First-time homebuyers will soon have another option if they want to use their $8,000 tax credit toward a downpayment. On the tails of a Florida-created program that Gov. Charlie Crist is expected to sign into law, the federal government announced its own downpayment assistance program at the National Association of Realtors® Midyear Legislative Meetings & Trade Expo taking place this week in Washington, D.C.
While the tax credit applies to “first-time homebuyers,” the term is misleading. In general, anyone who hasn’t owned a home for the past three years is considered a first-timer under the program. Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development (HUD), hopes to have additional details available within a few days, though it’s still unclear how soon homebuyers can apply for the credit.
Donovan said that the Federal Housing Administration (FHA) would allow its lenders to credit homeowners up to $8,000. He made the announcement to several thousand Realtors yesterday at a special daylong session called, The Real Estate Summit: Advancing the U.S. Economy.
“We all want to enable FHA consumers to access the homebuyer tax credit funds when they close on their home loans, so that the cash can be used as a downpayment,” Donovan said. According to Donovan, FHA approved lenders will be permitted to “monetize” the tax credit by using short-term bridge loans. Donovan also said that more will be done, and the Obama administration plans to further stabilize the housing market.
“I do think we have some early signs that the market overall is stabilizing,” said Donovan. “Since January, we’ve seen both home sales moving up and down around a relatively stable number, and we are seeing the first signs that the rapid decline in home prices is starting to abate.”
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© 2009 FLORIDA ASSOCIATION OF REALTORS®
Wednesday, May 13, 2009
Monday, May 11, 2009
Florida Homeowners Insurance Rate Increase
With the official start of the 2009 hurricane season only three weeks away, Florida property owners can anticipate higher homeowners insurance rates.
New legislation approved by the Florida Legislature more than a week ago would raise rates 10 percent for homeowners covered by Citizens, the state-run insurer. Gov. Charlie Crist is expected to sign it into law.
Privately held insurance companies can also pass on the cost of back-up reinsurance to their policyholders, up to 10 percent a year, under the legislation.
Sen. Mike Fasano, R-New Port Richey, said Friday he can’t speak for the governor but said the governor’s office has indicated to him that it feels better about the bill after changes were made in the Senate and in conference with House members.
Fasano helped amend the bill, reducing the 20 percent increase that was initially proposed for Citizens policyholders and making sure the bill didn’t contain “only provisions that were overwhelmingly in favor of the insurance industry.”
For Citizens policyholders, the increase would be a flat 10 percent of their current premium, regardless of where their homes are located and whether they have only windstorm coverage from the company or a policy that includes fire and theft protection. The increase would hit when their policies renew next year.
The 10 percent annual increases would continue until Citizens rates are actuarially sound. That means the company is accumulating enough from premiums to pay for possible future claims.
“It’s not a matter of greed. It’s necessary,” says Dulce Suarez-Resnick, a personal lines agent at Brown & Brown’s HBA Division in Miami.
“I’m encouraged the Legislature took some responsible steps to lower Florida’s hurricane insurance risk this session,” Alex Sink, Florida’s chief financial officer, said in a statement referring to provisions in the proposed insurance law.
The legislation allows Citizens to raise its rates gradually and reduces the size of the Florida Hurricane Catastrophe Fund, which sells back-up insurance to the carriers operating in Florida.
Bill aids insurers
Regulators expect private carriers to take advantage of the legislation’s provisions as soon as they put in place their reinsurance coverage for this hurricane season. So some Florida policyholders could see these increases if they renew their policies later this year.
Some lawmakers, regulators, insurers, agents and business groups argued that higher rates are needed because Citizens doesn’t have enough money to pay all the claims it might see if a massive storm were to hit the state.
Why would Citizens see a shortfall? Its rates have been frozen since the start of 2007, yet it has continued to provide insurance coverage for risky properties in coastal areas, such as older homes and condominium buildings that many private insurers prefer not to insure.
Of course, these likely insurance rate increases come as the recession has hit Florida hard. Consumers, many unemployed or taking pay cuts to keep their jobs, are hard-pressed to cover household costs, including insurance, at current levels.
