FHA loans to boost affordable housing development

WASHINGTON – July 17, 2015 – The Federal Housing Administration (FHA) published guidance on its new Small Buildings Risk Sharing (SBRS) Initiative.

Under SBRS, new private-sector lenders can partner with FHA to provide long-term fixed-rate lending products to multifamily property owners. It applies to mortgages of $3 million, and up to $5 million in high-cost areas.

SBRS builds on the Department of Housing and Urban Development's (HUD) existing risk sharing programs with state and local housing finance agencies, as well as Fannie Mae and Freddie Mac.

"Communities across the nation are seeking ways to support affordable housing production and preservation," says Ed Golding, principal deputy assistant secretary for HUD's Office of Housing. The initiative "allows us to target our products to an important and underserved part of the rental market by partnering with CDFIs (Community Development Financial Institutions) and other lenders who have on-the-ground relationships with small building owners in their communities."

Small buildings make up 34 percent of the 17.5 million multifamily rental units in the U.S., according to HUD. They house nearly 6 million households and, on average, offer lower rents than larger properties.

Nearly 60 percent of small rental property owners are individuals, households and estates, and they often have trouble securing financing thanks to credit standards than are more stringent than those offered to larger property owners.

If successful, SBRS will encourage lenders to enter this smaller-investor market and provide long-term, fixed rate capital.

How the SBRS program works

In return for assuming 50 percent of the risk, approved lenders will underwrite and service the loans subject to minimum standards that reduce processing times relative to traditional FHA mortgage insurance programs.

FHA's willingness to assume half the risk can free up lenders' balance sheets and allow them to increase their lending activities without an additional federal subsidy or new regulations.

Given the challenges of accessing long-term fixed rate capital even with an FHA guaranty, the Administration has asked Congress for statutory relief to allow SBRS lenders to access funding through Ginnie Mae; in the interim, lenders will be eligible to access capital from the United States Treasury's Federal Financing Bank at prevailing Ginnie Mae rates.

Lending will be limited to properties that are willing to ensure that at least 20 percent of the units rent for no more than 50 percent of an area's median income, or 40 percent of the units rent for 60 percent of the area's median income.

HUD says rural communities, specifically, have a high share of small multifamily properties that could benefit from this program.

© 2015 Florida Realtors®

Floridians’ confidence rises 3 points in March

GAINESVILLE, Fla. – March 27, 2015 – Consumer sentiment among Floridians rose in March by more than 3 points to 96.8, the highest reading in 10 years, according to a monthly University of Florida (UF) survey. All five components that make up the index increased.

"Florida consumers are particularly optimistic about the future," says Chris McCarty, director of UF's Survey Research Center in the Bureau of Economic and Business Research. "The three components that are forward-looking are much higher than they have been for quite some time."

Expectations of personal finances a year from now increased 2.4 points to 103.6, the highest level since August 2004. Perceptions of U.S. economic conditions over the next year rose 1.2 points to 94.6, while expectations of U.S. economic conditions over the next five years increased 3.4 points to 93.6, the highest since July 2004.

On the question of whether now is a good time to buy big-ticket items such as a car or appliance, March saw an uptick of 7.4 points to 106.1.

"Overall the index reflects a Florida consumer who is really feeling a recovery," McCarty says.

While increases in the overall index were broad-based across age and income groups, there were some differences.

Gains in the component comparing personal finances now with a year ago were higher among households making less than $50,000, up 4.5 points, compared with those making more than $50,000, which decreased 1.9 points.

An even greater difference was noted in expected U.S. economic conditions over the next five years, but the trend was reversed: The outlook for those making under $50,000 per year decreased slightly by 2 points, but for those making more than $50,000, it surged up 9.4 points.

"This reflects lower-income households who have made some gains recently but are less optimistic about the future. Upper-income households appear to be happy with future trends," McCarty says.

Floridians at various income levels may have different reasons for a positive outlook. Those invested in the stock market have cause for optimism as stock values recovered from a mid-month decline and approach record levels. For lower-income Floridians, gas prices remain low and are likely to stay there for a while because of the strengthening U.S. dollar, the currency used for international oil exchange.

Other economic data for Florida are positive, according to UF:

Housing prices increased in February to $180,000 for the median price of a single-family home, up $5,000 from the previous month and a 9.1 percent increase from a year before.

Mortgage rates have been declining over the past month and are once again near historic lows.

The Florida unemployment rate remained steady at 5.7 percent in January. While the "U6" measure of unemployment that also counts part-time and discouraged workers is still higher in Florida (12.8 percent) compared with the U.S. (12 percent), it has declined considerably from 19.3 percent in 2010.

"For now, Florida's economy is doing quite well, with the caveat that wages remain persistently stagnant," McCarty says. "But many economists see signs that wages will pick up. The rate of people who quit a job is up to 2 percent in January from 1.7 percent a year ago, suggesting that workers see better-paying opportunities which later translate to higher wages."

Conducted March 1-23, the UF study reflects the responses of 419 individuals who were reached on cell phones, 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.

