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Do investors need landlord insurance?

CHICAGO – April 24, 2017 – Renting out property can always be a gamble, with the risk of a bad tenant who could, for example, smash a hole in the wall or bail on paying rent. In either case, the landlord is left financially liable.

But could landlord insurance help investors better protect their property investments?

“Landlord insurance is a vital add-on for anyone planning to rent some or all of a property to another party,” says James J. Whittle, assistant general counsel and chief claims counsel for the American Insurance Association.

Landlord insurance coverage varies based on location; but, in general, it will protect the house, apartment or condo being rented out against “covered perils.” Those “covered perils” usually consists of severe weather, natural disasters and vandalism. It also might cover the owner if someone is injured at the property, like if the tenant trips on the entry stairs and then tries to sue the landlord.

Some landlord insurance policies also provide income coverage protection. For instance, if the property becomes unlivable due to an event like a fire, the landlord would be paid the fair market value for rent while the house is being repaired.

Some policies also offer rent default coverage. If a tenant doesn’t pay the rent on time, the landlord would receive out-of-pocket money and assistance with legal fees.

Homeowner insurance policies don’t always cover renting property, particularly if the property is being rented on an ongoing basis. “Your home insurer has chosen to insure you, but they don’t know anything about that third party,” says Whittle.

Landlord insurance costs about 25 percent more than homeowners insurance for a basic policy, though rates vary drastically depending on location and coverage limits. For an investor, however, landlord insurance can be deducted on a tax return as a business expense.

Source: “What Is Landlord Insurance? Property Owners Need This Now,” realtor.com® (April 20, 2017)

© Copyright 2017 INFORMATION, INC. Bethesda, MD (301) 215-4688

Fla. home sales up 9.3% year-to-year in March

ORLANDO, Fla. – April 21, 2017 – Florida’s housing market reported more closed sales, higher median prices and increased pending sales in March, according to the latest housing data released by Florida Realtors. Sales of single-family homes statewide totaled 25,921 last month, up 9.3 percent compared to March 2016.

“March’s strong sales likely were influenced by buyers ready to take action before interest rates could move higher,” says 2017 Florida Realtors President Maria Wells, broker-owner with Lifestyle Realty Group in Stuart. “Higher demand, coupled with a shortage of available homes for sale, continues to put pressure on prices – so buyers are eager to make an offer when they find the right property.

“That means it’s a good time for sellers to list their homes since they continue to receive a higher sales price as inventory remains scarce,” Wells adds. “In March, sellers of existing single-family homes received 96.1 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 94.7 percent – an indication that the listed price is extremely close to market value.

“Consumers who work closely with a local Realtor have an expert guide to help them navigate the often-complex process of buying or selling a home.”

The statewide median sales price for single-family existing homes last month was $231,900, up 10.4 percent from the previous year, according to data from Florida Realtors research department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in March was $171,000, up 9.4 percent over the year-ago figure.

March marked the 64th consecutive month that statewide median prices for both sectors rose year-over-year. The median is the midpoint; half the homes sold for more, half for less.

According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in February 2017 was $229,900, up 7.6 percent from the previous year; the national median existing condo price was $216,100. In California, the statewide median sales price for single-family existing homes in February was $478,790; in Massachusetts, it was $330,000; in Maryland, it was $251,816; and in New York, it was $242,000.

Looking at Florida’s townhouse-condo market, statewide closed sales totaled 11,193 last month, up 11.4 percent compared to March 2016.

Closed sales data reflected fewer short sales and cash-only sales last month: Short sales for townhouse-condo properties declined 29.7 percent while short sales for single-family homes also dropped 33 percent. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

“March turned out to be one of the strongest months we’ve seen in a long time for sales of existing homes in the Sunshine State,” said Florida Realtors Chief Economist Dr. Brad O’Connor. “Sales for both single-family homes and for townhouse-condo units in March marked the fourth-highest monthly total for any single month over the past decade.

“The data shows that inventory levels in the more affordable price tiers continue to fall, especially in the case of single-family homes. The number of active single-family home listings was down almost 5 percent year-over-year at the end of March. As a result, the single-family sector remained a seller’s market, though the inventory situation in the townhouse-condo market appears more balanced.”

In a continuing trend, inventory remained at a tight 4.1-months’ supply in March for single-family homes and at a 6.3-months’ supply for townhouse-condo properties.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.20 percent in March 2017, up significantly from the 3.69 percent average recorded during the same month a year earlier.

To see the full statewide housing activity reports, go to Florida Realtors Media Center and look under Latest Releases, or download the March 2017 data report PDFs under Market Data.

