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At least half of the nation’s REALTOR® associations planned projects, from serving homeless shelters to community cleanup efforts, during the 2022 REALTOR® Volunteer Days.
From volunteering at local homeless shelters to community cleanup efforts, REALTORS® turned out in large numbers during the nationwide REALTOR® Volunteer Days, and the results of their giveback efforts are rolling in.
At least half of the nation’s 1,138 local and state REALTOR® associations planned volunteer projects and invited their members to join the efforts during the week-long nationwide event. The National Association of REALTORS® encouraged associations, brokerages and individual members across the country to participate in local volunteer activities during the REALTOR® Volunteer Days, which ran June 4-12. REALTOR® Volunteer Days is a yearly event in early June that is part of the REALTORS® Are Good Neighbors program.
“It’s inspiring to see stories from all over the country of REALTORS® coming together to uplift their communities,” says Sara Geimer, manager of NAR’s Good Neighbor Awards. “It’s not surprising, though: REALTORS® tend to be natural problem solvers, natural connectors, and, of course, they are deeply invested in making sure their communities are healthy and strong.”
But REALTORS® show up to give back to their communities far beyond the REALTOR® Volunteer Days event, Geimer says. NAR members volunteer in their communities nearly three times more than the average American, according to NAR’s C.A.R.E. (Community Aid and Real Estate) report.
Associations and members planned numerous events as part of the 2022 REALTOR® Volunteer Days to help benefit their local communities, such as through donation drives for food banks, Habitat for Humanity builds, neighborhood cleanups and more. Read more stories from the 2022 REALTOR® Volunteer Days at the REALTORS® Are Good Neighbors Facebook page, and take a peek at some of their many efforts.
Florida Realtors®: Florida’s single-family median price up 21.8% to $420K. Condo median price up 28.8% to $322K. Rising interest rates slow sales but new listings up.
Rising mortgage interest rates, high inflation and still-tight inventory levels were factors influencing Florida’s housing market in May, with fewer closed sales compared to a year ago, according to Florida Realtors®’ latest housing data.
“Households everywhere are feeling the pinch of high inflation,” says 2022 Florida Realtors® President Christina Pappas, vice president of the Keyes Family of Companies in Miami. “Homebuyers are also facing the challenges of rising interest rates and tight inventory of for-sale homes, causing some to hit the pause button on their plans. Still, the median time to contract for single-family existing homes in May was nine days – the same as it was in May 2021. The median time to contract for existing condo-townhouse units last month was 10 days compared to 19 days a year ago.
“Real estate market conditions are always changing, but buyers and sellers can turn to a local Realtor® for expertise, knowledge and support.”
Last month, closed sales of single-family homes statewide totaled 28,861, down 6.9% year-over-year, while existing condo-townhouse sales totaled 13,265, down 14.4% from May 2021, according to data from Florida Realtors® Research Department in partnership with local Realtor® boards/associations. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Rising mortgage interest rates continue to depress sales of existing homes in Florida, according to Florida Realtors® Chief Economist Dr. Brad O’Connor, who added that the current level of sales is more comparable to the pre-pandemic years of 2018 and 2019 than sales in 2021, when mortgage rates were still near their all-time lows.
“This slowdown in the rate of sales was accompanied by an increase in the rate of homes listed for sale in May,” he said. “New listings of single-family homes were up on a year-over-year basis by 10.2% – the largest such increase since August of last year. New listings of townhouses and condos were up more modestly, by 3.4%.”
Dr. O’Connor explains, “With sales levels falling closer to historical norms and new listings on the rise in May, inventory levels are starting to rise, as well. The number of single-family homes actively listed for sale in Florida at the end of May was up over 23% compared to the end of April, and up 31.5% compared to a year ago. However, townhouse and condo inventory was up by almost 16% month-over-month, but still down on a year-over-year basis by 20.5%.
“Remember, inventory in each category – single-family homes and also for condo-townhouse properties – has remained at a very low level for some time, which means we’re still deep in seller’s market territory. But we’re starting to see some progress back toward a balanced market.”
The statewide median sales price for single-family existing homes in May was $420,000, up 21.8% from the previous year. Last month’s statewide median price for condo-townhouse units was $322,000, up 28.8% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
On the supply side of the market, inventory (active listings) of single-family existing homes showed some year-over-year improvement in May; it was at a 1.4-months’ supply compared to a 1.1-months’ supply a year ago. Condo-townhouse inventory was at a 1.5-months’ supply in May.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 5.23% in May, significantly higher than the 2.96% averaged during the same month a year earlier.
To see the full statewide housing activity reports, go to the Florida Realtors Newsroom and look under Latest Releases or download the May 2022 data report PDFs under Market Data.
The median age of a home in the U.S. is 39 years old. The aging housing stock signals a growing remodeling market ahead, according to a new report from the National Association of Home Builders.
As homes age, they need repairs or updated components such as appliances. Homeowners may add amenities to older homes as well, to have them better compete against more modern home styles and amenities.
“Rising home prices also encourage home owners to spend more on home improvement,” the NAHB says on its Eye on Housing blog. The aging housing stock also likely will lead to rising demand for new construction over the long run as homes get older, the NAHB notes.
More than half of owner-occupied homes were built before 1980. About 38% were built before 1970. Meanwhile, new-home construction has not kept up the pace over the past nine years, with the share of new homes dropping from 15% in 2006 to 7% in 2019, according to the builders’ trade group.
The share of housing stock built 50 years ago or more jumped from 30% in 2009 to 37% in 2019.
Just in! May 2022 released from Florida Realtors® detailing recent real estate activity in St. Lucie County. The reports compare year-over-year data. Here are statistics on single family homes.
“St. Lucie County’s median sale price reached $390,000 in May! Along with the rise in median sale price, we also saw a 37.9% increase in active listings and 30.0% increase in months’ supply of inventory. This uptick in inventory can be attributed in large part to the federal interest rate hikes to combat inflation,” said Carlos A. Melendez, President of Broward, Palm Beaches & St. Lucie REALTORS®.
