Decade In Review

We are 7 days into the new year and 7 days into a new decade.  I’ve read post after post of individuals reviewing how great that last year was or wasn’t.  How this year is going to be the year to “cut out all toxic people, make more money, go to the gym (which is packed with everybody in new sweat whisking shirts they got for Christmas), and focus on me.”  After reading all the posts I felt I needed to look back on the last Decade and after several hours of reflection while smoking a Monticristo #4 (Cuban cigar) and imbibing in a few rums (also Cuban) my thoughts on the last decade are this.

WHAT THE F@#& WAS THAT!!

I say that with an *.  The last two years have been great.  Business is good and I’m in a relationship with a great woman that makes me a better person (no need to put the next decade in jeopardy), but WTF.  I experienced more in 10 years than most do in 10 life times.

Here are just a few of the highlights:

Lost a House, (not once, but twice.  One in the Real Estate crisis and one in divorce), lived in 6 different houses, lost a great friend to cancer, lost a cousin to cancer, had a baby boy (before divorce), wrote a book “Storm Surge” available on Amazon, started a new book no title yet, became a contract Federal Investigator doing investigations on individuals getting Top Secret clearances, got my own Top Secret Clearance and spent time at NASA and Patrick AFB where I got lost and found myself next to a SpaceX launch pad with a rocket getting ready for launch, met the next Edward Snowden (stopped him), lost my contract, lost some friends, made some new great ones and traveled to new locations.

That’s just the highlights, but the one thing that really got to me was the fact I got FAT.

So starting this year I’m going to “get rid of toxic people in my life, go to the gym, make more money and focus on me”.

Can’t wait to see what kind of crazy things will happen in the next 10 years.

Do Realtors Forget What It’s Like to Buy a House??

I posted this almost 5 years ago.  A lot has changed in my life in 5 years.  I neither have the house I mentioned nor the wife, but the rest still applies.  Enjoy!
—————————————————————————————————————————————–Do Realtors forget what it’s like to buy a house?

The short answer is Yes.

As Realtors we are involved with every aspect of a purchase or a sale, but we are not the ones living and dying with each offer. We don’t ride that emotional rollercoaster like our clients do. We like to think we do, but we don’t. And once our clients finally come to an agreement to purchase a house we don’t have to go through the deep probing exam known as the Loan Application. We don’t have to read the home inspection that will make you question, with every fiber of your body, your decision to buy this house. We don’t have to go to bed each night discussing the house with our spouses digging up all the old wounds about not caring about her ideas or her in-laws (this is just an example. It didn’t happen). And we also don’t have to find out that the roof was replaced after a hurricane without permits being pulled (that may have happened).

My wife and I went through the home buying process just 4 months ago and even though our lender was great and our Realtor (me) was awesome the process was just a couple of levels above the prostate exam I had last year. It’s not fun. It starts out fun, but it’s not fun.

Spouse 1….”Don’t you love it honey? All we have to do is paint, replace the flooring, the kitchen cabinets and all the bathrooms.”

Spouse 2….”That sounds great.”

Spouse 2 thinking…”What will this cost?” or “What?”

I didn’t use Husband or wife to stay politically correct.

It’s a huge challenge to stay enthusiastic about what you are doing and not to worry about the fact that over the next 30 years you are going to pay 4 times what you paid for it because of your loan interest.

As Realtors we can’t buy a house every 2 years like continuing education and we can’t be there in bed with our client/clients when they discuss all the things that come along with buying a house (some may want to, but that’s for another time). All we can do is try to remember what it was like and make sure the process is as easy as possible and do everything to keep our clients from divorcing or jumping off a bridge.

Some advice to anyone that is looking to buy or sell a house. Interview your realtor. Choose one that you are willing to spend a lot of time with. Because you may find yourself talking about them, thinking about them or with them in your bed at night.

Your Real Estate Guru

Federal Reserve Cuts Interest Rates: Will It Help Buyers?

The small cut isn’t expected to have a big impact on real estate, but it could trigger a slight rate decrease in adjustable rate loans and maybe fixed-rate loans.

