South Florida Real Estate Blog by Michael Catino, Realtor

The economic outlook hasn't been quite as rosy lately, and so the Fed is stepping back just a bit.

The Federal Reserve raised its key interest rate Wednesday for a fourth time this year but lowered its forecast to two hikes in 2019 amid the recent stock market sell-off and uncertain growth prospects.

"The economy has continued to perform well," Fed Chairman Jerome Powell said at a news conference. But, he added, "We have seen developments that may signal some softening … In early 2018, we saw a rising trajectory for growth. Today, we see growth moderating ahead."

The central bank's latest move, which comes amid President Donald Trump's repeated criticism of Fed rate hikes, is expected to set off a domino effect across the economy, bumping up rates on credit cards, home equity lines of credit and adjustable-rate mortgages.

As expected, the Fed raised the federal funds rate – which is what banks charge each other for overnight loans – by a quarter point to a range of 2.25 to 2.5 percent. It marked the central bank's ninth hike since late 2015.

But in a statement after a two-day meeting, the Fed acknowledged a slowdown in global economic growth, the stock market's plunge and a strong dollar that's making U.S. exports more expensive for overseas customers.

The Fed "will continue to monitor global economic and financial developments and assess their implications for the economic outlook," the statement said.

Fed officials also indicated they foresee fewer rate hikes next year, estimating that only "some gradual increases" will be warranted.

The wording change reflects a central bank that now intends to respond in real time to the course the economy takes rather than follow a rate-hike road map as it has the past couple of years.

"Weaker-than-expected data, both in the United States and/or in major foreign economies, could derail further rate hikes, at least for the foreseeable future," Wells...

 Unforeseen events can challenge transactions, but an end-of-the-year government shutdown could be particularly troublesome for buyers and sellers who hope to close before 2019.

While the government shutdown is only partial – meaning not every federal agency is affected – agencies involved with home loans and flood insurance have been officially shut down with many employees furloughed. However, that "shutdown" can mean different things. In some cases, a program may still be operating; in other cases, buyers and sellers may have some type of work-around; in a few cases, programs are on complete hiatus until the president and Congress reach some kind of agreement.

Real estate-related government programs affected by the shutdown

Flood insurance

UPDATE, Dec. 21: Congress passed a bill this evening extending the National Flood Insurance Program  until May 31, 2019. It still needs President Trump's signature to become law, but that's generally expected.

The bill is limited only to the flood insurance program; other programs that could be affected by a partial shutdown of the federal government, including FHA mortgage programs, are not part of the extension legislation.

Federal Housing Administration (FHA loans)

FHA falls under the Department of Housing and Urban Development (HUD), and up to 95 percent of HUD employees may be furloughed while the government is shut down.

However, FHA lending should not completely stop. HUD's Contingency Plan calls for FHA to continue endorsing new loans in its Single Family Mortgage Loan Program. However, the agency will be short on staff during the shutdown. Existing and new FHA loan applications will likely take longer to approve and fund.

Other FHA programs will not continue, such as the home equity conversion mortgage (HECM) program – reverse mortgages....

Effective Jan. 1, 2019, the Realtors® Code of Ethics has a new requirement for listing brokers if a cooperating broker says, "Did your seller see my buyer's offer?"

Standard of Practice 1-7 of the Code of Ethics is amended, effective Jan. 1, to include the following language:

Upon the written request of a cooperating broker who submits an offer to the listing broker, the listing broker shall provide a written affirmation to the cooperating broker stating that the offer has been submitted to the seller, or a written notification that the seller has waived the obligation to have the offer presented.

"You must request affirmation of receipt of your offer – the listing broker is not obligated to provide affirmation automatically," says Anne Cockayne director of policy services for Florida Realtors. "If you don't request it, it does not have to be provided."

As part of the Code of Ethics, the request and response rules apply only to Realtors – not buyers or sellers.

"Do not expect nor demand that the seller sign any documentation acknowledging receipt or waiver of your offer to prove receipt," says Cockayne. "The listing broker's written response is sufficient to meet this requirement. The obligation is on the Realtor."

A Realtor who fails to submit an offer – unless otherwise instructed by the sellers – could potentially be a violation of Article 1. This hasn't changed under the updated guidelines; it's always been part of the Code of Ethics. Failure to present an offer could be an ethics violation, and the case could end up being heard by a panel of the Realtor's peers in an ethics hearing.