Owner’s costs triple
William Ycikson, a Miami Beach homeowner, has seen his windstorm premiums nearly triple after the eight hurricanes that hit Florida in 2004 and 2005. “I can’t see paying more.”
Ycikson, who is self-employed, is toying with the possibility of dropping his windstorm coverage since he has paid off his mortgage and the coverage isn’t required. He also faces a tough decision: Help his retired father cover a higher insurance bill or advise him to forego hurricane coverage as well.
It’s a risky move, but one that many Floridians are weighing to keep their insurance costs down. Without windstorm insurance, repairing any damage to their homes caused by a hurricane would have to be covered by Ycikson or his father, who also lives in Miami Beach.
If a major hurricane hits a densely populated section of the state such as South Florida or Tampa Bay, both Citizens and the Florida Hurricane Catastrophe Fund could face substantial shortfalls.
The big concern among insurance regulators in Tallahassee and business people around the state is that such a deficit would have to be covered by all Florida policyholders through one or more surcharges.
‘Tax’ is assessed
“What this means for Floridians – those who own a home, business or auto policy – is that we will be stuck with assessed ‘hurricane taxes’ that can be tacked onto our policies for years to come,” says Barney Bishop, executive director of Associated Industries of Florida, a business lobbying group.
Several surcharges to cover deficits from the 2004 and 2005 storms are now added to almost all insurance policies in Florida, except worker compensation and medical malpractice policies, and will remain for at least another five years.
Groups backed bill
Associated Industries, the Florida Chamber of Commerce, other business groups and some nonprofit organizations lobbied hard to be sure the new insurance legislation reduced risk for the CAT Fund and allowed Citizens to raise its rates.
“It’s a vicious circle. We have more people coming for help and we have fewer donations to help them,” Sheila Hopkins, associate director for social concerns/respect life for the Florida Catholic Conference. She says surcharges on insurance that her organization must pay out of its operating budget take away funds that could be used to provide social services.
The new legislation reverses changes made in early 2007 after a special legislative session expanded the CAT Fund. Urged on by newly elected Gov. Crist, lawmakers hoped the savings from additional, less-expensive reinsurance companies could buy from the CAT Fund would be passed on to policyholders as lower rates.
Many homeowners did see at least a small drop in rates. Also, a requirement that insurers double the mitigation credits given to homeowners who add hurricane shutters or reinforce garage doors also provided savings on insurance premiums.
Meltdown has impact
But the meltdown of the financial markets has reduced the ability of the CAT Fund and Citizens to sell bonds to provide the cash needed to pay claims after a massive storm.
The new Florida legislation reduces the amount of reinsurance the CAT Fund can sell by $2 billion a year through 2013, thus reducing the risk the fund faces. The legislation would require insurers to pay additional premiums over the next five years to build reserves in the fund more rapidly. Citizens would be allowed to increase its rates 1 percent annually during this time to recover the cost of extra payments it will be making to the CAT Fund.
Even insurance agents aren’t immune to pain of rising costs and shrinking incomes. Suarez-Resnick says she is in the process of refinancing her mortgage because she knows that her homeowners policy premiums will be going up next year. Staffing at her agency has been cut nearly 10 percent and salaries reduced in the past year.
Nestor Rivero, who owns Tropical Insurance in West Miami-Dade, says he had to cut support staff to eight employees from 11, including laying off the receptionist who had worked for him for 21 years.
“This is absolutely the worst time to have to absorb an increase,” says Suarez-Resnick.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
Copyright © 2009 The Miami Herald
New legislation approved by the Florida Legislature more than a week ago would raise rates 10 percent for homeowners covered by Citizens, the state-run insurer. Gov. Charlie Crist is expected to sign it into law.
Privately held insurance companies can also pass on the cost of back-up reinsurance to their policyholders, up to 10 percent a year, under the legislation.
Sen. Mike Fasano, R-New Port Richey, said Friday he can’t speak for the governor but said the governor’s office has indicated to him that it feels better about the bill after changes were made in the Senate and in conference with House members.
Fasano helped amend the bill, reducing the 20 percent increase that was initially proposed for Citizens policyholders and making sure the bill didn’t contain “only provisions that were overwhelmingly in favor of the insurance industry.”
