Fake Sellers, Fake Landlords: What’s Real Anymore?

 By Meredith Caruso

The advice for anyone you meet in real estate? Trust but verify – which means don’t fully trust anyone who isn’t your mother. Scammers continually find new ways to separate you, your buyer or your seller from their money.

ORLANDO, Fla. – Florida Realtors has sent out several articles concerning the uptick in scammers, whether that be a fake seller of vacant land or a fake landlord who doesn’t actually own the rental property or tips on how to avoid being scammed. Watch for red flags so this doesn’t happen in your transaction. (Also see: Scam Involving Sale of Vacant Lots is Back: Don’t Get Fooled Again!) There is also the twist where scammers fraudulently change the corporate docs online in attempt to get you to think they are who they claim they are.

But what can you do should you actually catch the fraudulent transaction? Depending on the details of what occurred in the scam, you may have different options. For example, a false landlord posting on Zillow can be reported to Zillow directly so the offending post can be removed. If this is something posted on the MLS, contact the MLS.

The Internet Crime Complaint Center (IC3) was created in 2000 by a task force that includes the Federal Bureau of Investigations (FBI), National White Collar Crime Center (NW3C) and the Bureau of Justice Assistance (BJA).

Per the IC3 website, www.ic3.gov, the “mission of the Internet Crime Complaint Center is to provide the public with a reliable and convenient reporting mechanism to submit information to the Federal Bureau of Investigation concerning suspected Internet-facilitated criminal activity and to develop effective alliances with law enforcement and industry partners. Information is analyzed and disseminated for investigative and intelligence purposes to law enforcement and for public awareness.”

While IC3 tackles other types of crimes, this article focuses on internet crime specifically so it’s important to recognize how that is defined. The website clarifies this in its FAQs as “any illegal activity involving one or more components of the Internet, such as websites, chat rooms, and/or email. Internet crime involves the use of the Internet to communicate false or fraudulent representations to consumers. These crimes may include, but are not limited to, advance-fee schemes, non-delivery of goods or services, computer hacking, or employment/business opportunity schemes.”

How could this appear in the real estate world? Fake listings or wire fraud scams via email, for example, would qualify.

Who can file a complaint with IC3? Either the person directly affected by the fraud or someone on their behalf is able to file a complaint. They will ask for:

• The victim’s name, address, telephone number and email address (your information if you’re the victim, someone else’s info if you’re filing the complaint on their behalf of another person)
• Any financial transaction information (i.e. account information, transaction date and amount and who received the money)
• The subject’s (aka alleged scammer) name and any information you have about them (name, address, telephone, email, website, IP address)
• Specific details on what occurred and any other information to support your complaint

Keep all documentation regarding the situation. Should the appropriate authorities conduct an investigation, you’ll have copies readily available. 

It’s also important to note that the IC3 doesn’t conduct any investigations. It sends the complaint information to the relevant oversight authorities for them to do so.

Per the IC3 website, types of evidence that could become useful in the course of an investigation may include, but are not limited to:

• Canceled checks
• Credit card receipts
• Money order receipts
• Certified or other mail receipts
• Wire receipts
• Virtual currency receipts
• Pre-paid card receipts
• Envelopes (if you received items via FedEx, UPS, or U.S. Mail)
• Facsimiles
• Pamphlets or brochures
• Phone bills
• Printed or preferably electronic copies of emails (if printed, include full email header information)
• Printed or preferably electronic copies of web pages
• Hard drive images
• PCAP files containing malicious network traffic
• Network, host system, and/or security appliance logs
• Copies of malware
• Chat transcripts and/or telephone logs

Meredith Caruso is Associate General Counsel for Florida Realtors
Note: Information deemed accurate on date of publication

Property Insurance Issues Teed Up for Special Session

 By Jim Saunders

A special session of the Florida Legislature meets next week, and lawmakers issued a formal proclamation saying they will consider hot-button insurance issues.

TALLAHASSEE, Fla. – With Florida’s property-insurance system in turmoil, state lawmakers could be poised to take major steps to try to stabilize the market during a special legislative session next week.

Senate President Kathleen Passidomo, R-Naples, and House Speaker Paul Renner, R-Palm Coast, released a formal session proclamation Tuesday that indicated lawmakers will consider a series of hot-button insurance issues.

