Realtor.com: First look at 2017 real estate market

Realtor.com: First look at 2017 real estate market

SANTA CLARA, Calif. – Oct. 19, 2016 – The 2017 home buying season will be see a large increase in first-time homebuyers, according to realtor.com’s latest Active Home Shopper Report, and an increased demand for suburban homes. However, buyers will also face greater affordability challenges.

The study, based on September survey data of active shoppers on realtor.com, provides insight into future home buying trends in 2017 by analyzing responses from consumers who plan to purchase homes in the spring or summer of 2017.

According to the report, the percentage of first-time homebuyers could rise as high as 52 percent of all buyers, and increase from 33 percent in 2016.

But this boost in first-time buyers will also make affordability, downpayments and credit scores a challenge, and those issues could become the market’s top problem next year. Currently, the limited inventory of listings is the top barrier to homeownership.

In general, suburban homes are preferred by 43 percent of first-time homebuyers surveyed, likely due to their desire for safe neighborhoods, privacy and the needs of growing families, according to realtor.com researchers.

Top 5 predictions for 2017

1. First-time homebuyers could make up a majority of 2017 homebuyers
According to the survey, first time homebuyers make up 52 percent of prospective buyers looking to purchase in 2017. Millennials lead the pack with 61 percent of potential first-time buyers under age 35. Top reasons cited by millennials for buying: getting married or moving in with a partner, growing tired of their current living space, and planning to increase family size.

“This represents an ‘Oh, shift’ moment in housing,” says Jonathan Smoke, chief economist for realtor.com. “With so many first-time buyers in the market, competition will be even fiercer next year for affordable starter homes in the suburbs. Those looking to buy may want to consider a winter home purchase in order to avoid bidding wars and higher prices spurred by a potential increase in millennial buyers.”

2. Affordability and mortgage qualifying expected to replace lack of inventory as largest barrier to homeownership
In 2016, 40 percent of home shoppers cited lack of inventory as the largest barrier to homeownership, but realtor.com reports this will potentially shift to affordability and mortgage qualification issues as more first-time home buyers enter the market. Of first time buyers planning to purchase next spring, 37 percent said their largest impediment to homeownership is the downpayment, and 30 percent said finding a house within their budget.

3. Safe neighborhoods, more living space and larger yards top list of key home attributes
Safety, more living space and larger yards as key features is consistent with their top goals of buying: attaining privacy and addressing the needs of their families. A third top objective of first-time buyers is to make a financial investment that will grow over time.

As millennials marry and move in with partners, reasons to purchase are driven by actual or planned growth in their families, and they show strong preference for single-family homes (39 percent) or townhomes (34 percent), and away from multi-family homes (15 percent), condos (10 percent) or mobile homes (2 percent).

4. Competition for the suburbs should heat up
With families and safety on the brain, it’s no surprise that first time homebuyers identified the suburbs as their No. 1 preferred location. In fact, 50 percent of all respondents identified suburban areas as their preferred location. For boomers, their desire for the suburbs can likely be attributed to their desire to be close to family and friends.

Data also show younger homebuyers are more likely than their older counterparts to prefer urban living, the second-most common location preference among millennials after suburbs.

5. Spring and summer will continue to be 2017’s hottest time to buy a house
A majority of all survey respondents were beginning the housing search at the time of the survey and planned to purchase in seven months or longer, indicating spring and summer will continue as the top seasons to buy and sell homes: 73 percent of respondents had been considering homeownership for less than three months and did not expect to purchase a home immediately.

Source: © 2016 Florida Realtors®

What happens when a home under contract is damaged?

What happens when a home under contract is damaged?

October 3, 2016 — Since all contracts are different and contain various provisions regarding how damage to the property is handled, the answers depend on the language of your specific deal. However, if you use the Florida Realtors/Florida Bar contracts, Standard 18M covers repairs, the obligation of the seller and other issues related to property damaged before closing.

This section, entitled Risk of Loss, states that if the property is damaged by fire or other casualty loss and the cost of restoration does not exceed 1.5 percent of the purchase price, the seller must restore the property and closing shall proceed according to the terms of the contract. In the event the cost of restoration exceeds 1.5 percent of the purchase price, the buyer has the option of taking the property “as is” together with the 1.5 percent, or the buyer can receive his or her deposit back, and all parties are released from the contract.

In the event of any casualty damage to the property, it is important for the parties to get an estimate for repairs as quickly as possible so they will have a better understanding of their options. Additionally, depending on the type of casualty loss, the contract’s force majeure provision may apply, which could delay the closing or terminate the deal.

As risk of loss could involve potential legal issues, buyers and sellers may also want to consult their own legal counsel.

Meredith Caruso is Manager of Member Legal Communications for Florida Realtors

© 2016 Florida Realtors®

Source : Florida Realtors

Hurricane prep includes offices as well as homes

Hurricane prep includes offices as well as homes

TALLAHASSEE, Fla. – Oct. 4, 2016 – Attorney General Pam Bondi activated Florida’s price gouging hotline as a strong storm moves through the Caribbean, after Gov. Rick Scott declared a state of emergency.

Just as homeowners prepare for the potential impact of Hurricane Matthew, businesses and local Realtor associations should also prepare for a post-storm world. According to the Hurricane Preparation and Recovery Plan produced by Florida Realtors, some of the work mirrors that of homeowners, such as checking insurance policies for coverage and bolstering building defenses to minimize damage.