Inventory is the number of property listings that are active at the end of the month. Meanwhile, months’ supply of inventory is an estimate of the number of months it will take to deplete the current inventory given recent sales rates.
“Despite rising mortgage rates, this is still a bargain compared to interest rates from the 1970s to early 2000s when we look at historical data from Freddie Mac. Don’t fall into the trap of waiting to buy and with hopes that mortgage rates will drop. The South Florida real estate market is hot, and one of the best ways to fight inflation is to work with a REALTOR® to invest in real estate. With a REALTOR®, you’re not just getting any real estate agent. You’re getting the expertise and dedication of a professional who is just as invested in your future as you are. Visit OnlyARealtor.com to learn more,” continues Melendez.
As quickly as mortgage rates are rising, the once red-hot housing market is cooling off. Home prices are still historically high, but there is concern now that they will ease up as well.
All of this has people asking: Is today’s housing market in the same predicament that it was over a decade ago, when the 2007-08 crash caused the Great Recession?
The short answer is: no. America’s housing market is in far better health today. That’s thanks, in part, to new lending regulations that resulted from that meltdown. Those rules put today’s borrowers on far firmer footing.
For the 53.5 million first lien home mortgages in America today, the average borrower FICO credit score is a record high 751. It was 699 in 2010, two years after the financial sector’s meltdown. Lenders have been much more strict about lending, much of that reflected in credit quality.
Home prices have soared, as well, due to pandemic-fueled demand over the past two years. That gives today’s homeowners record amounts of home equity. So-called tappable equity, which is the amount of cash a borrower can take out of their home while still leaving 20% equity on paper, hit a record high of $11 trillion collectively this year, according to Black Knight, a mortgage technology and data provider. That’s a 34% increase from a year ago.
At the same time, leverage, which is how much debt the homeowner has against the home’s value, has fallen dramatically.
Total mortgage debt in the United States is now less than 43% of current home values, the lowest on record. Negative equity, which is when a borrower owes more on the loan than the home is worth, is virtually nonexistent. Compare that to the more than 1 in 4 borrowers who were under water in 2011. Just 2.5% of borrowers have less than 10% equity in their homes. All of this provides a huge cushion should home prices actually fall.
Not as many risky loans
There are currently 2.5 million adjustable-rate mortgages, or ARMs, outstanding today, or about 8% of active mortgages. That is the lowest volume on record. ARMs can be fixed, usually for terms of five, seven or 10 years.
In 2007, just before the housing market crash, there were 13.1 million ARMs, representing 36% of all mortgages. Back then, the underwriting on those types of loans was sketchy, to say the least, but new regulations following the housing crash changed the rules.
ARMs today are not only underwritten to their fully indexed interest rate, but more than 80% of today’s ARM originations also operate under a fixed rate for the first seven to 10 years.
Today, 1.4 million ARMs are currently facing higher rate resets, so given higher rates, those borrowers will have to make higher monthly payments. That is unquestionably a risk. But, in 2007, about 10 million ARMs were facing higher resets.
Mortgage delinquencies are low
Mortgage delinquencies are now at a record low, with just under 3% of mortgages past due. Even with the sharp jump in delinquencies during the first year of the pandemic, there are fewer past- due mortgages than there were before the pandemic. Pandemic-related mortgage forbearance programs helped millions of borrowers recover, but there are still 645,000 borrowers in those programs.
“The mortgage market is on very historically strong footing,” said Andy Walden, vice president of enterprise research at Black Knight. “Even the millions of homeowners who availed
themselves of forbearance during the pandemic have by and large been performing well since leaving their plans.”
There are, however, about 300,000 borrowers who have exhausted pandemic-related forbearance programs and are still delinquent. In addition, while mortgage delinquencies are still historically low, they have been trending higher lately, especially for more recent loan originations.
“We’ll want to keep an eye on this population moving forward,” Walden said.
Mortgage credit availability is well below where it was just before the pandemic, according to the Mortgage Bankers Association, suggesting still-tight standards. But lenders have lost about half their business since rates began rising, and that could mean they become more aggressive in lending to less credit-worthy borrowers.
The biggest problem in the housing market now is home affordability, which is at a record low in at least 44 major markets, according to Black Knight. While inventory is starting to rise, it is still about half of pre-pandemic levels.
“Rising inventory will eventually cool home price growth, but the double-digit pace has shown remarkable sticking power so far,” said Danielle Hale, chief economist at Realtor.com. “As higher housing costs begin to max out some buyers’ budgets, those who remain in the market can look forward to relatively less competitive conditions later in the year.”
In exchange for that savings, however, buyers accept risks. Adjustable rates reset at a future point, and interest rates could be uncomfortably higher when they do.
When the average 30-year, fixed mortgage rate hit record lows over the past few years, adjustable-rate mortgages (ARMs) seemed to have completely disappeared. But as rates rise, more buyers are considering ARMs as a way to offset higher costs.
According to an analysis by Redfin, the typical homebuyer could save an estimated $15,582 over five years – roughly $260 per month – by taking out an adjustable-rate mortgage rather than a 30-year-fixed-rate mortgage (FRM).
In savings terms, it’s the largest amount of money since at least 2015.
For the analysis, “typical” is based on estimated monthly mortgage payments for a median-asking-price home during the four weeks ending May 12, comparing the 30-year fixed mortgages and 5/1 adjustable-rate mortgages (ARM).
A 5/1 ARM offers a fixed interest rate for five years, and then a varying rate that adjusts once per year, usually for a 30-year loan. However, ARMs vary. A 7/1 offers a fixed rate for seven years, though the initial guaranteed rate is likely higher than the one for a 5/1 ARM.
The typical monthly payment for buyers who took out a 5/1 ARM was an estimated $2,164 during the four weeks ending May 12 – roughly 11% ($260) lower per month than the $2,423 estimated payment for buyers who took out a 30-year FRM.
