May 7, 2019

Want flood insurance for hurricane season? You’re late!

WASHINGTON – May 6, 2019 – While some Florida homeowners have private options, national flood insurance has a 30-day waiting period in most cases – and hurricane season starts in 25 days.

As it stands now, the entire National Flood Insurance Program (NFIP) expires on May 31, 2019. Should that happen, homeowners won't lose coverage but homebuyers may not be able to secure coverage even if it's demanded by their lender. Congress may have a new plan in place for the program by then, or they may authorize a short-term extension as they have done in the past.

In any case, homeowners and buyers should prepare for the possibility of another NFIP hiatus. NFIP issued the following commonly asked questions about flood insurance coverage:

Why do I need flood insurance?

Standard homeowner's insurance policies do not cover floods, and it's wise to consider flood insurance even if you are not required to purchase it. Even if you live outside a high-risk flood zone, called a Special Flood Hazard Area, it's a wise decision to buy flood insurance. In fact, statistics show that people who live outside high-risk areas file more than 25 percent of flood claims nationwide.

It's often said that wherever it rains, it can flood. So, while flood zones are specific geographic areas where there is a higher statistical probability of a flood occurring, floods do occur elsewhere. Florida, for example, has exceeded that statistical probability, putting more homes and properties at risk than expected over the last five years.

FEMA calculates that just three inches of floodwater in a home likely will require replacing drywall, baseboards, carpets, furniture and making other necessary repairs. If you don't have flood insurance, your likely out-of-pocket cost (based on a 1,500-square-foot, one-floor home) is estimated at $15,000. For six inches of water, estimated loss jumps to an estimated $23,000. And 18 inches or more could require repairs to electrical, heating and cooling systems plus replacing doors, appliances and cabinetry. The estimated cost: $30,000.

How does flood insurance work?

If a community participates in the National Flood Insurance Program (NFIP), both building and contents coverage can be included in a policy for homeowners and businesses. Renters can get coverage for contents only. Policies issued by the NFIP pay even if a federal disaster isn't declared.

In Florida and other states recently impacted by hurricanes, NFIP streamlined the claims process, enabling policyholders to receive advance payments to jump-start rebuilding. Some policyholders were recently able to get advance payments up to $5,000 without an adjuster visit or additional documentation. Some received advance payments of up to $20,000 if they had photos/video evidence and receipts or a contractor's estimate.

A Preferred Risk Policy (a lower-cost flood insurance policy) provides both building and contents coverage for properties in moderate-to-low risk areas. This policy can be purchased for as little as $325 per year.

When should I buy a policy? As soon as possible. There's a waiting period.

NFIP cannot pay a claim without a policy in effect when damage occurs. A new insurance policy from NFIP becomes effective 30 days after you buy it, unless the purchase is associated with the origination, renewal or extension of a federally backed loan on property in a high-risk area.

Even if I'm not in a flood hazard area, can I purchase flood insurance?

Yes, providing your community participates in NFIP. You're eligible to purchase a flood policy with the same coverage you would receive if you lived in a high-risk area.

Can I get flood insurance if I'm renting a property?

Yes. If you live in a community that participates in NFIP as a renter, flood insurance covers the contents of your home, apartment or business at a rented location. An insurance agent can talk about the costs and ways to lower those costs.

NFIP policy holders choose their amount of coverage. The maximum for one to four family residential structures is $250,000 in building coverage and $100,000 in contents coverage. For residential structures of five or more units, the maximum is $500,000 in building coverage and $100,000 in contents coverage.

The maximum for businesses is $500,000 in building coverage and $500,000 in contents coverage.

How much will I get from NFIP after flood damage?

There are some misconceptions about the amount a policyholder will receive following flood-caused damage. While a policy may state it covers losses up to a certain amount:

  • The amount paid to the policyholder on a homeowner's flood insurance policy will cover only the cost of actual damage caused by the flood.
  • The amount paid on contents will cover only actual losses caused by the flood.
  • The amount paid to businesses covered for structure and contents will be only for actual losses by the flood.

Where can I buy flood insurance?

Contacting your insurance company or agent. For an agent referral call 800-427-4661 or visit FloodSmart.gov.

