targeting property managers and investment homeowners that ban any potential renter with a criminal record.

The Fair Housing Act doesn’t specifically deny a landlord the right to reject an applicant based on a prior conviction; however, HUD issued a statement saying a blanket policy to deny felons can have an impact on minority populations under “disparate impact.”

Landlords who have a “no criminal background” policy – especially those who include that information in their advertising – are being sued, and when the lawyers issuing the lawsuit cite the HUD update on criminal background checks, these landlords can find themselves in a difficult – and legally expensive – position.

“Private law firms essentially test whether a property management company adheres to a memo issued by HUD (Department of Housing and Urban Development), and if in their opinion it does not, they file a lawsuit,” said Florida Realtors CEO Margy Grant last year after a single law firm filed over 48 lawsuits against property owners who had blanket no-criminal-background-check policies.

In short, a no-criminal-background policy isn’t worth the risk. Any money saved using a thorough vetting system could be lost instantly if an aggressive lawyer files a lawsuit.

“Unfortunately, it doesn’t matter if a rental policy purposely discriminates or not,” says Grant. “With HUD’s recommendations in hand, a law firm can file a lawsuit. And even if a property management company has done nothing wrong, it’s always expensive for a brokerage to defend itself in court.”

What is disparate impact?

Disparate impact is an act that may not discriminate against a single individual under the Fair Housing Act but is deemed harmful to a minority group overall. According to HUD, some minority communities have a higher percentage of members convicted of a felony, and that makes blanket policies against all felons discriminatory under the Fair Housing Act.

Things to consider when developing an in-house rental policy

  • Overall impact
    Does the policy have a disparate impact – an action that may not discriminate against a specific applicant yet still impact a group protected under the Fair Housing Act? Is there a distinct impact on a group of people because of their race or national origin, for example? HUD recognizes that this is fact specific; however, it points to several Department of Justice statistics showing that blanket denials based on criminal history have a significant impact on African Americans and Hispanics.
     
  • Justified policy
    A housing provider must show that its screening policy is justified, which HUD defines as “necessary to achieve a substantial, legitimate, nondiscriminatory interest.” The policy can’t be speculative or hypothetical, meaning evidence must exist that supports the screening policy. While protection of other residents’ safety and their property may be considered, the housing provider must prove, through “reliable evidence,” that the policy serves that purpose.
  • Alternatives
    Is a less discriminatory alternative available? Examples will depend on the details of the applicant’s background. However, HUD mentioned the length of time that has passed since an applicant’s conviction, a good tenant rental history before or after the conviction, and the circumstances surrounding the criminal conduct.

The National Association of Realtors® (NAR) offers additional screening information on its website.

Rental operating recommendations to avoid lawsuits

  • Create a written policy with standards on how to evaluate all individuals; evaluate each individual on a case-by-case basis.
  • Document research done and decisions made on individuals, and periodically review the information to ensure the policy is a) being followed and b) not having an unintended discriminatory effect.
  • Delay evaluating an individual’s criminal record until last – only after all financial and other qualifications have been met. This helps avoid any unintentional discriminatory effect and minimizes costs and efforts.
  • Don’t make decisions based on prior arrests that did not result in a conviction.
  • Remove application questions that ask about arrests without convictions. While a landlord may ask about prior convictions, it should be clear that each applicant is evaluated on a case-by-case basis.
  • A blanket restriction against any particular conviction or all individuals with a criminal record will likely be viewed as having a discriminatory effect, therefore evaluate each individual applicant on a case-by-case basis. Take into account mitigating and surrounding factors.
  • Do not apply criminal record policies or practices in an inconsistent manner. This may subject a housing provider to a claim of intentional discrimination.

Questions? Contact Florida Realtors Legal Hotline – a free service included with membership.

© 2020 Florida Realtors®

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Fair Housing Act: Words Matter in Advertisements

It’s vital to review all advertisements, MLS entries and public-facing messages to make sure they comply with the Fair Housing Act and related laws that exist at all levels – local, state and federal. Realtors have been sued over accidental mistakes in the past.

ORLANDO, Fla. – The Fair Housing Act protects people from discrimination when renting or buying a home, getting a mortgage, seeking housing assistance or engaging in other housing-related activities. It protects against discrimination because of race, color, national origin, religion, sex, familial status or disability. There can be additional protected classes, such as sexual orientation and gender identity, which are included in the National Association of Realtors® Code of Ethics Article 10. Additionally, Realtors should be aware of any county or city rules that could add even more protected classes, such as source of income, age, or actual or perceived status as a victim of domestic violence, dating violence or stalking.

Although the Fair Housing Act and related rules cover a wide range of behaviors that could be discriminatory, one area of heightened concern for Realtors is advertising. Advertising should be written and reviewed (preferably with at least one other person for an additional perspective) to ensure nothing in an advertisement could be construed as discriminatory against a protected class. After all, in any lawsuit or complaint based on an advertisement, the published words will take center stage, with very little room for someone to argue that the message they intended to convey was not discriminatory.

As with all Fair Housing-related issues, Florida Realtors recommends all members use an abundance of caution in advertisements. As a starting point, any mention of a named protected class will very often be a problem. For example, it would look very strange indeed to see national origin or religion mentioned in a real estate advertisement.

Some organizations have taken an extra step to list specific words and phrases into red (avoid), yellow (caution), and green (acceptable) categories. Some Multiple Listing Services may also screen for specific words as a tool to ensure people stay safely on the side of caution.

These lists of words are easily discoverable by using a search engine to find links to “fair housing word and phrase list.” Although this is a good starting point to think about how to carefully phrase advertisements, the list is only a tool and should not be confused as an absolute safe harbor, which is why this article does not include its own list of words and phrases.

For example, here are a few advertisements that don’t include any words on the “avoid” or “caution” list, but still resulted in actual lawsuits filed against members in recent years:

  • “No section 8.” Although this is not a protected class at the federal level, a few sizeable local jurisdictions in Florida include source of income as a protected class. This means that, when a member in one of those jurisdictions adds “no section 8” to their advertisement, usually at the request of a landlord, they have made themselves a target of a lawsuit. To our knowledge, most lawsuits like this ended up with the agent or brokerage company paying to settle the case without going to trial.
  • “No criminal convictions.” Although criminal convictions are not a protected class by themselves, a HUD memo published April 4, 2016, titled Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions. The memo argued that aggressively screening out all criminal convictions, regardless of underlying crime and when it occurred, could be a violation of the Fair Housing Act under a disparate impact theory. The memo mentions that “Across the United States, African Americans and Hispanics are arrested, convicted, and incarcerated at rates disproportionate to their share of the general population. Consequently, criminal records-based barriers to housing are likely to have a disproportionate impact on minority home seekers.” At least one lawyer in Florida has targeted real estate licensees who are likely unaware of this HUD memo and has sued dozens of real estate companies over this issue.

Since an interpretation of what may be considered discriminatory is more a concept than a yes/no pre-made list, there is also a healthy amount of gray area. If you find yourself unsure of whether a phrase like “within walking distance of the beach,” or “no students” could be discriminatory (both phrases land on the “caution” list for many organizations), Florida Realtors members are welcome to call the Florida Realtors Legal Hotline to discuss a specific topic in more detail. We will almost certainly err on the side of caution as we discuss these issues.

Hopefully, members calling about their own advertisements before they are published will discover that there’s an objective, non-discriminatory way to describe the property that avoids the issue altogether and results in a safer advertisement that honors both the letter and spirit of the law.

Joel Maxson is Associate General Counsel for Florida Realtors

© 2020 Florida Realtors®

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Violations Increase During Stay at Home Order

Noting an “increase in violations and tempers” during the COVID-19 pandemic, a condo board wants to boost its enforcement powers and fine unit owners who break the rules. But details count. Any new enforcement process might create more problems than it solves.

NAPLES, Fla. – Question: Many of our residents have been spending more time at home due to COVID-19, and the result has been an increase in violations and tempers. We have seen an increase in architectural violations without application, noise disturbances, smoking violations and complaints by neighbors against neighbors.

We have never fined an owner before but want to implement a process. Can the board levy a fine at a regular board meeting? – R.T., Marco Island

Answer: The short answer to your question is that board action is required at some point in the process, but a board vote at a regular meeting is not enough, by itself, to properly levy a fine.

Both the condominium and homeowners associations (HOA) statutes provide little guidance on how to levy and enforce a fine. The few procedural requirements in the statutes have changed over the years and although there are some helpful judicial decisions on fining, there are still many uncertainties.

The biggest issue is due process. Neither the rules of civil procedure nor the rules of evidence apply to condominium or HOA fines, so the question is whether your process provides the owner with due process in light of the limited statutory framework and any specific requirements in your governing documents.

At a broad level, the statute provides that fines and suspensions may not be imposed without providing at least 14 days’ notice and an opportunity for hearing before an independent committee. This phrase has been debated in the legal community for a long time. We believe the statute first requires the board to conduct a vote at a board meeting with normal notice (48 hours under the statute) and the board must vote to impose a fine. At this meeting, the board should vote to determine the amount of the fine per day and the number of separate violations or the number of days of a continuing violation.

Then, the association should provide the offending owner with a specific notice of the date, time and location of the hearing with the independent committee. The condominium statute provides that the committee must consist of “at least three members appointed by the board who are not officers, directors, or employees of the association, or the spouse, parent, child, brother, or sister of an officer, director, or employee.” At the hearing, the committee considers all of the evidence, allows the owner to present and challenge evidence, and the committee then votes to approve or reject the fine or suspension approved by the board. If approved, the fine is due and payable within five days.

