Fastest-growing U.S. luxury market? Sarasota County
SANTA CLARA, Calif. – June 14, 2018 – Interest from prospective home buyers in Northern states have propelled two Florida counties – Sarasota and Collier – to the top of the nation’s fastest-growing luxury housing markets, according to the May 2018 Luxury Home Index from realtor.com.
In May, the top 5 percent most expensive home prices in Sarasota (North Port) and Collier (East Naples) counties grew 19 and 14 percent, respectively.
Additionally, Broward County, Fla. – home to Fort Lauderdale and ranked No. 19 on the list – grew 9 percent year-over-year. Much of this growth is attributed to increased interest from buyers located in New York, Boston and Chicago – markets where, in many cases, luxury prices have stalled, according to realtor.com search data.
“Luxury prices in the Sunshine State are rising quickly as buyers from places like New York, Boston, and Chicago get wind that there is a better bang for their buck available down South,” said Javier Vivas, director of economic research for realtor.com. “Meanwhile, we’re seeing signs of a luxury market glut in many established markets, which is in some cases leading to spillover demand for their less pricey neighbors.”
May 2018 top 10 fastest growing luxury markets
Market (local county seat) – Top 5% luxury price – % Change year-over-year
Sarasota County (Sarasota) – $ 993,000 – 19.1%
Queens County (Queens, N.Y.) – $ 1,240,000 – 15.1%
Collier, County (East Naples) – $ 1,651,000 – 13.7%
Douglas County (Castle Rock, Colo.) – $ 919,000 – 13.1%
San Mateo County (Redwood City, Calif.) – $ 3,496,000 – 13.0%
King County (Seattle) – $ 1,486,000 – 12.8%
Marin County (San Rafael, Calif.) – $ 3,220,000 – 12.5%
Snohomish County (Everett, Wash.) – $ 790,000 – 12.4%
Hudson County (Jersey City, N.J.) – $ 1,306,000 – 12.1%
Santa Clara County (San Jose, Calif.) – $ 2,744,000 – 11.9%
While buyers in New York, Boston and Chicago may be driving growth in places like Florida, luxury prices within those markets themselves have stalled. In Boston’s Suffolk County, Chicago’s Cook County, and New York’s Manhattan and Suffolk counties, for instance, over the past year luxury home prices decreased 2.7, 2.2, and 2.1 and 1.3 percent, respectively.
In New York, in particular, demand for luxury homes in Manhattan and Brooklyn have stalled at $4.6 and $2.2 million, respectively.
ATTOM Data Solutions released its Q1 2018 U.S. Residential Property Loan Origination Report this week, which shows that more than 1.8 million (1,813,691) loans secured by residential property (1 to 4 units) were originated in Q1 2018, down 5 percent from the previous quarter and down 3 percent from a year ago.
665,887 of the residential loans originated in Q1 2018 were purchase loans, down 16 percent from the previous quarter but still up 2 percent from a year ago.
799,939 of the residential loans originated in Q1 2018 were refinance loans, down 2 percent from the previous quarter and down 11 percent from a year ago.
347,875 Home Equity Lines of Credit (HELOCs) were originated on residential properties in Q1 2018, up 18 percent from the previous quarter and up 14 percent from a year ago
The loan origination report is derived from publicly recorded mortgages and deeds of trust collected by ATTOM Data Solutions in more than 1,700 counties accounting for more than 87 percent of the U.S. population. Counts and dollar volumes for the two most recent quarters are projected based on available data at the time of the report (see full methodology below).
“Putting home equity to work is the name of the game in the 2018 housing market — both for current homeowners as well as homebuyers,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “With interest rates rising and home price appreciation accelerating, current homeowners are increasingly turning to home equity lines of credit rather than refinances to tap their home’s equity. And given that median down payments rose more than four times as fast as median home prices over the past year, it’s not surprising that homebuyers are increasingly getting help from co-buyers — often in exchange for a share of their home’s future equity.”
Co-Buyer Heat Map by Metro
Co-buyers account for 17.4 percent of all Q1 2018 home sales
Nationwide, 17.4 percent of all single-family home purchases in Q1 2018 were to co-buyers (multiple, non-married buyers listed on the sales deed), up from 16.3 percent from a year ago and up from 14.9 percent two years ago.
“Homeownership rates are still hovering around historic lows — even though lenders continue to offer more low down-payment options,” says Michael Micheletti, director of corporate communications at Unison, a company that provides down payment assistance to homebuyers in exchange for a share of any future increase in the home’s value. “Letting people borrow more doesn’t make buying a home more accessible or affordable. It’s not surprising that in places like Seattle, the Bay Area, and other challenging markets, buyers are looking at ways to increase their purchasing power, and reduce the amount of debt they are taking on. The sharing, co-buying and co-owning of a home movement will only grow as more millennials and Gen Z enter the marketplace.”
The average down payment for homes purchased by co-buyers nationwide was $56,911, 46 percent higher than the average down payment of $38,915 for homes purchased by other homebuyers. The average co-buyer down payment represented 15.3 percent of the average sales price, 35 percent higher than the 11.4 percent for other homebuyers.
Among 184 metropolitan statistical areas analyzed for co-buyer share, those with the highest percentage of co-buyers were San Jose, Calif. (48.3 percent); San Francisco, Calif. (37.9 percent); Seattle, Wash. (27.7 percent); Honolulu, Hi. (27.7 percent); and Miami, Fla. (27.6 percent).
HELOCs up more than 50 percent in Hartford, Nashville, Las Vegas, Raleigh, Indianapolis
Among 165 metropolitan statistical areas analyzed for loan originations, those with the biggest year-over-year increase in HELOC originations in Q1 2018 were Athens, Ga. (up 176 percent); Chattanooga, Tenn. (up 165 percent); Norwich, Conn. (up 99 percent); Kingsport, Tenn. (up 92 percent); and Atlantic City, N.J. (up 87 percent).
Among 50 metro areas with a population of at least 1 million, those with the biggest year-over-year increase in HELOC originations in Q1 2018 were Hartford, Conn. (up 80 percent); Nashville, Tenn. (up 74 percent); Las Vegas, Nev. (up 69 percent); Raleigh, N.C. (up 56 percent); and Indianapolis, Ind. (up 51 percent).
Median down payment increases 27 percent from year ago
The median down payment on single family homes and condos purchased with financing in Q1 2018 was $16,750, down 4 percent from $17,500 in the previous quarter but still up 27 percent from $13,207 in Q1 2017.
The median down payment of $16,750 was 6.6 percent of the median sales price of the homes purchased with financing during the quarter, down from 6.9 percent in the previous quarter but still up from 5.5 percent in Q1 2017.
Among 83 metropolitan statistical areas analyzed for median down payments, those with the biggest median down payments for homes purchased in Q1 2018 were San Jose, Calif. ($298,250); San Francisco, Calif. ($180,000); Los Angeles, Calif. ($122,000); Oxnard-Thousand Oaks-Ventura, Calif. ($102,958); and San Diego, Calif. ($80,100).
Other metro areas with median down payments of $50,000 or higher in the first quarter were Naples, Fla. ($64,750); Seattle, Wash. ($59,800); Boston, Mass. ($55,000); and New York-Newark-Jersey City ($50,000).
FHA loan share decreases to more than six-year low
Residential loans backed by the Federal Housing Administration (FHA) accounted for 10.9 percent of all residential property loans originated in Q1 2018, down from 12.0 percent in the previous quarter and down from 13.3 percent a year ago to the lowest share since Q4 2011 — a more than six-year low.