For Citizens policyholders, the increase would be a flat 10 percent of their current premium, regardless of where their homes are located and whether they have only windstorm coverage from the company or a policy that includes fire and theft protection. The increase would hit when their policies renew next year.
The 10 percent annual increases would continue until Citizens rates are actuarially sound. That means the company is accumulating enough from premiums to pay for possible future claims.
“It’s not a matter of greed. It’s necessary,” says Dulce Suarez-Resnick, a personal lines agent at Brown & Brown’s HBA Division in Miami.
“I’m encouraged the Legislature took some responsible steps to lower Florida’s hurricane insurance risk this session,” Alex Sink, Florida’s chief financial officer, said in a statement referring to provisions in the proposed insurance law.
The legislation allows Citizens to raise its rates gradually and reduces the size of the Florida Hurricane Catastrophe Fund, which sells back-up insurance to the carriers operating in Florida.
Bill aids insurers
Regulators expect private carriers to take advantage of the legislation’s provisions as soon as they put in place their reinsurance coverage for this hurricane season. So some Florida policyholders could see these increases if they renew their policies later this year.
Some lawmakers, regulators, insurers, agents and business groups argued that higher rates are needed because Citizens doesn’t have enough money to pay all the claims it might see if a massive storm were to hit the state.
Why would Citizens see a shortfall? Its rates have been frozen since the start of 2007, yet it has continued to provide insurance coverage for risky properties in coastal areas, such as older homes and condominium buildings that many private insurers prefer not to insure.
Of course, these likely insurance rate increases come as the recession has hit Florida hard. Consumers, many unemployed or taking pay cuts to keep their jobs, are hard-pressed to cover household costs, including insurance, at current levels.
Owner’s costs triple
William Ycikson, a Miami Beach homeowner, has seen his windstorm premiums nearly triple after the eight hurricanes that hit Florida in 2004 and 2005. “I can’t see paying more.”
Ycikson, who is self-employed, is toying with the possibility of dropping his windstorm coverage since he has paid off his mortgage and the coverage isn’t required. He also faces a tough decision: Help his retired father cover a higher insurance bill or advise him to forego hurricane coverage as well.
It’s a risky move, but one that many Floridians are weighing to keep their insurance costs down. Without windstorm insurance, repairing any damage to their homes caused by a hurricane would have to be covered by Ycikson or his father, who also lives in Miami Beach.
If a major hurricane hits a densely populated section of the state such as South Florida or Tampa Bay, both Citizens and the Florida Hurricane Catastrophe Fund could face substantial shortfalls.
The big concern among insurance regulators in Tallahassee and business people around the state is that such a deficit would have to be covered by all Florida policyholders through one or more surcharges.
‘Tax’ is assessed
“What this means for Floridians – those who own a home, business or auto policy – is that we will be stuck with assessed ‘hurricane taxes’ that can be tacked onto our policies for years to come,” says Barney Bishop, executive director of Associated Industries of Florida, a business lobbying group.
Several surcharges to cover deficits from the 2004 and 2005 storms are now added to almost all insurance policies in Florida, except worker compensation and medical malpractice policies, and will remain for at least another five years.
Groups backed bill
Associated Industries, the Florida Chamber of Commerce, other business groups and some nonprofit organizations lobbied hard to be sure the new insurance legislation reduced risk for the CAT Fund and allowed Citizens to raise its rates.
“It’s a vicious circle. We have more people coming for help and we have fewer donations to help them,” Sheila Hopkins, associate director for social concerns/respect life for the Florida Catholic Conference. She says surcharges on insurance that her organization must pay out of its operating budget take away funds that could be used to provide social services.
The new legislation reverses changes made in early 2007 after a special legislative session expanded the CAT Fund. Urged on by newly elected Gov. Crist, lawmakers hoped the savings from additional, less-expensive reinsurance companies could buy from the CAT Fund would be passed on to policyholders as lower rates.
Many homeowners did see at least a small drop in rates. Also, a requirement that insurers double the mitigation credits given to homeowners who add hurricane shutters or reinforce garage doors also provided savings on insurance premiums.
