Category Archives: Association News: Reprinted with permission Florida Realtors. All rights reserved

Homeowners Want to List – but They Fear What Comes Next

Many owners would love to get top dollar for their home, but they weigh that perk against the downside – buying another home – and fears outweigh their desire to list.

NEW YORK – Some homeowners are reluctant to sell amid a hot housing market because the profit they stand to make is less of a concern than the burden of finding a new home.

Selling appears easy right now – list, accept multiple bids, and sell for top dollar. But the prospect of fierce and expensive bidding wars to secure their next home is discouraging.

Thad Wong, co-founder of @properties, says that “even with low rates and the appreciation of their home, they can’t find something better than what they live in right now.”

With so many homeowners unwilling to sell, housing inventory is extremely tight; the number of existing homes on the market at the end of April was down 20.5% year over year, while the number of listed homes plunged to record lows earlier this year. The low stock underpins continuing home price appreciation, making homeownership too costly for many buyers.

The timing of dual transactions – selling one home and buying another at the same time – contributes to the problem since many families can’t afford to buy a new property without selling a current one first. And since sellers often receive multiple bids in the current market, agents say offers with contingency clauses are likely to be rejected.

The supply shortage is particularly pronounced at lower price points. The National Association of Realtors said the supply of existing homes on the market priced between $100,000 and $250,000 fell more than 30% in April from a year earlier, while the stockpile of homes listed for over $500,000 grew.

“I don’t think we can really alleviate the shortage until people feel like they can sell their home and move,” says Meredith Hansen with Keller Williams Greater Seattle.

Source: Wall Street Journal (06/04/21) Friedman, Nicole

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Landlords Ask Supreme Court to End the Eviction Moratorium

One judge ruled to end the eviction moratorium, but an appeals court refused to make any changes right away. Landlords now want the U.S. Supreme Court to weigh in.

WASHINGTON – A lawyer representing landlords and housing providers asked the Supreme Court on Thursday to halt the Biden administration’s moratorium on evictions, which was put into place because of the coronavirus pandemic.

The request comes after a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit on Wednesday declined to stop the moratorium while a case challenging its constitutionality is pending.

“Landlords have been losing over $13 billion every month under the moratorium, and the total effect of the CDC’s overreach may reach up to $200 billion if it remains in effect for a year,” states the landlords’ request to Chief Justice John G. Roberts Jr.

The landlords won in the district court in the District of Columbia, but the judge paused the ruling while it was appealed, leaving the Centers for Disease Control and Prevention’s (CDC) eviction moratorium intact – for now.

The appeals court affirmed that move this week, allowing the lawsuit to proceed but kept landlords from evicting non-paying tenants.

“The moratorium was tailored to the necessity that prompted it,” wrote the three-judge panel. “[The Department of Health and Human Services] carefully targeted it to the subset of evictions it determined to be necessary to curb the spread of the deadly and quickly spreading COVID-19 pandemic.”

The landlords hope the Supreme Court will reverse that move.

“The stay order cannot stand. As both the Sixth Circuit and the district court here recognized, Congress never gave the CDC the staggering amount of power it now claims,” the landlord’s court filing states. The moratorium bans landlords from evicting tenants while the order is enforced, so landlords are unable to remove a renter who can’t pay rent.

The CDC first issued the moratorium in September under former President Trump, but the government has continued to renew it, even after vaccines have been widely distributed.

Lawyers for the landlords said they fear that the government will renew the moratorium again instead of letting it lapse at the end of June as scheduled.

Lawsuits challenging the government’s eviction moratorium are piling up, as property owners, including struggling mom-and-pop operators, ask the courts why they are expected to take a financial hit while non-paying tenants are protected by the moratoriums.

Some district courts have delivered wins for the landlords, while others have ruled for the government. Recently, the 6th U.S. Circuit Court of Appeals invalidated the government’s moratorium but did not issue a nationwide injunction.

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April Pending Home Sales Drop 4.4% Month-to-Month

Year-to-year, however, pending sales skyrocketed 51.7% since April 2020 was the start of nationwide lockdowns to fight a spreading pandemic. NAR Economist Yun says contract signings now are near pre-pandemic levels after the big surge during COVID-19 lockdowns.

WASHINGTON – Pending home sales took a step backward in April, according to the National Association of Realtors® (NAR). All four U.S. regions saw year-over-year increases, but only the Midwest had month-over-month gains in pending home sales contract transactions.

The Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – fell 4.4% to 106.2 in April. Year-over-year, signings, however, jumped 51.7% higher, in part because April 2020 had a wave of pandemic-related shutdowns. An index of 100 is equal to the level of contract activity in 2001.

“Contract signings are approaching pre-pandemic levels after the big surge due to the lack of sufficient supply of affordable homes,” says Lawrence Yun, NAR’s chief economist. “The upper-end market is still moving sharply as inventory is more plentiful there.”

Yun thinks that housing supply will improve as soon as autumn. He points to an increase in the comfortability of homeowners more willing to list their homes, as well as a rise in sellers who might have to make difficult decisions after the eviction moratorium expires and their mortgage forbearance comes to an end.

“The Midwest region, which has the most affordable homes, was the only region to notch a gain in the latest month,” Yun adds. “Some buyers from the expensive cities in the West and Northeast, who have the flexibility to move and work from anywhere, could be opting for a larger-sized home at a lower price in the Midwest.”

April pending home sales regional breakdown: The Northeast PHSI declined 12.9% to 85.3 in April, though it was up 96.5% jump from a year ago. In the Midwest, the index increased 3.5% to 101.1 last month, up 39.4% compared to April 2020.

Pending sales transactions in the South fell 6.1% to an index of 128.9 in April, up 45.3% from April 2020. In the West, the index decreased 2.6% in April to 92.0, up 57.3% from a year prior.

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NAR Partners with LGBTQ+ Real Estate Alliance

The National Association of Realtors says the new partnership will “identify training opportunities … cultivate LGBTQ+ leaders and mobilize members.”

WASHINGTON – The National Association of Realtors® (NAR) announced a new partnership with the LGBTQ+ Real Estate Alliance. The Alliance was founded June 2020 and has chapters throughout the U.S., Canada and Puerto Rico.

According to NAR, the collaboration will allow the groups to identify training opportunities that cultivate LGBTQ+ leaders and mobilize members in support of mutually beneficial federal policies, including pro-LGBTQ+ and real estate industry initiatives.

“NAR has long championed LGBTQ+ rights in the housing market, and we’re proud to continue leading today’s industry in the fight against discrimination,” says NAR President Charlie Oppler. “As the nation recognizes Pride Month this June, we’re excited to announce this partnership with The Alliance and begin our work toward initiatives that will provide tremendous benefits to American real estate and our society as a whole.”

NAR amended its Code of Ethics in 2011 and 2014 to ensure Realtors® were upholding housing protections for members of the LGBTQ+ community. More recently, it worked with the Department of Housing and Urban Development as the agency reformed its enforcement of the Fair Housing Act to prohibit discrimination based on sexual orientation and gender identity.

“This partnership between NAR and The Alliance is built on a mutual desire to advance the shared interests of our members, supporting both the Alliance’s mission and NAR’s core values to lead change while advancing diversity and inclusion,” says NAR CEO Bob Goldberg.

The Alliance advocates on behalf of the LBGTQ+ community on a variety of home-related topics. A 501(c)6 non-profit, it also provides its members with learning and business opportunities.

“Having the leading trade association in the U.S. as a part of The Alliance is a huge step for our members and the entirety of the LGBTQ+ community,” says John Thorpe, The Alliance’s national president and board chairman.

Thorpe also commended NAR for its “prominent” role in the push to secure fair housing protections for LBGTQ+ Americans in states where those safeguards are not already codified.

“NAR’s support has been present for several months through acts of solidarity in the face of discriminatory acts against LGBTQ+ Realtors, their participation in our Policy Symposium this past April and their incredible support for our National Convention this September in Vegas,” says Ryan Weyandt, The Alliance’s CEO.

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U.S. Borders With Canada, Mexico Restricted Through June 21

Fla. real estate’s top source for international business faces visiting restrictions for at least another month. Until then, only trade and essential travel is allowed.

WASHINGTON – The Department of Homeland Security says the U.S. borders with Canada and Mexico will remain restricted through at least June 21, with only trade and essential travel allowed.

The DHS confirmed the move Thursday and said it is “working closely with Canada & Mexico to safely ease restrictions as conditions improve.”

The agency, in conjunction with its Canadian and Mexican counterparts, originally closed the U.S.’s northern and southern borders to leisure travelers in March 2020, at the start of the COVID-19 pandemic. The restrictions have been extended monthly since.

In the intervening year, Canada has tightened its border security, requiring anyone entering by plane or land to be tested in advance for COVID-19. In addition, anyone traveling to Canada from the U.S. must prove that they are doing so for essential reasons and must quarantine upon arrival.

In February, Canada announced it was banning cruise ships from its waters until 2022. Since then, legislators have worked to salvage the 2021 Alaska cruise season. Last week, the U.S. Senate passed the Alaska Tourism Restoration Act, which would allow large cruise ships to skip required stops in Canadian ports while traveling between Washington and Alaska.

Earlier this month, Canadian Prime Minister Justin Trudeau told the Canadian Broadcasting Corporation that he would prefer to wait until 75% of his country is vaccinated before fully reopening the border; according to USA TODAY data, 48.1% have been at least partially vaccinated as of Thursday.

“My gut tells me it’s going to be (closed) at least well into the fall of 2021,” he predicted a week earlier.

Southbound travel from the U.S. into Mexico’s northern border cities has gone unchecked since the beginning of the pandemic, and Americans can still fly there. However, last week, the governor of Quintana Roo state warned it was at danger of “imminent lockdown” because of a five-week-long increase in COVID-19 cases there.

Anecdotal evidence suggests tourists are attracted to Mexico’s Caribbean resorts in part because there has been no lockdown, and sanitary measures are largely voluntary.

About 12.5% of Mexicans are fully vaccinated, and an additional 8.3% have had their first shot.

Contributing: Morgan Hines, Julia Thompson, USA TODAY; Lauren Villagran, El Paso Times

Copyright 2021, USATODAY.com, USA TODAY

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Rebranding: Quicken Loans to Soon Become Rocket Mortgage

After July 31, Quicken will retire its name and start using Rocket Mortgage, a subsidiary it formed in 2015 in order to completely automate the lending process.

NEW YORK – Quicken Loans, the nation’s largest home lender, will officially change its name to Rocket Mortgage on July 31, 2021. The name change reflects that technology – which the Rocket Mortgage brand has touted for six years – is at the core of its mortgage business.

Quicken Loans launched Rocket Mortgage in 2015 with a goal of putting the entire mortgage process online – and Rocket Mortgage says it accomplished that goal, allowing for a fully digital mortgage experience from application to closing that can take place virtually without a borrower ever speaking directly to a human being.

These virtual “nonbanks” have been quickly growing their market share in the mortgage business recently, and Quicken Loans is the largest single-family lender in the country by dollar volume and units, according to preliminary 2020 data from the Home Mortgage Disclosure Act.

Quicken notes in a press release announcing the name change that the public has become familiar with its Rocket Mortgage brand over the years through marketing and sports sponsorships.

