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Serving South Florida

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For over 35 years

real estate news

Florida Is Not Headed For A Housing Crash

Florida is now America’s fast growing state. According to recent census data, the Sunshine State added over 400,000 additional people between July 2021 to July 2022. It was a growth of 1.9%, bringing the total population to 22,244,823. That makes it faster-growing than Texas, which has the second-largest population in the United States, trailing only California. Florida is a popular destination for retirees, second-home buyers, and investors which is driving up demand for housing.

Florida has consistently maintained one of the highest rates of job growth in the U.S., making it an appealing destination for those seeking employment opportunities and a vibrant lifestyle. This influx of residents contributes to the demand for housing in the state, stimulating the real estate market.

Key Market Indicators:

·      For Sale Inventory: As of December 31, 2023, there are 133,691 properties listed for sale, showcasing a diverse range of options for potential buyers.

·      New Listings: In the same period, 32,615 new listings have entered the market, providing fresh opportunities for those in pursuit of their dream homes.

·      Median Sale to List Ratio: The median sale to list ratio, a key metric indicating market competitiveness, stands at 0.977 as of November 30, 2023.

·      Percent of Sales Over List Price: Notably, 14.5% of sales in November 30, 2023, exceeded the list price, indicating a competitive environment.

·      Percent of Sales Under List Price: On the other hand, 67.9% of sales during the same period were below the list price, providing insights into negotiation dynamics.

Florida’s strong population growth, diverse job market, tourist attractions, affordable property prices, tax benefits, and diversified economy all contribute to making it a hot spot for real estate investment.

Termite Awareness Week- March 10-16, 2024

Florida is home to over twenty different species of termites with the most damaging and common species are subterranean and drywood termites. These termites cause billions of dollars of damage annually in the United States and correct termite identification is pivotal to successful prevention, control, and protection of your home.

Subterranean termites live and invade from underground, and a single colony can cover one acre underneath
homes. They typically live in dark, moist, hidden environments underground but will create and live in carton
nests aboveground. These can be found in walls and attics of structures and in nearby trees. To move above the
ground, these termites build mud tubes on foundations, walls, and nearby trees. These mud tubes are a sign
of termite activity and used for detection.

Drywood termites live and forage in dry wood. There are many different species of drywood termites in Florida,
and these are located throughout the state. They enter structures through swarming from infested trees, stored
wood, or other structures near your home. Unlike subterranean termites, drywood termite colonies grow
slowly and thus do not cause as much damage as subterranean termites. A tell-tale sign of drywood termites are
sawdust-like piles near the infestation, these piles are hexagonal shaped pellets or waste of the termite.

Actions you can take to keep air home termite free are:

  • Eliminate sources of standing water in or near the home.
  • Be wary of areas in the home where wood is in contact with soil.
  • Keep piles of lumber or firewood away from your home.
  • Regularly inspect your deck, patio, or outdoor furniture for signs of damage.
  • Remove decaying trees and branches from areas surrounding your yard.
  • Use pine needles, pea gravel, rubber, or other non-organic material as mulch.

Part of your Inspections before purchasing a home should include Wood Destroying Organisms ( WDO) Inspection. Unlike most states, the Florida Department of Agriculture and Consumer Services (FDACS) requires the licensed WDO Inspector to report on Wood Destroying Organisms.

The Department of Agriculture and Consumer Services recommends that you hire a licensed pest control company for correct termite identification and protection for your home. You can find out if a company is licensed in Florida at: https://www.fdacs.gov/Business-Services/Pest-Control. For more info and tips: https://www.fdacs.gov/Consumer-Resources/Health-and-Safety/Protect-Your-Home-from-Pests/Termites.

Benefits of Energy Efficient Homes

A recent survey from the National Association of Home Builders (NAHB) found that energy-efficient features are among the most sought-after “must-haves” among homebuyers. Among those surveyed, 83% desired Energy Star-rated windows, 81% wanted Energy Star-rated appliances and 80% preferred energy-efficient lighting.

Though eco-conscious sensibilities compel millions of homeowners to make their homes more energy-efficient, that’s not the only reason to upgrade your home. The following are a handful of the many benefits of energy-efficient homes.

Save money: The U.S. Department of Energy indicates upgrading to energy efficient appliances products can help homeowners reduce their energy costs by as much as 30%. The Environmental Protection Agency (EPA) estimates you can save 11% on average on your total energy costs by air sealing your home and adding insulation in the attic and crawl spaces.

