ORLANDO, Fla. – Oct. 27, 2017 – Orlando and Tampa are among the large U.S. markets least likely to see home prices fall in the next two years, according to a report from Arch Mortgage Insurance.
The report finds that home prices have only a 2 percent chance of falling in Orlando and Tampa over the next two years, a low-risk level that tied 36 other U.S. markets.
At the other end of the spectrum, Fort Lauderdale and Nashville probably won't see prices rise over the next two years either, but they still have a noticeably higher risk with a 35 percent chance of that happening. Austin, Texas, has the third-highest probability, at 25 percent, followed by Miami's 17 percent and West Palm Beach's11 percent, according to Arch MI.
In explaining Fort Lauderdale's and Nashville's rates, Arch MI cites "home prices growing faster than incomes, which is hurting affordability."
Arch MI estimates that the average probability of home-price declines for America's 401 largest cities is 4 percent, which it calls "an unusually low number."
The report suggests that Florida will remain the best economic performer in the South for at least another year, led by tourism, residential and public construction.
The report also found that Orlando is one of America's 10 hottest housing markets, when looking at the country's 100 biggest metros. Orlando's home price index grew 12.5 percent in the past year.
Source: Florida Realtors
WASHINGTON (AP) – Oct. 26, 2017 – The costs of borrowing to buy a home increased slightly this week, but U.S. mortgage rates are still near relative lows.
Mortgage buyer Freddie Mac said Thursday that the average rate on 30-year, fixed-rate mortgages rose to 3.94 percent from 3.88 percent last week. At this time last year, the benchmark rate was 3.47 percent. The historic average was roughly 6 percent.
Long-term home loan rates tend to track the yield on 10-year U.S. Treasury notes. The interest charged on 10-year Treasury notes has risen since early September, possibly in anticipation of tax cuts pushed by President Donald Trump that could cause the amount of government debt to climb.
Average mortgage rates began to rise after Trump's election nearly a year ago in anticipation of tax cuts, climbing to as high as 4.32 percent at the end of last year. But rates began to slope downward again this year as the intended tax overhaul is unfolding at a slower and less certain pace than what the president promised.
The lower borrowing costs have helped preserve some affordability for would-be homebuyers, who are finding that home prices are severely outpacing incomes.
The average rate on 15-year, fixed-rate mortgages, popular with homeowners who are refinancing, rose to 3.25 percent from 3.19 percent last week. A year ago, the 15-year rate was 2.78 percent.
The average rate on the five-year, adjustable-rate mortgage increased to 3.21 percent from 3.17 percent last week.
Source: Florida Realtors
PORT ST. LUCIE, Fla. – Oct. 25, 2017 – As individuals get older, many decide to add their children's names to their homes or their brokerage and bank accounts.
This is called owning something in "joint tenancy."
People are told that by doing this, they will avoid probate and automatically pass those assets to the persons named on the property or accounts. This is true, but doing this may have significant adverse consequences that most people are not aware of.
First, by putting your children's names on your assets, you no longer have complete control of those assets. If you put your child on the deed of your house, then you will need their permission before it can be sold.
A child may decide that they don't want their parents' house to be sold and can withhold their signature preventing the parent from doing what they want with their home.
You also have to be careful that the addition of your child to your deed is done correctly. There are varying types of joint tenancy and if the wrong type of joint ownership is recorded, your property may still have to go through probate.
If you put your child on your bank or brokerage account they will have the same access to it that you would have. During your lifetime, they will have complete access to your business. They could keep track of your spending habits, use the account to write checks for their own personal reasons, or even take all the money for themselves.
Additionally, if you name your child on your home or accounts, then you are subjecting your assets to the circumstances of your child's life. If your child whose name is on your house or accounts gets sued, divorced or files bankruptcy, his or her creditors may attempt to collect against your assets. You could have a lien recorded against those assets because your child is now a part owner.
Finally, there are adverse tax consequences of including your kids on your home or accounts.
Property that is transferred by inheritance is given very preferable tax treatment. At death, the IRS allows a stepped-up basis on your investments once they transfer into the hands of your heirs.
If you don't own the whole property because your child's name is on the deed or account, you may lose this benefit. This may cost your kids thousands of dollars when the investments are ultimately sold.
There are other options that will allow your assets to avoid probate and pass easily to your heirs.
By setting up a Revocable Living Trust you can avoid probate as well and not have to worry about any of these potential problems. This kind of estate planning allows you to maintain complete control of your assets during your lifetime while also avoiding probate and giving your family immediate access to your assets.
