Myths About Today’s Housing Market
And for an up to the date market analysis please contact me. (more…)
5 tips on how not to disappear in the hybrid workplace
When remote work was mandatory and all or most of your co-workers, your boss, and many of your external stakeholders were remote, the playing field was level. There was a real sense that we were all “in this together.” People were remarkably understanding and accepting of quirky situations, whether IT related or the result of the blurred line between home and work (think dogs barking and children crying during meetings). That kind of tolerance is now rare. And it’s just one of many pitfalls for remote workers.
Whether you are fully remote or in a hybrid work environment, avoid the “Zoom ceiling” by understanding and working around the potential pitfalls that come from lowered visibility in the office.
Knowledge at Wharton, a business journal from the Wharton School of the University of Pennsylvania, has suggested five steps to position yourself better for greater visibility to ensure that you are getting recognition for your accomplishments and staying in line for promotions and desirable assignments. Make sure your employer knows you aren’t stepping off the ladder. (more…)
Florida Regulator: Insurers Can Offer Roof Deductibles
TALLAHASSEE, Fla. – Florida has had a rash of insurance claims alleging damaged roofs covered under their homeowner’s property insurance policy, and the 2022 Florida Legislature considered a fix that would have charged homeowners a deductible if their roof needed replacement following a covered event. However, the bill, SB 1728, passed the Senate but failed in the House.
While the Florida Legislature may return to Tallahassee for a special session to discuss the state’s property insurance challenges, it’s generally not expected to do so before November after a new House Speaker takes over.
On Wednesday, however, the Florida Office of Insurance Regulation (OIR) announced that it would allow insurers to offer roof-replacement deductibles as an option in their policies. (more…)
Did You Know?
* Though just 17% of the U.S. population is 65 or older, United Van Lines reports that seniors in that age group completed 29% of all its moves in 2020. Sumter County, Florida has one of the highest levels of inbound migration of seniors in the U.S. thanks in large part to the Villages, a sprawling retirement community more than 50 miles northwest of Orlando. But large cities are seeing an influx of older people seeking the excitement and variety/volume of entertainment/restaurant options. (WSJ)
* In the 4th quarter of 2021, investors bought 18.4% of the US homes that were purchased, a record high. And possibly one of the biggest drivers of housing inflation? Higher purchase prices + higher rents = essential demand for higher wages. (FT)
* The median monthly payment on a new mortgage is now taking up a much larger share of a typical consumer’s income. It jumped 8.3% in February compared with January. The average rate on the 30-year fixed mortgage shot significantly higher yesterday, rising 24 basis points to 4.95%. The quicker-than-expected rise in rates has weighed on demand for mortgages and refinancing loans. With both rates and prices considerably higher, the median mortgage payment is now more than 20% higher than it was a year ago. And so is pricing in some parts….Now comes the question: are incomes that much higher to sustain this? (CNBC)
* The average bonus paid to securities industry employees in New York climbed 20% to a record $257,500 for 2021, the largest increase in bonuses since 2009. Securities industry jobs make up just 5% of private sector roles, but accounted for 18%, or $14.9 billion, of state tax collections in the 2021 fiscal year. (CNBC)
And read these recent articles: (more…)
The Federal Reserve and Mortgage Rates
As expected, the Federal Reserve (Fed) increased its Fed Funds Rate (FF) this week by 0.25% to 0.5%, the first increase since 2018.
What does this mean for mortgage rates and why are they rising? The FF rate affects the lending rate for credit cards, auto loans, adjustable rate mortgages, all of which are impacted by banks’ Prime Rate, which moves with the FF rate. Fixed Rate Mortgages – the typical 30-year mortgage – have a longer life and their benchmark is the closest Treasury security, which is the 10-year (10T).
Five charts explain the factors driving mortgage rates. In all cases the numbers are at the dates that the Fed has changed its FF since 2015: 9 increases followed by 5 decreases before this week’s rise. Because the purpose of this article is to show the link between FF, FRM and 10T the dates shown are only those on which the FF rate changed. Bear that in mind when looking at the charts below – they do not attempt to show all the price movements in between the dates shown. (more…)
Sunday Snippets – Did You Know?
