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U.S. housing starts climbed 18.6% in Jan.

WASHINGTON (AP) – March 8, 2019 – U.S. housing starts jumped 18.6 percent in January, as builders ramped up construction of single-family houses to the fastest pace in eight months.

The Commerce Department said Friday that January ground breakings occurred at a seasonally adjusted annual rate of 1.23 million. Home construction rebounded sharply from December, when the annual rate was just 1.04 million.

Most of the new construction came from single-family houses, which were being built at the strongest rate since May 2018. Still, overall housing starts in January were slightly below the 2018 total of 1.24 million as the pace of apartment construction slowed.

The housing market was hurt for much of 2018 by rising mortgage rates, which made it costlier to purchase a home. But average rates have declined since early November and the average 30-year rate was 4.41 percent this week, providing a possible boost for home buying this year.

Permits for construction, an indicator of future activity, improved 1.4 percent to a seasonally adjusted rate of 1.35 million. The permits suggest additional apartment construction in the coming months, as that segmented accounted for the gains. Single-family permits fell 2.1 percent in January to an annual rate of 812,000.

AP Logo Copyright © 2019 The Associated Press, Josh Boak, AP economics writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

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FBI opens Miami task force to stop foreign corruption

MIAMI – March 8, 2019 – The FBI is looking to clamp down on foreign corruption with a new task force in Miami, a city that has long served as a gateway for illicit money laundering.

The squad will concentrate on Miami and on international corruption in South America, according to the Associated Press. The FBI said it often finds people hiding their money in luxury South Florida real estate and luxury boats. And in recent months, federal authorities have uncovered a number of high-profile money laundering cases tied to Miami area real estate.

The task force will look to find individuals and companies who violate the Foreign Corrupt Practices Act, or those who are looking to bribe foreign officials. The federal agency said it is also working with companies to educate them about corruption and to self-report illicit behavior, according to the AP. The office will open this month and have six agents.

Most recently, top Venezuelan officials allegedly siphoned money out of the country’s state oil company and into South Florida real estate properties, including two condos at Dezer Developments Porsche Design Tower and one condo at Related Groups Icon Brickell.

But developers and real estate agents have minimal obligations to perform due diligence on their buyers or where the money came from, according to a Real Deal investigation last summer.

Copyright © 2019 Global Data Point, Governance, Risk & Compliance Monitor Worldwide. Provided by SyndiGate Media Inc. All rights reserved.

 

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U.S. mortgage rates up this week; 30-year at 4.41%

WASHINGTON (AP) – March 8, 2019 – U.S. long-term mortgage rates rose modestly this week, but they remain slightly lower than they were a year ago.

Mortgage buyer Freddie Mac says the average rate on the benchmark 30-year, fixed-rate mortgage increased to 4.41 percent from at 4.35 percent during the prior week. The average was 4.46 percent a year ago, but rates climbed for much of 2018 and peaked at nearly 5 percent in early November.

The average rate this week for 15-year, fixed-rate loans rose to 3.83 percent from 3.77 percent during the prior week.

Mortgage rates often move in sync with the interest paid on 10-year U.S. Treasury notes. Rising rates in 2018 suppressed home sales, but the lower levels in recent months point to the possibility of sales gains this year.

AP Logo Copyright © 2019 The Associated Press, Josh Boak, AP economics writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

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NAR: Majority of real estate firms remain optimistic

WASHINGTON – March 7, 2019 – The evolving technological landscape, competition from nontraditional market participants and housing affordability continue to be among the biggest challenges facing real estate firms in the next two years, according to a report by the National Association of Realtors® (NAR).

NAR’s 2019 Profile of Real Estate Firmsfound that commercial real estate firms were more likely than residential firms to cite local or regional economic conditions as the biggest challenges, while residential firms were more likely to mention competition from non-traditional market participants and virtual firms.

The survey found that the vast majority of firms have an optimistic outlook for the industry’s future growth. Although expectations have slightly decreased from last year’s survey, firms remain confident and expect profits from real estate activities to increase or stay the same over the next year.

“Real estate firms continue to look optimistically toward the future, with a majority expecting profits to increase in the next two years. These trends are positive signs, particularly in our constantly evolving industry,” said NAR President John Smaby.

The report is based on a survey of firm executives who are members of NAR and provides insight into firm activity, the scope of benefits and education provided to agents and future market outlooks.

The report shows that almost 60 percent of firms expected profitability (net income) from all real estate activities to increase in the next year. Forty-four percent of firms expected competition from virtual firms to increase in the next year and 43 percent expected the same from non-traditional market participants.

“It is clear that the real estate industry is rapidly changing, and with that comes growing competition in the market,” said NAR CEO Bob Goldberg. “NAR continues to stay ahead of the evolving trends in technology as we work with market disruptors to best serve our members and ensure they have the resources needed to be successful.”

Firms also predicted the effects different generations of homebuyers would have on the industry. Fifty-eight percent of firms were concerned with millennials’ ability to buy a home while 46 percent experienced similar heartburn with millennials’ view of homeownership.

Firms typically had 30 percent of their sales volume from past client referrals and 30 percent from repeat business from past clients. Fifty percent of current competition came from traditional brick and mortar large franchise firms.

The most common benefit that firms offered to independent contractors, licensees, and agents was errors and omissions/liability insurance at 40 percent. Thirty-five percent of senior management received errors and omissions/liability insurance, 15 percent vacation/sick days, and 10 percent received health insurance.

That survey states that over 80 percent of real estate firms had a single office, typically with two full-time real estate licensees, down from three licensees in the 2017 report. Eighty-six percent of firms were independent non-franchised firms, 11 percent were independent franchised firms and 82 percent of firms specialized in residential brokerage.

Thirty-two percent of brokers of record were CEOs, presidents or owners, and 64 percent were regional managers or regional vice presidents.

Firms with only one office had a median brokerage sales volume of $4.2 million in 2018 (down from $4.3 million in 2016), while firms with four or more offices had a median brokerage sales volume of $100 million in 2018 (down from $235.0 million in 2016).

Thirteen percent of all firms had real estate teams, with a median of three people per team.

Real estate firms with one office had 18 real estate transaction sides in 2018 (down from 20 in 2016), while firms with four or more offices typically had 478 transaction sides (down from 550 in 2016).

Firms usually received 30 percent of their sales volume from past client referrals and 30 percent from repeat business, while 50 percent of current competition came from traditional brick and mortar large franchise firms.

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Fla. lawmakers seek permanent nationwide switch to daylight saving time

WASHINGTON – March 7, 2019 – The push to make daylight saving time permanent in Florida is going national.

Sens. Marco Rubio and Rick Scott and Rep. Vern Buchanan introduced the Sunshine Protection Act in Congress that would make daylight saving time permanent across the country.

Rubio also introduced a similar bill last year after the Florida Legislature passed a state law that calls for Florida to move to permanent daylight saving time, but that bill stalled. Florida’s law ending daylight saving time can’t go into effect unless the federal law is changed as well.

Florida is not the only state to call for an end to daylight saving time. California voters passed a referendum calling on their Legislature to end daylight saving time with nearly 60 percent of the vote.

Rubio re-filed his bill this year, saying Wednesday he was “reflecting the will of the state of Florida,” and Scott, the former governor and newly elected senator, joined as a co-sponsor.

Buchanan, who represents Florida’s 16th Congressional District in Manatee County, is sponsoring the bill in the Florida House of Representatives.

“Last year, Florida lawmakers were the first in the nation to vote to make daylight saving time permanent in our home state,” Buchanan said in a press release. “We should follow their lead at the national level to allow them to move forward with this change and ensure that Florida and the rest of the nation are on the same page year-round.”

The bill would essentially end the twice-a-year time change and stay on the time observed from March to November. It would apply nationwide except in states and territories that don’t observe daylight saving time, such as Hawaii and Puerto Rico.

Daylight saving time for 2019 begins at 2 a.m. Sunday and will end Nov. 3.

The United States began observing daylight saving at the end of World War I in an effort to conserve fuel. During World War II, the U.S. observed year-round daylight saving time from 1942 to 1945.

In 1974, the country tried to save fuel during the energy crisis by observing daylight saving time for 16 months, but the experiment was ended after less than a year when people became upset about children having to go to school in the dark.

The Florida PTA asked then-Gov. Scott to veto Florida’s bill last year when it passed the Legislature on the grounds that the change would put students at risk when they had to travel to school in the dark in winter months.

Scott signed the bill into law over those objections, and in a press release issued Wednesday said he was joining Rubio’s effort to pass the bill nationwide.

“I was glad to sign legislation as governor to continue daylight saving time year-round for Floridians, and now join Senator Rubio to lead this effort in Congress,” Scott said. “The Sunshine Protection Act will allow Floridians and visitors to enjoy our beautiful state even later in the day, and will benefit Florida’s tourism industry, which just celebrated another record year.”