Source : Florida Realtors
WASHINGTON – Oct. 24, 2017 – The number of apartments deemed affordable for very low-income families across the United States fell by more than 60 percent between 2010 and 2016, according to a new report by Freddie Mac.
The report by the government-backed mortgage financier is the first to compare rent increases in specific units over time. It examined loans that the corporation had financed twice between 2010 and 2016, allowing a comparison of the exact same rental units and how their affordability changed.
At first financing, 11 percent of nearly 100,000 rental units nationwide were deemed affordable for very low-income households. By the second financing, when the units were refinanced or sold, rents had increased so much that just 4 percent of the same units were categorized as affordable.
"We have a rapidly diminishing supply of affordable housing, with rent growth outstripping income growth in most major metro areas," said David Brickman, executive vice president and head of Freddie Mac Multifamily. "This doesn't just reflect a change in the housing stock."
Rather, he said, affordable housing without a government subsidy is becoming extinct. More renters flooded the market after people lost their homes in the housing crisis. The apartment vacancy rate was 8 percent in 2009, compared to 4 percent in 2017. That trend, coupled with a stagnant supply of apartments, resulted in increased rents.
Freddie Mac buys mortgage loans from a network of primary market lenders, and issues mortgage-related securities. This helps lenders provide loans to developers and owners for the purchase, refinancing, rehabilitation and construction of multifamily properties.
The study defined "very low income" as households making less than 50 percent of the area median income, and "affordable" rent as costing less than 30 percent of household income.
The report found a significant drop in the percentage of affordable units in seven of the nine states where Freddie Mac financed the most rental units.
Colorado and North Carolina had the greatest gaps. At first financing, 32 percent of the units in Colorado were considered affordable for very low-income families; at second financing, only 8 percent in Colorado were deemed affordable. Most of the rental units analyzed in Colorado were in the greater Denver area. In North Carolina, the percentage of affordable apartments dropped from 10 percent to 0.3 percent – mostly in the greater Charlotte area.
Rental affordability for very low-income families also declined in Arizona, Georgia, Nevada, Texas and Washington.
In California and Florida, the poorest households were already shut out of the rental market before the period covered by the report. And those on the next level up were quickly being squeezed out. In California, 56 percent of apartments were affordable for low-income families at first financing, compared to 10 percent upon second financing.
In Florida, the number of affordable apartments dropped from 60 percent to 39 percent.
The significant decrease in affordability typically occurred within just a few years, said Steve Guggenmos, vice president of research and modeling at Freddie Mac Multifamily. Most of the units remain affordable for people making the median income in the area, with the exception of California, where only a quarter of the units were affordable for them.
Most new construction of multifamily housing generally serves high-income renters, according to Freddie Mac. The corporation – along with Fannie Mae, another government-sponsored enterprise with a similar mission – significantly reduced its role in financing multifamily housing after the Great Recession.
Together, they had financed about 70 percent of all original loans for multifamily properties in 2008 and 2009 as private capital pulled back, said Karan Kaul, a research associate at the Housing Finance Policy Center at the Urban Institute. By the end of 2014, their market presence declined to 30 percent.
"The affordability issues are becoming more severe at the lower end of the market," said Kaul, a former researcher at Freddie Mac. "Absent some kind of government intervention or subsidy, there is just not going to be any investments made at that lower end of the market."
Kaul said that in the past three years, Freddie Mac introduced a "small balance loan" program targeting smaller multifamily buildings that have the most trouble securing private financing. The initiative could help stem the decline in the supply of affordable housing, he said.
"By increasing this financing, Freddie Mac for the first time has been able to crack this market in a meaningful way, given its inherent challenges," Kaul said.
Source: Florida Realtors
WASHINGTON – Oct. 13, 2017 – The Mortgage Bankers Association (MBA) says it is open to a rewrite of homeowner tax breaks as part of a broader reform package.
The MBA position comes days after the National Association of Home Builders endorsed changes to the mortgage interest deduction, a tax break that for decades has been considered untouchable.
"The mortgage interest deduction is important, but if there are other alternatives, we are open to them," says MBA President David Stevens.
"In isolation, we would fight against modification to the mortgage interest deduction very hard," Stevens adds. But in the context of broader reform, "we want to remain open-minded and involved in those proposals. If there's a trade-off that gets you ultimately to the same outcome, we're open to it."
With mortgage bankers and builders splitting off, the National Association of Realtors is the last big trade group fully committed to defending the $70 billion mortgage interest deduction. The group has 1.2 million members and the country's biggest political action committee.
