Florida Dodges Bullet as Storm Season Set to End

TALLAHASSEE, Fla. – For the second consecutive year, the hurricane season has exhausted a list of storm names.

But with days to go before the Nov. 30 end of the season, Florida has had brushes with only three named systems – Elsa, Fred, and Mindy – that were mostly rainmakers with tropical-storm-force winds.

All things considered, the state has been relatively unscathed in the highly active storm season, allowing emergency staff in Florida – who also needed to react to wildfires and the COVID-19 pandemic – to continue addressing lingering impacts of past storms.

“We’re still working Hurricane Michael. We’re still working Hurricane Irma, Matthew, Hermine, Dorian, and so on,” said Kevin Guthrie, director of the state Division of Emergency Management. “So, yeah, it was good for us to be able to work on some of those past disasters and get them working towards closing out.”

For a third year, Florida can chalk up the outcome of the six-month season to luck or the fate of wobbles. The 2021 hurricane season officially ends on Dec. 1.

“The storm season that happened last year in Louisiana, if you would have taken that track and moved it a number of miles to the east, then we would have had in that exact same path, you would have had major landfalling hurricanes into Jacksonville, the Panhandle, and South Florida in the exact same year,” Guthrie said.

Quoting National Hurricane Center Director Ken Graham, Guthrie added, “Wobbles matter. Little wobbles matter.”

This year was the sixth consecutive above-average storm season and came after Florida suffered historic strikes from Irma in 2017 and Michael in 2018. But this year is essentially the third consecutive season without a hurricane directly causing massive damage to Florida. And there were opportunities, with much warmer than average sea-surface temperatures in the subtropical Atlantic, along with an enhanced west Africa monsoon and weak upper-level winds that contribute to easier hurricane formations.

“It only takes one big storm to cause problems in the state of Florida,” Guthrie said. “This is not going to be the norm. We are Florida. We get hit by hurricanes. It is going to happen.”

The Atlantic saw 21 named storms, the third-most active season on record. That included seven hurricanes and four reaching Category 3 strength.

When Ana formed on May 22, forecasters recorded the seventh consecutive year in which a system emerged before the June 1 designated start of the season.

Elsa made landfall in Taylor County after dropping from hurricane to tropical-storm strength in early July. Tropical Storm Fred made landfall near Cape San Blas in the Panhandle with maximum sustained winds around 65 mph in mid-August. Tropical Storm Mindy found the Panhandle’s St. Vincent Island on Sept. 9.

With earlier and more active seasons seemingly becoming the norm, state lawmakers also might readjust efforts to help people prepare. Sen. Joe Gruters, R-Sarasota, has proposed a measure (SB 808) that for the first time would split up what has been a sales tax “holiday” at the beginning of the storm season to help people stockpile disaster supplies.

Under Gruters’ proposal, which will be considered during the 2022 legislative session, tax breaks on supplies such as tarps, batteries, radios and portable generators would be offered from June 2 through June 6 and from Sept. 8 through Sept. 12.

Source: News Service of Florida

Florida Market: Median Prices Up, Amid Low Oct. Inventory

 By Marla Martin

Florida Realtors’ data: Demand, low inventory impact prices. Single-family home median sale price up 17.7% to $358,950, condo median price up 17.6% to $260,000.

ORLANDO, FL – Florida’s housing market showed higher median prices, more cash sales and tight inventory levels in October compared to a year ago, according to Florida Realtors® latest housing data.

“In markets across the state, the for-sale inventory continues at low levels, and that puts pressure on prices and also impacts closed sales – some buyers may have paused their home search for now,” says 2021 Florida Realtors President Cheryl Lambert, broker-owner with Only Way Realty Citrus in Inverness. “Last month, the median time to a contract was 12 days for single-family homes and 15 days for condo-townhouse properties.” The median time to contract is the midpoint of the number of days it took for a property to receive a sales contract during that time.

The statewide median sales price for single-family existing homes in October was $358,950, up 17.7% 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 $260,000, up 17.6% over October 2020. The median is the midpoint; half the homes sold for more, half for less.

However, closed sales of single-family homes statewide last month totaled 27,628, down 6.8% year-over-year, while existing condo-townhouse sales totaled 11,433, down 5.6% from October 2020. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

“In 2020, Florida’s housing market had perhaps the best second half of any year in recent memory,” says Erica Plemmons, Florida Realtors economist and director of housing statistics. “Part of this was due to the shifting spring buying season: The onset of the COVID-19 pandemic pushed a lot of sales that would have occurred in spring, back into the late summer and fall. But other factors were at play as well, including record-low mortgage rates, changes in consumers’ housing preferences, and the demand pressure from continued movement of millennials into their prime home-buying years.”