Source: 2015 Florida Realtors®

Census: Florida city tops list of fastest-growing cities

WASHINGTON (AP) -- The beautiful weather in Florida seems to be drawing more and more Americans, with the Sunshine State climbing the ranks of most populous states and fastest-growing cities.

New data released from the U.S. Census Bureau showed that The Villages, Florida, ranked as the nation's fastest-growing metro area last year, with the city west of Orlando boasting a 5.4 percent increase in population between July 1, 2013, and July 1, 2014. This comes as Florida became the nation's third most-populous state in December, taking over the spot once held by New York.

But it's not just The Villages, which grew to a population of about 114,000, the Census Bureau said. The growth is driven by increases in the state's metroplexes in areas such as central and southern Florida, Census Bureau Director John H. Thompson said. Six Florida metro areas were among the 20 fastest-growing: The Villages, Cape Coral-Fort Myers, Naples-Immokalee-Marco Island, Orlando-Kissimmee-Sanford, North Port-Sarasota-Bradenton and Panama City.

Florida has been long known for retirees, beaches and vacationers. The influx of new residents was enough to offset the fact that there were more deaths than births in about half of the state's counties, the Census Bureau said. Florida averaged 803 new residents each day between July 1, 2013, and July 1, 2014, growing by 293,000 to reach 19.9 million during that time period, census data released in December showed.

New York went up by 51,000 to 19.7 million during that same period.

A few more beach towns and cities in the West make up most of the top five fastest-growing cities by percent growth: Myrtle Beach-Conway-North Myrtle Beach metroplex in South Carolina and North Carolina at 3.2 percent; the Austin-Round Rock area in Texas at 3 percent; Odessa, Texas, at 2.9 percent; and St. George, Utah, at 2.9 percent.

Texas snagged the top spots in both numerical increase by person for counties and metro areas.

Harris County, Texas, leads the nation in population growth by person, with the county surrounding Houston adding 89,000 people between July 2013 and 2014, followed by Maricopa County, Arizona, with 74,000 and Los Angeles County with 63,000.

The Houston-The Woodlands-Sugar Land metro area was also the top in metro area numerical increase with 156,371 people added between 2013 and 2014, followed by the Dallas-Fort Worth-Arlington area with a 131,217-person increase and the New York-Newark-Jersey City-Pennsylvania area with a 90,797-person increase.

By percentage, Williams County, North Dakota, remained the nation's fastest-growing county with a population of more than 10,000 people. It increased by 8.7 percent from 2013 to 2014, followed by Stark County, North Dakota, at 7 percent; Sumter County, Florida, at 5.4 percent; Pickens County, Alabama, at 5.1 percent; and Hays County, Texas, at 4.8 percent.

The Census Bureau also said:

—California was the nation's most populous state in 2014, with 38.8 million residents. Texas came in second at 27 million.

—Los Angeles County had the nation's largest population with more than 10.1 million people.

—New York was the nation's largest metro area, with about 20.1 million people.

—Detroit was still losing people. Wayne County, Michigan, has the nation's largest numerical decline at just less than 11,000. The next closest county? Cuyahoga County, Ohio; the county including Cleveland lost slightly more than 4,000 people.

Source: Jesse j. Holland, Associated Press - U.S. Census Bureau: http://www.census.gov

Census bureau: 10% of Americans want to move

WASHINGTON – March 25, 2015 – New data from the U.S. Census Bureau finds that 11.2 million Americans – about one out of every 10 – are so unhappy with their current living situation that they want to move.

In the agency's recent report, "Desire to Move and Residential Mobility: 2010-2011," Americans who owned their home were about half as likely to want to move as non-owners.

Overall, the top groups likely to pick up and move somewhere else are:

1. Younger adults: About 14.6 percent of Americans age 16 to 34 said they would like to move, compared to 10.3 percent of Americans age 35 to 54, and 6.3 percent age 55 and older.

2. Renters: 16.5 percent of all renters say they would like to move – more than double the rate of homeowners.

3. Those living in impoverished areas: Homeowners who lived in neighborhoods with a high poverty rate tended to have a greater desire to relocate.

4. Households with children: 14.3 percent of households with children said they wanted to move compared with 8.7 percent of households without children.

5. Households with a disability: 12.5 percent of households with a disability said they wanted to move compared to 8.2 percent of those without a disability.

Source: U.S. Census Bureau 

2015's Most Desired Neighborhoods

The most sought-after neighborhoods in 2015 won't be the trendiest or the most expensive. Instead, Redfin's recent list of the Hottest Neighborhoods of 2015 reveals that buyers are focused on "neighborhoods of compromise" that offer affordability and convenience and an overall good value, rather than living in a trendy location with a huge mortgage.

This is in contrast to last year's results that listed hip areas like Higland Park, Los Angeles and The Mission District in San Francisco as the most desired neighborhoods, and found that buyers preferred trendy urban areas with high price-tags.

"Many homebuyers have recoiled from the dramatic increase in house prices in urban centers posted over the past three years,” said Redfin Chief Economist Nela Richardson. “They are now searching for more affordable places farther out. Expect the neighborhoods on this list to see high demand in 2015 as rock-bottom mortgage rates and a more lenient mortgage lending environment help make homeownership in expensive cities less costly.”