© 2019 Florida Realtors®

May 6, 2019

2019 Florida Legislature adjourns! Remote notaries, open permits & environment among victories!

TALLAHASSEE, Fla. — May 4, 2019 — 2:16 pm — Your world got a little bit easier thanks to new legislation that brings modern technology and common sense to transactions.

 

 

The Florida Legislature, which ended its 60-day legislative session minutes ago, passed two bills many Florida Realtors’ members had requested. One allows the use of remote online notaries and the other provides remedies for open and expired permits.

 

 

"Our members spoke loud and clear about the problem of open permits and the benefit of remote notaries, and I’m happy to say lawmakers listened,” says Eric Sain, 2019 president of Florida Realtors and district sales manager with Illustrated Properties in Palm Beach. “But the really good news is that these two bills were only a part of our legislative successes this year. We’re also celebrating assignment of benefits (AOB) reform, funding to improve water quality and another cut to the business rent tax.”

 

 

This end-of-session report covers key real estate legislation filed for the 60-day session that ended minutes ago. Bills passed head to the governor for final approval.

 

 

Florida Realtors biggest legislative victories

 

 

  • Remedies to open and expired permits — Open and expired permits can delay a closing, and, in some cases, kill a deal because of the uncertainty associated with them. To address the problem, HB 447 allows local governments to close a permit six years after its issuance as long as no apparent safety hazards exist. It also prevents local governments from penalizing property owners for an open permit that was applied for by a previous owner. Effective: October 1, 2019.
  • Approval of online remote notaries — Many states allow the use of online remote notaries in real estate transactions to make closings easier, faster and more convenient for distant parties. Thanks to HB 409, Florida now joins this group of modern-thinking states. Effective: January 1, 2020.
  • Curbing AOB abuse to keep insurance affordable — Property insurance assignment of benefits (AOB) came about to reduce insurance claim burdens for property owners. However, some contractors and attorneys abused the AOB process by overcharging for repairs and suing insurance carriers when they refuse to pay, leading to higher premiums for everyone. HB 7065 limits contractors’ ability to receive payment for their attorney fees if the claim is settled or won in court. This is commonly referred to as one-way attorney fees and the primary incentive behind AOB fraud. Please note: All bill provisions become effective on July 1, 2019, except for provisions relating to attorney fees, which become effective when the bill is signed into law.
  • $682 million for environmental projects — Communities throughout Florida were devastated last year by environmental problems such as blue-green algae and red tide. The Legislature responded with significant amounts of funding for environmental projects designed to address these issues. The proposed funding includes $322 million for both Everglades restoration and the early planning, design and construction of the Everglades Agricultural Area Reservoir. Also included: $40 million to complete the raising of Tamiami Trail, $100 million for springs restoration, $50 million for beach restoration projects, $10 million for a red tide/blue green algae task force and $25 million for a septic-to-sewer cost-share program. Effective: July 1, 2019.
  • Further reduction to the business rent tax — Businesses throughout Florida will save more than $65 million each year due to a .2% reduction of the business rent tax. The new state tax rate on commercial leases will be 5.5%, down from 5.7% in 2018 and 6% in 2017. Effective: January 1, 2020.
  • More than $200 million for affordable housing projects — Lawmakers allocated $200 million from the state and local government housing trust funds for affordable housing programs. This includes $115 million to assist Panhandle residents whose properties were devastated by Hurricane Michael. Effective: July 1, 2019.
  • Continued funding for LIDAR mapping — The budget includes language that allows the Division of Emergency Management to continue spending the $15 million currently being used for LIDAR (light detection and ranging) mapping. LIDAR is a next-generation mapping technique and has the potential to lower flood insurance rates throughout Florida. Effective: July 1, 2019.
  • Preventing unlicensed real estate activity — The Legislature allocated up to $500,000 from the Professional Regulation Trust Fund to the Department of Business and Professional Regulation (DBPR) to combat unlicensed real estate activity. Effective: July 1, 2019.