Improve resale value: Being able to market your home as energy-efficient when it comes time to sell it may help your resale value, especially as energy-efficient homes become better-known and more in-demand.

According to several studies, energy-efficient homes and apartments garner anywhere from 2% to 8% more in sales prices than their traditional counterparts. Research from the mortgage lender Freddie Mac found that homes with energy-efficient ratings sold for nearly 3% more on average than homes without such ratings.

Live healthier: The benefits of energy-efficient homes aren’t just economic, though health-related benefits certainly produce an economic incentive as well.

Energy-efficient homes boost your comfort level by also enhancing the indoor air quality by reducing pollen, dust, insects, and humidity, which leads to better quality of life.

Energy-efficient appliances are typically quieter than traditional models, as well, making their operation less intrusive to your daily life.

To learn more and find out how to perform some of these improvements yourself, visit DOE’s Energy Saver website.

Tools and Calculators for Homes:

Information, tools, and resource to help consumers seal and insulate their homes, including a DIY Guide to Sealing and Insulating with ENERGY STAR.

Information, tools, and resources to help consumers assess their home’s energy use, including the ENERGY STAR Home Advisor and the ENERGY STAR Home Energy Yardstick.

List of building energy software packages, some of which are available for free or a small fee.

A tool that allows a consumer to determine energy savings and costs associated with replacing non-ENERGY STAR-rated refrigerators.

Information, tools, and resources to help consumers increase the efficiency of their home’s heating and cooling system.

A tool developed as an industry-consensus roof savings calculator for residential and commercial buildings using whole-building energy simulations.

Home Buying Strategies for 2024

For now, economic signals suggest more positive news for buyers in 2024 though no experts are forecasting a return to 3% rates anytime soon. More likely, we will see the 30-year mortgage rate decline closer to 6% according to forecasts from the Mortgage Bankers Association and the National Association of Realtors.

Mortgage rates and housing prices are both high while the housing supply is running low. The current market has a 3.6-month supply of unsold home inventory. A balanced market has a supply of five to six months. Despite larger shortages, 92% of markets have seen modest inventory growth over the last three months, according to a November 2023 report from ICE Mortgage Technology.

Until supply catches up to demand, prices are unlikely to fall. Realtor.com estimates prices will fall less than 2% next year and that is a nationwide forecast. Prices in the South are not expected to fall with over 2000 people a month moving to Florida.

More than one in four homes are still selling for above list price, according to October 2023 data from the NAR: 28% of homes sold for above list price that month. Homes for sale spent a median of 23 days on the market and saw an average of 2.5 offers, a sign that competition remains tough.

Don’t let high rates keep you on the sidelines for too long. When rates go down, competition goes up — another reason there’s no time like the present to start house hunting.

How do you compete in this market?

1.    Adjust your criteria and expectations. No one gets 100% of what they want in a home. Decide the features that are your top priority and compromise on the rest. Plan on adding or changing features you can control in the future and shop for those you cannot such as location, community amenities, school districts, and more.

2.    Consider the option to refinance in the future if rates do fall significantly. Nothing in the economy is suggesting that this will happen anytime soon. Waiting around for rates to drop only means that there will be more competition for the homes you can afford while home prices continue to rise. Consider getting into a home that you can afford and leave open the option to refinance in the future to ease your monthly expenditures and invest in home improvements. Should rates not fall, then you are already building equity and are way ahead of where you would be if you waited.

3.    Consider new construction, some developers are offering below market mortgage rates if you use their financing company and often include incentives towards closing costs. You start off with a brand-new roof, appliances, a home warranty, and more so the future expenditures you need for a resale can be applied to your down payment or décor.

2024 Real Estate Forecast

2024 Real Estate Forecast

NAR economist Yun predicts home sales will begin to rise next year – by 13.5% compared to 2023, and the median home price will reach $389,500 – an increase of 0.9% from this year. “Metro markets in southern states will likely outperform others due to faster job increases, while markets in the Midwest will experience gains from being in the most affordable region.”

Yun expects rent prices to calm down further in 2024, which will hold down the consumer price index. He predicts foreclosure rates will stay at historically low levels in 2024, comprising less than 1% of all mortgages.