According to information from Florida Realtors’ Public Policy office, those goals include:

• Reducing the cost of litigation regarding property insurance claims.
• Fostering the availability of reinsurance for property insurance.
• Improving the claims handling practices in property insurance.
• Modifying deadlines for notices of property insurance losses and limiting the assignment of benefits (AOB) under property insurance policies.
• Updating property insurance requirements regarding alternative dispute processes, coverage options and agent practices.
• Increasing oversight of property insurance market participants.
• Improving the financial stability of Citizens Property Insurance Corporation – the Florida-owner “insurer of last resort”– reducing potential assessments related to the Citizens Property Insurance Corporation, and fostering the transition of Citizens Property Insurance Corporation policies to the private property insurance market.
• Providing tax relief and other financial assistance related to damages resulting from Hurricanes Ian and Nicole.
• Providing additional mechanisms to support the Division of Emergency Management for natural disaster response, recovery and relief efforts.
• Establishing a statewide toll-credit program for frequent Florida commuters.

Detailed bills have not been released for the special session, which starts Monday.

During a news conference last month, Renner said lawmakers will look at a “kitchen sink of options” to try to stabilize the market and expand private coverage. But he also cautioned that whatever changes the Legislature makes during the special session will not lead to immediate rate reductions for consumers.

“As outlined in the proclamation, we will consider further reforms to ensure Floridians have access to reliable and affordable property insurance, legislation that provides property tax relief to Floridians whose homes are uninhabitable due to recent hurricanes, and legislation that establishes a statewide toll credit program for frequent Florida commuters,” Passidomo wrote Tuesday in a memo to senators. The toll-credit program is a priority of Gov. Ron DeSantis.

Private insurers have shed hundreds of thousands of policies and sought large rate increases during the past two years because of financial problems. Six insurers were declared insolvent this year.

Meanwhile, Citizens has seen its number of policies soar to more than 1.13 million as of Friday. State leaders have long sought to keep policies in the private market, at least in part because of financial risks to Citizens from major hurricanes.

Lawmakers held a special session in May to try to stabilize the market, but problems have persisted. Among the steps that lawmakers took during the May session was to provide $2 billion for reinsurance, which is essentially backup coverage that insurers need to handle large amounts of claims.

During the news conference last month, Renner indicated lawmakers could consider tapping state reserves to help with reinsurance. Renner, however, said he did not want to make a “long-term commitment to underwrite insurance.”

A day after Renner’s Nov. 22 news conference, Fitch Ratings released an analysis that said overall reinsurance prices are expected to increase by more than 10 percent in 2023, pointing to losses from disasters such as Hurricane Ian and “increasing frequency and severity of natural catastrophe claims.”

Fitch also said it expects tighter restrictions when reinsurance policies are renewed in 2023, while raising the possibility that Florida property insurers will not be able to buy all of the reinsurance they need.

“Nevertheless, we believe demand for property catastrophe reinsurance during the 2023 renewals season will be broadly met, except for Florida,” the analysis said.

Perhaps the noisiest issue of the special session will focus on limiting litigation costs and, particularly, whether to change a law that often leads to insurers paying the fees of plaintiffs’ attorneys. The insurance industry blames lawsuits for many of its problems, while plaintiffs’ attorneys argue litigation helps hold insurers accountable for properly paying customer claims.

A related issue is assignment of benefits, which is a practice that involves policyholders signing over claims to contractors, who then pursue payments from insurers. The industry argues that assignment of benefits leads to costly litigation.

© 2022 The News Service of Florida. All rights reserved.

What Could Make Home Prices Drop in 2023?

 Buyer demand has dropped due to rising rates, and seller supply slowed too, creating an uneasy balance. But if buyers drop or sellers expand more, it will impact prices.

NEW YORK – The U.S. housing market is in an uneasy state of equilibrium. Demand has plummeted as mortgage rates hit a two-decade high, but prices haven’t declined much in part because supply remains correspondingly low. If borrowing costs don’t start to normalize by early next year though, the scales may finally tip.

The start of the year, of course, is when homeowners and real estate agents start to bring new inventory to market. It’s a time-honored tradition that draws on some smart strategy and a bit of industry lore. As the thinking goes, buyers and sellers often want to get their transactions closed by summer, especially if they have children starting at new schools in September. Agents also contend that homes look their best in spring, surrounded by lush landscaping and emerald-green lawns. Even if sellers don’t come out in quite their usual numbers this year, there may still be enough additional inventory to push home prices down.