Rubio’s office released a summary of the bill that listed seven benefits of passing a year-round daylight saving time, from reducing car crashes to cutting down on energy usage.

“Studies have shown many benefits of a year-round daylight saving time, which is why Florida’s Legislature overwhelmingly voted to make it permanent last year,” Rubio said.

It’s not clear if Congress will have any appetite for taking up the bill as it is consumed with issues surrounding President Donald Trump.

When asked by the News Journal on Wednesday by text message if he had a position on the bill, Rep. Matt Gaetz, replied with a simple answer.

“I don’t,” he said.

Copyright © 2019 Journal Media Group, Pensacola News Journal, Stuart News, Jim Little

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Visa program is bringing more Vietnamese investors to U.S.

NEW YORK – March 7, 2019 – Vietnamese investors are increasingly gaining on China as a significant source of participants in a foreign investment initiative by the United States that provides green cards for investing in U.S. real estate, The Wall Street Journal reports. 

The program, the EB-5 Immigrant Investor Program, offers green cards to those who invest in job-creating U.S. businesses or real estate projects. The percentage of EB-5 visas issued to Vietnamese nationals has surged 693 percent in the past fiscal year.

About 20 percent of current EB-5 investments in U.S. real estate now come from Vietnam, according to estimates from the U.S. Immigration Fund. Four years ago, Vietnamese barely accounted for 1 percent of these visas. But Vietnamese’s latest rise is now catching them up to other strong EB-5 investor populations, behind 25 percent of participants coming from India and 30 percent from China.

Realizing the stronger allure, several New York City developers are advertising their projects to Vietnamese investors through local agencies, The Wall Street Journal reports.

“In the past, any large-scale capital raise, anything over $50 million or $100 million, particularly in New York, you had to go to China,” Phuong Le, an immigration attorney and partner at David Hirson & Partners LLP, told The Wall Street Journal. Now, “most of the big New York real estate developers who were in China before are certainly all in Vietnam now.”

However, as wait periods for EB-5 visas have grown from months to years, some Chinese investors have pulled back.

Vietnam’s booming economy and its growing class of wealthy business owners have made the country a new source for the EB-5 program. However, the estimated visa wait time – up to 7.2 years as of last October – could be a hurdle that discourages more foreign investors from taking advantage, experts say.

Source: “Real Estate Developers Look to Vietnam for Cheap Financing,” The Wall Street Journal (March 5, 2019)

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Gov. DeSantis to lawmakers: Be bold on big issues

TALLAHASSEE, Fla. (AP) – March 7, 2019 – Republican Florida Gov. Ron DeSantis gave an anti-tax, pro-environment State of the State address Tuesday, asking lawmakers to be bold as they tackle issues like education, school safety and health care.

It was as much a recap of his whirlwind first two months in office as it was a blueprint for his goals as lawmakers begin their annual 60-day session.

The governor ticked through a list of what he’s already done, including securing hundreds of millions of dollars in federal aid to help Hurricane Michael recover; announcing an aggressive plan to address problems with red tide and algae; removing Broward County Sheriff Scott Israel for his handling of the Parkland high school shootings that left 17 dead; appointing three Supreme Court justices; and giving posthumous pardons to four black men accused of raping a white woman more than 70 years.

“And this is just the beginning,” DeSantis told lawmakers gathered in the House chamber. “Be bold. Be bold in championing economic opportunity, be bold in protecting Florida’s environment, be bold in improving education, be bold in defending the safety of our communities. Be bold, because while perfection is not attainable, if we aim high, we can achieve excellence.”

DeSantis said he wants to keep building Florida’s economy by keeping taxes low and reducing the regulatory burden on businesses and professional licenses.

“We need reform of our occupational licensing regime, which borders on the absurd and primarily serves to frustrate opportunities for Floridians,” said DeSantis, a former Navy officer. “You can become a sniper in the U.S. Marine Corps by completing training for 79 days, which is roughly 632 hours, and yet in Florida becoming a licensed interior designer in requires 1,760 hours. You can earn jump wings by completing Army Jump School in three weeks, or about 168 hours; Florida law requires 1,200 hours to become licensed as a barber.”

And in comments later praised by Democrats, DeSantis also said Florida’s environment must be protected and he’s taking steps to address red tide and algae blooms that have plagued the state.

“Given the persistent water problems we have seen over the past several years, now is the time to be bold,” he said. “With your support for these initiatives, we will restore and preserve the beauty of Florida for generations to come.”

Democrats, however, weren’t as pleased with DeSantis’ push to expand Florida’s school voucher program, which sends students to private schools at taxpayer expense. DeSantis outlined other education goals, like moving away from Common Core standards, streamlining standardized testing and putting a new emphasis on civics education. DeSantis also wants a strong vocational education options to prepare students who don’t want a four-year college degree.

“He’s hitting the right topics. He’s staying on message, he’s focused on the environment, he’s focused on education,” said Republican Sen. Jeff Brandes. “He’s got energy and I think what you’re seeing is he’s got support of the Legislature on many of these items.”

For Democrats, the speech was a mixed bag.

“There were a couple of things I thought were great, and a couple of things that I though weren’t so great,” said Democratic Rep. Richard Stark. “I’m glad that the governor is taking notice on the environment. I’m glad that he wants to work on education. My problem with education is that I’m not happy about expanding charter schools and vouchers.”

Stark did say that DeSantis is already an improvement over predecessor Rick Scott, who’s now a Republican U.S. senator.

“Governor Scott was very difficult, even to get him to do environmental stuff,” Stark said. “We voted to on money to improve the Everglades – a lot of money – so that bad stuff wasn’t flowing out from Lake Okeechobee. The last governor didn’t do anything; he just sat on his hands. This man, right away, he decided to do something.”

AP Logo Copyright © 2019 Associated Press, Brendan Farrington, AP writer. All rights reserved.

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Act now: Fla. license renewal deadline is March 31

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New-home sales in U.S. rose 3.7% in Dec.

WASHINGTON (AP) – March 6, 2019 – Sales of new U.S. homes climbed in December to their highest pace in seven months, a sign that lower mortgage rates are helping the real estate market.

The Commerce Department said Tuesday that new-home sales rose 3.7 percent in December to a seasonally adjusted annual rate of 621,000. November’s sales were revised down to 599,000 from an annual rate of 657,000.

For all of 2018, new-home sales rose 1.5 percent. Purchases began to dip in June as higher mortgage rates worsened affordability, but mortgage rates have fallen since peaking in early November and that appears to be supporting a sales rebound.

The sales gains point to a potentially stronger 2019. The purchase of new homes not yet under construction surged 22.4 percent in December from the prior month. Average 30-year mortgage rates at 4.35 percent, down from nearly 5 percent in early November, have also eased some affordability pressures.

Price growth has stalled as sales sipped last year. The median sales price of a new home in December was $318,600, a 7.2 percent drop from a year ago.

Sales increased in December in the Northeast, South and West. But purchases fell in the Midwest.

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America’s 19- to 29-year-olds are facing $1 trillion in debt

NEW YORK – March 6, 2019 – The New York Federal Reserve Consumer Credit Panel reports that debt among 19- to 29-year-old Americans topped $1 trillion at the end of 2018, the highest debt exposure for young adults since late 2007.

Student loans make up the majority of the debt, followed by mortgage debt. Spending among those under age 35, however, has slowed compared to other generations, according to a University of Michigan survey.

The survey says weakened job prospects, delayed marriage, and educational debt may have played a role in their reduced spending.

Meanwhile, new mortgages among young adults today remain below levels incurred in the early 2000s, and implied debt that is 90-plus days delinquent for student loans dwarfs other loan-type categories.

At the end of 2018, auto loans were the third largest portion of debt composition in the United States, with overall consumer debt reaching a record $13.5 trillion.

Source: Bloomberg (02/25/19) Tanzi, Alexandre; Lu, Wei

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Top 10 cities with high homeownership among low-income families

SEATTLE – March 6, 2019 – Minneapolis may offer the most possibilities for low-income households to become homeowners. The city has the nation’s highest homeownership rate among households in the bottom 25 percent of income at 57.7 percent, according to a new analysis from Redfin of the 50 largest metros. Pittsburgh and St. Louis followed on the list, also having homes that tend to sell for less than the national median of $285,000.

“Homeownership allows people to share in the prosperity of their communities and gain wealth through home equity,” says Redfin Chief Economist Daryl Fairweather. “In many expensive metros, low-income residents aren’t able to access the benefits of homeownership because of a lack of affordable starter homes. But in areas like Minneapolis and Pittsburgh, low-income workers are still able to get their foot in the door on the American dream of homeownership.”