“Rocket Mortgage has extremely high-affinity metrics that eclipse those of Quicken Loans,” the release states. “The name change is significant for the company, but clients will not see any difference to the digital experience.”

Starting July 31, consumers will see a name change from “Quicken Loans” to “Rocket Mortgage” on documents and communications, company officials say. Borrowers likely won’t note any other changes.

Quicken Loans’ subsidiaries of Rocket Companies went public last year. Several of Rocket Mortgage’s sister companies have already embraced the Rocket name, including Rocket Home, Rocket Auto and Rocket Loans.

Source: Rocket Mortgage

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It’s Time: Prepare for the ‘21 Hurricane Season

The season starts in two weeks: June 1. What will happen to pets if you evacuate? What about work? What about school? If separated from family, how will you meet up?

WASHINGTON – National Hurricane Preparedness Week ran from May 9 through May 15, and the American Red Cross urges everyone to plan now for any possible dangerous storms this year.

“After back-to-back years of active hurricane seasons that have broken records, this year it’s more important than ever before to get ready now,” said Linda Voss, regional CEO, in a news release. “Last year, on top of the pandemic, we saw a record 30 named storms with two hitting the southeast before the actual start of hurricane season.”

The American Red Cross encourages everyone to create an evacuation plan.

Plan what to do in case you are separated from your family during an emergency and if you have to evacuate. Coordinate your plan with your child’s school, your work and your community’s emergency plans. Plan multiple routes to local shelters, register family members with special medical needs as required and make plans for pets.

If you already have an emergency plan, update it and review with family members so everyone knows what to do if an emergency occurs, the American Red Cross states.

Build an emergency kit with a gallon of water per person, per day, non-perishable food, a flashlight, battery-powered radio, first aid kit, medications, supplies for an infant and pets if applicable, a multi-purpose tool, personal hygiene items, copies of important papers, cell phone chargers, extra cash, blankets, maps of the area and emergency contact information.

Because of the pandemic, include a mask for everyone in your household, the release states.

The American Red Cross recommends that if you already have a disaster kit, now is the time to make sure the food and water is still safe to consume and that copies of important documents are up to date.

Be informed. Find out how local officials will contact you during a disaster and how you will get important information, such as evacuation orders, the release states.

Download the free Red Cross Emergency app to help keep you and your loved ones safe with real-time alerts, open Red Cross shelter locations and safety advice on hurricanes and other emergencies.

Standard homeowners’ insurance doesn’t cover flooding. It’s important to have protection from the floods associated with hurricanes, tropical storms, heavy rains and other conditions that impact the United States, the release states. For more information on flood insurance, visit the National Flood Insurance Program website at www.FloodSmart.gov.

As the pandemic continues, the American Red Cross has procedures and resources in place to help. It is still providing the same types of support after disasters as it always has, according to the release.

This includes making sure people have a safe place to stay, food to eat and resources to help them recover. The American Red Cross has put in place additional precautions, in line with Centers for Disease Control and Prevention recommendations, including social distancing protocols, masks, health screenings and enhanced cleaning procedures.

Ensuring people have a safe place to stay during a disaster is a critical part of the American Red Cross mission, but how it supports sheltering efforts may be different in each community, depending on local emergency plans and the scale of the disaster. In some instances, there may be group shelters, while other times hotels are more appropriate.

“Hurricane season starts June 1 and runs through November 30,” Voss said. “Get ready now, it’s your best defense.”

© Copyright 2021 Kent County News, Chesapeake Publishing Group (Adams Publishing/APGMedia). All rights reserved.

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CFPB Preparing for Hectic Transition as Housing Protections End

The housing industry had an artificial pause button pushed during the pandemic, thanks to eviction moratoriums, forbearance programs, etc. As those draw to a close, CFPB proposed rules to maintain stability, and NAR commented with a suggestion that short sales might be the way to go.

WASHINGTON – As foreclosure moratoriums and forbearance programs begin to close, what’s the best way to keep the housing market stable, organized and productive without creating other problems, such as homelessness, frustration and an onslaught of evictions?

The U.S. Consumer Protection Bureau (CFPB) proposed rules to organize the transition, and the National Association of Realtors® (NAR) recently commented on those rules. CFPB posted its proposals online as “Protections for Borrowers Affected by the COVID-19 Emergency under the Real Estate Settlement Procedures Act, Regulation X”.

Outside CFPB’s proposals, NAR also co-sponsored a study, Protecting Homeownership From the Impact of COVID-19. It says the purpose of the study is a desire to “identify best practices learned from the Great Recession to blunt the pandemic’s impact on homeownership.”

In a letter sent to CFPB signed by NAR President Charlie Oppler, the association made a number of comments on CFPB’s proposals, including:

The nation needs an orderly transition out of forbearance

Oppler’s letters says that Realtors “greatly appreciate the efforts the CFPB has taken to consolidate information about loss mitigation options from all federal channels in a single location,” and it “supports the CFPB’s efforts … as states and localities ease and remove restrictions related to the spread of COVID-19.”

NAR agrees with a CFPB proposal to give at-risk homeowners a list of all their options, including both a home sale and a short sale. It will allow “distressed owners who have exhausted modification alternatives the means to exit homeownership in a manner that will minimize the impact on their credit score, equity, and time to return to homeownership.”

NAR also recommends a closer focus on short sales, saying they generally have a “smaller impact on the distressed owner and cost the lender less than a foreclosure.”

Time is of the essence

NAR suggests that the frustrations homeowners experienced with short sales during the Great Recession should not be repeated, saying “This all too often … would result in the potential homebuyer canceling the purchase contract, the property ending in foreclosure, and the distressed household suffering long-term harm.”

In the best cases, a short sale can take many months. NAR suggest that CFPB establish a “timeframe for servicers and investors to respond to buyers’ offers” as a way to streamline the short-sale process. It will “benefit the seller, the buyer and the community.”

Change foreclosure calculations for credit scores

A foreclosure or short sale hurts a homeowner’s credit score and makes it harder to get a mortgage in the future, but when does the impact from one of those events get recorded in a credit score?

NAR says the “freeze-out period” recorded on credit scores currently begins when the foreclosure process is completed – but many “lenders recognize the start of this period as when the lender or investor sells the distressed property, rather than when the distressed owner ceases to have title to the property.”

NAR calls the time between losing title and an eventual resale as a “limbo period.”

“While the CFPB does not have authority over practices of (Fannie Mae or Freddie Mac) or state foreclosure laws, NAR urges CFPB to use its ability to investigate the issue and to clarify for lenders when a consumer has satisfied their obligation under the foreclosure.”

NAR’s conclusion

NAR calls it “imperative that the CFPB and industry continue to work toward a clear, robust and holistic approach to supporting distressed owners making the transition out of forbearance during this crisis,” and urges CFPB to include its suggestions in its final rules.

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3 Issues That Could Affect Second-Home Sales

Financing for a second-home purchase could be limited, taxes could go up for 1031 like-kind exchanges, and policy updates are expected for national flood insurance.

WASHINGTON – The second-home market got a pandemic boost as more buyers turned to resorts and vacation hot spots, whether to escape the city, find a more leisurely area to remote work, generate extra income or to just simply shelter in place. But a few policy changes have the potential to dampen second-home sales over the coming months.

Russell Riggs, senior policy representative for the National Association of Realtors®’ (NAR) Advocacy Group, highlighted three advocacy issues the association is focusing on that could affect the second-home market:

1. Fannie Mae limits financing

On Dec. 7, 2020, Fannie Mae modified existing rules for how it finances and invests in second homes and investment properties. Besides placing a 7% limit on Fannie’s acquisition of single-family mortgage loans secured by second-home and investment properties, the rules also restrict the kinds of projects that Fannie will invest in.

For example, Fannie Mae said it won’t finance loans with a large number of short-term rentals. Riggs said that Fannie Mae is not completely pulling out of these markets, but it will more carefully scrutinize its financial investments in the second-home market moving forward. NAR says it’s had ongoing discussions with Fannie Mae to understand the full impact of this policy, and it’s conveyed concerns over the change’s potential effect on members and the second-home market.

Riggs says NAR is also looking to build coalitions with other organizations and create an industrywide effort to voice concerns about the policy change.

2. 1031 like-kind exchanges under attack

The Biden administration recently proposed a $500,000 limit on deferred gains in 1031 like-kind exchanges.

“This could impact all forms of real estate, including investment and resort properties,” Riggs said. “Putting this limitation on these transactions now is bad timing because like-kind exchanges could accelerate our economic recovery from the pandemic by preventing property from being underutilized and underinvested – an important tool in a Realtor’s® financial toolbox.”

NAR plans to share success stories and anecdotes of 1031 exchanges with lawmakers and point to their economic benefits, including promoting job creation, land and environmental conservation, generating state and local tax revenue, and aiding in retirement savings.

To move the initiative forward, NAR created a Like-Kind Exchange: Myth Busters webpage to explain common misunderstandings about the 1031 like-kind exchange tax benefit, which has existed since 1921.

3. Looming expiration of the National Flood Insurance Program (NFIP)

NFIP, set to expire on Sept. 30, 2021, provides flood insurance to more than 5 million homeowners in 22,000 communities nationwide. Many areas threatened by flooding events are located in second-home or resort areas. While a needed protection for many homeowners, however, NFIP is billions of dollars in debt and, and lawmakers have issued a lot of short-term extensions over the years to keep it afloat.

NAR advocates for long-term authorization of the NFIP as well as reform that includes more private flood insurance, mitigation and improved Federal Emergency Management Agency (FEMA) flooding maps (long the standard that lenders use in determining the need for flood insurance).

Riggs said there’s been progress on the flood insurance front. For example, last year, a searchable database from First Street called Flood Factor launched, providing consumers with information on an individual property’s flood risk, including heavy rainfall events and climate change data. Flood Factor has now been integrated into listings data at realtor.com.

Riggs notes another area of progress: NFIP Risk Rate 2.0, featuring a new federal flood insurance rate structure designed by FEMA to modernize the NFIP’s insurance pricing methodology and more accurately tie its rates to the flood risks of individual properties.

In a meeting with NFIP Chief Executive David Maurstad in March, NAR leaders said that Risk Rating 2.0 represents the first significant update to NFIP rating methodology in nearly five decades. New rates take effect Oct. 1 for new and existing NFIP policyholders who may want to opt in earlier to see a decrease in their premiums. All other existing policyholders would receive the new rates on April 1, 2022.

Source: National Association of Realtors® (NAR)

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Fla. No. 1 for Median List Price, Most Expensive Home Price Gap

Realtor.com study: The median asking price for a Fla. home in April was $367,450; the asking price for the most expensive listing was $95M – a 25,754% difference.

CHICAGO – Realtor.com recently examined the ultraluxury real estate market to identify mansions currently for sale and compare their asking prices to states’ median asking prices on realtor.com’s website.

The state with the biggest price gap? Florida.

A listing at 10 Cannon Point, Key Largo, was priced at $95 million on realtor.co. Florida’s median asking price in April was $367,450 on realtor.com. That makes the percentage difference between the median and most expensive listing 25,754%.

While many Florida estates come close to the $100 million mark, hardly any can boast a private island in the price tag. The prime selling points in this listing on Pumpkin Key are bay views, lush landscape and privacy. The main home is relatively small for the high price, coming in at 5,000 square feet, but it sits on 26 acres.