Residential loans backed by the U.S. Department of Veterans Affairs (VA) accounted for 6.2 percent of all residential property loans originated in Q1 2018, down from 6.6 percent in the previous quarter and down from 6.6 percent a year ago.
Top loan originators for Q1 2018
The table below shows the top 10 mortgage originators in Q1 2018 based on dollar volume of loans.
Property insurer reliability: New study ranks Fla. firms
MIAMI – June 19, 2018 – After the monster storm Hurricane Andrew struck Florida in 1992, 16 insurers went under as claims swamped some smaller companies, according to the Insurance Information Institute. Though Florida insurers are now backed by the Florida Insurance Guaranty Association, insolvency can lead to delays in the claims process.
A new study by ratings firm Weiss Ratings ranked Florida windstorm insurers on the basis of their financial soundness. All are not equally prepared to handle post-hurricane claims, it found.
The firm evaluated 135 companies on a scale of A through F rating based on the safety of its investments, cash reserves, profitability, liquidity/cash flow and years in operation.
“Many Florida homeowners are still waiting for their insurance claims to come through after a severe hurricane season last year,” said Gavin Magor, Weiss Ratings director of research, in a news release. “If the 2018 hurricane season is similar or worse, it could compound the problem, raising questions about the ability of weaker insurers to promptly cover major damages.”
Weiss Ratings gives these 10 companies the highest marks:
Amica Mutual Insurance (B+)
Auto Club Insurance Company of Florida (B+)
Castle Key Insurance Company (B+)
Cincinnati Insurance Company (A)
Citizens Property Insurance Company (A+)
Southern Fidelity Insurance Company (B+)
Southern-Owners Insurance Company (A)
United Services Automobile Association (A-)
USAA Casualty Insurance Company (A-)
USAA General Indemnity Company (B+)
Rating lowest were these companies:
Anchor P&C Insurance Company (D)
Edison Insurance Company (D+)
Florida Specialty Insurance Company (D)
Olympus Insurance Company (D+)
People’s Trust Insurance Company (D+)
Prepared Insurance Company (D)
Tower Hill Preferred Insurance Company (D)
Tower Hill Prime Insurance Company (D)
Universal P&C Insurance Company (D)
White Pine Insurance Company (D+)
WASHINGTON – June 21, 2018 – Three out of four (75 percent) of Americans think it’s a good time to sell a house, while 68 percent think it’s a good time to buy, according to research from the National Association of Realtors®’ (NAR) second quarter Housing Opportunities and Market Experience (HOME) survey.
In addition, a majority of consumers believe prices have and will continue to increase and that homeownership strengthens our nation’s communities.
“Good time to buy” optimism remains stagnant from last quarter; 39 percent strongly agree that now is a good time to buy, while 29 percent moderately agree.
Among renters, however, those positive feelings fell significantly from 55 percent in the first quarter to 49 percent this quarter. Optimism is highest among older buyers (65 or over) and those living in the South and Midwest regions (73 and 71 percent respectively).
NAR Chief Economist Lawrence Yun says affordability and low inventory are eroding buyer confidence.
“Inventory remains the driving force in real estate, affecting everything from rising prices to household formation,” says Yun. “Improving supply conditions is critical to improving buyer optimism and helping to remove some of the barriers holding back potential first-time buyers.”
As home prices continue to climb across the country, the number of respondents who believe now is a good time to sell remains high with 46 percent strongly agreeing (up from 42 percent last quarter) and 29 percent moderately agreeing. Twenty-nine percent believe that now is not a good time to sell a home, and that drops to 19 percent for current homeowners.
“Hopefully this strong seller optimism will lead to an increase in inventory later on in the year,” says Yun.
Respondents were also asked about their perception of home prices in their communities. Sixty-eight percent believe that home prices have gone up in their area in the last 12 months, up from 63 percent last quarter. Fifty-five percent also believe that home prices will continue to increase in their communities over the next six months – also up from the previous quarter (53 percent).
A near high of 58 percent of households believe that the economy is improving – slightly down from 60 percent last quarter but up from 54 percent last year. People in rural areas are more likely to view the economy as improving (63 percent) than in urban areas (51 percent).
The HOME survey’s monthly Personal Financial Outlook Index, showing respondents’ confidence that their financial situation will be better in six months, dropped slightly from 63.8 in March to 62.1 in June. A year ago, the index was 57.2.
Forty-six percent of those surveyed say they do not believe it would be difficult to obtain a mortgage, up from 36 percent last quarter.
“This is most likely a reflection of the current positive outlook on the direction of the economy,” says Yun. “Healthy job creation and faster wage growth mean that homeownership is viewed as a more attainable goal than it was a year ago.”
Homeownership’s effect on communities, future generations
In this quarter’s survey, homeowners and non-homeowners were asked if a high rate of homeownership strengthens a community, and 67 percent said homeownership strengthens communities a great deal. That number jumps to 76 percent for current homeowners and 77 percent for those 65 and older.
“Homeowners are more likely to be involved and engaged in the issues facing their communities, since they tend to be more rooted in the area than renters,” says NAR President Elizabeth Mendenhall. “This involvement – homeowners are more likely than renters to vote, volunteer their time at local charities and support neighborhood upkeep – helps shape and strengthen our nation’s communities, as well as drive the national economy.”
HOLLYWOOD, Fla. – May 31, 2018 – RentCafe creates a monthly rent report with data compiled from actual rents charged in the 250 largest U.S. cities. In its latest report, it found that nationwide rents rose 2 percent year-to-year – the lowest increase since 2010.
However, all Florida cities in the report came in higher than 2 percent, starting with Hollywood, Fla., at the top – an 8.5 percent year-to-year increase – and Miami at the bottom with 2.5 percent.
Select Florida cities – average rent – year-to-year increase
Renter mega-hubs: Overall, prices in 16 out of the 20 cities with the largest numbers of rental apartments climbed faster than the national average. Orlando, Las Vegas, Denver, Los Angeles rents are between 4 percent and 6 percent more expensive than one year ago, while rents in Manhattan, Austin, DC, and Chicago are about the same as last May.
Large cities: Currently boasting the fastest growing rent in the U.S., Detroit surpasses Las Vegas. Brooklyn (-1.2 percent) leads the way in the top 5 slowest growing rents, while Baltimore also makes an appearance on this list (0.4 percent).
Mid-size cities: Stockton and Tampa see the highest rent increases, 5.6 percent and 5.5 percent respectively. Sacramento drops to third place for fastest growing rents, a tie with Kansas City, MO (4.9 percent). New Orleans is the only market where apartment prices dipped 1.5 percent Y-o-Y.
Small cities gain momentum as growth in jobs and population draws rent increases. The most significant rent boosts in May were witnessed in Midland (35.4 percent) and Odessa (35.8 percent), but also in Yonkers (12.9 percent), Reno (10.7 percent) and Hollywood, Fla. (8.5 percent).
TALLAHASSEE, Fla. – July 13, 2018 – Gov. Rick Scott issued an executive order Thursday to block state agencies from taking action on a bill he signed into law earlier this year – one that critics said from the outset could limit the public’s access to beaches.
Scott’s order imposes a moratorium on any new state regulation that could inhibit public beach access and urges local government officials to take similar steps.