Meltdown has impact
But the meltdown of the financial markets has reduced the ability of the CAT Fund and Citizens to sell bonds to provide the cash needed to pay claims after a massive storm.
The new Florida legislation reduces the amount of reinsurance the CAT Fund can sell by $2 billion a year through 2013, thus reducing the risk the fund faces. The legislation would require insurers to pay additional premiums over the next five years to build reserves in the fund more rapidly. Citizens would be allowed to increase its rates 1 percent annually during this time to recover the cost of extra payments it will be making to the CAT Fund.
Even insurance agents aren’t immune to pain of rising costs and shrinking incomes. Suarez-Resnick says she is in the process of refinancing her mortgage because she knows that her homeowners policy premiums will be going up next year. Staffing at her agency has been cut nearly 10 percent and salaries reduced in the past year.
Nestor Rivero, who owns Tropical Insurance in West Miami-Dade, says he had to cut support staff to eight employees from 11, including laying off the receptionist who had worked for him for 21 years.
“This is absolutely the worst time to have to absorb an increase,” says Suarez-Resnick.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
Copyright © 2009 The Miami Herald
Tuesday, May 5, 2009
Florida's Recovery Is Heating Up
After two long years of recession, economists are beginning to see signs that the economy’s recovery is finally in sight. South Florida home sales are picking up, Wall Street has staged some solid rallies and even consumer confidence is rising.
But the road to recovery will be uneven. Economists say that an uptick in business spending will lead the way, followed by federal government stimulus projects that will create some jobs. Consumers, unfortunately, are likely to be the last to see good times return, because widespread unemployment – which is now just a notch below 10 percent – won’t start to go down until after the recovery is well under way.
It has been rough, but economists say it’s always that way for Florida.
“It performs better in good times, but during bad times, in recessions, it is one of the worst performing states in the nation,” said Moody’s Economy.com economist Chris Lafakis. “And during times of expansion it is one of the best.”
Some experts say they already see the early signs of such progress.
“The negative numbers just start getting smaller or they stop falling or they fall at a slower rate,” said SunTrust Chief Economist Gregory Miller. It’s like you tumbled out of a boat a while ago and “now we’re at the stage of swimming back to the surface.”
Other economists agree that the worst may be over as soon as this summer. Consumers surely have had enough, judging by the strong jump in Floridians’ consumer confidence this month.
Here’s how economists say the state will find its way out of the slump:
Business-led recovery
Economists say the recovery will begin with an increase in business capital spending, as companies rebuild inventories or upgrade technology or send business travelers back out on the road.
At some South Florida companies, capital spending already has increased and begun to pay off. Last year, Stress Free Corporate Housing, which provides temporary living arrangements for executives, says the audio-visual equipment it installed in its new Weston office is helping to bring in new business.
The firm wanted to hold employee conferences and save on travel expenses. But it also began using the equipment for Webinars – seminars via the Internet – for its clients.
President and Chief Executive Officer Darin Karp said his firm is about to sign a deal with a Fortune 500 company to provide temporary housing for executives from Asia and the Middle East who need to come to Florida for training.
“We’re definitely seeing glimmers of hope off the first quarter and the beginning of this quarter,” Karp said. “We have some big stuff on our plate, and it’s attributed to doing the Webinars.”
Stimulus spending
An increase in government spending is expected in the fourth quarter, as states and cities pump out the $787 billion in federal stimulus money to build roads and other projects. That influx of cash will lead to more jobs, at least in construction.
Even though the stimulus law was enacted in February, government is still crafting detailed plans and regulations for the federal package, so it’s unclear precisely how many millions will be earmarked for Florida.
“We will begin to see some impact of the stimulus legislation in the last quarter of this year,” said economist Antonio Villamil, dean of the School of Business at St. Thomas University.
Confidence rises
Consumer confidence – a measure of how willing people are to spend on big-ticket items – is already rising. The University of Florida consumer confidence survey issued earlier this week showed the index jumped to 71 in April, up from 65 in March, which is close to the low reached during the last recession in 1991.
The importance of the jump is that consumer confidence is a forward-looking economic indicator, one that is often a sign that consumer spending will rise, too.
