Valley forum to focus on housing for middle-class workers



It’s a short acronym — H.O.W. — but the three letters support a big idea.

They stand for “Housing Our Workers.”

It is not a new idea but it is a problem that is more vexing than ever, especially here in the San Fernando Valley.

Some numbers that popped up last week illustrate just how tough this issue may be to solve. The median resale home price in the Valley for 2016 rose to $599,733, just 2 percent under its record level, and the condominium median hit $373,208. Those high prices helped push home sales to their second lowest level since 1985.

Getting workers housing is now a cause for the Van Nuys-based Southland Regional Association of Realtors, which next month is hosting a day-long “Housing Our Workers Forum” in Van Nuys.

The goal is to create ways to reverse the departure from California of middle-class workers and the businesses that employ them.

The local association has enlisted the help of the National Association of Realtors, the Valley Economic Alliance and the BizFed, an alliance of business groups that advocates for policies and projects that strengthen the regional economy.

They are casting a wide net and hope to spur the construction of affordable housing. “Affordability is just a huge issue. Prices are extremely high. It’s not unique to the Valley,” said Tim Johnson, CEO of the Realtors association. “The solution rests in the legislative area at the state level and locally. It (the solution) relates to allowing development to occur in an affordable fashion. Without inventory we’re going to have that upward pressure on prices.”

The forum is just the beginning, he said.

“The idea is to really start coming up with some really actionable solutions … We hope to get some good action items for our political leaders,” Johnson said.

Two workforce projects are planned for Panorama City near the busy intersection of Roscoe and Van Nuys boulevards.

The long-shuttered Montgomery Ward department store on Roscoe Boulevard at Tobias Avenue — across the street from Panorama Mall — will be demolished to make way for hundreds of apartments, along with a variety shops.

And Panorama Tower, a high-rise office building at 8155 Van Nuys Blvd., that was damaged in the 1994 Northridge earthquake, will be turned into a development with 192 loft-style apartments and a retail component on the ground floor.

The exodus of businesses and jobs is widespread, according to a Southern California Association of Governments report.

Impacted cities include Los Angeles, Orange, Santa Clara, San Francisco, San Diego, Riverside, Alameda, San Mateo, Ventura, Sacramento and San Bernardino, the report said.

The middle-class job drain includes nurses, teachers, administrative staff, construction workers, firefighters, paramedics and law enforcement officers.

Workforce housing is an issue nationwide.

And sometimes the projects do not work out.

Mel Wilson, the Realtors association’s government affairs director, notes that if a person is earning less than $100,000 they are likely not able to buy a home in the Los Angeles area because of the high prices.

And renting a home might cost from $2,200 to $2,500 per month. A one bedroom apartment will cost a minimum of $1,500, he noted.

“The middle-class is getting the big squeeze,” Wilson, who is also a broker and owner of the real estate firm Mel Wilson Associates, said in a statement.

Some political heavyweights have been invited to speak at the forum, including Dr. Ben Carson, who president-elect Donald Trump has nominated as the Secretary of Housing and Urban Development.

Los Angeles City Council members Paul Koretz and Bob Blumenfield have said they will attend as has Los Angeles County Supervisor Kathryn Barger.

The forum will be Feb. 8 from 8:30 a.m. to 4 p.m. at the Airtel Plaza Hotel, 7277 Valjean Ave, in Van Nuys.

FHA suspends planned mortgage insurance cut

In one of the first acts of the Trump Administration, the
Federal Housing Administration (FHA) has suspended indefinitely a recent announced
cut to insurance premiums on FHA loans. 

Earlier this month, the Obama administration announced an
eleventh-hour move to reduce the annual premium on most FHA loans by 25 basis points
effective on Jan. 27.

Minutes after President
Donald Trump was sworn into office, the FHA issued a mortgagee letter that
suspended the cut indefinitely, saying that “more analysis and research are
deemed necessary to assess future adjustments.” The letter also said FHA needs
to weigh “potential market conditions in an ever-changing global economy that
could impact our efforts.”

An insurance cut was generally supported by the mortgage industry. The U.S. Mortgage Insurers, however, opposed the move, saying it would push people unnecessarily into the government program and away from conventional loans that are privately insured.

U.S.
Mortgage Insurers President Lindsey Johnson praised the move to suspend the
cut.

“Today’s
action allows the incoming administration appropriate time to begin its work
and to determine if an FHA mortgage insurance premium reduction is needed, and
how it might expose taxpayers to undue risk,” Johnson said. She said that
conventional Freddie Mac and Fannie Mae loans can be a better deal for
homebuyers because the insurance can be canceled after the borrower has established sufficient equity in the home. FHA requires borrowers to hold insurance for the entire loan term. 

“While
the FHA serves an important role in the housing market, it has expanded its
footprint dramatically since the financial crisis and should instead remain
focused on its core mission of serving underserved borrowers,” Johnson said. 

The National Association of Realtors said it was disappointed by the decision, however, and will continue to make the case for a reduction.