“Unfortunately, the legislation has now created considerable confusion and some have even interpreted it as restricting beach access,” Scott said in a press release announcing the order. “I’m committed to keeping our beaches open to the public.”
Scott signed the law on March 23 and it went into effect July 1. It requires local governments to get a judge’s approval to enforce a “customary use” law so that the public can continue to use the dry sand areas of privately owned beachfront. In Florida, beach property can be privately owned, with ownership extending across dry sand to the edge of the high-water shoreline. However, private ownership of the dry-sand portion of the beach does not necessarily mean the public can’t use it.
The measure drew opposition from groups ranging from the Florida Association of Counties to the Florida Wildlife Federation and the Surfriders Foundation. The bill (HB 631) was sponsored by Sen. Kathleen Passidomo, R-Naples, and Rep. Katie Edwards-Walpole, D-Sunrise, and was approved 29-7 by the Senate and 95-17 by the House.
Scott’s order maintains that the law “does not privatize or close access to any public beach in Florida, but instead creates a uniform legal process for local governments seeking to expand the public’s access to beaches.” The order notes that “it is critical that there be no room for confusion regarding access to public beaches in Florida.”
The executive order also directs the Florida Department of Environmental Protection to serve both as an advocate for the public and as a liaison to local governments regarding the public’s right to access the beach.
Florida’s Democratic party immediately responded to Scott’s Order. Scott, a Republican, is running for the U.S. Senate in November and trying to unseat incumbent U.S. Sen. Bill Nelson, a Democrat.
“While it is welcome news that Floridians could now be able to access their beaches without fear of prosecution … Scott literally just signed the law that allowed residents to restrict beach access,” Florida Democratic Party spokesman Nate Evans said in a press release.
The governor’s order also directs state environmental officials to establish an online system in which Floridians can provide input on beach access. The results will be presented to the Legislature and governor prior to the 2019 session.
IRVINE, Calif. – July 13, 2018 – ATTOM Data Solutions’ Midyear 2018 U.S. Foreclosure Market Report found a total of 362,275 U.S. properties with foreclosure filings – default notices, scheduled auctions or bank repossessions – in the first six months of 2018.
That number is down 15 percent year-to-year and down 78 percent from its recession-era foreclosure peak in the first six months of 2010.
Unlike earlier years, Florida is barely mentioned in ATTOM’s latest report. While its foreclosure rate remains No. 4 nationwide (0.37 percent), the top three states are now South Carolina (0.39 percent), Ohio (0.37 percent) and Nevada (0.37 percent).
In a look at metro areas, Miami is mentioned only because its foreclosure activity has dropped 55 percent below pre-recession averages – but 55 percent of the metro areas studied have also seen their foreclosure activity drop to a level below the “normal” level they had before the recession.
Florida does, however, continue to rank high for the number of days it takes for a home to go through the foreclosure process, ranking second nationwide. States with the longest average foreclosure timelines for foreclosures completed in the second quarter were Hawaii (1,553 days), Florida (1,166 days), New Jersey (1,161 days), Utah (1,108 days) and Indiana (1,054 days).
A handful of U.S. metro areas (12 percent) saw an increase in foreclosure activity rather than a decrease, however – but none of note in Florida. They include Houston (up 10 percent), Dallas-Fort Worth (up 11 percent), Cleveland (up 4 percent), Phoenix (up 5 percent) and Indianapolis (up 2 percent).
“Localized foreclosure flare-ups in the first half of 2018 can no longer be blamed on legacy distress left over from the last housing bubble, given that nearly half of all active foreclosures are now tied to loans originated in 2009 or later, and given that the average time to foreclose plummeted in the first two quarters of the year,” says Daren Blomquist, senior vice president with ATTOM Data Solutions.
Blomquist says the local foreclosure increases “are typically the result of more recent distress triggers” in those specific markets.
“We’re also seeing (some of the results) of gradually loosening lending standards starting in 2014, specifically for FHA-backed loans,” Blomquist added. “The foreclosure rate on FHA loans originated in 2014 and 2015 has now jumped above the average FHA foreclosure rate for all loan vintages – the only two post-recession vintages with foreclosure rates above that overall average.”
Ellie Mae: 91% of June new-home loans went to millennials
PLEASANTON, Calif. – Aug. 3, 2018 – An increasing number of younger adults are becoming homeowners.
Mortgages to millennial borrowers for new home purchases continued their ascent in June, accounting for 91 percent of closed loans, according to the latest Ellie Mae Millennial Tracker report. In May, 90 percent of closed mortgages to members of the generation were for new home purchases, up from April’s 89 percent, and January’s annual low of 81 percent.
The increasing loan numbers correlate with the Census Bureau’s latest quarterly homeownership and vacancy report that shows homeownership among millennials age 35 and younger increased slightly, representing 36.5 percent of all homeowners, compared to 35.3 percent in the first quarter of 2018.
Conventional loans remained attractive among millennials, representing 69 percent of all loans closed in June, a slight uptick from 68 percent in May.
FHA loans represented 27 percent of all closed loans to this generation in June, down one percentage point from the month prior – a significantly higher number than the Ellie Mae June Origination Insight Report data that found FHA loans represented 20 percent of closed loans for borrowers of all ages.
Average millennial borrower FICO scores across all loan types rose slightly in June to an average of 723 – up from 721 which held steady March through May. For purchases, the average FICO score was 746 for a conventional loan, 681 for an FHA loan and 744 for a VA loan.
“This new generation of homebuyers wants the capability of an on-demand mortgage, and we are working to provide borrowers a convenient and secure digital mortgage offering that makes the homebuying process a seamless experience,” says Joe Tyrrell, Ellie Mae’s executive vice president of corporate strategy.
Across all loan types, it took millennials an average of 42 days to close on their loans in June, a day longer than in March, April and May. Purchases took an average 41 days and refinances took an average 45 days.
In June, the hottest housing markets for millennials were primarily in the Midwest. The top markets by percentage of millennial loans closed included Clarksburg, W.Va. (65 percent); Watertown, S.D. (65 percent); Boone, Iowa (64 percent); and Dickinson, N.D. (61 percent).
Handful of signs suggest seller’s market may have peaked
NEW YORK – Aug. 3, 2018 – They were fed up with Seattle’s home bidding wars. They were only in their late 20s but had already lost two battles and were ready to renew with their landlord. Then, in May, their agent called.
Suddenly, Redfin’s Shoshana Godwin told the couple, sellers were getting jumpy, even here in the hottest of markets. Homes that should have vanished in days were sitting on the market for weeks. There was a three-bedroom fixer-upper just north of the city going for $550,000, down from more than $600,000. They made the leap in early June and had closed by the end of the month, for list price.
The U.S. housing market – particularly in cutthroat areas like Seattle, Silicon Valley and Austin, Texas – appears to be headed for the broadest slowdown in years. Buyers are getting squeezed by rising mortgage rates and by prices climbing about twice as fast as incomes, and there’s only so far they can stretch.
“This could be the very beginning of a turning point,” said Robert Shiller, a Nobel Prize-winning economist who is famed for warning of the dot-com and housing bubbles, in an interview. He stressed that he isn’t ready to make that call yet.
The data
A slew of figures released over the past few days gives ample evidence of at least a cooling.
Existing-home sales dropped in June for a third straight month. Purchases of new homes are at their slowest pace in eight months. Inventory, which plunged for years, has begun to grow again as buyers move to the sidelines, sapping the fuel for surging home values. Prices for existing homes climbed 6.4 percent in May, the smallest year-over-year gain since early 2017, and have gained the least over three months since 2012, according to the Federal Housing Finance Agency.