However, some preparation is unique to the real estate industry. According to the guide, the top 10 things (there are 24 recommendations) brokers or association executives should do is:

  1. What does your MLS do? What happens to business data? Does the MLS have an out-of-state backup system?
  2. Call your insurance agent. Has anything changed since the last storm threat?
  3. If renting space, meet with the landlord. Who is responsible for pre-hurricane preparation and storm recovery? Some leases hold the tenant responsible.
  4. Meet with your team and get organized. Who determines whether the office will be closed? Who will prepare the office?
  5. Have a building backup plan. If your office is unusable for weeks or even months, where can you conduct business?
  6. Make a video of office contents.
  7. Update the office inventory, including purchases and amounts paid.
  8. Update home addresses and phone numbers of staff.
  9. Make a list of local, licensed repair and service companies.
  10. Scan or make copies of insurance papers with policy numbers – and store one copy offsite.

Price gouging

“Hurricane Matthew has already caused deaths in the Caribbean, and while the storm may not make landfall in Florida, scammers may still use the threat of impact to prey on consumers. Anyone who suspects price gouging during this declared state of emergency should contact my office immediately,” said Attorney General Bondi.

Florida’s price gouging law applies statewide. It prohibits extreme increases in the price of essential commodities, such as food, ice, gas, hotels, lumber and water during a declared state of emergency. Anyone who suspects price gouging should report it to the Attorney General’s Office by calling 1-866-9-NO-SCAM.

© 2016 Florida Realtors®

Source: Florida Realtors

How will Fla. grow? UF maps show options

How will Fla. grow? UF maps show options

GAINESVILLE, Fla. – Sept. 26, 2016 – Moderate projections suggest that Florida’s population will reach approximately 33.7 million residents by 2070 – almost 15 million more people than in 2010. To gauge the impact of that growing population, the University of Florida’s GeoPlan Center, Florida Department of Agriculture and Consumer Services and 1000 Friends of Florida developed a series of GIS-based state and regional maps to explore alternative scenarios for growth and development.

“Our goal is to generate informed discussion on how our state develops over the next fifty years,” says 1000 Friends President Ryan Smart.

The study, Florida 2070, “clearly shows that what may seem like small conservation and development decisions we make today have significant, long-term ramifications,” says 1000 Friends Communications Director Vivian Young.

Florida 2070 has a series of statewide and regional baseline maps depicting development and conservation lands in 2010, trend maps showing how Florida will develop if current development patterns continue to 2070, and alternative maps showing the impact of more compact development patterns and greater land conservation.

“The growing power of geographic information systems (GIS) and the extensive data available for Florida allow us to develop complex representations of alternative future scenarios for Florida,” says Peggy Carr of UF’s GeoPlan Center. “Clearly land is a finite resource and the decisions made about its use need to account for our long term future.”

An interactive website provides an overview of the project, recommendations to promote more efficient development patterns, links to interactive state and regional maps, a summary report and a technical report outlining methodology.

© 2016 Florida Realtors®

Fla. sees 19% year-to-year drop in mortgage fraud

Fla. sees 19% year-to-year drop in mortgage fraud

NEW YORK – Sept. 22, 2016 – According to the second quarter mortgage fraud report from CoreLogic, Florida continues to lead the nation, but the total amount of mortgage fraud in the Sunshine State dropped significantly – 19 percent in a year-to-year comparison. Nationwide, mortgage fraud rose over the same period by 3.9 percent.

Miami ranked first nationwide for mortgage fraud risk, and seven out of the top 10 high-risk cities are in Florida.

The CoreLogic Mortgage Application Fraud Risk Index is standardized to a baseline of 100; each 1-point change in the index represents a 1 percent change in the share of mortgage applications with a high risk of fraud.

Florida cities in the top 25, by rank, for mortgage fraud risk

1. Miami-Fort Lauderdale-West Palm Beach: 278 risk index

2. Lakeland-Winter Haven: 226 risk index

3. Tampa-St. Petersburg-Clearwater: 213 risk index

5. Jacksonville: 198 risk index

6. Deltona-Daytona Beach-Ormond Beach: 193 risk index

7. Orlando-Kissimmee-Sanford: 181 risk index

11. Palm Bay-Melbourne-Titusville: 163 risk index

12. Cape Coral-Fort Myers: 161 risk index

14. North Port-Sarasota-Bradenton: 152 risk index

Increase/decrease of risk by fraud type (nationally)

  • Income fraud: Up 12.5%. With income fraud, applicants lie about their income in order to qualify for a mortgage.
  • Transaction fraud: Up 3.2%. With transaction fraud, the nature of the deal isn’t fully revealed, such as falsified downpayments or undisclosed agreements.
  • Occupancy fraud: Up 2.9%. In this case, applicants lie about their intended use of the property.
  • Undisclosed real estate debt fraud: Down 3.4%. Applicants who fail to disclose other real estate debt, such as another mortgage or taxes, commit this type of fraud.
  • Identity fraud: Down 10.8%. Considered one of the worst types of fraud, applicants apply under a name other than their own.
  • Property fraud: Down 14.2%. In this case, the application contains lies about the property or its value.

© 2016 Florida Realtors®

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