The new law, SB 1084, was a session priority for Florida Realtors as the continued abuse of online “ESA certificates” created major problems for property managers.
TALLAHASSEE, Fla. – Governor Ron DeSantis signed Senate Bill 1084 into law this week, which seeks to curb growing abuses of emotional support animal (ESA) certificates.
The new law was a major session priority of Florida Realtors as the continued abuse of online “ESA certificates” presented significant problems for many Realtors who are also property managers. The law establishes what can be considered reliable information for an ESA.
One of the main components of the law, which is based on new federal guidelines, is that patients must establish the need for an ESA through a licensed medical practitioner with whom they have an established professional relationship. Additionally, the law creates a civil penalty for the falsification of documentation used to support the need for an ESA.
Other changes in the law of interest to Realtors include the need for separate supporting documentation for each emotional support animal in a household, liability for any damages done to a person or property where an ESA resides, and a housing provider’s ability to ask for supporting documentation if the disability is not readily apparent.
Finally, the law allows a housing provider to deny an ESA if they believe the animal will cause harm to people or the property of others. The bill does not address restaurants, airplanes or other public places. The effective date is July 1, 2020.
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As expected, the Federal Reserve made no interest-rate-change decisions at its meeting this week, and it didn’t signal a propensity for changes in early 2020.
WASHINGTON – The Federal Reserve made no changes to its benchmark interest rate, according to an announcement released when its meeting ended on Wednesday. Federal interest rate changes, either up or down, can directly impact adjustable-rate mortgages and, indirectly, fixed-rate mortgages.
In addition, nothing in the Fed’s accompanying statement suggests that further interest rate cuts are on the horizon, assuming nothing major in the economy changes. That likely means little change early next year, though economists are split on whether another interest rate cut may occur later in 2020.
Fed Chairman Jerome Powell once worried that a robust job market would push consumer prices higher than the 2% level. However, inflation appears stable even with almost full employment. The current unemployment rate is at 3.5% – a 50-year low – but inflation was well under the 2% benchmark in October when it stood at 1.3%.
Economists usually scour the Fed statement to look for signs of intention – whether the Fed is leaning toward lowering or raising rates at its next meeting. However, the latest statement appears to suggest neither, at least over the short term.
“Risk Rating 2.0” now goes into effect Oct. 1, 2021. Rather than rely heavily on flood zones to determine policy premiums, Risk Rating 2.0 will consider more variables and charge premiums that vary by home.
WASHINGTON – The Federal Emergency Management Agency (FEMA) has postponed the roll-out date of Risk Rating 2.0 – its plan to update and extend the National Flood Insurance Program (NFIP). The original effective date of Oct. 1, 2020, has been moved back one year to Oct. 1, 2021.
This federal program, which is crucial to the Florida real estate industry, helps keep insurance affordable. Take a look at why the NFIP is so important.LEARN MORE ►
“Some additional time is required to conduct a comprehensive analysis of the proposed rating structure, so as to protect policyholders and minimize any unintentional negative effects of the transition,” FEMA said in a prepared statement. The extension will also allow “all National Flood Insurance Program (NFIP) policies – including, single-family homes, multi-unit and commercial properties – to change over to the new rating system at one time instead of a phased approach.”
Although the Risk Rating 2.0 program is still being developed, it’s expected to change the way NFIP calculates flood-insurance rates. As a result, it could save some homeowners money and raise the coverage cost for others.
Rather than levy premiums based on the dollar amount of insurance a homeowner wants, NFIP could operate more like traditional property insurance by weighing a roster of risk variables. Currently, rates are generally based on the amount of coverage a homeowner wants and the risk of flood their home faces – largely whether the home is inside or outside a FEMA-designated flood zone.
FEMA originally said the plan would consider multiple variables, such as the potential for hurricanes, a home’s distance from a body of water and its risk from coastal surges. It would also consider using new “loss-estimation technology” that predicts a home’s risk from climate change. It could also offer replacement cost coverage.