The week of May 12, the average interest rate on a 5/1 ARM was 3.98% compared to a 5.3% average rate on a 30-year FRM. It’s a spread of 1.32 percentage points, or just shy of the 1.36 percentage-point spread during the week ending April 21, which was the largest since 2014.
About one in 10 (10.8%) of loan applications as of May 6 were for an ARM, up 3.1% from the start of the year and the highest percentage since 2008, when a lack of ARM regulation helped contribute to the housing crash.
In the early 2000s, scores of borrowers were drawn to ARMs offering low initial “teaser rates” and sometimes a 0% down payment. But when those ARMs later reset to a higher interest rate, many of those borrowers could no longer afford their monthly payment. Today’s ARMs are generally safer, in part because federal regulations grew tougher following the Great Recession, and lenders today learned a lesson from those mistakes.
Still, ARMs come with a big risk: No one can predict where interest rates will be five years in the future. If they’re significantly higher, it still might be harder for borrowers to cover their monthly mortgage. For certain types of ARMs, borrowers may even face fees or penalties if they refinance or pay off their loan early.
“Adjustable-rate mortgages can work really well for homebuyers who plan to stay in their home for less than 5 to 10 years and have the means to cover higher payments when the loan resets,” says Arnell Brady, a senior loan officer Bay Equity Home Loans.
FHA Releases Second Webinar in Dispelling Homebuying Myths Series: Affording a Home
Today, the Federal Housing Administration (FHA) is launching, Dispelling Homebuying Myths: Affording a Home, the second webinar in its four-part webinar series. The Dispelling Homebuying Myths webinar series is available on the Single Family Housing Events and Training webpage on HUD.gov and reveals the truth about common myths associated with using an FHA-insured loan to purchase a home.
In addition to providing a resource to prospective homebuyers, this webinar may be useful for loan originators, real estate professionals, and others interested in learning more about FHA-insured loans and misconceptions in the homebuying process.
Other topics in the series, including Qualifying for a Home, Finding the Right Home, and Tips for Buying Your First Home, were or will be released in June, which is National Homeownership Month. Additional details will be communicated via FHA INFO.
Let’s say you take a listing on a nice little Cape Cod–style home that has 1,000 square feet on the main floor. The second floor, with two bedrooms and a bathroom, measures 500 square feet. You sell the property and, when the appraisal comes back, it shows only 1,000 square feet of above-grade space. What’s going on? Has the appraiser made a mistake?
The answer is no, and here’s why.
As of April 1, Fannie Mae requires the ANSI home measurement standard for appraisals; that standard has guidance on what constitutes living space that may differ from your understanding. It’s the only one of the secondary financial agencies—so far—that has officially adopted this standard. Other government lending institutions (Freddie Mac, FHA, VA, and Rural Housing) indicate that they’ll accept the ANSI standard, but it’s unclear if they’ll accept Fannie Mae’s protocol when there are portions of the property that are used as living space but aren’t classified as living space under ANSI.
Key Elements of the Standard
ANSI stands for the American National Standards Institute. It’s a private nonprofit organization founded in 1918 that administers and coordinates the U.S. voluntary standard and conformity assessment system. ANSI doesn’t develop standards itself but provides a framework for setting them in a wide range of disciplines. The ANSI home measurement standard is one of several; another commonly used standard is the American Measurement Standard.
The ANSI home measurement standard has a few key elements that you should be aware of:
It applies only to single-family housing. It doesn’t apply to apartments, condos, or commercial property.
The measurement standard is from the exterior walls and includes the area on each floor above grade based on exterior measurements including stairwells but excluding open areas.
The standard requires a minimum ceiling height of seven feet. In second-story areas with sloped roofs living area starts at 5 feet on the slope, and 50% or more of the ceiling has to be 7 feet or above.
Living space that is below grade, even if it’s only a foot or two, is to be considered basement space.
The standard requires that the property to be measured to the nearest inch or one-tenth of a foot.
In the case of our Cape Cod home, its second floor has a ceiling height of 6 feet 9 inches. Under the ANSI standard, none of that space is considered living space. Fannie Mae guidance indicates that the space should be included and valued appropriately but is not to be reported as above-grade living space; rather; it must be reported on the lower section of the adjustment grid as another item. However, bedrooms and baths found in this space are to be reported as above-grade bedrooms and bathrooms.
If you are confused, you are not alone.
A host of potential questions and problems accompanies the adoption of this standard, including how to treat functional space that’s not defined as living space by ANSI. Fannie Mae has issued an FAQ that should answer many agent questions and provide guidance to appraisers on how to deal with individual situations. In addition, Fannie Mae’s Selling Guide includes a section on how gross living area is measured and calculated.
The Quandary: Conflicting Data
Why did Fannie Mae adopt the ANSI standard? Millions of appraisals are submitted to Fannie Mae every year, and the agency determined that a national standard was needed to improve the consistency and reliability of appraisal reports when it comes to living area determinations.
Getting to that national standard is easier said than done.
Much of the information about property physical characteristics is obtained from public record sources that are usually developed by the county assessor. Some counties have adopted the ANSI rule and some have adopted the AMS. Others follow local tradition and practice. There are some differences in the two most common home measurement standards. For example, in addition to the issue of ceiling height, the AMS doesn’t include stairwells in the living area, whereas ANSI does; that leads to discrepancies between appraisals and public records.
It is in our interest, as competent real estate professionals, to be aware of the ever-changing valuation landscape so that we can help our clients better understand the appraisal and financing process. In most areas, there are likely to be only minimal discrepancies between public records and the appraisal. But when those discrepancies are significant, it’s important to understand why they exist and to be sure the space is being valued properly. Broad adoption of the ANSI standard by the secondary mortgage market would reduce confusion.
Craig Morley – Craig Morley, GAA, MNAA, is owner and managing partner of Accurity Valuation–Morley & McConkie LC in St. George, Utah. A certified general appraiser licensed in Arizona, Nevada, and Utah, Morley was a member of the Utah Appraiser Licensing and Appraisal Board from 2004 to 2012 and chaired the board for four of those years. He’s a past president of the National Association of Appraisers and a past chair and current member of the National Association of REALTORS® Real Property Valuation Committee. In 2020, the Appraisal Foundation board of trustees appointed him to serve a three-year term on the Appraisal Standards Board, which is responsible for writing, amending, and interpreting the Uniform Standards of Professional Appraisal Practice, or USPAP.
