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https://www2.floridarealtors.org/news-media/news-articles/2019/08/new-rule-will-approve-more-fha-loans-condos

New Rule Will Approve More FHA Loans for Condos

From Florida Realtors

On Oct. 15, the state's condo market could really open up to first-time buyers after FHA issued new mortgage rules that qualify more condo complexes and units for FHA loans.

WASHINGTON – On Oct. 15, the Fla. condo market could open up for first-time buyers after Oct. 15, 2019, after the Federal Housing Administration (FHA) issued new mortgage rules that will qualify more condo complexes and units for FHA loans.

The new FHA condominium approval regulation – and a new Condominium Project Approval section of the Single Family Housing Policy Handbook – are a comprehensive revision to FHA condominium project approval policy.

The policy released by the U.S. Department of Housing and Urban Development (HUD), which oversees FHA programs, was published in the Federal Register on Thursday, Aug. 16, and becomes official 60 days after publication.

Of special interest in Florida, which has a preponderance of condo units, is a new policy that will make some individual condominium units eligible for FHA mortgage insurance even if the condominium project isn’t FHA approved.

“Florida is ground zero when it comes to condominium sales but these markets have been impacted by certain federal rules,” says 2019 Florida Realtors President Eric Sain, a Realtor and district sales manager with Illustrated Properties in Palm Beach. “The changes being proposed by HUD will go a long way in allowing flexibility in these markets and help more hard-working Americans achieve the dream of homeownership.”

“It goes without saying that condominiums are often the most affordable option for first-time homebuyers, small families and those in urban areas,” says National Association of Realtors® (NAR) President John Smaby. “This ruling, which culminates years of collaboration between HUD and the National Association of Realtors® (NAR), will help reverse recent declines in condo sales and ensure the FHA is fulfilling its primary mission to the American people.”

The new rule, once effective:

  • Introduces a new single-unit approval process to make it easier for individual condominium units to be eligible for FHA-insured financing
  • Extends the recertification requirement for approved condominium projects from two to three years
  • Allows more mixed-use projects to be eligible for FHA insurance

The majority (84%) of FHA-insured condo buyers have never owned a home before. While there are more than 150,000 condominium projects in the U.S., only 6.5% are approved to participate in FHA’s mortgage insurance programs. Under the new policy, FHA estimates that 20,000 to 60,000 condominium units could become eligible for FHA-insured financing every year.

“Florida Realtors has been working with NAR on this matter for some time now, and we are excited to see the results of this work,” says Sain. “Many congratulations to NAR for staying diligent on the issue and communicating with members at HUD to explain the problem and find sensible solutions.”

Single Family Policy Handbook guidance

To complement the FHA condo change, a new Single Family Handbook section provides the additional requirements lenders need to implement FHA’s new policy, including requirements for single-unit approvals, minimum owner occupancy requirements, and commercial/non-residential space limits.

Single-unit approvals

After Oct. 15, FHA will insure mortgages for selected condominium units in projects that aren’t approved under current rules. An individual unit may be eligible for Single-Unit Approval under the following conditions:

  • The individual condominium unit is located in a completed project that is not approved
  • For condominium projects with 10 or more units, no more than 10% of individual condo units can be FHA-insured, and projects with fewer than 10 units may have no more than two FHA-insured units

Minimum owner-occupancy requirements

FHA will require that approved condominium projects have a minimum of 50% of the units occupied by owners for most projects.

FHA insurance concentration in condominium projects

FHA will only insure up to 50% of the total number of units in an approved condominium project.

Commercial/nonresidential space limits

FHA will require that the commercial/non-residential space within an approved condominium project not exceed 35% of the project’s total floor area.

NAR’s latest existing-home sales report recorded condo sales at a seasonally adjusted annual rate of 580,000 units – a decline of 3.3% from May and a 6.5% drop from the same time last year. Out of more than 8.7 million condo units nationwide, only 17,792 FHA condo loans have been originated in the past year.

“Condos are typically more affordable than a detached single-family home, but only a small fraction of condos are FHA-certified,” NAR Chief Economist Lawrence Yun said last month.

© 2019 Florida Realtors®

 

 

https://www2.floridarealtors.org/news-media/news-articles/2019/08/mortgage-rates-fall-sharply-30-year-360-week

Mortgage Rates Fall Sharply – 30-Year at 3.60% This Week

Financial markets have been whipsawed by anxiety over the U.S.-China trade war, pushing bond interest-rates – which influence mortgage rates – to record lows.

WASHINGTON – U.S. long-term mortgage rates fell sharply this week, with the benchmark 30-year loan touching its lowest level since November 2016.

Financial markets around the globe have been whipsawed by anxiety over the U.S.-China trade war, sending investors fleeing from stocks to the safety of bonds and pushing bond interest-rates to record lows.

Mortgage buyer Freddie Mac said Thursday the average rate on the 30-year mortgage dropped to 3.60% from 3.75% last week. A year ago the rate stood at 4.59%.

The average rate for 15-year, fixed-rate home loans tumbled to 3.05% from 3.20%.

The roiling markets reflected fears that trade tensions between the U.S. and China could cripple global economic growth. Before Monday’s 3% drop in the S&P 500 U.S. stock index, investors hadn't seen a loss of even half that size since mid-May.