Florida – home to about 35 percent of all NFIP policies – could be impacted, though it’s not yet clear how a specific homeowner might be affected. However, it’s likely that some homeowners in FEMA flood zones would see flood insurance costs increase, and that potential for higher costs led some lawmakers to push for a Risk Rating 2.0 delay.
“We’re encouraged that FEMA is listening to Congress’s concerns about the impacts of Risk Rating 2.0. FEMA’s promise to protect policyholders and minimize any unintentional negative effects in the transition is vital to ensuring the NFIP remains successful,” according to a joint news release issued by six lawmakers, including three from Florida: Reps. Charlie Crist, Debbie Mucarsel-Powell and Francis Rooney.
NFIP currently expires on Nov. 21, 2019, and Congress is working on a solution to extend it for at least a few years. Should lawmakers reach agreement, it’s unclear how a legislative fix might impact FEMA’s Risk Rating 2.0 regulatory fix.
Under U.S. law, FEMA is limited in its ability to raise rates. It’s also unclear how those limitations might impact increases under NFIP’s new risk model.
Sales, prices and pending inventory rose statewide year-over-year. Single-family sales up 8.1%, median price up 3.9%; condo sales up 2.2%, median price up 4.1%.
ORLANDO, Fla. – Florida’s housing market experienced positive trends in 3Q 2019, with more closed sales, higher median prices, more pending sales and rising pending inventory, according to the latest housing data released by Florida Realtors®. Closed sales of single-family homes statewide totaled 78,759 in 3Q 2019, up 8.1% from the 3Q 2018 level.
“Median sales prices for both existing single-family homes and for condo-townhouse properties rose in Florida during the third quarter – continuing the ongoing trend,” says 2019 Florida Realtors President Eric Sain, a Realtor and district sales manager with Illustrated Properties in Palm Beach.
“Florida’s business-friendly outlook continues to attract investment and growth, as well as new residents, which provide a strong foundation for the state’s housing market. The latest report from the state’s economists show that Florida’s annual private-sector job growth rate of 2.8% continues to outpace the national job growth rate of 1.6%. Job growth, an unemployment rate of 3.2% in September and a growing population continue to keep Florida’s economy strong.”
The statewide median sales price for existing single-family homes in 3Q 2019 was $265,000, up 3.9% from the same time a year ago, according to data from Florida Realtors Research department in partnership with local Realtor boards/associations. The statewide median price for condo-townhouse properties during the quarter was $190,000, up 4.1% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Looking at Florida’s condo-townhouse market, statewide closed sales totaled 29,539 during 3Q 2019, up 2.2% compared to a year ago. Closed sales typically occur 30 to 90 days after sales contracts are written.
“Inventory levels – particularly among single-family homes for sale – continued to fall throughout the third quarter,” says Florida Realtors Chief Economist Dr. Brad O’Connor. “But so did mortgage interest rates, which provided opportunities for both prospective and current homeowners. Many current owners locked into low mortgage rates from a few years back have been waiting for a chance to buy a bigger or better home at similar rates, and that’s exactly what we saw happen throughout the summer. As a result, we saw an increase in new listings as well as closed sales across all price tiers above $200,000, with many first-time buyers getting a shot at those newly listed homes located at the more affordable end of the price spectrum.”
In 3Q 2019, new pending sales for existing single-family homes rose 4.4% while pending inventory was up 1.7%. During the same three months, condo-townhouse new pending sales rose 0.5% while pending inventory increased 0.9%. Pending inventory is the number of listed properties that were under contract at the end of the month or data collection period.
Inventory was at a 3.6-months’ supply in 3Q 2019 for single-family homes and at a 5.3-months’ supply for condo-townhouse properties, according to Florida Realtors.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.67% for 3Q 2019, significantly lower than the 4.57% average recorded during the same quarter a year earlier.
Senate Bill 2507, introduced by Scott and Rubio, would allow Canadian snowbirds to stay in the U.S. for up to eight months – an increase from the current six months.
WASHINGTON – Florida’s U.S. Senators Marco Rubio and Rick Scott think Canadians should be allowed to stay in the United States longer than the current mandatory six months, so they introduced the Canadian Snowbirds Act (S. 2507) in Congress.