The following are the metros with the highest homeownership rates for low-income households, according to Redfin’s analysis:

1. Minneapolis
Homeownership rate among households in bottom 25% of income (2017): 57.7%
Median sales price: $255,000

2. Pittsburgh
Homeownership rate among low-income households: 55.8%
Median sales price: $149,000

3. St. Louis
Homeownership rate among low-income households: 55.5%
Median sales price: $173,000

4. Detroit
Homeownership rate among low-income households: 55%
Median sales price: $122,000

5. Tampa, Fla.
Homeownership rate among low-income households: 54.4%
Median sales price: $220,000

6. Louisville, Ky.
Homeownership rate among low-income households: 54.2%
Median sales price: $181,000

7. Salt Lake City
Homeownership rate among low-income households: 53.8%
Median sales price: $319,000

8. Nashville, Tenn.
Homeownership rate among low-income households: 53.7%
Median sales price: $284,000

9. Charlotte, N.C.
Homeownership rate among low-income households: 53.1%
Median sales price: $230,000

10. Philadelphia
Homeownership rate among low-income households: 52.6%
Median sales price: $190,000

Louisville, Charlotte, and Nashville saw the largest uptick in low-income homeownership from 2012 to 2017.

Meanwhile, some metros – particularly the pricey coastal markets – saw some of the lowest amount of low-income homeownership (bottom 25 percent of income earners in 2017). Those metros are Los Angeles (31%); New York (35%), San Diego (37.6%), Las Vegas (39.7%), and Columbus, Ohio (39.8%).

Source: “Minneapolis, Pittsburg and St. Louis top metros with highest homeownership rates for low-income families,” Redfin (March 4, 2019)

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What are ‘granny flats’ – are they next bargain homes?

FORT LAUDERDALE, Fla. – March 5, 2019 – South Florida’s affordable-housing crisis could be alleviated by legislation that the state approved 15 years ago, encouraging cities to allow single-family homeowners to build a second dwelling on their properties that can be rented out to very low- to moderate-income wage earners.

Recent studies demonstrate that South Florida has the nation’s highest percentage of severely burdened renters, with more than a third paying more than half their income on housing.

Broward County is now considering the little used legislation, actively discussing “accessory dwelling units.” If Broward commissioners approve a proposed land-use change supporting the secondary units, it still would be up to individual cities to decide whether they want to open their neighborhoods to an influx of new dwelling units and the people who would live in them.

“To solve the affordable-housing crisis, we’re going to have to use multiple options,” said Commissioner Nan Rich. She said the units not only provide affordable housing for the renters but also can create income that makes homeownership more affordable for the property owner.

Under the state statute and county proposal, the dwelling can be free-standing, an addition attached to the primary home, or the conversion of a garage or other living space into a second unit with its own entrance.

Homeowners, however, would have to commit to renting it to a person or family making no more than 80 percent of the county’s median household income – currently no more than $51,750 for a two-person household. The rent for a two-person household would have to be less than $1,300 a month. The unit also would need to have a kitchen, a bathroom, and a separate entrance.

Source: South Florida Sun-Sentinel (02/22/19) Barszewski, Larry

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U.S. construction spending drops 0.6% in Dec.

WASHINGTON (AP) – March 5, 2019 – U.S. construction spending edged down 0.6 percent in December with declines in residential construction and government projects. Even with the December setback, construction spending for all of 2018 reached record levels, though it was the smallest increase seven years.

The December decline followed a 0.8 percent rise in November, the Commerce Department reported Monday. Residential construction fell by 1.4 percent, revealing ongoing struggles in the housing sector. Nonresidential activity rose 0.4 percent, while spending on government projects fell 0.6 percent, with both federal and state and local activity falling.

For the year, construction spending rose 4.1 percent to $1.3 trillion. It was an all-time high, but the 4.1 percent gain was the weakest performance since spending fell 2.6 percent in 2011.

Construction spending had hit a previous record high of $1.16 trillion in 2006, the peak of a housing boom that would begin declining in 2007, helping to trigger a deep recession and five-year retreat in construction spending.

Beginning in 2012, construction activity started rising again and in 2016 surpassed the 2006 high. After double-digit gains of 11 percent in 2014 and 10.7 percent in 2015, spending increases have slowed in the past three years.

The drop in residential activity in December reflected a 3.2 percent fall in single-family construction which was partially offset by a 3.1 percent rise in apartment construction.

The 0.4 percent increase in nonresidential construction reflected a solid 1 percent gain in hotel and motel construction, but a flat reading for office construction and a 1 percent drop in the category that includes shopping centers.

The 0.6 percent fall in public construction echoed a sharp 2.2 percent drop in spending by the federal government and a 0.5 percent fall in construction spending at the state and local levels.

The December construction spending report was one of a number of government reports that have been delayed because the 35-day partial government shutdown.

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‘It’s pure hell’: Hurricane Michael leaves housing crisis

PANAMA CITY, Fla. (AP) – March 5, 2019 – A small village of the forgotten has popped up in Diahnn “Shelly” Summers’ backyard outside Panama City. Where there once was empty grass abutting almost 5 acres of woods, 10 tents now encircle a fir tree with Christmas lights.

The tents shelter those still homeless more than four months after Hurricane Michael screamed ashore with 155-mph winds, flattening, blowing away or rendering uninhabitable thousands of houses.

“There is nowhere for them to go,” Summers said. “When you don’t have a home, you have no sense of safety, no sense of belonging, no security. You don’t even know where you’re going to sleep without getting into trouble. It’s the worst feeling.”

Of all the Florida Panhandle areas affected by Michael, Bay County was hardest hit: Officials said almost three-quarters of its 68,000 households were affected. Former Florida House Speaker Allan Bense, who is leading a hurricane recovery initiative, estimated about 20,000 people were homeless in the weeks after the October storm.

Some have been able to make their homes livable again with cosmetic repairs. Others left town: The county’s student population is down 14 percent. And 7,800 residents are still considered homeless, county officials said.

Many unable to move in with relatives or find a coveted hotel room with the help of federal vouchers have turned to living in tents.

Several obstacles prevent their return to normalcy. Trailers from the Federal Emergency Management Agency have been slow to arrive, and it’s hard to find an apartment where the rent hasn’t been jacked up in a suddenly tight market. Almost three-quarters of the damaged properties were rental units, which are difficult to replace with temporary shelter, Bay County Manager Robert Majka said.

“If you have 100 units in an apartment complex, you can’t put 100 FEMA trailers into that apartment complex and accommodate these folks,” he said.

Sue Laurel Shaw was able to stay in her apartment after the storm and said her landlord even agreed to deduct the cost of repairs she made from the rent. But now she faces eviction for back rent after she says the landlord reneged on their agreement.

She is looking for another place to live, but “everything is tripling,” said Shaw, who was fighting to stay in her Panama City apartment.

Mystie Gregory said she, her fiance and 2-year-old daughter left their apartment for several days to take a break from living without electricity. When they returned, she said, it had been rented to another family.

Gregory found refuge with more than a dozen others living in tents behind Summers’ ranch-style house.

Gregory said she is trying to “make the most” of living in a tent, but “it makes you feel like a failure as a parent, even though it’s out of your control.”

Among the county’s homeless are 4,700 students, said Bay District Schools Superintendent Bill Husfelt. Some schools lost more than 40 percent of their students and the school board is closing at least three schools for now.

“It’s all about housing,” Husfelt said. “Everything we’re dealing with, it’s about housing.”

In December, U.S. Sen. Marco Rubio wrote a letter chastising FEMA for not finding enough sites for trailers or mobile homes. Rubio said families “have not seen an appropriate response to their housing needs and FEMA must immediately act to address this concern.”

At the time, more than 1,200 Bay County families were waiting for trailers or mobile homes. By the end of February, that number had fallen to more than 200, partially because more than 500 families had found other options on their own, county officials said.

“The velocity of FEMA’s temporary housing improved after the first of the year, although trailers … never came in consistently at stated goals,” said Joel Schubert, Bay County’s assistant manager.

FEMA officials said the large numbers of renters and the enormous amount of debris that needed to be cleared before trailers could be installed slowed the process.

In addition, 26,000 Florida households received grants for home repairs, 21,000 residents received temporary rental assistance and 2,000 households were approved for hotel rooms or short-term condo rentals, FEMA spokesman Samuel “Carr” McKay said in a statement.

Even that help took a while to reach some residents. Dennis Myrick, who has no home insurance, said he lived in a tent in the front yard of his decimated Panama City home until mid-January, when he was finally able to get a FEMA hotel voucher.

“It’s pure hell, man,” Myrick said. “The wind blows, and you get wet. I had to hold the tent down with my hands. It was about to blow away.”