There is simply not enough space in this article to fully discuss the process, so the discussion should not end here. Your covenants may impose specific notice requirements. Your community may simply not be able to find volunteers to serve on the committee. Your community may want to find a way to streamline the process so that the board does not need to vote on every single fine, and there are some ways to accomplish this. Your community should also discuss how the hearing itself is conducted and whether the process provides an owner with an adequate opportunity to defend himself or herself.

At the end of the day, a fine should not be imposed without providing due process, and there is no playbook for how to provide minimum or full due process in this context. When you discuss your process, you should also consider that your attorney may need to file suit to collect an unpaid fine or enforce a suspension, and thus any shortcomings in due process may be scrutinized.

As a result, you should work with your legal counsel to discuss your governing documents, the statutory framework, any previously adopted procedures or resolutions, and how to best pursue fines and suspensions in light of the virus epidemic.

Question: Our board met with our attorney to discuss a pending lawsuit and the meeting was closed to owners. As a result, we did not think it necessary to post a notice, but we are being challenged by a resident on this point. Is notice required even though owners may not attend? – P.N., Naples

Answer: Section 718.112 of the Condominium Act provides: “notwithstanding any other law, the requirement that board meetings and committee meetings be open to the unit owners does not apply to a) meetings between the board or a committee and the association’s attorney, with respect to proposed or pending litigation, if the meeting is held for the purpose of seeking or rendering legal advice; or b) board meetings held for the purpose of discussing personnel matters.

The above statute provides that these two types of board meetings can be closed (executive session) meetings and not open to the unit owners. This makes sense because the attorney-client privilege extends to the board, officers and other necessary individuals involved in the litigation process, and the attorney cannot effectively explain the strengths and weaknesses of litigation in a non-privileged setting. It is also important to note that the adverse party may be a unit owner and these sensitive discussions cannot be held in the presence of the party suing you.

The statute does not, however, state that other notice requirements do not apply to these meetings. As a result, we believe that closed board meetings must still be noticed, and this generally requires 48 hours’ posted notice and you must follow any specific notice requirements to individual directors. The agenda should state that the meeting is closed to unit owners but should nevertheless disclose the date, time and location of the board meeting.

The follow up question here typically concerns the minutes. Yes, you must still keep minutes of board meetings that are closed meetings. Those meetings should include motions and votes and other information you believe necessary. For example, if the board votes to authorize settlement within a specific range of dollar amounts, the individual signing the settlement agreement should certainly want to rely on written minutes reflecting that the settlement amount falls within the board-approved limits. Those minutes, however, are confidential and exempt from owner access for the pendency of the litigation.

Attorney John C. Goede is a shareholder in the law firm of Goede, Adamczyk, DeBoest & Cross.

© 2020 Journal Media Group

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Dear Anne: Don’t Use an Offer to Increase Your Bottom Line

Realtor A’s listing excited Realtor B – just what his clients want. But after Realtor B scheduled a showing, he said the commission in the MLS wasn’t high enough. After failing to convince Realtor A, he then included a higher commission in the contract. That’s wrong – right?

Dear Anne: I received a showing request from “Buyer’s Agent Earl” the minute I entered my listing into the MLS. He said the property was ideal for his buyers.

After I confirmed the showing appointment, however, he asked if I could come up on the commission. He only works for a specific percentage and nothing less will do.

I told Earl the seller and I discussed the commission at length when I took the listing, and he made it clear he only wanted to pay X% to a cooperating agent and nothing more. But I did not tell Earl that the seller was being realistic: He believed that the final sales price wouldn’t be ideal because the property needs work, and a buyer would need money to make the repairs.

To be honest, my commission was less than preferable too, but a sale is a sale in my book.

As it turned out, Earl’s buyers saw a diamond in the rough and put in an offer within the price range we anticipated. What we did not anticipate was the terms of the offer: It stated that the listing broker would pay Earl a commission that was higher than offered in the MLS.

My seller went ballistic. He curtly reminded me he would not pay anything more than what was offered in the MLS. I explained he could counter the offer, remove the terms asking for a higher commission, and the commission would remain as stated in the MLS – and he did.

So next, Earl sent me a scathing email demanding that we pay up, saying his buyers would walk if we didn’t honor the terms in the contract.

The buyer walked alright – right into my office and I sold them the property. Now I want to take him to the Board for his underhanded tactics. And by the way, I paid old Earl the commission offered in the MLS because I believe it was the right thing to do even though I know I have grounds to argue procuring cause. Signed, Irritated with Earl

Dear Irritated: It’s possible an ethics hearing panel may find Earl in violation of the Code of Ethics. Why? Article 16 comes to mind, more specifically Standard of Practice 16-16, which says, Realtors shall not use the terms of an offer to attempt to modify the listing broker’s offer of compensation or make the submission of an executed offer contingent on the listing broker’s agreement to modify the offer of compensation.

Earl’s attempt to modify your offer of compensation could get him into hot water.

If Earl wanted to increase his bottom line, he had several options. He did start out on the right foot by asking if it’s possible to increase his commission before he showed the property. There is nothing unethical about asking the listing broker for a raise at this stage of the game.

Alternatively, Earl could ask the buyer to pay the difference in commission. If that failed, he could refer the buyer to another agent if he did not want to accept a commission that fell below his bottom line. He could then move on to a new sale and collect a referral fee.

There is another option, and this may sound familiar but it is different: The buyer can ask the seller in the terms of the contract to increase the commission as a concession. And no, I am not contradicting myself. It’s important to point out that the sales contract is between the buyer and the seller. And once again, the seller reserves the right counter back and remove the concession.

To be clear, the buyer is not asking the listing broker to modify the offer of compensation – he is asking the seller to kick in the additional funds as a concession to the actual sale of the property.

But what if Earl talks the buyer into this? Is it unethical?

In my opinion, no, because the obligation under the Code of Ethics is on Earl not to attempt to modify the listing broker’s offer of compensation. Ultimately, the buyer makes the decision to ask for the concession and sign the purchase agreement. I expect many may disagree; but, in the end, it is not my decision to make, the decision rests with a panel of Earl’s peers.

The final option is for Earl to accept the offer of commission as it stands, get paid and move on. The route he chose backfired. If he does go to hearing and is found in violation, his bottom line may take another hit if he gets fined. If you ask me, lesson learned.

Have an ethics or rules question? Email us at legalnews@floridarealtors.org with “Dear Anne” in the subject line.

Anne Cockayne is Director of Local Association Services for Florida Realtors

© 2020 Florida Realtors®

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Creating Contracts? You Must Literally Cross T’s and Dot I’s

The goal in a transaction is to proceed smoothly to closing. Speedbumps occasionally arise – but don’t create speedbumps on your own. A smooth process starts with careful attention to the contract, filling in all necessary blanks, and checking all appropriate boxes.

ORLANDO, Fla. – Everyone involved in a real estate transaction can agree that successfully closing the deal is the ultimate goal. And you start to achieve that goal by making sure to double check the contract, line by line, to make sure something isn’t missed … or added by the other side!

An integral part of the contract process is paying attention to each line of the contract – particularly any line that must have a box checked, may have default provisions or can contain additional information. The good news is that if you are using a Florida Realtors’ contract, the line numbers that contain an asterisk next to them easily guide you to those parts of the contract. The presence of an asterisk indicates that a blank may need to be filled out or a box may need to be checked.

Here is the tricky part: Do ALL blanks in the contract have to be filled out? Do ALL boxes need to be checked?

Here comes your favorite answer: It depends. Regardless, it likely serves your customer well for you to check, then double-check, portions of the contract to make sure that your buyer and/or seller are satisfied with what is there. Does the default timeframe for an inspection work for your buyer, for example?

Some sections of the contract don’t have default provisions, i.e., “if left blank, then 15 days.” Is a box that is required to be checked appropriately checked? Was additional information added by a party in a blank that may affect the other party?  For more examples of contract sections that can cause problems, refer to “What if someone fails to completely fill out a contract?” published in 2019.

Recent calls to the Florida Realtors’ Legal Hotline indicate a trend – additional information being added to paragraph 9 of the Florida Realtors/Florida Bar Residential Contract for Sale and Purchase (“FR/Bar”). This paragraph of the FR/Bar contract discusses closing costs of the parties, among other things. One line of that section also lists “Other” and allows a party to add potential costs to a party’s closing costs.

Calls to the Hotline reflect that this section is often overlooked, resulting in an unhappy consumer facing additional closing costs. The main example we’ve heard is a buyer adding a credit for buyer’s closing costs under the seller’s closing costs section.

More than likely, this oversight is due to a quick skimming of the document without taking the cautionary time to review each line. So again, check, then re-check, the lines of each contract that passes through your hands in each transaction that you handle.

While time-consuming, I would like to think that the parties would rather be out of additional minutes of their day rather than out of additional money from their pockets.

Meredith Caruso is Associate General Counsel for Florida Realtors

© 2020 Florida Realtors®

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Landlords Get Creative to Maximize Rent Collections

Some tenants can’t cover all their expenses right now, and a few landlords are giving them a reason to make “pay the rent” a higher priority as they make hard decisions.

NEW YORK – The COVID-19 pandemic has sent unemployment skyrocketing, but many landlords are finding ways to keep collecting rent payments. Some offer flexible payback terms, gift cards or other incentives to try to get tenants to pay rent and avoid forbearance if they’re able to.

For tenants that still have some amount of income, these landlords are making “pay the rent” a higher priority if residents are making difficult financial decisions.

Ellie Perlman’s company Blue Lake Capital LLC has 2,000 rental units across the country, and she recently told Forbes.com how her company has been able to collect more than 96% of rents during April and May, while the portion of property owners successfully collecting rent nationwide hovers around 69%.