The Treasure Coast’s unprecedented real estate market continues to redefine the lives of buyers and renters alike, as high demand and properties in low supply catapult prices. But some are bearing the brunt of the consequences more than others. Many middle- to low-income residents who can’t adapt to the area’s drastic rise in housing costs are being forced to either: move out of the tri-county region; couch surf at the homes of family and friends; find extra employment to offset bills; or live homeless.
“It seems like everything that’s going on is kind of pushing people like me —who have been here forever — out because we can’t afford it,” said Melanie Quinn, an ostomy specialist who lives in Port St. Lucie. “We’re all at our ceiling of what we can afford.”
Priced out of paradise
The Port St. Lucie Metropolitan Service Area, encompassing Martin and St. Lucie counties, is the 5th “most overvalued” rental market nationwide, according to a Florida Atlantic University study published this month.
The “effective asking rent” — the listed price minus discounts — increased last year, according to the nationwide real estate analysis firm Real Page, by:
25.9%: Port St. Lucie Metropolitan Service Area
11.8%: Vero Beach-Sebastian Metropolitan Service Area though resident income also increased, it wasn’t as much.
Florida last year saw a 9.4% jump in its “personal income” — including earnings, property income and financial assets — when compared to 2020,according to preliminary data by the U.S. Department of Commerce’s Bureau of Economic Analysis.
The data may not accurately represent residents’ net worth, though, as the nation continued to economically recover from the affects of the COVID-19pandemic.
Regardless, residents shouldn’t spend over 30% of their income on housing. The U.S. Department of Housing and Urban Development calls that “cost-burdened.”
About 71% of low-income Florida residents and 42% of middle-income residents are expected to be cost-burdened this year, according to the National Low Income Housing Coalition.
Those statistics are likely to worsen, said Andrew Aurand, vice president of research for the National Low Income Housing Coalition.
“Low-income renters were struggling to afford their rent even before the pandemic, and even before this significant spike in rents,” Aurand said. “… If they’re severely cost-burdened by housing, they cut back on other necessities: food, medical care, other things that they need.”
It will be devastating to low-income residents if these rent hikes continue, he said. Aurand speculates that evictions, homelessness and familial cohabitating will increase until more affordable
rental housing becomes available.
Leaving the Treasure Coast
Melissa Lamb is a Martin County native, but it’s not the hometown she remembers.
“It’s hard to see how everything is just different,” said Lamb, 34, who has moved to Titusville, citing the area’s comparative affordability. “It used to be this tiny, little, small beach town. And now it’s just grown into an overpopulated area. It’s a nightmare.”
Lamb and her boyfriend pay $1,900 a month for a four-bedroom, roughly2,000-square-foot single-family home, where they live with four children and a dog. She still commutes to the Treasure Coast regularly, working as a laboratory technician in Vero Beach and sharing custody of two children with her ex-husband, who lives in Port St. Lucie.
Seeing the changes, Lamb said she wouldn’t consider moving back. “It’s just not worth it,” she said.
Biting the bullet
Quinn doesn’t want to leave the Treasure Coast.
The 43-year-old was born and raised in Stuart, but has been renting in Port St. Lucie for about 11 years.
She, her boyfriend and a roommate were splitting the $1,200 monthly rent for a three-bedroom home. The landlord raised the rent to $1,450 monthly in2021, then decided to sell the property, forcing them to leave in August.
The trio moved into another rental, but faced a 62% price hike and had to bring in another roommate — Quinn’s mother. They’re paying $2,350 monthly for a four-bedroom Port St. Lucie home.
Quinn also picks up extra work through food delivery services such as Grubhub, InstaCart and Door Dash to help pay the bills. But it still might not be enough if rental rates keep increasing, she said.
“All of us are really scared of how high this rent is going to go,” Quinn said.
Couch surfing increases
The Treasure Coast saw a 5 1% increase in the number of people who identified as “couch surfers” last year — or individuals temporarily staying with family or friends, according to Treasure Coast Homeless Services Council data.
That doesn’t shock Port St. Lucie resident Marni Gandel, a 39-year-old living with her mother. She moved in amid the coronavirus pandemic, but is unable to find an affordable one-bedroom rental.
“I don’t think many of us that are working-class people are making enough,” said Gandel, a personal assistant who earns $22 hourly. “I just want to live in the town that I work. I want to have my own place to call home and rest.”
Jill Winder has a different perspective. Her 38-year-old son moved into her Rocky Point home in Stuart in March.
It’s a win-win situation, Winder said: Her son pays the $1,300 mortgage, but is saving hundreds monthly to put toward a down payment on a home. That likely wouldn’t be possible had he been renting elsewhere.
She doesn’t mind the extra company either.
“I kind of like having him around. It’s pretty nice,” said Winder, 65. “But, hopefully (the market) will get better.”
Gandel, on the other hand, is desperate to get out of her mother’s house. She’s searched market listings daily for the last seven months, but everything within her budget isn’t suitable.
When expressing frustrations to others, Gandel said she’s often dismissed.
“A lot of people say, ‘Well, get a better job’ or ‘Move away’ — but to what end?” she said. “The whole town, who is the working class, has to move away?
“I just don’t think it’s fair,” she said. “I’ve planted my roots here, I work really hard, I make good money, comparatively speaking, and yet I’m told I just shouldn’t live in town?”
With the Hometown Heroes program, frontline community workers may be able to get up to $25,000 in down payment and closing cost assistance. Check out the video and flyer below for more information.
Housing costs have skyrocketed across Florida, as out-of-towners flock to the Sunshine State in search of bigger houses, more outdoor recreation and a better quality of life amid the coronavirus pandemic.