Clearly, the amount of supply on the market is still extraordinarily low relative to demand. It would take just 3.3 months to work through the market’s existing home inventory, based on non-seasonally adjusted data for the most recent month. The metric had already been declining consistently for a decade through 2019, but the pandemic brought it to unthinkable lows. It’s no wonder that the S&P CoreLogic Case-Shiller 20-City Composite Home Price Index is down only about 2% from its peak despite mortgage rates surging to 7% from 3% in 10 months.

But every year, the inventory-to-sales ratio spikes in January and February as transactions crater and the first new listings start to come online in anticipation of the spring open house season, which can set bad things in motion in times of stress. In January 2008, supply jumped by four months’ worth of housing to 15 months, and there was a similar spike during every January of the housing bust. The last two years have experienced unusually muted spikes in the ratio, but that won’t repeat again this winter. If you zoom in, it’s already clear that the number of months of supply has been climbing in a seasonally unusual manner. The trend line will start to look concerning if it breaks through seasonal norms from 2018 and 2019 in the months ahead.

Consider the various countervailing forces in the market heading into the 2023 inventory surge. On the one hand, some would-be sellers will decide to forgo transactions this year and hunker down in their existing homes, many financed with below-3% mortgages that they’d forfeit if they bought a new property. On the other hand, more than 30 million single-family homes and condominiums in the U.S. – 34% of the total – are mortgage free, according to data compiled by real estate analytics firm Attom. And many more homeowners simply won’t have the luxury of waiting for the next open house season to roll around. They include but are not limited to:

• People with growing families who need to buy a bigger house
• Seniors who need to move for health-related reasons
• People required to move for work

On the latter point, housing bulls will often emphasize what they see as the cosmic shift that’s come from increased working from home. But that doesn’t imply that Americans will no longer move for their jobs. Hybrid work in knowledge-based industries certainly looks poised to endure, yet many companies no longer allow working full time from whatever palm-tree-lined destination their employees choose. As of June, only about 15% of full-time employees are fully remote, according to data from the Survey of Working Arrangements and Attitudes, an online survey of U.S. residents. That’s much higher than anyone ever imagined before the pandemic, but it still leaves 85% who may have to sell their homes if they get fired or leave their job for a new one in another part of the country.

All told, the early 2023 inventory spike looks unavoidable, and the real question is where mortgage rates will be when the listings hit the market. If inflation continues to moderate, that could lead financial markets to anticipate a change in monetary policy later next year. That would set the stage for Treasury bonds to rally and a corresponding drop in mortgage rates.

It’s a race against the clock, though, and you’d have to hope for a near-perfect run of inflation data to assuage jittery policymakers and financial market participants and bring 30-year mortgages back down below, say, 6%. Even then, it’s unlikely that rates will look anywhere near as attractive as the loans that prevailed for most of the past decade, and they might not be enough to keep the market’s delicate equilibrium intact and prices afloat.

© 2022 Bloomberg L.P.; © 2022 Penton Media. Based on research of Jose Maria Barrero of the Instituto Tecnologico Autonomo de Mexico; Nicholas Bloom of Stanford University; and Steven J. Davis of the University of Chicago’s Booth School of Business.

More Sellers Decide to Delist Their Homes

 By Kerry Smith

One agent’s take: “Some sellers are having a hard time grasping that we’re not in a housing-market frenzy anymore … that they missed the boat on getting a high price.”

SEATTLE – One out of every 50 housings listed for sales – a record 2% – were delisted each week on average during the 12 weeks ending Nov. 20 compared with 1.6% one year earlier, according to a report from Redfin. The share dropped to 1.9% for the 12 weeks ending Nov. 27, which includes the Thanksgiving holiday.

Sellers pull their listing for a variety of reasons, but many lately do so because they’re not getting the money they thought they would get as prices stagnate. Many sellers also don’t the challenges buyer have faced recently as higher mortgage rates cut into their homebuying dollar. While mortgage rates have dipped slightly since mid-November, the monthly mortgage payment on the median-asking-price home is still 40% higher than it was one year ago.

In some cases, sellers received no offers at the price they wanted, and in some cases no offers at all.