Perlman said that they offered early-bird discounts to those who paid rent during March – a $50 discount if residents paid for April rent by March 30 and $100 for paying May’s rent during March. About 20% of their tenants took advantage of the discount.

Blue Lake Capital also offered tenants flexible payment plans. Perlman shared one scenario as an example: If a resident paid $600 of their $1,000 rent and had four months left on the lease, then Blue Lake Capital would increase the tenant’s rent by $100 per month for the remaining four months of their lease.

They also allowed residents who became unemployed during the pandemic to use their security deposits to pay rent, but Perlman said that carries some risks. “The challenge is that you also can’t expose yourself to an unnecessary risk of releasing the security deposit,” she wrote. “To mitigate that risk, allow residents to sign up for security deposit insurance, which basically replaces the one-time security deposit with monthly payments of $5 to $10.”

In some cases, Perlman also tried to incentivize renters by sending Walmart gift cards to every tenant who impacted by the coronavirus.

“Not only did we feel that was our way to give back, but we were also hoping that our residents would feel more inclined to pay rents when they became in a better position to do so,” she wrote. “It worked – kindness still goes a long way.”

Source: “Seven Proven Tactics to Maximize Rent Collections During a Crisis,” Forbes.com (May 18, 2020)

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Loan Forbearance Advice: Assume Nothing, Check Everything

Most lenders admit to mass confusion when new forbearance options came out; ones that both service and/or own loans could offer borrowers completely different options.

EVANSVILLE, Ind. – Aaron Rodenberg thought, I gotta get ahead of this thing. It was toward the end of March. Shutdown orders shrouded several states as COVID-19 barreled across the country.

The Evansville, Indiana, resident runs his own one-man construction outfit – kitchen and bathroom remodels, mostly, and he knew coronavirus would affect his business. If people were losing their jobs, they wouldn’t have money lying around to fix up their homes.

To be proactive, he applied for a mortgage forbearance through his bank, Fifth Third. He never heard whether he was approved or not, so he put next month’s payment into his checking account.

A few weeks later, something weird happened.

“I got a piece of mail (saying) my mortgage payment was overdue,” he said. “I thought, ‘well that’s ridiculous.’” The payment was always auto-deducted, and the money still waited in his account. But there had been some confusion.

Turns out, Rodenberg had been approved for a forbearance. He just wasn’t notified. A Fifth Third associate told him over the phone it was for six months.

But because he’d seen horror stories online, he asked an important question: When this forbearance ends, he said, am I going to owe all the missed payments at once? In one lump sum?

Yes, the associate said.

Luckily, that person was mistaken – but only partly.

Rodenberg and others who apply for forbearances won’t necessarily owe all the money as soon as the forbearance ends. That’s a huge relief, of course. A lump payment of thousands of dollars would shred the finances of anyone who lives month-to-month. If we had piles of extra cash, we wouldn’t be applying for forbearances in the first place.

But it is one repayment option for the millions of Americans who seek mortgage relief as they lose their jobs or battle back-breaking hospital bills amid a pandemic that has hurled traditional American life into the garbage.

According to a column from the Washington Post’s Michelle Singletary, scores of borrowers who applied for forbearances through the federal CARES Act were recently told their deferred payments would be due as soon as their forbearance ended. That was wrong, and the government is clambering to fix the problem.

Fifth Third spokeswoman Carrie Hagovsky said her bank offers customers three choices once a forbearance ends: the lump-sum route; a repayment plan that would run concurrently with your normal payments; or the possibility of a loan modification that would tack the missed payments onto the end of your mortgage.

Fifth Third lays out those options online.

“We’re definitely not going to push anybody into a situation where they would have to repay (immediately),” she said. She claimed Fifth Third has tried to provide borrowers with as much information as possible, and she implored anyone with concerns to contact the bank immediately.

But she did admit there was some scrambling at the onset of the pandemic. Any bank or credit union employee will tell you that. Around the time Rodenberg applied, private institutions and the federal government alike hustled to figure out how to offer relief to homeowners during an unprecedented disaster.

It’s that communication lapse that worries Rodenberg.

He eventually spoke with a second Fifth Third employee who told him his forbearance had been for three months – not six. And, despite what the first person said, he learned a lump-sum repayment wasn’t the default option.

Eventually, he canceled the forbearance.

“I wasn’t even thinking about it in terms of myself. I started thinking about it in terms of people who have actually lost their jobs, who are making no money. Who aren’t able to go to work,” he said.

He wondered: how would a lump sum repayment help anyone?

Know your terms

If you apply for a forbearance, you need to be rock-solid about the terms. Depending on your institution, and even what type of mortgage you have, the stipulations could differ wildly.

Take Old National Bank. According to Chief Credit Administration Officer Denny Villines, ONB is offering mortgage deferrals. If someone is having a hard time paying, they can push their payments for 90 days. When the lull ends, the missed payments get glued to the back-end of the loan, and the customer can apply for an additional 90 days if their situation hasn’t improved.

“(But) it is important to note that Old National Bank is also a mortgage servicer, which means that we service loans for investors like Fannie Mae and Freddie Mac,” he said. “These are loans that Old National does not own. When we get a deferral or forbearance request on an investor loan, we must follow their guidelines, which may be different from ours.

“For example, some investors will call for all deferred payments to be made once the deferral period has ended.”

Because we’re talking about federally backed financial institutions – patron saints of needless complexity who would make even Rube Goldberg roll his eyes – none of those guidelines are uniform.

The Consumer Financial Protection Bureau’s website does its best to lay out stipulations for warring agencies such as FHA, USDA and others. Sometimes you can extend your loans and sometimes you can’t. Sometimes you have to pay everything back at once and other times you don’t.

The CFPB says anyone with a federally-backed loan should talk to their agencies directly. But if you’ve ever dealt with a giant bureaucracy like that, you know extracting information from them is about as easy as swiping a bear cub from an angry grizzly. The best place to start may be the bank or credit union through which you got the loan in the first place.

Be careful and advocate for yourself. Once this disaster is over, you don’t want to battle another one.

© 2020 Journal Media Group

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Hurricane Season Collides with Coronavirus on Monday

Fla.’s disaster managers modified hurricane plans for evacuations, shelters and relief crews. More people, for example, may be encouraged to stay home during the storm.

TALLAHASSEE, Fla. – With the six-month Atlantic hurricane season starting Monday, emergency-management officials have changed how Florida will respond to storms as they grapple with the coronavirus pandemic.

Disaster managers, already working long days because of the pandemic, have modified hurricane plans on issues such as evacuations, shelters and conditions for relief crews because of the virus.

“You know it’s not usual that we’ve been in the (Emergency Operations Center) for three months doing planning before hurricane season, (but) that’s going to give us a leg up in a lot of ways because we’ve been thinking about it day in and day out here,” says Florida Division of Emergency Management Director Jared Moskowitz.

The hope is always for an inactive hurricane season, but forecast models aren’t crafted for comfort.

“We’ll have to see what the season does,” Moskowitz says. “They say it’s going to be an active season. Remember, we had 18 named storms last year. And we almost got (Hurricane) Dorian. So, you know, we’ll just have to see what it brings us.”

Arthur, which threatened the Carolinas as a tropical storm this month, started checking off the list of storm names for the 2020 season, which will last on the calendar from Monday through Nov. 30. Then came Tropical Storm Bertha, which formed off the Carolinas on Wednesday.

Last week, the National Oceanic and Atmospheric Administration (NOAA) became the latest organization to forecast an above-active hurricane season, with 13 to 19 named storms, of which six to 10 should reach hurricane status. The range is consistent with other forecasters that presume a La Nina weather pattern rushing warm water into the Atlantic.

In its forecast, NOAA also pointed to warmer-than-average sea surface temperatures in the tropical Atlantic Ocean and Caribbean Sea, reduced vertical wind shear, weaker tropical Atlantic trade winds and an enhanced west African monsoon wind system. All are factors for above-average storm activity.

“Similar conditions have been producing more active seasons since the current high-activity era began in 1995,” a NOAA news release said.

Mixing the forecasts with the virus, the state has created a reserve of 10 million face masks, 1 million face shields, and 5 million gloves.

The approach to shelters and evacuations also will be different.

“We’ve been always telling people to leave. Now, potentially, county emergency managers will be saying, ‘Know your home, know your (flood) zone,’” Moskowitz says. “So, if you live in a surge zone, yes, you’ll still have to get out. But if your house was a new construction. It’s built to code and we get a Category 1 or Category 2 storm, perhaps they’ll decide that the safest place for you to be is in your home. So, the issue is shelter in place. That’s clearly different.”

People who go to shelters are less likely to be crowded into single large rooms. Caps will be placed, maybe 50 people to a shelter, or evacuees could be spread across complexes such as schools, where each classroom could be used by five to 10 people. Another possibility is that people could find themselves filling hotels that would otherwise be low on occupancy.

“We’ve developed an app that hotels can sign up,” Moskowitz says. “We have 200 hotels so far signed up to do non-congregate sheltering. So instead of going to a shelter, you’d be assigned potentially to go to a hotel.”

Additionally, utility officials told regulators this month that plans are underway to establish more staging areas to reduce crowds of relief workers who would be needed to restore electricity after storms. Also, the utilities plan to shift to single-serve packaging of food and revamp sleeping arrangements for restoration crews that could require single occupancy in hotels or a need for more smaller sleeper vehicles.

They also cautioned that post-storm recovery assistance from utility crews based in other states might not be as large as in past years, as each state deals with issues related to the coronavirus.