Other states in the top 10 for the biggest gap between the median price and most expensive listing were Wyoming, Virginia, California, New York, Colorado, Pennsylvania, Connecticut and Nevada.

Source: realtor.com (05/05/21) Cox, Elena

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NAR Economic Forecast: Consumers Will Propel 2021 Growth

After the quickest recovery in the nation’s history, consumers with pandemic savings will “do more shopping, restaurant dining, traveling and in-person house hunting.”

WASHINGTON – After recording the quickest recovery in the nation’s history in the wake of the COVID-19 pandemic, the U.S. economy is expected to kick into high gear in 2021, according to analysis from the National Association of Realtors® (NAR) at its Residential Economic Issues and Trends Forum.

Thanks to the number of vaccinated Americans increasing and new coronavirus cases decreasing, the economy will grow 4.5% in 2021, according to NAR Chief Economist Lawrence Yun.

“Consumers will begin to spend massive savings, and do more shopping, restaurant dining, traveling and in-person house hunting,” Yun says.

While home sales have been, and will be, an economic bright spot, unemployment remains an issue, Yun adds. Eight million jobs were lost during the pandemic and have not yet been recaptured. Yun maintains that job recovery is taking longer due to some friction in the labor market, including some workers still unable to return to their jobs, with work-from-home not an option for them. As economic growth strengthens, however, NAR projects 4 million jobs will be added this year.

Unexpectedly and despite high unemployment, the economic recovery – propelled by favorable monetary and fiscal policies – created the hottest housing market in nearly 50 years. The market surpassed pre-pandemic levels in terms of sales, but the fast-paced recovery has also contributed to historic home price growth. In fact, an NAR report released Tuesday found that 89% of metros saw prices climb at double-digit rates on a year-over-year basis during the first quarter of 2021.

Thursday’s presentation noted that the economic recovery, both in the U.S. and globally, has raised inflationary pressures which will ultimately lead to an increase in the 30-year fixed mortgage to an average of 3.2% in 2021. Consumer price inflation is accelerating due to higher costs for a number of goods and commodities, including oil, gasoline, lumber, moving and storage fees, household appliances, rents and houses, which have reached record-highs.

“As mortgage rates increase, the frenzied multiple-offer situation will become less prevalent by year’s end, as affordability challenges squeeze out some buyers and more inventory reaches the market,” Yun predicts.

Although a low housing supply has played a significant role in home price surges, Yun expects more home construction, a growing willingness among homeowners to list properties due to an increase in vaccinations, and a gradual decline in mortgage forbearance.

“With more inventory and some easing in demand, home prices are expected to shift to mid-single-digit appreciation by the fourth quarter and in 2022,” Yun says. He predicts that:

  • Median existing-home sales price will increase 7% in 2021
  • Existing-home sales will grow by 10% as more homes reach the market
  • New home sales will increase by 20%

© 2021 Florida Realtors®

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What Type of Homeowner Opted for Forbearance?

About 4M owners chose to delay monthly mortgage payments using forbearance, and 1 in 3 (34%) used the money for essentials. Many now worry about what comes next.

NEW YORK – One of the lifelines for homeowners during the COVID-19 pandemic has been forbearance, an ability to skip or make smaller monthly payments on mortgages under the CARES Act, leaving them more cash for emergencies.

Still, the majority of people who went into forbearance remain stressed about getting – and staying – on track with mortgage payments, according to the results of a survey by Credit Karma that was exclusively shared with USA TODAY.

About 2.2 million homeowners had entered forbearance plans as of April 25, 2021, according to the Mortgage Bankers Association. In May 2020, more than 4 million U.S. mortgages were in forbearance.

Of those surveyed who were in forbearance, 59% felt that their financial stability depended on being able to delay their mortgage payments, and 62% agreed that they felt stressed about the payments they would eventually need to make toward their mortgage in the future.

While in forbearance:

  • 34% used the cash that would have gone toward their mortgage for such essentials as groceries, medical needs, utilities and additional expenses incurred throughout the pandemic, such as homeschooling equipment and caring for additional family members.
  • Nearly 32% saved the money by either putting it toward an emergency fund or a general savings account.
  • A full 21% said they used the cash to pay down debts such as student loans or credit cards.
  • The rest (13%) claimed they didn’t have any extra money, even while in forbearance.

“Forbearance is a double-edged sword. It’s great because it allowed people to stay in their homes. It allowed them to save the money for necessities like groceries, medical attention or even to pay down debts,” says Andy Taylor, general manager for Credit Karma Home. “But it does come at a cost. Namely, at the end of your forbearance period, you will have to pay that back.”

The results are based on a national online survey conducted in April 2021 among 1,033 adults conducted by Qualtrics on behalf of Credit Karma, a financial technology company with more than 100 million customers.

About 20% of the homeowners in the survey tapped their home equity (what the home is worth minus what is owed on the mortgage) line of credit in the last 12 months. Of those, 41% used the money on home renovations.

“Last year, homeowners with mortgages saw their equity increase by 11%, fundamentally because home values went up pretty significantly in 2020,” says Taylor.

Other insights from the survey:

Many renters want to own homes. Overall, 30% of respondents said they were considering a home purchase in the next 12 months. Of the 70% who weren’t in the market for a home in the next year, only 2% overall said they’ll never want to buy a home.

But home financial literacy is lacking. To assess Americans’ understanding of two basic terms related to home ownership, Credit Karma asked survey-takers to select the correct definition for the terms out of four possible options.

Only 54% of respondents selected the correct answer when it came to the definition of home equity. Fifty-nine percent of homeowners were more likely to pick the right answer compared with 45% of renters.

Respondents did slightly better identifying the meaning of home value, which is the current market value of a home. A full 62% were able to pick out the correct definition.

Surprisingly, people who had tapped into their home equity in the last 12 months did worse than the overall group in selecting the correct definitions. Only 45% of this group correctly identified the definitions of home equity and home value – an indication that people may be getting financial products they don’t fully understand.

One area of strong understanding: 84% of survey respondents overall knew that it’s possible to leverage home equity to access cash.

Copyright 2021, USATODAY.com, USA TODAY

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Foreclosures Less Likely with Few Homes Underwater

Underwater homeowners – they owe more on their mortgage than their home’s value – are more likely to end up in foreclosure. But today, 1 in 3 owners with a mortgage (32%) have at least 50% equity, and only 1 in 21 (4.7%) owes 25% or more than their home’s current market value.

IRVINE, Calif. – Thanks in part to rising property values, today’s homeowners largely have a lot more equity than they did during the housing meltdown in the Great Recession. Of those with a mortgage, one in three (31.9%) is equity rich, according to ATTOM Data Solutions’ first-quarter 2021 U.S. Home Equity & Underwater Report, meaning that the remaining amount on the owner’s mortgage is 50% or less than their home’s estimated market value.

The report only analyzes homes in which the homeowner has a mortgage. Those without a mortgage generally have 100% equity.

On the flipside, a smaller amount of homeowners with a mortgage are underwater now compared to the Great Recession. Nationally, just 2.6 million – one in 21 or 4.7% of all mortgage properties – were considered seriously underwater in the first quarter of 2021, meaning the amount they still owe on the home is at least 25% more than its estimated market value.

That 4.7% of mortgaged homes seriously underwater is down from 5.4% in the prior quarter, 6% in the third quarter of 2020 and 6.6% a year ago.

On the other hand, the percentage of equity rich homes, 31.9%, is up from previous quarters – 30.2% in the fourth quarter of 2020, 28.3% in the third quarter and 26.5% in the first quarter of 2020.

Overall, Florida was about average when ATTOM compared states. Among the 50 states, 41 had an increase in equity-rich homes compared to the previous quarter, and 49 saw a decrease in the percentage seriously underwater.

“It continues to be a great time to be a homeowner most everywhere in the country, says Todd Teta, chief product officer with ATTOM Data Solutions. “The ongoing price spikes we’re seeing help to cut down the number of seriously underwater properties and boost the level of equity-rich properties.”

Teta says current trends may shift, however, once the foreclosure moratorium is lifted, something he says ATTOM is watching. “For now, though, the equity picture remains one of many signs that the long U.S. housing market boom keeps charging ahead.”

 

© 2021 Florida Realtors®

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Mortgage Rates Down a Bit – But Can It Continue?

The average 30-year, fixed-rate mortgage dropped to 2.94% from last week’s 2.96%, but with inflation apparently rising, they’ll likely change direction soon.

MCLEAN, Va. – Mortgage rates continued their slow descent this week, with the average 30-year, fixed-rate mortgage dropping to 2.94% from last week’s 2.96% average, according to Freddie Mac’s weekly Primary Mortgage Market Survey (PMMS).

“Since the most recent peak in April, mortgage rates have declined nearly a quarter of a percent and remained under 3% for the past month,” says Sam Khater, Freddie Mac’s chief economist.

However, Khater also issued a warning about possible rate increases in the short term.

“The low mortgage rate environment has been a boon to the housing market but may not last long as consumer inflation has accelerated at its fastest pace in more than 12 years and may lead to higher mortgage rates in the summer,” he says.

Weekly mortgage rates, May 13, 2021

  • The 30-year fixed-rate mortgage averaged 2.94% with an average 0.7 point, down from last week when it averaged 2.96%. A year ago, the 30-year FRM averaged 3.28%.
  • The 15-year fixed-rate mortgage averaged 2.26% with an average 0.6 point, down from last week’s 2.30%. A year ago, the 15-year FRM averaged 2.72%.
  • The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.59% with an average 0.3 point, down from last week’s 2.70%. A year ago, the 5-year ARM averaged 3.18%.

© 2021 Florida Realtors®

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Condo Q&A: How Can We Raise Capital for Future Projects?

Also: Should a condo board send warning letters before issuing fines? A board does so, but some members now wonder whether that’s a good idea.

NAPLES, Fla. – Question: Our condominium association is looking for new ways to raise capital for future projects. Our master association charges a resale transfer fee of $1,000 per sale and we would like to implement a $500 per sale transfer fee on top. How can we accomplish this? – L.P., Treasure Coast

Answer: Unfortunately, the short answer is that you really can’t accomplish this at all. Presently, condominium associations are capped in the amounts they can charge in connection with a sale.

Specifically, section 718.112 of the Florida statutes provides that “No charge shall be made by the association or anybody thereof in connection with the sale, mortgage, lease, sublease or other transfer of a unit unless the association is required to approve such transfer and a fee for such approval is provided for in the declaration, articles, or bylaws. Any such fee may be preset, but in no event may such fee exceed $100 per applicant other than husband/wife or parent/dependent child, which are considered one applicant.”

This statute is partially intended to allow the association to recover hard expenses incurred to run background checks or other administrative acts when considering to approve or deny a purchaser or tenant. That being said, the statute is also written broadly to apply to any “charge.”

If your condominium association were to require each purchaser $500 to purchase a unit, it would technically violate the above statute because it exceeds $100 per applicant and is in connection with the sale of a unit.

Conversely, it is critical to note that the above statute is not in Chapter 720 governing homeowners’ associations. So, if your master association is a HOA and governed by Chapter 720, there is no statutory restriction on the amounts charged in connection with the sale of a home or unit.