“Home prices are plateauing,” said Ed Stansfield, chief property economist at Capital Economics Ltd. in London. “People are saying: Let’s just bide our time, there’s no great rush. If we wait six or nine months we’re not going to lose out on getting a foot on the ladder.” That means “we’re now looking at a period in which prices move more or less sideways, or increase no more quickly than growth in incomes, over the next few years.”
Stansfield projects a 5 percent gain this year and a 3 percent increase in 2019. That compares with 10.7 percent in 2005, shortly before the crash.
Supply lines
Some of the most expensive markets, where sales are falling under the weight of prices, are now seeing substantial increases in supply, according to Redfin Corp. In San Jose, California, inventory was up 12 percent in June from a year earlier. It rose 24 percent in Seattle and 32 percent in Portland, Oregon. Those big jumps are from low numbers, so the housing crunch is still a serious problem.
“Inventory has increased quite a bit,” Godwin, the Seattle agent, said. “We’re seeing less competition.”
Dustin Miller, an agent with Windermere Realty Trust in Portland, said he’s trying to manage sellers’ expectations, something he hasn’t had to do since the end of the last housing boom. One customer, a baby boomer moving to a new home across the state, expected to have buyers fighting over her house. She got one bid, below her asking price.
“Buyers want to shop and take some time, as opposed to having to rush and throw offers in,” Miller said. “It’s the market correcting itself. At some point, you hit a peak of momentum, and then things level off.”
This new wariness was noticeable in the latest consumer-sentiment data from the University of Michigan. In its preliminary July survey, 65 percent of Americans said it’s a good time to buy a home, the lowest since 2008, when the economy was still in recession.
Still, market watchers note that the housing sector has strong support from a healthy labor market and steady economic growth, which indicates a stabilizing trend for home prices rather than anything close to the experience of the crisis, when property values plunged.
“The rate of home sales, new and existing, has probably peaked,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “But it’s not going to roll over. It will gently decline.”
New record
S&P CoreLogic Case-Shiller data hint at the softening. The 20-city index of property values rose 6.6 percent in the 12 months ending in April. After seasonal adjustments, the gauge posted its smallest monthly increase in 10 months, with New York, San Francisco and Washington reporting declines.
Homeownership still remains out of reach for many Americans, especially for first-time and younger buyers. For existing homes, the median price climbed in June to a record $276,900, while properties typically stayed on the market for 26 days, unchanged from the prior three months, according to the National Association of Realtors.
“Affordability is becoming a major headache for homebuyers,” said Lawrence Yun, the association’s chief economist. “You are seeing home sales rising in Alabama, where things are affordable. But in places like California, people aren’t buying.”
In addition, “no one knows how far and how fast” borrowing costs may rise as the Federal Reserve raises interest rates, Stansfield said. Lenders and borrowers alike are less likely to let credit spiral out of control than in 2005 and 2006. And with financing tighter and wage gains in check, “there’s not much scope for prices to continue to increase sustainably” at recent rates, he said.
The cooling, in turn, could curb housing starts, “because builders tend to only build what they think they can confidently sell,” Stansfield said. At the same time, he said, “it will decrease the risk of a bust.”
Fla.’s ‘Realtor license plate’ generates $1M for affordable housing
ORLANDO, Fla. – Aug. 8, 2018 – The Florida Realtors-backed “Support Homeownership for All” license plate hit a major fundraising milestone this summer: It’s generated $1 million in total donations earmarked for affordable housing projects through the state.
“While not limited just to Realtors, it’s kind of become the ‘Realtor license plate’,” says Brad Monroe, chair of Homeownership For All Inc. and broker with Suncoast Realty Solutions in Tampa. “It’s a great way to promote homeownership and a lot of the projects supported by the state’s local real estate associations.”
2006 Florida Realtors President Mike Dooley created the license plate program, and he remains involved in its operations – the “godfather” for the plate, according to Monroe.
“Florida Realtors has offered incredible support for the entire license plate program,” says Dooley. “The association picks up all the administrative costs of the program, so almost 100 percent of the funds flowing into the program gets used for affordable housing programs.”
In addition to standard Florida license fees, drivers who opt for the specialty plate pay $25 at the time of purchase and each year after that – a relatively small amount of money that adds up over time. Almost 100 percent of the money – a little bit is used to promote plate sales – goes directly to help struggling homeowners since Florida Realtors provides the organizational work without charge. The program is a 501(c)(3) charity.
By the end of July 2018, 40,141 Florida automobiles sported the “Support Homeownership for All” license plate and $1,003,525 dollars had been raised since the program’s inception. To date, $817,013 has been disbursed to affordable housing programs across the state.
License plate history
Dooley started planning his presidential years in 2005 as president-elect. “Joyce Bartlett – my local AE (Jupiter-Tequesta-Hobe Sound Association) and a very dear friend we lost recently– and I were chatting, and she said that a Realtor had stopped in and said, ‘Wouldn’t it be cool to have a Realtor license plate?’ I let that idea stew for a while, and I picked up the phone and called John Sebree, the VP of public policy in Tallahassee at the time. We then started to do some research.”
The original goal was a true Realtor license plate but that proved problematic, so Dooley focused on a more general theme.
“In 2005-2006, real estate values peaked, and we only paid lip service to affordable housing because there wasn’t any,” says Dooley. “Fireman, teachers, police? They couldn’t find housing. We took that concept and ended up with a license plate called ‘Support Homeownership for All,’ which became a vehicle of funding for affordable housing.”
The actual design for the license plate – a Florida home shaded by palms and backlit by a dramatic sunset – sprang from a “design the license plate” contest open to Realtors and was based on the winner’s entry.
Once the license-plate concept was in place along with bylaws and a charter, Florida Realtors’ Tallahassee team found lawmakers in the Senate and House of Representative who agreed to introduce a bill authorizing the plate, HB 1589. It passed and the governor signed it into law.
License plate today
When asked about the $1 million milestone, Dooley doesn’t focus on the big amount – he focuses on the $25 that Realtors and others pay each year to sport the plate on their car.
“You might think one license plate doesn’t do anything,” says Dooley. “It costs no more than a doorknob, a light fixture. But if we all join in, $25 grows into more than $1 million. That, in and of itself, is a testament to the belief that every little bit helps.”
Since Realtors tend to sport the license plate, they also serve a secondary role: “When you’re driving around and you see one, you kind of feel as if that other driver is part of our club,” says Dooley. “It’s kind of cool.”
Fastest-growing U.S. luxury market? Sarasota County
SANTA CLARA, Calif. – June 14, 2018 – Interest from prospective home buyers in Northern states have propelled two Florida counties – Sarasota and Collier – to the top of the nation’s fastest-growing luxury housing markets, according to the May 2018 Luxury Home Index from realtor.com.
In May, the top 5 percent most expensive home prices in Sarasota (North Port) and Collier (East Naples) counties grew 19 and 14 percent, respectively.
Additionally, Broward County, Fla. – home to Fort Lauderdale and ranked No. 19 on the list – grew 9 percent year-over-year. Much of this growth is attributed to increased interest from buyers located in New York, Boston and Chicago – markets where, in many cases, luxury prices have stalled, according to realtor.com search data.