The population increase has culminated to a piping hot residential real estate market as buyers vie for properties in high demand but low supply. As a result, some native Floridians are being outbid or priced out of the state entirely.
The statewide single-family median sale price in April was $410,000, up 21.8% from the previous year, according to data from Florida Realtors. Some areas are experiencing even starker increases.
Where are the most ‘overpriced’ housing markets in Florida?
Moody’s Analytics dubbed housing as more than 20% overvalued in nearly two dozen Florida metropolitan statistical areas and divisions. The Treasure Coast neared the top of the list, with Port St. Lucie and Vero Beach-Sebastian homes overvalued at 42% and 40%, respectively. Homosassa Springs topped the list, where homes are 57% overvalued. Hover over the cities to view the data:
Two dozen Florida metropolitan areas are considered overvalued, according to financial services company Moody’s Analytics — and a majority are overpriced more than 20%.
Here’s where the most overvalued housing markets are statewide, as of the first quarter this year. It’s no surprise that coastal areas top the list.
The Homosassa Springs Metropolitan Service Area (MSA), encompassing Citrus County, clinched the No. 1 spot at 57% overvalued. It was also the fourth-highest ranking nationwide.
Rounding out Florida’s Top 10 most overpriced markets include:
The data analyzed the difference between the actual house prices and the “fair value” prices consistent with household incomes and construction costs, said Mark Zandi, chief economist at Moody’s Analytics.
That means an area is dubbed “overvalued” if house prices in the area have risen significantly above the key factors that determine a home’s value.
Treasure Coast markets near top of list
Both Treasure Coast housing markets landed a spot among the state’s Top 5 most overvalued, with the Vero Beach-Sebastian MSA ranking fourth and Port St. Lucie’s MSA — encompassing both Martin and St. Lucie counties — right behind.
It may not shock residents, as prices continue to reach record highs throughout the tri-county region. In April, median single-family home sale prices all peaked at:
$619,900:Martin
$386,940:Indian River
$380,000: Lucie
Though Moody’s Analytics examined the residential market, others have also reported similar findings for the Treasure Coast’s rental market.
Rentals in the Port St. Lucie MSA are the sixth-most overvalued nationwide, according to a project jointly produced by Florida Atlantic and Florida Gulf Coast universities.
The area had an average rental price of $2,266, about 16% more expensive than what it “should be,” researchers found.
What does this mean for Floridians?
These price hikes are troubling for Floridians for a few reasons.
Though industry professionals predict the market will stabilize eventually, as it always has, these higher home prices could continue for some time. But as it slows, homeowners won’t capitalize as much.
“Floridian homeowners are much wealthier given the surge in house prices in much of the state, but not quite as wealthy as they may think,” Zandi said. “It will be tougher to trade up to another more expensive home, or take equity of their home to help finance their spending.”
Moreover, many middle-to-low-income residents and first-time homebuyers are locked out of the market, Zandi said, unable to not only front these high sale prices but increased mortgage rates and homeowners insurance.
The 30-year rate moved up to an average 5.25% — up from an average 3% a year ago, as of a May 19 report by mortgage buyer Freddie Mac.
Moreover, property insurance policies are expected to increase 30-40% this year because the Legislature did not pass multiple bills intended to alleviate skyrocketing premiums statewide.
Is the real estate market cooling?
Though real estate experts predicted 2022’s market to be similar to that of last year, these continual price hikes may cool it down.
These increases in mortgage rates and homeowners insurance could significantly affect a homeowner’s monthly payment when home prices are as expensive as they are now, and push affordability out of reach.
“Florida homeowners should prepare for much slower house price gains, or even some declines in some parts of the state, for the next several years,” Zandi said.
Fannie Mae and Freddie Mac are implementing big reforms aimed at helping disadvantaged communities become homeowners and making sure homebuyers of color stay owners.
The initiative from the two federally backed home mortgage companies announced Wednesday is the most sweeping overhaul since the housing crash in 2008. Some of the big-ticket items exclusively reviewed by USA TODAY include assistance with down payments, reserve funding for homeowners’ emergencies and lower mortgage insurance premiums.
Fannie Mae and Freddie Mac are also rolling out anew credit reporting system that factors rent payments into creditworthiness scores, one of the biggest barriers experts say keep renters of color from being able to purchase a home.
‘It’s really powerful, almost like the government is owning the problem,’ said Naa Awaa Tagoe, acting deputy director for the Division of Housing Mission and Goals at the Federal Housing Finance Agency, the independent regulatory agency that oversees the secondary mortgage market, including Fannie Mae and Freddie Mac.
‘This is Fannie Mae and Freddie Mac saying, ‘Yes, there is an issue with equity in housing finance, and these are the steps we need to take to address them.’’
The three-year strategy also laid out plans to increase fairness in the underwriting process, address appraisal disparities in multifamily housing, and finance permanent supportive housing programs primarily geared at housing for people experiencing homelessness.
As part of the effort, Freddie Mac is expected to issue $3billion in affordable housing bonds this year.
Widening accessibility
By 2024, Freddie Mac wants to fund the construction of 30,000 new multifamily units that allow credit-building for renters, accept housing choice vouchers and are designed inclusively for people with disabilities. They want to make the credit-building program available to 300,000units. The lender also wants to finance loan offerings in underinvested communities and neighborhoods at risk of losing affordability.
By 2024, Fannie Mae has a target of 140,000consumers completing the first-time homebuyer process with any provider and 90,000 completing Fannie Mae’s course.
Some of the measures already have been piloted. From September 2021 to May, about 2,000applicants have benefited from Fannie Mae’s credit reporting system that takes positive rental payment history into account for building creditworthiness. About 50% of applicants were racial minorities.
Decades of discrimination
Together with the Federal Housing Administration and Department of Veterans Affairs, Fannie Mae and Freddie Mac directly or indirectly guarantee 70% of single-family mortgage origination.
Neither Fannie Mae nor Freddie Mac services loans. Instead, they purchase mortgages from lenders to hold, sell or repackage as securities. That helps originate more loans and increase the supply of mortgage dollars.
