South Florida Real Estate Blog by Michael Catino, Realtor

Fed shifts gears, may not push interest rates much higher

Federal Reserve Chairman Jerome Powell ignited a market rally yesterday by saying interest rates are "just below" broad estimates of a level considered neutral – a setting designed to neither speed nor slow economic growth.

Investors welcomed his remarks because they appeared to retreat from a comment he made in early October describing the Fed's benchmark rate as a "long way" from a neutral level. For some listeners, that statement implied that Powell planned to keep raising rates for a while.

However, his remarks Wednesday appeared to suggest to this audience that he might stop sooner or move more slowly.

Powell did not provide any more guidance on the likely path for rates, and he noted they remain low by historical standards. In addition, he offered nothing to dispel market expectations of another rate increase at the Fed's policy meeting on Dec. 18-19.

For homebuyers, the Fed's interest rate increases directly affect the rate charge on adjustable rate mortgages. The impact on fixed-rate mortgages is less reliable, but they also tend to go up generally as short-term rates increase.

A Fed slowdown in rate increases could bring some new stability to the mortgage market going forward.


FHFA increases max loan rates for 2019

In response to rising home prices, the Federal Housing Finance Agency (FHFA) will raise the national conforming loan limit for 2019 by 6.9 percent – from $453,100 this year to $484,350 next year.

In addition, the high-cost limit – an amount used in areas with notably high home prices, such as San Francisco – will rise from $679,650 to $726,525.

In Florida, Monroe and Miami-Dade counties may be able to access higher-limit conventional loans. For an overview of maximum loans by U.S. county, visit FHFA's website. Overall, loan limits will be higher in all but 47 counties or county equivalents across the country beginning Jan. 1, 2019.

In addition, Federal Housing Administration (FHA) loans generally adopt the same loan limits set by FHFA, though 2019 changes have not yet been announced.

The conforming loan limit determines the maximum size of a mortgage that government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac can buy or "guarantee." Non-conforming (higher than this maximum) or "jumbo loans" typically have tighter underwriting standards and sometimes carry higher mortgage interest rates than conforming loans.

"The National Association of Realtors® is pleased to see the Federal Housing Finance Agency raise its national conforming loan limits for 2019," says NAR President John Smaby. Today's decision reflects rising or near-record-high home prices in many U.S. markets, and the move helps keep the American Dream within reach for countless families working with Fannie Mae and Freddie Mac. Without this assurance that loan limits keep up with home price growth, borrowers across the country risk being pushed out of the market altogether as mortgage rates and rising home prices continue to hold back potential homebuyers."

At the end of each year, FHFA updates the...

I inherited a house – what do I do now?

"Inheriting a property can come as a shock and may feel like an insurmountable obstacle," says Alex Lehr, a California real estate broker and author of "The Unexpected Sale: Guidance For The Executor/Administrator Of An Estate." "And usually the biggest asset in an estate – and the most difficult to resolve – is a house.

Decisions an executor might face when a house is part of an inheritance

Keep, rent or sell?
Competing interests among siblings can make the right decision difficult. "Caught in the middle, the executor has to ask the heirs to keep their emotions under control and put the rational facts on the table," Lehr says. "Selling is often the best decision if medical bills, tax issues or other reasons require cashing out. And it produces a specific amount that can be divided equally."

Can you manage a property investment?
If "keep the property in the family" is an option, an executor needs objectively consider the beneficiaries' dependability. "Would you choose the other beneficiaries to be your partners in any long-term investment?" Lehr asks. "Could they get divorced, go bankrupt or bring other entanglements?" And if you decide to rent the property, Lehr said there are issues to consider such as the local market for rentals and your ability to maintain the property.

Establishing property value
If one heir or beneficiary wants to buy the house, the estate must determine the market value and get a fair price to be fair to the other heirs and beneficiaries, and that starts with at least one appraisal. "Alternatively, the executor can put the property on the market with the expressed provision that one of the heirs has the right of first refusal to match the highest offer," says Lehr.

Repair and renovate?
In the time after a homeowner dies and the house sells, an executor must make sure the house is maintained in...

NAR: Existing U.S. sales increase for first time in 6 months

Existing-home sales increased in October after six straight months of decreases, according to the National Association of Realtors® (NAR), and three of the four major U.S. regions tracked saw gains in sales activity last month.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – increased 1.4 percent from September to a seasonally adjusted rate of 5.22 million in October. Sales are now down 5.1 percent year-to-year.

Lawrence Yun, NAR's chief economist, says increasing housing inventory has brought more buyers to the market.