While the new rule requires written affirmation that an offer was submitted to a seller, it does not include a timeframe for the response.

"Ultimately, an ethics hearing panel would determine what is reasonable based on the evidence and testimony presented during an ethics hearing...

The U.S. Department of Housing and Urban Development (HUD) announced that Tamaron Association – which represents residents of a 55-and-older condominium development in Waldwick, New Jersey – will pay $9,000 under an Initial Decision and Consent Order resolving allegations that the association refused to sell a condo to a man with disabilities and his wife because the couple planned to have their adult, disabled daughter live with them.

The Fair Housing Act prohibits housing providers from denying or limiting housing to persons with disabilities and from refusing to make reasonable accommodations in policies or practices.

"No family whose members have disabilities should be denied the reasonable accommodations they need to make a home for themselves," says Anna María Farías, HUD's Assistant Secretary for Fair Housing and Equal Opportunity. "Hopefully, today's ruling will remind homeowner associations of their obligations under the Fair Housing Act and encourage them to follow the law."

Under the terms of the Consent Order, entered by a HUD administrative law judge, Tamaron Association will pay a civil penalty of $9,000 to the United States, undergo fair housing training, and make changes to the associations' bylaws as they relate to reasonable accommodations.

The wife, now a widow, is pursuing claims against Tamaron Association in New Jersey State Court. Tamaron Association denies that it discriminated against the family.

"HUD is committed to ensuring that housing providers, including homeowner associations, do not discriminate against individuals with disabilities," said Paul Compton, HUD's General Counsel. "This Consent Decree is a reminder to housing providers that making reasonable accommodations for persons with disabilities is an essential part of their legal obligation under the Fair Housing Act."

 The Federal Housing Administration (FHA) announced the agency's new schedule of loan limits for 2019, with most areas in the country to experience an increase in loan limits in the coming year. These loan limits are effective for FHA case numbers assigned on or after Jan. 1, 2019 and mirror earlier limits announced by the Federal Housing Finance Administration (FHFA).

In high-cost areas of the country, FHA's loan limit ceiling will increase to $726,525 from $679,650. FHA will also increase its floor to $314,827 from $294,515.

FHA says that increases in median housing prices required changes to FHA's floor and ceiling limits, which are tied to the Federal Housing Finance Agency (FHFA)'s increase in the conventional mortgage loan limit for 2019.

Overall, the maximum loan limits for FHA forward mortgages will rise in 3,053 U.S. counties. In 181 counties, FHA's loan limits will remain unchanged.

By statute, the median home price for a Metropolitan Statistical Area (MSA) is based on the county within the MSA having the highest median price. HUD has used the highest median price point for any year since the enactment of the Housing and Economic Recovery Act (HERA).

The cap for reverse mortgages – FHA-insured Home Equity Conversion Mortgages (HECMs) – will increase to $726,525 from $679,650. FHA's current regulations implementing the National Housing Act's HECM limits do not allow loan limits for reverse mortgages to vary by MSA or county.

The National Housing Act, as amended by HERA, requires FHA to establish floor and ceiling loan limits based on the loan limit set by FHFA for conventional mortgages owned or guaranteed by Fannie Mae and Freddie Mac. FHA's 2019 minimum national loan limit, or floor, of $314,827 is set at 65 percent of the national conforming loan limit of $484,350. This floor applies to those areas where 115 percent...

Freddie Mac announced a nationwide suspension of eviction lock-outs between Dec. 17, 2018, and Jan. 2, 2019. The moratorium applies to all foreclosed, occupied homes owned by Freddie Mac.

The eviction moratorium is a yearly tradition, and Fannie Mae and FHA are expected to do the same thing. While the foreclosure process will continue to move forward behind the scenes, no families will be made homeless after Monday and before Wednesday, Jan. 2.

Over half of all U.S. homes with a mortgage are backed by either Freddie Mac or Fannie Mae.

"As we have done in past years, we are suspending evictions from Freddie Mac-owned homes to help provide families with a greater measure of certainty during the upcoming holiday season," says Yvette Gilmore, Freddie Mac vice president of single-family servicer performance management.

The holiday suspension applies to eviction lockouts on Freddie Mac real estate-owned homes but will not affect other pre- or post-foreclosure activities. Companies managing local evictions for Freddie Mac may continue to file documentation as needed during the suspension period.