Question: Our bylaws provide that the association has the right to levy fines against owners for violations. A few years ago, the board adopted a resolution providing a procedure to levy fines, and it requires the association to send a few warning letters to give the owner a chance to fix the problem before a fine is levied. Our board now disagrees whether we should have such a procedure. What is your opinion? – A.D., Stuart

Answer: You would expect that an attorney would want clear written procedures for everything, and although I agree with the need for some formality, I do not recommend the association self-impose restrictions which are not included in the statute.

Currently, the statute provides that you must give 14 days notice and an opportunity for a hearing before a fine can be levied. In addition, through arbitration and appellate decisions, we know that a critical element of fining is providing due process.

There is no minimum standard of due process in the statutes, administration code, or appellate decisions, but we know that the association must provide due process before imposing financial penalties.

As mentioned above, the statute actually provides very little in terms of procedural hurdles. You, like many of my clients, have tried to fill in the blanks with your own board adopted policy.

I applaud this, but I would warn against requiring the association to provide warnings or opportunities to cure. Obviously, the arguments in favor of warnings are that it is neighborly and consistent with a policy of correcting, and not penalizing, for bad behavior.

That being said, a self-imposed warning requirement is a self-imposed element of due process that must be honored. In my opinion, this typically creates opportunities for errors and defenses in litigation.

Instead of requiring warning letters in your policy, I would recommend you consider removing all warning requirements and simply state that the association may provide a warning in its discretion, but that owners should never rely on a warning or opportunity to cure before a violation is pursued. This way you can provide warnings and you can try to correct behavior before penalizing behavior, but you maintain some flexibility and you mitigate the opportunity for error.

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

© 2021 Journal Media Group. John Goede is partner of the Law Firm Goede, Adamczyk, DeBoest & Cross.

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More Relocators than Locals Ask About S. Fla. Climate Change

MIAMI – In South Florida, top considerations for choosing a new home have shifted, thanks to climate change.

“Before it was location, location, location. Now, it’s about elevation, elevation, elevation. The new buyer has to worry about both,” said George Jalil, broker and president at Miami Way Realty.

Sea level rise doesn’t top the list of buyer or seller concerns in South Florida – especially if you’re rich enough to afford the ever-skyrocketing costs of waterfront property – but for budget-conscious buyers, choosing the wrong home could have expensive consequences.

In the 30-year lifespan of a typical mortgage, some parts of South Florida could start to see floodwaters regularly soak their streets, yards or even their homes. Local governments are planning on more than a foot of sea level rise by 2050, and Miami alone could see high-tide flooding about 150 times a year by then, according to a NOAA analysis.

After years of stiff-arming the issue of climate change, South Florida real estate professionals have finally begun talking to buyers about their concerns with the rising sea and flooding, according to Jalil. “Folks that are looking to relocate to South Florida have more questions [about sea level rise and flooding] than the local people.”

Realtors suggest flood insurance, technology to keep floodwaters out and above all – looking for a home on high ground. The concept of “flood-safe” neighborhoods for ownership is a fraught one, but five Miami-Dade Realtors, insurance and flooding experts interviewed by the Miami Herald recommend these strategies for choosing a home.

Location, location, location

For most buyers, budget determines neighborhood. When they factor in commuting time, schools, places of worship and proximity to family, options narrow considerably. Adding heightened elevation shortens the list further.

From a climate standpoint, environmental consultant Albert Slap said he doesn’t consider any neighborhood in South Florida a universally “bad” or “good” place to buy a home.

“It’s not about doom and gloom, it’s about what is right for a particular family, company, whatever,” said Slap, president of Coastal Risk Consulting. A buyer’s appetite for buying a house in a flood-prone area can depend on multiple variables: how long he or she plans to live there, whether they can afford flood insurance or if they have a safety net to fall back on if a hurricane or flood destroys the home.

“Is this someone who is investing all of their equity into this home? Or is this someone who doesn’t care?” Slap said. “You see celebrities on Star Island spending $20 million on properties that aren’t going to last 30 years; they just aren’t. There’s a lot of people in Miami and South Florida who have got so much money they just don’t care.”

Part of that calculation is deciding how much flooding you’re willing to tolerate, even outside of your property line. While a home can be elevated and safe from floods, nearby roads could be swamped in a strong rainstorm. Or the local soccer field could go soggy in a king tide.

As Slap puts it, “You don’t wanna buy a castle with a moat around it.”

On a map, Miami-Dade is bordered by blue – indicating water – to the east and south. When sea rise is factored in, the blue invades, surging the banks of rivers and canals, pushing the shoreline inland and even seeping in from the Everglades side.

A review of two popular climate change mapping services – Climate Central’s Surging Seas and First Street Foundation’s Flood Factor – reveals a few areas of high elevation. Most of it is clustered around the coastal ridge, a spine of higher ground that cuts through the center of the county. It’s where Henry Flagler built his railroad, and in many places, it’s about a dozen feet above sea level, far above the county average of seven feet.

Based on those maps and market trends, a panel of two local Realtors and an insurance expert created a list of neighborhoods they would recommend to clients. Allapattah, Coral Gables, Homestead, Pinecrest, South Miami and Wynwood were tops. The panel included Jalil, Keyes Company CEO Mike Pappas and JAG Insurance Group Partner Luis Gazitua.

Some activists and residents warn that as the tide turns on what kind of land is most desired, it could lead to a phenomenon called climate gentrification that pushes up values beyond the means of lower-income residents.

For buyers on a budget, Homestead should be “ground zero,” Pappas said. “The best value is Homestead,” he said, highlighting how buyers can still find fincas, or ranches, and relatively large homes compared to other neighborhoods on the list.

First-time home buyers already know the city. Homestead ZIP code 33033 had the most single-family home sales below $400,000 from the first quarter through the third quarters of 2020, according to data provided by the Miami Association of Realtors.

Prices in Homestead typically fall 29% below the county’s median sales price for a house of $450,000, according to the latest Miami Association of Realtors sales report. As of May 2021, the median sales price of a house in Homestead was $350,000, according to Multiple Listing Service sales data.

“Homestead is very good,” Jalil said, “because you have a balance of non-flood areas combined with well-priced homes.”

Allapattah is an even bigger bargain, with sales prices 32% below the county median, at $340,000 according to Realtor.com.

Buyers with more generous budgets may opt for Coral Gables, Pinecrest or South Miami, Pappas said. Average prices are much higher, with a median sales price of $1.1 million in Coral Gables, $1.4 million in Pinecrest and $884,000 in South Miami, according to MLS sales data from April 2021.

Most climate change experts see Miami-Dade real estate as a declining proposition. But that risk doesn’t kick in for most properties for a while.

Only a small fraction of South Florida properties are at risk from serious, permanent inundation in the next 30 years. Flood Factor’s Flood Risk Explorer Miami map shows that by 2051, 8,045 buildings have a 20% chance of flooding. Of those buildings, 60% face a chance of seeing one to four feet of flooding, which could be devastating.

While there’s uncertainly over the timing, current models from international climate scientists and local experts show the problem is forecast to get worse. At six feet, the amount expected by the end of the century, there’s very little dry land left.

“I would be very cautious about purchasing property in South Florida because of sea level rise,” said Kristina Dahl, a senior climate scientist from the Union of Concerned Scientists. “That said, that hasn’t slowed the real estate scene down in South Florida.”

Buyers and Realtors don’t see an issue. Sales and property values have continued to skyrocket over the past year, rising to an all-time median high of $490,000.

Still, one Harvard study found that single-family homeowners are starting to pay more for high elevation properties in Miami-Dade, a sign that those homes are becoming more valuable. Another study from Columbia University suggests the threat of flooding is holding down coastal home prices from rising as high as they could.

A recent Realtor.com study showed that between 2014 and 2019, sales price per square foot grew about 52% for Miami-Dade single-family homes, condominiums and townhomes at low risk of flooding. Homes with the highest flood risk, researchers found, only grew 5% in value over that same time frame – the most dramatic disparity of the 78 counties included in the study.

Danielle Hale, chief economist for Realtor.com, said the company recently introduced data on flood risk for every parcel on the site through a partnership with Flood Factor because buyers were asking for more information on flood risk.

“It’s important for home buyers to be aware of that among all the other things,” she said. “Especially in an area like Miami where you have lots of properties that are more obviously at risk because they’re close to waterfront.”

Still, Realtors say they receive few questions regarding flooding during the home shopping process.

“People are more interested in having impact windows and protection against hurricanes, said the Miami Realtors Association’s Wollmann. “The last buyer that brought up flooding was from Boston and it was five years ago.”

The top three concerns for buyers – and local Realtors – include first-time homebuyer assistance programs, condominium homeowner’s association issues and condominium financing, according to a Miami Association of Realtors 2021 Advocacy Survey, which surveyed nearly 1,200 members. Resiliency ranked 14th out of 20 concerns.

“Years ago you never heard these questions,” Pappas said. “People are more educated and concerned, but we don’t see it being a limiting factor.”

Insight on flood insurance

Flood insurance is a must, said Gazitua of JAG Insurance Group, and should not be confused with homeowner’s insurance, which covers water damage and leaks due to hurricanes but not sea level rise or flooding.

“You would be surprised that some areas that are not in flood zones have flooding issues,” Gazitua said. “The assumption is that the farther you are from the ocean, the safer you are from flooding, but the truth is that there are some pockets in neighborhoods that flood due to [issues with] drainage systems, it’s raining more or the area is nearby a lake.”

Buyers can get flood insurance estimates for homes with the help of a Realtor during the search process, said Jennifer Wollmann, 2021 Chairman of the Board Miami Association of Realtors and Realtor-Associate with Berkshire Hathaway HomeServices EWM Realty.

Generally, that estimate comes from insurance brokers, but recently the Miami Association of Realtors partnered with CartoFront to allow its members access to automatically generated flood insurance estimates on any home in South Florida. The service shows estimates for flood insurance through the National Flood Insurance Program, run by FEMA, and private flood insurance companies for any property in Miami-Dade through the realtor’s private site, the Multiple Listing Services.

“Realtors have had contracts pulled because buyers later say that the flood insurance is higher than they expected,” said Luis Gazitua, partner at JAG Insurance Group.

Flood insurance rates for new property owners are set to rise in October, but Gazitua said sellers can transfer their policies to the buyers to keep prices lower.

“If you are getting a 30-year mortgage on the beach, let’s say you are paying $3,500 per year on flood insurance, you can transfer that to the buyer,” he said. “Not a lot of people know that you could inherit the policy. It is the only policy that could be transferable. The only thing that would change is the name on the policy.”

© 2021 Miami Herald. Distributed by Tribune Content Agency, LLC.

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How Tight Is Inventory? 1 in 4 Listings is New Construction

Except for sky-high material prices, it’s a good time to be in the home construction industry. Of homes available to buyers today, one in four (25.7%) is brand new.

SEATTLE – It’s a good time to work in a new-home niche as it becomes more attractive to home shoppers. The number of existing homes for sale has dropped to historic lows, but builders keep ramping up production.

More than a quarter (25.7%) of single-family homes listed for sale in the first quarter were new-construction homes, according to a national analysis of real estate data from Redfin.