Last Thursday, President Donald Trump rattled markets when he promised to impose tariffs on Sept. 1 on an additional $300 billion in Chinese imports that haven’t already been taxed. China struck back on Monday, allowing its yuan to weaken against the dollar. The weaker currency negated some of the effects of the U.S. tariffs but created the risk that countries could start to competitively weaken their currencies, destabilizing markets and the economy.

Also last week, the Federal Reserve cut its benchmark interest rate for the first time in a decade. The Fed made the quarter-point rate reduction with the aim of countering the impact of Trump's trade wars, stubbornly low inflation and global economic weakness. The risk of a recession in the U.S. remains relatively low.

Fed Chairman Jerome Powell left open the possibility of future rate cuts, but perhaps not as many as Wall Street had hoped for. The Fed’s rate cut unwound some of the credit tightening from last year, when rates were raised four times.

Freddie Mac surveys lenders across the country between Monday and Wednesday each week to compile its mortgage rate figures. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates.

The average fee on 30-year fixed-rate mortgages was unchanged this week at 0.6 point.

 

https://www2.floridarealtors.org/news-media/news-articles/2019/08/hud-lowers-amount-accessible-equity-cash-out-refi

HUD Lowers Amount of Accessible Equity in a Cash-Out Refi

The Federal Housing Administration (FHA) will lower its maximum loan-to-value requirements for cash-out refinance transactions from 85% to 80% on Sept. 1.

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) announced joint policy actions to “reduce risk associated with cash-out refinance lending.”

The changes preserve homeowners’ ability to convert home equity to cash via a government-sponsored mortgage – but it should also improve the risk profile of HUD’s housing finance programs.

FHA loans
To do this, the Federal Housing Administration (FHA) will lower its maximum loan-to-value (LTV) requirements for cash-out refinance transactions from 85% to 80% for case numbers assigned on or after Sept. 1, 2019. The new LTV limitations will then align with the LTV allowed by the Government Sponsored Enterprises (GSEs) – primarily Fannie Mae and Freddie Mac.

VA loans
Meanwhile, the Government National Mortgage Association (Ginnie Mae) is taking further action to manage risk associated with ‘loan churning’ among mortgages insured by the Department of Veterans Affairs (VA). HUD says that rapid, serial refinancing has proven to deplete home equity and wealth for veterans with VA-insured mortgages and harmed investor confidence in mortgage-backed securities (MBS) that Ginnie Mae guarantees.

“We are taking another important step to support sustainable homeownership that builds wealth for families,” says Federal Housing Commissioner Brian Montgomery. “This is a prudent measure to make certain that we protect and preserve the home equity borrowers are building for their futures and guard against taxpayer losses from the FHA program.”

“Today’s announcement underscores Ginnie Mae’s commitment to ensuring the agency’s policies enable homeowners to borrow prudently, utilizing the government-guaranteed mortgage market,” said Ginnie Mae Acting President Maren Kasper, “Additionally, this policy provides global investors with increased certainty in the performance of the Ginnie Mae security, which ultimately lowers mortgage rates for all borrowers served by our program.”

Background

FHA: Before the housing recession, borrowers increasingly turned to cash-out refinances when home values were rising quickly. When prices declined in the wake of the housing collapse, however, many homeowners found themselves with negative equity and some faced foreclosure. FHA last adjusted the maximum LTV on cash-out refinances from 95% to 85% in 2009 in response to the weakening housing market and has been monitoring the risk associated with cash-out refinances since.

According to FHA’s latest annual report to Congress, cash-out refinances continue to represent a large and growing segment (64%) of all FHA-insured refinance transactions and accounted for 15% of all forward mortgage endorsements. This increasing share of cash-out refinances is attributed to recent home price increases and the decline of other forms of refinance activity.

Ginnie Mae: The Ginnie Mae II Multi-Issuer Program (GII MIP) represents nearly 90% of the agency’s mortgage-backed security (MBS) issuance. Strong market acceptance of the GII MIP enables Ginnie Mae to fulfill its mission of facilitating low-cost financing for American homeowners and the federal housing finance programs it serves.

In the current policy announcement, Ginnie Mae outlines revisions to the pooling eligibility requirements applicable to all VA-guaranteed refinance loans and establishes new pooling criteria for certain cash-out refinances with LTV ratios exceeding 90%.

Effective with MBS guaranteed on or after Nov. 1, 2019, high LTV VA Cash-Out Refinance Loans (those with LTV ratios above 90%) are ineligible for Ginnie Mae I Single Issuer Pools and Ginnie Mae II Multiple Issuer Pools, except in cases when the loans are Permanent Financing Construction Loans (as defined in Chapter 24 of the MBS Guide).

High LTV VA Cash-Out Refinances may be pooled into Ginnie Mae II Custom Pools without restriction, provided they satisfy the seasoning and number of payment requirements detailed in Chapter 24, Part 2 § (A)(3)(d).

© 2019 Florida Realtors®

 

https://www2.floridarealtors.org/news-media/news-articles/2019/07/long-term-mortgage-rates-fall-30-year-375

Long-term Mortgage Rates Fall – 30-Year at 3.75%

The Fed’s anticipated interest-rate cut and other events, such as the U.S.-China trade war, helped push mortgage rates lower last week.

WASHINGTON (AP) – U.S. long-term mortgage rates fell this week, edging toward three-year lows amid signals from Federal Reserve officials that they could cut their benchmark interest rate at their meeting next week.