Employment to lag
Employment rates aren’t expected to rise until recovery of other sectors is under way. Only after growth returns in the overall economy will businesses be comfortable enough to begin to create jobs again. Employment is key to consumers’ recovery. Don’t look for consumer spending to increase until after employment stabilizes, economists say.
“Every business cycle is unique, but they get going in fits and starts,” said economist Manuel Lasaga, president of Strategic Information Analysis in Miami. “This [recovery] will be weaker than normal.” Strong growth, he said, won’t appear until 2010.
And some sectors seem to be hurt so badly, their recovery is not at hand. Surely, housing remains deeply troubled. Manufacturing, too, is waiting for signs of recovery.
“We’re not seeing that [any increase in demand] yet frankly,” said Tom Kennedy, a CPA who is chairman of the South Florida Manufacturers Association. Kennedy is controller of R.L. Schreiber in Pompano Beach, which produces food products for the food service industry. The credit crunch, he said, is making the business environment even more difficult.
When will it end? The economy should begin to pull out of recession around the end of summer, according to several economists. At the latest, look for it early next year, others say.
“We are in the fourth phase of the recession,” said SunTrust’s Miller. That’s the pre-recovery phase, he said. Next is the turnaround.
It’s a little early yet, and the signs are still faint.
“You really have to look long and hard to find any signs of strength in the economy,” said Mark Vitner, Wachovia’s senior economist. “But it’s not so hard to find areas where the economy had been in a free fall and now is just merely declining.”
For those businesses looking forward to the turnaround, they’ve set their sights on year’s end.
“People are getting new budgets for purchasing at the end of the third quarter, the fourth quarter. A lot of lights are coming on,” said Joel Ledlow, chief executive officer of ScheduAll, a Hollywood firm that produces management software systems for broadcasters and media. “People are saying they have cut about as much as they can cut. Now they’re ready for some very strategic investments.”
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 Sun Sentinel
But the road to recovery will be uneven. Economists say that an uptick in business spending will lead the way, followed by federal government stimulus projects that will create some jobs. Consumers, unfortunately, are likely to be the last to see good times return, because widespread unemployment – which is now just a notch below 10 percent – won’t start to go down until after the recovery is well under way.
It has been rough, but economists say it’s always that way for Florida.
“It performs better in good times, but during bad times, in recessions, it is one of the worst performing states in the nation,” said Moody’s Economy.com economist Chris Lafakis. “And during times of expansion it is one of the best.”
Some experts say they already see the early signs of such progress.
“The negative numbers just start getting smaller or they stop falling or they fall at a slower rate,” said SunTrust Chief Economist Gregory Miller. It’s like you tumbled out of a boat a while ago and “now we’re at the stage of swimming back to the surface.”
Other economists agree that the worst may be over as soon as this summer. Consumers surely have had enough, judging by the strong jump in Floridians’ consumer confidence this month.
Here’s how economists say the state will find its way out of the slump:
Business-led recovery
Economists say the recovery will begin with an increase in business capital spending, as companies rebuild inventories or upgrade technology or send business travelers back out on the road.
At some South Florida companies, capital spending already has increased and begun to pay off. Last year, Stress Free Corporate Housing, which provides temporary living arrangements for executives, says the audio-visual equipment it installed in its new Weston office is helping to bring in new business.
The firm wanted to hold employee conferences and save on travel expenses. But it also began using the equipment for Webinars – seminars via the Internet – for its clients.
President and Chief Executive Officer Darin Karp said his firm is about to sign a deal with a Fortune 500 company to provide temporary housing for executives from Asia and the Middle East who need to come to Florida for training.
“We’re definitely seeing glimmers of hope off the first quarter and the beginning of this quarter,” Karp said. “We have some big stuff on our plate, and it’s attributed to doing the Webinars.”
Stimulus spending
An increase in government spending is expected in the fourth quarter, as states and cities pump out the $787 billion in federal stimulus money to build roads and other projects. That influx of cash will lead to more jobs, at least in construction.
Even though the stimulus law was enacted in February, government is still crafting detailed plans and regulations for the federal package, so it’s unclear precisely how many millions will be earmarked for Florida.