WASHINGTON – The Federal Reserve on Wednesday cut interest rates for the first time since the Great Recession took hold in 2008, though the move is not likely to deliver significant juice to an already favorable borrowing environment for homebuyers.

The federal funds rate – what banks charge one another for short-term borrowing – will now hover between 2% and 2.25%, according to news reports.

The Fed says its decision to lower interest rates is designed to stave off the threat of an economic downturn – but it’s unlikely to translate into additional mortgage savings for many buyers. With the interest rate for a 30-year loan already hovering below 4%, the Fed’s move may be more meaningful for buyers with other types of financing, says Lawrence Yun, chief economist for the National Association of Realtors®.

“Many borrowers will benefit, especially those with adjustable-rate mortgages and commercial real estate loans,” Yun says, but “the longer-term 30-year fixed-rate mortgages will see little change in the near future because they had already declined in anticipation of this latest move by the Fed.

Yun thinks the rate cut will “partly help with housing affordability over the short-term. Both rents and home prices have been consistently outpacing income growth, (but) the only way to mitigate housing-cost challenges as a long-term solution is to bring more supply of both multifamily and single-family homes to the market,” Yun says.

Still, lower borrowing costs are helping buyers manage rising home prices. Buyers able to spend $1,500 on monthly mortgage payments can afford to purchase a $402,500 home this year compared to $367,500 last year, for example, when mortgage rates averaged 4.57%, according to realtor.com.

“Last year, buyers would have needed an additional $145 a month on top of the $1,500 to afford a $402,500 home,” says Danielle Hale, realtor.com’s chief economist.

In some locales, buyers’ money can stretch even further.

“An extra $35,000 in purchasing power, depending on where you are in the country, can really make a difference to buyers today,” Hale says. “It still counts, even with home prices up 6% nationally. That increase in purchase power is greater than the national price increase.”

Source: “Realtor.com® Reports How Much More Home Buying Power There Is Today Thanks to Lower Mortgage Rates,” Forbes.com (July 30, 2019); “The Fed Just Cut Interest Rates. Here’s What That Means for You,” The New York Times (July 31, 2019); National Association of Realtors®

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

Florida Growth to Top 300,000 People Each Year

Fla. will continue growing by more than 330,000 people per year (906 per day) and top 22 million residents by 2022, according to a report by state economists. The rate is equivalent to adding a city population larger than Orlando each year.

 

TALLAHASSEE, Fla. – Florida will continue growing by more than 300,000 people a year and will top 22 million residents in 2022, according to a report posted online this week by state economists.

The Demographic Estimating Conference updated population forecasts through April 1, 2024 and showed steady growth during the multi-year period.

“Between April 1, 2018 and April 1, 2024, population growth is expected to average 330,605 net new residents per year (906 per day), representing a compound growth rate of 1.53% over this six-year time horizon,” an executive summary of the report said. “These increases are analogous to adding a city slightly larger than Orlando every year.”

The report estimated the population on April 1, 2018, at 20.84 million, with an increase to 21.2 million on April 1, 2019. It’s forecast to hit 22.2 million as of April 1, 2022 and 22.8 million on April 1, 2024.

The population increases will primarily stem from “net migration” as people move into the state, rather than births, which are largely offset by deaths.

The report noted that the state’s forecasts are actually lower than population predictions by the U.S. Census Bureau, saying they use different methodologies in reaching their estimates.

Source: News Service of Florida

June Sales Numbers Are Here!

I know all of you have been waiting for the June numbers with bated breath so here they are.

Total closed sales for single family homes decreased 13.7% with cash sales dropping 29.2 for the same period last year.  Median sales price for single family homes were unchanged at $250,000.

Not all is bad.  Pending sales jumped a huge 17.9% to 540 properties meaning July and August could be very big for our summer season.

Click the link below to see the full June report as compared last year.

Sebastian-Vero_Beach_MSA_Single_Family_Homes_2019-06_Detail

Buyers Waiting for List Prices to Drop? They’ll Be Disappointed

Home prices plummeted during the recession, and some buyers are waiting for it to happen again. But investors who dream of easy money – sure they can make even more by flipping – aren’t driving the current market.