"After six consecutive months of decline, buyers are finally stepping back into the housing market," Yun says. "Gains in the Northeast, South and West – a reversal from last month's steep decline or plateau in all regions – helped overall sales activity rise for the first time since March 2018."

The median existing-home price for all housing types in October was $255,400, up 3.8 percent from October 2017 ($246,000). October's price increase marks the 80th straight month of year-over-year gains.

Total housing inventory at the end of October decreased from 1.88 million in September to 1.85 million existing homes available for sale, but that represents an increase from 1.80 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace, down from 4.4 last month and up from 3.9 months a year ago.

Properties typically stayed on the market for 33 days in October, an increase from 32 days in September but down from 34 days a year ago.

Overall, 46 percent of homes sold in October were on the market for less than a month.

"As more inventory enters the market and we head into the winter season, home price growth has begun to slow more meaningfully," says Yun. "This allows for much more manageable, less frenzied buying conditions."'s Market Hotness...

Finding and Fixing Leaks in Your Home

On the Hunt for Leaks

Usually, a homeowner will stumble across leaks on pure accident. They’re rarely loud, raging rivers, most are gentle trickles at best. In fact, you could have a leak for months and not even realize it! So how do you go about tracking one down?

  1. Look for signs of moisture damage. A leaking toilet, for example, will almost always leak at the wax ring that creates the seal between the stool to the drain pipe. When leaking happens here, it’s common that the water goes under the flooring and causes it to bubble up or soften.
  2. Smell around. This sounds ridiculous, but if you can’t see any damage, you may be able to smell the distinctive scent of mildew and moisture. Follow your nose to the source of the problem.
  3. Listen for dripping sounds. Even a tiny leak can sometimes be heard, especially if the leak in question is dripping into a closed area. For example, an air handler with a clogged or rusted condensation pan may drip into the space below, until a significant amount of standing water collects. The drip, drip, drip you hear when you walk by the utility closet could be a warning sign.

If your basic senses fail you, it’s time to start a systematic search. When you just know there’s a leak, but you can’t quite find it, make a list of all the things in your house that use water, including appliances like the dishwasher and the icemaker. Don’t forget all the drains, which can be really frustrating since a leaky drain literally comes and goes as it fills with water.

Fixing a Leak

Fixing your leak is going to depend heavily on where it’s located and what kind of materials are involved. For a basic homeowner-level repair, limit your efforts to plastic pipes and screw-on braided cables like the water lines to the toilet and sinks. Copper, galvanized steel and cast iron require special tools and...

Older homeowners could spark next buyers’ market

More households are increasingly being headed by older adults – 50 or older – and that requires different types of housing to meet this aging group's needs and preferences, according to "Housing America's Older Adults 2018," a new report released by Harvard University's Joint Center for Housing Studies.

The report found that more than half of the nation's households – some 65 million – are now headed by someone at least 50 years of age.

The report warns that many households in their 50s and early 60s may not be financially prepared for retirement – much fewer are ready than previous generations at their same age. Nearly a third of households age 65 or older pay at least 30 percent of their income for housing, and more than half pay more than 50 percent. Most financial experts consider more than 30 percent of income toward housing to be "cost burdened."

"We need to address gaps in the affordability and accessibility of our housing stock, both of which are essential to older adults' independence and well-being," says Jennifer Molinsky, the lead author of the report. "As the number of households in their 80s grows, it will be essential that we strengthen the links between housing, healthcare and other services."

The report warns that America doesn't have enough accessible units to serve the nation's aging population. In 2016, 17 percent of households aged 50 and over included someone who had difficulty climbing stairs or walking. However, only 4.5 percent of U.S. homes have three features considered key for those with mobility challenges: single-floor living, no-step entries, and extra-wide halls and doors.

Further, many of the most vulnerable in the aging population live alone. The share of households 80 and over with only one resident is 57 percent; for renters, that percentage jumps to 77 percent.

"Single-person households in need of support or care must rely on non-resident or paid caregivers, yet they...

5 Worst Returns on your home renovation dollars

First and Foremost: Personalization Has Limits

When you bought your house, there were probably some very specific things about it that you promised yourself you’d change as soon as possible. From dated light fixtures to unbearably pink carpet, there’s always something. Hold on to that thought for a moment.

Now, pretend that you’re the person looking at this same house after you pulled out the pink carpet and changed those fixtures. Is this a house that now has wide appeal, or does the fact that you hung floral wallpaper on the ceiling create a whole new level of problems?

Of course you want to make your house your own, but if you think you’ll be selling in the near future to relocate, upgrade or downsize, maybe don’t go too nuts. Keep in mind that most buyers will accept some level of personalization, provided you don’t push it. You don’t have to live in a bland cracker box, but there’s something between that and a 1970’s disco inferno.