NEW YORK – Oct. 20, 2017 – One-month delinquency on mortgages soared nearly a half-percentage point last month driven by deterioration in states impacted by the recent hurricanes.
Single-family loans that were either delinquent at least 30 days or in the foreclosure inventory numbered 2.603 million as of Sept. 30.
The non-current count was comprised of 2.245 million loans past due 30 days but not in foreclosure and 0.358 million loans in the foreclosure inventory.
Black Knight Financial Services reported the statistics Thursday.
Based on an estimated 51.039 million loans outstanding, last month's non-current rate worked out to 5.10 percent – surging from 4.69 percent the preceding month.
The non-current rate, however, was still lower than 5.27 percent in the same month last year.
In Mississippi, September's non-current rate was 10.81 percent – higher than any other state. After that was Louisiana's 9.48 percent, then 7.67 percent in Florida, 7.53 percent in Alabama and 7.30 percent in Texas.
Florida, which was devastated by Hurricane Irma, moved up from No. 22 in August, while Texas, where Hurricane Harvey caused widespread destruction, climbed from No. 20.
Reflected in the U.S. non-current rate was a 4.40 percent 30-day rate excluding foreclosures. The rate leapt 47 basis points from August and was 13 BPS worse than in September 2016. The month-over-month leap was "driven primarily by fallout from Hurricanes Harvey and Irma."
Based on an analysis of Black Knight's data, September 2017's ninety-day rate was an estimated 1.13 percent, ascending 4 BPS from the previous month.
The foreclosure inventory rate was 0.70 percent. That was 6 BPS better than a month earlier and a 30-basis-point improvement over a year earlier.
Last month's 45,200 foreclosure starts brought the year-to-date total to 506,900.
"Monthly foreclosure starts were at their lowest in more than 17 years, with starts down as much as 90 percent in areas covered by post-hurricane foreclosure action moratoria," the report stated
We got lucky, because most of the features that make our place good for "aging in place" – the single-story layout, open design, wide doorways – weren't on our must-have list when we were newlyweds.
We're not the only people who didn't think far enough into our future. The vast majority of homebuyers and remodelers don't consider what it might be like to grow old in their homes, says Richard Duncan, executive director of the Ronald L. Mace Universal Design Institute, a nonprofit in Asheville, North Carolina, that promotes accessible design for housing, public buildings and parks.
"We think aging is what happens to other people," Duncan says. "Nobody puts away money to save for that good-looking ramp they've always wanted."
Concerns for everyone
Consider these figures:
And it's not just the elderly who are affected. Ask anyone who worries about aging parents tumbling down steps or becoming increasingly isolated in family homes that are hard to navigate.
"If you can't get in and out easily, it's a huge barrier to staying connected in the community," Harrell notes.
These concerns are more than just professional for Duncan, since he and his wife are currently renovating a home to make it more accessible after moving from Chapel Hill to Asheville, North Carolina, to be closer to their daughter. The Duncans had renovated their previous home to allow his disabled father to visit, but finding a new home that had even some of the features they wanted proved a challenge, Duncan says.
What to seek in your last home
Since truly accessible dwellings are rare, people can focus instead on finding one that can be easily adapted to their needs as they age, Duncan says, such as a home with at least one bedroom on the same level as the kitchen, a full bathroom and the laundry room.
The couple ultimately found a first-floor condo and are remodeling it to widen the master bedroom doorway, replace the thick carpeting with solid-surface floors and add a Wi-Fi-enabled thermostat that is easier to adjust. Future projects will include making the front entrance and back porch "step-free" (they now have 2-inch and 3-inch rises, respectively) and creating a "curbless" or step-free shower.
No-step entries are good for people in wheelchairs, of course, but they also make life easier for people with walkers, teenagers in casts or anyone wheeling a big-screen TV through the door, Harrell notes.
Other important features to look for include:
For example, standard wheelchairs require a 5-foot turning radius and showers without steps. People can help their future selves by choosing a home with a bathroom that's spacious enough to maneuver a walker (or a person plus a caregiver) and a shower that's large enough to include a chair or seat. If homeowners aren't ready to add more supports – and you should know that "stylish grab bars" are no longer an oxymoron – they can at least reinforce walls during a remodel so that adding bars later is an option.
"You don't need to create an institutional-looking home," Harrell says. "You just need to think about your future needs."
NEW YORK – Oct. 13, 2017 – Following the Great Recession, the cost of rental housing took a growing bite out of U.S. household budgets, as increasing demand for rental units pushed up prices. Now the share of households considered burdened by high rents is falling, according to a report from New York University’s Furman Center for Real Estate & Urban Policy.