Florida’s emergency-management division has also been taking internal steps to ward off its own disaster fatigue.

“We’re making sure that we’re rotating people on and off on weekends to give them time off with their families,” Moskowitz says. “Obviously, we’re boosting morale around here. We’re letting people bring their dogs to work. Because, look, mental health is an important aspect of what we do around here. We’ve been working 18-hour days since the beginning of March.”

Source: News Service of Florida

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Short-term Rentals Down Amid Pandemic

Realtor.com: Some owners may be pivoting to longer-term, seasonal rentals. In the 100 largest metro areas, furnished and seasonal rentals are up 21% since Feb.  

PORTLAND, Ore. – All the travel we’re not doing because of COVID-19, for business or pleasure, has hit the market for short-term rentals pretty hard. Airbnb announced this month it’s laying off a quarter of its workforce – almost 2,000 people – and its long-awaited IPO may be on hold until next year.

Meanwhile, a new report suggests some owners of those properties may be pivoting to longer-term, seasonal rentals. In the 100 largest metro areas, furnished and seasonal rentals are up 21 percent since the end of February.

Kimberly Kent is an art broker, painter and former Airbnb host in Portland, Oregon. In March, she started renting her two studio apartments to traveling nurses for one- to three-month stays.

“We were getting about $100 a night originally with Airbnb. And what we’re getting with these folks now is $1,200 a month,” Kent said.

That’s less than half what she made when fully booked on Airbnb. It wasn’t just the coronavirus; a saturated market also played a role.

But as short-term bookings have dried up during the pandemic, new data from the listing site realtor.com® suggests a lot of hosts may be shifting to longer-term rentals. Tourism hotspots like Nashville, Tennessee; Austin, Texas; Orlando, Florida; and Las Vegas have seen the biggest increases.

George Ratiu, senior economist at realtor.com, said for many owners facing mortgage bills, “a slightly longer-term rental is a viable alternative, in the sense to bridge the gap between the lack of demand right now and a possible rebound later.”

But is there enough demand for those slightly longer-term rentals? Joshua Clark, an economist at Zillow, said a lot of renters may want more flexibility.

“If I’m a renter right now, and I’m seeing all the chaos going on in employment, I don’t know how long this thing’s gonna last,” Clark said. “I may not want to sign up for a full-year lease.”

And then there are all the people, especially in crowded cities, who may be looking to escape to the beach or the country.

Vi Nguyen, CEO of Homads – a marketplace for medium-term rentals – said with many employers allowing remote work, “employees are thinking, ‘Hey, I don’t actually even have to be here. I can have something a little bit more enjoyable, right?’ “

Not to be left out, Airbnb says more of its hosts are booking longer term, too, and offering discounts for stays of a month or more.

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City Dwellers Headed to the Suburbs After Pandemic? Maybe?

It’s too soon to tell, but suburban living with more open space, bigger lawns and room to stretch out could lure current urbanites to move in the wake of COVID-19.

CHICAGO – Since the first week in March, when I started writing nonstop about the coronavirus, not a day goes by that I don’t look outside my home office window and thank my lucky stars I live in the suburbs.

You’re likely thinking that as well, right?

We may be lumped in with Chicago and Cook County as far as the governor’s four-region/five-stage plan for reopening the state is concerned. But all you have to do is review the data that gets cited so frequently to realize we are doing a lot better out here (per capita and otherwise) against COVID-19 than the more densely populated zip codes of the region.

And that could be good news for property values in the area. I don’t own a crystal ball and have no expertise in real estate. (Although I did work my butt off to learn all that math in order to get my Realtor’s license a thousand years ago.) I am, however, going to rely on common sense to suggest city dwellers may just start looking toward the suburbs, with more open space, bigger lawns and room to stretch out in the wake of this pandemic that’s propelled social distancing and sheltering-in-place into a virtual tie for 2020 phrase of the year.

New York City is already seeing it, according to a recent article in the New York Times that featured one man moving from Manhattan to Long Island because “the balance of nature in the city has become so different.”

Seriously. It just makes sense. The more dense an area, the harder it is to stay away from that highly-contagious new virus that has driven us out of jobs, into our houses and behind those homemade masks.

In addition to the safety issue, there’s the new work-from-home phenomena that’s only picked up steam the last three months. Companies are already noting productivity levels have not slipped as employees shelter in place. So there’s likely to be more freedom from the boss to skip the commute and work from the kitchen table or attic office even after rules have been lifted and we can start moving about freely again.

And there’s no question some of the charm of city-living – the hustle and bustle, quaint shops and cozy but crowded restaurants – could be dramatically reduced in the post-pandemic new world.

Kathy Brothers, whose Aurora Keller Williams office spent Thursday driving around to area grocery and hardware stores, lauding their front-line workers and passing out food to them, is a big fan of the suburbs since she moved to the Fox Valley more than 20 years ago.

“I wouldn’t live anywhere else,” she proclaimed proudly. And she’s trying to convince those die-hard city folks to give this community a try, as well, by purchasing ads in the city touting local properties.

Density and new rules because of the coronavirus, she agreed, “could cause a transformation.”

As president of Realtor Association of the Fox Valley, Paul Kempa was even more emphatic. “Without a doubt this will help us in the suburbs,” said the broker with Realty One Group Excel.

While a lot of sellers are cautious, postponing putting their houses on the market and waiting to see if a second wave is coming, “there’s no doubt interest in growing in Kane County,” he said.

“We are starting to see it happen. People see this as having their own sanctuary, their own office, a nice yard,” Kempa said. “We are just putting together a marketing piece and are already getting a ton of phone calls because of it.”

Long-time Fox Valley Realtor Linda Pilmer also confirmed “it’s been on our radar.”

One thing city dwellers thinking about purchasing in the suburbs may have, however, “is sticker shock” from the property taxes that are three times higher here. Still, housing prices are certainly cheaper. And even before COVID-19, people have started to see the advantage of Aurora and the Fox Valley, which is 45-60 minutes from major airports and other city amenities, she noted, while also offering a less hectic pace of life that might be even more alluring now.

One attorney she works with had his adult children, all apartment dwellers, move back home with him after the governor’s shelter-in-place order, Pilmer told me, and all have developed renewed appreciation for the open space and friendliness of suburban living.

Whether or not that brings the grown kids home permanently remains to be seen. “If Chicago people lease, they might start looking out here when their leases are up,” she said. “People don’t move every year so we may be seeing the effect in the next five years.”

When I checked in with commercial real estate broker Brian Dolan to ask about my theory, he’d just gotten off a Zoom meeting with a group of brokers. And “the subject of a resurgence,” he said, “definitely came up.”

There’s been “a trend going this way anyway … with less officer workers,” Dolan pointed out. “From a logistical standpoint alone, the ‘burbs make more sense” after the pandemic. “Buildings in Chicago are 30-40-50 stories tall … how are you going to deal with elevators? Have two people get on at a time?”

Kempa, too, is seeing signs of a rebound.

Home showings are back up to normal compared to April when “everyone was huddled up,” he said. “The last couple of weeks people seem to be saying, ‘Let’s get on with our lives.'”

Copyright © 2020, The Beacon News, Denise Crosby. All rights reserved.

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U.S. Long-Term Mortgage Rates Ease; 30-Year at 3.24%

It’s the 4th straight week that the 30-year home loan stayed below 3.30%; the average rate on the 15-year fixed-rate mortgage slipped to 2.70%.

WASHINGTON (AP) – Long-term U.S. mortgage rates eased this week in a housing market battered by the shutdown spurred by the coronavirus pandemic. Rates hovered near all-time lows as the benchmark 30-year home loan stayed below 3.30% for the fourth straight week.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year loan declined to 3.24% from 3.28% last week. A year ago, the rate stood at 4.06%.

The average rate on the 15-year fixed-rate mortgage slipped to 2.70% from 2.72% last week.

Sales of existing homes plunged 17.8% in April to a 4.33 million rate, the slowest pace since 2011, the National Association of Realtors reported Thursday. The normally busy spring homebuying season has been upended. At the same time, however, home prices have been rising.

Bleak data, meanwhile, continues to pour in showing the economic damage from the virus that shut down wide swaths of business and social life. The government reported Thursday that the number of Americans filing for unemployment benefits because of the pandemic has surged to nearly 39 million since widespread shutdowns began two months ago.

The continuing stream of heavy job cuts reflects an economy that is sinking into the worst recession since the Great Depression of the 1930s. The nonpartisan Congressional Budget Office estimated this week that the economy is shrinking at a 38% annual rate in the April-June quarter. That would be by far the sharpest quarterly contraction on record.

Copyright © 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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Homebuilders Climb Even as Housing Outlook Remains Cloudy

As builders reported quarterly results, many said business was going great until mid-March, when the coronavirus shutdowns began. But several also say business started to improve by mid-April.

LOS ANGELES (AP) – The U.S. economy and housing market had set homebuilders up for a strong 2020. That was before the efforts to stem the spread of the coronavirus pandemic knocked the economy into a skid, dimmed consumer confidence and left a record number of Americans unemployed.

The housing market stalled in March as many would-be buyers held off on purchases. Sales of newly built and previously occupied U.S. homes fell sharply. Home construction slowed. The April data out so far shows the housing slowdown continued last month.

And yet, you wouldn’t know it by looking at homebuilder stocks. While shares in most of the builders are still in the red for the year, the majority of them have notched big gains so far this month that eclipse those of the S&P 500 by a wide margin. An S&P index of homebuilders is up 12.5% in May, versus a 1.4% gain for the broad-market S&P 500 index.

