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Monday, May 5, 2025

New Rules Condotel Buyers Need to Know

 By Richard Swank

New legislation requires condotel buyers to receive disclosures about maintenance responsibilities and fees for non-condo areas, ensuring clarity before purchase.

ORLANDO, Fla. — On October 1, 2024, Florida Realtors® released revisions to its existing condominium riders to add a section with disclosure language related to “Condominiums Created within a Portion of a Building or Within a Multiple Parcel Building.” This disclosure language was mandated by the Legislature’s creation of section 718.407, Florida Statutes, pertaining to such condominiums. But that title doesn’t shed much light on exactly what kind of condominium the Legislature was talking about. This type of condominium is usually referred to as a “Condotel.”

Most people are vaguely familiar with the usual type of condominium. Generally speaking, the condominium form of governance is created when a developer builds a building (or sometimes a townhouse community) and then sells the individual dwelling units within the building to buyers. These buyers actually own the space inside the unit. In addition to the units themselves, the condominium consists of “common areas,” which are essentially any space outside the units. In a typical condominium, this space can encompass many things, including hallways, elevators, parking garages, pools and pickle ball courts. Once the developer has turned over control to the association, the owners within the condominium own these common areas collectively. The association board then votes on assessments to charge each owner to maintain the whole condominium, including these common areas.

Condotels are a little different. In the condotel form of governance, the owner of the building still sells individual units to buyers, who own the space inside. However, the building owner never turns the building over to an association of unit owners. The building owner – not the unit owners – retains control and ownership of the space outside the units.

Recent legal disputes muddied the waters with respect to who is responsible for the maintenance of this exterior space and whether specific parts of the space constitute common areas or shared amenities. Ultimately, the precise definition of these spaces is not crucial for purposes of this article. The important takeaway is that unit owners recognize they may have little control over how much they are charged to maintain these spaces outside their units.

Concern over this issue prompted the Legislature to pass section 718.407, Florida Statutes. Section 718.407 recognizes the condotel form of ownership and governance, calling it a “condominium created within a portion of a building or within a multiple parcel building.” The statute mandates that when creating such a condominium, the declaration must state which parts of the building are subject to a condominium form of governance and which are not. The declaration must then state which party is responsible for operating and maintaining such shared facilities and the way maintenance expenses will be apportioned.

Perhaps the most significant part of section 718.407 is the Legislature’s mandate that any buyer considering purchasing a unit in a condotel be provided a disclosure acknowledging what they are buying into. This is the reason the Florida Realtors disclosures were amended. The buyer must acknowledge multiple factors, including the fact that there are portions of the building outside their unit not included within the condominium form of governance. Critically, the disclosure puts the buyer on notice that even though the condo owners will not have control over the maintenance budget for these spaces, they will still be responsible for paying these fees.

Most importantly, though the prospective buyer must acknowledge their responsibility for fees, the disclosure does not give the buyer the right to terminate the contract once they become aware of this responsibility. It is therefore crucial that a buyer interested in a condotel unit be aware of this fact before making an offer on such a property. Real estate agents can assist with education about condotels by informing buyers of these issues, and directing their attention to section 718.407, Florida Statutes, at the outset of the representation. If the buyer still has questions, they should consult an attorney familiar with the ins and outs of condotels.

Richard Swank is an Associate General Counsel for Florida Realtors.

Note: Information deemed accurate on date of publication.

© 2025 Florida Realtors®

Saturday, May 3, 2025

U.S. buyers median monthly mortgage payment at an all-time high

 by 

Mortgage-purchase applications are declining and pending home sales are sluggish.

https://www.redfin.com/news/housing-market-update-record-high-housing-costs-economic-uncertainty/

Friday, May 2, 2025

Why Existing-Home Sales Are Falling Short

 By Melissa Dittmann Tracey

Existing-home sales fell in March due to tight inventory, while new-home sales rose as builders met strong buyer demand. Buyers still face competition.

CHICAGO — Existing-home sales have lagged over the past two years, while new-home sales have surged — highlighting a key dynamic: Buyer demand remains strong when inventory is available.