Before she landed in Summers’ backyard, Jacinta Wheeler, whose apartment was damaged by the hurricane, joined other residents in an encampment dubbed “Tent City” in a different part of town. Officials forced them to leave over safety and hygiene concerns. Lori and Gene Hogan had settled in a tent on the beach after Michael destroyed their home, but police officers threatened to arrest them if they didn’t move, so they came here as well.

Wheeler has been working construction jobs and helping repair neighbors’ properties while she stays in her tent.

“Everybody wants the American dream,” the Trinidad native said. “If this is the dream, I don’t want it.”

Summers and her husband, Sam, want to build more permanent housing on the property for their guests but said they have run into regulatory roadblocks. In the meantime, they try to make them feel at home, inviting them to their dinner table and leaving the Christmas lights on the backyard tree to retain some cheer.

Summers said she has always welcomed people in need to her home.

“They need help and we were blessed enough that our house was untouched,” she said. “We seem to be the outcasts by trying to help people and it shouldn’t be that way. This should be a normal thing.”

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

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More homeowners paying their mortgages on time

WASHINGTON – March 5, 2019 – More Americans are paying their mortgages on time than at any point in nearly two decades, according to the Mortgage Bankers Association.

Delinquency rates are a key economic measure, closely watched by economists. The last time a large number of homeowners stopped making mortgage payments on time, from 2007 to 2008, it impacted the entire economy.

Borrowers who have conventional mortgages are the most likely to pay on time, while borrowers with loans backed by the Federal Housing Administration tend to pay late nearly three times more often. (Still, 91 percent of FHA borrowers pay on time.) FHA borrowers tend to have lower credit scores, higher debt-to-income ratios, and lower downpayments. All three factors multiply the risk that borrowers will pay late, according to the MBA. But the FHA delinquency rate of 8.65 percent is still a big improvement over a decade ago, when it was about 14 percent.

Why are more Americans paying their mortgages on time? For one, more homeowners now have greater equity in their homes. They’ve paid down the mortgage while price inflation has increased their home values. Homeowner equity in the U.S. stands at $1.5 trillion, the highest on record, according to the Federal Reserve.

Also, stricter federal underwriting rules since 2010 have limited who can get a mortgage. Fannie Mae and Freddie Mac require borrowers to have an average FICO credit score near 750, which is much higher than they required before the financial crisis. However, “if the lending industry begins to relax underwriting standards in any significant way to dig deeper into the pool of riskier credit applicants to plump up their volume of home-purchase mortgages, it’s inevitable that delinquencies will rise,” writes Ken Harney, a syndicated real estate columnist for The Washington Post.

Some lenders have already started to loosen their standards. The average credit score of a mortgage borrower is on the decline, notes a study by FICO. Also, Fannie Mae has eased its policy on debt-to-income ratios and is allowing more applicants with ratios up to 50 percent to get approved for a mortgage. (Previously, the mortgage giant required 45 percent or less.) The FHA also has posted a decrease in average credit scores and is now approving debt-to-income ratios well above 50 percent.

Source: “More People Pay Their Mortgages on Time, Will This Good News Last?” The Washington Post (Feb. 27, 2019)

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A guide: How to use real estate hashtags in social media

NEW YORK – Feb. 27, 2019 – Hashtags are important when marketing a real estate business on social media – especially to millennials.

Combinations of letters, numbers and emoji starting with the # symbol categorize content on social media to make it more discoverable. Clicking on a hashtag or searching for a hashtag displays results with all the posts tagged with it.

A few hashtags real estate professionals should consider are:

  • #[your location], which will help people searching for a home in their area
  • #[your location + school district], which will help parents looking for a new home in a particular school district
  • #[local attractions], avoiding hashtags for attractions that are not relevant to their listing
  • #[area + style], which helps if a buyer is looking for a specific type of home in the area
  • #[your brokerage], which makes it easy for searchers to find everything related to the brokerage in one place
  • #[generic, relevant words], like #DreamHome, #HouseGoals or other trendy hashtags that could increase the reach of their post

Tools like Hashtagify can suggest relevant hashtags and show how many people are using them. Agents should choose a hashtag that has a sizeable reach but not so big that their post gets lost in the noise.

They also should consider what their competitors are doing with hashtags and use some of the same ones so they’ll appear in similar search results.

As for the number of hashtags per post, TrackMaven found that Instagram posts with nine hashtags receive the most engagement, but Twitter posts with just one hashtag receive the most engagement.

Ultimately, agents should let the content of their post inform how many hashtags to use and ensure they are all relevant to the content they are posting.

Source: RISMedia (02/17/19) Petersen, Alexis

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Push to stop real estate money laundering goes worldwide

NEW YORK – Feb. 27, 2019 – U.S. regulations force shell companies in some metro areas to reveal the names of their actual owners, and a bill in Congress could expand that financing rule nationwide.

But money laundering activities in the real estate industry aren’t limited to the U.S. Countries around the world are starting to crack down on money laundering schemes in the luxury real estate sphere.

“Real estate has always been a favorite asset for criminals, through which they would launder their money,” says Brigitte Unger, a professor at the University of Utrecht in the Netherlands and an expert in global money laundering issues.

Real estate money laundering schemes are estimated to reach $1.6 trillion a year worldwide, according to a report from Accuity, a global risk and compliance company.

“It was becoming increasingly apparent in countries such as Australia, America and the United Kingdom that a number of assets being purchased could possibly be linked to political or criminal activities where money laundering was about to occur,” Patrick Hinchin, vice president of commercial strategy at Accuity, told Mansion Global.

In some areas, real estate purchases tied to organized crime and market abuse are being blamed for skyrocketing home prices. Criminals will many times purchase real estate in a city where the housing market holds high values, for example, and then hide behind a shell company or a trusted business associate. They’ll then either rent the property or remodel it using criminal funds and later sell it for a profit, Unger says.

To help combat scams in the U.S., FinCEN, an investigative arm of the U.S. Treasury Department, has lowered the threshold for real estate transaction sizes involving shell companies. As it currently operates, title companies must identify the parties – the real owners – behind the shell companies. The threshold is now cash purchases above $300,000 or transactions involving cryptocurrency.

The orders apply to all title companies in Boston, Chicago, Dallas-Fort Worth, Honolulu, Las Vegas, Los Angeles, Miami, New York, San Antonio, San Diego, San Francisco, and Seattle. However, that list could expand.

Since the requirement was enacted in January 2016 to make LLC owners who purchase luxury real estate identify themselves, FinCEN says it has seen cash purchases plunge by 70 percent. However, other security experts say those who still want to use real estate to launder money are seeking markets outside of those 12 to continue to hide behind shell companies.

Other countries are stepping up their efforts. The British Parliament introduced legislation in 2018 to require foreign owners to identify themselves in real estate purchases. The bill has not yet passed, but the registry is supposed to be made public by 2021. Owners who don’t comply could be sent to prison for two years or face fines.

In Germany, lawmakers introduced a transparency registry in 2017 that requires all shell companies to list the real owner of any property. A failure to do so would result in a fine of $1.15 million.

Source: “Governments Around the World Are Tackling Money Laundering in Real Estate,” Mansion Global (Feb. 18, 2019)

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Will tech companies fix the affordable housing crisis?

SAN FRANCISCO – Feb. 27, 2019 – From atop his gleaming new headquarters, Salesforce CEO Marc Benioff has an inspirational view of mountains, the bay and an endless Pacific Ocean.

But when Benioff looks down, he’s not so happy.

Some 60 floors below his Salesforce Tower offices is what he calls “an inequality train wreck,” city streets “out of control” with thousands of homeless and often infirm citizens who have rendered sidewalks a landmine of feces and drug paraphernalia. Many have been destitute for years, but others are newly minted refugees of a housing crisis created in large part by the very technology boom that has made Benioff and other tech entrepreneurs billionaires many times over.

That’s why Benioff, along with some of his tech peers and civic leaders, say it’s time for corporations in general, and tech companies specifically, to contribute financially toward fixing a problem that looms large from Seattle to Boston.

Activists, meanwhile, warn that housing stock has lagged so severely in some cities that even huge infusions of cash will struggle to make an impact.

San Francisco’s woes are particularly acute. Its housing stock is a quarter of its need, which has led to real estate prices that are among the highest in the nation. Some 15,000 tech positions were added in the city in 2016 and 2017, according to a report from brokerage firm CBRE.

Seattle, another tech hub, has experienced the same housing deficit phenomenon, all while local tech powerhouses Amazon and Microsoft helped create 33,000 new tech jobs in 2016 and 2017, the CBRE report says.

And as Amazon moves into Northern Virginia and Apple into Austin, local lawmakers and housing experts there are keeping careful watch on how an explosion of technology jobs will hit their communities.

