April Sales Numbers

April sales stats are here:

Sales are up 7.8% to 333 units with an increase in median sales price of 8.5% to $255,000.  Time to contract increased from 49 days to 59 days.

To see full 10 page click AprilSebastian-Vero_Beach_MSA_Single_Family_Homes_2019-04_Detail

 

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Are hybrid appraisals becoming the new normal?

WASHINGTON – May 17, 2019 – Appraisals, a critical part of real estate transactions, have customarily been done in-person by an experienced appraiser. However, with advancements in technology and the rise of big data, alternatives to the traditional appraisal field are beginning to become more prevalent in the U.S.

Traditional appraisal alternatives – like hybrid appraisals, broker price opinions and data-driven automated or desktop valuation models – can be useful and cost-effective tools. However, many in the industry, including the National Association of Realtors® (NAR), urge caution when waiving traditional, onsite appraisals for home transactions to ensure purchases are based on sound financial principles and don’t put undue risk on consumers or the market.

Peter Phelan, deputy assistant secretary for Capital Markets for the U.S. Department of the Treasury, discussed how data and technology are changing the financial services industry and driving innovation at the recent 2019 Realtors® Legislative Meetings & Trade Expo.

“The adoption of these new financial technologies is not a matter of if, but when,” said Phelan. “And with a new generation of tech-savvy homebuyers, this digital revolution will be necessary.”

Michelle Czekalski Bradley, a certified appraiser and broker with Czekalski Real Estate, Inc., agrees that appraisers need to be ready to embrace such new technology because it’s already affecting the industry.

“Change is not going to happen; it has already happened, and it’s going to continue to happen,” said Bradley. “At some point, we are going to move beyond hybrid to something completely new.”

Timothy O’Brien, general manager of Clear Capital’s Appraisal Management Company, believes that hybrid appraisals will create more choice rather than herald the end of appraisers. Consumers can decide on a scope of work that does not include an appraisal if the information provided by data collectors is adequate, saving homebuyers time and money. However, the quality and amount of data is key to making these products viable.

“A lot of markets have really good data, and this system works most of the time. In other markets, the data isn’t there, and it might work 10% of the time,” said O’Brien. “But appraisers will always be needed, whether for field or desktop work.”

O’Brien also suggested that the newer models might bring new people to the appraisal field – those who were not interested in a career that required a lot of travel or those who have problems with mobility.

“My father is 70 years old, and he is still a practicing appraiser. He cannot go up a flight of stairs, but he can still do desktop appraisals,” said O’Brien.

John Torvi, vice president of marketing and sales for Landy Insurance Agency, discussed the liability and legal issues that arise when appraisers and agents adopt these new appraisal products.

“The number one question I get asked by appraisers is ‘Am I covered?'” said Torvi.

Insurance companies are slow to adapt to these advancements, so before appraisers begin taking on hybrid appraisals, they should check their insurance plan to make sure they are covered in order to avoid a lawsuit.

Additional information and resources for real estate professionals about appraisals can be found at www.nar.realtor/appraisal-valuation.

© 2019 Florida Realtors®

Judge says Zillow ‘co-marketing’ lawsuit can proceed

WASHINGTON – May 14, 2019 – A judge says a class-action lawsuit against Zillow can move forward. Parties that filed the suit allege that Zillow’s “co-marketing” program between agents and lenders violates federal antikickback laws.

Zillow officials have called the lawsuit “without merit,” and company officials say they intend to “vigorously defend” against the accusations.

Zillow offers a “premier” agents and brokers program, in which real estate professionals can receive prominent advertising placements on its listed home sites. In 2013, Zillow added to the program, in which agents could have large portions of their advertising fees paid for by lenders who share the advertising costs for prominent ad placements. Prospective buyers on Zillow would then see an agent and lender advertised as they browsed for homes. The program allows lenders to share access to these buyer leads.

However, the lawsuit alleges that the co-marketing program violates the Real Estate Settlement Procedures Act (RESPA), a federal law that prohibits the payment of fees for business referrals among real estate, mortgage and title industry providers that aren’t for services actually rendered.

In April 2017, the U.S. Consumer Financial Protection Bureau announced an investigation intowhether Zillow’s co-marketing program violated RESPA’s rules regarding kickbacks. However, the CFPB dropped its case after a new agency director was named.

Investors who purchased Zillow stock also filed a class-action lawsuit alleging securities fraud, but a district court judge dismissed portions of that lawsuit. But plaintiffs were told they could file an amended complaint if they could produce evidence that Zillow’s co-marketing program violated RESPA.

A federal district court judge ruled on April 19 that the lawsuit can proceed.

“The court can draw a reasonable inference that Zillow designed the co-marketing program to allow agents to provide referrals to lenders in violation of RESPA,” Judge John C. Coughenour of the United States District Court for the Western District of Washington wrote in his decision.

Source: “Whistleblowers’ Claims Revive a Class-Action Suit Against Zillow,” The Washington Post (May 11, 2019)

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

More U.S. properties ‘seriously underwater’

IRVINE, Calif. – May 9, 2019 – ATTOM Data Solutions’ Q1 2019 U.S. Home Equity & Underwater Report finds an increase in properties that are seriously underwater – ones in which the amount owed on one or more mortgages is at least 125 percent of the property’s value.