“Luxury prices in the Sunshine State are rising quickly as buyers from places like New York, Boston, and Chicago get wind that there is a better bang for their buck available down South,” said Javier Vivas, director of economic research for realtor.com. “Meanwhile, we’re seeing signs of a luxury market glut in many established markets, which is in some cases leading to spillover demand for their less pricey neighbors.”
May 2018 top 10 fastest growing luxury markets
Market (local county seat) – Top 5% luxury price – % Change year-over-year
Sarasota County (Sarasota) – $ 993,000 – 19.1%
Queens County (Queens, N.Y.) – $ 1,240,000 – 15.1%
Collier, County (East Naples) – $ 1,651,000 – 13.7%
Douglas County (Castle Rock, Colo.) – $ 919,000 – 13.1%
San Mateo County (Redwood City, Calif.) – $ 3,496,000 – 13.0%
King County (Seattle) – $ 1,486,000 – 12.8%
Marin County (San Rafael, Calif.) – $ 3,220,000 – 12.5%
Snohomish County (Everett, Wash.) – $ 790,000 – 12.4%
Hudson County (Jersey City, N.J.) – $ 1,306,000 – 12.1%
Santa Clara County (San Jose, Calif.) – $ 2,744,000 – 11.9%
While buyers in New York, Boston and Chicago may be driving growth in places like Florida, luxury prices within those markets themselves have stalled. In Boston’s Suffolk County, Chicago’s Cook County, and New York’s Manhattan and Suffolk counties, for instance, over the past year luxury home prices decreased 2.7, 2.2, and 2.1 and 1.3 percent, respectively.
In New York, in particular, demand for luxury homes in Manhattan and Brooklyn have stalled at $4.6 and $2.2 million, respectively.
© 2018 Florida Realtors®
ATTOM Data Solutions released its Q1 2018 U.S. Residential Property Loan Origination Report this week, which shows that more than 1.8 million (1,813,691) loans secured by residential property (1 to 4 units) were originated in Q1 2018, down 5 percent from the previous quarter and down 3 percent from a year ago.
665,887 of the residential loans originated in Q1 2018 were purchase loans, down 16 percent from the previous quarter but still up 2 percent from a year ago.
799,939 of the residential loans originated in Q1 2018 were refinance loans, down 2 percent from the previous quarter and down 11 percent from a year ago.
347,875 Home Equity Lines of Credit (HELOCs) were originated on residential properties in Q1 2018, up 18 percent from the previous quarter and up 14 percent from a year ago
The loan origination report is derived from publicly recorded mortgages and deeds of trust collected by ATTOM Data Solutions in more than 1,700 counties accounting for more than 87 percent of the U.S. population. Counts and dollar volumes for the two most recent quarters are projected based on available data at the time of the report (see full methodology below).
“Putting home equity to work is the name of the game in the 2018 housing market — both for current homeowners as well as homebuyers,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “With interest rates rising and home price appreciation accelerating, current homeowners are increasingly turning to home equity lines of credit rather than refinances to tap their home’s equity. And given that median down payments rose more than four times as fast as median home prices over the past year, it’s not surprising that homebuyers are increasingly getting help from co-buyers — often in exchange for a share of their home’s future equity.”
Co-Buyer Heat Map by Metro
Co-buyers account for 17.4 percent of all Q1 2018 home sales
Nationwide, 17.4 percent of all single-family home purchases in Q1 2018 were to co-buyers (multiple, non-married buyers listed on the sales deed), up from 16.3 percent from a year ago and up from 14.9 percent two years ago.
“Homeownership rates are still hovering around historic lows — even though lenders continue to offer more low down-payment options,” says Michael Micheletti, director of corporate communications at Unison, a company that provides down payment assistance to homebuyers in exchange for a share of any future increase in the home’s value. “Letting people borrow more doesn’t make buying a home more accessible or affordable. It’s not surprising that in places like Seattle, the Bay Area, and other challenging markets, buyers are looking at ways to increase their purchasing power, and reduce the amount of debt they are taking on. The sharing, co-buying and co-owning of a home movement will only grow as more millennials and Gen Z enter the marketplace.”
The average down payment for homes purchased by co-buyers nationwide was $56,911, 46 percent higher than the average down payment of $38,915 for homes purchased by other homebuyers. The average co-buyer down payment represented 15.3 percent of the average sales price, 35 percent higher than the 11.4 percent for other homebuyers.
Among 184 metropolitan statistical areas analyzed for co-buyer share, those with the highest percentage of co-buyers were San Jose, Calif. (48.3 percent); San Francisco, Calif. (37.9 percent); Seattle, Wash. (27.7 percent); Honolulu, Hi. (27.7 percent); and Miami, Fla. (27.6 percent).
HELOCs up more than 50 percent in Hartford, Nashville, Las Vegas, Raleigh, Indianapolis
Among 165 metropolitan statistical areas analyzed for loan originations, those with the biggest year-over-year increase in HELOC originations in Q1 2018 were Athens, Ga. (up 176 percent); Chattanooga, Tenn. (up 165 percent); Norwich, Conn. (up 99 percent); Kingsport, Tenn. (up 92 percent); and Atlantic City, N.J. (up 87 percent).
Among 50 metro areas with a population of at least 1 million, those with the biggest year-over-year increase in HELOC originations in Q1 2018 were Hartford, Conn. (up 80 percent); Nashville, Tenn. (up 74 percent); Las Vegas, Nev. (up 69 percent); Raleigh, N.C. (up 56 percent); and Indianapolis, Ind. (up 51 percent).
Median down payment increases 27 percent from year ago
The median down payment on single family homes and condos purchased with financing in Q1 2018 was $16,750, down 4 percent from $17,500 in the previous quarter but still up 27 percent from $13,207 in Q1 2017.
The median down payment of $16,750 was 6.6 percent of the median sales price of the homes purchased with financing during the quarter, down from 6.9 percent in the previous quarter but still up from 5.5 percent in Q1 2017.
Among 83 metropolitan statistical areas analyzed for median down payments, those with the biggest median down payments for homes purchased in Q1 2018 were San Jose, Calif. ($298,250); San Francisco, Calif. ($180,000); Los Angeles, Calif. ($122,000); Oxnard-Thousand Oaks-Ventura, Calif. ($102,958); and San Diego, Calif. ($80,100).
Other metro areas with median down payments of $50,000 or higher in the first quarter were Naples, Fla. ($64,750); Seattle, Wash. ($59,800); Boston, Mass. ($55,000); and New York-Newark-Jersey City ($50,000).
FHA loan share decreases to more than six-year low
Residential loans backed by the Federal Housing Administration (FHA) accounted for 10.9 percent of all residential property loans originated in Q1 2018, down from 12.0 percent in the previous quarter and down from 13.3 percent a year ago to the lowest share since Q4 2011 — a more than six-year low.
Residential loans backed by the U.S. Department of Veterans Affairs (VA) accounted for 6.2 percent of all residential property loans originated in Q1 2018, down from 6.6 percent in the previous quarter and down from 6.6 percent a year ago.
Top loan originators for Q1 2018
The table below shows the top 10 mortgage originators in Q1 2018 based on dollar volume of loans.
Microsoft Word – Document5
For more information, visit ATTOM Data Solutions.
This was posted on RISMedia.com.
Property insurer reliability: New study ranks Fla. firms
MIAMI – June 19, 2018 – After the monster storm Hurricane Andrew struck Florida in 1992, 16 insurers went under as claims swamped some smaller companies, according to the Insurance Information Institute. Though Florida insurers are now backed by the Florida Insurance Guaranty Association, insolvency can lead to delays in the claims process.