Here in the second half of 2021, the Florida housing market still has many of these demand drivers in place. So, while sales were down year-over-year, she explained that “if we compare this October’s home sales to two years ago, before the pandemic, they were up over 18%. Similarly, condo and townhouse sales, while down 5.6% year-over-year, were still up 23% compared to October 2019.”

In a continuing trend over the past few months, the share of closed sales that were cash purchases rose last month compared to the previous year. In October, single-family existing home sales paid in cash increased by 25.4% year-over-year, while cash sales of condo-townhouse units rose by 6.5%.

On the supply side of the market, new listings and inventory (active listings) remained restricted last month.

“Low inventory levels continue to hold back the market,” says Plemmons. “At the end of October, single-family inventory (active listings) was 29.9% lower than it was a year ago, while condo and townhouse inventory was down 54% year-over-year.”

Single-family existing homes were at a low 1.3-months’ supply in October, while condo-townhouse properties were at a 1.6-months’ supply.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.07% last month, up from the 2.83% averaged during October 2020.

To see the full statewide housing activity reports, go to Florida Realtors Tools and Resources. Realtors also have access to local market data (password protected) through Florida Realtors SunStats resource.

© 2021 Florida Realtors®

What Will Infrastructure Bill Do for Florida?

 By Kerry Smith

The new law is controversial, but one element – a big investment in broadband for rural areas – could open up areas of Florida to buyers who no longer commute to work.

WASHINGTON – On Monday, Nov. 15, President Biden signed the Bipartisan Infrastructure Law in law, a $1.2 trillion infrastructure spending package approved by a bipartisan group of lawmakers in Congress.

Transportation historically leads development, and South Florida’s growth can be traced to Henry Flagler’s new railroad. While money slated for road repair will theoretically ease commutes and repair roadways, the law’s commitment to expanded broadband technology may subtly change Florida’s housing market by boosting demand for rural areas and small towns that don’t currently have strong internet access.

According to a release from Florida Rep. Charlie Crist, $100 million from an approved $65 billion will go to Florida. He estimates that will help 700,000 Floridians gain high-speed broadband access.

According to Crist, Florida money from the infrastructure bill will include:

Nearly $16 billion in state formula funds for highways, bridges, and transit, including:

• $13.1 billion for highways
• $245 million for bridge replacement and repairs
• $2.6 billion for public transit
• $1.2 billion for airports
• $1.6 billion in state revolving formula funds to improve water infrastructure
• $26 million to protect against wildfires
• $29 million to protect against cyberattacks
• Access to $3.5 billion in national funding for weatherization upgrades

Florida is also eligible for $12.5 billion in competitive, discretionary funds through the Bridge Investment Program for economically important bridges and $16 billion in competitive, discretionary funds for major projects too large or complex for traditional transportation funding programs.

Nationwide, the bill authorizes:

• $39 billion in new spending to modernize public transit and improve accessibility
• $25 billion to repair and upgrade airports
• $17 billion for ports and waterways to ease shipping congestion
• $55 billion for clean drinking water and wastewater infrastructure, including $15 billion for lead pipe replacement; $10 billion to address PFAS (polyfluoroalkyl) chemicals, and $23.4 billion for Clean Water State Revolving Fund and Safe Drinking Water State Revolving Fund programs
• $7.5 billion to build out a national network of electric vehicle chargers
• $198 million for EV (electric vehicle) charging
• $50 billion to protect infrastructure from hurricanes, floods, extreme heat, wildfires, and cyberattacks

© 2021 Florida Realtors®

NAR Economist Yun: Housing Market May Normalize in 2022

 By Kerry Smith

Forecasts always include caveats that may upend predictions, but NAR’s Lawrence Yun says the market is hot right now – and he sees more of the same in 2022. While next year’s sales may not surpass 2021 numbers, he expects a banner year compared to those before the pandemic.

SAN DIEGO – The outlook for the residential real estate market, which performed exceptionally well during the height of the pandemic, continues to be promising, according to NAR Chief Economist Lawrence Yun, speaking during the National Association of Realtors® (NAR) convention.

“All markets are seeing strong conditions and home sales are the best they have been in 15 years, Yun said. “The housing sector’s success will continue – but I don’t expect next year’s performance to exceed this year’s.”

An unknown, he said, is how remote work opportunities will play out in the future, and he advised the industry to keep that in mind.