Leading up to the 2008 housing market crash, Fannie Mae and Freddie Mac pumped more money into the housing financing system and bought an outsized number of mortgage loans, which helped inflate home prices. After the Great Recession of the late 2000s, both were placed into conservatorships.
In the U.S., homeownership has long been viewed as the single most important vehicle for wealth accumulation.
The median net worth of white families who are homeowners was $300,000, of which $130,000was attributed to housing, according to the 2019 Survey of Consumer Finance, the most recently available. That number decreases to $113,000 for Black families who are homeowners, of which $67,000 is derived from home equity. And for Latino families, roughly $95,000 of their median net worth of $165,000 is tied to owning a home.
Homeownership has remained out of reach for people of color because of decades of disinvestment and racist practices such as redlining, which allowed banks to limit loans, mortgages and insurance in geographic areas based on race and ethnicity.
On June 1st, FL Housing Finance Corporation launched the new, frontline worker program, the FL Hometown Heroes Program. This program is offered as a TBA (The Bond Alternative) program and offers full-time, licensed or certified professionals below market interest rates for first mortgages that include both conventional and government financing options. Down payment and closing cost assistance of up to 5% of the loan amount (not to exceed $25,000) is available to assist those that serve our communities with purchasing a home in the community they serve.
A list of all eligible occupations is provided in the upcoming training as well as in the FL Hometown Heroes Lender Guide. Click on this link to view the guidelines, scroll down and click on Hometown Heroes.
What’s trending and where? Confused.com, a home insurance resource, took its annual look at the latest trends for homes across the U.S.
In New Mexico, residents are loving Japanese home-inspired styles (like white walls and “zen” finishes) while Maine residents are showing more favor for Tuscan styles (with terracotta, iron finishes, stone, and tiles). The overall favorite among the states, however, is modern, defined by monochromatic color palettes, clean lines, minimalism, and natural finishes.
View this chart from Confused.com to find the trendiest style in your state.
You’re probably familiar with the statistic: Homeowners have a median net worth that is nearly 40 times greater than that of their renter counterparts, according to the Federal Reserve’s Survey of Consumer Finances. Owners gained a staggering $3.2 trillion in home equity in 2021. Yet the current low inventory and high prices, as well as the continued burdens of student loan debt and historic racial inequalities, have essentially closed off this great wealth builder for many Americans.
“To get more people into homeownership … we need to overcome the ‘double trouble’ dilemma of low inventory and high prices—and now interest rates,” said NAR President Leslie Rouda Smith in her Presidential Quarterly Update video released in late May.
That’s something the National Association of REALTORS® is working hard to do. NAR kicks off the month with the launch of a new Homeownership Month landing page that gathers the association’s policy priorities, research, and resources in one place.
“Our job is to fight for your clients, consumers, and the entire industry to make sure we have enough housing supply to make homeownership accessible, available, and affordable,” says NAR Chief Advocacy Officer Shannon McGahn.
Here are some of the activities and initiatives that NAR is highlighting as part of Homeownership Month:
1. NAR is working closely with the White House, Congress, and industry partners on solutions to increase housing supply and affordability. The association championed the inclusion of a historic funding request for affordable housing in the Biden administration’s fiscal year 2023 budget and applauded the White House for marking the importance of National Homeownership Month with a new proclamation. NAR is also currently advocating for the following key pieces of legislation:
Housing Supply and Affordability Act (S. 902, H.R. 2126), which would create a Local Housing Policy Grant program for cities, states, and tribes to enact pro-housing policies at the local level.
Neighborhood Homes Investment Act (S. 98, H.R. 2143), which would offer tax credits to attract private investment in building and rehabilitating owner-occupied homes.
GREATER Revitalization of Shopping Centers Act (H.R. 5041), which would create a grant within the Section 108 Loan Guarantee Program to incentivize public and private investment in abandoned and underutilized shopping malls.
Revitalizing Downtowns Act (S. 2511, H.R. 4759), which would offer a tax credit to convert unused office buildings into residential, commercial, and mixed-use properties.
Housing Fairness Act (S. 769, H.R. 68), which would reauthorize and increase funding for HUD fair housing testing and enforcement programs.
2. As a founding member of the Black Homeownership Collaborative, NAR is working with coalition partners to add 3 million net new Black homeowners in the U.S. by 2030 through the 3by30 plan.
3. NAR Research has produced a number of landmark reports and analyses on housing supply and affordability that are valuable resources for members, policymakers, and the public:
The 2022 Obstacles to Home Buying report explores current obstacles to home buying broken down by race and ethnicity.
The Double Trouble of the Housing Market report examines the two challenges that are simultaneously impacting the housing market: record home prices and record low inventory.
4.Drive With NAR, the popular new REALTOR® Magazine podcast, will release a Homeownership Month–themed episode on June 6 that will focus on how to help new homeowners enter the market.
5. That’s Who We R, NAR’s national ad campaign, demonstrates the difference REALTORS® make in helping consumers achieve the dream of homeownership. Download marketing and social media assets.
6. You can show your support for expanding homeownership by downloading NAR’s new Homeownership Month graphics and sharing them on your social channels. A 2022 graphic and general graphic are available.
In a move straight out of the dark ages (pre-COVID), Tesla CEO laid down the hammer on employees by saying: “If you don’t show up, we will assume you have resigned.”
“Anyone who wishes to do remote work must be in the office for a minimum (and I mean *minimum*) of 40 hours per week or depart Tesla. This is less than we ask of factory workers,” he said in a series of emails to workers.
But that return to work must include working for the home office not “some remote pseudo office” in order to fully engage with colleagues, said Musk.
But the high-profile CEO, who also owns SpaceX and is trying to purchase Twitter, is not the only leader who is facing criticism with such a heavy-handed approach to the new reality of post-COVID working.
Not the only backlash
By forcing this non-flexible model on employees, this will only result in a “younger, whiter, more male-dominated, more neuro-normative, more able-bodied” workforce, say the Apple employees.