Other bills that passed of interest to Realtors

 

 

  • Fighting red tide through research and technology — SB 1552 establishes the Florida Red Tide Mitigation and Technology Development Initiative, a partnership between the state and Mote Marine Laboratory to develop technologies that can control and mitigate red tide and its impact. Lawmakers appropriated $3 million a year for the next six years to fund the initiative. Effective: July 1, 2019.
  • Banning local governments from restricting vegetable gardens — SB 82 prevents local governments from regulating homeowners’ vegetable gardens. The issue stemmed from a couple in Miami Shores who had to uproot their vegetable garden due to a local ordinance. This does not apply to homeowners associations (HOAs). Effective: July 1, 2019.
  • Flood insurance matters — HB 617 requires insurers that do not provide flood insurance to provide a disclosure at initial issuance and each renewal regarding the importance of flood insurance. Effective: July 1, 2019.
  • Property insurance changes — HB 301 includes a host of insurance revisions. The bill removes the $100 cap for insurers who provide loss control/mitigation goods or services (e.g. a temperature/humidity sensor) to policyholders and makes it easier for owners who have dwellings valued at $700,000 or more to obtain surplus lines of coverage. Effective: July 1, 2019.
  • Property owner bill of rights and tree trimming — SB 1400 requires county appraisers to publish a list of constitutionally protected property rights on their websites. The bill also allows property owners to trim or remove trees on their property without consequence as long as they have a letter from a certified arborist or landscape architect stating the tree is a danger. Effective: July 1, 2019.
  • Providing more structure for beach restoration projects — HB 325 creates a five-year work plan for beach renourishment projects throughout Florida based on a specific set of criteria. The new approach is intended to remove the arbitrary selection of projects that currently exists. Effective: July 1, 2019.
  • More options for wetlands mitigation projects — HB 521 allows developers in areas lacking private wetlands mitigation credits to partner with local governments to mitigate on publicly-owned conservation land. Effective: July 1, 2019.
  • Fire and life safety systems for condos — HB 647 extends the deadline for high-rise condominiums that must be retrofitted with fire sprinklers or another engineered life safety system from Dec. 31, 2019, to Dec. 31, 2023. Effective: July 1, 2019.
  • Texting while driving ban gets tougher — HB 107 strengthens Florida’s existing ban on texting, emailing and instant messaging while driving. The bill changes current enforcement of the ban from a secondary offense to a primary offense, meaning law enforcement can now stop a vehicle solely for texting while driving. Effective: July 1, 2019.
  • Military affairs — SB 620, in its original form, included a provision that capped the total money owed by an active duty service member who was entering into a lease at no more than the total of two months’ rent. Although the bill passed, the language pertaining to the cap was removed from the bill. Effective: July 1, 2019. 

 

Bills that did not pass

 

 

  • Private property rights/short-term rentals — SB 824 and HB 987 were companion bills supported by Florida Realtors aimed at protecting the right of private property owners to rent their property on a short-term basis because many local governments continue to enact ordinances that discourage short-term rentals and infringe on this fundamental right.
  • Emotional support animals — HB 721 would have provided clarity for emotional support animals. It would have created a legal definition for these animals and would have required an emotional support animal certificate to come from a licensed doctor who has a relationship with the patient.
  • Requiring online retailers to collect sales tax— SB 1112 would have required remote (out-of-state) sellers to collect and remit sales tax to the state on purchases made by Florida residents. The revenue gained from collecting the sales tax could have then been used to offset other taxes such as the business rent tax. Current law says that sales tax from remote sellers is legally owed to the state by the Floridian making the purchase, but few residents know about this requirement and even fewer pay it.
  • Condo transfer fee background costs — HB 1075 contained several items related to HOAs and condominium associations. Of note to Realtors was an allowance for associations to charge a buyer or renter the “actual cost” of a background check plus a $100 administrative fee. Transfer fees are currently capped at $100 per applicant.
  • Septic tank inspections — HB 85 would have required all homeowners in Florida to have septic tank inspections every five years.
  • Water quality improvements — HB 973 would have transferred septic tank oversight from the Department of Health to the Department of Environmental Protection. The bill would have given the two state agencies one year to suggest recommendations on how to best transfer this massive responsibility.
  • Rent control — HB 6053 and SB 1390 sought to allow local governments to adopt rental control ordinances.
  • Seller disclosure — HB 163 and SB 1254 would have required sellers to provide buyers a written disclosure if the property is located within a dependent special district. The bill also gave buyers a three-day right of rescission after the disclosure was provided.
  • Landlord disclosure — HB 153 and SB 1248 would have required landlords to provide prospective tenants with a “physical” copy of the restrictive covenants governing the use and occupancy of the premises.
  • Property Assessed Clean Energy (PACE) — HB 163 and SB 282 sought to expand the list of qualifying improvements under the PACE program to include septic tank improvements or replacements.
  • Swimming pool safety features — HB 805 and SB 724 would have required all residential pools in Florida to be equipped with two of the following safety features when a residential property with a pool is sold: 1) pool barrier, 2) pool cover, 3) door and window alarms, 4) self-closing and self-latching doors and 5) a pool alarm.