That’s good news. But the dynamics driving improved affordability are a mixed bag.
One reason for the shift is that wealthier families are increasingly likely to rent, allowing landlords to raise prices without raising the risk that their tenants won’t pay. The number of households that spend 30 percent of their income on rent (considered cost-burdened) and the share that spend half their income on rent (considered severely cost-burdened) are still historically high.
Twenty-one percent of households earning at least 120 percent of the area median income rented in 2015, up from 15 percent in 2006; families with children and households where at least one member has a bachelor’s degree also became more likely to rent over the course of the decade.
“More people are choosing to rent, and disproportionately so among the higher-education, higher-income groups,” said Sewin Chan, a professor of public policy at NYU and co-author of the report. “It seems extremely likely that they’re driving up rents.”
Not all cities benefited from better affordability; of 53 metros with at least 1 million people, one in three recorded an increase in the number of cost-burdened households. Fifty-nine percent of Miami renters spent at least 30 percent of their income on rent, the highest in the U.S.
One positive from the report is that rental affordability improved across income levels, with the rent-burden rate falling fastest for households earning between 50 percent and 80 percent of their area median income. Those earning less than half their median area income saw more modest improvement, though, and there’s currently a shortage of more than 7 million housing units affordable to the poorest U.S. households, according to the National Low Income Housing Coalition.
Households that moved, meanwhile, probably saw their rent go up. Across the 53 metros included in the Furman Center report, households that had moved in the 12 months preceding the Census Bureau’s 2015 American Community Survey reported paying rents that were 5 percent higher than the renter population at large. But renters in the big metros shown in the chart above faced much steeper hikes.
WASHINGTON – Oct. 13, 2017 – President Donald Trump signed an executive order Thursday to get the ball rolling on the creation of association healthcare plans. It's intended to help small employers access more affordable health insurance coverage for their employees.
According to the National Association of Realtors® (NAR), the change holds promise for real estate professionals who seek coverage, but it will not yet help Realtors seeking more affordable healthcare coverage because, as it currently stands, Trump's order doesn't include independent contractors.
"The White House announcement is an important part of the work to expand health coverage opportunities," says William E. Brown, president of NAR. "Association health plans have long offered promise for small-business owners and self-employed individuals seeking affordable health coverage."
Brown says that NAR is currently reviewing the specifics of the latest proposal to determine what kind of aid it might offer to "self-employed individuals such as real estate professionals."
Under the order, Trump is directed the Department of Labor to write guidelines allowing small employers to band together to form association health plans and purchase coverage as a single unit in the large group health insurance market, which is exempt from some regulations of the Affordable Care Act.
The order also directs the Departments of Labor, Health and Human Services and Treasury to look at expanding the length of short-term insurance policies for individuals and modifying rules governing employer-offered health reimbursement accounts to fund employee healthcare expenses.
NAR has long supported legislation that enables the creation of association health plans and expanded health insurance options for real estate professionals, who are mostly independent contractors; and Brown says NAR will continue to work with the administration and Congress to make association health plans a workable option for Realtors.
Oct. 16, 2017 – You've got a great listing. It's a hot property, reasonably priced, and you expect lots of interest in the home. The day after an open house, you get confirmation that you were right: Your seller has received three offers.
What happens now?
First, the best time to talk to the seller about multiple offers has already passed – when you took the listing. It's a good tactic to address the possibility of multiple offers with your seller at the onset of the transaction, so that you and the seller have an idea how you'll proceed if faced with more than one offer at the same time. Ultimately, however, the seller decides how to handle multiple offers – not the Realtor.
With three contracts in hand, is the seller obligated to go back and ask each buyer for their "highest and best" offer? The short answer is no – but the seller may still want to get the best price he can for his property.
In the three-offer scenario, for example, the seller is free to choose one of those offers and reject the others. There is no obligation to go back and ask for "highest and best" from each buyer. Additionally, the seller could decide to counter some – or even all – of those offers.
However, the seller doesn't want to be under contract with three different buyers. To avoid this, the seller would want to reserve the right to choose only one of the accepted counteroffers. The seller could also go the somewhat traditional route: Go back to the buyers and ask them to submit their "highest and best" offer on the property by a certain deadline. The seller could then choose between the three "highest and best" offers.
The key to multiple offers is making sure the seller is informed and instructing you how to proceed – never assume that a seller wants to proceed a certain way.
Since each real estate transaction is unique, there is no standard way to handle multiple offers. Sellers faced with legal questions regarding the process should consult their attorney.