“We are only in the first innings of work-from-home options,” Yun said. “People have not fully digested the work-from-home-flexibility model yet in determining home size and locational choice.”

Even though there may be a decline in sales in 2022, Yun still forecasts that home sales will outdo pre-pandemic levels. His prediction, he noted, is based on an anticipation of more inventory in the coming months. That supply will be generated, in part, from new housing construction – already underway – as well as from the conclusion of the mortgage forbearance program, which in turn will cause a number of homeowners to sell.

“With more housing inventory to hit the market, the intense multiple offers will start to ease,” Yun said. “Home prices will continue to rise but at a slower pace.”

The job market struggled during the pandemic but turned a corner and continues to make incremental progress, Yun said. Since the nation emerged from lockdown, 18 million jobs have been created. At 4.6%, the unemployment rate implies the U.S. economy should be back to normal – however, the country still faces an employment shortage, he added. There are 4 million fewer jobs now than the number before COVID-19.

Forecasts for 2022 depends a bit on U.S. location. Some areas of the nation are thriving and fully recovered, Yun said – places like Idaho and Utah. Both states currently having more jobs now than at the beginning of the pandemic.

While real estate has thrived, Yun says signs suggest that a more normal and predictable market is on the horizon. Home sales surged over the past year in an uncharacteristic manner, with many receiving multiple bids after only being on the market for a short period. However, the 2022 housing sector will settle down, though at above pre-pandemic levels.

Yun projected that mortgage rates, currently at 3.0%, will increase to 3.7% in the coming months, a rise he attributes to persistent high inflation. Home prices rose by 12% on average in 2020 and 2021, while inflation rose 3%.

“Rising rents will continue to place upward pressures on inflation,” he said. “Nevertheless, real estate is a great hedge against inflation.”

© 2021 Florida Realtors®

First Time Ever: Inflation Soars as Mortgage Rates Plunge

 By Jeff Lazerson

The last time inflation rose as mortgage rates fell? Never. But the world is awash with cash, and that holds down mortgage rates, says Wells Fargo senior economist.

NEW YORK – Contradiction? Kerfuffle? Chaos?

Freddie Mac’s 30-year fixed plunged 11 basis points to 2.98% last week, even as the nation’s inflation rate jumped to 6.2%.

When was the last time this happened? Exactly never.

Traditionally, mortgage rates move up with inflation, says Richard Green, director of USC’s Lusk Center for Real Estate.

“This has happened at no other time in history,” Green said. “We are living in a world of uncertainty.”

The yield for the 10-year Treasury Inflation-Protected Securities, or TIPS, was at an all-time low price of negative .57, Green observed. TIPS are indexed to inflation to protect investors from a decline in the purchasing power of their money, according to Investopedia.

This is the lowest Freddie’s rates have been since Sept. 23.

It’s important to note Freddie’s 30-year weekly rate survey was completed prior to the Labor Department’s Wednesday inflation announcement, and rates could bounce back up. For example, the 10-year Treasury rate – which the 30-year fixed closely follows – jumped 10 basis points to 1.56% after the Labor Department’s announcement.

So, how did mortgage rates manage to go down again with price inflation all around us?

The world is awash with cash, which is holding down mortgage rates, said Mark Vitner, senior economist at Wells Fargo Bank. “The U.S. government has spent $5.4 trillion since the beginning of the pandemic. The Fed has added $4.3 trillion to its balance sheet. (U.S. households) have $2.3 trillion in excess savings. And the U.S. acts as an anchor, pulling in money from overseas as (investment returns) are so low overseas.”

Inflation pressures are demand-driven, experts say. As we return to normalcy, consumers want goods, but the shelves are empty. Experts differ, however, as to whether this is transitory inflation or whether this is going to be around for a long time.

When COVID-19 hit, the world sort of stopped. And it wasn’t just manufacturing.

“States haven’t issued truck driver’s licenses in the last few years,” said Ted Tozer, a senior fellow at the Milken Institute of Housing Policy and former Ginnie Mae president for seven years under President Barack Obama. “The supply chain problem is like a traffic jam trying to get flowing again.”

Vitner thinks we are currently at the peak of supply disruption, although supply issues “will dog the economy until the middle of the decade,” he said.

The number of workers in the supply chain may improve to about 3 million jobs over the next six months, said Tendayi Kapfidze, U.S. Bank’s head of economic analysis. He pointed to a recent report that the U.S. labor force grew by 500,000 jobs.