“Some sellers are having a hard time grasping that we’re not in a housing-market frenzy anymore – it’s tough for them to swallow that they missed the boat on getting a high price,” says Heather Kruayai, a Redfin real estate agent in Jacksonville. “By the time sellers realize their listing is priced too high, it has already been on the market for too long and is considered stale. I recently had two sellers take their homes off the market after 45-plus days.”

Florida metros – weekly delisting average – year-to-year change

• Fort Lauderdale: 1.6%, up 0.2 points year-to-year
• Jacksonville: 1.9% up 0.9 points
• Miami: 1.9%, up 0.1 points
• Orlando: 2.0%, up 0.4 points
• Tampa: 1.9%, up 0.3 points
• West Palm Beach: 1.7%, up 0.3 points

Nationally, only six metros saw a decrease in delistings year-to-year, all less than 1%: Warren, Michigan; Chicago; Newark, New Jersey; New Brunswick, New Jersey; Detroit; and Montgomery County, Pennsylvania.

West Coast tops for unhappy sellers

Sacramento, California, led the U.S. in the year-to-year increase of delisted homes – 3.6% of active listings were delisted per week, on average, during the 12 weeks ending Nov. 27, up 1.6 percentage points from one year earlier. It’s followed by Austin, TX (up 1.5 points), Seattle (up 1.4 points), Phoenix (up 1.3 points) and Denver (up 1.2 points).

Sacramento not only saw the biggest year-over-year jump in delistings; it also had the highest overall share, with 3.6% of for-sale homes delisted per week on average during the 12 weeks ending Nov. 27. It was followed by San Francisco (3.4%), Oakland (3.3%), Seattle (3.2%) and San Jose (3%).

Pittsburgh had the lowest share of delistings at 1.3%, followed by Cincinnati at 1.4%,New Brunswick (1.5%), Newark (1.6%) and Virginia Beach (1.6%).

“Usually, sellers who pull their listings off the market in the fall do it with the intention of listing again in the spring,” says David Palmer, a Redfin agent in Seattle. “But with the word ‘recession’ out there, there’s not as much optimism about spring being a better market. Now people are talking about trying again in another year or two once the economy improves.”

© 2022 Florida Realtors®

Florida Has 5 of Top 10 Move-To Metros in U.S.

 By Kerry Smith

Florida metros remain popular with outside-the-city homebuyers. In a 3Q top-state popularity contest, Fla. has 5 metros in the top 10 and Calif. has 2.

SEATTLE – About one in four (24.1%) U.S. homebuyers considered moving to a different metro area in third quarter of 2022, according to a report from Redfin, and five of the popular metros in the top 10 were in Florida.

Top U.S. metro areas by inflow in 3rd Quarter 2022

1. Sacramento, California: Top origin metro, San Francisco. Top out-of-state origin: Chicago
2. Las Vegas, Nevada: Top origin metro, Los Angeles. Top out-of-state origin: Los Angeles
3. Miami: Top origin metro, New York. Top out-of-state origin: New York
4. San Diego, California: Top origin metro, Los Angeles. Top out-of-state origin: Chicago
5. Tampa: Top origin metro, New York. Top out-of-state origin: New York
6. Phoenix, Arizona: Top origin metro, Los Angeles. Top out-of-state origin: Los Angeles
7. Cape Coral, Florida: Top origin metro, Chicago. Top out-of-state origin: Chicago
8. North Port-Sarasota, Florida: Top origin metro, Chicago. Top out-of-state origin: Chicago
9. Dallas, Texas: Top origin metro, Los Angeles. Top out-of-state origin: Los Angeles
10. Orlando, Florida: Top origin metro, New York. Top out-of-state origin: New York

The third quarter results were similar to the second quarter, according to the study, but up from 2019 when 18% of home shoppers searched for housing in a different metro area.

The U.S. housing market cooled significantly during the second half of 2022, but of the people still buying homes, an unprecedented portion are relocating to new metros. Many are seeking relative affordability as mortgage rates hover around 7% and persistently high home prices make expensive parts of the country even more expensive.

Overall, affordable Sun Belt metros are most popular with relocating homebuyers, largely because they can get more home for less money. In Las Vegas, for instance, the typical home cost $410,000 in October, roughly half the price of the typical home in Los Angeles ($823,000) – the most common origin for people moving there.