The argument that collaboration and creativity will flow in a serendipitous manner was strongly refuted by the employees, who sent a clear message to management.
“Office-bound work is a technology from the last century, from the era before ubiquitous video-call-capable internet and everyone being on the same internal chat application. But the future is about connecting when it makes sense, with people who have relevant input, no matter where they are based,” they say in a letter addressed to the company’s executive team.
Many teams are already separately sequestered, the employees argued, as they have different locations and do not include other departments.
And by placing workers in the typical workspace, it makes it harder for employees to do their best creative work.
“Being in an office often does not enable this, especially not many of our newer offices, with their open floor plans, which make it hard to concentrate on anything for an extended amount of time,” say the employees.
Survey shows reluctance
While these high-profile employers are facing backlash, what about the rest of the working population, how do they feel about a full-time return to the workplace?
Just 12% of workers say that working entirely at their physical workplace is their ideal working scenario moving forward, while 43% are likely to look for a new job if their employer mandates a return to the office full-time.
Many want to work remotely at least three days per week (30%) and a further 27% said their preference is to remain away from the office permanently.
“It’s clear that the role that the physical office plays in the day-to-day work and satisfaction of employees has changed dramatically during the pandemic. We’re not going back to how things were before, and businesses need to adjust to the many operational realities that come with that,” said Nick Georgiev, country manager for Amazon Business Canada.
When further probed, close to half of workers surveyed (43%) reported they expect to work primarily from home for the next year and 18% expected they would work remotely for the long term.
What’s an employer to do?
For employers, this presents a conundrum: should employees be given more flexibility and options, or should they be forced to do what management orders?
Legally, a recalcitrant employee can be fired, according to Puneet Tiwari, a lawyer at Levitt LLP.
“Before the pandemic, your job was working from an office location; and now that the pandemic is over, you’re being recalled, you must go back — unless some other deal has been made where your employer has said, ‘We are now a three-days-in-office, two-day-at-home work environment’ or you renegotiated a contract which states you can now work from home exclusively, or choose at your leisure the hybrid model.”
“Unless one of those factors exists, and your employer calls you back, you must go back. If you do not go back, it’s job abandonment,” said Tiwari.
But if you care about employee morale and engagement, tread carefully on this matter, said Stephanie Henry, an associate at Bennett Jones.
“That’s something that you need to think about: ‘What do I need to do to keep my employees happy and attract and retain good talent? From an employee relations perspective, employers do need to think about that, but people don’t have a right to work from home unless they have a contractual right to work from home.”
Ultimately, it’s better for both sides to establish communication with employees rather than adopt such stringent rules, said Tiwari.
“This is an opportunity for you to reach out and discuss with that employee: ‘Look, what do you want, what’s your ideal scenario?’ And see if there’s some kind of arrangement they can make. And that could be that employee signs a new contract, which allows them to work from home.”
The National Association of Realtors® developed a Data Security and Privacy Toolkit to educate real estate associations, brokers, agents, and multiple listing services about the need for data security and privacy; and to assist them in complying with legal responsibilities.
The Data Security and Privacy Toolkit is updated to reflect changes in the law, governmental guidance, and industry standards and practices.
The Toolkit provides information about state laws and pending federal regulations regarding data security and privacy protection that may affect your business. In regards to compliance, the Toolkit includes various checklists of issues to consider when drafting a security program tailored to your business’s needs. There is no one-size-fits-all approach to security and compliance, but the National Association of Realtors® (NAR) aims to provide your real estate business with the tools necessary for developing a program that best suits your business.
The Toolkit provides:
Information about state laws and pending federal regulations regarding data security & privacy protection including state data security laws on entities in the private sector
Checklists, recommendations and tips that align with FTC guidance and current industry standards and practices
Tips and tools regarding managing and safeguarding personal information and sensitive data, crafting and updating data retention policies, data security programs and privacy policies
Sample policies
Use this Toolkit to know how to best manage data security and privacy and comply with legal requirements. View Toolkit
Share these tips with your clients to help them take a deep dive into decluttering and storage for greater efficiency and enjoyment of their abode.
Having a well-organized house that functions for everyday living takes time to achieve. It requires putting in the time and having the right supplies for storage that allows for a harmonious aesthetic.
Whether it’s holiday decorations, winter clothing, legal documents, or children’s toys, storage that’s out of the way yet easy to access is an important system for the home. This helps owners avoid exhaustive hunts for items and feel more at ease in their space.
“When there’s a home for things, people tend to put them back rather than pile them on the counter, far from where needed, or on the floor,” says Raleigh, N.C., designer Leslie Cohen.
The goal should be to keep belongings so organized that a room’s contents add to rather than complicate daily living.
When the pandemic hit, and everyone was at home 24/7, even well-organized homeowners needed additional help. “I got calls for turning dining room tables to desks and areas for kids to do homework or Zoom classes,” says Santa Monica, Calif.–based certified professional organizer Cary Prince.
Extra storage above and below windows with creative use of shelving.
The good news is that there’s a growing cadre of support—members of the National Association of Productivity and Organizing, books, YouTube videos, and shows like Netflix’s “Tidying Up with Marie Kondo.” Piecing together organizational hacks from several sources is worthwhile, and it can all be done in a way that enhances rather than detracts from decor due to an expanding assortment of attractive containers, bins, baskets, and file drawers. Prince has found that attractive storage containers are key.
“Visual clutter is what drives everybody crazy,” she says.
Besides saving time, removing frustration, and creating more usable space, there’s yet another benefit to home organization. Homeowners who decide to sell will find they need less time to ready their homes before listing.
Here are six steps that organization pundits say can help.
Kitchen pantry with attractive organizational containers.
1. Declutter.
To get and stay organized, many follow Marie Kondo’s “KonMari” method of decluttering a home, which caught fire after she published her first book, The Life-Changing Magic of Tidying Up. Her advice is to keep only possessions that spark joy and discard the rest rather than store them. A big part of that advice is to consider how much something is used.