“Building homes has become more attractive and profitable during the pandemic due to record-low mortgage rates and red-hot homebuyer demand,” says Taylor Marr, Redfin’s lead economist. “At the same time, many homeowners have opted to stay put and refinance or remodel their existing homes instead of selling them, allowing new-construction homes to take up a larger portion of the market.”

Single-family housing starts jumped 41% in March compared to a year earlier, according to the U.S. Census Bureau data. At the same time, the number of existing homes listed for sale fell about 28% in March year-to-year, according to the National Association of Realtors®, though March 2020 was also the month the pandemic started to impact the national economy.

While it takes longer to move into a newly built home, it also provides a benefit to some buyers as bidding wars become commonplace in the existing-home market and they usually encounter less competition in the new-home market.

However, that may be changing. Ryan Aycock, a Redfin market manager in Salt Lake City, says newly built homes in his area have waitlists 90 buyers deep.

New-home prices are rising too. The increase in lumber prices over the past year has added $35,872 to the price of an average new single-family home, according to new housing data from the National Association of Home Builders. The median sales price of a newly built home in March was $330,800.

Source: “Newly Built Homes Make Up 26% of All Single-Family Homes for Sale – A Record High,” Redfin (April 30, 2021)

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Expanding Economy Makes Foreclosure Wave Less Likely

Two-thirds of homeowners in forbearance have already started making monthly payments – and March had the best single-month improvement in delinquencies in 11 years.

SAN FRANCISCO – Many homeowners granted forbearance on their mortgage payments during the pandemic will reach their 18-month program eligibility limit at the end of September.

However, two-thirds of the 7.1 million homeowners granted forbearance during the pandemic have already left forbearance, with most of this “bellwether” group either resuming their monthly loan payments or paying them off.

Black Knight classified about 160,000 homeowners who had exited forbearance as being at “high risk” of foreclosure as of April 20 because they’re not enrolled in a loss mitigation plan and remain delinquent.

“Bellwether forbearances – homeowners who entered into forbearance early in the pandemic and who will determine the impact of the initial wave of 18-month expirations – have made up a significant share of the improvement, a good sign for the overall recovery,” concludes Black Knight’s latest Mortgage Monitor report.

The number of foreclosure starts was up 28% in March to 5,000, but the total number of homes in foreclosure fell to another record low, 162,329, as forbearance programs and foreclosure moratoriums continue to provide protection for homeowners.

“Not only did March see the largest single-month improvement in delinquencies in 11 years, but all indications suggest more is yet to come,” says Black Knight’s Ben Graboske.

As of April 23, 91.6% of mortgage holders were current on their monthly payments, up from 91% in March – and the largest share for any month during the pandemic.

Source: Inman (05/03/21) Carter, Matt

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New York City to Fla. Relocations: Flight or Hype?

Florida Realtors economist: Florida’s population benefited from residents leaving New York City, but other states experienced gains too – some with triple-digit increases. With Fla. migration, residents of NYC’s Manhattan flocked in the highest numbers.

ORLANDO, Fla – Are New Yorkers, specifically those from the city, coming to Florida? Yes!

Are all New York City residents fleeing to the Sunshine State? No. Florida had a significant increase in movers from NYC in 2020, but many states benefitted from the area’s out-migration.

Although definitive migration data, such as information tracked by the U.S. Census Bureau, is not yet available for 2020, change-of-address filings from the United States Postal Service (USPS) provide insight into the patterns expected once that data comes out.

Before diving into the data, a few nuances should be noted: Permanent residential change-of-address filings (combining both individual and family) are not a perfect measure of people moving. First, individuals filing represent one mover, but the number of people associated with one family filing cannot be determined. Additionally, duplicate filings could occur (such as a family with different last names at the same address), or a mover may not submit a filing with the USPS at all.

Migration patterns for most of the U.S. were remarkably similar in 2020 to those of both 2018 and 2019. However, a few densely populated cities experienced a dramatic change of filings compared to prior years. According to USPS permanent filings, the number of individuals and families leaving New York City for a new state to call home jumped 47% from 2019 to 2020.

To add perspective in “people terms,” that’s an additional 58,000 individuals and 11,000 families leaving the Big Apple!

Yet while the number of permanent change-of-address filings by New York City residents leaving for other states increased in 2020, there was little change in which destination states they chose. For instance, Florida’s share of NYC movers in 2020 was 12.2% compared to 12.7% in 2019 and 12.4% in 2018. Two states that deviated from their typical apportionment were Connecticut with 7.6% (5.6% in 2019) and California with 9.3% (11.5% in 2019).

While state shares remained steady, the total number of New York City movers to Florida still increased roughly 41%. Some states (those nearby like Vermont, New Hampshire, Maine and Connecticut) saw triple-digit gains in the number of movers.

Out of New York City’s five boroughs, Manhattan had the largest increase (71%) in out-of-state permanent change-of-address filings in 2020. There were over 9,500 filings by Manhattanites moving to Florida in 2020, a staggering 81% increase from 2019.

Where specifically are these wealthy Manhattanites migrating in the Sunshine State? For the most part, they’re moving to the same places they always have, just in greater numbers.

Headlines circulating in newspapers focus on a flock of wealth to Miami, and it’s true that South Florida continued to charm the most Manhattanites to its sunny shores. Miami-Dade, Palm Beach and Broward counties raked in an additional 2,710 residential filings in 2020. On the whole, Florida saw an increase of approximately 4,300, so South Florida accounts for over half of the state’s gain.

In percentage terms, though, most counties throughout the state saw significant increases in relocations from Manhattan in 2020. Some of the largest increases occurred in coastal counties with ample amounts of low-density luxury development, particularly in Southwest Florida and along much of the Atlantic coast from Jacksonville down to the South Florida metro area.

The Florida Keys saw the largest increase, however, with address changes from Manhattan to Monroe County increasing by 208% from 2019 to 2020.

These figures suggest that affluent Manhattanites are making a significant impact in Florida’s luxury home market – and Florida Realtors® is seeing it in the housing market data.

The association’s year-end statistics revealed that over 16,000 Florida homes sold for at least $1 million in 2020 – a 46% increase from 2019. It’s likely that many of these additional buyers came from Manhattan, including many second or vacation homebuyers who did not permanently relocate to Florida (yet, at least).

The biggest winner of the exodus from New York City depends on how you look at the data. Some states had larger volume increases from 2019, while others saw greater percentage growth. But it’s evident Florida’s real estate market, primarily in the luxury segment, benefited from increased migration out of the Big Apple in 2020.

As vaccine distribution continues through 2021, we’ll see if the pull to leave the city is as strong in 2021 and what slice of the pie Florida can attract.

Erica Plemmons is a Florida Realtors economist and Director of Housing Statistics

© 2021 Florida Realtors®

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Fla. Host of ‘Zombie House Flipping’ Can’t Find Homes to Flip

Justin Stamper says he’s digging through court cases to find flippable homes, but even those owners say, “‘Get off my phone! You’re the 26th person to call me today!’”

ORLANDO, Fla. – Justin Stamper, star of the “Zombie House Flipping” TV show, says finding places to renovate and sell in Orlando has become so hard that he sometimes has to dig through court cases in search of properties.

“I’ll get word through an attorney about a probate case, call the [homeowner] that day, and they respond, ‘Get off my phone! You’re the 26th person to call me today!’” said Stamper, 31, currently filming the fourth season of his show on A&E.

“We’re back to our grassroots,” he said. “We’re literally knocking on doors [for leads] in some cases.”

Soaring home prices and a shortage of inventory in Central Florida and across the nation is wreaking havoc on house flippers and wholesalers, people who make their living buying places at a bargain and fixing them up or selling them to other investors.

“We have investors calling us nonstop,” said Tammy Kerr of Sand Dollar Realty Group. “Unfortunately, we have way more buyers than houses to sell them.”

In metro Orlando, the median home price rose more than $30,000 from March 2020 to March of this year, according to the Orlando Regional Realtor Association (ORRA). Over the same year, inventory dropped to fewer than 3,000 housing units for sale in the region. Stick to just single-family homes and that number drops below 2,000, just three weeks’ worth of inventory.

That has meant there are fewer possible investment homes available. In the Orlando-Kissimmee-Sanford metro, a total of 3,219 homes were flipped, a drop of 8.7%, according to Attom Data Solutions, which analyzes the U.S. real estate market. Home-flipping activity around the country declined for the first time in six years.

The inventory crunch has hurt more than just investors, said Foster Algier, a real estate agent and owner of First Alliance Capital in Orlando.

“Say you sell even 3,000 houses in a month,” he said. “There are thousands of real estate agents in Orlando not getting a paycheck that month.” ORRA has 19,000 member Realtors, and they don’t account for every real estate agent in the area.

Algier points to low-interest rates as one of the main drivers of the housing shortage, with 30-year mortgage rates falling to less than 3% last year. “When money gets cheap, home prices go up,” he said.

Stamper said part of the problem stems from people who see real estate investment as a quick way to make money.

“There is such a low barrier of entry,” he said. “All you have to do is go on YouTube and there’s a million videos on how to wholesale.”

Algier also pointed to a glut of buyers and investors as reducing options.

“We’re paying more because we’re competing against buyers who will buy anything,” he said.

Kerr, who has worked in Orlando real estate for 20 years, said one advantage to the current market: flippers don’t have to do much work fixing up houses they sell. “People are buying up anything, they don’t care,” she said. “They’ll do the work for you.”

House flipping did continue to turn a profit for the people who were lucky enough to get properties to sell. In the Orlando area, Attom reports that the median profit from a flipped property rose to $54,500 in 2020, reflecting an 8% year-over-year increase in the return-on-investment ratio.

“Home flipping remained a good investment in 2020, while resale values rose and raw profits hit a highwater mark not seen since at least 2005,” said Attom’s chief product officer Todd Teta in an email.

Still, the lack of inventory makes finding properties a real challenge. Stamper, a lifelong Orlando resident, continues to hunt for houses in his hometown for his show. But with his business, Blueprint Real Estate Group, he’s been expanding his vision.

“I’ve started buying a lot more houses in the Tampa Bay area, to be honest,” he said.

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Now Available: Landlord Applications for $850M in Rent Relief

Landlords can now apply for money to recoup lost rent. DCF debuted a website, OurFlorida.com, last week and started offering applications Monday. Landlords receive payments directly, but both landlords and tenants can apply for help.

ORLANDO, Fla. – Florida’s Department of Children and Families (DCF) now accepts applications from landlords and tenants, as well as utility providers, for past-due payments on a website created specifically for distribution of $850 million in federal recovery funds.

DCF announced the debut of a new website last week – OURFlorida.com (Opportunity for Utilities and Rental Assistance) – and the applications for funds went live on Monday. In addition to the application, DCF designed OurFlorida.com as a central hub for information, frequently asked questions (FAQs), auxiliary help and tools that can help spread the word about the program, though the latter has not yet gone live.

The site encourages landlords to apply, but tenants may also submit an aid application. If a tenant does apply and qualifies, DCF says the money will go directly to the landlord, either as a direct deposit or mailed check. The program requires proof of identity and financial information, and landlords are advised to work with tenants to secure the information needed.

An eligible household can receive up to $2,000 per month, which includes rent and utilities. A household’s maximum payment via the program is $15,000. If a tenant is in default for an amount greater than $15,000, landlords can still apply to receive that maximum amount.

