Short ‘Days on Market’ Shifts to the North

 By Kerry Smith

Albany, N.Y., homes went under contract in 8 days in Sept., followed by Rochester (9) and Grand Rapids, Mich. (9). In 8 Florida metros, it ranged from 25-58 days.

SEATTLE – The U.S. supply-demand balance for real estate has shifted over the past year. In Albany, N.Y., the typical home sold in September went under contract in just eight days, making it the fastest market in the country, according to a report from Redfin. Next came Rochester, N.Y. (9), Grand Rapids, Mich., (9) Buffalo, N.Y. (11), San Jose, Calif. (12) and Seattle (12).

In all eight Florida metros included in the study, time-on-market grew year-to-year, with a low in Tampa of 25 days and a high in West Palm Beach of 58 days.

Florida metro – Median days on market – year-to-year change

1. West Palm Beach – 58 days, 8 days longer year-to-year
2. Miami – 51 days, no change year-to-year
3. Fort Lauderdale – 51 days, 5 days longer year-to-year
4. Jacksonville – 44 days, 8 days longer year-to-year
5. Cape Coral – 43 days, 19 days longer year-to-year
6. North Port – 42 days, 18 days longer year-to-year
7. Orlando – 26 days, 5 days longer year-to-year
8. Tampa – 25 days, 5 days longer year-to-year

Four of the six fastest turnaround markets have median home sale prices well below the national level of $412,081 – one reason homes in those metros are getting snatched up so quickly.

The typical home that sold in Rochester last month went for $235,000, making it the 4th most affordable metro in the nation. Buffalo ranked No. 8, with a median sale price of $255,000, and Albany and Grand Rapids ranked 21st and 24th, with median sale prices of $310,000 and $320,000, respectively based on a list of U.S. metropolitan areas with populations of at least 750,000.

“You might not think of Rochester as a hotspot, but people are still flocking into our area and supply remains very low,” says Kimberly Hogue, a Rochester Redfin agent. “Especially for someone coming with a big-city budget, paying $400,000 for a beautiful single-family home in a desirable neighborhood is a no brainer, and there just aren’t enough to go around. Even with mortgage rates near 8%, homes here are still affordable.”

The situation is a bit different in nearby Buffalo, according to local Redfin agent James Strzalkowski, who has observed signs that the market is beginning to slow.

“Buffalo was promoted for years as an affordable city with so much to offer, including cheaper labor, but our local economy is changing. Home prices and the general cost of living are catching up to other parts of the country,” he says. “We have a housing shortage in part because people can’t afford to move, but homes that are listed are starting to sit for longer and see price drops as mortgage rates rise and inflation impacts our city.”

Slowest markets in the U.S.

In New Orleans, the typical September home went under contract in 70 days, making it the slowest market in the country. Next came Honolulu (62), Austin, Texas (59), West Palm Beach, (58), McAllen, Texas (53) and Charleston, S.C. (53).

Homes in most of those markets have historically taken longer to sell than the typical U.S. home, but the outlier is Austin, where homes historically sold faster. Austin exploded in popularity during the pandemic as scores of remote workers moved in from expensive coastal cities to take advantage of the area’s relatively affordable housing. In turn, home prices skyrocketed, and many homebuyers were priced out.

© 2023 Florida Realtors®

Survey: Bleak News for Remote Workers

 By Todd Campbell

Remote work, the viable pandemic option, is now a workplace perk for many people – but more and more employers are requiring a return to the office.

NEW YORK – Covid-era alternative work solutions have come under fire as businesses increasingly deploy a carrot-and-stick approach to convincing employees to return to offices.

Technology titan Meta Platforms (META), which owns Facebook, threatened poor performance reviews if workers failed to attend offices three times weekly. JP Morgan Chase (JPM) CEO Jamie Dimon recently suggested workers uncomfortable with returning to offices should look for employment elsewhere.

Workers don’t like the idea of giving up the flexibility afforded by remote work, but a recent survey shows that these workers may face an uphill battle if they hope to continue working from home.

Remote work loses its luster

Companies big and small rushed to offer flexible alternative work schedules like remote and hybrid work during Covid. Remote work quickly became a key benefit used to fill jobs created by those who took early retirement and newly created positions in response to demand growth fueled by easy-money policies.

Remote work initially appeared to be a win/win for companies and employees. It allowed businesses to source job candidates nationally rather than locally and sometimes save money by closing expensive offices. Meanwhile, workers could live in the suburbs rather than crowded cities and save money by eliminating expensive childcare costs.

Unfortunately, the love affair with remote work has soured over the past year.

Businesses, from technology to financial services, have rolled back remote work, citing a need for increased collaboration and greater productivity. Many companies have likely sought to reduce the number of remote workers as part of layoff plans or to fill otherwise vacant office spaces.

Businesses are winning the return-to-office battle

Worker surveys suggest employees prefer remote work. However, they’re losing the battle with employers demanding more office face time.