The legislation would allow some Canadian citizens to spend up to eight months per year vacationing in the United States without penalty. According to the Canadian Embassy, Canadians who visit Florida contribute more than $6.5 billion each year to the state’s economy.
“Tourism is a crucial part of Florida’s booming economy, creating and supporting thousands of jobs all across the Sunshine State,” Rubio said in a statement. “This bill will be a huge boost to our state’s economy by allowing the millions of Canadian snowbirds who visit Florida each year to stay two months longer.”
To become law, the Senate would have to pass S. 2507 and send it to the House for approval. If that happened, it would then need President Trump’s signature to become law.
The bill would allow Canadian citizens over age 50 who own or rent a U.S. residence to remain in the country for up to 240 days each year. The bill prohibits qualifying visitors from working for American employers or seeking public assistance.
Under current laws, Canadians may remain in the United States for up to six months per year. If they stay more than six months, they’re considered U.S. residents for tax purposes and required to pay U.S. federal income taxes on any and all income they earn that year – regardless of which country it was earned in.
According to VISIT Florida, approximately 3.5 million Canadians visited Florida in 2018 alone. The legislation is endorsed by VISIT Florida and the Canadian Snowbird Association.
“This bill is a win-win for people on both sides of the border,” says Karen Huestis, president of Canadian Snowbird Association
NEW YORK – Jan. 4, 2018 – Forget fevered bidding wars and snap home-buying decisions. Slower and steadier will characterize next year’s housing market.
That follows a 2018 that started off hot but softened into the fall as buyers – put off by high prices and few choices – sat out rather than paid up.
Affordability issues will remain a top concern going into 2019, exacerbated by rising mortgage rates. But some of 2018’s more intractable issues will begin to loosen up. The volume of for-sale homes is expected to rise and diversify, while the number of buyers is forecast to shrink.
“For home sellers, they need to recognize those days of frenzied market are over. They must price competitively to sell their home,” said Lawrence Yun, the chief economist at the National Association of Realtors. “For buyers, there will be challenges when it comes to rising interest rates, but they don’t have to make hurried decisions anymore.”
Still, some cash-strapped first-time buyers will simply be priced out, while a cohort of potential move-up buyers will decide to stay in their existing home, make renovations and enjoy their current low mortgage rate. Price increases will moderate, and everyone in the market will need to adjust.
Finally, more homes to choose from
One of the biggest complaints among buyers in the last several years is that there weren’t enough homes for sale. In fact, the supply of houses hit historic lows in the winter of 2017 and has yet to rebound substantially. That fueled bidding wars, price increases and frustration.
The supply crunch is expected to ease some in 2019 with inventory rising 10 percent to 15 percent, according to Yun.
But the increase will be skewed toward the mid-to-high end of the market – houses priced $250,000 and higher – especially when it comes to newly built houses, said Danielle Hale, chief economist of realtor.com. That’s good news for move-up buyers, but not so much for the first-time millennial buyer. “There’s still a mismatch on the entry-level side,” she said.
Houses in all shapes and sizes
If you’re a first-time buyer, you won’t be completely out of luck if you stay open-minded. If a single-family home is out of the question, consider a mobile home or townhouse as a starter home, both of which are on the rise.
The volume of shipments for manufactured houses – also known as mobile homes – is expected to finish above 100,000 this year, up from 93,000 in 2017, according to Robert Dietz, chief economist of the National Association of Home Builders. The trend is expected to continue next year.
These homes are also significantly cheaper than other home types. Not including land costs, the cost to buy a mobile home averages $70,600, compared with $257,900 for an existing single-family home and $309,700 for a new home.
You may also consider a townhouse, an attached single-family home located in a community of homes. Construction of townhomes also is experiencing year-over-year growth and is outpacing the single-family detached home market, Dietz said.
“The market is being supported by millennials moving from renting to their first-home purchase,” he said. “If you’re in a high-cost area with wage and job growth, townhouses are appropriate for entry-level. And they still get that suburban feel with their own front door.”