In Florida, most cities have a seriously underwater rate between 10 and 20 percent, though ATTOM found that Jacksonville has a rate of 32.8 percent. ATTOM’s interactive map with county-by-county details is posted online.

Nationwide, more than 5.2 million U.S. properties were seriously underwater in the first quarter (where the combined balance of loans secured by the property was at least 25 percent higher than the property’s estimated market value), up by more than 17,000 properties from a year ago.

The 5.2 million seriously underwater properties at the end of Q1 2019 represented 9.1 percent of all U.S. properties with a mortgage, up from 8.8 percent in the previous quarter but down from 9.5 percent in Q1 2018.

“With home prices increasing at a slower pace in 2018 than in previous years, the potential for people to climb out from mortgages that are underwater or advance into equity-rich territory tends to be reduced,” says Todd Teta, chief product officer at ATTOM Data Solutions. “However, only one in 11 mortgages are seriously underwater today compared to nearly one in three during the depths of the recession.”

Teta says that a continued increase in the number of seriously underwater mortgages could be “another clear signal of a market slowdown, which will be good for buyers, but not so good for sellers.”

However, it’s too soon to read anything into the 1Q 2019 numbers and the numbers could turn around.

States with the highest percentage of seriously underwater properties are Louisiana (20.7 percent, Mississippi (17.1 percent), Arkansas (16.3 percent), West Virginia (16.2 percent) and Illinois (16.2 percent).

Among 99 metropolitan statistical areas analyzed in the report, those with the highest share of seriously underwater properties were Baton Rouge, Louisiana (21.3 percent); Scranton, Pennsylvania (20.0 percent); Youngstown, Ohio (19.2 percent); Toledo, Ohio (19.2 percent); and New Orleans, Louisiana (17.8 percent).

Equity rich properties

ATTOM defines equity rich as properties where the owner has at least 50 percent equity.

The highest equity rich states are California (43.0 percent), Hawaii (38.1 percent), New York (34.2 percent), Washington (33.2 percent) and Vermont (32.8 percent).

Among 99 metropolitan statistical areas analyzed, those with the highest share of equity rich properties were San Jose, California (68.3 percent); San Francisco (58.4 percent); Los Angeles (48.1 percent); Santa Rosa, California (47.6 percent) and San Diego (39.3 percent).

© 2019 Florida Realtors®

Realtors Better get Their %#$& Together

Redfin, the Seattle-based real estate brokerage, is starting a program that lets house
hunters bid on properties directly through its website. The move aims to bring online shopping to a business dominated by attending weekend open houses and driving around with agents.

The company recently tested the program in Boston and now plans to extend it in stages across the country. It is the latest sign that technology companies are encroaching on the decidedly low-tech world of real estate sales.

Web-focused operations like Redfin, Zillow, Opendoor and Offerpad — along with brokerage giants like Realogy, which owns Coldwell Banker and other brands — have been building out “instant buying” programs that allow home sellers to solicit direct offers from the company. The Redfin program, Redfin Direct, is an effort to bring the approach to the other side of the transaction.

Real estate agents’ groups will be watching to see whether Redfin’s competitors introduce similar programs. At stake is the roughly $110 billion a year in commissions generated by home sales.

 

Click here for full story

Accommodating For Service Animals: Better Follow the Law

Accommodating for service animals is becoming an issue if you are selling or renting properties in neighborhoods or condominiums that don’t allow pets. Condo boards need to get prepared.  The link below is a white paper written last August by Randall B. Holbrook with the Legal Research Center, Inc.

It’s worth a read.

NAR-Fair-Housing_Resonable_Accommodation_Service_Animals-AUGUST-2018-002-1

 

AS IS inspections: Can buyers cancel for any-old reason?

May 6, 2019 – Calls to Florida Realtors Legal Hotline indicate confusion – sometimes flat-out outrage – over buyers’ ability to cancel within the inspection section of the Florida Realtors/Florida Bar ASIS Residential Contract for Sale and Purchase (“FR/Bar ASIS Contract”).

What triggers the buyers’ ability to cancel under this provision? Can it be for any reason? Does it have to be based on the inspection results? Does the buyer even have to get an inspection to allow cancellation?

This article will cover these questions, as well as provide options for those who think this section of the FR/Bar ASIS Contract is too “buyer-friendly.”

To have/not have an inspection

Paragraph 12 of the FR/Bar ASIS Contract states that the “buyer shall have X (if left blank, then 15) days after Effective Date ‘Inspection Period’ within which to have such inspections of the Property performed as buyer shall desire during the Inspection Period.

Let’s break this down a bit to see what this sentence is saying. It’s clear that the buyer has a certain number of days to have any inspections done, and those inspections must be done during the Inspection Period. What might not be clear: It’s entirely up to the buyer whether or not he even has an inspection. (What?!) Per the language, the buyer can have any inspections “buyer shall desire.” So, if buyer doesn’t “desire” to have any inspections, that’s the buyer’s call.