Mortgage buyer Freddie Mac said Thursday the average rate on the key 30-year mortgage dipped to 3.75% from 3.81% last week. Those are historically low levels for the 30-year rate, which a year ago stood at 4.54%.

The average rate for 15-year, fixed-rate home loans fell to 3.18% from 3.23% last week.

On Thursday, the European Central Bank joined the Fed in making clear that more stimulus could be coming soon to support an economy weakening in the face of global trade tensions. The ECB’s rate-setting board left its key interest benchmarks unchanged at a policy meeting but said it could cut them as its next move.

Global economic growth is being dragged down by events like the U.S.-China trade war that have spurred a number of central banks to move toward providing greater stimulus. Central banks in South Korea, Indonesia and South Africa already have cut interest rates in recent days.

The Fed’s anticipated rate cut next week would undo some of the policymakers’ credit tightening from last year, when they raised rates four times. Many economists believe that the Fed will cut its benchmark rate, currently in a range of 2.25% to 2.5%, by a quarter-point at this week’s meeting and another quarter-point in September.

Freddie Mac surveys lenders across the country between Monday and Wednesday each week to compile its mortgage rate figures. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates.

The average fee on 30-year fixed-rate mortgages fell this week to 0.5 point from 0.6 point.

The average fee for the 15-year mortgage was unchanged at 0.5 point.

The average rate for five-year adjustable-rate mortgages eased to 3.47% from 3.48% last week. The fee held steady at 0.4 point.

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

 

Opportunity Zones: Real estate dominates the tax breaks

 

WASHINGTON – June 17, 2019 – Members of Congress who pushed for the Opportunity Zones provision in the 2017 federal tax law said it would help businesses and entrepreneurs in low-income communities. The tax break rewards investors for spending capital gains on businesses or real estate in more than 8,000 economically distressed neighborhoods selected by governors.

The incentive will unlock new private investment for communities where millions of Americans face the crisis of closing businesses, lack of access to capital and declining entrepreneurship, said a bipartisan congressional group Sens. Tim Scott (R-S.C.), Cory Booker (D-N.J.), and Reps. Pat Tiberi, an Ohio Republican, and Ron Kind, a Wisconsin Democrat in announcing the idea.

But almost two years after the tax break became law, and almost two months after the Trump administration clarified how private equity firms, venture capitalists and other investors can qualify for the tax break, only a handful of people have started funds that focus on operating businesses. Many still are trying to figure out how to satisfy both the Internal Revenue Service and investors eager for high returns.

Meanwhile, real estate-focused funds already have raised billions. And real estate companies are cashing in.

For example, Kushner Companies, the family business of President Donald Trump's son-in-law, Jared Kushner, has been buying up property in the zones, according to the Associated Press.

Confusing U.S. Treasury Department rules held business-focused funds back, said John Lettieri, president and CEO of the Economic Innovation Group, a public policy group in Washington, D.C., that lobbied for Opportunity Zones. Now that the agency has issued more guidance, Lettieri said, Opportunity funds that are geared toward investing in local businesses are going to proliferate.

But the tax break always has been easier to apply to real estate.

The truth is, it's a tax break that's place-based, said Napoleon Wallace, a former deputy secretary of the North Carolina Department of Commerce and a founding partner of Opportunity North Carolina, a group that helps expedite deals in the state.

An uneasy alignment

The Opportunity Zones tax break is several incentives in one. Investors defer paying income taxes on capital gains that they invest in special funds that, in turn, invest in real estate or businesses in the zones. After five years, investors get a tax break on those gains. After seven years, the tax break increases.

And most important, after 10 years, they can pocket any money they earn from their zone investment-tax-free.

Brian Phillips is an entrepreneur who is confident he can find promising tech start-ups that are already in a zone or willing to move to one. But last year, when Phillips was considering creating an Opportunity Zones fund focused on businesses, he was kind of the only one.

Investors had to wait until the April release of Treasury guidelines to learn how businesses would qualify as being in a zone for tax purposes. The guidelines said businesses need to perform at least half their services in a zone, pay half their wages in the zone, or generate half their income from a mix of property and management functions in a zone.

Yet despite the new clarity, investing in businesses remains more complicated than investing in real estate.

Buildings, by definition, stay put. And while 10 years is a long time to own a building, a property that's delivering good returns after five years likely will still be a good investment in 10, said Michael Kressig, an Opportunity Zones expert and partner at Novogradac, an accounting and consulting firm.

Businesses, on the other hand, can change a lot in 10 years. They might fail, get acquired, go public, move or radically change their business model. It is contrary to your normal kind of private equity, or venture capital, investment-hold periods to think about holding something for 10 years, Kressig said.

There's not much fund managers can do to control the business cycle, and it's difficult to delay business decisions such as whether to relocate until the 10-year mark.

Many fund managers have sort of landed on the understanding that this is a best-efforts proposition, Kressig said, and so I can't and I'm not going to promise an investor that they're going to get 100% of these tax benefits.

Investors still could make money if a growing company leaves a zone, said Chris Schultz, CEO of LaunchPad, a chain of coworking spaces that also makes venture investments. If a company is moving out of a zone, presumably it's because something very good is happening, he said. LaunchPad is setting up a $20 million opportunity zone fund focused on start-ups in mid-sized cities.

Business-focused funds also may face more technical difficulties than real estate funds do. For example, while a real estate fund can be set up to focus on a single project, Phillips fund has to spread investments over several companies to soften the blow to investors in case any of the companies fails.