 

WASHINGTON – Homebuyers sitting on the sidelines waiting for housing prices to backslide might be waiting longer than expected, according to experts. Although the high price of housing in many parts of the country seems to signal a possible bubble, the usual signs – like oversupply, an uptick in investors and loose credit standards – are not there.

The strong demand for housing coupled with a supply shortage is spurring home-price growth rather than speculative buying. A speculative buyer purchases a home with the intention of selling for profit, which played a role in the housing crisis, says Michael Neal, a senior research associate at the Urban Institute.

This is a good thing for people who are worried that home values are going to nosedive. An Urban Institute analysis of recent housing price index data from Black Knight concluded that today’s housing demand is primarily coming from people who plan to live in the home, not real estate investors.

“The investment piece of the (index) is shrinking quite dramatically,” Neal says. “It explains why house-price growth has slowed. It stands in contrast to the housing boom when investors were driving up home-price appreciation.

“You see the same thing when you look out West – that investment piece has declined, as well. It’s actually slightly negative, so it’s detracting from housing prices.”

Supply not keeping up with demand

The supply shortage also gives cover to home values, as there are still more buyers than homes on the market. And that naturally drives up prices.

Despite housing starts of new homes rising in April, there continues to be a shortage of single-family units, says Joel Kan, associate vice president for industry surveys and forecasts with the Mortgage Bankers Association.

“On an annual basis, we’re about 300,000 to 330,000 units short,” Kan says. “If you think about the early 2000s and through the crisis, we had price appreciation that outpaced income growth. And we had overbuilding in many markets. When there was a price correction, there was still inventory and demand lessened; that’s the perfect storm,” Kan says.

Today’s market is very different, though. Builders are mostly focusing on the high-end market, leaving entry-level homebuyers with limited options.

Consider that 15 years ago, nearly 55% of new homes were priced under $200,000, but today that number has dropped to almost 13%, according to a recent report from the Urban Land Institute. Similarly, homes priced under $400,000 have slid from 91% 15 years ago to just 67% of new-home sales today.

Although cooling home prices and waning bidding wars are a welcome reprieve from last year’s housing frenzy, entry-level buyers still face a market with limited options. That means home prices aren’t likely to stop growing anytime soon. Couple this with a tighter credit market and stricter borrowing guidelines, and the looming threat of a housing bubble is unlikely.

“We could loosen lending standards and still be within very reasonable 2001 to 2003 levels,” Neal says.

Tighter lending standards and a robust economy

Unlike the lead-up to the housing crisis when subprime loans were being made to many borrowers who didn’t have the ability to repay, the landscape has tightened considerably in recent years through stricter federal lending regulations. As a result, fewer homeowners are defaulting on their loans today. Foreclosure rates sunk to the lowest level in March for any month in the past 20 years, according to data from CoreLogic.

Qualified mortgage, or QM, standards put into place by the Consumer Financial Protection Bureau, or CFPB, mitigate risk from once-dicey mortgage products like adjustable-rate mortgages, or ARMs. The CFPB put caps on the variable interest rates on ARM products after they reset so that borrowers’ payments can’t jump too high over a short period of time.

While there might be more pronounced fluctuations in certain metro areas, a nationwide housing bubble is doubtful, Kan says. Today’s housing demand is fueled by a strong economy, low unemployment and solid household formation. The sustained growth in housing might even be more impressive if the supply were greater but, instead, home prices have grown.

“Housing is still getting tailwinds from low rates and the strong economy,” Kan says. “We’ve already seen home prices start to break, but they’re still going up, just at a slower pace.”

As of March, U.S. home-price growth has fallen for the past 12 months and is now at its lowest level since September 2012, according to the latest S&P CoreLogic Case-Shiller’s national home price index. Despite the cooling market, Kan predicts home-price growth to continue into 2020, easing fears that today’s homebuyers will lose money next year.

“Our expectation is for prices to grow between 3% and 4%. So even if someone were to buy now, generally, we’re going to see some home-price growth next year,” Kan says.