To compile the list, Redfin looked at the neighborhoods that received the most page views and favorites on their site, analyzed data from their own "Hot Homes" algorithm, and asked local Redfin agents.

The El Cerrito neighborhood in San Diego tops the list of the most desired neighborhood of 2015 due to its mix of good shopping and dining and affordability compared to trendier neighborhoods where home buyers are finding themselves priced out.

Redfin's 10 Hottest Neighborhoods of 2015:

1.  El Cerrito (San Diego, CA)

2.  Dickinson Narrows (Philadelphia, PA)

3.  East Atlanta (Atlanta, GA)

4.  Little Neck (Queens, NY)

5.  Bohemia (Long Island, NY)

6.  Curtis Park (Sacramento, CA)

7.  Andersonville (Chicago, IL)

8.  Woodridge (Seattle, WA)

9.  Crocker (San Francisco, CA)

10. Woodridge (Washington DC)

Source: "Redfin Predicts the Hottest Neighborhoods of 2015," Redfin (Jan. 22, 2015)

The new electric company: Your home

WASHINGTON – Jan. 28, 2015 – Some builders are starting to design "net-zero" homes for the mass market in hopes of taking the concept mainstream. Long viewed as a niche product for the wealthy buyers, net-zero homes generate more electricity in a year than they use; and the homeowner receives credit for the excess electricity.

Builders believe there is rising demand from home buyers and local regulators. However, the cost of achieving net-zero status – the initial outlay for equipment – will be the main hurdle.

Customers who switch to solar would have to wait several years for electricity-bill savings to cover the thousands of dollars they spent upfront on features like solar panels and energy-efficient windows, doors and appliances.

The industry predicts that parts of the country with a lot of sunshine to generate solar energy – such as Florida or the American Southwest – will see the highest initial demand for solar energy.

The Department of Energy certified 370 homes as "net-zero ready" in the past year, but the total number of homes is just a fraction of the overall market.

Source: Wall Street Journal (01/21/15) P. A3; Hudson, Kris

White House says no to oil drilling near Fla. coast

WASHINGTON – Jan. 28, 2015 – The Obama administration announced a proposal that would approve oil drilling along some states along the eastern seaboard, but as written, it would keep the waters off Florida's coast free from oil drilling for at least the foreseeable future. The recommendation was part of a five-year draft proposal released yesterday.

U.S. Sen. Bill Nelson (D-FL), part of a contingent of lawmakers pushing to ban oil drilling off Florida's coasts, called the plan yet another victory. "They left us alone for the last five years, and it looks like they're going to leave us alone for the next five years," Nelson said in a statement.

In 2006, Nelson and then-Sen. Mel Martinez successfully brokered a deal to ban drilling off Florida's Gulf coast through the year 2022.

Not everyone opposes oil drilling, but the BP crisis in the Gulf of Mexico still resonates with many Floridians. Nelson also cited other reasons for an oil rig ban off state coasts, such as the Florida's tourism-driven economy that depends on clean beaches, military training areas off Florida's shore and the launch activities at the Kennedy Space Center and Cape Canaveral Air Force Station.

While Florida would remain off limits for drilling under the proposal released today, some U.S. senators are upset that the plan could open up other areas in the Atlantic Ocean to drilling, notably off the coasts of Maryland and South Carolina.

Source: Florida Realtors®

SEC bans credit rater S&P over faulty ratings

WASHINGTON – Jan. 22, 2015 – Securities and Exchange Commission (SEC) Chair Mary Jo White banned the world's largest credit rater, Standard & Poor's, from a large part of the mortgage market for one year.

In the toughest action since the mortgage crisis that nearly collapsed the banks, S&P has agreed to a year-long ban from rating a segment of the commercial mortgage-backed securities market (CMBS) because of ratings it issued in 2011 that regulators say were misleading.

The suspension is part of a settlement with the SEC as well as the attorney generals of New York and Massachusetts, and is tied to $1.5 billion worth of CMBS that S&P graded in early 2011.

S&P pulled the ratings a few months later, saying it had to review a potential problem in its models – causing market disruptions. That prompted an investigation by the SEC and the two AGs, which discovered that S&P had departed from its published criteria and went with assumptions that were less conservative than advertised.

"In the wake of the housing crisis and the collapse of the global economy, credit agencies like S&P promised not to contribute to another bubble by inflating the ratings on products they were paid to evaluate," New York Attorney General Eric Schneiderman said in a statement. "Unfortunately, S&P broke that promise in 2011, lying to investors about their profits and market share."

Specifically, the SEC banned S&P from rating new U.S. conduit-fusion CMBS transactions until Jan. 21, 2016. These are securities backed by pools of loans secured by commercial real estate, such as mortgages for shopping malls or skyscrapers. They include a financial intermediary, often a bank, that acts as a link between the lender and the investor.