The existing-home market continues to face a short supply of homes for sale, despite the latest progress of a 20% annual uptick in inventory. With just a 4 months’ supply of inventory, existing-home sales fell nearly 6% in March compared to February. Sales were down 2.4% from a year ago, the National Association of Realtors® reported Thursday.

“That may begin to shift,” says Lawrence Yun, NAR’s chief economist. “As time passes, life events — such as job changes, family transitions or financial needs — could prompt more homeowners to sell, even if it means giving up their low locked-in mortgage rates.”

As it stands now, about 44 million homeowners have a mortgage rate below 6%, according to an NAR analysis. That’s lower than the current 30-year fixed-rate mortgage, which has been averaging in the mid- to high 6% range. Buyers with financial wherewithal are bypassing mortgages altogether: All-cash buyers continue to make up a sizable share of the market, comprising 26% of existing-home sales transactions in March, according to NAR’s data.

Proof buyers are still out there

Even with last month’s slide in existing-home sales, buyers could still face some competition. Twenty-one percent of homes sold above list price in March, and 57% of real estate pros report that properties typically sold in just over a month, according to the March Realtors® Confidence Index Survey, reflecting results from a survey of more than 1,500 real estate pros about their latest transactions. Homes listed received an average of 2.4 offers. What’s more, 22% of buyers waived the inspection contingency and 19% waived their appraisal contingency in competing in a home sale last month.

Home prices also are still climbing: The median existing-home sales price in March reached an all-time high of $403,700, NAR reports.

Contrasting housing prices with recent stock market declines, Yun says, “Household wealth in residential real estate continues to reach new heights. With mortgage delinquencies at near-historical lows, the housing market is on solid footing.”

Signaling further potential buyer interest, mortgage applications for home purchases are up 4.3% year-to-date. “Aside from inventory growth, lower mortgage rates will be needed to get homeowners to move,” Yun says. “A small deceleration in home price gains, which was slightly below wage-growth increases in March, would be a welcome improvement for affordability.”

Builders capitalize on demand but face headwinds

Meanwhile, homebuilders have plenty of inventory — and in some cases, lower mortgage rates — to meet some of that pent-up buyer demand. Sales of newly built homes climbed 7% in March compared to the previous month and are up 6% from a year ago, the U.S. Department of Housing and Urban Development and the U.S. Census Bureau reported on Wednesday.

“A wide inventory availability — at eight months’ supply — is helping newly constructed home sales to move forward,” Yun says. “The homebuilders’ focus on smaller-sized homes is also attracting buyers.” New home sales are up 33% year-to-date for homes priced below $300,000 and up by 28% year-to-date for new homes priced between $300,000 and $400,000, NAHB reports.

In March, the median price of newly constructed homes was $403,600, well-below the $435,000 price from three years ago when builders were more focused on larger-sized homes, Yun adds.

Builder incentives also could be drawing buyers in. About 30% of builders say they cut their home prices in April, with the average price reduction at 5%, according to the NAHB and Wells Fargo Housing Market Index. About 61% of builders say they also used sales incentives this month, like with mortgage rate buy downs or upgrades.

“The new home sales data shows that demand continues to be present in the market, provided affordability conditions permit a purchase,” says Buddy Hughes, NAHB’s chairman. “An increase in economic certainty would be a big boost to future sales conditions.”

Uncertainty looms, however, particularly around the potential impact new tariff policies could have on the new-home industry. Sixty percent of builders reported that suppliers have already increased or have announced tariff-related price increases for materials — an uptick of 6.3%, on average. Builders estimate that recent tariff actions could increase the cost of a newly built home by about $10,900 per home.

“Builders have expressed growing uncertainty over market conditions as tariffs have increased price volatility for building materials — at a time when the industry continues to grapple with labor shortages and a lack of buildable lots,” Hughes said.

© 2025 National Association of Realtors® (NAR)

Friday, April 25, 2025

U.S. Market: Existing-Home Sales Slip 5.9% in March

 WASHINGTON — Existing-home sales descended in March, according to the National Association of Realtors®. Sales slid in all four major U.S. regions. Year-over-year, sales dropped in the Midwest and South, increased in the West and were unchanged in the Northeast.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – fell 5.9% from February to a seasonally adjusted annual rate of 4.02 million in March. Year-over-year, sales drew back 2.4% (down from 4.12 million in March 2024).

"Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates," said NAR Chief Economist Lawrence Yun. "Residential housing mobility, currently at historical lows, signals the troublesome possibility of less economic mobility for society."

Total housing inventory registered at the end of March was 1.33 million units, up 8.1% from February and 19.8% from one year ago (1.11 million). Unsold inventory sits at a 4.0-month supply at the current sales pace, up from 3.5 months in February and 3.2 months in March 2024.

The median existing home price for all housing types in March was $403,700, up 2.7% from one year ago ($392,900). All four U.S. regions registered price increases.

"In a stark contrast to the stock and bond markets, household wealth in residential real estate continues to reach new heights," Yun said. "With mortgage delinquencies at near-historical lows, the housing market is on solid footing. A small deceleration in home price gains, which was slightly below wage-growth increases in March, would be a welcome improvement for affordability. With real estate asset valuation at $52 trillion, according to the Federal Reserve Flow of Funds, each percentage point gain in home prices adds more than $500 billion to the household balance sheet."

Realtors® Confidence Index

According to the monthly Realtors® Confidence Index, properties typically remained on the market for 36 days in March, down from 42 days in February but up from 33 days in March 2024.

First-time buyers were responsible for 32% of sales in March, up from 31% in February 2025 and identical to March 2024. NAR's 2024 Profile of Home Buyers and Sellers – released November 20244 – found that the annual share of first-time buyers was 24%, the lowest ever recorded.

Cash sales accounted for 26% of transactions in March, down from 32% in February and 28% in March 2024.

Individual investors or second-home buyers, who make up many cash sales, purchased 15% of homes in March, down from 16% in February and unchanged from March 2024.

Distressed sales – foreclosures and short sales – represented 3% of sales in March, unchanged from February and up from 2% the prior year.

Mortgage rates

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.83% as of April 17. That's up from 6.62% one week before but down from 7.1% one year ago.

Single-family and condo/co-op sales

Single-family home sales retreated 6.4% to a seasonally adjusted annual rate of 3.64 million in March, down 2.2% from the previous year. The median existing single-family home price was $408,000 in March, up 2.9% from March 2024.

Existing condominium and co-op sales were unchanged in March at a seasonally adjusted annual rate of 380,000 units, down 5.0% from one year ago. The median existing condo price was $363,000 in March, up 1.5% from the prior year ($357,700).

Regional breakdown

In March, existing-home sales in the Northeast declined 2.0% from February to an annual rate of 490,000, identical to March 2024. The median price in the Northeast was $468,000, up 7.7% from one year earlier.

In the Midwest, existing-home sales waned 5.0% in March to an annual rate of 950,000, down 3.1% from the previous year. The median price in the Midwest was $302,100, up 3.5% from March 2024.

Existing home sales in the South contracted 5.7% from February to an annual rate of 1.81 million in March, down 4.2% from one year before. The median price in the South was $360,400, up 0.6% from last year.

In the West, existing-home sales plunged 9.4% in March to an annual rate of 770,000, up 1.3% from a year ago. The median price in the West was $621,200, up 2.6% from March 2024.

© 2024 National Association of Realtors® (NAR)

Florida’s Housing Market: New Listings, Supply Up

 By Marla Martin

ORLANDO, Fla. — Florida’s housing market in March and the first quarter (1Q) of 2025 reported more new listings, increased for-sale inventory (active listings) and easing median prices compared to a year ago, according to Florida Realtors®’ latest housing data.

“After years of incredibly low inventory and ever-increasing home prices across Florida, we are experiencing a normalization of the real estate market in our state,” said 2025 Florida Realtors President Tim Weisheyer, broker-owner, Dream Builders Realty and dbrCommercial Real Estate Services in Central Florida. “This is great news for homebuyers that have been sitting on the sidelines as increased for-sale inventory and the easing of median prices brings more opportunities in Florida’s housing market.