The Census Bureau’s latest Household Pulse Survey shows remote work has reached a new post-pandemic low, with declines seen in all 50 states, reports Bloomberg.

The survey showed that fewer than 26% of households include someone who works remotely at least one day weekly. That’s a significant drop-off from the high of 37% in 2021. A total of 31 states had remote work rates above 33% at the peak. Now, only seven states exceed that hurdle.

States with the highest percentages of remote workers are typically Democratic states, mainly on the east and west coasts. Middle America and the South boast some of the lowest rates of remote work.

There’s also a more significant push for a return to office (RTO) in major metro markets where office building valuations are tumbling because of empty offices. During its recent quarterly conference call, Goldman Sachs (GS) told investors that it reduced valuations on office properties in its portfolio by 50%.

The impact of lower valuations on financial companies could contribute to the stricter return to office demands. Big banks like JP Morgan have been among the most vocal in demanding RTO, and they’re also heavily exposed to commercial real estate.

For instance, in addition to loans held on commercial properties, JP Morgan is building a new multibillion-dollar headquarters in New York City.

© Copyright 2023, Longview News-Journal, Longview, TX

Buyer Stress Worse than Dating – and Potty Training

 By Kerry Smith

Study: What’s more stressful than buying a new home? 

SEATTLE – Nearly two-thirds of recent U.S. homebuyers (59%) think purchasing a house is more stressful than dating, according to a report from Qualtrics commissioned by Redfin covering May-June, 2023.

“Getting ghosted by your date is stressful, but purchasing a home in today’s market comes with its own unique set of anxieties,” says Redfin Chief Economist Daryl Fairweather. “Buyers are increasingly ghosting sellers as housing costs climb, and high mortgage rates are prompting many homeowners to stay put instead of selling – meaning house hunters have a record low number of homes to swipe right on.”

Of the life events respondents had to choose from, respondents found only two more nerve-wracking than buying a home: 57% said divorce and 56% said finding a new job.

The results don’t necessarily apply to other real estate markets. With higher mortgage rates and fewer homes to choose from, more people moving in 2023 were doing so out of need rather than desire, often tied to a major life event, such as a divorce or new job. One in 10 home sellers say they’re moving because of a return-to-office policy.

Age, race affect home buying stress

• Millennials and Gen Z buyers were more likely to see homebuying as stressful – baby boomers and Gen X not as much. Baby boomers, at least, largely have a stronger financial position than the rest since they’ve been building home equity for years. In fact, boomers recently overtook millennials as a total percentage of homebuyers.
• Older generations were most likely to emphasize the stress of divorce; 67% of boomers said divorce is more stressful than homebuying, compared with 61% of millennials and 48% of Gen Z respondents.
• More than two-thirds of white respondents (64%) said buying a home is more stressful than getting into college – but that was flipped for Black respondents, with 57% saying “getting into college” is more stressful.
• Roughly one-quarter of Black adults say they carry student loan debt, compared with 14% of white adults.

© 2023 Florida Realtors®

Don't expect major legislation on property insurance in 2024

 Florida Senator on Insurance: ‘We Got a Lot Done’

By Jim Saunders

Lawmakers think recently enacted insurance changes will help but need more time to work.

TALLAHASSEE, Fla. – A key senator said Tuesday he does not expect lawmakers to make major property-insurance changes during the 2024 legislative session, as they continue to watch the results of an overhaul passed last year.

“In my opinion, we swung for the fences, and we got a lot done,” Senate Banking and Insurance Chairman Jim Boyd, R-Bradenton, said after his committee received updates about the property-insurance market from state Insurance Commissioner Michael Yaworsky and Citizens Property Insurance President and CEO Tim Cerio.

Boyd said he doesn’t see “any additional big-deal things that we can do” during the 2024 session, while giving time for the changes passed last year to play out. The 2024 session will start in January.

Troubles in the property-insurance market during the past three years have led to many homeowners facing massive rate increases or losing coverage, and have spurred a flood of policies into Citizens, which was created as the state’s insurer of last resort. Citizens ended last week with 1.412 million policies, nearly double the 708,919 policies it had on Sept. 30, 2021.

Lawmakers during a special session in December passed wide-ranging changes to try to shore up the market. For example, they tried to shield property insurers from costly lawsuits and took steps to help push policies from Citizens into the private market.

At the time, lawmakers said the changes would likely take 12 to 18 months to filter through the system. Since December, property owners have continued to see increased rates and, in many cases, few choices for coverage.

But Boyd, Yaworsky and Cerio said they see signs of improvement in the industry.

“Everyone is in this together,” Yaworsky told reporters after his presentation to the Banking and Insurance Committee. “It is a very difficult time for Florida homeowners, but the state has enacted significant legislation to address that after years of trying to get it done.”

Yaworsky said, for example, the costs of reinsurance – critical backup insurance that drives a large chunk of homeowners’ bills – did not increase as much as initially feared.

Also, regulators have approved requests from private insurers to take as many as 646,617 policies from Citizens this year. While only a portion of those policies will go into the private market, Yaworsky said the interest in so-called “depopulation” of Citizens is a sign of a healthier market.

