April 12, 2021

JPMorgan CEO Foresees Post-Pandemic Boom

JPMorgan Chase CEO Jamie Dimon calls robust consumer savings and a $2T infrastructure plan the economic “Goldilocks scenario” for fast and sustained growth into 2023.

NEW YORK – JPMorgan Chase CEO Jamie Dimon said the U.S. economy is headed for a boom that could run well into 2023.

In his annual letter to shareholders Wednesday, Dimon said robust consumer savings, a successful vaccine rollout and the Biden administration’s proposed $2 trillion infrastructure plan could lead to an economic “Goldilocks scenario” of fast and sustained growth, tame inflation and a measured rise in interest rates.

“I have little doubt that with excess savings, new stimulus savings, huge deficit spending, more QE (quantitative easing), a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the U.S. economy will likely boom,” Dimon said. “This boom could easily run into 2023 because all the spending could extend well into 2023.”

In his 65-page letter, Dimon said the long-term effects of the economic boom won’t be known for years because it will likely take time to see how government spending, including President Joe Biden’s proposed $2 trillion infrastructure bill, will boost economic growth.

The infrastructure plan, dubbed the American Jobs Plan, aims to rebuild the nation’s aging roads, bridges, transit and rail service, along with supporting electric vehicles, clean energy and building more than 2 million affordable homes. The White House said it would like to see the plan approved by Congress in the summer.

“The permanent effect of this boom will be fully known only when we see the quality, effectiveness and sustainability of the infrastructure and other government investments,” Dimon added. “I hope there is extraordinary discipline on how all of this money is spent. Spent wisely, it will create more economic opportunity for everyone.”

To be sure, a number of challenges could thwart the boom, Dimon said, including the risk of new COVID-19 variants and rising debt levels. A faster-than-expected rise in inflation could also lead the Federal Reserve to raise interest rates more quickly than Wall Street is expecting, which would threaten to weigh on economic growth.

April 9, 2021

Mortgage Rates Dip – First Time Since January

The 30-year mortgage rate dropped to 3.13% this week from 3.18% last week; it was 3.33% a year ago. High prices and limited supplies continue to impact buyers.

McLEAN, Va. (AP) – Mortgage rates fell for the first time in more than two months as buyers continue to be stifled by high prices and limited supply.

Mortgage buyer Freddie Mac reported Thursday that the benchmark 30-year loan rate dipped to 3.13% this week from 3.18% last week. At this time last year, the long-term rate was 3.33%.

The rate for a 15-year loan, popular among those looking to refinance, fell to 2.42% from 2.45% last week. One year ago it was 2.77%.

Mortgage rates have been historically low for years, but strong demand and low inventory have pushed prices higher.

Last week the National Association of Realtors® reported that its index of pending home sales tumbled 10.6% to 110.3 in February, its lowest level since May of 2020. Contract signings are now slightly behind where they were last year after eight straight months of year-over-year gains.

Meanwhile, U.S. home prices rose at the fastest pace in seven years in January, according to the S&P CoreLogic Case-Shiller 20-city home price index. The pandemic has fueled demand for single-family homes as people look for more space.

Economists expect home loan rates to remain low as the Federal Reserve says it intends to keep its main borrowing rate near zero until the economy recovers from the coronavirus pandemic.

Also Thursday, the Labor Department reported that the number of Americans applying for unemployment benefits rose last week to 744,000, signaling that many employers are still cutting jobs even as more people are vaccinated against COVID-19 and state and local governments lift virus restrictions.

Posted in National News
April 6, 2021

As Mortgage Relief Plans End, What's Next for Homeowners?

For owners in forbearance, a possible foreclosure is closely tied to whether or not they’re working again. This spring, about 800K owners in forbearance – out of a total of 2.6 million homeowners – hit the 12-month mark, though a six-month extension may still be possible.

LONGVIEW, Texas – Millions of U.S. homeowners facing financial hardship related to the COVID-19 pandemic have sought mortgage payment relief, or forbearance, allowing them to temporarily pause or reduce their monthly mortgage payments. According to the mortgage data firm Black Knight, as of March 2021, approximately 2.6 million U.S. homeowners remain in an active forbearance plan. It’s important they know their options for what happens next.

Early in the pandemic, Fannie Mae, a provider of home loan and rental housing financing in the U.S., launched an online portal at KnowYourOptions.com with interactive resources to help homeowners and renters, including clear explanations of mortgage forbearance, when it may be an option, and steps to get started.

For those still feeling the financial impact of COVID-19 or those newly impacted by the economic fallout, it’s not too late to get help.