Yun forecasts the U.S. GDP will grow by 1.5%, avoiding a recession, with net new job additions slowing to 1.7 million in 2024 compared to 2.7 million in 2023, and 4.8 million in 2022. After eclipsing 8% in late 2023, he expects the 30-year fixed mortgage rate to average 6.3% and for the Fed to cut rates four times – calming inflationary conditions – in response to slower economic activity.

Yun also foresees 1.48 million housing starts in 2024, including 1.04 million single-family and 440,000 multifamily.

Florida is home to over 22+ million people—a number that is growing every day. In fact, Florida is the fastest-growing state in the country, adding an average of 1,000 people per day. These new residents are congregated in just a handful of counties. According to an analysis by the Tampa Bay Times, a third of Florida’s new residents wound up in just five counties: Orange, Hillsborough, Lee, Polk, and Palm Beach. These five counties are all located in the state’s southeastern region, known for its warm weather and beaches.

Florida’s growth is largely fueled by migration. Over the last two years, 616,000 new residents have come to Florida from other parts of the country, and 175,000 from other countries. In fact, without migration, Florida would not have grown at all. Its 567,881 deaths exceeded its 478,834 births. And according to projections, by 2030 Florida will have more than 25 million residents.

Florida’s statistics will be greatly influenced by available inventory for sale. The South Florida real estate market still has a significant shortfall or inventory relative the the migration to the area and demand for housing.  Southeast Florida’s housing market is poised for a rebound in sales and sustained price appreciation in 2024.

Should You Buy A House Now Or Wait Until 2024?

Many prospective homebuyers have been left wondering when the time will be right for them to enter the housing market. The average 30-year fixed mortgage rate hit 8% this week, the highest level since 2000 but a very moderate rate to the 16.5% I paid for my first home in 1980.
Daryl Fairweather, Redfin’s chief economist, said waiting for rates to fall before entering the housing market could be a mistake. “The second that happens, buyers will rush back into the market, and we will see a return of bidding wars,” she said.
For homebuyers who are financially prepared to buy a home, locking in a high interest rate now — and refinancing at a lower rate down the road — could be a wise move, Lawrence Yun, stated chief economist at the National Association of Realtors.
Over the next 12 to 18 months, Yun expects mortgage rates to fall from the near-8% they’re at now to below 7%, perhaps even close to 6%, he said. Remember, the real estate adage of  ‘Marry the house and date the rate.’ To put it another way, you can always refinance later. I always advise my buyers to plan on staying in the home for five or more years if you plan on owning a home. If your short term situation involves  moving, then perhaps it is best to rent for the time being.
Many factors will change rates in the future and the housing market is directly influenced by mortgage rates. Many of these factors are unknown at this time. Inflation, world unrest and economic conditions, GDP, and more.
The volume of existing home sales was down more than 15 percent from August 2022 to August of this year, according to the National Association of Realtors.  However in South Florida though the volume of sales where down homes prices have continued to increase month to month due to a lack of inventory with both resale and new construction.
Cash Buyers should get into the market sooner than later since there are no forecasts that predict that home prices will be lower in South Florida in 2024, just the opposite.
No matter which way the real estate market is leaning, though, buying now means you can start building equity immediately. It also means avoiding the potential for additional mortgage rate increases later.
The decision to buy a house in 2023 or wait till 2024 is multifaceted, depending on market conditions, economic forecasts, personal finances, and lifestyle factors. While it’s essential to consider all these elements, remember that a home is not just an investment—it’s a place to live, grow, and create memories. Whether you choose to buy now or wait, ensure it aligns with both your financial goals and personal needs.

Government Shutdown’s Effect on Real Estate Market

While a government shutdown won’t stop people from buying and selling homes, the ripple effects across the economy could be disruptive, especially if it drags on.

Some expect to see delays around mortgage loans, particularly if the shutdown isn’t resolved quickly. Zillow estimates around 2,500 originated loans would be delayed per working day. Homebuyers applying for a government-backed mortgage from the Federal Housing Administration would face processing delays.

A government shutdown could also delay mortgage loan approval for other reasons. In areas where flood insurance is required, for example, buyers could be stalled if the National Flood Insurance Program were to pause operations.