“We will begin to see some impact of the stimulus legislation in the last quarter of this year,” said economist Antonio Villamil, dean of the School of Business at St. Thomas University.
Confidence rises
Consumer confidence – a measure of how willing people are to spend on big-ticket items – is already rising. The University of Florida consumer confidence survey issued earlier this week showed the index jumped to 71 in April, up from 65 in March, which is close to the low reached during the last recession in 1991.
The importance of the jump is that consumer confidence is a forward-looking economic indicator, one that is often a sign that consumer spending will rise, too.
Employment to lag
Employment rates aren’t expected to rise until recovery of other sectors is under way. Only after growth returns in the overall economy will businesses be comfortable enough to begin to create jobs again. Employment is key to consumers’ recovery. Don’t look for consumer spending to increase until after employment stabilizes, economists say.
“Every business cycle is unique, but they get going in fits and starts,” said economist Manuel Lasaga, president of Strategic Information Analysis in Miami. “This [recovery] will be weaker than normal.” Strong growth, he said, won’t appear until 2010.
And some sectors seem to be hurt so badly, their recovery is not at hand. Surely, housing remains deeply troubled. Manufacturing, too, is waiting for signs of recovery.
“We’re not seeing that [any increase in demand] yet frankly,” said Tom Kennedy, a CPA who is chairman of the South Florida Manufacturers Association. Kennedy is controller of R.L. Schreiber in Pompano Beach, which produces food products for the food service industry. The credit crunch, he said, is making the business environment even more difficult.
When will it end? The economy should begin to pull out of recession around the end of summer, according to several economists. At the latest, look for it early next year, others say.
“We are in the fourth phase of the recession,” said SunTrust’s Miller. That’s the pre-recovery phase, he said. Next is the turnaround.
It’s a little early yet, and the signs are still faint.
“You really have to look long and hard to find any signs of strength in the economy,” said Mark Vitner, Wachovia’s senior economist. “But it’s not so hard to find areas where the economy had been in a free fall and now is just merely declining.”
For those businesses looking forward to the turnaround, they’ve set their sights on year’s end.
“People are getting new budgets for purchasing at the end of the third quarter, the fourth quarter. A lot of lights are coming on,” said Joel Ledlow, chief executive officer of ScheduAll, a Hollywood firm that produces management software systems for broadcasters and media. “People are saying they have cut about as much as they can cut. Now they’re ready for some very strategic investments.”
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 Sun Sentinel
Monday, May 4, 2009
Pending Home Sales Are Up
Pending home sales rose in March with many first-time buyers taking advantage of historically good housing affordability conditions, according to the National Association of Realtors® (NAR).
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, increased 3.2 percent to 84.6 from a level of 82.0 in February, and it’s 1.1 percent higher than March 2008’s 83.7.
“This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a downpayment,” says Lawrence Yun, NAR chief economist. “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”
NAR’s Housing Affordability Index remained near record highs. The affordability index was 166.7 in March – down from an upwardly revised record of 174.4 in February due to higher home prices in March. The index remains 30.8 percentage points higher than a year ago. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income. Tracking began in 1970.
The Pending Home Sales Index in the South rose 8.5 percent to 93.2 in March and is 7.7 percent above a year ago. In the West the index increased 3.9 percent to 93.1 and is 1.7 percent higher than March 2008. The index in the Northeast fell 5.7 percent to 59.5 in March and is 24.1 percent below a year ago. In the Midwest the index slipped 1.0 percent to 82.3 but is 8.2 percent higher than March 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the increase in buying power is quite remarkable. “Compared to a year ago, the typical family can pay much less in mortgage costs for the same home, or buy a better home without necessarily increasing their monthly payment,” he said. “For buyers who’ve been on the sidelines and have good jobs, the market has never looked more favorable. Homeownership has always offered immediate benefits and long-term value, but the advantages in today’s market are unique.”
A median-income family, earning $61,100, could afford a home costing $291,600 in March with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of that amount. The affordable price was notably higher than the median existing single-family home price in March, which was $174,900.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
© 2009 FLORIDA ASSOCIATION OF REALTORS®
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, increased 3.2 percent to 84.6 from a level of 82.0 in February, and it’s 1.1 percent higher than March 2008’s 83.7.