“According
to our estimates, roughly 750,000 to 850,000 homebuyers will face higher costs
and 30,000 to 40,000 new homebuyers will be left on the sidelines in 2017
without the cut,” the trade group said in a statement. 

During
his Senate confirmation hearing, U.S. Housing and Urban Development
Secretary-nominee Ben Carson called the late move to cut the premium “surprising” and said it would be
reviewed. Carson indicated that the Obama administration hadn’t
consulted or notified Trump’s transition team of the decision.

Reaction by mortgage trade associations was subdued. 

“We recognize the administration’s need to examine
the overall health of the insurance program and weigh that against the benefits
of lowering mortgage insurance premiums [MIPs],” said David Stevens, president of the Mortgage Bankers Association. “Given that lenders have already
started preparing for the MIP decrease, it is important that any new policy be
implemented in a way that minimizes disruption for borrowers and lenders.” 

Scott Olson, executive director of the nonbank trade group,
the Community Home Lenders Association (CHLA), said  he was still hopeful
the administration would ultimately approve the cut.

“Based on the prior administration’s lack of
communication on the FHA premium reduction, we believe  the decision to
review such action prior to implementation is prudent,” Olson said. “We are
confident the review will support a premium cut.”

Olson said the change would help millions of
homeowners “without posing risk to taxpayers.”

The cut would have saved the average homebuyer $446
a year based on the 2016 median home-sales price of homes purchased with an FHA
loan, Attom Data Solutions reported this week. 

In justifying an insurance cut, the Obama administration noted that the insurance fund’s reserve ratio exceeded the 2 percent threshold for the second year in a row last year. 






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  • Greeley-area Business Report for Jan. 22

    ON THE MOVE

    Brady Hull has been named the general manager of NewsTalk 1310 KFKA. Hull will continue to co-host Agfinity Sports Day each weekday, from 11 a.m. to 1 p.m., while taking on the added duties.

    1310 KFKA continues to serve northern Colorado with more live, locally produced programming than any other station in the market, with Chad Peterson, Gail Fallen, Hull Jason Homan, Tyler Walje and Scooter McGee hosting shows throughout the day and night. Live and local programming on 1310 KFKA also includes University of Northern Colorado football and men’s basketball and high school sports coverage.

    Maribel Hidalgo has joined Sears Real Estate as a broker associate. Hidalgo has a lived in Greeley for more than 20 years where she and her husband have been raising their four children.

    She has a background in translating in the medical field for more than 15 years and comes to Sears Real Estate as a bilingual broker associate. She specializes in helping English and Spanish speaking buyers and sellers in northern Colorado. She can be reached at (970) 689-6065 or (970) 475-1042 or maribel@searsrealestate.com.

    Re/Max Realtor John Armour relocated to Re/Max Eagle Rock in Loveland. Armour recently received a prominent National Association of Realtors Senior Real Estate Specialist designation, which demonstrations his skills in counseling clients ages 50 and over through major financial and lifestyle transitions such as relocating, downsizing or selling the family home.

    He has been working with the over-50 population for years by liquidating estates.

    He is a member of Greeley Area Realtor Association, Colorado Association of Realtors, and National Association of Realtors. He states he picked Re/Max Eagle Rock because of its central location to Windsor, Loveland, Johnstown, Fort Collins, Greeley and more.

    Call Armour at (970) 396-5054 or go to http://www.johnarmour.nocoresidential.com. Re/Max Eagle Rock is located at 6028 Stallion Drive, Loveland.

    Bruce Dennis has been promoted to advertising director of The Greeley Tribune. Dennis has been employed with The Tribune for 11 years, most recently serving as sales manager.

    He will be responsible for all revenue generation at the Tribune including digital advertising, nondigital advertising and event production. He is a graduate of Colorado State University with a bachelor’s degree in business with a concentration in marketing. He lives in Greeley with his wife, Lacy, and two sons, Ethan and Jaxon. Call him at (970) 392-4429.

    AARP offers free tax preparation in Greeley, Windsor

    Low-income residents in Greeley and Windsor can get free tax help this year through the AARP Foundation.

    AARP Foundation TaxAide, now in its 49th year, gives special attention to the older population, but tax aide is available to all ages. AARP membership is not required.

    Here are the two sites in Weld that will offer tax help:

    » Windsor Recreation Center, 250 11th St., Windsor; 8:30 a.m. to 3 p.m., Mondays and Tuesdays from Feb. 6-April 18. Call (970) 674-3500 to make an appointment.

    » High Plains Library District, 2650 29th St., Greeley. 9-11 a.m. and 1-3 p.m., Tuesday through Thursday, Feb. 1-April 18. Call (970) 584-0144 to make an appointment.

    Last year, Colorado AARP Tax-Aide volunteers helped more than 33,000 people file their federal, state and local tax returns. The program is offered at approximately 59 sites in Colorado, including senior centers, libraries and other convenient locations.

    For more information, call 1-888-AARPNOW (1-888-227-7669).

    AARP Foundation Tax-Aide is a program of AARP Foundation, offered in cooperation with the IRS.