“Do you really need five whisks and 10 spatulas?” asks Prince. “Curate your home like a museum might do by keeping the best and getting rid of the rest.”
Forewarn homeowners that this step takes time because it requires careful sorting of closets, drawers, cabinets, boxes, bins, and file cabinets. Instead of just giving things a heave-ho, homeowners might donate to community groups like the Buy Nothing Project or to a local thrift shop. Caution them to call places first. Due to the pandemic, many organizations are over capacity and might be accepting more items at this time, or they may limit the types of goods they accept.
Many agents are skilled in organizational advice. However, you may want to refer clients to a specialist, especially if they need a lot of help. Members of NAPO, stagers, designers, and even cabinet manufacturers have creative ideas for storage. For example, a homeowner might want to get rid of an old entertainment unit that looks dated and detracts from a room’s decor, but they need suggestions on how to replace it with modern storage.
Experts know all about finding furnishings that offer dual functions, often with inconspicuous storage, says Houston-based real estate salesperson Maya Peterson of Better.com. These include benches and ottomans, custom sofas with deep drawers underneath, or custom bed platforms with drawers around the frame.
3. Improve available space.
Many homeowners think they need to add square footage to create added storage, but they might not be maximizing what they already have, Cohen says. She advocates for fashioning a better pantry or adding custom storage in a dead corner. These types of makeovers are less costly and time-consuming than building from scratch. One such hack that sparked interest during the pandemic was to construct a home office in an extra closet, says Charlotte, N.C., designer Laura Van Sickle, owner of a Closets by Design franchise. In Texas, many make use of floored attic space, termed a “Texas basement,” since most homes there don’t have basements, says Peterson.
Other ways to find space and even make rooms look bigger is to go up, out, and under. Going vertical is smart in many garages, attics, and basements by using pegboards, hooks, and shelves. Homeowners can use a library ladder to reach books and other items high up or add a second rod in a closet, says Prince. A Murphy bed along a wall can turn a guest bedroom into flex space for other uses, says Marco Angelucci, design director at Philadelphia-based Marguerite Rodgers.
For homeowners who add horizontal shelves, Van Sickle recommends not extending them more than 14 inches so items don’t get hidden behind other objects.
Some places should be used with caution, such as hot or cold attics or potentially wet basements. Besides weather, insects and animals may get into storage that’s not been well-sealed, says Lindsey-Goodman. Even clear containers should be labeled, and homeowners are wise to make a list on their computer of what’s where in case they forget or others need access.
4. The benefit of zones.
Organizational experts agree that the best place to store items is near where they’re needed. In some rooms that may mean setting up zones, such as for baking or food prep in a kitchen, says Lindsey-Goodman. Zones can also be set up in spaces like an attic, garage, or basement for what’s not needed as often. Garden tools might go in one area, old paint cans in another, and sports balls in yet a third.
5. Make storage visible and attractive.
While it sounds like a simple rule to follow, many homeowners fail at making storage attractive because they don’t have the right containers, drawers, or cabinets. This can be especially true with clothing. The advantage of a neat, visible system is that it can help homeowners dress faster. For example, Van Sickle likes to roll t-shirts and yoga pants in drawers to grab and go rather than stack them in a pile.
These days, companies like The Container Store, Ikea, and Target make it easy by offering myriad affordable options in rustic, clear plastic, acrylic, wood, and other materials to fit in with decor. Built-ins or freestanding furnishings should suit a room’s style, too. When done well, they can create a handsome backdrop for Zoom calls, says Van Sickle, who favors classic white, gray, and taupe hues. But pops of color can also be stylish such as glossy black shelves against a white wall, says architect Giuroiu Anton, CEO at Architecture Lab.
Lindsey-Goodman has found that built-ins can add value to a home, but some spaces don’t call for the expense. Generally, she suggests deciding based on how many years a homeowner will stay. If fewer than five years, she suggests portable furniture that can move with them.
Within the cabinets and drawers, design experts recommend internal organizers. “The inside of cabinets has dramatically changed,” says Mitchell Parker, senior editor at Houzz, a design and remodeling resource. What’s available includes options like inserts and drawer dividers, holders for plates, spices, and cookie sheets, and pull-out waste and recycling baskets.
Prince advocates thinking of organization systems like planting and caring for a garden. “Everything planted needs care and watering over time,” she says.
By making systems flexible, it’s easier and less costly to adjust when changes arise. Good examples are shelves that can be moved up and down, using brackets rather than those fixed in place, and pegboards with hooks that are easy to move, Van Sickle says.
A well-organized home can give a house an edge for resale. “Houses may be moving fast, but homes that are decluttered and well taken care of—where people can see the house and not all the stuff—will go faster,” Lindsey-Goodman says.
Cabinets with rollout shelves for efficiency and easy access.
Among the toughest rooms to organize is the kitchen because it has so many items often used, and it also doubles as a workspace for many people working from home. Jasper, Ind.,-based MasterBrand Cabinets, one of the country’s largest manufacturers, and J.T. Norman, in charge of business development, product design, and innovation at Kitchen Magic in Nazareth, Penn., offer these tips for keeping the room organized and looking its best:
Drawers rather than doors on base cabinets offer the same amount of storage but with greater accessibility, especially when rollout trays are incorporated.
Big walk-in pantries have become akin to small general stores with space for canned goods, utensils, pots and pans, small appliances, and sometimes even a sink, says Norman.
Panel-ready appliance fronts provide a sleek, cohesive look, which can mimic cabinet fronts and blend with cabinetry in adjoining rooms, sometimes part of an open plan layout.
Floating shelves permit quick access to items and a way to personalize a kitchen. But don’t eliminate all upper cabinets, since they can keep things out of view to help the room look neater.
Barbara Ballinger – Barbara Ballinger is a freelance writer and the author of several books on real estate, architecture, and remodeling, including The Kitchen Bible: Designing the Perfect Culinary Space (Images Publishing, 2014). Barbara’s most recent book is The Garden Bible: Designing Your Perfect Outdoor Space, co-authored with Michael Glassman (Images, 2015).