Cerio said Citizens had expected it could end 2023 with 1.5 million to 1.7 million policies. But he said it now expects to end the year with about 1.3 million policies.

During the committee meeting, however, concerns about the market remained apparent.

For example, Senate Rules Chairwoman Debbie Mayfield, R-Indialantic, said the majority of calls she gets in her office are related to property insurance. At least some of those concerns involve a lack of competition and coverage choices.

“I can tell you it (coverage) has been shopped, and you can’t find it,” Mayfield said.

Sen. Victor Torres, D-Orlando, asked Yaworsky whether the state would consider a cap on rate increases over the next few years or a moratorium on policies being dropped.

But Yaworsky said a rate cap could lead to some Florida-focused insurers leaving the market or going insolvent. Cerio also said lower rates for Citizens could be a “long way off” because the insurer’s rates are below where they should be.

© 2023 The News Service of Florida. All rights reserved; see terms. News Service broadcast journalist Mike Exline contributed to this report.

U.S. Isn’t Ready for Boomers to Age in Place

 By Kerry Smith

Census Bureau survey: There’s a disconnect between perception and reality. While many older adults think they can “age in place,” their homes aren’t outfitted to do so.

WASHINGTON – A survey by U.S. Census Bureau took a look a housing and older adults. While the nation largely focuses on millennial and Gen Z buyers stuck in a difficult housing market, the Census study analyzed old adults’ housing needs.

It identified 37 million older-adult households in the U.S., and 1 in 10 (11%) of them face some kind of difficulty living in their current home – a number that rises to 24% for the oldest adults.

The report, Aging-Ready Homes in the United States–Perception Versus Reality of Aging-Accessibility Needs: 2019, found that home accessibility varied by region. Older households in the South Atlantic division – an area that includes Florida – were more likely to report critical difficulty compared with the national average. And older households in New England and the West North Central divisions were less likely to do so.

There’s also a breakdown in homeowner perceptions, according to the report, with many owners saying their home is equipped for contented aging in place. However, they also reported some basic features missing, such as a step-free entryway and a bedroom and full bathroom on the first floor.

In many cases, older adults have little choice: Many cannot afford to upgrade their homes to make it easier to age in place, particularly where the stock of homes is old and requires more extensive renovations, such as in the Northeast.

The Census Bureau concludes by saying that the U.S. has a need for more aging-in-place homes over the next few decades. “Given the risks and long-term consequences of fall-related injuries, it is economically and health-imperative to consider the ability of older adults to age safely and comfortably in their homes,” it says.

© 2023 Florida Realtors®

Mortgage Rates Hit 7.31% – a 23-Year High

 By Alex Veiga

Last week, a 30-year, fixed-rate loan averaged 7.19%; a year ago, it was 6.70%. The last time rates were this high was in 2000 when home values weren’t going up.

LOS ANGELES (AP) – Home loan borrowing costs climbed again this week, pushing the average long-term U.S. mortgage rate to its highest level in nearly 23 years, another blow to prospective homebuyers facing an increasingly unaffordable housing market.

The average rate on the benchmark 30-year home loan rose to 7.31% from 7.19% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.70%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loan, also increased. The average rate rose to 6.72% from 6.54% last week. A year ago, it averaged 5.96%, Freddie Mac said.

“The 30-year fixed-rate mortgage has hit the highest level since the year 2000,” said Sam Khater, Freddie Mac’s chief economist. “However, unlike the turn of the millennium, house prices today are rising alongside mortgage rates, primarily due to low inventory. These headwinds are causing both buyers and sellers to hold out for better circumstances.”

High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already out of reach for many Americans. They also discourage homeowners who locked in rock-bottom rates two years ago from selling. The average rate on a 30-year mortgage is now more than double what it was two years ago, when it was just 3.01%.

The combination of elevated rates and low home inventory has worsened the affordability crunch by keeping home prices near all-time highs even as sales of previously occupied U.S. homes have fallen 21% through the first eight months of this year versus the same stretch in 2022.

This is the third consecutive week that mortgage rates have moved higher. The weekly average rate on a 30-year mortgage has remained above 7% since mid-August and is now at the highest level since mid-December 2000, when it averaged 7.42%.

Mortgage rates have been climbing along with the 10-year Treasury yield, which lenders use as a guide to pricing loans. The yield has surged in recent weeks amid worries that the Federal Reserve will keep short-term interest rates higher longer to fight inflation.

The central bank has already pulled its main interest rate to the highest level since 2001 in hopes of extinguishing high inflation, and it indicated last week it may cut rates by less next year than earlier expected.

The threat of higher rates for longer has pushed Treasury yields to heights unseen in more than a decade. The yield on the 10-year Treasury was at 4.61% in midday trading Wednesday. It was at roughly 3.50% in May and just 0.50% early in the pandemic.

While mortgage rates don’t necessarily mirror the Fed’s rate increases, they tend to track the yield on the 10-year Treasury note. Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.

Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.