The real estate (opportunity) fund is not that much different from what these real estate companies have been doing for a long, long time, said Phillips, now managing partner of an opportunity fund called the Pearl Fund.

For him, however, setting up a fund was uncharted territory. Phillips worked with Kressig and a lawyer to come up with a workable structure. Its challenging, but I tell everyone to please note, it is doable, he said.

He hopes this year to raise $25 million and spend it on up to 25 early-stage companies either in or willing to relocate to zones within a three-hour drive of New York City. Once the money is spent, hell raise another fund.

Making it work

Venture capitalists and public equity firms still have a good pitch for investors. Phillips is looking for start-ups growing so fast they could increase his original investment 10 times over, or more.

The relative tax benefits are actually better for investing in operating businesses, particularly those with heavy capital assets, said Jonathan Tower, managing partner at Arctaris, an impact investment fund manager based in Boston.

Tower is planning to raise over $500 million for an Opportunity Zones fund and spend it on up to 25 primarily industrial and manufacturing companies, including some that he'll shepherd through mergers and acquisitions with other companies.

Finding good deals in distressed communities will be a challenge for real estate and business investors alike. But Schultz and Phillips are confident they'll strike enough deals to spend their initial funds. Arctaris is particularly well-positioned, as the company has been investing in low-income areas for a decade.

Arctaris approach is somewhat unique, however. Traditional private equity is not used to select companies based on their place, Tower said, and they probably don't have as good deal-sourcing relationships in those areas.

The Arctaris Opportunity Zone fund also includes a $15 million guarantee from the national Kresge Foundation, which focuses on cities that will help protect investors if the fund loses money. Funds focused on small businesses unlikely to grow rapidly may need a guarantee, or some other risk-reduction mechanism, to attract investors.

The Community Reinvestment Fund USA, a Minneapolis-based not-for-profit that issues loans to entrepreneurs underserved by traditional banks, is considering creating an opportunity fund that will invest in businesses such as small food and beverage manufacturers and expanding child care centers, said Keith Rachey, senior vice president of development and community advancement for the fund.

Rachey is hoping to raise between $50 million and $100 million that would be spent on up to 100 businesses nationwide. Were heavy into the feasibility piece of this right now, he said.

Part of the challenge is finding business owners who are willing to relinquish full ownership.

Can we find enough small businesses in these areas that would be willing to give up a portion of their equity, for a period of time? he wondered. It may be possible for business owners to buy back the company once the opportunity investment period ends, he said. He's also wondering if his fund will need to be bolstered with a guarantee.

Phillips, of the Pearl Fund, said that he believes Opportunity Zones investment will occur in waves. The first wave is all the things you've seen with real estate investing, because it's easy, he said. But once the best property deals have been secured, such investments will slow, and business investments will accelerate, he said.

Eventually, he said, business and real estate investors will work together to secure office, warehouse or manufacturing space for growing companies.

Lettieri said that the real estate and business sides are working together already.

Every commercial real estate investor wants a tenant, Phillips said.

 

 

U.S. Foreclosures Drop 50% in a Year — But Not in Florida

ATTOM: Florida had the nation’s third-highest foreclosure rate (1 out of 1,238 housing units) in May, and its foreclosure starts (homes receiving a first notice) rose 23%.

IRVINE, Calif. – ATTOM Data Solutions’ May 2019 U.S. Foreclosure Market Report finds that foreclosure filings – default notices, scheduled auctions and bank repossessions – were up 1% from the previous month but down 22% year-to-year – the 11th consecutive month with an annual decline.

However, the reverse was true in Florida. New Jersey (one in every 1,117 housing units with a foreclosure filing), Maryland (one in every 1,127 housing units) and Florida (one in every 1,238 housing units) were the top three states for having the worst foreclosure rate.

“We are continuing to see a downward trend with overall foreclosure activity, especially in completed foreclosures declining year after year,” says Todd Teta, chief product officer at ATTOM Data Solutions. “However, in May 2019 we did see an uptick in the number of states increasing in foreclosure starts going from 17 to 23 states rising annually – and again Florida is bucking the national trend with a continuous annual increase.”

May 2019 foreclosure completions

Foreclosure completions declined annually in every state except Vermont. In some states the number of completed foreclosures has dropped dramatically, such as in Michigan (down 84%), Massachusetts (down 74%) and Indiana (down 67%).

May 2019 foreclosure starts

With foreclosure starts – homes receiving their first notice about delinquent payments – Florida ranked third.

Nationwide one in every 2,411 housing units had a foreclosure filing in May 2019, but it’s higher in New Jersey (one in every 1,117 housing units with a foreclosure filing), Maryland (one in every 1,127 housing units) and Florida (one in every 1,238 housing units).

States that posted annual decreases in foreclosure starts in May 2019, included Texas (down 39%), Pennsylvania (down 38%), Massachusetts (down 34%), Oklahoma (down 29%) and New York (down 25%).

Cities

Among 220 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in May 2019 were Atlantic City, New Jersey (one in every 680 housing units with a foreclosure filing); Jacksonville, Florida (one in every 764 housing units); Fayetteville, North Carolina (one in every 777 housing units); Columbia, South Carolina (one in every 936 housing units); and Rockford, Illinois (one in every 941 housing units).