Buyers leaving expensive West Coast, East Coast cities

More homebuyers looked to leave San Francisco, Los Angeles, New York, Washington, D.C. and Boston than other major metros, determined by net outflow – a measure of how many more Redfin.com users looked to leave an area than move in.

In general, homebuyers are leaving expensive coastal job centers more than other places – a trend that started before the pandemic and picked up steam due to remote work and rising housing costs – and they commonly head to more affordable regions.

© 2022 Florida Realtors®

Fed Wants Home Prices to Fall – It’s Not a Side Effect

 By Meghan McCarty Carino

From the Federal Reserve’s perspective, they’re starting to win the fight against inflation if home prices are going down.

NEW YORK – The housing market has slowed way down, as expected, in response to rising interest rates. Home prices fell for the third straight month in September, according to the S&P CoreLogic Case-Shiller index. Its measure of national home prices dropped by 1% from the previous month, though values were still about 10% higher than a year earlier.

In case there was any lingering doubt, the new data shows the housing market has definitely turned, according to Mark Zandi, chief economist at Moody’s Analytics.

“It feels somewhat clifflike at the moment,” he said. “You know, I think what this reflects is whiplash. I mean, what goes up comes down.”

And down is the direction the Federal Reserve wants to see prices go as it tries to curb inflation, per Craig Lazzara, managing director at S&P Dow Jones Indices – which produces the Case-Shiller index.

“This is a feature, not a bug. This is what they want to see,” Lazzara said. “If I were [Fed Chair] Jay Powell, I would like it.”

Rising interest rates hit the housing market fast. According to Odeta Kushi, deputy chief economist at First American, the September index doesn’t even show the full extent.

“It’s mostly reflecting signed contracts in May through August, which is when the 30-year fixed-rate mortgage was in the low- to mid-5% range.”

Since then, 30-year fixed rates have topped 7% at times, which means prices likely have further to fall – especially in the most expensive markets. While prices dropped in all 20 cities tracked by the Case Shiller index, San Francisco, Seattle and other West Coast cities had some of the steepest declines, said Stuart Gabriel of the University of California, Los Angeles.

“We have very significant problems of affordability that relate to both high mortgage interest rates and high house prices,” he said. “That, of course, is prompting moves by households to more affordable areas.”

Copyright © Marketplace, 2022 APM. All rights reserved.

2023’s New Conventional Loan Limit: $726,200

 By Kerry Smith

FHFA announced new conforming loan limits for 2023, and most buyers can borrow up to $726,200 without a jumbo loan – and it’s over $1 Million in some areas.

WASHINGTON – Fannie Mae and Freddie Mac – which back a majority of U.S. home loans – have a new lending cap in 2023.

The Federal Housing Finance Agency (FHFA) announced that the conforming loan limit values (CLLs) for mortgages to be acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2023 will go up $79,000 to $726,200 in most areas of the U.S for one-unit properties. The cap in those areas this year is $647,200.

The cap varies by county, however. FHFA says two U.S. counties will have a lower cap, and additional areas will have a higher cap that, in 2023, will rise about $1 million for the first time – up to $1,089,300 for one-unit properties. FHFA says about 3.3% of counties – 100 out of more than 3,000 – are considered high-cost markets.

In Florida, the higher conforming cap largely applies only for some Monroe County residents.

The higher cap applies in areas where 115% of the local median-home value exceeds the baseline conforming loan limit. The Housing and Economic Recovery Act (HERA) of 2008 includes a calculation to create a higher cap in those areas. In addition, special statutory provisions create different loan limits for Alaska, Hawaii, Guam and the U.S. Virgin Islands. In these areas, the baseline loan limit will also be $1,089,300 for one-unit properties.

HERA is a yearly adjustment to conforming loan limits. According to the nominal, seasonally adjusted, expanded-data FHFA HPI, house prices increased 12.21%, on average, between the third quarters of 2021 and 2022. As a result, 2023’s baseline conforming loan limit will increase by the same percentage.​

Other resources

• List of conforming loan limits for all counties and county-equivalent areas in the U.S. 
• A map showing the conforming loan limits across the U.S.
• List of FAQs that covers broader topics that may be related to CLLs.
• Questions about the CLLs can be addressed to LoanLimitQuestions@fhfa.gov. For more information, visit https://www.fhfa.gov/CLL.

© 2022 Florida Realtors®