“Buying a home is always a long-term decision that requires expert guidance to navigate the process and understand the nuances of local market dynamics; a Realtor® will put their knowledge of local market conditions and expertise to work to help consumers find the best opportunities to achieve their version of the American dream.”

Last month, closed sales of existing single-family homes statewide totaled 23,128, down 1.3% year-over-year, while existing condo-townhouse sales totaled 8,414, down 9.8% over March 2024. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

Florida Realtors Chief Economist Dr. Brad O’Connor said “While closed sales of Florida single-family homes were down year-over-year for the second consecutive month in March, it was only by 1.3%. That’s a big improvement over February’s more than 7% decline. What’s more, the number of single-family homes that went under contract in March was actually up year-over-year by over a half of a percent.”

He cited mortgage rates as an influencing factor: “One reason for this is likely that we had the average 30-year fixed mortgage rate hovering at around 6.75% for most of March, in stark contrast to January and February when it was largely north of 7%. That bodes well for closed sales in April, but this boost is going to be short-lived, as mortgage rates have since returned to those 7% levels.

“Demand remains relatively weaker over in the condo and townhouse property type category,” O’Connor said. “Closed sales in this category were down 9.8% compared to a year ago in March.”

For 1Q 2025, statewide existing single-family home sales totaled 56,209, down 1.9% from 1Q 2024, while statewide existing condo-townhouse sales totaled 20,704, down 9.2% from the same quarter a year ago.

The statewide median sales price for single-family existing homes in March was $412,500, down 1.9% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $315,000, down 4.5% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

For 1Q 2025, the statewide median price for single-family homes was $414,555, only slightly down (0.1%) year-over-year; the statewide median price for condo-townhouse properties was $315,000, down 3.2% from the same quarter a year earlier.

On the supply side of the market, new listings for existing single-family homes were up 10.8% last month compared to March 2024 and up 9.6% for 1Q 2025 compared to a year earlier. New listings for condo-townhouse units in March were up 5.8% year-over-year, and up 4.1% in the 1Q compared to 1Q 2024.

Inventory (active listings) for both property categories rose in March as well as for 1Q 2025. Single-family existing homes were at a 5.5-months’ supply while condo-townhouse properties were at a 10.1-months’ supply for both timeframes.

© 2025 Florida Realtors®

Wednesday, March 5, 2025

Florida Consumer Sentiment Drops in February

 Floridians’ opinions about current economic conditions were mixed. Their views of future economic conditions are more pessimistic, a UF analysis found.

GAINESVILLE, Fla. — After three consecutive months of increases following the presidential election, consumer sentiment among Floridians dropped 2.6 points in February, down from a revised figure of 86.9 in January. National sentiment stands out with a sharp decline of seven points.

“The decline in consumer sentiment is primarily driven by Floridians’ pessimistic expectations about future economic outlooks, which have decreased for the second consecutive month. In particular, expectations for the U.S. economy dropped sharply, nearly reversing the gains seen since the presidential election in November,” said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.

“Several factors are contributing to this growing pessimism, with the potential impact of tariffs likely at the top of the list, particularly through their effect on prices. This has led to higher inflation expectations. While tariffs on Canada and Mexico were postponed in February, they are now expected to take effect in March. Tariffs on China were imposed in February, and further increases are under consideration. Additionally, inflation remains above the Fed’s target, delaying any prospects of interest rate cuts in the near future,” Sandoval added.

Among the five components that make up the index, four decreased and one increased. Floridians’ opinions about current economic conditions were mixed. Opinions of personal financial situations now compared with a year ago increased 5.5 points, rising from 62.6 to 68.1. These views were shared broadly across sociodemographic groups and were particularly strong among men and people aged 60 and over. In contrast, opinions on whether now is a good time to buy a major household item, such as an appliance, decreased slightly three-tenths of a point from 77.9 to 77.6. However, these views varied across sociodemographic groups, with men, people younger than 60, and people with an annual income above $50,000 expressing more favorable opinions.