S&P, a unit of publishing house McGraw Hill, will also pay close to $77 million in fines, including $12 million to New York and $7 million to Massachusetts.

In total, the SEC issued three proceedings against S&P related to the 2011 bonds as well as the rating agency's effort to get back into the market in 2012, after it had pulled the faulty ratings.

S&P "made certain admissions" regarding the first order tied to the misrepresentation of the 2011 bonds, the SEC said.

White's mission, when she took the office in 2013, was to not allow companies to settle without admitting wrongdoing – a practice that had come under scrutiny in the courts.

The SEC also found that S&P sought to mislead clients and investors when it sought to re-enter the CMBS market in mid-2012 by overhauling its ratings criteria.

"To illustrate the relative conservatism of its new criteria, S&P published a false and misleading study purporting to show that its new credit enhancement levels could withstand Great Depression-era levels of economic stress," the SEC said.

In reality, the models were never tested against the severe losses of the Great Depression.

The misleading nature of the study had the original author concerned that he could find himself "sit(ting) in front of (the) Department of Justice or the SEC," the SEC said. S&P didn't admit or deny that it sought to mislead clients with the study, but it agreed to correct how it described its ratings criteria.

S&P, Moody's and Fitch were all criticized following the financial crisis for issuing ratings favorable to the banks that were paying for them in order to make the sometimes junky bonds they were selling more appealing.

Source: USA TODAY, Kaja Whitehouse

Naples-Marco Island expected to lead state in economic growth in 2015

NAPLES, Fla. - The Naples-Marco Island metro area is expected to lead the state in terms of gross metropolitan product growth in 2015, according to a report released Tuesday by Florida TaxWatch.

Naples-Marco Island should see 4.7 percent GMP growth over the next year, according to the report, which cites research by IHS Global Insight. Palm Coast and Orlando-Kissimmee-Sanford were second and third on the list with projected GMP growth of 4.6 percent and 4.4 percent, respectively.

The Cape-Coral-Fort Myers metro area was fourth on the list with projected GMP growth of 4.3 percent. It is also expected to have the most vibrant employment market in the first quarter of 2015 in comparison to 99 other metro areas across the nation, according to Florida TaxWatch, a nonpartisan, nonprofit taxpayer research institute.

Overall, the report paints a sunny economic picture for Florida in 2015.

Unemployment in the state is expected to continue its downward trend with the addition of thousands of jobs, led by the construction industry (8.7 percent projected growth) and professional and business services industry (3.7 percent projected growth), according to the report.

The report forecasts 111,500 total housing starts in 2015, up from 83,400 in 2014 according to the report, which cites University of Central Florida research. And although foreclosure activity in Florida is still the highest in the nation, the state is seeing fewer, with a notable 15 percent decrease in foreclosures from November 2013 to November 2014.

The continued strengthening of the U.S. dollar and slowing of the global economy is expected to increase Floridians’ purchasing power abroad, but could translate into more expensive Florida exports, the report says. It also could cause some international visitors to go elsewhere on vacation, and drive some international homebuyers to reconsider purchasing in Florida.

Source: Naples Daily News, Ryan Mills

How the 2014 Housing Market Will Shape 2015

The real estate market has shown a build-up of housing momentum this year – “fueled by significant improvements in economic fundamentals, low mortgage rates, and compressed inventory” – that will likely translate into larger gains in 2015, according to realtor.com®’s newly released 2014 Housing Review.

"Many of the gains that we recently predicted in the realtor.com® 2015 Housing Forecast are built on housing growth established in 2014,” says Jonathan Smoke, realtor.com®’s chief economist. “Overall, this year's housing market showed steady advances over 2013 with significant improvement in key housing metrics, despite some remaining challenges. Increases in job creation and gross domestic product (GDP) have had a significant impact on consumer confidence and home buyer demand. Paired with historically low interest rates, these factors kept properties moving quickly with median time on market at approximately 90 days. Unfortunately, the low number of homes for sale and stringent lending standards prevented a normal number of first time home buyers from closing on their first home in 2014."   

Here are some of the trends realtor.com® notes from 2014 that will help drive a stronger 2015:

An improving economy: “After an especially harsh winter earlier in the year, the economy picked up steam and produced a banner year for new jobs,” realtor.com® notes in its report. “The GDP this year was higher, and is still trending higher, resulting in stronger consumer confidence.”

Low mortgage rates: Despite the end of the Federal Reserve’s quantitative easing this year, mortgage rates continued to decline and helped to lower borrowing costs of home buyers. In recent weeks, the 30-year fixed-rate mortgage has been below 4 percent.

Returns to normal price appreciation: “After two years of abnormally high levels of home price appreciation in 2012 and 2013, price increases moderated throughout 2014,” realtor.com® notes. “We are now experiencing increases in home prices consistent with long-term historical performance.”

Distressed sales decline: Foreclosures and short sales fell throughout the year. Foreclosures are projected to be down 30 percent year-over-year at the close of 2014.

Investor activity lessens: Coinciding with the drop in distressed sales and higher home prices, large-scale investor purchase activity in the single-family market decreased. Less competition from investors may offer more room for traditional first-time buyers to squeeze into the market.