© 2019 Florida Realtors®

 

 

 

Miami Home Sales Rise in May, Fueled by Low Mortgage Rates and New Tax Law

Miami-Dade County total home sales jumped year-over-year in May as low mortgage rates and new tax laws continue encouraging encourage domestic buying activity, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.




 

MIAMI — Miami-Dade County total home sales jumped year-over-year in May as low mortgage rates and new tax laws continue encouraging encourage domestic buying activity, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.

 

Miami total home sales jumped 6.6%, from 2,622 in May 2018 to 2,796 in May 2019. Miami single-family home sales increased 10.2%, from 1,230 to 1,355. Miami condo sales increased 3.5%, from 1,392 to 1,441.

 

“Miami real estate home sales for all property types increased in May,” MIAMI Chairman of the Board José María Serrano said. “Miami’s lifestyle coupled with a growing economy, new tax laws and low mortgage rates continue fueling the market. Miami has now posted more single-family and condo sales in the first five months of this year compared to the same period last year.”

 

Total Miami Home Sales Rise in May
Total Miami-Dade County Home Sales rose 6.6% year-over-year, from 2,622 to 2,796. Miami single-family home sales increased 10.2%, from 1,230 to 1,355. Miami condo sales increased 3.5%, from 1,392 to 1,441.

 

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.07% in May, down from 4.14% in April. The average commitment rate across all of 2018 was 4.54%. Mortgage interest rates have been declining sharply since late last year.

 

Total sales volume decreased to $1.30 billion last month from $1.32 billion in May 2018. Single-family dollar volume increased 6.3% from $673.6 million to $716 million. Condo dollar volume decreased 9.4% from $645.8 million to $585.2 million.

 

Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Of the 9,307 condominium buildings in Miami-Dade and Broward counties, only 12 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA.

 

7.5 Consecutive Years of Price Appreciation in Miami 
Miami-Dade County single-family home prices increased 2.9% in May 2019, increasing from $350,000 to $360,000. Miami single-family home prices have risen for 90 consecutive months, a streak of 7.5 years. Existing condo prices decreased 0.8%, from $245,000 to $243,000. Condo prices have increased or stayed even in 92 of the last 96 months.

 

Miami Distressed Sales Stay Low, Reflecting Healthy Market 
Only 5.6% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 6.4% in May 2018. In 2009, distressed sales comprised 70% of Miami sales.

 

Total Miami distressed sales decreased 7.1%, from 169 to 157.

 

Short sales and REOs accounted for 1.0 and 4.6%, respectively, of total Miami sales in May 2019. Short sale transactions decreased 14.7% year-over-year while REOs decreased 5.2% percent.

 

Nationally, distressed sales represented 2% of sales in May, down from 3% in April and from 3% in May 2018. Less than 1% of May 2019 sales were short sales.

 

Miami Real Estate Selling Close to List Price 
The median number of days between listing and contract dates for Miami single-family home sales was 59 days, a 34.1% increase from 44 days last year. The median number of days between the listing date and closing date for single-family homes was 107 days, a 16.3% percent increase from 92 days.

 

The median time to contract for condos was 78 days, a 6.8% increase from 73 days last year. The median number of days between listing date and closing date increased 5.4% percent to 118 days.

 

The median percent of original list price received for single-family homes was 95 percent. The median percent of original list price received for existing condominiums was 93.1 percent.

 

National and State Statistics 
Nationally, total existing-home sales jumped 2.5% from April to a seasonally adjusted annual rate of 5.34 million in May. Total sales, however, are down 1.1% from a year ago (5.40 million in May 2018).  

 

Statewide closed sales of existing single-family homes totaled 30,742 last month, up 9.6% over May 2018, according to Florida Realtors. Looking at Florida’s condo-townhouse market in May, statewide closed sales totaled 12,217, up 1.6% compared to a year ago.

 

The national median existing-home price for all housing types in May was $277,700, up 4.8% from May 2018 ($265,100). May’s price increase marks the 87th straight month of year-over-year gains.

 

In May, statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for the 89th consecutive month. The statewide median sales price for single-family existing homes was $266,000, up 4.3% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $195,000, up 3.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

 

Miami’s Cash Buyers Represent Almost Double the National Figure 
Miami cash transactions comprised 36.2% of May 2019 total closed sales, compared to 39% last year. Miami cash transactions are almost double the national figure (19%).

 

Miami’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international home buyers, who tend to purchase properties in all cash.

 

Condominiums comprise a large portion of Miami’s cash purchases as 48.3% of condo closings were made in cash in May compared to 23.2% of single-family home sales.

 

Balanced Market for Single-Family Homes, Buyer’s Market for Condos 
Inventory of single-family homes increased 8.7% in May from 6,219 active listings last year to 6,759 last month. Condominium inventory increased 2.5% to 15,893 from 15,502 listings during the same period in 2018.

 

The increase in inventory is for properties above $300,000 for condos and for properties above $600,000 for single family homes.

 

Months supply of inventory for single-family homes increased 5% to 6.3 months, which indicates a balanced market. Existing condominiums have a 13.7-month supply, which indicates a buyer’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.

 

Total active listings at the end of May increased 4.3% year-over-year, from 21,721 to 22,652. Active listings remain about 60 percent below 2008 levels when sales bottomed.

 

New listings of Miami single-family homes decreased 7.7% percent to 1,737 from 1,881. New listings of condominiums decreased 11.8%, from 2,629 to 2,319.