For more information, visit the FAQ page of the website. Some answers of specific interest to landlords include:

Can I file an application on behalf of my tenant?

The application can be submitted by either a landlord or eligible tenant. The landlord’s and tenant’s identity must be established as a condition of eligibility. A renter must sign the application for assistance attesting that all information is correct. Required documentation may be submitted by the landlord on behalf of the renter, to the extent feasible.

How is assistance calculated?

DCF will look at a current lease – signed by the applicant and the landlord or sublessor – that identifies the unit and the rental payment amount where possible. Fees included in the lease, (separately identified or included in an overall rent payment), such as pet fees or garbage fees, are eligible for assistance.

DCF also has options for landlords without a signed lease.

The amount of late payments must be documented by a notice of late rent, a notice of eviction, eviction court filing information, or a signed attestation by the landlord.

All payments for utilities and home energy costs must be supported by a bill in the name of the tenant reflecting the address for each qualifying utility for a period after April 1, 2020. Utilities and home energy costs covered by the landlord are treated as rent. Arrearages owed in the name of the primary applicant for expenses after April 1, 2020 on a different property may be included. Telephone, cable, and internet are not considered utilities.

How do I apply?

Renters need:

  • Identification, such as driver’s license, birth certificate or passport.
  • Current lease agreement or other proof of rental arrangements, such as receipts, bank records or canceled checks that show a pattern of rent payments.
  • Documentation of annual income, such as 2020 tax filings, a W-2 or 1099 from their employer, or other proof of income; or documentation of monthly income, such as pay stubs, bank statements, income certification for housing subsidy, or other proof of income.
  • If they qualify for SNAP, TANF, Medicaid, subsidized housing or low-income housing, proof of eligibility documents.
  • Documentation of unemployment benefits or proof of reduction in household income or proof of increased costs (medical expenses, child care, transportation) due to the COVID-19 Public Health Emergency.
  • Notice of past due rent, lease termination or eviction, or condemnation order or failed inspection report from local government.

Landlords need:

  • Identification, such as a driver’s license, birth certificate or passport.
  • Verification of a property ownership or property management agreement executed with the owner.
  • Bank deposit information.
  • Notice of late rent, a notice of eviction, an eviction court filing.

To qualify, renters must:

  • Rent a home, apartment or other residential dwelling in Florida.
  • Earn an income at or below 80% of the area’s median income (AMI).
  • Have qualified for unemployment, experienced a loss of income, incurred significant costs or faced financial hardships due to the COVID-19 Public Health Emergency.
  • Are at risk of losing their home, experiencing housing instability or living in unsafe or unhealthy conditions.

What happens after an application is submitted?

A landlord may help a tenant complete an application, but the tenant must sign it. OUR Florida Program will then review the information to determine if additional information is required and verify the information. If the applicant is eligible for relief, the payment will be calculated. Once completed, the applicant will receive notification of eligibility, and payments will be made directly to the business, landlord and/or utility provider.

© 2021 Florida Realtors®

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NAR Counters Proposal Limiting 1031-Exchanges to $500K

Under Pres. Biden’s proposal, 1031 like-kind exchanges only defer $500K from taxation. NAR says not to panic, though. There’s time before any decisions are made.

WASHINGTON – President Joe Biden’s recent tax proposal includes a $500,000 limit on the amount of deferred gain from Section 1031 like-kind exchanges.

If the proposal becomes part of the official package that moves through Congress, it could present adverse consequences for communities and their economic development, according to Evan Liddiard, director of federal taxation for the National Association of Realtors® (NAR). Liddiard spoke during the Commercial Federal Policy Meeting at the virtual 2021 Realtors Legislative Meetings on Thursday.

Section 1031 allows investors to defer paying capital gains taxes on the exchange of one investment property if it’s replaced for another property of “like kind.”

Biden originally proposed during his campaign to do away with Section 1031 like-kind exchanges.

“We’ve been watching this for months now,” said Liddiard. “We’re not panicking, because we still have a long way to go before the proposal moves anywhere.” That said, NAR and other members of the Real Estate Like-Kind Coalition are redoubling their efforts to inform members of Congress about the mistake that would result from limiting like-kind exchanges. The organizations have already “had many discussions about the issue with members of Congress, especially on the Ways and Means Committee and the Finance Committee,” he added.

“We keep telling them that most 1031 deals are for mom and pops,” Liddiard said. “Their reaction has been, ‘Then we’ll limit them to $500,000.’ They think that’s going to be the answer. But it’s the big deals – the ones over that amount and many more times that amount – that have the potential to create the most jobs and do the most transformational work in cities and communities.”

The prospect that this move could lead to more draconian changes also concerns Liddiard.

“There’s always the ‘camel’s nose under the tent’ idea,” he said. “They put a $500,000 cap on it this year. Next year they come back and lower it again. Then finally they take it away altogether.”

In addition to meeting with representatives and senators, NAR is requesting examples from members about the benefits of 1031s, Liddiard said.

“We’re even creating an electronic input sheet on our website so that people can identify a 1031 they think should be highlighted as an example that can change a neighborhood or a community – create jobs and growth. We’ll take the examples to Congress to fight the myths surrounding 1031s and show why 1031s need to be preserved and celebrated.”

Source: National Association of Realtors® (NAR)

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Big RE Question: Will Workers Return to Offices?

NEW YORK – A growing number of states are lifting business constraints as the numbers of Americans vaccinated against COVID-19 continues to rise, leading people to shop, dine out and travel.

But the revival of one activity has been agonizingly slow: Working from the office.

The number of employee office visits in 10 large cities reached 26.1% of the pre-pandemic level the week ending April 21, according to Kastle Systems, the largest provider of technology that tracks such data through swipes of keycards and other devices. While Dallas and other Texas metro areas have solidly topped that average, cities such as San Francisco and New York have lagged.

The 10-city average is up from 22.9% in mid-January but has bounced around in the low- to mid-20s since last June, rising as much of the economy reopened last summer and dipping during events such as the winter storm that battered much of the country, particularly Texas, in mid-February.

“While the return to office is picking up slowly, we have not seen meaningful movement yet,” says Kastle Chairman Mark Ein. “It’s a very low number.”

Higher office occupancy is critical for the survival of downtown restaurants, shops and other businesses that rely heavily on purchases by office workers. Many outlets have permanently closed during the health crisis as central business districts turned into ghost towns. Office building owners are hoping for a comeback to minimize bankruptcies in that industry.

The outlook should brighten in coming weeks, Ein says, as a growing portion of the working age population gets their COVID-19 shots. President Joe Biden told states to make every adult eligible for a vaccine by April 19. By early June, most workers should be vaccinated and many could be back at their offices by July, at least some of the time, Ein says.

So far, 68.4% of people 65 and over – who typically are retired and not working in offices – have been fully vaccinated, compared with 30% of the total population, according to the Centers for Disease Control and Prevention.

“We think you’re going to see many more people coming to the office in the summer,” Ein says.

Another hurdle for America’s return to the office is that many companies and their workers have said they’re satisfied with remote work, believing it has improved productivity.

Paul Leonard, managing consultant at CoStar, a commercial real estate research firm, thinks office visits may remain depressed over the summer but should reach at least 50% after Labor Day and 80% by the end of the year. A Gartner survey of HR leaders at 130 companies in December found 90% plan to let employees work remotely at least some of the time even after much of the population is vaccinated.

Leonard reckons 10% of the workforce will work from home all the time, a third of the remainder will return to the office five days a week and two-thirds will let workers split time between the home and office. Based on those assumptions, 34% of the workforce would be remote on any given day.

Since Kastle’s systems track office visits rather than individual workers, a company that lets employees work at home two days a week would record visits that are 60% of their pre-pandemic level.

Lone Star State leads

Texas metro areas have well exceeded the 10-city average of 26.1%, with Dallas, Houston and Austin at 41.2%, 39.3% and 38.8%, respectively. The cities rely mostly on cars, rather than mass transit, where COVID-19 is easily spread, to get people to work, Ein and Leonard say.

Also, they say, the state lifted restrictions on shops and restaurants earlier and more aggressively than other states, an approach that combined with Texas’s more libertarian culture may have affected the views of professional service firms. Many office districts in Texas are also located in less dense suburban areas that are deemed less contagion-prone than urban cores.

“In Texas, there’s a little more risk and less concern about the virus,” says Stephen LaMure, CEO of Dominus Commercial, a Dallas commercial real estate firm, adding that most tenants in the buildings it handles have returned to the office.

Lisa Hall, CEO of Bene-Marc, a Fort Worth-based insurance firm for sporting events, says she asked her eight employees to come back to the office April 18 after they told her they were comfortable doing so.

A big factor, she says, was “the availability of vaccinations and the ability of anyone that wants to get one” to be inoculated. Also, Hall notes, Texas Gov. Greg Abbott lifted the state’s mask mandate and all capacity limits early last month and COVID-19 cases have been falling.

She says she wanted employees to come back to the office so she could assess their work load and productivity to determine if she needs to hire more workers now that revenue is gradually rising after plunging 80% early in the pandemic.

In Houston, when Masroor Fatany, opened a The Halal Guys franchise in a downtown office district in late January, one or two tables were typically occupied for lunch in the 40-seat eatery. But he has seen a gradual increase in the area’s office workers. Most tables are now filled and sometimes there are lines to order the restaurant’s gyros, falafels and other dishes, he says.

Although the rebound still has a long way to go, “We have turned the corner,” Fatany says.

San Francisco, New York City lag

At the other end of the spectrum, San Francisco and San Jose are at 14.2% and 17.4% of pre-crisis office visits, in part because they’re high-tech hubs where companies and their workers were used to telecommuting even before the health crisis, Ein says.

Other industries are more inclined to return to the office swiftly. Office occupancy among law firms in the 10 cities it tracks is at 39.3%, Kastle data shows. The companies tend to be less tech savvy, they’re more reliant on paper documents, and they have more rigid policies, Ein says.

New York City also lags, at 15.8% of pre-pandemic office visits, in part because it was hit hard by COVID-19 early in the pandemic and has been cautious about reopening, Ein says.

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NAR, Economists, See Bright Path for Commercial RE

Economists predicted commercial real estate’s future at NAR meeting. The office market still has a wild card, but they’re generally bullish about the overall industry.

WASHINGTON – The U.S. economy experienced one of the swiftest declines in history last year, followed by a quick and relatively significant recovery in the second quarter of 2020.

Speakers at the National Association of Realtors® (NAR) Commercial Economic Issues and Trends Forum, part of the 2021 Realtors® Legislative Meetings & Trade Expo, discussed those historic economic shifts while projecting a favorable outlook for the commercial real estate market in the coming year.

Lawrence Yun, NAR chief economist, predicts that considerable capital will be pumped into the economy in 2021’s second quarter, with consumers eager to tap into a year’s worth of savings and unspent stimulus funds.

“Economic expansion and the jobs recovery will lead to rises in occupancy across all commercial real estate property types,” Yun says. “However, overall consumer price inflation is expected to increase 3% by the end of 2021 and likely will stay stubbornly high through next year, which will increase interest rates to 3.5%.”