Buying a house now can help you later

Although it can be a challenge to find affordable housing, there are still good reasons for homeownership, Neal says. First, homeowners get the benefit of having a consistent housing bill each month for the life of their mortgage. And the longer homebuyers stay in their house, the more money they’ll likely save in rising rent down the road.

A stable housing payment with a fixed-rate mortgage can shelter you from the inflation that renters have to pay, something called shelter-cost inflation. Average rents have grown about 1% over the past two months, the fastest pace of growth in nearly two years, according to data from Apartment List’s National Rent Report. Over time, those increases add up for renters.

Today’s homebuyers also benefit from low mortgage rates, which help keep loan costs down. However, not all areas are better for buyers, Kan says. In fact, it’s cheaper to rent, on a monthly basis, than it is to buy a home in nearly 60% of the nation’s major metro areas. There are a few markets where the opposite is true like Detroit, Cleveland and Philadelphia, but those areas are the exception to the rule.

Copyright © 2019 Capital Gazette Newspapers, Natalie Campisi

May Sales Are In for Indian River County

May sales are in and look good.

Single Family Sales increased 5.3% to 356.  Median sales price increased 9.1% to $261,500, but the time to get to contract increased to 52 days.

 

To see full report go to Sebastian-Vero_Beach_MSA_Single_Family_Homes_2019-05_Detail

Fed likely to leave rates alone but signal readiness to cut

WASHINGTON (AP) – June 18, 2019 – Jerome Powell has tantalized the financial world with the prospect that the Federal Reserve he leads may soon cut interest rates for the first time in over a decade.

Probably not quite yet, though.

When the Fed issues a policy statement Wednesday and Powell holds a news conference, the message will likely echo the theme the chairman struck in a speech early this month: That the Fed will act if it thinks the Trump administration’s trade conflicts are threatening the U.S. economy.

Powell’s remarks were seen as a signal that the Fed will likely cut rates later this year, and the stock market surged in response.

Yet economists say when – or even whether – the Fed eases credit this year will depend on a host of factors that are hard to predict. Will Trump’s trade wars be resolved before they inflict real damage on the economy? Will the job market remain resilient? Will inflation finally edge close to the Fed’s target level?

Investors collectively envision a Fed rate cut by July and possibly further cuts after that. Some are even betting on a rate cut this week. Many economists, though, think the Fed will wait until September at the earliest to announce its first drop in its benchmark short-term interest rate since 2008 and might not cut again in 2019. A few Fed watchers foresee no rate cut at all this year.

The Fed is meeting this week against the backdrop of President Donald Trump’s trade war with China, with its escalating tariffs and counter-tariffs on each other’s products. The trade war has magnified concern and uncertainty for businesses and investors about whether and how much the economy will suffer.

The U.S. manufacturing sector, in particular, is weakening. On Monday, the Federal Reserve Bank of New York reported that an index it compiles of manufacturing in New York state plunged this month into negative territory – to its lowest point since 2016. The index reflects manufacturing conditions in the state.

Trump is expected to meet with President Xi Jinping of China at a Group of 20 nations summit in Japan at the end of this month. The Fed may want to see whether that meeting produces any breakthrough in the U.S.-China trade war before deciding whether the economy requires an interest rate cut.

“I think any Fed move this week would be premature,” said Sung Won Sohn, an economics professor at Loyola Marymount University in Los Angeles.

Still, some Fed watchers think that in the policy statement the central bank will issue Wednesday, it will replace a reference to being “patient” about rate changes to some new phrasing that would hint at a forthcoming rate cut should it decide the economy needs it. When the Fed adjusts its key short-term rate, it influences rates on everything from mortgages to credit cards to home equity lines of credit and can help stimulate the economy.

Analysts expect the Fed’s description of the economy to note signs of a slowdown.

“I think the Fed will talk about the weakening labor market and softness in business investment to acknowledge that growth has downshifted,” said Mark Zandi, chief economist at Moody’s Analytics. “The statement will reinforce the message that Powell has already articulated that the economy is slowing and the trade war will pose an additional threat if it escalates.”