“We encourage homeowners and renters facing financial hardship to visit KnowYourOptions.com to learn what options may be available, and to contact their mortgage servicer or landlord to make a plan,” said Malloy Evans, senior vice president, Fannie Mae. “It’s our top priority to help keep people in their homes.”

According to Black Knight, more than 800,000 homeowners who opted for forbearance will reach the end of their 12-month plan this spring. Those who are still facing financial hardship may be eligible to extend for up to six additional months. Homeowners interested in seeking an extension should contact their mortgage servicer (the company they send their monthly payment to).

Those homeowners who are ready to begin making their monthly mortgage payments again have access to a number of options such as:

  • Reinstatement allows homeowners to pay any missed amounts all at once, if they are financially able to do so.
  • A repayment plan enables homeowners to resume making their regular monthly mortgage payment, plus an additional portion of the missed amount each month, until the missed amount is paid off, if they are able to do so.
  • Payment deferral might be a good option for those who are unable to reinstate or afford a repayment plan but can resume their monthly mortgage payments. This defers any missed payments to the end of the loan term when it is paid off. Interest is not charged on the deferred amounts. The deferred amounts are due earlier upon the sale or transfer of the property, refinance, or payoff of the loan.
  • Loan modification is another option where the original loan terms – such as the interest rate or term of the loan – could be permanently changed to make a homeowner’s monthly mortgage payment more manageable moving forward.

The new, interactive virtual assistant at KnowYourOptions.com can provide homeowners with an informed recommendation for their financial situation, which they can discuss with their mortgage servicer. Servicers should also contact homeowners approximately 30 days before their forbearance plan is scheduled to end to discuss extension and exit options.

© Copyright 2021 Longview News-Journal, 320 E. Methvin St. Longview, TX.

April 2, 2021

Florida Consumer Confidence Bounces Back, Up 3.7 Points

All five components rose too. UF economist: “Consistent with the vaccination rollout …, the gain in confidence came from consumers’ future expectations.”

GAINESVILLE, Fla. – Attitudes are improving in Florida. After tumbling in February, consumer sentiment increased in March 3.7 points from February’s revised figure of 77.2 – though a similar national poll found an 8.1-point bump in national confidence.

All five components that make up the index also increased.

Current outlook: Floridians’ opinions of their personal financial situation now compared with a year ago increased 1.3 points from 66.4 to 67.7. However, opinions varied by demographics, with women and people older than 60 reporting less-favorable opinions.

Similarly, an index on whether it’s a good time to make a major purchase, such as an appliance, rose 5.4 points from 71.7 to 77.1. Again, however, older Floridians (60 and older) had less-favorable opinions.

Future outlook: Attitudes about future economic conditions were also positive. Expectations for personal finances a year from now increased 3.6 points, from 87.6 to 91.2 – but again, not so much for people older than 60.

Expectations about U.S. economic conditions over the next year increased 6.8 points, from 79 to 85.8, the greatest increase of any reading in March. In this case, older adults generally agreed, and it was shared across all sociodemographic groups, and especially strong among those with an annual income above $50,000.

Finally, views of U.S. economic conditions over the next five years increased 1.4 points from 81.4 to 82.8. While adults over 60 seemed to agree that good things would happen over the next year, however, they were less optimistic about the next five years.

“In four of the five components, people older than 60 reported more pessimistic views than the state at-large,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research. However, “despite the differing opinions by age, Floridians overall are more optimistic in March and are anticipating greater economic prospects.

“Consistent with the vaccination rollout and the proposed vaccine eligibility expansions, the gain in confidence came from consumers’ future expectations, particularly from Floridians’ expectations about the national economy over the next year,” Sandoval adds.

Florida’s labor market has continued to recover. The state’s unemployment rate dropped 0.1% in February, reaching 4.7%. New claims of unemployment benefits have maintained a downward trend, and in March, they dropped to the lowest level since the pandemic began one year ago.

“The recovery is far from complete, though the vaccine eligibility expansion recently announced, opening up eligibility to all adults, is expected to have a positive impact on Florida’s economic prospects in the short-run,” says Sandoval. “Coupled with the arrival of the third stimulus check, which is expected to boost local economies, we anticipate an increased rate of recovery and further improvements in consumer sentiment in the coming months.”

March 31, 2021

January Home Prices Soared – Biggest Increase In Seven Years

S&P CoreLogic Case-Shiller: Prices rose 11.1% year-to-year in Jan., the biggest gain since March 2014. Prices rose in all 20 cities included in the report.