Hotels, restaurants, theaters and other entities across the entertainment and hospitality industries are expected to benefit from pent-up demand as many cities have eased or altogether ended pandemic-induced restrictions.

While housing helped prop up the economy over the last year, apartments and rental markets have stumbled in the midst of the pandemic. Yun, however, expects them to regain footing as the broader national economy – particularly in urban areas – continues to recover.

“The apartment sector underwent sudden swings in occupancy – down abruptly in the early months of the pandemic and then sharply rebounding in recent months – but we expect vacancy to drop and rents to rise,” Yun says.

Office rents have also declined over the past four quarters, and it is unclear if new leasing of office spaces will take place, even as more workers return to physical work locations. Yun predicts that office vacancies will remain elevated at 16.5% in 2022, while retail vacancies are projected to settle at 11.5%.

“The industrial sector has been the star throughout the pandemic,” Yun adds. “There’s been great demand for industrial space, and reconversion of some disused properties like older shopping malls can help meet this demand.”

On the whole, the pandemic is leading to sweeping changes in the commercial real estate sector, including modifications to vacant hotels/motels. NAR recently released Case Studies on Repurposing Vacant Hotels/Motels into Multifamily Housing, a report that demonstrates the feasibility of such conversions. Often, those adaptations require public funding, such as the Low-Income Housing Tax Credit, the Historic Tax Credit or tax abatement.

John D. Worth, executive vice president for research and investor outreach at the National Association of Real Estate Investment Trusts (NAREIT), also spoke at the forum and provided a positive forecast for commercial real estate’s future.

“Work from home is the most important question facing the future of commercial real estate coming out of COVID-19,” he says. It’s too early to tell what percentage of workers currently at home will eventually return to offices.

Worth noted that commercial valuations are recovering, but that those improvements are occurring unevenly across various property types, with high returns over the COVID-19 period in REIT funds invested in digital real estate, such as cell towers, data centers and logistics facilities, as well as single-family homes, self-storage and timber.

Share prices are being driven by the strong demand for housing, the surge in e-commerce and the rising price of lumber.

“We’re going to go through a period where companies will experiment with how they use office space, but I’m bullish about the outcome of the office space sector after a period of experimentation,” Worth says.

Both Yun and Worth agree that office vacancy rates will remain elevated compared to pre-pandemic levels as hybrid work models become the norm in America.

© 2021 Florida Realtors®

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FHFA May Create New Lending Rules for ‘Condotels’

If a development has a large number of short-term rentals – individually owned units or single-family homes rented out similar to a hotel’s operations (condotel) – what unique lending standards for home sales should apply? FHFA opened a comment period that runs through July 5.

WASHINGTON – The Federal Housing Finance Administration (FHFA) is questioning whether lending standards should be changed for homes destined to be used exclusively as short-term rentals.

The issue impacts loans that Fannie Mae or Freddie Mac (the Enterprises) will eventually buy from lenders. A bank or other lender can make a loan to anyone they wish, but if they hope to keep making loans, they often plan to sell the loan to Fannie or Freddie and use the cash to make even more loans. They’re assured of a Fannie or Freddie purchase at the time of origination, providing they follow the rules established by FHFA for those loans.

FHFA is now looking at those rules as they apply to short-term rental developments.

“There are several attributes of short-term rentals that can increase liability risk, such that the standard unit owner’s insurance policy may be inadequate, resulting in losses that are uninsured, underinsured or improperly insured,” FHFA writes in its request for comments. “Condotels and other transient or resort type projects located in areas with higher exposure to natural disasters increase exposure to inadequate hazard insurance, flood insurance, special assessments and concentration risk. These factors can lead to increased default risk due to loss of rental income both at the project and unit levels.”

FHFA says that Fannie and Freddie’s loan policies for short-term rental projects are similar, but there are some differences. It’s seeking input for various reasons, including whether “these differences might contribute to industry confusion or processing inefficiencies.”

The request for information (RFI) is posted online and includes instructions for responding, including a list of 11 specific questions about any potential changes to short-term rental mortgage loans.

© 2021 Florida Realtors®

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In Mortgage Forbearance? Here’s What You Need to Know

FORT LAUDERDALE, Fla. – Mortgage servicers took their sweet time last spring advising customers affected by the pandemic about their right to hit the pause button on making payments with no documentation required, and no penalty charged to get back on track.

Now that most of those borrowers are preparing to resume making payments, mortgage servicers are again facing criticism for not being straight with their customers about their options for resuming payments when their forbearance period ends.

And that’s potentially troublesome for South Florida and Central Florida, where rates of mortgage borrowers allowed to skip payments through a process called forbearance exceed state and national averages, and are disproportionately high among Black and Hispanic homeowners in low-income neighborhoods.

Because those borrowers typically have less equity to work with, consumer advocates say they will need to take the initiative to work out a payment resumption plan with their mortgage servicers – which include traditional banks and payment processors that aren’t banks. If they’re not satisfied with the answers they get, help is available from volunteer legal aid organizations and federally funded housing counselors.

“This is often very complicated stuff,” said Mike McArdle, assistant director of mortgage markets for the Consumer Financial Protection Bureau (CFPB). “What is a deferral? What is a modification? What are term extensions? It’s important for borrowers to understand what is going on with their loans.”

Kim Henderson, president and CEO of Neighborhood Housing Services of South Florida, one of the area’s federally certified housing counseling providers with offices in Miami and Fort Lauderdale, said her organization hasn’t see an uptick in requests for help yet – probably because the Biden administration extended the forbearance period through Sept. 30 and the foreclosure moratorium through June 30.

“It’s coming, but not yet,” Henderson said. “We’re preparing. It’s one of those things that people won’t worry about until it hits them in the face that the party’s over.” When that happens, she says, her organization and numerous others will be ready to help, she said.

Complaints about mortgage servicers increasing

In a report released this week, the Consumer Financial Protection Bureau said in March it received the largest number of consumer complaints about mortgages since April 2018. Complaints mentioning forbearance or related terms reached their highest monthly average since March and April of 2020, when consumers seeking forbearance protection made available for borrowers of federally backed loans first began complaining about getting inaccurate information from their mortgage servicers. The report did not identify subjects of the most recent complaints.

Andrea Bopp Stark, an attorney at the nonprofit National Consumer Law Center, says some mortgage servicers are again providing confusing and contradictory information about borrowers’ options for resuming payments on federally backed loans. Some servicers of private market loans not subject to federal requirements are requiring borrowers to pay back missed payments in a lump sum or make monthly payments over a couple of years, she said.

While bound by the foreclosure moratorium, private-market lenders are not required to provide any affordable post-forbearance options, Stark said. She’s aware of one consumer who had to borrow $30,000 to get current and another who had to dip into his retirement account.

Meanwhile, some servicers of Federal Housing Administration (FHA) loans aren’t properly offering to defer missed payments to the end of the loans or offering modifications that could lower borrowers’ monthly payments if they can’t afford to pay the pre-pandemic amount, she said.

The opportunity for the roughly 70% of borrowers with federally backed loans to suspend mortgage payments for up to a year was part of the first pandemic relief act passed by Congress and the president last March. In February, it was extended through September by the entities that control the loans, including Fannie Mae, Freddie Mac, the Department of Agriculture, the Federal Housing Administration and the Department of Housing and Urban Development.

During the national shutdown last spring, financially devastated Americans took advantage of the unprecedented opportunity. An estimated 6.5 million home loan borrowers have missed at least one payment since March, according to the Mortgage Bankers Association. By July, about 8.5% of U.S. borrowers were in forbearance programs.

More borrowers behind on payments in Central and South Florida

In South Florida and Central Florida, however, the percentage of homeowners in forbearance programs far exceeded the national rate.

Here, rates peaked in June, according to data collected by Black Knight, a Jacksonville-based financial data provider. Rates peaked in South Florida at 18.9% in Broward County, 22.1% in Miami-Dade County and 15.3% in Palm Beach County. In Central Florida, rates peaked at 20% in Osceola County, 15.1% in Orange County, 10.1% in Seminole County and 11.5% in Lake County.

The highest percentages of homeowners in forbearance were in ZIP codes with large numbers of Black and Hispanic borrowers. In Broward County’s 33068 zip code, which includes parts of North Lauderdale, Tamarac and Margate, 24.5% of borrowers were in forbearance in June while another 5.6% not in forbearance were more than 30 days past due on their payments. The ZIP code is 86.5% Hispanic and/or non-white and 62.9% low- to moderate income.

In Osceola County’s 34758 ZIP code near Kissimmee, the forbearance rate reached 23.8% in June. The ZIP code is 85.3% Hispanic and/or non-white and 57.6% low- to moderate income. Another 4.6% not in forbearance programs were more than 30 days past due.

Forbearance and delinquency rates have gradually fallen since the economy began to reopen last summer. By January, the most recent month for which data was available, 5.6% of borrowers in the U.S. were still behind on their payments. In Florida, the rate was 6.9%. But rates remained comparatively high in the tri-county metro area at 9.1% and 7.4% in the Orlando region, according to CoreLogic, a consumer information service based in Irvine, California.

Consumer protection bureau is watching

Federal authorities said they plan to look closely at how mortgage servicers manage their communications with borrowers with limited English proficiency.

In March, consumers reported experiencing communications issues about their forbearance plans and options available at the end of the forbearance periods, the report said. Some reported long delays in getting loan modifications to help them lower their monthly payments.

The bureau released its report about a month after issuing a bulletin warning mortgage servicers “to begin taking appropriate steps now to avoid a wave of avoidable foreclosures once borrowers begin exiting COVID-19 forbearance plans later this fall.” Mortgage servicers, the bulletin said, are expected to prepare for the anticipated increase in loans exiting forbearance programs as well as applications for relief from borrowers who are delinquent but not in a forbearance program.

It warned that the bureau would closely monitor mortgage servicers’ compliance with requirements to contact borrowers before their forbearance periods expire to give them time to apply for help, work with them to make sure they have all necessary documentation to obtain help, promptly respond to inquiries, and evaluate income fairly.

Also, the bureau said it will look carefully at how mortgage servicers manage communications with borrowers with limited English proficiency.

Options for borrowers of federally backed loans

About 70% of all borrowers have home loans backed by one of the federal entities. Those borrowers must be given a series of options appropriate to their financial situation. While details may differ depending on which entity backs the loan, borrowers generally will be asked if they can step up to one of these options:

Stark said borrowers planning to exit forbearance, as well as those not in forbearance who have missed payments, need to take the initiative now – before the federal foreclosure moratorium expires on June 30 – to contact their mortgage servicers and inquire about their options.

With more than 2 million borrowers still in forbearance and planning to exit, mortgage servicers probably aren’t purposely spreading bad information, Stark said. “I think they’re bombarded and overwhelmed with the amount of forbearance and post-forbearance options. There are probably hundreds of thousands coming off forbearance every week.”

Borrowers who are among the 30% whose loans are privately backed and not federally backed should seek help from a housing counselor certified by the U.S. Department of Housing and Urban Development, a local legal aid department, or a private attorney if their servicer refuses to respond or provide affordable options, she said.

Henderson, of Neighborhood Housing Services of South Florida, said she expects further federal help to be announced to help delinquent borrowers avoid foreclosure. If none materializes, “then it boils down to good old fashioned self-advocacy and negotiation,” she said.