Across the nation, the influx of high-paying jobs in areas with limited housing has sent housing prices soaring for local residents.

Since 2010, median home values in San Francisco have doubled to $1.37 million, according to Zillow. Seattle and Boston also doubled, to $730,000 and $600,000 respectively. Austin jumped from $212,000 to $364,000 in that time period.

Benioff, whose family has been in San Francisco for generations, says more foresight should have gone into managing the tech explosion. “There’s been really poor planning in our state and our cities,” Benioff says with measured anger. “Look at Paris, they build social housing into their city,” he says. “You can have an amazing economy with high-end residences but also accommodate everyone. You just have to plan for all income types. The government has to step in, and companies have to help.”

The housing crisis must be addressed by a careful collaboration between politicians, advocacy groups and corporate entities, says Corianne Scally, principal research associate with The Urban Institute in Washington, D.C.

“There is no magic solution,” says Scally. “Companies need to understand the pressure they are creating, particularly when taxes levied on them aren’t covering their impact when you take into account the tax incentives that they get for setting up shop.”

Some already digging deep

Many tech giants say they are already reaching into their pockets to fund affordable housing solutions.

Google has donated $3 million toward homelessness solutions being proposed by San Francisco Mayor London Breed. A spokesperson for the search giant said it had “granted over $250 million since 2014 in the areas of homelessness, economic opportunity and education.”

In mid-January, Microsoft revealed that it was going to allocate $500 million toward housing initiatives around its Seattle-area headquarters. In a blog post trumpeting the news, Microsoft president Brad Smith and CFO Amy Hood said the move was spurred by a realization that “this is a big problem, and it’s a problem that’s only going to get worse.”

Microsoft said because jobs have grown 21 percent since 2011 while housing has only expanded by 13 percent, the company would be investing $225 million toward building middle-income housing, $250 million to support low-incoming housing, and $25 million in grants to help those tackling homelessness issues.

About a week after Microsoft laid out its plan, a San Francisco corporate consortium calling itself Partnership for the Bay Area’s Future announced it was halfway toward a goal of raising $540 million. The Partnership’s investment fund is aimed at providing financial assistance toward a goal of building 8,000 new housing units across the Bay Area in the coming years. Its policy fund will support initiatives to preserve and expand housing, with a particular focus on strengthening low-income tenant protections to guard against landlords evicting low-income renters so they can charge higher rates.

Preserving affordable housing also is a mission of newly installed California Gov. Gavin Newsom, who has made housing a top priority. He recently sued the Southern California city of Huntington Beach for resisting efforts to build affordable housing.

Ultimately, civic leaders and some tech leaders warn that ignoring housing issues is bad for business. San Francisco’s homeless problem already has caused some companies to plan lucrative conventions elsewhere, and an inviting urban core also is considered a key recruiting tool.

“A place like the Bay Area is very diverse and vibrant, which is why companies want to be here and hire here,” says Caitlyn Fox, director of Justice and Opportunity for the Chan Zuckerberg Initiative, the foundation started by Facebook founder Mark Zuckerberg and his wife, Priscilla Chan.

The foundation is part of the new Partnership for the Bay Area’s Future, along with Facebook, the Ford Foundation, Genentech, Morgan Stanley and others.

“We all came to the Bay Area because of its promise, and now we have a stake to ensure that promise remains for all,” says Fox. “Because that’s being threatened.”

Will Amazon match Microsoft?

It is not uncommon for tech companies flush with cash to create programs aimed at placating communities where they operate.

Apple, which built a new billion-dollar headquarters in Cupertino, California, a few years ago, said it had contributed to $1.8 million to area bike lanes, and added that in 2018 its employees had donated more than $125 million to non-profits around the world.

Representatives at the iPhone-maker would not say whether it has plans to work with local officials on housing issues, including in Texas, where Apple’s plan to build by 2021 a new 133-acre campus in Austin would make it the largest private employer in the city.

In Seattle, Amazon said it has donated $40 million to Mary’s Place, a local homeless shelter. Working with the non-profit, Amazon has created two temporary homeless shelters on its campus, which will become permanent in 2020.

But Amazon also has come under heavy fire for contributing to rising inequality in Seattle, as well as for successfully killing a head-count tax on employees – $275 per worker on companies making more than $20 million a year – that would have raised money partly for affordable housing.

“When Microsoft announced their news, the feeling here was, ‘OK, Amazon, what are you going to do?'” says Jeff Shulman, a marketing professor at the University of Washington who has been studying Amazon’s impact on Seattle’s growth. Shulman notes that Amazon has been good for the area not only in terms of tech jobs but also “jobs at every level, particular in terms of people moving here to serve Amazon employees.” But, he adds, such cafeteria workers, janitors, teachers, child-care workers increasingly find themselves priced out of the areas in which they work, resulting in endless commutes along clogged roads.

“Tech companies need to lure talent, and for those employees, quality of life includes where they live, how they get to work, where their kids go to school and even cultural amenities. But the housing crunch is pushing all but those paid big tech salaries far away,” says Shulman.

And just recently, Amazon abruptly pulled out of plans to build part of its new headquarters in the Queens borough of New York City after politicians and activists there raised questions about the company’s financial commitment to the region while receiving $3 billion in subsidies.

Real estate agents in New York had already starting seeing evidence of an “Amazon effect” on prices just as a result of the announcement that the everything-store tech behemoth was moving to New York and Virginia.

Michelle Winters, executive director of the Alliance for Housing Solutions in Northern Virginia, says so far Amazon has not said how it plans to help beyond bringing thousands of jobs to the area. She remains optimistic, but fears the worst.

“You could have dual impacts,” says Winters. “One is the immediate local impact near campus, where there might be a large-scale displacement of residents who have been there for generations. And the other is a broader regional impact, where affordable homes are only available in outlying areas, with a negative impact on traffic that creates a poorer quality of life.”

In San Francisco, Fernando Marti, co-director of the Council for Community Housing Organizations, a non-profit that crafts affordable housing public policy, says he is grateful for the newfound corporate focus on the housing crisis, but is also skeptical about whether the gestures are too little, too late.

Marti points out that, for one thing, in the Bay Area even $500 million doesn’t go far. Consider that at an average home-building cost of $300 per square foot, a new 1,500-square-foot home would cost $450,000 to construct. That means $500 million would only build 1,111 new homes.

“I remain optimistic that more will be done by these companies,” says Marti. “It’s all tied together in the end, housing and education and quality of life, and all of that, if not resolved, affects their ability to do business.”

Most can’t afford California

The California Dream is proving increasingly elusive, especially for younger residents.

A recent Quinnipiac University poll indicated that 43 percent of California voters said they couldn’t afford life in the state, while 61 percent of 18 to 34 years old living in the world’s fifth largest economy said it was beyond their means.

In Silicon Valley’s backyard, only high-end housing needs in San Francisco have been met over the past four years ending in 2017, according to CASA, the Committee to House the Bay Area. In contrast, over the same period, low-income and middle-income housing demand outstripped new housing supply four to one.

One solution may well be to leverage technology itself to make housing construction more affordable.

That’s the mission of Factory OS, a new company (OS stands for off-site) just north of San Francisco that takes an automotive assembly line approach to building. OS builds apartments in its factory at around a 30 percent costs savings over on-site construction. Factory OS already has an order from 300 small apartments from Google, which is looking to add short-term housing options for employees who come to its Mountain View, California, headquarters to work on projects.

Company CEO Rick Holliday says he was forced to innovate due to the pressures he’s facing from the very housing shortage he’s hoping to alleviate.

“We’re in a mess, and part of the issue is my own labor shortage,” says Holliday, who said between unaffordable Bay Area housing and younger workers not getting into building trades, he has lost 30 percent of his workforce in recent years.

“We need to tackle hard costs and get more housing out of those dollars,” he says. “Tackle those costs, get Sacramento politicians engaged and ask tech companies to engage. You do those three things, and you might make a dent.”

Tech leaders are far from reaching a consensus on how – and even whether – to pay for affordable housing. Benioff, for example, was a huge backer of San Francisco’s Proposition C, which passed in November. It stipulates that any company with revenues over $50 million would be charged 0.5 percent on income over that mark. So if you pull in $55 million one year, you’d be assessed $25,000 in Prop C taxes.

While that’s a small amount for many of the roughly 400 area companies affected by the law, supporters estimate that the city will be able to collect around $300 million a year from the tax.

That money would go toward 1,000 new beds for the city’s homeless and also over time allot $150 million to 4,000 new housing units dedicated to lower income families.