WASHINGTON (AP) – U.S. home prices increased at the fastest pace in seven years in January as the pandemic has fueled demand for single-family houses even as the supply for such homes shrinks.

The S&P CoreLogic Case-Shiller 20-city home price index, released Tuesday, rose 11.1% in January from a year earlier. That’s the biggest gain since March 2014. Prices rose in all 20 cities, and the 12-month increase was larger for all cities in January than in the previous month.

“January’s data remain consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes,” said Craig Lazzara, managing director and global head of index investment strategy at S&P DJI. It’s not yet clear whether that trend will fade as the pandemic is brought under control, Lazzara said, or if there will be a permanent shift higher in demand.

The biggest price gain was in Phoenix, where home prices jumped 15.8%, followed by Seattle, with a 14.3% gain, and San Diego, at 14.2%.

Home sales have jumped in the past year, driven by a desire for more space among those Americans fortunate enough to keep their jobs. With roughly one-quarter of workers doing their jobs from home, along with children going to school online, families have sought out houses rather than apartments, or moved to larger homes.

Yet that trend has run into a reluctance among many Americans to sell their homes – and have legions of potential buyers parade through their living rooms – during the pandemic.

The number of available homes collapsed nearly one-third by February compared with a year earlier, to just over 1 million, according to the National Association of Realtors®. That’s the sharpest yearly drop on records dating back to 1982.

Higher mortgage rates may slow sales a bit in the coming months, but borrowing costs remain near historic lows. The average rate on a 30-year fixed mortgage rose to nearly 3.2% last week, the highest since June, up from 3.1% the week before. That’s still below the pre-pandemic rate of 3.5%.

Sales of new and existing homes fell sharply in February, mostly because of unseasonably cold winter weather and ice storms in Texas and other southern states. Yet existing home sales were still 9% higher in February compared with a year ago.

March 23, 2021

Florida's Housing Market: More Sales, Higher Median Prices in February 2021

Florida Realtors’ data: Single-family home sales rose 15.7% year-over-year, median sales price up 16.6%; condo sales up 28.7%, median price up 16.6%. Chief Economist O’Connor: Fewer new listings and a tight inventory means a strong seller’s market.

FEBRUARY: HOME PRICES SOAR AS INVENTORY SHRINKS

The statewide inventory of active single-family home listings, which Florida Realtors has been tracking since January 2008, is currently at an all-time low. And the scarcity of inventory and high demand for existing homes continues to drive home prices higher.

ORLANDO, Fla. – Amid increased COVID-19 vaccinations and hopeful signs for the future, Florida’s housing market in February reported more closed sales, higher median prices, more new pending sales and increased pending inventory in February 2021 compared to a year ago, according to Florida Realtors® latest housing data. Single-family existing home sales rose 15.7 % compared to February 2020.

“Florida’s housing market continued its momentum in February, but higher interest rates could be a factor going forward,” says 2021 Florida Realtors President Cheryl Lambert, broker-owner with Only Way Realty Citrus in Inverness“While rising rates could potentially slow the pace of home sales, rates remain relatively low by historical standards. Record-low inventory is continuing to put pressure on home prices to rise and creates challenges for buyers. However, new pending sales rose 10.9% for single-family existing homes last month compared to February 2020, while new pending sales for condo-townhouse units increased 35.4% year-over-year.

Closed sales of single-family homes statewide in February totaled 23,947, up 15.7% year-over-year, while existing condo-townhouse sales totaled 11,379, up 28.7% over February 2020. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

The statewide median sales price for single-family existing homes was $314,900, up 16.6% 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 $233,240, up 16.6% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Florida Realtors Chief Economist Dr. Brad O’Connor notes that Florida’s current housing market is a strong seller’s market, with fewer new listings and a very tight inventory (active listings), particularly for single-family existing homes.

He says, “The statewide inventory of active single-family home listings, which Florida Realtors has been tracking since January 2008, is currently at an all-time low. At the end of February, single-family inventory was down 56.3% compared to a year ago. Most of this decline has been a result of our ultra-high rate of sales.

“However, so far in 2021, new listings of single-family homes have not kept up with their pace of 12 months ago. In February, they were down 4.9% year-over-year, which is an improvement over January, but still represents a move in the wrong direction. There’s a likelihood that much of this decline has been due to some sellers, who in normal times might have listed in January or February, instead listing ahead of 2021 in response to the unusually strong market in the second half of 2020. But there’s also the possibility that a small but increasing number of homeowners, who have been thinking of selling their current home and buying another one, are starting to get turned off by the lack of available inventory and the rising prices that have resulted from it.”