A new study by ratings firm Weiss Ratings ranked Florida windstorm insurers on the basis of their financial soundness. All are not equally prepared to handle post-hurricane claims, it found.
The firm evaluated 135 companies on a scale of A through F rating based on the safety of its investments, cash reserves, profitability, liquidity/cash flow and years in operation.
“Many Florida homeowners are still waiting for their insurance claims to come through after a severe hurricane season last year,” said Gavin Magor, Weiss Ratings director of research, in a news release. “If the 2018 hurricane season is similar or worse, it could compound the problem, raising questions about the ability of weaker insurers to promptly cover major damages.”
Weiss Ratings gives these 10 companies the highest marks:
Amica Mutual Insurance (B+)
Auto Club Insurance Company of Florida (B+)
Castle Key Insurance Company (B+)
Cincinnati Insurance Company (A)
Citizens Property Insurance Company (A+)
Southern Fidelity Insurance Company (B+)
Southern-Owners Insurance Company (A)
United Services Automobile Association (A-)
USAA Casualty Insurance Company (A-)
USAA General Indemnity Company (B+)
Rating lowest were these companies:
Anchor P&C Insurance Company (D)
Edison Insurance Company (D+)
Florida Specialty Insurance Company (D)
Olympus Insurance Company (D+)
People’s Trust Insurance Company (D+)
Prepared Insurance Company (D)
Tower Hill Preferred Insurance Company (D)
Tower Hill Prime Insurance Company (D)
Universal P&C Insurance Company (D)
White Pine Insurance Company (D+)
Those who are considering buying homeowners insurance can sign up to check a company’s score on Weiss Ratings’ website.
© 2018 Miami Herald, Dylan Jackson. Distributed by Tribune Content Agency, LLC.
NAR: 75% think it’s a good time to sell a home
WASHINGTON – June 21, 2018 – Three out of four (75 percent) of Americans think it’s a good time to sell a house, while 68 percent think it’s a good time to buy, according to research from the National Association of Realtors®’ (NAR) second quarter Housing Opportunities and Market Experience (HOME) survey.
In addition, a majority of consumers believe prices have and will continue to increase and that homeownership strengthens our nation’s communities.
“Good time to buy” optimism remains stagnant from last quarter; 39 percent strongly agree that now is a good time to buy, while 29 percent moderately agree.
Among renters, however, those positive feelings fell significantly from 55 percent in the first quarter to 49 percent this quarter. Optimism is highest among older buyers (65 or over) and those living in the South and Midwest regions (73 and 71 percent respectively).
NAR Chief Economist Lawrence Yun says affordability and low inventory are eroding buyer confidence.
“Inventory remains the driving force in real estate, affecting everything from rising prices to household formation,” says Yun. “Improving supply conditions is critical to improving buyer optimism and helping to remove some of the barriers holding back potential first-time buyers.”
As home prices continue to climb across the country, the number of respondents who believe now is a good time to sell remains high with 46 percent strongly agreeing (up from 42 percent last quarter) and 29 percent moderately agreeing. Twenty-nine percent believe that now is not a good time to sell a home, and that drops to 19 percent for current homeowners.
“Hopefully this strong seller optimism will lead to an increase in inventory later on in the year,” says Yun.
Respondents were also asked about their perception of home prices in their communities. Sixty-eight percent believe that home prices have gone up in their area in the last 12 months, up from 63 percent last quarter. Fifty-five percent also believe that home prices will continue to increase in their communities over the next six months – also up from the previous quarter (53 percent).
A near high of 58 percent of households believe that the economy is improving – slightly down from 60 percent last quarter but up from 54 percent last year. People in rural areas are more likely to view the economy as improving (63 percent) than in urban areas (51 percent).
The HOME survey’s monthly Personal Financial Outlook Index, showing respondents’ confidence that their financial situation will be better in six months, dropped slightly from 63.8 in March to 62.1 in June. A year ago, the index was 57.2.
Forty-six percent of those surveyed say they do not believe it would be difficult to obtain a mortgage, up from 36 percent last quarter.
“This is most likely a reflection of the current positive outlook on the direction of the economy,” says Yun. “Healthy job creation and faster wage growth mean that homeownership is viewed as a more attainable goal than it was a year ago.”
Homeownership’s effect on communities, future generations
In this quarter’s survey, homeowners and non-homeowners were asked if a high rate of homeownership strengthens a community, and 67 percent said homeownership strengthens communities a great deal. That number jumps to 76 percent for current homeowners and 77 percent for those 65 and older.
“Homeowners are more likely to be involved and engaged in the issues facing their communities, since they tend to be more rooted in the area than renters,” says NAR President Elizabeth Mendenhall. “This involvement – homeowners are more likely than renters to vote, volunteer their time at local charities and support neighborhood upkeep – helps shape and strengthen our nation’s communities, as well as drive the national economy.”
Respondents were also asked if homeownership will be easier or harder to attain for future generations. Seventy-three percent believe that it will be harder for future generations to purchase a home compared to only 11 percent who think it will be easier. Seventy-four percent of respondents 34 or under believe it will be more difficult to become homeowners.
© 2018 Florida Realtors®
Study: Rents still rising but not as fast
HOLLYWOOD, Fla. – May 31, 2018 – RentCafe creates a monthly rent report with data compiled from actual rents charged in the 250 largest U.S. cities. In its latest report, it found that nationwide rents rose 2 percent year-to-year – the lowest increase since 2010.
However, all Florida cities in the report came in higher than 2 percent, starting with Hollywood, Fla., at the top – an 8.5 percent year-to-year increase – and Miami at the bottom with 2.5 percent.
Select Florida cities – average rent – year-to-year increase
Hollywood – $1,422 – 8.5%
Fort Lauderdale – $1,853 – 6.5%
Orlando – $1,342 – 5.8%
Tampa – $1,260 – 5.5%
West Palm Beach – $1,397 – 5.1%
Gainesville – $1,191 – 4.9%
Jacksonville – $1,014 – 4.0%
Tallahassee – $1,185 – 3.3%
Miami – $1,623 – 2.5%
Other report highlights
Renter mega-hubs: Overall, prices in 16 out of the 20 cities with the largest numbers of rental apartments climbed faster than the national average. Orlando, Las Vegas, Denver, Los Angeles rents are between 4 percent and 6 percent more expensive than one year ago, while rents in Manhattan, Austin, DC, and Chicago are about the same as last May.
Large cities: Currently boasting the fastest growing rent in the U.S., Detroit surpasses Las Vegas. Brooklyn (-1.2 percent) leads the way in the top 5 slowest growing rents, while Baltimore also makes an appearance on this list (0.4 percent).
Mid-size cities: Stockton and Tampa see the highest rent increases, 5.6 percent and 5.5 percent respectively. Sacramento drops to third place for fastest growing rents, a tie with Kansas City, MO (4.9 percent). New Orleans is the only market where apartment prices dipped 1.5 percent Y-o-Y.
Small cities gain momentum as growth in jobs and population draws rent increases. The most significant rent boosts in May were witnessed in Midland (35.4 percent) and Odessa (35.8 percent), but also in Yonkers (12.9 percent), Reno (10.7 percent) and Hollywood, Fla. (8.5 percent).