In recent weeks, as builders reported quarterly results, many have said business was going great until mid-March, when the coronavirus shutdowns began. But several also noted that business started to improve by mid-April and has continued to do so into May, said Carl Reichardt, a homebuilding analyst with BTIG.

“The critical question is how much of the improvement we’ve seen was simply the release of pent-up demand from the period of time of four weeks in mid-March to mid-April when business was frozen,” Reichardt said. “It’s hard to answer that question right now.”

The builders that have tended to weather the coronavirus slowdown better have been those, such as D.R. Horton and Lennar, that sell lower-priced homes for the entry level segment of the market, especially in the Southeast, and those that build ready-to-sell homes, rather than the built-to-order model, Reichardt said.

The housing market appeared set to extend a solid run-up in sales that began last fall as mortgage rates headed lower. The inventory of U.S. homes for sale had dwindled to the lowest level in more than a decade and a solid job market and low unemployment rate combined with more millennials entering their 30s led economists to forecast strong demand for housing this year.

Homebuilders were in prime position to capitalize on these trends heading into the spring homebuying season, aided by another pullback in mortgage rates. The average rate on a 30-year, fixed-rate mortgage has gradually fallen from an already low 3.72% the first week of January to 3.24% this week.

Sales of new homes jumped 7.5% in January then fell 4.6% the next month. By March, however, the economic fallout from the coronavirus pandemic knocked the housing market activity into a skid.

New homes sales sank 15.4% in March as mounting job losses and mandates to shelter in place in many cities put off many would-be buyers. April figures are out next week, and analysts estimate sales skidded 15.5% last month. Housing starts, another barometer for housing and builders, plunged 22.3% in March and cratered 30.2% last month, the lowest level in five years.

The National Association of Realtors said Thursday that sales of previously occupied U.S. homes, a far larger slice of the market than newly built homes, slid to a seasonally adjusted annual rate of 4.33 million units in April, the slowest pace since September 2011.

A forecast issued earlier this month by Zillow economists calls for U.S. home sales to decline as much as 60% this spring and take through the end of the year to recover. Another forecast, this one from Haus, a lender that co-invests with buyers as an alternative to traditional mortgages, projects the number of completed new homes largely declining well into 2021.

While states have begun to relax stay-at-home mandates and are clearing the way for businesses that were shut down to reopen, some economists predict U.S. economic growth could take years to fully bounce back. And many expect the unemployment rate to come down slowly over the next couple of years.

“The key, of course, is employment, meaning housing’s big rebound year is looking more as if it occurs in 2021,” Steven Blitz, chief U.S. economist at TS Lombard, wrote in a report this week. “Beyond that, and unlike the expansion just ended, housing will be back as a critical driver of growth.”

Still, even if a sluggish economic and job market recovery ends up delaying some would-be buyers from purchasing a home, the housing market remains largely favorable for big builders.

In addition to low mortgage rates and rising home prices, builders benefit from the chronically thin inventory of homes for sale nationwide, a trend that’s intensified during the pandemic as the pace of new construction slowed and as homebound sellers pulled their homes off the market. The number of previously occupied homes for sale nationally fell to a record-low last month, which drove the median sales price up over 7%.

Copyright © 2020 The Associated Press, Alex Veiga, AP business writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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Fed Chair Says Economic Forecasts Filled with Uncertainty

While it’s hard to predict what’s next with the pandemic, it’s also unclear how people will react as lockdowns aimed at limiting the virus’s spread are lifted.

WASHINGTON (AP) – Efforts to forecast the U.S. economy’s path to recovery from the current deep downturn face “a whole new level of uncertainty,” Federal Reserve Chairman Jerome Powell said Thursday.

Not only is there the difficulty predicting how the coronavirus pandemic will play out, it is also unclear how American workers and consumers will react as lockdowns aimed at limiting the spread of the virus are lifted, Powell said in an address to a virtual Fed conference.

Successfully restarting the economy will depend in large part on the public’s confidence that the loosening of the stay-at-home orders will not trigger a resurgence of the virus, he said.

“The pain of this downturn is compounded by the upending of normal life, along with great uncertainty about the future,” he said. “All of us have our own decisions to make … and those decisions will depend on public confidence that it is again safe to undertake various activities.”

He noted that the country is going through a sudden and severe economic downturn that is without modern precedent.

“It has already erased the job gains of the past decade and has inflicted acute pain across the country,” Powell said. “And while the burden is widespread, it is not evenly spread. Those taking the brunt of the fallout are those least able to bear it.”

The Fed has cut its benchmark interest rate to a record low of zero to 0.25%, purchased $2 trillion of Treasury and mortgage-backed securities and launched a number of programs aimed at keeping the financial markets functioning.

Powell did not send any signals in his remarks about what the Fed might do next but Fed Vice Chairman Richard Clarida, speaking at a different event, repeated the Fed’s pledge to use all of its tools to protect the economy and promote a strong rebound.

“The Federal Reserve will continue to act forcefully, proactively and aggressively as we deploy our toolkit … to provide critical support to the economy during this challenging time,” said Clarida, who spoke by webcast to the New York Association for Business Economics.

Powell and Fed board member Lael Brainard spoke at the 15th “Fed Listens” event, which the central bank began holding last year in an effort to gather public input into possible changes the central bank should make in the way it conducts interest-rate policies. The Fed still hopes to release its findings later this year.

Pat Dujakovich, president of the Greater Kansas City AFL-CIO, told the Fed officials that his concern is that many workers, especially those who had just gained jobs as unemployment fell to a 50-year low before the virus struck, could lose hope of ever getting back into the labor force.

He said while many low-income workers had been helped by the Paycheck Protection Program and expanded unemployment benefits, “The question we are struggling with is what is going to last longer, the (benefit) money or the virus.”

Powell said it is “tragic” and “heartbreaking” to see unemployment surging now after it had been so low at the start of the year.

“This is a hard, hard blow,” Powell said. But he said it is important to remember that the economy will recover and disadvantaged communities “will always have our support.”

Copyright © 2020 The Associated Press, Martin Crutsinger, AP economics writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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Some Borrowers Aren’t Using Their Mortgage Payment Forbearance

A third of the 4.1M who sought the forbearance have remained current on their payments, perhaps getting the “time-out” agreement by accident or “just in case.”

WASHINGTON – About one in 12 mortgage borrowers in the U.S. have sought a time-out on their monthly payments because of the pandemic, a helping hand made available for up to a year under the CARES Act.

But a third of the 4.1 million borrowers who have requested a “forbearance” agreement, as they are known, have remained current on their payments.

Whether they sought the agreements “just in case,” got into one accidentally or found a way to scrape up the money to prevent delinquency, those borrowers could complicate efforts to refinance or take out a new mortgage, something federal officials are trying to head off.

“Those who are making their payments should be treated as current when it comes to refinancing their loans,” Mark Calabria, director of the Federal Housing Finance Agency said Tuesday during a webinar hosted by the Mortgage Bankers Association.

Although the CARES Act requires servicers to report mortgages in forbearance as “current,” HousingWire reported last week that some borrowers had notes attached to their credit reports saying their accounts were in forbearance, the equivalent of having a scarlet letter stamped on them.

In the past, a forbearance would prevent a borrower from obtaining another government-backed mortgage for up to a year. But the federal government has stepped in, reducing the waiting period to three months, and allowing guarantors like Freddie Mac and Fannie Mae to refinance borrowers who sought forbearance.

Calabria said that mercy should also be extended to borrowers who take a month or two off and quickly catch up on payments. Whether lenders, who are tightening credit standards, hold the same attitude remains to be seen.

About two-thirds of borrowers who have sought forbearance have loan-to-value ratios of 70% or lower. That means home prices on those properties could fall by 30% and lenders could still come out whole, reducing the impact on the government-sponsored agencies who would otherwise be on the hook for losses.

“As long as we retain a situation where borrowers have a considerable amount of equity, we will be alright,” said Calabria.

Compared to other states, mortgage borrowers in Colorado entered the downturn in a stronger financial position. Colorado ranks 46th for mortgage delinquencies, at 2.46%, and 44th lowest in foreclosures at 0.28%, according to the MBA. Mississippi, by contrast, had a delinquency rate nearly three times as high, at 7.43%.

Servicers, who collect mortgage payments and forward them on to investors who own the underlying mortgage securities, are on the hook for covering up to four months of skipped payments when a loan goes into forbearance.

Assuming the $500 million worth of payments in forbearance a month they are covering doesn’t substantially increase, that works out to $2 billion, Calabria said. Many servicers have gone out and raised money to cover shortfalls, he said. And the Federal Reserve is providing liquidity to those who need it.

As more states have opened up, demand for mortgages to purchase homes has rebounded. Historically low interest rates, at 3.5% on a 30-year loan, have fueled another wave of refinancings, which could run between $1 trillion to $1.5 trillion this year, estimates Joel Kan, associate vice president of economic and industry forecasting at the MBA.

But not everyone is able to take advantage. Liquidity has largely dried up in the jumbo market, which could reduce demand for the most expensive homes. And with 36.5 million people in the U.S. filing for unemployment benefits the past two months, lenders have become much pickier about who they are willing to underwrite and the documentation they require.

“We are back to levels that we haven’t seen since 2014,” Kan said of credit availability.

But Kan also added that the MBA expects home prices to “hold up well” this year, rising 4% nationally, which should help anyone who can no longer afford a mortgage and needs an exit.

Copyright © 2020 Fort Morgan Times, Aldo Svaldi. All rights reserved. Reproduced with the permission of Media NewsGroup, Inc. by NewsBank Inc.