The condo-townhouse category shows a slightly different picture, O’Connor says.

“In February, closed sales in this category rose 28.7% year-over-year, which is consistent with the growth rates we’ve been seeing each month going back to September,” he says. “Some of this growth is likely being fueled by frustrated buyers who had their hearts set on a single-family home finally giving up and settling for an attached unit instead, but we’re also seeing high demand from folks with the typical condo- and townhouse-buyer profile, as well. And while inventory in this category is still high relative to what we’re seeing in the single-family home category, it was down 34.4% compared to a year ago.”

On the supply side of the market, inventory (active listings) remained constrained in February. Single-family existing homes were at a very restricted 1.3-months’ supply while condo-townhouse inventory was at a 3.4-months’ supply.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 2.81% in February 2021, significantly lower than the 3.47% averaged during the same month a year earlier.

To see the full statewide housing activity reports, go to Florida Realtors Tools and Research section. Realtors also have access to local market data (password protected) through Florida Realtors’ SunStats resource.

March 22, 2021

Some Florida Agents See a ‘Mass Migration’ from California

Pandemic relocation numbers aren’t out yet, but agents across Fla. report a higher number of new clients are Californians looking for a less expensive lifestyle.

SAN FRANCISCO – Real estate agents say more San Francisco Bay area residents are moving to Florida. Lynn Peters, a Realtor with Remax in Gulf Breeze, says she has seen a significant increase in the number of Californians moving to Northwest Florida since COVID-19 lockdowns began in March 2020.

Prior to the pandemic, Florida was the seventh-most popular state for California residents moving to another state. A total of 28,628 Californians left for Florida in 2019, the most recent data available from the U.S. Census Bureau.

Florida’s lack of an individual income tax and lower cost of living are factors that attract California residents.

Among metro areas, Orlando is seeing a flood of buyers from California and other West Coast states, says Peter Luu, an agent at Premier Sotheby’s International Realty in Orlando.

“In the past, California buyers would go as far as Colorado and Texas,” says Luu. “Now there’s no need to be at corporate meetings in a couple days.”

In recent months, Bay Area venture capitalists and entrepreneurs concluded that life is better in the Miami area. David Blumberg of Blumberg Capital and Keith Rabois, an investor in companies like PayPal, Square and LinkedIn, are among the Bay Area’s affluent residents who recently moved to South Florida.

In Northeast Florida, where Zillow estimates the Jacksonville median home price is $254,000, Realtor Chris Snow with eXp Realty in St. Augustine says he is working with more California clients, often under 60 years old. He says many California clients are fatigued about the Bay Area’s homelessness, crime, traffic and other quality of life issues.

Source: South Florida Business Journal (03/15/21) Calvey, Mark

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

March 18, 2021

Buyers Rush to Lock in Low Interest Rates

The uptick in interest rates increased buyer activism heading into the spring buying season, which probably won’t be a “season” since the market never slowed in 2020.

NEW YORK – The spring homebuying market is typically marked by higher sales and a greater number of house hunters, but many real estate professionals feel a spring-like market has been in full swing since the pandemic began a year ago.

“There will be no spring homebuying season in 2021, as we’ve been in it the entire time,” says Bob Bradley, a real estate professional in Orange, Calif. “Major markets haven’t had the chance to experience the winter decline in sales typically seen pre-pandemic. With interest rates starting to rise, buyers continue to scramble and compete with over-asking offers on single-family homes.”

Recent rises in mortgage rates don’t seem to be deterring would-be buyers either.

“People are making a mad dash to try and take advantage of what are historically low interest rates,” Jeremy Sopko, CEO of Nations Lending based in Independence, Ohio, told Bankrate.com. “And as rates have ticked up over the last couple of weeks, this has only fueled the fire. Second, you’ve got a pandemic-induced population shift. It’s no longer necessary for millions of people to live in or near large cities. No longer tied down to small apartments with high rents, they are free to explore elsewhere.”

Here’s where the housing market is starting from for this spring season:

  • Inventory of homes for sale dropped in February by nearly 49% year-to-year.
  • February’s median listing price increased to $353,000, up about 14% year-to-year.
  • Mortgage applications for new home purchases increased 19% in January 2021 compared to a year earlier.
  • 71% of homes sold in January were on the market for less than a month.

“The days on the market have been very swift throughout the winter, with no let-up,” says Lawrence Yun, chief economist of the National Association of Realtors®. “Though more inventory will show up in the spring months – around 20% above winter level – new sets of buyers will also emerge. Therefore, it will still feel like an overheated market with too many buyers chasing after too few homes.”