© 2018 Florida Realtors®
Scott issues order to protect beach access
TALLAHASSEE, Fla. – July 13, 2018 – Gov. Rick Scott issued an executive order Thursday to block state agencies from taking action on a bill he signed into law earlier this year – one that critics said from the outset could limit the public’s access to beaches.
Scott’s order imposes a moratorium on any new state regulation that could inhibit public beach access and urges local government officials to take similar steps.
“Unfortunately, the legislation has now created considerable confusion and some have even interpreted it as restricting beach access,” Scott said in a press release announcing the order. “I’m committed to keeping our beaches open to the public.”
Scott signed the law on March 23 and it went into effect July 1. It requires local governments to get a judge’s approval to enforce a “customary use” law so that the public can continue to use the dry sand areas of privately owned beachfront. In Florida, beach property can be privately owned, with ownership extending across dry sand to the edge of the high-water shoreline. However, private ownership of the dry-sand portion of the beach does not necessarily mean the public can’t use it.
The measure drew opposition from groups ranging from the Florida Association of Counties to the Florida Wildlife Federation and the Surfriders Foundation. The bill (HB 631) was sponsored by Sen. Kathleen Passidomo, R-Naples, and Rep. Katie Edwards-Walpole, D-Sunrise, and was approved 29-7 by the Senate and 95-17 by the House.
Scott’s order maintains that the law “does not privatize or close access to any public beach in Florida, but instead creates a uniform legal process for local governments seeking to expand the public’s access to beaches.” The order notes that “it is critical that there be no room for confusion regarding access to public beaches in Florida.”
The executive order also directs the Florida Department of Environmental Protection to serve both as an advocate for the public and as a liaison to local governments regarding the public’s right to access the beach.
Florida’s Democratic party immediately responded to Scott’s Order. Scott, a Republican, is running for the U.S. Senate in November and trying to unseat incumbent U.S. Sen. Bill Nelson, a Democrat.
“While it is welcome news that Floridians could now be able to access their beaches without fear of prosecution … Scott literally just signed the law that allowed residents to restrict beach access,” Florida Democratic Party spokesman Nate Evans said in a press release.
The governor’s order also directs state environmental officials to establish an online system in which Floridians can provide input on beach access. The results will be presented to the Legislature and governor prior to the 2019 session.
Source: News Service of Florida
Foreclosures down 78% since 2010 peak
IRVINE, Calif. – July 13, 2018 – ATTOM Data Solutions’ Midyear 2018 U.S. Foreclosure Market Report found a total of 362,275 U.S. properties with foreclosure filings – default notices, scheduled auctions or bank repossessions – in the first six months of 2018.
That number is down 15 percent year-to-year and down 78 percent from its recession-era foreclosure peak in the first six months of 2010.
Unlike earlier years, Florida is barely mentioned in ATTOM’s latest report. While its foreclosure rate remains No. 4 nationwide (0.37 percent), the top three states are now South Carolina (0.39 percent), Ohio (0.37 percent) and Nevada (0.37 percent).
In a look at metro areas, Miami is mentioned only because its foreclosure activity has dropped 55 percent below pre-recession averages – but 55 percent of the metro areas studied have also seen their foreclosure activity drop to a level below the “normal” level they had before the recession.
Florida does, however, continue to rank high for the number of days it takes for a home to go through the foreclosure process, ranking second nationwide. States with the longest average foreclosure timelines for foreclosures completed in the second quarter were Hawaii (1,553 days), Florida (1,166 days), New Jersey (1,161 days), Utah (1,108 days) and Indiana (1,054 days).
A handful of U.S. metro areas (12 percent) saw an increase in foreclosure activity rather than a decrease, however – but none of note in Florida. They include Houston (up 10 percent), Dallas-Fort Worth (up 11 percent), Cleveland (up 4 percent), Phoenix (up 5 percent) and Indianapolis (up 2 percent).
“Localized foreclosure flare-ups in the first half of 2018 can no longer be blamed on legacy distress left over from the last housing bubble, given that nearly half of all active foreclosures are now tied to loans originated in 2009 or later, and given that the average time to foreclose plummeted in the first two quarters of the year,” says Daren Blomquist, senior vice president with ATTOM Data Solutions.
Blomquist says the local foreclosure increases “are typically the result of more recent distress triggers” in those specific markets.
“We’re also seeing (some of the results) of gradually loosening lending standards starting in 2014, specifically for FHA-backed loans,” Blomquist added. “The foreclosure rate on FHA loans originated in 2014 and 2015 has now jumped above the average FHA foreclosure rate for all loan vintages – the only two post-recession vintages with foreclosure rates above that overall average.”
© 2018 Florida Realtors®
Ellie Mae: 91% of June new-home loans went to millennials
PLEASANTON, Calif. – Aug. 3, 2018 – An increasing number of younger adults are becoming homeowners.
Mortgages to millennial borrowers for new home purchases continued their ascent in June, accounting for 91 percent of closed loans, according to the latest Ellie Mae Millennial Tracker report. In May, 90 percent of closed mortgages to members of the generation were for new home purchases, up from April’s 89 percent, and January’s annual low of 81 percent.
The increasing loan numbers correlate with the Census Bureau’s latest quarterly homeownership and vacancy report that shows homeownership among millennials age 35 and younger increased slightly, representing 36.5 percent of all homeowners, compared to 35.3 percent in the first quarter of 2018.
Conventional loans remained attractive among millennials, representing 69 percent of all loans closed in June, a slight uptick from 68 percent in May.
FHA loans represented 27 percent of all closed loans to this generation in June, down one percentage point from the month prior – a significantly higher number than the Ellie Mae June Origination Insight Report data that found FHA loans represented 20 percent of closed loans for borrowers of all ages.
Average millennial borrower FICO scores across all loan types rose slightly in June to an average of 723 – up from 721 which held steady March through May. For purchases, the average FICO score was 746 for a conventional loan, 681 for an FHA loan and 744 for a VA loan.
“This new generation of homebuyers wants the capability of an on-demand mortgage, and we are working to provide borrowers a convenient and secure digital mortgage offering that makes the homebuying process a seamless experience,” says Joe Tyrrell, Ellie Mae’s executive vice president of corporate strategy.
Across all loan types, it took millennials an average of 42 days to close on their loans in June, a day longer than in March, April and May. Purchases took an average 41 days and refinances took an average 45 days.
In June, the hottest housing markets for millennials were primarily in the Midwest. The top markets by percentage of millennial loans closed included Clarksburg, W.Va. (65 percent); Watertown, S.D. (65 percent); Boone, Iowa (64 percent); and Dickinson, N.D. (61 percent).
© 2018 Florida Realtors®
Handful of signs suggest seller’s market may have peaked
NEW YORK – Aug. 3, 2018 – They were fed up with Seattle’s home bidding wars. They were only in their late 20s but had already lost two battles and were ready to renew with their landlord. Then, in May, their agent called.
Suddenly, Redfin’s Shoshana Godwin told the couple, sellers were getting jumpy, even here in the hottest of markets. Homes that should have vanished in days were sitting on the market for weeks. There was a three-bedroom fixer-upper just north of the city going for $550,000, down from more than $600,000. They made the leap in early June and had closed by the end of the month, for list price.
The U.S. housing market – particularly in cutthroat areas like Seattle, Silicon Valley and Austin, Texas – appears to be headed for the broadest slowdown in years. Buyers are getting squeezed by rising mortgage rates and by prices climbing about twice as fast as incomes, and there’s only so far they can stretch.