© 2017 Florida Realtors

Florida Real Estate number 1 improvement

Quote attributable to Freddie Mac Deputy Chief Economist Len Kiefer:

“Nationally, all MiMi indicators are heading in the right direction for the second consecutive month and improving more than 6 percent from the same time last year. Florida has some of the most improving housing markets in the country, largely a reflection of more borrowers becoming current on their mortgage payments as the local employment picture improves and house prices rebound. The one area of the country that has been slow to respond has been the Northeast. However, we’ve started to see these housing markets turn around, especially in Pennsylvania, Connecticut, New Hampshire, Vermont and Maine. While many of the locals markets in the Northeast are still weak, they’re steadily trending in the right direction and their pace of improvement is accelerating. Overall, the West remains especially strong, with many markets posting double-digit growth in their MiMi purchase applications indicator compared to a year ago and helping to keep the country on pace for the best year of home sales since 2007.”

Latest News from freddie mac

MCLEAN, VA–(Marketwired – Aug 26, 2015) – Freddie Mac (OTCQB: FMCC) today released its updated Multi-Indicator Market Index® (MiMi®) showing the U.S. housing market continuing to slowly stabilize with two additional states, Arkansas and Tennessee, and four additional metro areas entering their outer range of stable housing activity: Omaha, Nebraska; Scranton, Pennsylvania; Chattanooga, Tennessee and Madison, Wisconsin. 

The national Multi-Indicator Market Index value stands at 80.3, indicating a housing market that is on its outer stable range, while showing an improvement of +1.33% from May to June and a three-month improvement of +2.26%. On a year-over-year basis, the national MiMi value has improved +5.41%. Since its all-time low in October 2010, the national MiMi has rebounded 35 percent, but remains significantly off from its high of 121.7

Quote attributable to Freddie Mac Deputy Chief Economist Len Kiefer:

“Housing markets are the strongest they’ve been in years with the National MiMi above 80 for the first time since 2008. Nationally, all MiMi indicators are heading in the right direction. Robust homebuyer demand has put total home sales on pace for the best year since 2007 and look for that trend to continue as the MiMi purchase applications indicator remains on the upswing. The West has been especially strong, with many markets posting double-digit growth in their MiMi purchase applications indicator compared to a year ago.”

“While home prices are still 7 percent below peak values nationally, price indices in many markets are at all-time highs and current low interest rates are helping to support homebuyer affordability. Mortgage delinquencies are coming down rapidly, but are still high in many markets. Those markets hardest hit by the Great Recession, including many in Florida, are rebounding but they still need to improve to get delinquencies back in line with their benchmark historic averages. The key driver of all this recovery has been solid job growth, with 96 out of 100 metros and all states within range of their benchmark historic average unemployment rate.”

Rental condos will be harder to find

FORT LAUDERDALE, Fla. – Feb. 16, 2015 – If you want to rent a condo or townhome, your options in South Florida are disappearing.

Many developers and investors who rented out units after the housing collapse are putting them back on the market now that home prices are rising.

That means you’ll have a harder time finding one to rent, but you’ll have more places to look at to buy.

Among those making the switch so far are Royal Poinciana Townhomes at Boca Raton, The Whitney in West Palm Beach and Villas de Venezia in Sunrise. You’ll see even more in 2015 and beyond, analysts say.

“Renting is like always wasting your money – it goes right in the trash,” said Selmaria Rezende, a 45-year-old medical aesthetician who’s trading in her apartment lease for a mortgage on a four-bedroom townhome at Royal Poinciana in April. “When you buy, you’re paying a mortgage and it’s something for you.”

The 90-unit Royal Poinciana development, with Spanish Mediterranean architecture, was built north of Yamato Road off Dixie Highway in 2007, just as the housing downturn was deepening.

The developers sold about half of the two-, three- and four-bedroom units before losing the property in foreclosure, public records show.

In May 2013, Sabal Financial Group, an investment firm in Newport Beach, Calif., bought the unsold units for $11.4 million, records show. With the housing market still in tatters, Sabal rented the townhomes before deciding last year that prices had recovered enough to launch sales.

Balistreri Realty and Brenner Real Estate Group took the listing last summer and have 21 left to sell. Prices range from about $339,000 to $451,000. That’s a lot for townhomes without water views, real estate observers say. But consider what you’ll pay compared with the new buildings going up.

Another wave of condo construction is adding thousands of units to the South Florida skyline, many with $1 million-plus price tags. But they won’t open until next year or later, so they won’t help if you’re looking now.

Financing is more available now, too. First-time buyers can get Florida Housing Administration (FHA) loans that require as little as 3.5 percent down. Restrictions on condo loans put in place by Fannie Mae during the downturn are starting to lift – making it easier for people to qualify for mortgages, real estate observers say.

“FHA has helped a tremendous number of my buyers,” said Beverly Rothstein, an agent in Broward and Palm Beach counties. “Lenders have come to the realization that they have to be slightly less strict so that people can purchase homes and they can make loans.”