 

© 2019 Florida Realtors®

May 3, 2019

Mortgage rates drop – 30-year average at 4.14%

WASHINGTON (AP) –May 2, 2019 – U.S. long-term mortgage rates fell this week after four weeks of increases, giving a boost to prospective home buyers during the spring sales season.

Mortgage buyer Freddie Mac says the average rate on the 30-year, fixed-rate mortgage dropped to 4.14 percent from 4.20 percent last week. By contrast, a year ago the benchmark rate stood at 4.55 percent.

The average rate for 15-year, fixed-rate home loans declined this week to 3.60 percent from 3.64 percent last week.

A government report this week showing that the Federal Reserve's preferred inflation gauge rose just 1.5 percent in March from 12 months earlier helped depress mortgage rates, Freddie Mac suggested.

The Fed, by setting interest rates, is struggling to produce inflation of roughly 2 percent. Too-low inflation is viewed as an obstacle because it tends to weaken consumer spending, the economy's main fuel, as people delay purchases in anticipation of flat or even lower prices.

On Wednesday, the Fed left its key interest rate unchanged and signaled that it's unlikely to either raise or cut rates in coming months amid signs of renewed economic health but unusually low inflation. The Fed left its benchmark rate – which influences many consumer and business loans – in a range of 2.25 percent to 2.5 percent. Its low-rate policy has helped boost stock prices and supported a steadily growing economy.

For this summer, Freddie Mac is expecting mortgage rates to be about a quarter to a half percentage point lower than a year earlier, a potential boost to home sales.

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 fell to 0.4 point from 0.5 point.

The average rate for five-year adjustable-rate mortgages dropped to 3.68 percent from 3.77 percent last week. The fee remained at 0.4 point.

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

Illustration: champc / Getty Images

May 2, 2019

50% of boomers may face a home vs. healthcare decision

ORLANDO, Fla. – May 1, 2019 – Researchers at the University of Chicago said in a recent study that many adults "aging in place" could find that unexpected healthcare costs threaten their ability to keep their home.

According to the study that looked at probabilities in 10 years, more than half of middle-income Americans – those with about $25,000 to $74,300 a year in financial resources – over age 75 will be unable to afford the care they need to live independently or the expense of a nursing home or assisted living facility.

The study attributes this upcoming problem to a combination of factors, including rising housing and care costs, longer lifespans, increasing chronic health conditions and a shrinking population of would-be family caregivers.

This issue could be serious in Florida, where nearly 20 percent of the population is over 65 – the highest rate in the nation.

Researchers noted that the study may even underestimate the problem, since it calculated expenses that included only $5,000 in average annual out-of-pocket medical spending. Across Florida, nearly a half-million residents age 75 and older qualify as middle income, and that figure likely will grow substantially in the coming decade.

AARP Florida spokesman Dave Bruns says the state could adopt lower-cost solutions from other states, like Washington, which spends half of its Medicaid long-term-care budget on home- and community-based care services. Florida currently spends 22 percent.

Meanwhile, Bob Kramer, founder and strategic adviser at the National Investment Center for Seniors Housing & Care, which commissioned the study, said investors must recognize the potential for developing products and housing solutions for this aging population.

Source: Orlando Sentinel (04/24/19) Santich, Kate

© Copyright 2019 INFORMATION INC., Bethesda, MD (301) 215-4688

May 1, 2019

Floridian's consumer confidence hits 17-year high

GAINESVILLE, Fla. – April 30, 2019 – Consumer sentiment in Florida reached its highest level in 17 years, increasing 1.4 points in April to 102 from a revised figure of 100.6 in March.