March 15, 2021

The Best Overall State? Florida Moved Up to No. 10 This Year

U.S. News & World Report ranked Florida No. 10 this year as overall best state, up from 13 last year. Created via a survey of residents, the list covers 8 categories.

MIAMI – The Sunshine State – with its dazzling beaches, exciting nightlife and picture-perfect weather – is shining bright in a new annual survey.

According to the latest standings from U.S. News & World Report, Florida ranks 10th overall among the “Best States in the U.S.” And we’re on the rise.

Florida finished at No. 13 in 2019.

State rankings were determined based on the average of three years of data from an annual survey that asked 70,000 people to rank their state in eight categories – health care, education, economy, infrastructure, opportunity, fiscal stability, crime and corrections, and natural environment.

Florida – a paradise for the young and old, water-sports enthusiasts, golfers and others from all walks of life – ranked at No. 3 in education, No. 8 in economy, and No. 8 in fiscal stability in this year’s survey.

New York, which has a large number of transplants in Florida, came in at No. 21 overall, two spots behind New Jersey. Washington was No. 1 overall in the 2021 rankings, followed by Minnesota, Utah, New Hampshire and Idaho.

The bottom five were Alabama, West Virginia, New Mexico, Mississippi and Louisiana.

© 2021 the Sun Sentinel (Fort Lauderdale, Fla.) Distributed by Tribune Content Agency, LLC.

March 10, 2021

Economic Development Shift Focusing on People over Place

Florida Realtors economist: Florida cities are switching their economic-development focus. Instead of trying to attract companies, they’re putting a greater emphasis on attracting people as the “work from anywhere” trend continues to pick up steam.

ORLANDO, Fla. – Economic development traditionally focuses on a particular place – a state, region, county or town. Strong companies are attracted to a location that has a favorable operating environment – where there is a place for their type of operation and regulations that support their industry.

Of course, they also need a deep bench of people with the skills that their industry requires willing to move there for work. This skilled workforce is attracted to places where there are jobs, but they also want a favorable living environment – somewhere they actually enjoy the lifestyle when they aren’t working. This speaks to the overall quality of life, which also appeals to the companies and their executives.

But business as usual is changing as a result of the pandemic. Economic developers are completely re-thinking the way they’ve approached business attraction and workforce development – it is as if they face a blank slate to consider new possibilities.

One of the biggest examples of this is Silicon Valley, which was built around that tight connection between companies, resources and talent. Proximity to Sand Hill Road, where are all the major venture capital firms are located, was seen as critical to the tech ecosystem built around the next-big idea working with the right deep-pocketed investor. Now the very companies that made it so we can ostensibly work from home told their own employees to do exactly that. As a result, the tech diaspora has begun and, so far, some of the biggest places these high-wage earners are going are places like Boise and Miami.

A tweet from a prominent venture capitalist in December 2020 said, “Okay guys, hear me out: What if we moved Silicon Valley to Miami?” The mayor of Miami answered back, “How can I help?” The mayor reported that these were the four most powerful words he’s ever written, as it got over 2.3 million impressions and started conversations with numerous firms looking to relocate to Miami.

This is just one example obviously, but it shows that economic development has begun to flip on its head. It used to be about place – a “build it and they will come” type thing. But now, the focus has become less about the firms and more about the people.

This can present some challenges to commercial brokers unless they figure out ways to capitalize on this trend – creating a way to sell more than building space but also the quality of life for employees.

Another example of focusing on the people instead of the firms is the concept of “Zoom Towns” – places positioning themselves to be the ideal location for people to “work from anywhere.”

The Naples Chamber of Commerce has been working with other economic development organizations in their region to attract people, regardless of company or industry, to come and work from their city. They emphasize the quality-of-life offerings Naples has, including no snow in the winter, good schools, and relative lower cost of living to people who could realistically Zoom from anywhere.

Take some time to connect with your local economic development folks to see if there is a similar effort underway where you work.

Places are also taking a hard look at their broadband and other tech infrastructure. If you’re going to position yourself as a zoom town, you better have the broadband to meet the potential influx of demand.

Want to know if your area has strong broadband? Check out Enterprise Florida’s “Find it Florida” tool, which shows available properties with certain economic development filters, including broadband. For example, I was able to quickly locate 13 available office buildings in suburban Seminole County that have broadband. This tool can help you locate assets in your area or just see the condition of broadband overall. It may also help you figure out some new selling points that suddenly matter more than they did before.

Jennifer Quinn is an economist and Director of Economic Development for Florida Realtors

© 2020 Florida Realtors®