But the San Francisco Chamber of Commerce, along with some tech entrepreneurs, opposed the measure, arguing that the tax could drive companies away from San Francisco. Benioff and Twitter founder Jack Dorsey even got into an online feud over the matter, with Dorsey predicting that smaller companies would get disproportionately hurt by the measure.

The city has started to collect these taxes, but nothing has yet been distributed because the measure is facing a court challenge as it did not pass by a two-thirds majority.

Benioff hails Proposition C is an example of how big change can come from public-private partnerships. Ultimately, however, he said a solution can’t be reached if multi-billion-dollar tech companies don’t see pitching in on housing as a fundamental part of their corporate responsibility.

“Homelessness is my number one priority,” says Benioff. “It’s about getting San Francisco cleaned up again.”

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NAR: Pending home sales jump 4.6% in January

WASHINGTON – Feb. 27, 2019 – Pending home sales rebounded strongly in January, according to the National Association of Realtors® (NAR). All four major regions saw month-to-month growth last month, including the largest surge in the South, an area that includes Florida.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 4.6 percent to 103.2 in January, up from 98.7 in December. Year-over-year contract signings, however, declined 2.3 percent, making January the thirteenth straight month of annual decreases.

Lawrence Yun, NAR chief economist, says he expected an increase in January home sales because a “change in Federal Reserve policy and the reopening of the government were very beneficial to the market.”

Of the four major regions, three areas experienced a decline in a year-to-year comparison, however. Only the Northeast enjoyed a slight growth spurt.

Yun says higher rates discouraged many would-be buyers in 2018. “Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers.”

Additionally, Yun says the inventory of for-sale homes has risen, which bodes well for increased pending sales going forward, and positive pending home sales figures in January will likely continue.

“Income is rising faster than home prices in many areas and mortgage rates look to remain steady,” he says.” Furthermore, job creation will help lift home buying.”

January pending home sales regional breakdown

In 2019, Yun forecasts existing-home sales will be around 5.28 million – down 1.1 percent from 2018 (5.34 million). The national median existing-home price this year is expected to increase around 2.2 percent. In 2018, existing sales declined 3.1 percent and prices rose 4.9 percent.

Pending sales in the Northeast rose 1.6 percent to 94.0 in January and are now 7.6 percent above a year ago. In the Midwest, the index rose 2.8 percent to 100.2 in January – 0.3 percent lower than January 2018.

Pending home sales in the South jumped 8.9 percent to an index of 119.8 in January, which is 3.1 percent lower than this time last year. The index in the West increased 0.3 percent in January to 87.3 and fell 10.1 percent below a year ago.

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Thousands of Floridians aren’t insuring their homes

MIAMI – Feb. 27, 2019 – When people in Florida have a mortgage, banks require them to obtain homeowners insurance to protect their investment. After the mortgage is satisfied, however, thousands of people stop paying those insurance premiums, which puts them at risk, experts say.

“It’s totally crazy not to have insurance unless you are super rich and you can be self-insured but I don’t think that’s the case for most of us,” says Victor Roldan, director of RMS.

The National Association of Insurance Commissioners says Florida had the third-highest average premium for homeowners insurance compared to other states in 2016, costing homeowners $1,918 annually. Compared to the national average, Floridians pay $726 more per year.

According to the U.S. Census Bureau, more than one out of 10 (12.8 percent) owner-occupied Florida homes don’t have property insurance, and it rises to 14.4 percent in Miami – double the national average of 6.8 percent.

Source: NBC Miami (02/25/19) Masihy, Myriam; Esquivel, Sandra

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Home prices up but at slower pace for 9th straight month

WASHINGTON (AP) – Feb. 26, 2019 – U.S. home price gains slowed for the ninth straight month in December, reflecting weaker sales and higher mortgage rates that have since declined.

The S&P CoreLogic Case-Shiller 20-city home price index increased 4.2 percent from a year earlier, down from 4.6 percent in November, according to a report released Tuesday.

Home sales and price increases cooled considerably last year and have been a drag on the economy. Previous price gains have put many homes out of reach for would-be buyers, and a jump in mortgage rates last fall also held back sales, which plunged 8.5 percent in 2018.

Prices rose the fastest in Las Vegas, Phoenix and Atlanta. Seattle and Portland, which spent months as the hottest real estate markets nationwide, ranked 11th and 16th in price gains in December.

Washington, D.C. and San Diego saw the smallest cost increases.

Additional evidence of the housing market’s troubles emerged Tuesday, when a government report showed that developers started work in December on the fewest new homes in more than two years. That suggests builders are anticipating fewer sales of new homes this year.

The average rate on a 30-year fixed mortgage reached 4.75 percent in early December, nearly a percentage point higher than a year earlier. It has since fallen back to 4.35 percent, which could boost sales a bit this year.

Even as home price increases weaken, they are still increasing faster than average paychecks, which will likely limit sales.

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The Florida Legislature’s 2019 session begins next week

TALLAHASSEE, Fla. – Feb. 26, 2019 – Florida lawmakers will gather March 5 in the House chamber to hear Gov. Ron DeSantis give his first State of the State address, the traditional start of the 60-day legislative session.

Led by Senate President Bill Galvano, R-Bradenton, and House Speaker Jose Oliva, R-Miami Lakes, lawmakers this year will deal with myriad issues, ranging from passing a state budget to deciding whether to allow patients to smoke medical marijuana.

10 big issues to watch during the session

Budget
DeSantis has proposed a $91.3 billion budget for the fiscal year that starts July 1, as he seeks to increase money for education and water-quality projects and trim taxes. But the DeSantis proposal is only a starting point for lawmakers, who will have their own priorities for state funding. Lawmakers also will grapple with recovery costs from Hurricane Michael, which devastated parts of Northwest Florida in October.

Environment
After algae and red tide fouled waterways and coastal areas in Southeast Florida and Southwest Florida last year, DeSantis is making a priority of addressing water-quality issues. DeSantis has proposed a $625 million package that addresses Everglades restoration and other water-related issues. Lawmakers also are pushing bills that would deal with problems such as cleaning up the Indian River Lagoon.

Health care
Oliva and other House Republican leaders want to reduce regulations in the health-care industry, arguing that taking more of a free-market approach would help hold down costs. The House is targeting a variety of issues, such as “certificate of need” regulations that help determine whether hospitals and other types of facilities can be built. DeSantis has touted a proposal aimed at allowing lower-cost prescription drugs to be imported from Canada.

Hurricane Michael
Lawmakers face costly decisions as they look to help Northwest Florida recover from Hurricane Michael. Galvano said the state has already spent $1.13 billion responding to the October hurricane, and the total could go as high as $2.7 billion. The federal government is expected to reimburse many costs, but that will take time. The state also faces issues such as helping the region’s severely damaged timber industry.

Insurance
The insurance industry and business groups are lobbying heavily to make changes in the controversial insurance practice known as assignment of benefits, which involves policyholders signing over benefits to contractors. Insurers argue abuse and litigation are driving up property-insurance rates, while AOB supporters say the practice helps make sure insurers properly pay claims. A key part of the debate focuses on limiting attorney fees.

Medical marijuana
Facing heavy pressure from DeSantis, lawmakers appear likely to end a ban on smoking medical marijuana. The ban, included in a 2017 medical-marijuana law, was found unconstitutional by a circuit judge, and DeSantis has threatened to drop an appeal if the Legislature does not eliminate the ban. It is less clear, however, whether lawmakers will address other medical-marijuana regulatory issues that have led to lawsuits.

School choice
DeSantis and Senate leaders have outlined proposals that could lead to a major expansion of school choice, including the creation of a voucher-type program that would be directly funded with tax dollars. The House has long supported such programs, as has new Education Commissioner Richard Corcoran. Democrats and teachers’ unions will fight the expansion, but Republicans control both legislative chambers and the governor’s office.

School safety
Just past the one-year anniversary of the mass shooting at Marjory Stoneman Douglas High School in Parkland, lawmakers will look again at revamping laws to boost school safety. The most-controversial issue will be a proposal to expand the school “guardian” program to allow trained classroom teachers to be armed. A state commission created last year recommended allowing armed teachers.

Supreme Court
After taking office last month, DeSantis made three appointments that created a solid conservative majority on the Florida Supreme Court. The change could embolden the GOP-controlled Legislature, which in the past clashed with a more liberal Supreme Court. As examples, lawmakers could expand taxpayer-funded school vouchers and cap attorney fees in workers’ compensation insurance cases – issues that previously ran into Supreme Court roadblocks.

Transportation
Galvano has made clear that one of his top priorities will be highway projects that he says would help rural areas. The Senate president wants to extend the Suncoast Parkway toll road to go from the Tampa Bay region to the Georgia border; create a multi-use corridor, including a highway, from Polk County to Collier County; and extend the Florida Turnpike west from where it currently ends at Interstate 75.