* In 2020 we had a run on toilet paper and paper towels in the USA….. empty shelves and rationing followed as demand far outstripped supply. Now in northern Italy, the supermarkets have been cleared of pasta and pharmacies in Norway are sold out of iodine tablets! In 2020, toilet paper, paper towels, tissues, hand soaps, etc had price increases around 20% or more in one year! (FT)
* The world added 153 billionaires last year, or 3 billionaires each week, to a total of 3,381, according to the Hurun Global Rich List released Thursday. China led with 1,133 billionaires, followed by the U.S.’s 716, and India’s 215. The TOP 10 are all worth more than $100 billion…5 years ago none were. The average age of the billionaires was 64; 120 of them are under 40, and 269 are self-made women billionaires, nearly 66% from China. (PENTA)
* A home in Laguna Beach, CA features a rather interesting “amenity”…. on the property is a fire suppression system with six cannons connected to city water lines. The system senses the temperature of the land and if there is a fire, water will automatically spray from the cannons and alert the fire department. (WSJ)
* Just 10 seconds of idling uses as much gas as restarting your car, in case you wish to cut your gas costs…. Edmunds.com did a comparison of various gas-saving measures. To test the cost of idling, testers drove two cars for 10 miles—they stopped 10 times and idled for two minutes each time. Then testers drove the same route but turned off the engine and restarted at each of the 10 stops. They estimated nearly 20% fuel savings on the restarted cars.
U.S. Takes Step to Regulate Cryptocurrency Market
Cryptocurrency home sales barely have a toehold, and a new exec order from Pres. Biden may change the rules. The order suggests regulation and a U.S.-owned version.
Over 100 countries are exploring or piloting Central Bank Digital Currencies (CBDCs) – a digital form of a country’s sovereign currency.
“The rise in digital assets creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier, but also has substantial implications for consumer protection, financial stability, national security and climate risk,” according to the Executive Order.
The Order lays out a national policy for digital assets across six key priorities: consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.
Executive Order key points
Sunday Snippets – Did You Know?
* Tech meets TREES? 🤔 Trees help with stormwater attenuation, store carbon, improve air quality, provide shade for humans and offer habitats for wildlife…..but as the climate changes, some trees are not surviving/thriving in their current habitat and arborists are identifying the trees that will survive and thrive going forward. i-Tree is a state-of-the-art, peer-reviewed software suite from the USDA Forest Service that provides urban and rural forestry analysis and benefits assessment tools. (FT)
* The median age of a US homebuyer has risen from 31 in 1981 to around 45! If we average leaving home around the age of 20 and rent for 25 years before buying, that equates to $300k lost to rent if your rent is $1,000/month….. $600k if it’s $2,000/month…..and $ 1million if you average $3,333/month! (FT)
* Gen Z — those born between 1997 and 2012 — has become the most active faction in the housing market, flocking to major cities that some claimed were doomed in the pandemic. Manhattan’s social scene and job climate led to a 63% jump in Gen Z rental applications year-over-year. Zoomers made up 27% of Manhattan renters last year, up from 17% the year before as they contend with an increasingly tight market. Other major cities to see a spike in its share of Gen Z renters include San Jose (52%), Los Angeles (45%) and Irving, Texas (37%). Gen Z is the only generation to have its activity surge in the past year. There were 220,000 more rental applications from Zoomers in 2021 than the year before, making up 27% of the rental application market, trailing only millennials (45%). So yes, I was not hallucinating when I noticed everyone around me getting younger and prettier in Manhattan! (RENT CAFE)
* The number of unincorporated self-employed people in the U.S. reached 10 million in February, or 400,000 more than when the pandemic began. It soared as high as 10.3 million last summer. Being a self-employed, independent contractor has pro’s and con’s! (WSJ) (more…)
Naples YTD: sales plummet, prices soar
The combination of undiminished demand and greatly diminished inventory have had the inevitable consequence in the first two months of 2022: prices have soared 25-50% from a year ago, while sales have dropped by similar percentages ( read Naples Beach prices drop 47%? Not so fast.