According to the National Knock Deals Forecast, uses data for both predictive and historical analyses from ATTOM Data Solutions, the percent of home sellers who eventually sold for less-than-asking price in 2018 was about 2 in 3 (62 percent).

Of those homes that sold for less than asking price, six out of 10 are in the South, with Miami at No. 1, followed by New Orleans and Chicago.

As home values rise more slowly, Knock predicts that the trend of lower sale prices will continue into 2019, when 77 percent of on-the-market listings will sell for less than asking price, and half of the "top 10 markets for deals" will be in the South.

"Knock has developed six predictive algorithms to determine how much our Home Trade-in customers' homes will sell for and when," says Sean Black, co-founder and CEO of Knock. "By applying these algorithms … we hope to help more home buyers find and act on the best deals, and increase overall market fluidity."

Knock analyzed on-market listings in the largest U.S. MSAs to determine the markets with the highest percentage of homes predicted to sell below their original list prices, what Knock defines as a "deal." In November, Knock said that 80 percent of U.S. homes sold within 4 percent of its predicted final sale price, and 50 percent sold within 2 percent of the predicted final sale price.

The number one predicted MSA for deals heading into 2019, Miami, also saw the highest rate of deals in 2018.

"While there's no denying that home prices have been steadily on the rise, list prices are clearly increasing above realistic levels, corroborated by the study's findings that over 60 percent of homes sold well below their original list prices in 2018," says Paul Habibi, economic advisor to Knock and Lecturer at UCLA Anderson School of Management.

The tendency to overprice

While the rate of home price increases has begun to slow, it's still up 5.1 percent year-over-year,...

 The U.S. has about 7.4 million vacation and second homes, or about 5.6 percent of the total housing stock, according to a recent National Association of Home Builders (NAHB) analysis of 2016 national census data.

Florida has the largest stock of second homes – 1.1 million properties – followed by California, New York, Texas, Michigan, North Carolina, Arizona and Pennsylvania.

"The concentration of second homes is not simply restricted to conventional locations like beachfront areas," NAHB reports in its Eye on Housing blog. Second homes account for at least 10 percent of the local housing stock in about 916 counties in 49 states. Connecticut and Washington, D.C., were the two exceptions.

The counties with the most second homes tend to be located in or near metro areas. The following 10 counties, half of which are in Florida, have the most second homes:

1. Maricopa County, Ariz.: 113,513 second homes
2. Palm Beach County, Fla.: 99,536
3. Broward County, Fla.: 97,224
4. Lee County, Fla.: 95,671
5. Miami-Dade County, Fla.: 87,225
6. Riverside County, Calif.: 76,331
7. Pinellas County, Fla.: 65,281
8. Barnstable County, Mass.: 63,225
9. Collier County, Fla.: 61,050
10. Suffolk County, N.Y.: 58,452

You might have heard of lights that turn off with an app or voice command. Or window shades that magically rise every morning.

Technology companies are pushing the "smart home" hard, selling appliances and gadgets that offer internet-connected conveniences you didn't know you needed. But before you succumb to the temptation – for yourself or others – consider that these devices might also give companies and hackers a key to your homes.

Here's how to get started on your smart home and what to worry about along the way.

Starting that smart home

A smart home can encompass features as simple as remote-controlled lamps and as sophisticated as thermostats that know when you're home and turn up the heat automatically. Down the line, you may want to mix and match these tasks into routines, such as a wake-up ritual that automatically starts the coffee maker, lifts the window shades and plays the news.

With the right tools, you can check remotely whether you remembered to lock the doors – and lock them if you forgot. Some systems can also create temporary digital keys for guests and contractors.

Many people start thinking about a smart home when they get a voice-activated speaker such as Amazon's Echo or Google Home, although such gadgets aren't strictly necessary. Nor do you even need actual smart lights and appliances, as you can buy smart plugs, adapters that control existing lights or whatever you plug into them.

If you catch the smart-home bug, you can add appliances with the smarts already built in as you replace your existing ones. Major remodels also offer an opportunity to make bigger smart-home plans. You probably wouldn't want to get new window shades now only to replace them with smart ones a year later.

The risks

There are some concerns to keep in mind. Many devices are constantly listening for commands and connect to corporate servers to carry them out. Not everyone is going to be...