However, the realtor.com® report notes several factors that continue to plague the housing recovery and prevent it from being stronger, including:

Tight credit standards: “Despite historically low rates, many households were prevented from capitalizing on mortgage access because of overlays lenders added to qualification standards in order to limit put-back risk,” realtor.com® notes. “A tight spread between approved and declined FICO scores shut out nearly half of the potential population this year. As a result, mortgage credit availability did not improve in 2014.”

Tight inventories of for-sale homes: Inventories did rise this year, but supply failed to outpace demand. The monthly supply of new homes and existing homes continued to fall beneath normal levels, and the age of inventory was down year- over-year.

Fewer first-time buyers: The share of first-time buyers dropped to the lowest level in nearly 30 years, according to the National Association of REALTORS®. "But the first-time buyer share is showing signs of modest improvement by the year-end," says Lawrence Yun, NAR’s chief economist. Federal policy actions, such as revised regulations for lenders and new low down-payment programs introduced in December, are believed to have a positive impact in increasing first-time home buyer share in 2015.

Record levels of renters: The home ownership rate continued to fall this year as the number of renters increased. Rent increases have become an inflationary concern this year, and the pace of rental increases does not appear to be slowing down.

Sluggish new-home building: Single-family new-home starts barely budged in 2014 compared to 2013. New home sales remain far from normal levels. They are typically near 16 percent and instead remain around 9 percent. Still, new home prices rose substantially again this year, revealing that higher priced product is limiting the demand.

Source: Realtor.com 

Americans Are 40% Poorer Today

The net worth of American families has plunged 40 percent since 2007, right before the financial crisis struck, dipping to an average of $81,400 per household, according to a new report from the Pew Research Center. That's down from $135,700 in 2007. Pew measures net worth as the difference between the values of a household's assets, including homes, investments, and liabilities.

"The Great Recession, fueled by the crises in the housing and financial markets, was universally hard on the net worth of American families," the report says.

The average weekly wage has mostly stayed stagnant in recent years: $853 last month compared to $833 in November 2013, according to the Bureau of Labor Statistics.

The drop in net worth is particularly acute along racial lines. The gap between blacks and whites has reached its highest point since 1989, with the wealth of white households 13 times greater than that of black households in 2013, according to Pew research. The median net worth of white households was $141,900 in 2013, dropping 26 percent since 2007; for Hispanic households, net worth in that time fell by 42 percent to $13,700, and for African-American households, it dropped 43 percent to $11,000.

The Pew report partially attributes the wealth gap among the races to the fact that white households are more likely to own stocks directly or indirectly through retirement accounts. Financial assets such as stocks have recovered value more quickly than housing since the recession ended, according to Pew.

However, the housing picture has improved and may help lift many household's finances. Fewer borrowers are underwater, which means they no longer owe more on their mortgage than their home is worth. Eight percent of borrowers, or 4 million, were underwater in October compared to the peak of 35 percent, or 18 million homes, in February 2011, according to data from Black Knight Financial Services, which tracks mortgage performance.

Source: “Wealth Inequality has Widened Along Racial, Ethnic Lines Since End of Great Recession,” Pew Research Center (Dec. 12, 2014) and “Americans Are 40% Poorer Than Before the Recession,” MarketWatch (Dec. 13, 2014)

Questionable home appraisals make a comeback

NEW YORK – Dec. 3, 2014 – Maitland, Fla.-based Digital Risk Analytics reviewed the loan files of the 20 biggest mortgage lenders and found that one in seven appraisals bloated home values by roughly 20 percent or more between 2011 and early 2014.

In some cases, "the appraiser's selection of [comparable properties] ... is very hard to justify," says Digital Risk Chief Analytics Officer Thomas Showalter. He cites examples, such as valuations for older properties based on sales prices for new homes; or homes located within a short distance of the beach compared to waterfront residences' values.

Some observers worry that some appraisers may be inflating values at the bidding of loan officers or real estate agents, whose commissions are taking a hit due to weak sales and slowing home price appreciation.

The U.S. Office of the Comptroller of the Currency is reviewing mortgages due to its concern that some are based on inflated values; and Freddie Mac has launched fraud investigations of appraisals tied to mortgages it purchased.

A survey by the Salisbury, Md., appraiser-advocacy firm Allterra Group LLC finds an increase in the percentage of appraisers pressured to inflate values. It's nearly 40 percent now compared to 37 percent a year ago, according to Allterra.

Valuation professionals say appraisal-management companies (AMCs) hired by banks apply the most pressure. While AMCs are expected to help maintain a buffer between loan officers and appraisers, and thus eliminate pressure to inflate appraisals, they increasingly scramble to keep a lender's business.

Source: Wall Street Journal (12/02/14) P. A1; Andriotis, AnnaMaria

What’s the next big home feature buyers want?

KNOXVILLE, Tenn. – Nov. 24, 2014 – Homeowners are showing a bigger appetite for smart home technology. Nearly half of consumers – 46 percent – say it's important their current home or the next home they purchase have smart home technology, according to a survey of nearly 2,500 consumers, conducted by ERA Real Estate and HGTV.