“This could be the very beginning of a turning point,” said Robert Shiller, a Nobel Prize-winning economist who is famed for warning of the dot-com and housing bubbles, in an interview. He stressed that he isn’t ready to make that call yet.
The data
A slew of figures released over the past few days gives ample evidence of at least a cooling.
Existing-home sales dropped in June for a third straight month. Purchases of new homes are at their slowest pace in eight months. Inventory, which plunged for years, has begun to grow again as buyers move to the sidelines, sapping the fuel for surging home values. Prices for existing homes climbed 6.4 percent in May, the smallest year-over-year gain since early 2017, and have gained the least over three months since 2012, according to the Federal Housing Finance Agency.
“Home prices are plateauing,” said Ed Stansfield, chief property economist at Capital Economics Ltd. in London. “People are saying: Let’s just bide our time, there’s no great rush. If we wait six or nine months we’re not going to lose out on getting a foot on the ladder.” That means “we’re now looking at a period in which prices move more or less sideways, or increase no more quickly than growth in incomes, over the next few years.”
Stansfield projects a 5 percent gain this year and a 3 percent increase in 2019. That compares with 10.7 percent in 2005, shortly before the crash.
Supply lines
Some of the most expensive markets, where sales are falling under the weight of prices, are now seeing substantial increases in supply, according to Redfin Corp. In San Jose, California, inventory was up 12 percent in June from a year earlier. It rose 24 percent in Seattle and 32 percent in Portland, Oregon. Those big jumps are from low numbers, so the housing crunch is still a serious problem.
“Inventory has increased quite a bit,” Godwin, the Seattle agent, said. “We’re seeing less competition.”
Dustin Miller, an agent with Windermere Realty Trust in Portland, said he’s trying to manage sellers’ expectations, something he hasn’t had to do since the end of the last housing boom. One customer, a baby boomer moving to a new home across the state, expected to have buyers fighting over her house. She got one bid, below her asking price.
“Buyers want to shop and take some time, as opposed to having to rush and throw offers in,” Miller said. “It’s the market correcting itself. At some point, you hit a peak of momentum, and then things level off.”
This new wariness was noticeable in the latest consumer-sentiment data from the University of Michigan. In its preliminary July survey, 65 percent of Americans said it’s a good time to buy a home, the lowest since 2008, when the economy was still in recession.
Still, market watchers note that the housing sector has strong support from a healthy labor market and steady economic growth, which indicates a stabilizing trend for home prices rather than anything close to the experience of the crisis, when property values plunged.
“The rate of home sales, new and existing, has probably peaked,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “But it’s not going to roll over. It will gently decline.”
New record
S&P CoreLogic Case-Shiller data hint at the softening. The 20-city index of property values rose 6.6 percent in the 12 months ending in April. After seasonal adjustments, the gauge posted its smallest monthly increase in 10 months, with New York, San Francisco and Washington reporting declines.
Homeownership still remains out of reach for many Americans, especially for first-time and younger buyers. For existing homes, the median price climbed in June to a record $276,900, while properties typically stayed on the market for 26 days, unchanged from the prior three months, according to the National Association of Realtors.
“Affordability is becoming a major headache for homebuyers,” said Lawrence Yun, the association’s chief economist. “You are seeing home sales rising in Alabama, where things are affordable. But in places like California, people aren’t buying.”
In addition, “no one knows how far and how fast” borrowing costs may rise as the Federal Reserve raises interest rates, Stansfield said. Lenders and borrowers alike are less likely to let credit spiral out of control than in 2005 and 2006. And with financing tighter and wage gains in check, “there’s not much scope for prices to continue to increase sustainably” at recent rates, he said.
The cooling, in turn, could curb housing starts, “because builders tend to only build what they think they can confidently sell,” Stansfield said. At the same time, he said, “it will decrease the risk of a bust.”
© 2018 Bloomberg L.P; © 2018 Penton Media; Prashant Gopal, Shobhana Chandra, Scott Lanman, Daniel Taub, Peter Jeffrey
Fla.’s ‘Realtor license plate’ generates $1M for affordable housing
ORLANDO, Fla. – Aug. 8, 2018 – The Florida Realtors-backed “Support Homeownership for All” license plate hit a major fundraising milestone this summer: It’s generated $1 million in total donations earmarked for affordable housing projects through the state.
“While not limited just to Realtors, it’s kind of become the ‘Realtor license plate’,” says Brad Monroe, chair of Homeownership For All Inc. and broker with Suncoast Realty Solutions in Tampa. “It’s a great way to promote homeownership and a lot of the projects supported by the state’s local real estate associations.”
2006 Florida Realtors President Mike Dooley created the license plate program, and he remains involved in its operations – the “godfather” for the plate, according to Monroe.
“Florida Realtors has offered incredible support for the entire license plate program,” says Dooley. “The association picks up all the administrative costs of the program, so almost 100 percent of the funds flowing into the program gets used for affordable housing programs.”
In addition to standard Florida license fees, drivers who opt for the specialty plate pay $25 at the time of purchase and each year after that – a relatively small amount of money that adds up over time. Almost 100 percent of the money – a little bit is used to promote plate sales – goes directly to help struggling homeowners since Florida Realtors provides the organizational work without charge. The program is a 501(c)(3) charity.
By the end of July 2018, 40,141 Florida automobiles sported the “Support Homeownership for All” license plate and $1,003,525 dollars had been raised since the program’s inception. To date, $817,013 has been disbursed to affordable housing programs across the state.
License plate history
Dooley started planning his presidential years in 2005 as president-elect. “Joyce Bartlett – my local AE (Jupiter-Tequesta-Hobe Sound Association) and a very dear friend we lost recently– and I were chatting, and she said that a Realtor had stopped in and said, ‘Wouldn’t it be cool to have a Realtor license plate?’ I let that idea stew for a while, and I picked up the phone and called John Sebree, the VP of public policy in Tallahassee at the time. We then started to do some research.”
The original goal was a true Realtor license plate but that proved problematic, so Dooley focused on a more general theme.
“In 2005-2006, real estate values peaked, and we only paid lip service to affordable housing because there wasn’t any,” says Dooley. “Fireman, teachers, police? They couldn’t find housing. We took that concept and ended up with a license plate called ‘Support Homeownership for All,’ which became a vehicle of funding for affordable housing.”
The actual design for the license plate – a Florida home shaded by palms and backlit by a dramatic sunset – sprang from a “design the license plate” contest open to Realtors and was based on the winner’s entry.
Once the license-plate concept was in place along with bylaws and a charter, Florida Realtors’ Tallahassee team found lawmakers in the Senate and House of Representative who agreed to introduce a bill authorizing the plate, HB 1589. It passed and the governor signed it into law.
License plate today
When asked about the $1 million milestone, Dooley doesn’t focus on the big amount – he focuses on the $25 that Realtors and others pay each year to sport the plate on their car.
“You might think one license plate doesn’t do anything,” says Dooley. “It costs no more than a doorknob, a light fixture. But if we all join in, $25 grows into more than $1 million. That, in and of itself, is a testament to the belief that every little bit helps.”
Since Realtors tend to sport the license plate, they also serve a secondary role: “When you’re driving around and you see one, you kind of feel as if that other driver is part of our club,” says Dooley. “It’s kind of cool.”
“We can’t thank all the Realtors enough,” adds Monroe. “Keep it going. We’re making a difference and we’re getting affordable housing funds into the right hands and supporting homeownership around the state.”
© 2018 Florida Realtors®