These levels of confidence have not been observed since March 2002 when consumer sentiment reached 102 points.

Among the five components that compose the index, one decreased and four increased.

Current conditions
Floridians' opinions about current economic conditions were mixed. Views of personal finances now compared with a year ago increased eight-tenths of a point, from 96.7 to 97.5. Conversely, opinions as to whether now is a good time to buy a big ticket item such as an appliance decreased 1.2 points, from 107.5 to 106.3.

Future expectations
The three components representing expectations for future economic conditions improved in April. Expectations of personal financial situations a year from now rose 3.2 points, from 106.8 to 110 – the highest level for this component since May 1999 when it reached 110 points.

Expectations of U.S. economic conditions over the next year increased 2.3 points, from 97.6 to 99.9. Similarly, expectations of U.S. economic conditions over the next five years increased 2.4 points, from 94.2 to 96.6.

"Overall, Floridians are more optimistic," says Hector H. Sandoval, director of the Economic Analysis Program at UF's Bureau of Economic and Business Research. "April's confidence boost stems from the positive outlook regarding national economic conditions in the short- and long-run. It is worth noting expectations are split among the population by gender, with women reporting less-favorable views.

Other economic indicators in Florida continue to be favorable. In March, economic activity expanded and the Florida unemployment rate was unchanged at 3.5 percent. Compared with last year, the number of jobs added statewide was 209,700, an increase of 2.4 percent.

Among all industries, professional and business services gained the most jobs, followed by education and health services, and leisure and hospitality. The information industry was the only sector losing jobs.

Additionally, personal income in Florida increased 5.2 percent in 2018 compared with 4.5 percent for the nation, according to the latest report from the Bureau of Economic Analysis. Net earnings, which is the sum of wages and salaries, supplements to wages and salaries, and proprietors' income, contributed most to this increase in personal income. Professional, scientific, and technical services and construction were the leading contributors to the earnings increase in Florida.

"Looking ahead, given the economic outlook and the current levels of confidence, we anticipate consumer sentiment to remain high in Florida in the following months," Sandoval adds.

Conducted April 1-25, the UF study reflects the responses of 539 individuals who were reached on cellphones, representing a demographic cross section of Florida. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2, the highest is 150.

© 2019 Florida Realtors®

April 30, 2019

Census Bureau: Florida top U.S. state for in-migration

WASHINGTON – April 29, 2019 – Movers to and from the U.S. South make up the largest domestic migration flows at the regional level – and notably large flows at the state and county levels are in the South or in the West.

Some of the largest state- and county-level flows are to or from Florida, California or Arizona.

State-to-state migration flows

The 2017 American Community Survey (ACS) state-to-state migration flows table provides estimates of the number of people in the United States moving between geographies within the past year. These geographies include the 50 states, District of Columbia, Puerto Rico and abroad.

Moving to Florida
Florida had the most domestic in-movers, with 566,476 people moving from another state within the past year. The states with the next highest in-migration flows are Texas with 524,511 and California with 523,131.

New York lost the most residents to Florida, with 63,722 ex-New Yorkers become new Floridians. The second-highest contributor was Georgia with 38,800 in-movers.

Moving out of California
California had the most domestic out-movers, with 661,026 people leaving the state within the past year. The states with the next highest outmigration flows are Texas with 467,338 out-movers, New York with 452,580, and Florida with 447,586.

Among the five states that received the most out-movers from California, several are adjacent to California or nearby: Texas (63,174 out-movers), Arizona (59,233), Washington (52,484), Oregon (50,109) and Nevada (47,513).

Net migration, flows and mover rates by region

In 2018, 10.1 percent of people (about 32.4 million) in the United States moved.

Net migration
The South continued a pattern of net population gains from domestic migration and has done so most years since 1981.

In 2018, about 1.2 million people moved to the South from another region, while only about 714,000 moved from the South to another region, resulting in a net gain of about 512,000 people. If movers from abroad are included, the net gain from migration to the South is about 959,000 people.

Flows
There are 12 region-to-region migration flows and the five largest in 2018 were either to the South or out of the South. The South drew about 412,000 people from the Northeast, 356,000 from the Midwest and 459,000 from the West. The region lost about 317,000 to the West and 276,000 to the Midwest.