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Virtual Tours, Patience Can Pay Off for Homebuyers Now

Despite the pandemic, homebuyers are continuing their home search by options like online open houses where they can Zoom or FaceTime with Realtors in real time.

TORONTO – Thomas Rosenthal has been checking online property listings every day while under lockdown.

The 30-year old University of Toronto master’s student, who works part-time as a data engineer, currently rents a one-bedroom in midtown Toronto with his partner for $1,900 a month. They’re generally happy there, and their landlord is friendly and accommodating. But a place of their own would offer them the control and independence they long for. And, after almost a decade of saving, they’ve found themselves well-poised to make a down payment.

“We have fairly low expenses, all things considered,” Rosenthal says. “We’ve been able to save quite a lot.”

While Rosenthal and his partner are hoping to land a condo for around $500,000, he often sets his search parameters a bit higher, just to see what’s out there. Recently, he’s noticed unusually large numbers of properties posted around the $700,000 mark – units that would’ve been listed for higher just a few months ago.

It’s the sign of a broader shift in the market. As the country buckles in for its next great recession, housing sales have plummeted to their lowest levels since 1984, and prices in some areas have become more favorable for buyers.

This makes it an opportune time for first-timers like Rosenthal, although he says the move still feels like a dangerous one. While the pair are relatively job secure, making a significant financial investment in the middle of a pandemic still feels risky.

He’s also wary of making any commitments without seeing properties in person. Lockdown orders have moved the majority of tours online, which clouds buyers’ natural judgment on the condition of a property.

“In a virtual walk-through your opinion is based on the quality of that camera person,” Rosenthal says. “A professionally done one makes it look impeccable. But you can’t see everything. You know, you don’t get to open up the cabinets.”

It’s a valid concern, according to James Mabey, realtor with Century 21 Masters in St. Albert, Alberta. He suggests his clients stay away from virtual tours when making big decisions. Instead, he recommends online open houses, where prospective buyers can Zoom or FaceTime with Realtors in real time.

“You can interact with the agent while they’re at the property, so you can say ‘hey, let’s go downstairs, can you show me that room again?'” Mabey says.

He also suggests looking for gaps in photo collections when browsing listings. If you have a floor plan, it’s worth making sure photos of every room in the property are shown online. Missing rooms are an indication that the seller is trying to cover up problem areas while in-person access remains limited.

When in doubt, don’t be afraid to enlist a trained eye to help spot discrepancies, Mabey says. Buyer’s agents can help first-timers weed through the noise and learn to listen to their gut on closing a deal. The latter is something many struggle with – even Rosenthal, who admits he catches himself thinking about how to time his purchase with the market, despite knowing that waiting for a so-called golden opportunity to buy is typically ill-advised.

“People say if it’s going to be your primary residence, it’s always the right time to buy if you have the money,” Rosenthal says.

Timing a purchase around market price is not always the savviest move, says Mabey.

In fact, “the good deal is actually the interest rates you can get on a mortgage right now,” he says. “If a property comes down a couple thousand dollars in your negotiation, but if interest rates in the meantime start to go the other direction, then, in actual fact you have paid way more for that house over the time you’re paying that mortgage.”

So, if you’re ready to buy, Mabey advises not to wait too long, or you could miss out on a great deal.

“I don’t generally find that any buyers who do pull the trigger are unhappy with their decision, years later,” Mabey adds.

Copyright © 2020 The Canadian Press, Audrey Carleton. All rights reserved.

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NAR: Existing-Home Sales Down 17.8% in April from March

Existing-home sales dropped in April for the second consecutive month, due to the COVID-19 pandemic and resulting economic lockdowns, says NAR Chief Economist Yun.  

WASHINGTON – Existing-home sales dropped in April, continuing what is now a two-month decline in sales brought on by the coronavirus pandemic, according to the National Association of Realtors®. Each of the four major regions experienced a decline in month-over-month and year-over-year sales, with the West seeing the greatest dip in both categories.

Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 17.8% from March to a seasonally-adjusted annual rate of 4.33 million in April. Overall, sales decreased year-over-year, down 17.2% from a year ago (5.23 million in April 2019).

“The economic lockdowns – occurring from mid-March through April in most states – have temporarily disrupted home sales,” said Lawrence Yun, NAR’s chief economist. “But the listings that are on the market are still attracting buyers and boosting home prices.”

April’s existing-home sales are the lowest level of sales since July 2010 (3.45 million) and the largest month-over-month drop since July 2010 (-22.5%).

The median existing-home price for all housing types in April was $286,800, up 7.4% from April 2019 ($267,000), as prices increased in every region. April’s national price increase marks 98 straight months of year-over-year gains.

“Record-low mortgage rates are likely to remain in place for the rest of the year and will be the key factor driving housing demand as state economies steadily reopen,” Yun said. “Still, more listings and increased home construction will be needed to tame price growth.”

Total housing inventory at the end of April totaled 1.47 million units, down 1.3% from March, and down 19.7% from one year ago (1.83 million). Unsold inventory sits at a 4.1-month supply at the current sales pace, up from 3.4-months in March and down from the 4.2-month figure recorded in April 2019.

Properties typically remained on the market for 27 days in April, seasonally down from 29 days in March, but up from 24 days in April 2019. Fifty-six percent of homes sold in April 2020 were on the market for less than a month.

First-time buyers were responsible for 36% of sales in April, up from 34% in March 2020 and 32% in April 2019. NAR’s 2019 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 33%.

Individual investors or second-home buyers, who account for many cash sales, purchased 10% of homes in April, down from 13% in March 2020 and from 16% in April 2019. All-cash sales accounted for 15% of transactions in April, down from 19% in March 2020 and 20% in April 2019.

Distressed sales – foreclosures and short sales – represented 3% of sales in April, about even with both March 2020 and April 2019.

While virtually every sector of the American economy has been hit hard by this pandemic, our nation’s 1.4 million Realtors have continued to show an undying commitment to their profession, their clients and America’s real estate industry,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, Calif.

“As we find during any time of crisis, we have a tremendous opportunity to evolve and emerge stronger and more efficient,” Malta continued. “Having renewed our focus on new, innovative ways to serve American consumers, I am confident the real estate sector and our nation’s Realtors are uniquely positioned to lead America’s economic recovery.”

Realtor.com®’s Market Hotness Index, measuring time-on-the-market data and listing views per property, revealed that the hottest metro areas in April were Colorado Springs, Colo.; Fort Wayne, Ind.; Topeka, Kan.; Pueblo, Colo.; and Columbus, Ohio.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 3.31% in April, down from 3.45% in March. The average commitment rate across all of 2019 was 3.94%.

Single-family and condo/co-op sales

Single-family home sales sat at a seasonally adjusted annual rate of 3.94 million in April, down 16.9% from 4.74 million in March, and down 15.5% from one year ago. The median existing single-family home price was $288,700 in April, up 7.3% from April 2019.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 390,000 units in April, down 26.4% from March and down 31.6% from a year ago. The median existing condo price was $267,200 in April, an increase of 7.1% from a year ago.

“There appears to be a shift in preference for single-family homes over condominium dwellings,” Yun said. “This trend could be long-lasting as remote work and larger housing needs will become widely prevalent even after we emerge from this pandemic.”

Regional breakdown

As was the case for the month prior, April sales decreased in every region from the previous month’s levels. Median home prices in each region grew from one year ago, with the Northeast and Midwest regions showing the strongest price gains.

April 2020 existing-home sales in the Northeast fell 16.9%, recording an annual rate of 540,000, an 18.2% decrease from a year ago. The median price in the Northeast was $312,500, up 8.7% from April 2019.

Existing-home sales decreased 12.0% in the Midwest to an annual rate of 1.10 million, down 8.3% from a year ago. The median price in the Midwest was $229,200, a 9.3% increase from April 2019.

Existing-home sales in the South dropped 17.9% to an annual rate of 1.88 million in April, down 16.8% from the same time one year ago. The median price in the South was $249,400, a 6.4% increase from a year ago.

Existing-home sales in the West fell 25.0% to an annual rate of 810,000 in April, a 27.0% decline from a year ago. The median price in the West was $419,300, up 6.1% from April 2019.

© 2020 Florida Realtors®

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Is Your Website Bringing in Business?

Real estate pros need to drive people to their websites. But it can be challenging to create the perfect website, find the right content and keep it updated.

LAS VEGAS – Real estate professionals need to be able to drive people to their websites. They can accomplish this through email, blogging and print marketing, but it can be a challenge to do this right the first time.

To create the perfect website, they must first select the right domain name; choose a web host and web designer; and get a template that will allow them to change the text, pictures and links without paying additional money to the designer to add more content.

They should then work to add additional content every month, keeping in mind that creating a website isn’t an overnight process.

Once they have created their website, they can enhance it by focusing on the consumer and providing relevant information; offering property search features with multiple, high-quality digital images; providing virtual tours; and creating forms where visitors can offer their personal information in exchange for valuable information.

Ultimately, they need to ensure their site stands out, which can be accomplished by incorporating online video, among other things.

Source: Realty Times (03/13/19) Devitre, Doug

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

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COVID-19 Pandemic Impacts Fla.’s Housing Market in April

Florida Realtors’ data: Fewer closed sales, pending sales, new listings and other metrics year-over-year due to the virus and economic shutdown. Chief Economist O’Connor notes home values are generally holding firm.

ORLANDO, Fla. – In April, economic turmoil caused by the coronavirus pandemic, resulting business shutdowns and subsequent rising unemployment rates impacted Florida’s housing market. The latest housing data from Florida Realtors® reported lower levels of closed sales, pending sales, new listings and other metrics compared to a year ago – except for median sale price, which rose compared to April 2019.