 

Nationally, total housing inventory at the May increased to 1.92 million, up from 1.83 million existing homes available for sale in April and a 2.7% increase from 1.87 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace, up from both the 4.2 month supply in April and from 4.2 months in May 2018.

 

To access May 2019 Miami-Dade Statistical Reports, visit http://www.SFMarketIntel.com

 

 

https://www.floridarealtors.org/NewsAndEvents/article.cfm?p=4&id=381615

Commercial RE executives bullish on U.S. market

 

NEW YORK – June 14, 2019 – While overall business sentiment of the economy has grown increasingly pessimistic, or at the very least, concerned, a new report shows that executives in the real estate market continue to be bullish about the commercial real estate sector.

A survey released this week by Akerman (The Akerman U.S. Real Estate Sector Report) showed that executives expect significant United States Real Estate Investments coming in from China, Canada and even Mexico.

Bucking the overall economic outlook, executive optimism actually increased year over year from 68% to 70%.

Commercial real estate was a major beneficiary of the tax cuts passed in December of 2017, and that was one of the major reasons for the optimism. Investors continue to analyze how the tax breaks can benefit them with certain investment strategies.

Digital transformation of office space is an area of concern, and yet is also one of the expressions of opportunity within the market that can be appealing. Additionally, multifamily residential properties showed strength in that 67% of those surveyed were optimistic about growth.

Not surprisingly, the biggest area of concern sighted is interest rate hikes. However, with the majority of Wall Street analysts betting that it is more likely to have an interest rate cut rather than an increase, and reports that there is little sign of inflation, interest rate cuts should only continue to fuel optimism.

The results for banks were also positive with 51% of the respondents stating that banks would be one of the top three entities to fund commercial real estate debt and/or equity in 2019. The major markets that are overperforming the rest of the national markets are Chicago, Houston, Miami and New York. All of these markets are considered core markets by commercial real estate investors.

© Gulf Times Newspaper 2019 Provided by SyndiGate Media Inc. (Syndigate.info).

 

 

https://www.floridarealtors.org/NewsAndEvents/article.cfm?p=2&id=381557

 

U.S. foreclosures drop 50% in a year – but not in Florida.

 

IRVINE, Calif. – June 13, 2019 – ATTOM Data Solutions' May 2019 U.S. Foreclosure Market Report finds that foreclosure filings – default notices, scheduled auctions and bank repossessions – were up 1% from the previous month but down 22% year-to-year – the 11th consecutive month with an annual decline.

However, the reverse was true in Florida. New Jersey (one in every 1,117 housing units with a foreclosure filing), Maryland (one in every 1,127 housing units) and Florida (one in every 1,238 housing units) were the top three states for having the worst foreclosure rate.

"We are continuing to see a downward trend with overall foreclosure activity, especially in completed foreclosures declining year after year," says Todd Teta, chief product officer at ATTOM Data Solutions. "However, in May 2019 we did see an uptick in the number of states increasing in foreclosure starts going from 17 to 23 states rising annually – and again Florida is bucking the national trend with a continuous annual increase."

May 2019 foreclosure completions

Foreclosure completions declined annually in every state except Vermont. In some states the number of completed foreclosures has dropped dramatically, such as in Michigan (down 84%), Massachusetts (down 74%) and Indiana (down 67%).

May 2019 foreclosure starts

With foreclosure starts – homes receiving their first notice about delinquent payments – Florida ranked third.

Nationwide one in every 2,411 housing units had a foreclosure filing in May 2019, but it's higher in New Jersey (one in every 1,117 housing units with a foreclosure filing), Maryland (one in every 1,127 housing units) and Florida (one in every 1,238 housing units).

States that posted annual decreases in foreclosure starts in May 2019, included Texas (down 39%), Pennsylvania (down 38%), Massachusetts (down 34%), Oklahoma (down 29%) and New York (down 25%).

Cities

Among 220 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in May 2019 were Atlantic City, New Jersey (one in every 680 housing units with a foreclosure filing); Jacksonville, Florida (one in every 764 housing units); Fayetteville, North Carolina (one in every 777 housing units); Columbia, South Carolina (one in every 936 housing units); and Rockford, Illinois (one in every 941 housing units).

© 2019 Florida Realtors®  

 

https://www.floridarealtors.org/NewsAndEvents/article.cfm?p=1&id=381560

 

Long-term mortgage rates little changed, 30-year at 3.82%

 

WASHINGTON (AP) – June 13, 2019 – U.S. long-term mortgage rates were little changed this week, after six straight weeks of declines putting them at historically low levels.

Mortgage buyer Freddie Mac says the average rate on the 30-year, fixed-rate mortgage held steady from last week at 3.82%, its lowest point since September 2017. By contrast, a year ago the benchmark rate stood at 4.62%.

The average rate for 15-year, fixed-rate home loans slipped this week to 3.26% from 3.28%.

The declining rates have been a boon to potential purchasers in the spring home buying season, and the number of prospective buyers seeking mortgages jumped last month.

Mortgage applications for new home purchases increased 20.1% in May from a year earlier, according to new data from the Mortgage Bankers Association.

A reprieve for nervous stock-market investors came this week in the U.S. trade dispute with Mexico, as the two sides reached a truce Friday after Mexico agreed to do more to stop the flow of Central American migrants into the U.S. But by Monday, President Donald Trump was again threatening to slap crippling tariffs on Mexican exports if Mexico didn't abide by an unspecified commitment, "to be revealed in the not-too-distant future."