  • Delayed Loan Processing- Some federal agencies, such as the Federal Housing Administration (FHA), may operate with reduced staffing or close entirely. This can lead to delays in loan approvals and processing, affecting both homebuyers and sellers. It’s essential to inform your clients about the possibility of extended timelines.
  • Verification and Documentation- Many mortgage applications require verification of income, tax returns, and other documentation from government agencies. If these agencies are affected by a shutdown, obtaining necessary documents may become more challenging, further slowing down the mortgage approval process.
  • National Flood Insurance Program (NFIP)– The NFIP is vital for many homeowners in flood-prone areas, as lenders often require flood insurance for mortgage approval. A government shutdown could impact the availability of NFIP policies and affect property transactions in flood-prone regions.
  • IRS and Tax TranscriptsThe Internal Revenue Service (IRS) provides tax transcripts required for mortgage applications. The IRS would remain funded through the Inflation Reduction Act, but obtaining these transcripts may become difficult, potentially leading to delays in loan processing and closing.
  • Appraisals and Inspections- Government shutdowns may disrupt the scheduling of appraisals and inspections, as federal agencies oversee certain aspects of these processes. Delays in these areas can lead to extended closing times and may affect contract deadlines.
  • Market Uncertainty- A prolonged government shutdown can create uncertainty in the real estate market, causing some buyers and sellers to delay their transactions until stability is restored. This could result in slower market activity and potential fluctuations in home prices.
  • Economic Confidence- Government shutdowns can erode consumer and investor confidence in the economy. If potential buyers and investors become hesitant due to political uncertainty, it may impact the overall demand and stability of the real estate market.

Tips to Reduce Home Insurance Costs in South Florida?

Homeowner's Insurance
Are you a home buyer in Florida looking to save money on your insurance costs? Here are some expert tips to help you reduce your home and wind insurance expenses.
Shop Around: Don’t settle for the first insurance quote you receive. Take the time to compare prices from multiple insurers. By doing so, you can find the best coverage at the most competitive rates.
Increase Deductibles: Consider raising your deductibles to lower your premium. While this means you’ll pay more out of pocket in the event of a claim, it can significantly reduce your monthly insurance costs. Make sure you take on a deductible that won’t leave you financially overwhelmed when you need to make a major claim.
Improve Home Security: Installing security measures such as alarms, deadbolts, and smoke detectors can make your home safer and lower your insurance premiums. Insurers often offer discounts for homes with enhanced security features.
Bundle Policies: If you have multiple insurance needs, consider bundling your auto, umbrella, home and wind insurance with the same provider. This can lead to substantial savings on your premiums.
Maintain a Good Credit Score: Believe it or not, your credit score can affect your insurance rates. Pay your bills on time, keep your credit utilization low, and regularly check your credit report for errors to maintain a good credit score and potentially lower your insurance costs.
Consider Wind Mitigation Measures: Living in Florida means being prepared for hurricanes. By fortifying your home against wind damage with measures like impact-resistant windows and reinforced roof trusses, you can qualify for wind mitigation discounts.
Avoid Making Small Claims: While insurance is designed to protect you from significant financial losses, making multiple small claims can lead to higher premiums. Consider handling minor repairs out of pocket to avoid impacting your insurance rates.
Look for Discounts: t’s easy to miss a discount you’re eligible for. Homeowners often have the stress of the home-buying process in the background when they get coverage, meaning insurance could be one thing hurriedly checked off the list. You can qualify for discounts if you:
  • Have a residence with no smokers
  • Pay your premium upfront
  • Pick paperless billing
  • Sign up for automatic payments
Remember, every insurance policy is unique, so it’s essential to speak with a qualified insurance agent to find the best ways to lower your home and wind insurance costs in Florida. Don’t let high premiums take away from the joy of homeownership – take action today and start saving!

2023 Florida Jumbo Loan Limits

A jumbo loan is a type of mortgage loan that’s used to finance loans that exceed the conforming loan limit. In the United States, the Federal Housing Finance Agency (FHFA) sets loan limits for conforming loans each year.