But borrowers won’t have to go it alone. “We can be a third party. Borrowers can sign a paper to give us the ability to speak on their behalf. We can be on the phone when they call their servicer. We can negotiate for them, or with them, and help walk them through their options.”

Where to find help

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Experts: COVID-19 Sufferers Can Develop Psychotic Symptoms

NEW YORK – If you or someone you know may be struggling with suicidal thoughts, you can call the U.S. National Suicide Prevention Lifeline at 800-273-TALK (8255) any time day or night or chat online.

Ben Price always was the biggest presence in any room. Loud and funny, his smile was captivating, said his wife, Jennifer.

The couple owned a small business and two farms in an Illinois suburb west of Chicago, where they lived with their two teenage children. She said her husband was the hardest-working man she had ever met.

“He was the epitome of unconditional love and loved his kids with all his heart,” she said.

Price tells herself it wasn’t her husband who died by suicide on one of their farms the morning of Feb. 28. She said she believes he was taken over by what some health care professionals call “COVID psychosis.” The thought keeps the grief from swallowing her whole.

“It was shocking and devastating and so completely out of his character,” she said.

Neurological and psychiatric experts see more reports of COVID-19 sufferers developing psychotic symptoms, even when they have no history of mental illness. Though rare, the condition can be severe enough to require hospitalization.

Symptoms may include hallucinations, unusual agitation, restlessness, preoccupation, paranoid beliefs, decreased need for sleep and impulsive behavior, said Jonathan Alpert, a professor of psychiatry, neuroscience and pediatrics at Montefiore Medical Center and Albert Einstein College of Medicine in New York City.

Alpert did not treat Ben Price, who was never officially diagnosed with a COVID-19-related neurological condition before his death. But he recognizes the signs and urges people to seek immediate medical attention if they think someone is beginning to show symptoms of COVID-19 psychosis.

“When people are psychotic, they aren’t in touch with reality and may do things that harm themselves and other things that are very dangerous,” he said. “It looks like COVID-19 has a somewhat higher risk of causing it than other viral infections that we’ve seen.”

Price, 48, came down with COVID-19 two weeks before his death. When his oxygen levels were low, he was taken to a hospital and received treatments including steroids, antiviral medication and an antibody infusion, his wife said.

The COVID-19 unit was anxiety-inducing, Jennifer Price said, but her husband didn’t show signs of psychosis until he was home from the hospital. His anxiousness and paranoia skyrocketed, she said, and he became obsessed with working on the farm even though in February, there was no work to be done. He went from being boisterous and animated to subdued and “child-like.” After days of trying alone to help him, Price took him to a primary care doctor who prescribed him anxiety medication.

“It just wasn’t working. He was pacing and upset and worried,” Price said. “I was watching my daughter watch him and being worried … she saw it was not her dad.”

Although data is scarce, experts said “COVID psychosis” may be caused by brain inflammation triggered by the body’s immune response to the virus, Alpert said. Other contributing factors may include the side effects of high-dose steroids, low oxygen levels or the emotional trauma of being severely ill. Some COVID-19 patients suffer from small strokes that could lead to psychiatric disorders, he said.

A first episode of psychosis normally occurs in late adolescence or early adulthood, Alpert said. However, a study he co-wrote in November featured a 49-year-old man and 34-year-old woman who had COVID-19 and no history of mental illness.

After going public with her story, Price said she’s heard from dozens of families who fear their loved ones were or are suffering from the same condition.

“You can’t imagine the stories, the devastation and the things that people are doing out of character – thriving, wonderful people with zero prior (mental health) history,” she said. “It’s happening more than we realize.”

A study involving more than 230,000 COVID-19 survivors, which was published April 6 in The Lancet Psychiatry, found .4%, or nearly 1,000, had developed a psychotic disorder.

“There’s probably over 50-plus individual case reports where people are describing very specific instances of psychosis in the setting of someone having COVID-19,” said Colin Smith, a resident physician in internal medicine-psychiatry at Duke Medical Center, who co-wrote a case report studying COVID-19 psychosis.

Patients with temporary or permanent psychosis are at an increased risk of suicidality, said Mason Chacko, clinical assistant professor of psychiatry at Stony Brook University Hospital, who wrote a case report that detailed a patient who developed COVID-19-associated psychosis and died by suicide.

“Depression psychosis, being internally preoccupied or hearing voices or thoughts of self-harm could be triggers as well,” he said.

If she had known about COVID-19-induced psychosis, Jennifer Price said, she would have been better prepared to help her husband. That’s why she’s petitioning for the Biden administration to add a neurology expert to the White House Coronavirus Task Force.

Alpert agrees more focus should be placed on the possible mental health and neurological outcomes of COVID-19.

“Society itself, whether people have COVID or not, are experiencing significant mental health impacts,” he said. “Any COVID task force that doesn’t have mental health or neurological expertise on it is not really a full task force.”

The medical community is just learning about the possible psychotic manifestations associated with COVID-19 recovery, Alpert said, which is why it’s important for doctors to screen for psychiatric distress.

Price has been successful in her own state, convincing Illinois Gov. J.B. Pritzker to add neurology experts to the Illinois COVID Task Force. She’s been in touch with Eduardo Cisneros, intergovernmental affairs director for the COVID-19 Response Team at the White House.

She hopes a mental health question can be added to the Centers for Disease Control and Prevention’s V-safe survey, a smartphone-based tool that uses text messaging to provide personalized health check-ins after people receive a COVID-19 vaccine.

“Sharing my story is one thing, but really, what is important is action,” Price said. “My Ben has his hand on my back, and he’s with me every step of the way.”

For pandemic-specific mental health resources, head to covidmentalhealthsupport.org.

Copyright 2021, USATODAY.com, USA TODAY. Health and patient safety coverage at USA TODAY is made possible in part by a grant from the Masimo Foundation for Ethics, Innovation and Competition in Healthcare. The Masimo Foundation does not provide editorial input.

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Fla. Crowdfunding Firm Pleads Guilty to Fraud

The newest type of real estate investing still carries risk: A Jacksonville crowdfunding firm owner pleaded guilty to mail fraud when some projects didn’t fully fund.

JACKSONVILLE, Fla. – Crowdfunding has become a popular real estate tool that connects individual investors directly to specific projects, but like any other commercial venture, it carries a risk of fraud.

In a recent Jacksonville case, the owner of a company that oversees crowdfunding – a middle man that accepts investor money to be used toward a specific project – failed to return that money after it didn’t reach the total amount needed to proceed with the project.

According to the U.S. Attorney’s Office for the Middle District of Florida, Daniel Summers of St. Augustine pleaded guilty to mail fraud and now faces a maximum penalty of 20 years in federal prison. A sentencing date has not been set, and the United States is seeking forfeiture in the amount of $744,910 – the proceeds Summers obtained as a result of the fraud. The amount of restitution due to victims will be determined later.

According to court documents, Summers owned a Jacksonville-based company called Realty E Vest, which also did business as IHT Realty Group, an internet crowdfunding investment platform for real estate development projects. Summers also owned E Vest Technology, which sought to develop and license the Realty E Vest crowdfunding platform to other companies that also wanted to manage crowdfunding efforts.

Under that business model, individual invested in projects by wiring funds to Realty E Vest, where the funds were supposed to be held in escrow until the project met its crowdfunding goal. If a project failed to meet its goal, Summers promised to return the investors’ funds.

However, after several Realty E Vest crowdfunding projects failed to fully fund, Summers intentionally kept investors’ money and misappropriated it to fund the ongoing operations of his companies, including paying employee salaries.

Summers then acted as if the failed projects were fully funded, giving “victims the illusion that they had successfully invested in these projects,” according to the court. He paid investors “investment returns” for the failed projects via mailed checks or wire transfers. He also repaid some victims’ investments if they complained after discovering their crowdfunding projects failed to fund.

However, the money to pay these people wasn’t from the real estate developers or any legitimate investment activity; instead, it came out of victims’ principal investments in other crowdfunding ventures and equity investments that Summers solicited in E Vest Technology.

This case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney David B. Mesrobian.

© 2021 Florida Realtors®

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Buyers Want a Custom Home? It May Take 18 Months

There are pros and cons to buying a new vs. existing home, but it’s taking a longer time to complete a new one – about four months more than it did two years ago.

ORLANDO, Fla. – Rising costs, material shortages and a labor deficit have hit the homebuilding industry hard, and buyers looking for a custom home builder in Orlando, for example, may have to wait longer than usual.

Custom home builders are not immune to the problems facing the construction industry, and these issues are increasing costs and dragging out construction timelines, says Rial Jones, founder and president of Clayton Jones Construction Inc.

“We can’t do as much as we did a year or two ago, just because everything takes much longer, Jones says. “A typical house that may have taken 12 or 14 months might be a 16- or 18-month project in today’s world.”

Costs for materials are up “across the board,” including roofing tiles and electrical wire, Jones adds. A shortage of construction labor means Clayton Jones faces as much as a 30% to 40% spike in labor costs. It also takes longer to deliver materials, which is why the firm orders 12 weeks ahead.

Custom homes also often include more individualized facets that take longer to ship or import.

Source: Orlando Business Journal (04/29/21) Soderstrom, Alex

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The Nation’s Realtor Members Become More Diverse

In 2001, 10% of Realtors were nonwhite; in 2020, that number rose to 24%, according to a study on career choice released by NAR. However, whites had the highest median number of transactions (7) compared to Blacks and Asians (2), Hispanics (3) and LGBTQ+ members (5).

WASHINGTON – In 2001, just 10% of Realtors® were nonwhite, but that grew to 24% by 2020, which better reflects the demographic makeup of the country.

Jessica Lautz, vice president of demographics and behavioral insights at the National Association of Realtors® (NAR), presented top-line findings from the 2021 NAR study Career Choice in Real Estate: Through the Lens of Race, Gender, and Sexual Orientation on Wednesday at a meeting of the Diversity Committee held during the virtual 2021 Realtors Legislative Meetings.

The report included responses from some 18,000 NAR members and provided some understanding of the differences in why members entered the profession. It asked about the skills that are important in the real estate field, the areas in which members worked, and those members’ typical number of transactions, sales volume and income differences.

Lautz noted that the study, an expansion of member research from 2017, was an important step in furthering NAR’s goals to support diversity, equity and inclusion within its membership, in addition to similar objectives in support of fair housing and expanded housing opportunities for all.

Study findings

  • The most common reasons members cited for entering real estate: Flexible work hours, an interest in helping families, working with people, and a love of homes and homeownership.
  • Median years of experience: White members reported the lengthiest tenure, with 10 years, compared to five years for Asians and four years for both Black and Hispanic respondents.
  • Whites had the highest median number of transactions, seven, compared to two for Blacks and Asians, and three for Hispanics. LGBTQ+ respondents reported a median of five transactions.
  • The highest median annual sales volume was reported by white respondents at $1.988 million, with Black members indicating the lowest at $474,500.
  • Gross personal income from real estate in 2020 was highest for white respondents at $49,400 and lowest for Blacks at $16,700.
  • As far as ownership interest in their firms, Asian members had the highest percentage of any group, with 36%, while LGBTQ+ had the lowest at 24%.

Source: National Association of Realtors® (NAR)

© 2021 Florida Realtors®

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