Affording a home remains hard
Housing values are still expected to increase next year, but not at the gang-buster pace seen in recent years. NAR’s Yun forecasts modest price growth between 2 percent and 3 percent, down from close to 5 percent this year and over 5 percent in 2017.
At the same time, mortgage rates are expected to hit 5.5percent by the end of 2019. Both factors make it more expensive for buyers to purchase a home. Hale estimates that the expected increase in prices and interest rates translates to an 8percent rise in the average monthly mortgage payment.
Interest rate trap
Shrinking affordability will convince some buyers – especially first-timers – to sit out the market altogether next year because they can’t make the numbers work. Homeowners considering selling their home may also stay put because of rising mortgage rates – a so-called interest rate trap. Most outstanding mortgages have an interest rate of 4.5 percent or less, according to a report this year from Black Knight, a data analytics firm.
“They have a nice low mortgage rate, lower than the current rate, so there’s no reason to move,” said Mark Fleming, chief economist of First American Financial Corp.
Tax worries linger
The first few months of 2019 will reveal how the new tax changes affect homeowners. One key rule is the new cap on the mortgage interest deduction.
Before, homeowners could deduct interest they paid on up to $1 million in mortgage debt – including interest on home equity loans and lines of credit – reducing their taxable income.
Now, you can only deduct interest on up to $750,000 in mortgage debt. Interest paid on home equity loans and lines of credit is deductible only if the funds were used to pay for home improvements or renovations.
The only taxpayers who will exceed those limits are high-end homeowners and buyers and those with multiple homes with mortgages.
The bigger question mark is if and how the $10,000 limit on state and local taxes deduction – known as SALT – will affect housing markets in high-tax states such as New Jersey, New York, Connecticut and California.
Buyers may be reluctant to purchase homes in those states – or choose a smaller house – if they calculate they will pay too much in non-deductible taxes. “These states may see softer housing markets compared to the rest of the country,” said Yun, if the SALT cap hurts enough homeowners.
The bottom line
If you’re a seller: Price realistically and be ready to cut the listing price or offer other incentives to get a deal done. “It’s still a seller’s market, but not like it was,” Hale said. “Sellers need to be mindful of competition, especially for more expensive properties.”
If you’re a buyer: Don’t worry about going slow when making decisions. “There is less buyer competition and more inventory,” Yun said. “Buyers can take time to find the home that fits into their budget.”
Copyright 2019, USATODAY.com, USA TODAY, Janna Herron
Also, did you know that “First-Time Home Buyer” doesn’t necessarily mean that you have never ever purchased a home before.
According to HUD a first-time home buyer is an individual who meets any of the following criteria:
An individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property. This includes a spouse (if either meets the above test, they are considered first-time homebuyers).
A single parent who has only owned with a former spouse while married.
An individual who is a displaced homemaker and has only owned with a spouse.
An individual who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations.
An individual who has only owned a property that was not in compliance with state, local or model building codes and which cannot be brought into compliance for less than the cost of constructing a permanent structure.
Did you say yes to any of the above questions? Then you are a “First Time Home Buyer”.
Oh, and did you know working with a REALTOR® is FREE to buyers? Our commissions are typically paid by the seller. So take advantage of our expertise, don’t go it alone.
REALTORS® also take an oath to uphold the strict REALTORS® Code of Ethics. What does this mean to you? It means that any REALTOR® with whom you work has voluntarily agreed to abide by a Code of Ethics, based on professionalism and protection of the public. The Code is your assurance of dealing with a professional who has your best interests in mind.
I would be delighted to be your REALTOR® and help you and your family with the purchase of your new home. I have a ton of great resources to share with you many of which you can find on my website to help you get started. You can visit veroluxuryhomes.com for more information or to begin your home search. Want something more mobile? Go to searchinvero.com to download my mobile app to get listings via GPS, works great on iOS and Android phones and tablets.
Just starting to think about it? Have some more questions? Ready to get it started? Or just need some help? Give me a call today, I’ll be standing by 772-559-5524