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New housing starts fell 11.2% in December

WASHINGTON (AP) – Feb. 26, 2019 – The number of homes being built in December plunged to the lowest level in more than two years, a possible sign that developers are anticipating fewer new houses to be sold this year.

The Commerce Department said Tuesday that housing starts fell 11.2 percent in December from the previous month to a seasonally adjusted annual rate 1.08 million. This is the slowest pace of construction since September 2016.

Over the past 12 months, housing starts have tumbled 10.2 percent. December’s decline occurred for single-family houses and apartment buildings.

Builders have pulled back as higher prices have caused home sales to slump, suggesting that affordability challenges have caused the pool of would-be buyers and renters to dwindle.

“Artificially high prices have created affordability constraints, resulting in a situation where builders cannot deliver supply in scale,” said Brad Dillman, chief economist for the multi-family developer Cortland. “The result is that today’s housing market is undersupplied.”

The Commerce Department reported last month that new-home sales in November were 7.7 percent lower than a year ago.

The housing market initially cooled last year as average, 30-year mortgage rates climbed to nearly 5 percent. Home prices have consistently risen faster than wages, and the inventory of homes listed for $250,000 or less is tight, suggesting a sluggish market ahead.

But the average mortgage has fallen since November, and that may help some Americans become owners in 2019. Also, the pace of rising prices has slowed while wage growth has accelerated in recent months, which could also boost sales.

“Looking forward we may see a few more months of weak single-family starts before increasing confidence leads to increased production,” said Danielle Hale, chief economist for realtor.com.

Permits to build housing, an indicator of future activity, increased just 0.3 percent in December. Among single-family houses, permits fell 2.2 percent in December and 5.5 percent from a year ago.

Housing starts were flat in the Northeast in December but fell in the Midwest, South and West.

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Fla. consumers’ optimism rises to near-record levels

GAINESVILLE, Fla. – Feb. 26, 2019 – Consumer sentiment among Floridians increased 2.8 points in February to 100.9 from a revised figure of 98.1 in January – strong levels of confidence haven’t been seen since January 2018, when consumer sentiment reached 101.3 points. This month’s reading is the second highest since March 2002.

Among the five components that make up the index, three increased and two decreased.

Floridians’ opinions of their personal financial situation now compared with a year ago increased 1.3 points from 93.8 to 95.1. However, opinions varied greatly by gender and income levels, with male respondents and those with income levels under $50,000 reporting less-favorable opinions.

In contrast, overall opinions as to whether this is a good time to buy a major household item like an appliance decreased 1.1 points from 100.2 to 99.1. Again, men reported less-favorable opinions compared with women.

“Despite the differing opinions by gender, overall these two components of the index showed that perceptions regarding the current economic conditions increased slightly among Floridians in February,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.

Future economic condition expectations were also mixed. Expectations of personal financial situations a year from now decreased slightly: nine-tenths of a point from 109.1 to 108.2. Yet, expectations of U.S. economic conditions over the next year showed the greatest increase, up 7.9 points from 93.5 to 101.4. Similarly, expectations of U.S. economic conditions over the next five years increased 6.7 points from 94 to 100.7.

“Overall, Floridians are more optimistic. The increase in February’s confidence comes mostly from consumers’ future expectations about the national economy in the medium- and long-run. Importantly, these outlooks are shared by all Floridians regardless of their gender, age or socioeconomic status,” Sandoval says.

Economic indicators in Florida remained positive. In particular, the labor market in Florida continued to add more jobs in December, and the monthly unemployment rate in Florida remained unchanged at 3.3 percent. Similarly, the U.S. labor market has continued to strengthen, and economic activity has been rising at a solid rate.

As a result, the Federal Open Market Committee decided to maintain the range of the federal funds interest rate between 2.25 and 2.5 percent in their last meeting in January, stopping any potential increase in the cost of borrowing in the short-run.

“Looking ahead, in view of the realized economic outlook, we anticipate consumer sentiment to remain high in Florida,” Sandoval said.

Conducted Feb. 1-21, the UF study reflects the responses of 375 individuals who were reached on cellphones, representing a demographic cross section of Florida. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2, the highest is 150.

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Top reason some adults move back home? Broken hearts

NEW YORK – Feb. 26, 2019 – In the last few years, student loan debt and rising housing costs have been cited as the chief reasons why many young adults move back in with their parents. But a new Homes.com study suggests the real trigger may be a broken heart.

Since the Great Recession thwarted many millennials’ plans to move out on their own, an improving labor market has not done much to lure these young adults out of their parents’ houses. Why do they stay? In a recent survey of 500 “boomerang” millennials, 33 percent of 26- to 30-year-olds who moved back home cited a divorce or breakup as the primary reason; 37 percent of 31- to 35-year-olds and 24 percent of 36- to 40-year-olds said the same.

For millennials, it might be a combination of a breakup and unstable finances. Couples who live together often help each other financially by splitting housing costs, but post-breakup, the costs may be too much for one person to carry. Young adults may also be moving back home for emotional support to help them recover post-breakup.

“Home is a safe place a lot of times,” Grant Simmons, vice president of Homes.com, told CNBC. “Perhaps it’s just a safe place to get your act together and start fresh.”

Potential house hunters in the South – an area that includes Florida – may suffer the most heartache: 25 percent of survey respondents in the region saying they moved home due to the end of a relationship, followed by 20 percent in the Northeast, 17 percent in the Midwest, and 16 percent in the West.

Among all generations, the most commonly cited reason for moving back in with their parents was to save money for a home purchase, followed by a breakup or divorce. Other commonly cited reasons include unemployment and debt.

Of those who moved back home, 45 percent live in their childhood bedrooms, 12 percent sleep in the basement, 4 percent sleep in the living room and 2 percent move into the garage. About one in four (22 percent) pay rent to their parents, according to the Homes.com survey.

Moving back home is not always easy as an adult. Privacy and noise issues were the most commonly cited causes of household conflict, according to the survey.

Source: “This is the No. 1 Reason Young Americans Move Home With Their Parents – and It’s Not the Cost of Rent,” CNBC (Feb. 14, 2019) and “The Broken-Hearted Move Back Home,” The Wall Street Journal (Feb. 14, 2019)

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Fed report suggests few or no interest-rate hikes this year

WASHINGTON (AP) – Feb. 25, 2019 – The Federal Reserve said Friday that in light of a slowing global economy and last year’s financial market turmoil, the central bank intends to remain “patient” in determining when to make future changes in its benchmark interest rate.

The Fed’s semi-annual report to Congress on monetary policy stood in contrast to its last report in July when it signaled that it was on track to keep raising rates at a gradual pace over the next two years.

The new report cites a range of risks to the economy that have developed over the last six months, as well as continued muted inflation as reasons to slow further hikes.

Many private economists believe the Fed may raise rates at most only one more time late this year. And some analysts are even forecasting that the next move will be a cut in rates as the Fed confronts a slowing economy this year.

At its last meeting in January, the Fed left rates unchanged at a level of 2.25 percent to 2.5 percent and signaled a major pivot away from steadily raising rates by declaring that it intended to be “patient” in deciding when to raise rates again.

Various Fed officials including Fed Chairman Jerome Powell have emphasized that change in speeches since the Jan. 29-30 meeting. Powell will testify on the Fed’s Monetary Policy report before Senate and House committees next Tuesday and Wednesday.

The report noted the turbulence that hit markets in the final three months of last year. But unlike President Donald Trump, who tied falling stock prices to the Fed’s rate hikes, the central bank cited other factors including Trump’s trade policies.

“Financial market participants’ appetite for risk deteriorated markedly in the latter part of last year amid investor concerns about downside risks to the growth outlook and rising trade tensions between the United States and Canada,” the monetary report said.

The Fed’s decision in January triggered a big rally in stock prices as investors grew less concerned that the Fed could over-do its tightening cycle and push the country into a recession.

The Fed had raised rates four times in 2018 and signaled in December that it expected to hike rates another two times in 2019.

Among the highlights of the Fed’s monetary report:

  • Economic growth was impacted by slower consumer spending and business investment in the second half of 2018. The housing market also weakened amid rising mortgage rates and higher material and labor costs. A softening in consumer and business sentiment since the fall likely reflected financial market volatility and increased concerns about the global outlook.
  • The Fed has been trimming its balance sheet by not reinvesting some Treasury securities and mortgage-backed bonds as they mature, resulting in a drop in total Fed assets of about $260 billion since the middle of last year. The Fed’s balance sheet ended the year close to $4 trillion, down from a high of $4.5 trillion before the Fed began trimming the balance sheet in October 2007. The Fed minutes from its January meeting indicated that the central bank is close to announcing a plan for drawing the balance sheet reduction to a close.
  • While unemployment has fallen close to a 50-year low, not all areas of the country have benefited equally with rural areas lagging behind metropolitan areas. The Fed said broader economic trends, such as the ongoing shift that has favored workers with more education, has resulted in rural areas getting left behind.