Renovation Loss Leaders By the Numbers

It’s really important that you consider future owners when you go to the trouble to make a major upgrade to your home. But sometimes, even the most thoughtful and beautiful renovation can cost a lot more than it will ever be worth (and often, the most beautiful are the most susceptible to this).

It’s a good thing, then, that Remodeling Magazine has been tracking the average costs of the 21 most popular projects since 2002 and the value they retained at sale. If someone told you that adding eccentric details like green shag carpet can be a big punch to the checkbook, it probably wouldn’t shock you. But you might be surprised at these projects Remodeling Magazine...

Some millennials may be gambling on falling home prices

Millennials in the Tampa Bay/St. Petersburg region appear increasingly willing to wait until the housing market cools down before purchasing their first home.

Surveys show millennials want to own a home – about the same percentage as baby boomers and GenXers – but like most generations of first-time buyers, they're price sensitive and wary of market whims.

Nearly 80 percent of millennials who own homes think it's a good time to sell, a recent survey from ValueInsured found – but only 38 percent of would-be purchasers in that age group think it's a good time to buy, an 8 percentage point drop from a year ago. That wide gap in buyer-seller attitudes could result in more starter homes on the market but with fewer buyers willing to pay current prices.

"Florida buyers are savvy," ValueInsured founder and CEO Joe Melendez says. "Many have been hit hard by the cyclical nature of the market and have learned their lesson to take advantage of a down cycle."

Among all age groups, almost two-thirds of Florida residents interested in buying a home plan to wait for a "meaningful correction" in prices before pulling the trigger, the survey found.

"We are willing to wait six months, even a year to make sure we get a good deal," says Stephen Sutton, a Tampa Bay-area homebuyer.

However, it's not just millennials. The survey found that almost two-thirds of potential Floridian homebuyers may wait for a "meaningful correction."


Flood insurance expiration threatens 1,300 closings per day

Millions of small business and homeowners currently depend on the National Flood Insurance Program (NFIP) to protect their property against flooding, the most costly and common natural disaster in the United States.

To continue providing flood insurance after Nov. 30, Congress must reauthorize the National Flood Insurance Program before that date.

Without the NFIP, more property owners could become uninsured, and buyers that require a flood insurance policy to close would either have to find private coverage, postpone closing or potentially lose the sale. Flood insurance is required for a mortgage in more than 20,000 communities nationwide.

The National Association of Realtors® (NAR) supports reauthorizing and gradually strengthening the NFIP so it is sustainable over the long run. In addition to long-term reauthorization of the NFIP, NAR supports improving flood map accuracy.

Policyholders in more than 22,000 communities across the country depend on the NFIP to protect homes and businesses from flooding, according to NAR officials. Without the reauthorization, the NFIP cannot issue new policies or renew existing residential or commercial policies that expire. That is bad for consumers and potential homebuyers, as well as the broader economy.

When the NFIP last expired, NAR estimated that 1,300 home sales were disrupted every day as a result. That is 40,000 sales every month.

Although the National Flood Insurance Program has been extended through Nov. 30, it needs reforms that will make it solvent and sustainable in the long term.

The National Association of Realtors will continue fighting for these reforms as the next NFIP reauthorization discussions loom later this year, according to officials.

Despite years of debate and proposals to fix the program, reforms have stalled. Instead, Congress has passed six short-term extensions of the program.

Lawmakers also let the program lapse in 2017 and 2018....

Lessons in Land Buying

Unlike purchasing a house in an established neighborhood, where everything is pretty obvious and cut and dry, land can throw a lot of weird wrenches into the works. Let’s take a look at the most important aspects to keep in mind before and during your land acquisition.

1.Title Restrictions

Before you even set foot on a piece of property you’re interested in purchasing, ask about title restrictions. These are conditions that, when met, could go as far as to revoke your ownership or punish you in other serious ways. For example, if you’re interested in land for farm and you come across a lovely place that happens to border on public forest, you may be restricted from owning sheep because of the danger they pose to the unique neighboring trees.

Another more common example would be that the title restricts your subdividing the land. If you just want to get away from neighbors, that probably won’t be an issue for you, but if you had planned to build some houses on that land and splitting off the parts you don’t want to keep, you’re in trouble.

Always check the title restrictions because many will run with the land (that means they’re enforceable as long as the land exists). Don’t assume that because they’re 50 or 60 years old they’re unenforceable. They are.

2. Easements

Easements are a very specific type of property ownership where the legal use of your land is granted to another person or company. A good example of this is the utility easement that often runs along one edge of a home’s lot. That easement gives the utility company the right to go in and perform necessary upgrades and repairs without having to beg and plead...