Survey respondents had recently participated in an HGTV national focus group on smart home technology.

Homeowners and buyers say they see the value in smart home technology for comfort, safety and cost savings, and 51 percent surveyed say they would consider installing smart home technology in their home to make their home more marketable to future home buyers.

The younger segment of the millennial generation is the most likely age group to spend money on smart home technology – 10 times more likely than the percentage of generation X members who say they'd consider adding smart home technology to their homes, the survey reported.

"While still a growing trend, smart home enhancements have the potential to increase savings, safety, and resale value," says Charlie Young, president and CEO of ERA Real Estate. "As we have seen through this survey and our one-on-one interactions with buyers and sellers, a smart home is one that is well positioned for the future and aligns with a growing reliance on mobile technology."

Indeed, 70 percent of millennials say it's important that smart home technology integrate with their smartphone.

While smart home technology has often been thought to be driven by mainly security, survey researchers did not find security as the main motivation for adding smart home technology.

Instead, homeowners say they're using or wanting smart home technology mainly because of the money-saving potential, such as through automated climate control, energy management, remote home monitoring and lighting control systems.

What's more, consumers of all generations said they'd automate their thermostats before their lighting or security systems, and one in 10 Americans say they'd automate their TV over their lighting or security systems.

Source: ERA Real Estate

Real Estate boom in Naples creates downtown demand

London Bay Homes is coming out from behind the gates of Southwest Florida’s upscale communities and into the heart of Naples. The company’s first downtown Naples home this year met with so much success that it is building another one next door and has plans for even more in the future.

“In the past we had built in Aqualane Shores and Port Royal, but with the downturn we kind of stepped out of that market,” explained Mark Wilson, president of London Bay Homes. “With the market back up we are stepping back into that market.”

For the past few years London Bay has been known for its upscale homes in Mediterra and Quail West. Now it is buying up scattered lots in Old Naples as it geasr up for its latest building strategy.

“There is a market demand for it,” Wilson said. “It’s not that one is better than the other; it’s the market demand and downtown is very much in demand, so therefore let’s go there and fill the demand.”

James Bates, a Realtor with Coldwell Banker and one of the top-producing real estate agents in Naples, confirms that the Old Naples area is in great demand now.

“Property is just getting snapped up by developers,” he began. “Definitely, prices are going up.”

Bates sells a lot of homes in Naples and said in just the last few months he’s seen prices soar. He said a lack of inventory adds to the escalation of prices.

“I think we have probably seen an almost 20 percent cost increase in the past 12 months and it is continuing that way,” Bates said. “Naples is the hot spot and it is moving down to the Moorings and Parkshore too.”

London Bay’s first fully furnished downtown model was the Southampton that sold for $2.6 million in March just as the model was being completed. Now construction is underway nearby on the Chelston, a two-story, three bedroom plus study home on Broad Court that will be complete next spring. The Chelston combines West Indies and Old Florida-inspired architecture and features transom windows, an entry water fountain and a tin-type roof. The home will be fully furnished by Romanza Interior Design. The 4,092-square-foot home will sell for somewhere in the $3.5 million range.

“The Chelston is like the Southampton on steroids,” Wilson exclaimed.

It will have higher ceilings, a larger great room, a more dramatic master bedroom and an upstairs loft with wet bar.

“Some was feedback from clients that went through the Southampton and some was the market was ready for a little more,” Wilson said. “The Southampton was designed in January of 2012. This is what the market wants today as opposed to two years ago.”

Another thing driving the bigger home is the bigger expense of lots.

“Homesites downtown are more expensive since January of 2012,” Wilson began. “Some of them have more than doubled in price so then you look to increase the square footage to do it.”

London Bay Homes recently purchased a lot on 1st Avenue North for $2.6 million, the same price as the entire Southampton home sold for.

“It was $2.6 million for the lot so it will be a $6 million home,” Wilson said. “First Avenue North is one of the most desirable spots in downtown. It is very pretty and one block from the beach.”

“Now downtown the lot entry price is in the high $2 millions to low $3 millions,” Wilson continued. “If you want to spend less than that you go further north like Moorings Park.”

London Bay built homes downtown in the early 1990s and was known for its expensive, luxury homes in Port Royal. The new furnished models mark a return to that area as the company aims to attract a buyer who doesn’t want the gated community life.

“It’s the individual that doesn’t want to be in a community and wants easy walking to downtown,” Wilson said. “People are paying a very healthy number to live there now.”

The newest model home will showcase what Wilson said today’s customer wants. Highlights of the new Chelston model include a great room with pocket sliders that open to an outdoor living area with a secluded fire pit and fully equipped outdoor kitchen. Inside there is a huge kitchen with an island breakfast bar and large pantry. The master suite features large walk-in closets, a bathroom with his and her vanities, a spa tub and walk-in shower. Double doors lead from the master suite to a private patio with a linear pool and raised spa.