“This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a downpayment,” says Lawrence Yun, NAR chief economist. “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”
NAR’s Housing Affordability Index remained near record highs. The affordability index was 166.7 in March – down from an upwardly revised record of 174.4 in February due to higher home prices in March. The index remains 30.8 percentage points higher than a year ago. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income. Tracking began in 1970.
The Pending Home Sales Index in the South rose 8.5 percent to 93.2 in March and is 7.7 percent above a year ago. In the West the index increased 3.9 percent to 93.1 and is 1.7 percent higher than March 2008. The index in the Northeast fell 5.7 percent to 59.5 in March and is 24.1 percent below a year ago. In the Midwest the index slipped 1.0 percent to 82.3 but is 8.2 percent higher than March 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the increase in buying power is quite remarkable. “Compared to a year ago, the typical family can pay much less in mortgage costs for the same home, or buy a better home without necessarily increasing their monthly payment,” he said. “For buyers who’ve been on the sidelines and have good jobs, the market has never looked more favorable. Homeownership has always offered immediate benefits and long-term value, but the advantages in today’s market are unique.”
A median-income family, earning $61,100, could afford a home costing $291,600 in March with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of that amount. The affordable price was notably higher than the median existing single-family home price in March, which was $174,900.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Friday, May 1, 2009
State Farm Requests Exit Meeting From Florida
State regulators have granted State Farm’s request to appeal the state-approved plan for the company’s withdrawal from Florida’s property insurance market.
The dispute between State Farm, Florida’s largest private property insurer, and the Office of Insurance Regulation has been referred to a judge at the state Division of Administrative Hearings.
In January, State Farm announced plans to drop all 1.2 million property insurance policies, including 700,000 homeowners, over two years. The announcement came after state regulators rejected the company’s request to raise rates 47 percent on average statewide.
The dispute centers on the way State Farm will shed those policies.
The state-approved plan requires State Farm to sell the policies to other private insurers and bars the company from dumping any policies into state-run Citizens Property Insurance Corp., Florida’s insurer of last resort.
But company policy prohibits State Farm agents from offering services to other private insurers. Agents can offer services only for State Farm and Citizens. State Farm said the practice is a major element of the company’s business model and isn’t willing to abandon it.
Allowing State Farm agents to offer services to other private insurers would impair the success of State Farm’s marketing program, the company says in its appeal of the state-approved plan.
Insurance regulation officials say the state’s plan would keep Citizens, already bloated with 1.1 million policies, from getting bigger. If Citizens gets bigger, the risk of taxpayers bearing the cost of a major hurricane would grow because all Florida policyholders can be assessed a surcharge to pay Citizens’ claims if it runs out of money.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 Tampa Tribune, Fla.
The dispute between State Farm, Florida’s largest private property insurer, and the Office of Insurance Regulation has been referred to a judge at the state Division of Administrative Hearings.
In January, State Farm announced plans to drop all 1.2 million property insurance policies, including 700,000 homeowners, over two years. The announcement came after state regulators rejected the company’s request to raise rates 47 percent on average statewide.
The dispute centers on the way State Farm will shed those policies.
The state-approved plan requires State Farm to sell the policies to other private insurers and bars the company from dumping any policies into state-run Citizens Property Insurance Corp., Florida’s insurer of last resort.
But company policy prohibits State Farm agents from offering services to other private insurers. Agents can offer services only for State Farm and Citizens. State Farm said the practice is a major element of the company’s business model and isn’t willing to abandon it.
Allowing State Farm agents to offer services to other private insurers would impair the success of State Farm’s marketing program, the company says in its appeal of the state-approved plan.
Insurance regulation officials say the state’s plan would keep Citizens, already bloated with 1.1 million policies, from getting bigger. If Citizens gets bigger, the risk of taxpayers bearing the cost of a major hurricane would grow because all Florida policyholders can be assessed a surcharge to pay Citizens’ claims if it runs out of money.
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2009 Tampa Tribune, Fla.
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