If the home you’re purchasing will require you to borrow more than the conforming loan limit (CLL), you’ll need to apply for a jumbo loan. But because of the larger loan amounts and increased risk for lenders, Florida jumbo loans often come with higher interest rates and stricter requirements than conventional loans.
In 2023, the conforming loan limit for most U.S. real estate markets is $726,200. However, the jumbo loan limit in Florida depends on what county you’re planning to buy a home in.
·      $726,200 is the conforming loan limit in most Florida counties.
·      $874,000 is the maximum limit in Monroe County
The amount being borrowed is what determines whether you will need a jumbo loan, not the price of the home.
The requirements for a jumbo loan are much more stringent than a conforming loan. Each lender may have different requirements or processes, but below are the typical requirements for borrowers seeking a jumbo loan.
Higher credit score: When it comes to obtaining a jumbo loan, credit score requirements are typically stricter than for conventional mortgages. While some lenders may be willing to accept a lower score, a credit score of at least 720 is generally required to qualify for a jumbo loan.
Larger down payment: When applying for a jumbo loan, keep in mind that down payment requirements are generally more substantial than for traditional mortgages. While the specific amount will depend on the lender and the borrower’s financial situation, many jumbo loan lenders require a down payment of at least 10%, and some require as much as 20% or more.
More assets: During the asset review process, lenders typically request that jumbo loan borrowers provide evidence of sufficient liquid assets or savings to cover the equivalent of one year’s worth of loan payments.
Lower debt-to-income ratio (DTI): Whether you’re applying for a traditional mortgage or a jumbo loan in Florida, lenders evaluate your spending habits and creditworthiness by analyzing your debt-to income ratio ( DTI) The DTI is determined by dividing the total of your monthly debt payments by your gross monthly income. While some lenders may accept a DTI as high as 50% for a conforming loan, those applying for a jumbo loan should aim for a DTI under 43% and ideally closer to 36%.
Additional home appraisals: For a jumbo loan, lenders may require an additional home appraisal to ensure that the property’s value is accurate. This is particularly true in places where there are few comparable home sales. The additional appraisal acts as a second opinion and helps the lender to mitigate their risk. It’s important to note that the cost of a second appraisal may be higher than a typical home appraisal, particularly in areas with fewer sales.

Beware of Polybutylene Pines in Older Homes

Polybutylene pipes
Think twice about purchasing a home with Polybutylene (PB) pipes. Polybutylene (PB) pipes were widely used in Florida residential construction from 1978 to 1995. Billed as a less expensive alternative to traditional copper pipes, up to 10 million homes across the United States were outfitted with PB piping during this period. Polybutylene pipes tend to degrade over time, creating small fractures and pinhole leaks. Any single fracture could eventually result in sudden failure, which generally ends up causing extensive damage to the home. A class-action lawsuit in 1995 resulted in nearly $1 billion being awarded to affected homeowners but the class action is no longer an option for compensation by current homeowners.
Many experts will tell you that PB pipe failure is not a matter of if, but when, and if you currently have polybutylene pipes in your home they have been there for many years. Polybutylene pipes take about 10-15 years to deteriorate, and sometimes you may not know you have a leak, especially if the pipes are behind sheetrock.
These leaks are a serious risk because they can create:
  • Mold
  • Water damage
  • Or even flooding
Ways to tell if you have PB pipes:
  • PB pipes used for interior applications are generally gray in color but may also be black. PB pipes used outside may be gray, blue or black.
  • PB pipe is flexible, not rigid.
  • PBpipes may be stamped with the code: PB2110.
The easiest places to see polybutylene pipes in your home are…
  • Near the water heater
  • Connecting to sinks and toilets
  • At the main shut-off valve or water meter
A home inspection and/or 4-point inspection will determine if there existsPB piping, but only if it is visible. No home inspection, for the purpose of purchasing a home, will open walls to determine the existence of polybutylene piping. I advise my clients to assume that it exists if the home was built between 1978-1995.
If PB pipes exist in a home, you basically have 2 options:
1.  Replace the pipes with PEX (a more reliable type of plastic pipe)
2.  Wait until they rupture and pay for expensive water repair AND then re-pipe the home.
To replace polybutylene pipes or copper pipes, you’ll have to remove them and re-pipe your home’s entire plumbing system. This will likely involve opening walls and even floors.  Re-piping generally requires takes 1 – 2 days, dependent on the size of the home, followed by 2 – 4 days of drywall repair and floor repair and painting to return the home to its original appearance.
I advise my clients to think twice about purchasing a home with polybutylene piping unless you plan on doing extensive renovations. The home may be uninsurable in today’s insurance environment until this work is completed and as a result excludes buyers needing financing to purchase the home.