Will mortgage rates continue to stay under control or will they go up, up, and away with inflation trends?

“It would not be an absurd notion to think rates might fall a little bit,” said Jacob Channel, senior economist at Lending Tree. But rates eventually will go back up. Channel sees mortgage rates rising to the 3-4% range next year.

Tozer thinks there’s a delicate dance ahead as the Federal Reserve starts tapering its pandemic-era bond-buying program. The Fed has been purchasing $120 billion of treasury bonds per month, including $40 billion in mortgage securities.

“The key is how much tapering will trigger higher rates,” said Tozer. The next question is how will government borrowing affect inflation? “Deficit spending could trigger mortgage rates to go up.”

Will you lose your ginormous run-up in home appreciation? Will home prices pop?

Mortgage underwriting standards remain stringent since the Great Recession and the mortgage meltdown days.

“Credit underwriting has been so strict it’s hard to see a bubble,” said Vitner.

What’s the next shoe to drop?

“It’s really murky right now,” Kapfidze said.

© Copyright 2021 Press-Telegram. Jeff Lazerson is a mortgage broker.

The inventory for homes smaller than 1,400-square feet has hit a 50-year low

 Baby Boomer Challenge: Find a Home for Downsizing

The inventory for homes smaller than 1,400-square feet has hit a 50-year low – and it’s the same record-low inventory eyed by many first-time buyers.

NEW YORK – Too much yard, too much cleaning? Older homebuyers shopping for a smaller home that’s easier to maintain struggle to find enough possibilities in today’s housing market. It makes downsizing increasingly difficult.

Housing inventories for homes up to 1,400 square feet have fallen to a 50-year low, according to Freddie Mac, even as a growing number of young couples and aging seniors are competing for them. Price growth has been highest for smaller, less expensive homes, says Len Kiefer, deputy chief economist at Freddie Mac.

With so few homes available in that category, baby boomers may have to change their expectations when downsizing.

“We have a housing shortage,” Lawrence Yun, chief economist at the National Association of Realtors®, told The Wall Street Journal. “Clearly from the age patterns, young people want to upsize, and the older generation is looking to downsize, but not greatly – only 100 or 200 square feet smaller than where they’d been living.”

About 28% of real estate transactions in 2020 were for people looking to downsize, Yun says. Most of those transactions were for buyers aged 55 or older. However, some baby boomers choose to age in place and retrofit their current homes so they can stay there longer.

Higher costs could also mean more seniors carry mortgage debts. The number of older homeowners with debt increased from 33.2% in 2007 to 55.4% in 2019, and most of the increase is attributed to mortgage debt, according to the Urban Institute.

Source: “As Boomers Downsize, Competition Grows for Simpler – but Not Always Smaller – Homes,” The Wall Street Journal (Oct. 31, 2021) [Log-in required.]

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

States where residents don't want to leave: Florida is #3

NEW YORK – Of Americans who moved during the pandemic, 85% opted to move within their state, according to a new analysis from LendingTree, which evaluated mortgage loan data from March 1, 2020, to Sept. 21, 2021, to learn pandemic moving patterns.

Texas had the highest percentage of residents looking to stay in the state, followed by Oklahoma and Florida. 

On the other hand, New York had the highest percentage of residents who left the state.

The LendingTree study also identified Florida as a top destination for out-of-state movers: More than a third (36%) of state-to-state movers preferred relocating to Florida.

“Florida is the favorite out-of-state destination for mortgage shoppers in 18 of the 50 states,” LendingTree researchers say in the study. “The Sunshine State has a long history of bringing in visitors and new residents, particularly retirees, thanks to a mix of affordable housing, no state income tax, and sunny weather.”

Percentage of a state’s movers who opted for a new state that also had Florida as their most preferred destination:

1. Texas: 6.67% of movers relocated to a new state
2. Georgia: 8.88%
3. Michigan: 9.07%
4. Ohio: 90.49%
5. Alabama: 9.69%
6. Maine: 9.77%
7. Kentucky: 10.46%
8. Indiana: 10.58%
9. Wisconsin: 10.90%
10. Missouri: 10.95%
11. Tennessee: 12.21%
12. Iowa: 12.87%
13. Illinois: 15.65%
14. South Dakota: 16.49%
15. Connecticut: 16.99%
16. Maryland: 18.59%
17. New Jersey: 19.71%
18. Vermont: 20.01%

Source: “The States Homeowners Have Moved To – and Stayed in – During the COVID-19 Pandemic,” LendingTree (Nov. 2, 2021)

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688