Here are the numbers broken down by property type and location within Naples: (more…)
The Great Resignation’s Effect on Florida Real Estate
The Great Resignation’s impact on home construction means that the value of Florida residents’ homes could see another double-digit price rate increase in 2022, according to a recent report from the CE shop: The Great Resignation’s Effect on Florida Real Estate.
This impact comes on top of a 70% decrease in inventory since the start of the pandemic:
Disappearing inventory
The Great Resignation — the name given to the enormous wave of workers quitting their jobs over the past year — is making headlines nationwide around 33 million Americans have quit their jobs since the spring of 2021.
Why Are Americans Leaving Their Jobs? (more…)
Survey: Sellers Waiting Out Pandemic Are Ready to List
Homeowners have had all the usual reasons to sell over the past two years – marriages, deaths, children, etc. – but many hunkered down during the pandemic, and some feared the housing market because selling might be easy but finding a new home? Not so much.
A survey conducted by HarrisX for realtor.com, however, suggests that many of those people might be planning to list their home in 2022, with 65% of them planning to do so this winter and spring. The survey of 2,583 consumers was conducted online in September-October 2021.
Many sellers, however, want to set an asking price higher than they think their home is worth, and they expect buyer bidding wars.
When will sellers list? (more…)
Are Mortgage rates really under 3%?
When Freddie Mac released its weekly mortgage survey on Thursday it did so with the heading: “Mortgage Rates Drop Below Three Percent Again.”
Which they are not now.
The problem lies with the methodology. Freddie Mac surveys lenders from Monday to Wednesday with the major weighting given to Monday’s rates. As I have explained in many postings over the years (see Mortgage Rates back to 3% – again as an example), the 30-year Fixed Rate Mortgage (FRM) is priced based upon a premium that investors, when they buy pools of mortgages, demand over the yield on the nearest-equivalent US Treasury – which is the 10-year Note (10T). Thus, if the yield on 10T increases from Monday to Thursday – as it did this week – by the time of Thursday’s announcement the FRM may have changed – as it did this week.
Mortgage News Daily had a great article this week and I am going to use their charts. I recommend signing up for their newsletter, a source of great information and opinion. (more…)
How accurate are Zillow’s Zestimates?
During the pandemic-spurred housing boom, Zillow Offers emerged as a particularly aggressive iBuyer, or instant buyer, of homes in Sun Belt markets, offering homeowners more than the market value of their properties, with no catch. Zillow has now conceded that it has been paying too much for properties, even in a market characterized by soaring home values. Saying it had lost $1 billion on iBuying, Zillow has shut down its Zillow Offers unit.
“We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility,” Chief Executive Rich Barton said.
Zillow used an algorithm to make home price estimates, called the “Zestimate,” and determine what it would pay home sellers.
Are Zestimates accurate?
Zestimates are somewhat like the National Hurricane Center’s projection for a hurricane’s path: both provide a single price or point, but those prices and points are actually the median of a range.
Here’s an example for a house: (more…)
Naples September Market Overview
The median price in the overall Naples market through the first 9 months of 2021 increased 33% to $625,000 for Single Families (SF) and 18% to $329,595 for Condos.
The tables below show the breakdown of sales and median prices by area of Naples (see map below). Price increases for SF ranged from 30% in Central Naples to 40% in Naples Beach; and for Condos from 14% in South Naples to 21% in East Naples.
Sales also increased dramatically: up 30% for SFs and 68% for Condos.
Please contact me to discuss the current market and see how I can help you in your search. (more…)
Naples August Housing Market Review
The median price in the overall Naples market through the first 8 months of 2021 increased 35% to $625,000 for Single Families (SF) and 18% to $325,000 for Condos.
The tables below show the breakdown of sales and median prices by area of Naples (see map below). Price increases for SF ranged from 27% in South Naples to 44% in Naples Beach; and for Condos from 13% in South Naples to 33% in East Naples.
Sales also increased dramatically: up 39% for SFs and 79% for Condos. (more…)