Floridians’ views of future economic conditions in February forecast a pessimistic outlook, as all three components deteriorated substantially. Expectations of personal financial situations a year from now declined 3.9 points from 102.2 to 98.3. These negative views were shared by Floridians across sociodemographic groups, except for people with an annual income under $50,000, whose reading showed slightly more optimistic expectations. Outlooks of U.S. economic conditions over the next year experienced the steepest decline, plummeting 8.6 points from 96.5 to 87.9. Additionally, expectations of U.S. economic conditions over the next five years fell 5.8 points from 95.1to 89.3. Notably, these downward trends were observed across all sociodemographic groups.

“Federal civilian employment in Florida totals nearly one hundred thousand workers, but it is unclear how many will be affected by the recent layoffs. While the overall job market remains solid, job and wage losses among federal government employees could reduce demand and consumption, potentially affecting Florida businesses. Ultimately, the economic impact will depend on the scale of the job cuts and the ripple effect on contractors and consumer spending,” said Sandoval.

“Looking ahead, we anticipate a decline in consumer sentiment, driven by the potential for new tariffs and ongoing workforce reductions resulting from federal government layoffs. Consumer sentiment in March will offer further insight into whether this shift points to a longer-term downward trend in the months ahead,” said Sandoval.

Conducted Jan. 1 to Feb. 27, the UF study reflects the responses of 279 individuals who were reached on cellphones and 271 individuals reached through an online panel, a total of 550 individuals, 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 two, the highest is 150.

Source: University of Florida

© 2025 Florida Realtors®

Understanding Florida's Transaction Broker Role

Florida law presumes brokers as transaction brokers unless a disclosure is made. This role allows limited representation, no fiduciary duty and limited confidentiality.

ORLANDO, Fla. — Florida law states that unless a residential real estate broker provides a single agent or no brokerage relationship disclosure to their customer, the broker is presumed to be a transaction broker. But what does that mean?

Transaction broker is defined in Section 475.01(1)(l), Florida Statutes. A transaction broker can represent a seller, a buyer or both in a real estate transaction but does not represent either in a fiduciary capacity. Accordingly, the seller and the buyer give up their rights to undivided loyalty from the licensee. The limited representation allows the licensee to facilitate the transaction, but the licensee cannot work to the detriment of one party over the other if representing both.

Section 475.278(2), Florida Statutes, sets forth the duties of a transaction broker. A transaction broker must deal honestly and fairly, account for all funds, use skill, care, and diligence and disclose latent defects. In addition, a transaction broker must present all offers and counteroffers in a timely manner, unless their customer has instructed otherwise in writing. 

Finally, a transaction broker has the duty of limited confidentiality. The limits in the statute include disclosing that a party will pay more or accept less than presented in the listing or offers, a party’s motivation, private details of financing and anything else the customer asks the broker to keep confidential.

When reviewing these duties, it’s important to note that some of them, such as the duty of dealing honestly and fairly and the duty of disclosing latent defects, are universal to all three of Florida’s brokerage relationships. Where a transaction broker differs from, for example, a single agent, is that the transaction broker doesn’t have a duty of loyalty and only a limited duty of confidentiality.

Some brokers ask, “I’m a transaction broker. Doesn’t that mean I represent the transaction?” As you can see from the statutory definition and duties, that answer is no.  A transaction broker represents either or both of the parties, but the broker does not represent the transaction. If the broker is representing both parties, the broker facilitates the transaction but does not represent it.

Though the nuances of transaction broker practice can be tricky, ultimately it provides a great deal of flexibility to a real estate broker. If the broker identifies a buyer, the broker can represent that buyer in the same transaction without additional disclosure paperwork. Transaction brokers should be mindful of complying with Article 7 of the National Association of Realtors®’ Code of Ethics, which requires disclosure and consent if the broker is receiving compensation from more than one party. But the representation of both parties in a transaction is presumed to be permitted as a transaction broker.

Finally, one word of caution: When representing themselves in a transaction, a broker cannot be a transaction broker. Almost by definition, a person will always have their own best interests at heart when buying or selling their own property. The presumption of being a transaction broker should not mislead a broker into forming a relationship with the other party and its inherent conflicts of interest.

Richard Swank is an Associate General Counsel for Florida Realtors.

Note: Information deemed accurate on date of publication.

© 2025 Florida Realtors®