The U.S. trade battle with China continues to fester. The trade fights threaten to stifle economic growth in the U.S. and around the world. Investors have been mostly fleeing to safer investments, like bonds and gold, because of the uncertainty around trade negotiations.

The rush into the bond market has pushed up bond prices and depressed their yields. The yield on the 10-year Treasury note, which influences mortgage rates, was 2.12% late Wednesday, unchanged from a week earlier. It fell to 2.10% around midday Thursday.

Freddie Mac surveys lenders across the country between Monday and Wednesday each week to compile its mortgage rate figures.

The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates.

The average fee on 30-year fixed-rate mortgages rose to 0.6 point this week from 0.5 point.

The average fee for the 15-year mortgage was unchanged at 0.5 point.

The average rate for five-year adjustable-rate mortgages declined to 3.51% from 3.52% last week. The fee remained at 0.4 point.

 

 

Gov. DeSantis signs bills on open permits, online notaries

 

TALLAHASSEE, Fla., June 7, 2019 – Florida Gov. Ron DeSantis' signed two bills into law last week, HB 447 and HB 409 – a move applauded by Florida Realtors®.

HB 447: Open and expired permits

HB 447 allows local governments to close a permit six years after issuance, as long as no apparent safety hazards exist. It also prevents local governments from penalizing property owners for an open permit applied for by a previous owner.

"Open and expired permits bring uncertainty to real estate transactions and can delay the closing, and in some cases, prevent a home purchase," says 2019 Florida Realtors President Eric Sain, a Realtor and district sales manager with Illustrated Properties in Palm Beach. "That's why we applaud the leadership of Rep. Ben Diamond and Sen. Keith Perry to sponsor this legislation, and Gov. DeSantis' decision to sign it. It will go a long way in helping homebuyers and sellers fulfill the American Dream in Florida."

The signed the open and expired permit remedies become effective on Oct. 1, 2019.

HB 409: Online remote notaries

"Many states throughout the nation allow the use of online remote notaries in real estate transactions, making them easier, faster and more convenient for distant consumers," says Sain. "Thanks to Gov. DeSantis' signature and the leadership of Rep. James Grant and Sen. Jeff Brandes to create and pass this legislation, Florida now joins this crop of modern, forward-thinking states."

In addition to authorizing the use of online remote notaries, HB 409 also contains measures that protect the integrity and security of documents being notarized. The use of online remote notaries becomes effective on Jan. 1, 2020.

© 2019 Florida Realtors

https://www.floridarealtors.org/NewsAndEvents/article.cfm?p=1&id=380542

 

Mortgage rates fall again – edge closer to 4%

 

WASHINGTON (AP) – May 16, 2019 – U.S. long-term mortgage rates fell slightly this week, marking a third straight week of declines as a continued inducement to purchasers in the spring homebuying season.

Mortgage buyer Freddie Mac said Thursday the average rate on the 30-year, fixed-rate mortgage eased to 4.07% from 4.10% last week. By contrast, a year ago the benchmark rate stood at 4.61%.

The average rate for 15-year, fixed-rate home loans declined this week to 3.53% from 3.57% last week.

The continuing U.S.-China trade war kicked into a fevered battle this week as high-level talks between the two sides broke down Friday and the Trump administration slapped new tariffs on $200 billion in Chinese imports. Beijing retaliated on Monday with increased tariffs on $60 billion of U.S. products. That sent stock prices tumbling around the globe; the Dow Jones Industrial Average plunged more than 600 points as nervous investors shifted money from volatile stocks to the bond market.

Bond yields fall as prices rise. The yield on the 10-year Treasury note, which influences mortgage rates, was 2.37% late Wednesday, down sharply from 2.48% a week earlier. It rose to 2.41% Thursday morning.

With mortgage rates at historically low levels and positive economic signs, Freddie Mac is expecting home sales to increase this summer.

"While signals from the financial markets are flashing caution signs, the real economy remains on solid ground with steady job growth and five-decade low unemployment rates," Freddie Mac Chief Economist Sam Khater said.

Freddie Mac surveys lenders across the country between Monday and Wednesday each week to compile its mortgage rate figures.

The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates.

The average fee on 30-year fixed-rate mortgages was unchanged this week at 0.5 point.

The average fee for the 15-year mortgage held at 0.4 point.

The average rate for five-year adjustable-rate mortgages rose to 3.66% from 3.63% last week. The fee remained at 0.4 point.

 

https://www.floridarealtors.org/NewsAndEvents/article.cfm?p=4&id=379669

NAR: U.S. existing-home sales slide 4.9% in March

 

WASHINGTON – April 22, 2019 – Existing-home sales retreated in March, following February's surge, according to the National Association of Realtors® (NAR). Each of four major U.S. regions saw a drop-off, with the Midwest enduring the largest decline last month.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – fell 4.9 percent from February to a seasonally adjusted annual rate of 5.21 million in March. Sales as a whole are down 5.4 percent from a year ago (5.51 million in March 2018).

"It is not surprising to see a retreat after a powerful surge in sales in the prior month," says Lawrence Yun, NAR's chief economist. "Still, current sales activity is underperforming in relation to the strength in the jobs markets. The impact of lower mortgage rates has not yet been fully realized."