The remaining seven region-to-region flows range from about 54,000 to 162,000 people.

Mover rates
The Northeast had the lowest overall mover rate in 2018, at 7.7 percent. The other three regions do not differ statistically from one another, at 10.4 percent for the Midwest, 10.8 percent for the South, and 10.7 percent for the West.

Compared to the 2018 overall national mover rate of 10.1 percent, the Northeast mover rate is lower, the South and West mover rates are both higher, and the Midwest mover rate does not differ statistically.

The data was announced by Kristin Kerns and L. Slagan Locklear, statisticians in the Census Bureau's Journey-to-Work and Migration Statistics Branch.

© 2019 Florida Realtors®

April 30, 2019

Want flood insurance before hurricane season? Act now!

WASHINGTON – April 29, 2019 – Hurricanes provide little advance notice of their arrival, and as landfall approaches, insurance companies may temporarily suspend new coverage and coverage changes.

That means it's usually a good idea to review your insurance coverage yearly to make sure it matches your needs. An insurance representative can review your policy, explain limits and deductibles, and help you identify coverage gaps.

"You should ask your representative for tips on hurricane risk mitigation that may lower your insurance premiums and better protect your property," said Tom Woods, assistant vice president of property underwriting for USAA.

The Federal Alliance for Safe Homes and the Insurance Institute for Business and Home Safety offer numerous suggestions for improving the resiliency of your home during a hurricane.

"Many of these things don't cost a lot of money," Woods said.

During your annual coverage review, consider the following:

  • Flood insurance, which covers losses from rising water, isn't provided in routine homeowners insurance policies. However, it is available from USAA through the National Flood Insurance Program. Premiums vary depending on how flood-prone the covered property is and how much coverage you desire. Members can use USAA's Property Risk Assessment Tool to see what flood risk their home faces. Typically, flood insurance doesn't become effective until 30 days after purchase.
  • Windstorm damage is covered with its own deductible in some homeowners insurance policies, and a separate wind policy might be required in some places. Hurricane and windstorm damage in high-risk coastal areas may only be available through a state-managed insurance pool. It too may have a waiting period before coverage begins.
  • Review your policy's coverage for temporary living expenses. See how much your policy will pay and how long it will pay after the storm ends.
  • Coverage under USAA's Valuable Personal Property policies helps replace a homeowner's costliest possessions, including jewelry and artwork. Typical homeowners policies provide some coverage for those belongings, but it is limited and could keep you from reacquiring the full value of lost items.
  • Renters insurance can cover the loss of renters' personal belongings, which are not covered by the landlord's insurance. Renters can get temporary living expense coverage in their rental policies, and their belongings should be covered if stolen.

© Copyright 2019 Longview News-Journal, 320 E. Methvin St. Longview, TX.

Posted in National News
April 26, 2019

A home downpayment shouldn’t wreck buyers’ finances

NEW YORK – April 25, 2019 – Maximizing a home down payment can make sense: The bigger the down payment, the lower the monthly mortgage bill and the better the chance of building equity more quickly.

But putting too much down could leave you without enough cash for home maintenance – or anything else.

Pinpointing the right amount involves balancing the advantages of boosting the down payment against the need to hold back money for urgent upgrades, life's emergencies, and having some fun with your new home.

"There's really no one-size-fits-all solution," says Jason Speciner, a certified financial planner in Fort Collins, Colorado.

The effect of a higher down payment

Calculating how different down payments would affect a monthly mortgage payment is eye-opening. Some lenders require only 3 percent down for conventional home loans, which makes getting in the door easier but means assuming more debt than with higher down payments.

Many borrowers ask if they should scrape together a little more, such as 5 percent versus 3 percent, says Rick Bechtel, head of U.S. residential lending at TD Bank. But that probably wouldn't make enough difference in the monthly mortgage payment to justify doing so if it left you strapped, he says.

"The need for post-closing cash is always greater, and sometimes significantly so, than people expect," he says.

But a higher down payment can make a significant difference if it means lowering or avoiding mortgage insurance. The insurance, which can involve upfront and monthly fees, protects the lender if the borrower defaults. Depending on the type of loan, making a higher down payment may eliminate some of that expense, if not all of it.