Most analysts say they think economic growth has slowed sharply in the current April-June quarter to around a 1.5% annual rate, only half the pace of the past year.

Unemployment remains at a 50-year low of 3.6%, though job growth slowed to just 75,000 in May, a possible sign that some employers have become more cautious about hiring.

Trump, gearing up for his 2020 re-election campaign, has been escalating his public attacks on the Fed, a highly unusual move that has raised concern that he is undermining the Fed’s independence as a central bank. The president has asserted that under Powell’s leadership, the Fed hurt the economy by tightening credit too much last year and by failing to lower rates since then.

In television interviews last week, Trump insisted that the Fed’s policies have been “very destructive to us” and argued that the economy and the stock market would be performing far better under a looser interest-rate policy. When Powell has been asked about Trump’s attacks on the Fed, he has replied simply that the central bank will do whatever it thinks best for the economy regardless of political pressures.

Though most analysts think the Fed will cut rates at least once before the year ends, others foresee no changes at all this year, especially if the U.S.-China trade war is resolved and the economy and the job market appear solid.

“If there is a rate cut this year, I think it will be much later in the year, and I don’t see more than one cut,” said David Jones, an economist and veteran Fed watcher. “I just think the Fed would like to stick with what they’ve got. They are solidly in neutral at the moment.”

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

Some tiny home owners think they’re a bit too tiny

CHICAGO – June 17, 2019 – Over the last few years, some homeowners have swapped out spacious digs for 300-square-foot homes, favoring simplicity and lower costs. The tiny-home trend has played out on reality TV shows and throughout the media.

But a new trend is emerging in the tiny-home movement – and it’s making a not-so-tiny splash.

Buyers of tiny homes increasingly favor larger styles of the small dwellings, and they’re opting for higher-end finishes that move overall costs higher, realtor.com reports. Some buyers want more space for their own enjoyment. Others are turning tiny homes into vacation homes or renting them out for added income.

The newest tiny homes are coming with stainless steel appliances, solar panels, built-in TVs, and upgraded cabinetry, according to Mark Stemen, a professor who teaches sustainability at California State University in Chico, Calif. These upgraded tiny homes are fetching more than $200,000 – not too far from the median price for an existing single-family home, which is $267,300 as of April, according to the National Association of Realtors®.

The higher prices are prompting lenders to step in, and banks are offering mortgage loans to help buyers afford the properties as prices on tiny residences rise.

“The tiny-house movement is expanding to meet the desires and needs of the people who are in it and joining it every day,” says Coles Whalen, a marketing director at Simple Life. “It’s adapting to accommodate the needs of people who are tired of spending money on square footage they’re not using, but they may want slightly more [room].” Simple Life is creating tiny-home communities in the South and recently debuted a pricier two-bedroom model that is about 540 square feet.

Tiny homes traditionally are about 20 feet long and 8 feet wide. However, some companies are responding to buyers’ desire for more space. The firm Cumming is showing off 30-foot plans, and the owner, Dan Louche, says he’s even getting requests for 40-foot models. “Are you still interested in a tiny house?” he says is his response to the larger home requests.

A do-it-yourself 20-foot tiny home traditionally costs about $15,000 to $20,000, including materials but not labor, Louche says. Prices have been moving upwards to around $65,000 to $75,000 for a standard 28-foot finished tiny home, but the costs are going even higher for those who desire more upgrades.

For example, Tiny Heirloom in Portland, Ore., is selling customized models that can range from $89,000 to $220,000. One model includes a motorized deck that retracts in 30 seconds.

Source: “As Tiny Homes Spread Across the Nation, They’re Getting Bigger – and Pricier,” realtor.com® (May 23, 2019)

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

Governor’s task force tackles toxic algae

TALLAHASSEE, Fla. – June 13, 2019 – Reducing harmful nutrients in state waters, through moves such as more monitoring and staffing, is an expected short-term goal of a new task force set up by Gov. Ron DeSantis to look at toxic algae fouling Florida waterways.

But with a brief timeline for the five-member Blue Green Algae Task Force to reach its initial findings, don’t expect proposals for massive state rule changes related to farming practices or moving away from septic systems.