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

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NAR unveils new ‘That’s Who We R®’ ad campaign

WASHINGTON – Feb. 25, 2019 – While many people know that a Realtor® helps buy and sell homes, many don’t know that a Realtor is a member of the National Association of Realtors (NAR) and subscribes to its Code of Ethics, which NAR says inspired the association’s new “That’s Who We R®” campaign, which launched today.

The campaign aims to reinforce the value of Realtors as advocates for property owners, engaged community members and trusted advisors with in-depth knowledge of the industry.

“Our story is a century in the making, as we began to set NAR members apart from the rest by establishing a Code of Ethics in 1913,” says 2019 NAR President John Smaby. “This code is as relevant now as it was one hundred years ago; it’s our pledge of honesty, integrity, professionalism and community service as a true partner for buying or selling a home, or property. ‘That’s Who We R®’ reinforces that partnering with a Realtor, delivers the peace of mind that can only come from working with a real person who is committed to their clients’ futures and neighborhoods just as much as they are.”

The integrated marketing campaign from Havas features a cinematic world inspired by the Realtor mark. Everything from the larger than life “R” at the beginning, to the angles and geometry used as transitional elements and across numerous sets was inspired by the mark. “That’s Who We R®” features stories about humans helping humans find homes and property, build communities and turn business dreams into realities.

“Our society has created trusted symbols from ‘Verified’ Instagram accounts to the Good Housekeeping Seal,” says Karen Goodman, group creative director at Havas Chicago. “We needed to turn the ‘R’ into the trusted symbol you should look for when buying and selling property.”

The campaign content will be brought to life through strategic partnerships, including linear and online video, streaming and terrestrial audio, social media, branded partnerships with multi-channel content makers such as VICE, Apartment Therapy, The Atlantic, HULU and more. The :30 “That’s Who We R®” TV spot can be viewed online. More information about NAR is available at www.nar.realtor.

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HUD: Drop affordable housing’s not-in-my-backyard mindset

LAS VEGAS – Feb. 25, 2019 – Housing and Urban Development (HUD) Secretary Ben Carson vowed to builders last Thursday that HUD will do more to ease regulatory obstacles to increase the number of affordable housing projects across the country.

Carson also said that homeowners have nothing to fear and declared that it’s time to shed the not-in-my-backyard (NIMBY) mindset.

“NIMBYism – I totally understand where it comes from,” Carson said during the National Association of Home Builders’ board of directors meeting at the 2019 International Builders Show in Las Vegas. “The biggest investment most people have is their home. But [homeowners are] remembering the old model of affordable housing – where the government built these huge public housing facilities and then left, with nobody to look after them. They then deteriorated. We don’t do that anymore.”

He said affordable housing projects today are smaller and tailored to communities. They also don’t tend to be built within existing neighborhoods, but on the perimeters.

“This is so the teachers, firemen, and nurses can live in the same neighborhood where they work,” Carson said. “It just needs to be done the right way, and that’s what we’re trying to do.”

Bringing down building costs

Nearly 25 percent of the cost of a single-family home stems from federal, state and local regulations, with the cost even higher for multifamily construction, according to research from the National Association of Home Builders. Carson said he wants to change that.

“We are looking into ways that would incentivize local officials to cut back on archaic state and local regulatory barriers, such as outmoded zoning and land use restrictions,” said Carson.

The day before he addressed the builders, HUD announced that its Office of Multifamily Housing Programs will be expanding its Low Income Housing Tax Credit Pilot Program. The program is aimed at making it easier for builders to use FHA-insured loans to finance Low Income Housing Tax Credit projects, which will encompass new construction as well as substantial rehabilitation of existing homes.

“Today, we take another important step to stimulate capital investment in affordable housing at a time when we need affordable housing more than ever,” Carson said.

Carson also stressed the need to develop new technologies and improved construction methods and materials for repairing aging housing stock and adding new homes. He suggested that automated factory assembly techniques, such as 3D printing, could help speed construction times, as well as innovative construction materials that are less prone to mold, wind, water or fire damage.

“This is where HUD can play a role,” he told the crowd. “We will serve as a catalyst for innovation in the homebuilding industry to help speed the adoption and use of these new technologies.” He said HUD has a group devoted to construction innovations for affordable housing.

Generating investment through opportunity zones

Carson said investments in opportunity zones are another way to foster more affordable housing development. The opportunity zone program, created by the 2017 federal income tax overhaul, offers significant tax breaks to investors who purchase and improve property in certain distressed economic areas. In these approximately 8,700 areas across the country, designated last year by the U.S. Treasury Department, one in three people live in poverty and the unemployment rate is double the national average.

View a full list of the opportunity zones.

“With this strategy of long-term investment incentives, the longer you invest, the greater the tax benefit,” Carson said. “Investors will be interested in the well-being of that community because they will want to protect their investment. They’re not going to just walk away. … By aligning the conditions for increased affordable housing supply with the best interests of home buyers, builders, innovators and regulators, we can unlock the production of more affordable homes for countless American families in the years to come.”

Source: National Association of Realtors®, Melissa Dittmann Tracey

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2019 may be best time to buy luxury vacation home

NEW YORK – Feb. 25, 2019 – Real estate professionals say 2019 may be the best time to purchase a high-end vacation home – and they’re already seeing buyers pick up on the cues.

“We are seeing sales up in the resort areas, including Hawaii and Vail,” Stephanie Anton, president of Luxury Portfolio International, told forbes.com. She notes that sales and prices in Vail, Colo., are up over 25 percent from a year ago. “I think we are seeing people pulling money out of the stock market and buying these properties. … People are now so exhausted by today’s world, they are looking at vacation homes as total retreats to shut everything out.”

Vacation markets such as Cape Cod, Mass., and Palm Springs, Calif., are reporting an uptick in potential buyers looking for a retreat.

“Our market just turned in January, and we get really busy by March,” Erica Grossman, of Douglas Elliman Real Estate in New York’s Hamptons, told forbes.com. “Last year’s prices have been adjusted, depending on where you want to be in the Hamptons. Buyers who were sitting on the fence should come out and see what they can buy in their price range. Sellers are more realistic this year.”

Some luxury buyers are using their properties to then generate income from them when they’re not in use.

“When you are renting a luxury property, the guest expectation is very high,” says Andrew McConnell, CEO at rented.com. “You always must stay on top of maintenance. When you are decorating any vacation rentals, you have to be careful you don’t go too quirky or too cookie-cutter.”

Source: “2019 May Be the Best Time to Buy a Luxury Vacation Home,” forbes.com (Jan. 29, 2019)

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What does ‘I want a green home’ actually mean?

LAS VEGAS – Feb. 25, 2019 – When buyers think of a green home, they think of features that will first save energy and second improve the quality of the air in the home, according to survey results released by the National Association of Home Builders (NAHB) at the NAHB International Builders’ Show in Las Vegas last week.

NAHB surveyed nearly 4,000 homebuyers, both recent and prospective, on the types of features they prefer to have in their home, including eco-friendly components and designs.

To achieve their energy efficiency goals, buyers would most like to have windows and appliances rated Energy Star, efficient lighting (using less energy than traditional bulbs), and insulation higher than required by code.

More than half of homebuyers also find these indoor air quality features essential or desirable: a home dehumidification system, an electronic air cleaner and low volatile organic compound (VOC) materials.

“It’s confirmation that the most attractive green features for homebuyers are those that help them save money on energy costs as well as those that improve the air quality inside their homes,” says Rose Quint, associate vice president of survey research at NAHB.

Green features buyers don’t care about

A roof partially or completely covered by plants is the least appealing green feature – only 24 percent of buyers would want it in their next home. Many homebuyers are simply indifferent toward other green features, too, such as roof-mounted wind turbines, rainwater collection systems and recycled material or prefabricated building components.

It’s largely about the money

Consumers like the cost savings green features provide. Nearly half of homebuyers are willing to invest between $1,000 and $9,999 for $1,000 annual savings on their utility bills, with 37 percent willing to spend upward of $10,000. The average amount increases based on the price of the home, ranging from $6,653 for homes priced under $150,000, to $10,560 for homes valued at $500,000 or more.

Survey findings also show that most homebuyers would prefer a number of green options versus the non-green alternative: 74 percent would rather have features and finishes made of more expensive materials that last longer versus 26 percent who would prefer them to be made of cheaper materials that need to be replaced more often.

Similarly, 65 percent would opt for low-maintenance landscaping versus 35 percent who prefer a conventional lawn.

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