Over the past several years, Miami-based Mattoni Holdings bought about 150 condos and townhomes across Miami-Dade and Broward counties. Units at Sailboat Pointe in Oakland Park and Belmont in North Lauderdale were among its acquisitions.

The investment firm spruced up the units with fresh paint and new carpeting, found willing renters and enjoyed a strong cash flow before finally deciding the market had rebounded enough to sell.

“Renting for us was actually very easy, but it was never the long-term goal,” said Ricardo Caporal, owner of Mattoni. “Selling is almost like a cleanup – it’s closure.”

Back at Royal Poinciana, Andrea Brenner, marketing director at Brenner Real Estate, said she’s encouraged by a flurry of interest in recent weeks. Buyers are snapping up units that serve as the models and sales office – forcing the real estate firms to move to another townhome each time. They packed up and hired movers for the fifth time on Friday.

“We keep laughing and moving,” Brenner said. “The hassle is worth it.”

Brenner said she hopes to be sold out of the gated community by the summer or fall. That’s welcome news to existing residents such as Gabriel Paredes, who said he has lived there since 2009.

Paredes, 29, is convinced that Royal Poinciana will be better off with more owner-occupants in place, taking their morning jogs and swimming in the community pool.

“They have pride of ownership,” he said. “They care about the well-being of the neighborhood long-term.”

Copyright © 2015 the Sun Sentinel (Fort Lauderdale, Fla.), Paul Owers. Distributed by Tribune Content Agency, LLC.

Florida leads nation in all-cash sales – over 50% in 3Q

IRVINE, Calif. – Nov. 6, 2014 – Florida had more cash sales in the third quarter of 2014 than any other U.S. state, and a closer look at metro areas finds five Florida cities in the top five – and eight in the top 10. The data includes both single-family homes and condos.

According to RealtyTrac’sQ3 2014 U.S. Institutional Investor & Cash Sales Report, the state also has four of the top 10 cities for cash sales by institutional investors – buyers who purchase 10 or more homes per year.

In the third quarter (July-September), over half of all Florida sales (53.5 percent) were all-cash. Only Maine came close with 50.0 percent, followed by Alabama with 42.2 percent. Still, the percentage of all-cash Florida sales has declined over time. In the second quarter it was 57.6 percent; a year earlier, it was 56.2 percent.

Drilling down by metro area, Florida is also home to the U.S. leader: In Miami-Fort Lauderdale-Pompano Beach, two out of three sales are all-cash (59.1 percent), though in both the quarter and a year earlier, the percentage was above 63 percent. The following Florida cities round out RealtyTrac’s top five for all-cash sales:

  • Cape Coral-Fort Myers (55.8%)
  • Sarasota-Bradenton-Venice (54.5%)
  • Tampa-St. Petersburg-Clearwater (51.1%)
  • Palm Bay-Melbourne-Titusville (50.9%)

Two other Florida metro areas are added if looking at the top 10 all-cash list: Orlando-Kissimmee (47.6 percent) at No. 7 and Jacksonville (47.1 percent) and No. 9.

RealtyTrac also broke down the all-cash sales for a look at institutional investors. While national cities landed the top four spots, Florida metro areas ranked for the next four spots – five through eight. Cities and percent of institutional investor activity include:

  • No. 5 Orlando-Kissimmee (11.0% in 3Q, up from 9.4% year-to-year)
  • No. 6 Jacksonville (10.9%, down from 12.6% year-to-year)
  • No. 7 Miami-Fort Lauderdale-Pompano Beach (8.6%, up from 6.3% year-to-year)
  • No. 8 Tampa-St. Petersburg-Clearwater (8.6%, up from 7.5% year-to-year)

National all-cash sales

In the U.S., all-cash sales accounted for 33.9 percent of all single-family and condo sales in the third quarter, down from 36.9 percent in the second quarter. It’s unchanged from a year ago.

Cash sales helped “drive up U.S. median home prices 38 percent over the last two and half years,” says Daren Blomquist, vice president at RealtyTrac. “As institutional investors and other cash buyers slow down their purchasing … more traditional buyers – including first-time homebuyers and move-up buyers – will need to increasingly fill in the missing puzzle pieces to maintain the momentum of the housing recovery.

“Institutional investors are still actively purchasing single family rentals, but continue to gravitate toward markets where lower-end inventory is still available,” Blomquist adds.

The share of institutional investor sales increased from a year ago in eight states, including Florida. The share of cash sales increased from a year ago in 22 states. Cash sales represented 54.6 percent of distressed sales in the foreclosure process or bank-owned.

© 2014 Florida Realtors®

RealtyTrac: Fla. leads in 3Q foreclosures

MapPic_000136IRVINE, Calif. – Oct. 15, 2014 – In the third quarter, Florida once again had the highest state foreclosure rate – default notices, scheduled auctions and bank repossessions – in the nation, according to RealtyTrac’s U.S. Foreclosure Market Report.