Source: Andrea Stetson, Special to the News-Press

Expect ‘big data’ to impact real estate’s future

WASHINGTON – Nov. 12, 2014 – Mobile technology advances could radically change the ways consumers search for real estate online, according to speakers at the 2014 Realtors® Conference & Expo.

Technology will change and put more power into the hands of consumers – but that's not a bad thing if Realtors understand the tech trends and incorporate the changes into their business.

According to NAR Managing Director of Data Analytics Todd Carpenter, the "Internet of Things" (IoT) – which transfers data over networks without human-to-human or human-to-computer interaction – will transform the way consumers shop for real estate online. In fact, it has already changed Americans' lifestyles in some ways.

Carpenter shared big data examples: Mobile apps are already revolutionizing the way individuals go about their day, such as tracking daily physical activity, navigating traffic in real-time and managing a home thermostat from afar.

"A buyer could eventually ask an agent about how a home functions – such as how well it heats or the amount of electricity it uses during certain parts of the day – and receive an immediate answer with detailed graphics and analysis," said Carpenter. "That information may not be readily available to buyers today, but it's coming soon as more individuals use their smartphone to connect their home to the Internet."

Carpenter said that individuals already make more informed decisions about everything from transportation to healthcare industry based on data collected from their smartphone. "These (types of) advances in mobile technology will make it easier for Realtors to communicate valuable information to their clients during the home buying and selling process," he said.

Carpenter said IoT and predictive analytics help more than just consumers. They help the real estate industry too, because it has gained a better understanding of transaction and market data; and the amount of that data will continue to increase and better predict buyer and seller behavior. It will also offer more insights into trends in home preferences and neighborhoods, including highly customized home searches that might include factors such as proximity to the buyer's work, public schools and restaurants.

"Realtors should educate themselves about big data and be knowledgeable of how it's being collected through mobile devices," said Carpenter. "Buyers will increasingly use their smartphone during the search process – often before talking to an agent. Realtors who adapt and embrace big data will add considerable value to their relationship with clients."

Changing demographics impact housing market

NEW ORLEANS – Nov. 11, 2014 – Realtors® from across the country discussed changing homebuyer demographics that impact the housing market during the recently concluded 2014 Realtors® Conference & Expo.

"Among primary residence homebuyers, the demographics have shifted dramatically, especially among first-time homebuyers, whose share of the market has dropped to its lowest level in decades," said Jessica Lautz, director of member and consumer survey research for the National Association of Realtors (NAR).

Adult Millennials, those aged 18 to 33, were a popular topic of panel discussion. In 2014, Millennials saw 60 percent better job growth than the U.S. overall, and a drop in unemployment to 6 percent. This growth, along with improved economic opportunities, should encourage Millennials to form households and buy homes in the coming years.

"Millennials are the largest generation of people in the U.S. and represent 60 percent of first-time homebuyers," said Jonathan Smoke, chief economist for realtor.com®. "They are also more likely than any other group to purchase a home in the next year."

Tightened inventory, difficulty receiving credit and lower than average salaries have kept many of Millennial buyers out of the market, but most economists see that as a temporary setback.

"It's not that young people don't want to purchase homes, it's that they are delaying the purchase," said Lisa A. Sturtevant, vice president of research for the National Housing Conference. "Many of the reasons Millennials are not forming households or making purchases are economic; so as the economy improves, we should see this group become more of a force in the housing market."

Smoke said it's a misperception that Millennials are not already participating in the market.

Millennials "represented 37 percent of home shoppers this summer, and over the next 5 years, this generation will make up two-thirds of household formations," Smoke said. "Between June and September 2014, over half of adults aged 21-34 visited real estate websites or mobile apps. And this is the cusp – get ready for the millennial wave to drive the housing market for decades."

Another group that will be competing with Millennials for dominance in the housing market is baby boomers. Sturtevant added: "With Millennials searching for new homes, baby boomers downsizing, and groups with historically lower incomes all entering the market, an increased demand for smaller, less expensive homes will begin to emerge."

Realtors remain confident in market’s future

WASHINGTON – Sept. 29, 2014 – Realtors' confidence about the single-family housing market over the next six months held mostly flat in August, but more Realtors view their local markets as "strong" rather than "weak," according to the latest Realtors Confidence Index, based on responses from about 3,300 members of the National Association of Realtors (NAR).

Realtors mostly expect modest home price increases in the coming 12 months – a median nationwide at 3.5 percent. Overall, Realtors in North Dakota and Texas reported the greatest confidence.

However, Realtors in Florida are more optimistic about price increases, along with their cohorts in Texas and Hawaii. In those three states, Realtors expect sales prices to rise 5 or 6 percent over the next year.

Still, overall market concerns remain, according to NAR.

Realtors expressed concern about borrowers' difficulties in obtaining a mortgage, as well as a weak job market in many areas – major deterrents to home buying. About 18 percent of Realtors had clients who could not obtain financing in August.

Other hurdles to closing in August were: the buyer and seller could not agree on the price (11 percent); the buyer lost a bidding competition (8 percent); and appraisal issues (4 percent).