“The impact of COVID-19 on Florida, the U.S. and throughout the world was fully realized in April,” said 2020 Florida Realtors President Barry Grooms, a Realtor and co-owner of Florida Suncoast Real Estate Inc. in Bradenton. “Many businesses shut down as people sheltered in-place to protect themselves and their loved ones, following the governor’s stay-at-home order and recommended health practices. Job losses rose and unemployment claims overtaxed the state’s system. It’s no surprise that many buyers and sellers put their plans on hold for now, because of the pandemic and the current economy.

“As Florida continues to reopen businesses and activities in phases, we continue to follow social distancing and health guidelines to protect ourselves and our communities. People still need a place to call home, and Realtors in every community stand ready to help buyers and sellers who need support and guidance in these uncertain times.”

Last month’s closed sales of single-family homes statewide dropped 20.7 % year-over-year, totaling 21,403 while condo-townhouse sales declined 36.5%, for a total of 7,506. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

In April, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for 100 months in a row. The statewide median sales price for single-family existing homes was $275,000, up 6% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $209,000, up 7.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Florida Realtors Chief Economist Dr. Brad O’Connor noted that April’s decline in closed sales was in line with the drop in new pending sales shown in the March data. Meanwhile, median sale price continued to rise in April for both single-family homes and condo-townhouse properties, signaling that home values are generally holding firm – a trend that’s in line with what basic economic theory would predict when there are offsetting declines in both demand and supply, he said.

“Looking ahead to May, all indications are that we will continue to see stable prices but will see a further decline in closed sales,” O’Connor said. “New pending sales for April were down over 35.1% in the single-family category year-over-year, and they were down 56.6% in the condo and townhouse category. However, the silver lining is the majority of this drop occurred in the first couple weeks of the month. In each week of the second half of the April, we saw drastic improvement in the number of homes going under contract.

“The trajectory of this improvement has been strong enough, that preliminary data points to the possibility that we could see positive year-over-year growth in new pending sales in several markets across the state in May – particularly for single-family homes. What’s more, there’s a lot of current housing market data across the U.S. that points toward this being a national trend.”

For example, over the past four weeks, the Mortgage Bankers Association (MBA) has been reporting robust increases in the number of loan applications submitted for U.S. home purchases, the chief economist noted.

“Another metric that showed improvement over the course of April was new listings,” O’Connor said. “Overall for the month, new listings were down over 27.2% year-over-year in the single-family category, while new listings of condos and townhouses were down 38.5% percent. Again, though, like new pending sales, the pace of new listings was slowest in the first two weeks of April, after which it started to recover. This recovery in the pace of new listings was not as strong as what we saw for new pending sales, though – so we appear to be, for now, in a situation where demand is rebounding a bit faster than supply.”

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.31% in April 2020, down from the 4.14% averaged during the same month a year earlier.

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

© 2020 Florida Realtors®

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Nearly 39M Have Sought U.S. Jobless Aid Since Virus Hit

2.2M also sought aid under the new fed program for self-employed, contractors and gig workers; some analysts think unemployment rate may peak at 20-25% in May-June.

WASHINGTON (AP) – More than 2.4 million people applied for U.S. unemployment benefits last week in the latest wave of layoffs from the viral outbreak that triggered widespread business shutdowns two months ago and sent the economy into a deep recession.

Roughly 38.6 million people have now filed for jobless aid since the coronavirus forced millions of businesses to close their doors and shrink their workforces, the Labor Department said Thursday.

An additional 2.2 million people sought aid under a new federal program for self-employed, contractor and gig workers, who are now eligible for jobless aid for the first time. These figures aren’t adjusted for seasonal variations, so the government doesn’t include them in the overall number of applications.

The continuing stream of heavy job cuts reflects an economy that is sinking into the worst recession since the Great Depression. The nonpartisan Congressional Budget Office estimated this week that the economy is shrinking at a 38% annual rate in the April-June quarter. That would be by far the worst quarterly contraction on record.

Nearly half of Americans say that either their incomes have declined or they live with another adult who has lost pay through a job loss or reduced hours, the Census Bureau said in survey data released Wednesday More than one-fifth of Americans said they had little or no confidence in their ability to pay the next month’s rent or mortgage on time, the survey found.

During April, U.S. employers shed 20 million jobs, eliminating a decade’s worth of job growth in a single month. The unemployment rate reached 14.7%, the highest since the Depression. Millions of other people who were out of work weren’t counted as unemployed because they didn’t look for a new job.

Since then, 10 million more laid-off workers have applied for jobless benefits. Federal Reserve Chair Jerome Powell said in an interview Sunday that the unemployment rate could peak in May or June at 20% to 25%.

The pace of layoffs has declined for six straight weeks, and some reopened businesses have rehired a portion of their laid-off employees. By historical standards, though, the number of weekly applications remains immense.

Copyright © 2020 The Associated Press, Christopher Rugaber, AP economics writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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Researchers Hope to Predict Toxic Algae

As part of a study on how toxic algae works on the human body, more air quality sensors were installed in Cape Coral, hit hard by a blue-green algae outbreak in 2018.

CAPE CORAL, Fla. – Researchers are studying how toxic algae works its way through the human body and they continue to set their sights on Southwest Florida.

What’s the long-term health impact of red or blue-green algae blooms? Fla.’s Dept. of Health asked four state universities to find out and gave them $650K to do it.

Their goal is to one day be able to predict blooms in the name of public safety.

Last week, Mike Parsons, a Florida Gulf Coast University professor and Blue-Green Algae Task Force member, and Adam Schaefer of Florida Atlantic University, installed a second round of air quality sensors in Cape Coral, one of the areas hit hardest by a massive blue-green algae outbreak in 2018.

Studies already suggest toxic blue-green algae gets into the nasal cavity and lungs of humans, and it’s been found in urine samples as well.

Just what it does to the human body is unknown, although some experts have suggested it may be linked to neurological disorders.

“We just put out bulk air samplers for another baseline run,” Parsons said. “The idea really is we need more data all together and we haven’t seen cyanobacteria flare up yet (this year), but we’re getting ready for wet season and temperatures will continue to warm up.”

Parsons and others started monitoring air quality conditions late in 2018 to help set baseline conditions – how much of the toxin is naturally in the air – and compare those to bloom conditions.

If they can predict the bloom flare-ups, they can offer a warning system for people to avoid the area.

Blue-green algae has come to the forefront of environmental issues in recent years.

A large and particularly nasty bloom engulfed the east coast area after an El Nino wave dumped more than a foot of rain across the state during the middle of the dry season.

The 2018 bloom hit the west coast when blue-green algae started showing up on Lake Okeechobee that summer, then made its way into the Caloosahatchee River and estuary.

Conditions lasted for several months, and some people actually moved out of their houses to avoid the toxic air, particularly those with pre-existing health conditions that make them more prone to its impacts.

Water quality is a major issue for Southwest Florida and impacts this region in several ways.

When it goes bad, the local recreational and commercial fisheries can be shut down. The toxins appear to be a risk to the public, and a 2015 Florida Realtors report said property values by affected waterways in Lee and Martin counties – where Lake Okeechobee releases go on the east coast – could have been negatively impacted by as much as $1 billion over the study’s time frame.

Parsons said he hopes the research will one day lead to a system that detect blooms before they get too large in order to warn the public of the potential danger.

Calusa Waterkeeper John Cassani said the program is an important part of understanding a toxic water situation that we now know very little about.

“I would say that research on inhaling (toxic algae) is a critical thing now because you don’t have to be in the water or really be near the water to experience health risks,” Cassani said.

The sensors were installed in a canal network near Sun Splash water park and take measurements of the cyanobacteria. Similar devices found the toxin at FGCU’s Bonita Springs location and at a Cape Coral home.

Parsons said the group will test people for the toxin again in June.

“It’s really a matter of we don’t know,” Parsons said. “Is this a problem or not? If you have a bloom in your canal it’s in the air, and there will probably be toxins in the air. Can our body take care of it or you need to leave for your best interest? And that’s not comfortable for people.”

© 2020 Journal Media Group, Fort Myers News-Press, Chad Gillis. All rights reserved.

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Many Companies Plan to Reopen in Phases

CBRE survey: Most commercial firms plan to follow social distance guidelines and readjust workspaces as they reopen; about 50% also plan to add touchless technology.

LOS ANGELES – Most companies plan to take a gradual, cautious approach to reopening their workplaces due to the COVID-19 pandemic, a new survey from the commercial firm CBRE shows. Many companies are following social distancing procedures and readjusting workplaces as they reopen.

About half of 203 companies studied across the globe are also adding touchless technology aimed at preventing germ-spread in the workplace.

Florida Realtors is monitoring everything regarding how the COVID-19 pandemic is affecting the real estate industry and Realtors and sharing it here.

The CBRE survey, conducted May 4, covered account leaders who oversee 4.2 billion square feet of workspace in offices, industrial and logistics real estate, tech space, data centers, retail, and healthcare that is used by more than 38 million workers.

“Our analysis of our clients’ return-to-work strategies shows that virtually all are engaged in detailed planning to ensure a careful and reasoned approach,” says Karen Ellzey, executive managing director of consulting and global lead for CBRE’s COVID-19 response for occupier clients. “Most of these companies have established their own criteria for when to return to the workplace beyond local and state government requirements. And nearly three quarters plan to bring employees back in phases rather than all at once.”

Fifty-nine percent of companies surveyed say they will provide face coverings for their employees. Twenty-eight percent will require face coverings at all times while at the property. Forty-two percent will require masks only at company facilities mandated by local government or health agency guidelines, the survey shows.