Task force member Michael Parsons, a professor of marine science at Florida Gulf Coast University and director of the Coastal Watershed Institute and Vester Field Station, said rather than replace regulations, as some environmental groups contend is needed, a more realistic approach would focus on “fine-tuning” existing rules.

“In any field, if you make the rules too strong, too stringent, too unfair, they won’t be followed,” Parsons said. “I think there is a compromise between allowing people the flexibility to work within certain frameworks as well as getting the needed results or the intended results within that framework. You can’t force people to do things, but on the other hand, we do have goals we need to meet, so there has to be a compromise between the two.”

The task force, which held its first meeting Wednesday in Tallahassee, was created in January through an executive order by DeSantis in response to outbreaks of toxic algae and red tide across the state last year. The problems particularly drew attention in Southeast and Southwest Florida, as algae plagued water bodies such as the St. Lucie and Caloosahatchee rivers and red tide caused fish kills.

The panel Wednesday mostly received an overview about state roles in addressing algal issues, the regulatory structures for water quality and wastewater and agricultural best-management practices involving nutrients such as fertilizers.

Audubon Florida Executive Director Julie Wraithmell said environmentalists are expecting action from the task force, which will meet every three to four weeks through August.

“The causes of our blue-green algae problems are well understood,” Wraithmell said. “At this point, we need folks who are going to scour the science, look at our regulatory structure, and draft a bold prescription for how to get us out of the problems we are facing right now.”

St. Johns Riverkeeper Lisa Rinaman cautioned that an unintended result of prioritizing one part of the state is that others may lag in protection.

“We can’t buy our way out of Florida’s algae crisis,” Rinaman said. “We need to not only have projects but enhanced regulatory protections and education.”

The focus of the task force is Lake Okeechobee and waters on both sides of the lake, but the state is also looking at possible algae impacts as far north as the St. Johns River.

Florida Land Counsel Executive Director Ernie Barnett said it’s important to treat water before it reaches Lake Okeechobee.

Thomas Frazer, Florida’s chief science officer, said the state is already doing a lot, but more could be done.

“If we need to do more monitoring, for example to evaluate the effectiveness of various projects, we should probably be doing that,” Frazer said. “If we need to look at a regulation and change that regulation so there is more oversight, people are more accountable, that’s on the table as well.”

Frazer added he’s “optimistic that what we come up with here is not going to sit on a shelf. … We have an executive order with a charge that says we’re here to make a difference and we’re going to use this committee to identify areas where we can insert science to make better decisions with how we allocate our resources,” Frazer said.

Among the longer-term goals could be figuring out how to move residents from septic tanks to sewer systems, which has always been a matter of cost. The Florida Department of Health oversees septic-tank issues.

Task Force member James Sullivan, executive director of Florida Atlantic University’s Harbor Branch Oceanographic Institute, said the Department of Environmental Protection should have oversight because of the impact of nutrients released by septic systems.

Florida has 12.6 million septic tanks, accounting for 12% of the systems in the nation.

The inaugural meeting came after conservation groups Tuesday sued the U.S. Army Corps of Engineers, the U.S. Fish and Wildlife Service and the U.S. Department of the Interior over the handling of releases from Lake Okeechobee that contain toxic algae. Discharges go into the Caloosahatchee and St. Lucie rivers and their estuaries.

Department of Environmental Protection Secretary Noah Valenstein said he hopes to see a list of proposals from the task force that could range from process improvements within current rules to changes in department rules or even statutory changes.

“Let’s get used to every few years asking ourselves again, ‘Don’t get comfortable with the status quo,'” Valenstein said.

Valenstein expects to see additional water monitoring and field staffing to review data, as part of $680 million for environmental work that is in the proposed 2019-2020 state budget (SB 2500). DeSantis is expected to act on the budget next week.

The proposed budget includes $4 million to expand “statewide water quality analytics for the nutrient over-enrichment analytics assessment and water quality public information portal.”

Source: News Service of Florida, Jim Turner. News Service Assignment Manager Tom Urban contributed to this report.