The median existing-home price for all housing types in March was $259,400, up 3.8 percent from March 2018 ($249,800). March's price increase marks the 85th straight month of year-over-year gains.

Total housing inventory at the end of March increased to 1.68 million, up from 1.63 million existing homes available for sale in February and a 2.4 percent increase from 1.64 million a year ago. Unsold inventory is at a 3.9-month supply at the current sales pace, up from 3.6 months in February and up from 3.6 months in March 2018.

"Further increases in inventory are highly desirable to keep home prices in check," says Yun. "The sustained steady gains in home sales can occur when home price appreciation grows at roughly the same pace as wage growth."

Properties remained on the market for an average of 36 days in March, down from 44 days in February but up from 30 days a year ago. Forty-seven percent of homes sold in March were on the market for less than a month.

Yun says tax policy changes will likely add further complications to the housing sector.

"The lower-end market is hot while the upper-end market is not," he says. "The expensive home market will experience challenges due to the curtailment of tax deductions of mortgage interest payments and property taxes."

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.27 percent in March from 4.37 percent in February. The average commitment rate across all of 2018 was 4.54 percent.

"We had been calling for additional inventory, so I am pleased to see that there has been a modest increase on that front," says NAR President John Smaby. "We're also seeing very favorable mortgage rates, so now would be a great time for those buyers who may have been waiting to make a purchase."

First-time buyers were responsible for 33 percent of sales in March, up from last month and a year ago (32 percent and 30 percent).

All-cash sales accounted for 21 percent of transactions in March, down from February's 23 percent, but up from a year ago (20 percent). Individual investors, who account for many cash sales, purchased 18 percent of homes in March, up from February's 16 percent, and up from a year ago (16 percent).

Distressed sales – foreclosures and short sales – represented 3 percent of sales in March, down from 4 percent last month and down from 4 percent in March 2018. One percent of March 2019 sales were short sales.

Single-family and condo/co-op sales
Single-family home sales sit at a seasonally adjusted annual rate of 4.67 million in March, down from 4.91 million in February and down 4.7 percent from 4.90 million a year ago. The median existing single-family home price was $261,100 in March, up 3.8 percent from March 2018.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 540,000 units in March, down 5.3 percent from last month and down 11.5 percent from a year ago. The median existing condo price was $244,400 in March, which is up 3.6 percent from a year ago.

Regional breakdown
March existing-home sales numbers in the Northeast decreased 2.9 percent to an annual rate of 670,000, 1.5 percent below a year ago. The median price in the Northeast was $277,500, which is up 2.5 percent from March 2018.

In the Midwest, existing-home sales declined 7.9 percent from last month to an annual rate of 1.17 million, 8.6 percent below March 2018 levels. The median price in the Midwest was $200,500, which is up 4.6 percent from last year.

Existing-home sales in the South dropped 3.4 percent to an annual rate of 2.28 million in March, down 2.1 percent from last year. The median price in the South was $227,400, up 2.4 percent from a year ago.

Existing-home sales in the West fell 6.0 percent to an annual rate of 1.09 million in March, 10.7 percent below a year ago. The median price in the West was $389,300, up 3.1 percent from March 2018.

© 2019 Florida Realtors®

 

 

 

https://www.floridarealtors.org/NewsAndEvents/article.cfm?p=2&id=379677

 

Fla.’s housing market: Pending sales, median prices up in March

 

ORLANDO, Fla. – April 22, 2019 – Florida's housing market reported more pending sales, higher median prices and increased inventory (active listings) in March compared to a year ago, according to the latest housing data released by Florida Realtors®. Sales of single-family homes statewide totaled 25,013 last month, about the same level as March 2018.

"Along with low mortgage rates, the pressure on home prices is easing due to increased inventory, which is a positive trend for housing affordability and could encourage some buyers to enter the market, says 2019 Florida Realtors President Eric Sain,

In March, statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for the 87th month-in-a-row. The statewide median sales price for single-family existing homes was $256,000, up 2 percent from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month's statewide median price for condo-townhouse units was $189,500, up 3.6 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

According to the National Association of Realtors(NAR), the national median sales price for existing single-family homes in February 2019 was $251,400, up 3.6 percent from the previous year; the national median existing condo price was $534,140; in Massachusetts, it was $377,000; in New York, it was $280,000; and in Maryland, it was $273,762.

Looking at Florida's condo-townhouse market in March, statewide closed sales totaled 10,340, down 6.1 percent compared to a year ago. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

According to Florida Realtors Chief Economist Dr. Brad O'Connor, March is typically a busy month for real estate in Florida and March 2019 was no exception.

"On a statewide basis, more homes typically go under contract in March than in any other month of the year," O'Connor says. "And compared to March of last year, new pending sales of single-family homes this March were up by 2.6 percent to a total of 31,383. In fact, this is the highest number of new pending sales we've seen in any month across the previous 11 years in which Florida Realtors has tracked this statistic.

"New pending sales in the condo and townhouse category, by the way, were also up, rising by one percent from last March's total. Of course, not all homes that go under contract end up as closed sales, but this is a pretty good sign for the market going into spring."

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.27 percent in March 2019, compared to the 4.44 percent averaged during the same month a year earlier.

To see the full statewide housing activity reports, go to Florida Realtors Research & Statistics section on floridarealtors.org. Realtors also have access to local market stats (password protected) on Florida Realtors' website.

© 2019 Florida Realtors®


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