Termination: Whose call?

The second line in paragraph 12 states, “if buyer determines, in buyer’s sole discretion, that the Property is not acceptable to buyer, buyer may terminate this contract by delivering written notice of such election to seller prior to expiration of the Inspection Period.

Hopefully, it’s clear here that the buyer can terminate the contract as long as he gives written notice to the seller of the intention to cancel before the Inspection Period ends. What may not be so clear – the cancellation is based on buyers’ “sole discretion” – not necessarily on the results of any inspection report.

What does this mean? The buyer’s ability to cancel is based on that buyer’s personal opinion of the property. That opinion may take into account things the buyer finds out via the inspection report – but it does not have to be based on something within the inspection report.

Language similar to the above was put into the Pennsylvania Association of Realtors’ contract, and members were immediately dissatisfied, according to James L. Goldsmith, an attorney with Mette, Evans & Woodside who represents the association. Pennsylvania Realtors felt that buyers were able to walk away “for pretty much any or no reason.”

Goldsmith makes a valid point about the inspection clause, however: “What we have works well, assuming we have reasonable buyers who want to buy and reasonable sellers who want to sell.”

What becomes more complicated is understanding that a termination under the FR/Bar ASIS Contract is subjective. And, as Mr. Goldsmith points out, “there is no telling what an idiosyncratic buyer may or may not find to be satisfactory.”

In short, sure there are going to be picky buyers who may cancel for a personal reason that a seller just does not understand or agree with.

Sellers must recognize that buyers’ right to cancel under the FR/Bar ASIS Contract inspection provision has nothing to do with whether or not sellers agree with buyers or if it “makes sense” to sellers. It’s entirely up to buyers.

But what about the seller?

Now, to address those comments and thoughts that I know are running through your head right now, which may be “But this is so unfair to a seller!” or “This contract is way too buyer-friendly,” I make this note: Sellers have the ability to choose which contract is used in a transaction.

Florida Realtors has three residential contracts, only one of which contains this subjective “out” for buyers during the inspection period. The other two contracts contain repair limits for sellers with regards to any contractually-required repairs that may need to be made based on an inspection report. So if your sellers don’t like the fact that buyers could cancel for their own unpredictable reasons during the FR/Bar ASIS inspection period, the seller may want to consider using a different contract.

When I suggest this other-contract option to callers on Florida Realtors Legal Hotline, the response I tend to get is: “Well, the sellers don’t want to have to spend any money on repairs!”

To that I simply say: “Well, that is a choice of and benefit to your sellers in choosing the FR/Bar ASIS Contract. The contrast is that the choice of and benefit to the buyers is a right to terminate based solely on the buyers’ discretion.”

A related confusion

As mentioned in previous articles, a seller should not use any of the Florida Realtors’ non-ASIS contracts and think that writing in $0 as a repair limit somehow “locks the buyer into the contract.”

Quite the opposite, in fact. If there are any contractually-required repairs found based on inspection, the sellers’ refusal to pay for them could result in the buyers’ ability to terminate the contract and receive their deposit back, leaving the sellers, in effect, back to square one and trying to find buyers again.

Additionally, many buyers may ask the sellers to complete repairs even if the parties are using the FR/Bar ASIS Contract. Sellers who “want to sell” may benefit from considering those repairs, even if initially they didn’t want to make any or pay for them. Is it worth the deal blowing up over what could be a relatively minor repair item? I’m not saying this works for every seller, but to those sellers who automatically say no, I only point out that they may want to be more flexible.

For more information on inspections referenced in our contracts, refer back to articles we published last fall:

As a good-practice tip, I encourage listing agents to sit down with sellers and discuss what they are willing to do regarding any repairs and what they’re looking for in respect to the transaction over all. An agent shouldn’t automatically assume any one contract should be used in every single transaction.

Remember, each transaction is different. Sellers may be willing to put some money towards repairs if they feel confident their property is in “good shape” in order to avoid buyers walking away during the inspection period. But you won’t know, unless you ask. Good luck!

Meredith Caruso is Associate General Counsel for Florida Realtors

© 2019 Florida Realtors®

Ask Your Realtor for an Absorption Rate

I made the below post on Facebook yesterday about Absorption Rates and so may people asked me about it I decided to add it to my blog.  Ask your Realtor for an absorption rate for your neighborhood.

 

Absorption Rate is the rate a house is absorbed into the market per month. It’s my opinion that it is much more reliable than a CMA, but not as pretty.

The absorption rates for single family houses for first 4 months of 2019 are as follows:

Vero Beach Island – 54.25 that’s 54.25 homes are sold each month. With 747 listings on the island you end up with 13.8 months of supply

Vero Beach Mainland – 177.75. That’s 177.75 homes sold each month. With 1,241 listings you end up with 7 Months of supply.

Sebastian – 94.25. That’s 94.25 sold each month. With 377 listings you end up with 2.7 months supply.

These absorption rates include all price ranges, but you can dial these rates down more by using price range stats or even more by using neighborhood stats. The absorption rate will tell you when your house will sell.

Census Bureau: Fla. 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 2018 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®

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.