Realtor confidence in the townhouse/duplex and condominium market remains sluggish as well. Respondents reported that the condo market still lags because of FHA financing and occupancy regulations.

Realtors again reported challenges from a lack of for-sale inventory, though it appears to be easing in some states, including Florida. Other states where tight inventory problems eased include: Arizona, California, Delaware, Georgia, Indiana, Idaho, Maryland, Maine, Michigan, Minnesota, North Carolina, Nevada, New York, Texas, Virginia and Wisconsin.

Nevertheless, NAR says that the overall supply of homes remained tight for "lower" and "middle-priced homes," mostly attributed to the fewer number of distressed properties and the strong price appreciation since 2012 that has made homes less affordable.

Sales of new homes soar in August

WASHINGTON (AP) – Sept 24, 2014 – U.S. sales of new homes surged in August, led by a wave of buying in the West and Northeast.

The Commerce Department said Wednesday that new-home sales climbed 18 percent last month to a seasonally adjusted annual rate of 504,000. The report also revised up the July sales rate to 427,000 from 412,000.

Newly constructed homes sold at the fastest clip since May 2008. It's a sign that the real estate market might improve after the rebound from the housing bust stalled during the past year because of sluggish wage growth and rising prices.

In the West, August purchases of new homes soared 50 percent compared to the prior month. Off the sharp August increase, sales in the West have nearly doubled in the past 12 months.

Between August and July, sales grew 29.2 percent in the Northeast. Buying increased 7.8 percent in the South and remained flat in the Midwest.

The housing market has sputtered for much this year. A nascent recovery in sales and prices began to struggle toward the middle of 2013. Ferocious winter weather delayed construction and limited sales at the beginning of 2014. Buying did pick up over the summer, yet the pace of sales has been depressed by sluggish wage growth and the surge in prices last year that put homes out of reach for many Americans.

There are a number of signs that another housing uptick may be in the works.

The National Association of Home Builders/Wells Fargo builder sentiment index climbed in September to 59, the highest reading since November 2005. Readings above 50 indicate more builders view sales conditions as improving.

That has yet to translate into more construction, however.

In August, homebuilding fell 14.4 percent compared to the prior month to a seasonally adjusted annual rate of 956,000 houses and apartment complexes, according to the Commerce Department.

Much of that decrease was in the volatile apartments sector. Homebuilders started single-family houses at an annual rate of 626,000 last month, slightly below the pace of 631,000 in August 2013.

Existing home sales have also eased back compared with last year's pace.

Purchases of existing homes fell 1.8 percent to a seasonally adjusted annual rate of 5.05 million in August, the National Association of Realtors said this week. Sales fell from a July rate of 5.14 million, a figure that was revised slightly downward. Overall, the pace of home sales has dropped 5.3 percent year-over-year.

Fla. Aug. sales up 4.2% year-to-year, prices up 3.4%

ORLANDO, Fla., Sept. 22, 2014 – Florida's housing market saw higher median prices and a rising inventory in August, according to the latest housing data released by Florida Realtors®.

Closed sales of single-family homes statewide totaled 21,594 last month, up 4.2 percent over the August 2013 figure.

"For several months now, stability and consistency are key trends we're seeing in Florida's housing market, as the state's jobs outlook remains steady and the economy continues to grow," says 2014 Florida Realtors President Sherri Meadows, CEO and team leader, Keller Williams, with market centers in Gainesville, Ocala and The Villages. "The statewide inventory (active listings) for single-family homes last month rose 13 percent year-over-year, while the townhouse-condo inventory of active listings rose 8.9 percent.

"And once again, statewide median sales prices rose year-over-year for both single-family homes and townhouse-condo properties in August – a trend we've been seeing for 33 months in a row."

The statewide median sales price for single-family existing homes last month was $181,000, up 3.4 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis (IDA) department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in August was $135,000, up 3.8 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 July 2014 was $223,900, up 5.1 percent from the previous year; the national median existing condo price was $215,700. In California, the statewide median sales price for single-family existing homes in July was $464,750; in Massachusetts, it was $360,000; in Maryland, it was $278,626; and in New York, it was $239,000.

In Florida's townhouse-condo market, statewide closed sales totaled 8,848 last month, down 8.8 percent compared to August 2013. The closed sales data reflected fewer short sales last month compared to the previous year: Short sales for condo-townhouse properties declined 60.4 percent.

In the single-family home market, short sales dropped 49.1 percent year-to-year. Closed sales typically occur 30 to 90 days after sales contracts are written.

"In August, the annual growth rate of Florida home prices continued to converge toward a level typical of what we observed back in the housing market's stable, pre-boom days," says Florida Realtors Research Economist Dr. Brad O'Connor. "The fact that we continue to see price growth is an encouraging sign that more and more traditional owner-occupant homebuyers are emerging to keep demand strong in the face of a diminished investor presence in the market."

Inventory was at a 5.5-months' supply in August for single-family homes and at a 5.7-months' supply for townhouse-condo properties.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.12 percent in August 2014, down from the 4.46 percent average recorded during the same month a year earlier.