Kristin Phillips, a Tampa, Florida, psychologist and author of The Debt Shrink blog, says she and her husband, Brandon, couldn't put down the traditional 20 percent, but they wanted to put down more than the minimum when they bought a home in 2013.

"Ten percent was a good compromise," she says. That kept the monthly mortgage under 25 percent of their income so they could live comfortably. Eventually they made extra mortgage payments to build enough equity to eliminate private mortgage insurance.

Borrow with care

When deciding on down payment size, consider its effect on other aspects of your financial plan.

Twenty-nine percent of homeowners ages 21 to 34 borrowed from retirement accounts to help fund down payments, according to the Bank of the West's 2018 Millennial Study.

But the decision to do so shouldn't be taken lightly. Borrowing from a 401(k) is particularly risky. After a job loss, the loan must be repaid by the next tax filing deadline or it's taxed as ordinary income, with a 10 percent penalty if the withdrawal is taken before age 59½.

Using a Roth IRA to boost a down payment is a better option, says Aaron Clarke, a certified financial planner and wealth adviser at Halpern Financial in Ashburn, Virginia. There are no taxes or penalties on withdrawals of contributions. First-time home buyers who have contributed to a Roth for at least five years can withdraw up to $10,000 of earnings on the contributions, tax- and penalty-free.

But Linda Rogers, a certified financial planner and owner of Planning Within Reach in Memphis, Tennessee, says she doesn't recommend borrowing from retirement savings. Many people are behind on saving anyway, she says, and borrowing from an IRA means losing tax-free growth.

Expect the unexpected

Thirty-four percent of recent first-time buyers say they no longer felt financially secure after buying their current home, according to NerdWallet's 2019 Home Buyer Report, based in part on a survey of 2,029 adults by The Harris Poll for NerdWallet.

To maintain security, resist draining your savings for the down payment and closing costs. Leave some for emergencies, such as a car breakdown.

"Emergency reserves are for 'Oh, shoot' moments," Speciner says.

And homeownership includes plenty of those. To minimize surprises, review the home inspector's report and negotiate repairs with the seller before purchasing. Budget for immediate upgrades, such as fencing the yard for your dog. Include some cushion.

Alexandra Geneser, a neuropsychologist, used a portion of her savings for a 7 percent down payment and reserved the rest to remodel a fixer-upper in Charlottesville, Virginia, in 2018. The money for upgrades included a 20 percent cushion in case the project cost more than expected. The approach left her with enough to create the home she wanted without derailing her financially. "I am so overjoyed with my house," she says.

Finally, leave some cash for fun stuff, like furniture.

"You just achieved a dream," Bechtel says. "You're going to spend money because you'll have rooms you didn't have before."

April 24, 2019

March new-home sales pace highest since Nov. 2017

WASHINGTON – April 23, 2019 – Sales of newly built, single-family homes rose to a seasonally adjusted annual rate of 692,000 units in March after a slightly revised February report, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. It's the highest sales pace since November 2017.

"These numbers indicate that builders who can produce housing at affordable price points will experience sales growth," says Greg Ugalde, chairman of the National Association of Home Builders (NAHB). "However, builders are still dealing with a shortage of construction workers and buildable lots, which limits housing affordability."

"We saw a large gain at lower price points where demand is strong," adds NAHB Chief Economist Robert Dietz. "In March 2019, 50 percent of new home sales were priced below $300,000 compared to 39 percent in March of 2018. These are the price points that are attractive for renters seeking to become homeowners."

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the March reading of 692,000 units is the number of homes that would sell if this pace continued for the next 12 months.

The inventory of new homes for sale was 344,000 in March, representing a 6 months' supply. The median sales price was $302,700 with strong gains in homes sold at lower price points. The median price of a new home sale a year earlier was $335,400.

Regionally, and on a year to date basis, new home sales fell 17.6 percent in the Northeast, 8.1 percent in Midwest and 5.9 percent in the West. Sales rose 9.6 percent in the South, where 58 percent of new home sales occurred in March.

© 2019 Florida Realtors®

April 23, 2019

Florida'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'sstatewide 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®