In the early phases of reopening, many firms say they plan to limit visitors. Only 21% of companies say they’ll allow visitors to the workplace in the early phases of reopening.

In prepping their spaces for a return, the majority of companies are installing signage, establishing space-use policies and guidelines for social distancing, outlining social distancing zones with floor decals and other reminders, and reconfiguring furniture layouts.

Seventy-two percent of companies will conduct a phased reopening with defined percentages or groups of employees admitted over weeks or months. Fifty-two percent expect to give employees the option to work from home for the foreseeable future. That option, however, did vary considerably among industry sector, the survey shows.

“Across the board, we see evidence that companies are taking a thoughtful, measured approach to reopening their work environments in a safe and methodical manner,” Ellzey says.

Source: “Most Employers in CBRE Study Favor Phased Return to Workplace, Adding Touchless Tech, Restricting Visitors,” CBRE (May 15, 2020)

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

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3x Your Lead Generation ROI with 5 Tips

Retrace the last 12 months of ad spending across social media, referral networks and Pay Per Click (PPC) lead generation to see where your past business originated.  

NORWALK, Conn. – Agents need to focus on their leads’ user experience to ensure better ROI from lead spend. To identify where the bulk of past business came from, agents should use a spreadsheet to retrace the past 12 months’ worth of ad spend across social media, referral networks and PPC lead generation.

A customer relationship management (CRM) tool can help effectively manage every stage of a lead’s lifecycle. Robust CRM will allow agents to keep detailed lead records, prompt outreach and follow-up, and provide valuable insight into every step of the sales process.

A good workflow will allow agents to automatically connect with their leads and encourage meaningful actions such as telephone or text outreach, email, social media connection and direct mail. Communication should feel personal and relevant to whatever stage of the process the lead is in, and be accompanied with such analytics as opens, clicks and responses where applicable.

It can take about seven to 13 touches to convert a lead into a qualified opportunity, and many brokers and agents generally will start with 27 touches over 30 days. Ideally, 14 of those touches should occur in the first seven days.

As agents develop their workflows and touchpoints, they should incorporate helpful resources, personal insight, and local “goodies” as part of the communication process. This helps build rapport and drives higher engagement with leads.

Source: RISMedia (05/12/20) Jolly, Bondilyn

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

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NAR: Watch for Home Sales Rebound as Economy Opens Up

There are still many unknowns about COVID-19, but with that in mind, NAR Chief Economist Lawrence Yun is cautiously optimistic about where the economy is heading, and he also sees positive indicators in the residential real estate market.

WASHINGTON – First a caveat: There are still many unknowns about COVID-19 and what might happen next. But with that in mind, NAR Chief Economist Lawrence Yun sounded cautiously optimistic about where the economy is heading and positive indicators in the residential real estate market.

Yun predicted that steady and even rising home prices could point toward healthy home sales numbers once the economy reopens, and he saw signs that jobs could also rebound as stay-at-home orders ease.

Despite a decline in GDP, consumer spending and business spending in the first quarter of 2020, Yun said that residential investment – including home building, home sales, and remodeling – was actually up 21% during the first three months. He said that’s an indication, of how strong the housing market was before the pandemic hit.

Yun’s also encouraged by the fact that personal income was up by 2% and personal savings jumped a remarkable 152% related to curtailed household spending as the pandemic spread.

Yun hesitated to gauge the mindset of savers. “Are they waiting for the economy to reopen?” he said. “Or is it simply pessimism? There is certainly more money available.”

While grocery-store spending went up in March as spending at restaurants declined, Yun said that balance seemed to be changing a bit, with restaurant spending slightly improved over the last few weeks – a decline of just 60% to 70% year-to-year as some restaurants found ways to continue serving customers by engaging in social distancing and offering takeout service.

And while clothing stores, sporting and hobby stores, and department stores all saw steep declines in consumer retail spending over the same period a year ago, building materials and gardening spending actually increased by 10.4%, a hopeful indicator.

“People are upgrading their homes,” Yun said. “When the market reopens, that housing will go up in value. People are remodeling, working on lawn care. All things you do to sell a home.”

Jobs rebound

As grim as the unemployment numbers have been, Yun was encouraged by recent data. As of May 2, a reported 26 million people were jobless, in contrast to the high of 33 million who filed claims earlier in the lockdown. Yun inferred from the numbers that some people received unemployment checks for a few weeks and then got back to work, possibly in jobs in high-demand essential fields. He also said that it was important to watch for trends like these as a harbinger of improvement.

“Even in good years, people file (for unemployment),” he said. “We are looking for a flattening of the curve. When 1 million jobs are created in a week and less than 1 million file for unemployment, we will know the economy is turning for the better.”

Yun also said that the biggest job losses in April were found in leisure and hospitality (7.6 million) and in education and health (2.5 million). However, he saw potential for the latter category to rebound quickly once the economy reopens.

“I expect [education and health] to turn positive. People will need daycare. Hip replacement, knee surgery will be done again. These loses could be temporary.”

Home prices and sales

In addition to positive prognostications on the job front, Yun saw reason to be optimistic on the potential for home sales once the economy picks up steam. Of particular note were home prices, which he said were strong.

“There is no meaningful downward trend,” he said. “If anything, they appear to be rising.”

Yun pointed to the current housing inventory shortage as the source of stable prices, and he predicted that the shortage could grow even more severe since that the usual spring increase in listings didn’t occur this year. He suggested that sellers will be ready to list once the economy reopens. He used Georgia as an example since it was one of the first states to start to reopen.

“Listings are popping out” in Georgia, Yun said, “and buyers are quickly grabbing homes.”

He added further that healthy home sales are possible even if the job market is uncertain. “Even in high unemployment times,” Yun said, “60 to 70% have employment. And we have record-low mortgage rates. The situation could be good.”

Source: National Association of Realtors® (NAR)

© 2020 Florida Realtors®

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Realtors: Change the Way You Think About Money

It’s easy to avoid retirement planning or saving for business slowdowns when your money arrives sporadically in big chunks. But that needs to change.

WASHINGTON – Thinking about money – let alone talking about it – is uncomfortable most of the time – but during an unstable economy, it’s downright painful, said Leigh Brown, ABR, CRS, author and speaker. But money doesn’t have to be scary when you make a habit of saving it, Brown said during her session, “Getting Your Financial House in Order: Evaluating Your Finances in a Crisis,” at the virtual 2020 Realtor® Legislative Meetings.

Because Realtors tend to have a highly optimistic nature, Brown said, it makes sense that only 52% actively save for retirement, according to NAR research.

“You say, ‘I got this deal coming through next week, and I’ll be getting $5,000,’ Brown said. “But then you get [interested in] a CRM that’s $6,000, and you say, ‘Well, I just need one more sale to make that up.’” And the cycle continues, and we never save.

Now we’re in a downturn, and that hamstrings our confidence, Brown said. “If you’re feeling fear, I’ve had that, too. During the Great Recession, when the phone stopped ringing like a spigot turned off.” Brown said she learned to play the organ during that downtime so she could audition for church jobs as a side gig to support her children, who were then toddlers.

The first step to move from fear to action during the pandemic is to reach out to your peers who were around during that last disruption, Brown said. “We’re a profession of abundance in terms of energy, calmness and information. This is the crowd who will support you.”

Your next step, she recommended, is to take advantage of NAR’s Center for Realtor Financial Wellness, a free member benefit, where you can take a confidential financial assessment to get on the right path. You can access spreadsheets and calculators, and sign up for monthly financial webinars. Past webinars, such as “Financial Tips During Challenging Times: A Business Survival Guide,” are available in the archive.

Then institute what she called a “40-30-20-10” spending plan: 40% of your commission check goes into a business account (to pay for things like CRMs, sponsorships, signs, and professional certifications), 30% goes into a personal account (mortgage, food, car payments), 20% goes to taxes and 10% is used for giving.

But the order in which you deposit the money, she recommends, is giving, taxes, personal and then business. “When I make it a discipline to give, it comes back big time,” she said.

She also recommends that Realtors invest in real estate, which not many agents do, even though they know everything about their market.

Landlord horror stories, like the nightmare tenant depicted in the 1990 movie “Pacific Heights,” keep us from investing, she said. Don’t let it. Get a property manager friend. “Surround yourself with smart people in this oddball market,” she said. “Is it someone you can partner with? Build collegial relationships that will help you in the future.”

Brown says that 85% of millennials also believe real estate is a good investment, according to NAR research. Even if they’re not ready to buy a primary residence, they may be interested in investing, she noted.

Brown’s other money tips

  • Consider opening accounts at a local bank or credit union, which are traditionally more relationship-based than a big bank. Not only will it help to have a personal banker when you need to get in the fast lane for things like an SBA loan, but you can also add to your sphere by building on those relationships. “Not everything has to be by app,” Brown said.
  • If you’ve memorized your credit card number, expiration date and security code, tell your bank you lost your card so you can get a new one. Don’t memorize the new number and keep the card where you have to walk to get it. That gives you time to think twice before you buy.
  • You don’t need a fancy car. “I got frugal after the Great Recession,” Brown said.
  • Get a certified accountant to help you structure your business so you pay the least amount in taxes. Take advantage of the 20% deduction NAR scored for independent contractors and pass-through businesses during the federal tax bill negotiations in 2017.
  • Finally, how you position yourself in this market is key. “You’re a professional problem solver,” Brown said. You’re successful “not because you have open houses. It’s because you’re there to professionally solve clients’ problems.”

And today, expertise is everything.

Source: National Association of Realtors® (NAR)

© 2020 Florida Realtors®

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