Still, Florida foreclosures declined both month-to-month and year-to-year, at 4 percent and 17 percent respectively. One in every 153 Florida housing units had a foreclosure filing – a total of 58,589 Florida properties.

By metro area, Orlando, Atlantic City and Macon, Ga., posted the nation’s top metro foreclosure rates in the third quarter.

With one out of every 117 housing units facing a foreclosure filing in the third quarter, Orlando posted the highest foreclosure rate among metropolitan statistical areas (MSAs) with a population of 200,000 or more. Orlando saw its foreclosure rate decline 1 percent since the second quarter, but it rose 16 percent year-to-year.

In Ocala and Palm Bay-Melbourne-Titusville, third quarter foreclosure activity decreased year-to-year. However, the two cities still posted the nation’s fourth and fifth highest overall metro foreclosure rates in the third quarter.

The remaining five metro areas with top 10 foreclosure rates were all in Florida:

Miami at No. 6 (one in every 137 housing units with a foreclosure filing)
Jacksonville at No. 7 (one in every 140 housing units)
Tampa at No. 8 (one in every 148 housing units)
Lakeland at No. 9 (one in every 158 housing units)
Port St. Lucie at No. 10 (one in every 175 housing units).
Florida also remains one of the top states for the length of time it takes to complete a foreclosure, ranking second at 951 days. Only New Jersey (1,064 days) foreclosures take longer. Hawaii (937 days), New York (902 days) and Illinois (889 days) round out the top five states.

National foreclosures

Nationally, RealtyTrac reports that third quarter foreclosures were down 16 percent year-to-year but up 0.42 percent quarter-to-quarter. Looking at just September, U.S. foreclosure activity decreased on a year-over-year basis for the 48th consecutive month.

“September foreclosure activity was back to pre-housing bubble levels nationwide, in large part thanks to a continued slide in bank repossessions,” says Daren Blomquist, vice president at RealtyTrac. “However, a recent rise in scheduled foreclosure auctions in many markets across the country shows lenders are continuing to clean house of lingering delinquent loans. This rise in scheduled auctions foreshadows a corresponding rise in bank repossessions and auction sales to third party buyers in the coming months.”

© 2014 Florida Realtors®

Study: Landscaping boosts home values up to 12%

20901BLACKSBURG, Va. – Oct. 15, 2014 – Upgrading a home’s landscape from average to excellent can raise its overall value by 10 percent to 12 percent, according to research from Virginia Tech.

Alex X. Niemiera with Virginia Tech’s Department of Horticulture found that a $150,000 home with no landscaping could fetch an additional $8,300 to $19,000 more once surrounded by plants that vary in color and size.

The value of landscaping differed greatly from state to state, however. For example, the change in value from a home with no landscape to well landscaped ranged from 5.5 percent in Louisiana to 11.4 percent in South Carolina. Michigan homes saw the biggest difference in landscaping appeal, with a home’s value being increased by 12.7 percent.

“The most preferred landscape included a sophisticated design with large deciduous, evergreen, and annual color plants and colored hardscape,” according to Niemiera. Adding different plant sizes to a front yard, for example, can boost curb appeal, as well as mixing fruit trees and flowers for added color.

The survey found the following landscape elements most important:

Design sophistication
Plant size
Diversity of plant material type
“Survey results showed that relatively large landscape expenditures significantly increase perceived home value and will result in a higher selling price than homes with a minimal landscape,” Niemiera writes in the paper. “Design sophistication and plant size were the landscape factors that most affected value.”

Niemiera offers one reason why a boost in landscaping can impact a home’s value: “The resulting increase in ‘curb appeal’ of the property may also help differentiate a home in a subdivision where house styles are similar and thereby attract potential buyers into a home,” he says. “This advantage is especially important in a competitive housing market.”

Source: “Does Landscaping Increase Your Homes Value?” Realty Times (Oct. 13, 2014)

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688

Student debt costs housing $83B this year

IRVINE, Calif. – Oct. 13, 2014 – The latest John Burns Real Estate Consulting study calculates that student debt will cost the housing industry approximately $83 billion in sales this year.

With college debt increasing nearly 6 percent annually, the trend will probably continue – and likely worsen – in the years to come. The researchers estimate that heavy college debt will slash real estate sales by 8 percent for 2014, and that households that pay $750 or more for college loan debt a month will be priced out of the residential real estate market entirely, forcing them to rent or find other living situations.

Another recent study found that approved borrowers had monthly college loan payments around $300. Home-loan applicants paying nearly $500 per month in student debt, however, were usually denied.

Those researchers wrote: “Using previous academic literature as a benchmark for our own complicated calculation, we then estimated that today’s purchase rate is reduced from the normal 8 percent depending on the level of student debt.”

Source: Housing Wire (10/08/14) Garrison, Trey

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688