    To include your business news in the Sunday BIZ sections, contact Sharon Dunn at sdunn@greeleytribune.com or call (970) 392-4439. Items must be received by 4 p.m. Wednesday to make it into Sunday’s paper.

    South Florida International Real Estate report – 2016 profile | Press …

    According to the new 2016 Profile of International Home Buyers of MIAMI Association of REALTORS® (MIAMI) Members conducted by MIAMI and the National Association of Realtors (NAR), foreign home buyers spent more on South Florida homes and purchased more local residential properties in 2016 than the year before.

    According to the new 2016 Profile of International Home Buyers of MIAMI Association of REALTORS® (MIAMI) Members conducted by MIAMI and the National Association of Realtors (NAR), foreign home buyers spent more on South Florida homes and purchased more local residential properties in 2016 than the year before.

    The fifth annual survey, which includes data from Miami-Dade, Broward, Palm Beach and Martin counties, ranks countries of origin and highlights key characteristics of foreign buyers.

    “Our new South Florida international real estate report shows a more diverse group of countries purchasing Miami real estate,” said Christopher Zoller, the 2017 MIAMI chairman of the board. “Miami continues to be one of the world’s top destinations for international home buyers.”

    More than half of all international home sales in the entire state of Florida (52 percent) happen in Miami-Fort Lauderdale-West Palm Beach, according to NAR’s 2016 Profile International Residential Real Estate Activity in Florida.

    About 80 percent of all South Florida international home sales take place in Miami-Dade County, according to the new MIAMI and NAR report. The report showed a foreign buyer sales volume for the following counties: Broward (16.4 percent), Palm Beach (3.0 percent) and Martin (.4 percent).

    Foreign buyers purchased $6.2 billion of South Florida residential properties in 2016, up from $6.1 billion a year ago, according to the MIAMI and NAR report. International unit sales also increased to 24 percent of total sales in South Florida, up from 22 percent in 2015.

    Top Countries Investing in South Florida

    The countries of origin for consumers purchasing properties in Miami-Dade, Broward, Palm Beach and Martin counties are:

    1. Venezuela (15 percent of South Florida foreign purchases)

    2. Argentina (11 percent)

    3. Brazil and Colombia (10 percent each)

    4. Canada (6 percent)

    5. Mexico, France Peru (4 percent each)

    The top tier countries of origin — Venezuela, Argentina, Brazil, Colombia, Canada, Mexico, France and Peru — account for 64 percent of total South Florida international closed sales.

    By dollar volume, Venezuela, Brazil, Argentina, Canada and Colombia accounted for nearly half of the $6.2 billion of South Florida international home sales in 2016. Venezuelan and Brazilian buyers topped the list with $868 million and $861 million in sales volume, respectively.

    The top tier of countries continues with each at 3 percent of international sales:

    • Italy
    • Ecuador
    • China
    • Dominican Republic
    • United Kingdom

    Next tier countries of origin are: Spain, Germany, Australia, Honduras, South Korea, Russia, India, Costa Rica, Japan, Malaysia, Chile, Panama, Nicaragua and Portugal.

    Top Countries by County

    The top countries of origin for consumers purchasing properties in Miami-Dade are:

    1. Venezuela (17 percent)

    2. Brazil (15 percent)

    3. Argentina (14 percent

    4. Colombia (8 percent)

    5. Italy, Mexico Canada (4 percent each)

    Other top countries include Canada, France, China, the Dominican Republic and Peru.

    The top countries of origin for consumers buying real estate in Broward County are:

    1. Venezuela (18 percent)

    2. Colombia (17 percent)

    3. Canada (13 percent)

    4. Argentina (12 percent)

    5. Brazil (10 percent)

    The top countries of origin for consumers buying real estate in Palm Beach County are:

    1. Canada (30 percent)

    2. Venezuela (9 percent)

    3. Brazil, Germany Italy (7 percent each)

    4. Argentina, Colombia, Ireland Russia (4 percent each)

    The top countries of origin for consumers buying real estate in Martin County are:

    1. Canada (21 percent)

    2. Australia Brazil (13 percent)

    3. Germany Venezuela (8 percent each)

    Additional Survey Highlights

    Foreign home buyers spend more on average on real estate than other buyers, and MIAMI real estate buyers spend even more on average than other international buyers in the state of Florida or nationally.

    South Florida international home buyers paid $570,000 on average for residential properties. In comparison, all MIAMI buyers spend $352,900 on average. Foreign buyers of Florida Realtors members spend $412,100 on average, while foreign buyers in the U.S. spend $477,500 on average.

    Miami has about double the number of all-cash buyers than the national average. International home buyers in South Florida comprise an even larger percentage of all-cash buyers. According to the new MIAMI and NAR survey, about 72 percent of all international residential transactions in South Florida were made in all-cash.

    South Florida international home buyers prefer condominiums (55 percent) in the central/urban areas (58 percent), which they intend to use mainly as residential rental, vacation home or both (75 percent).

    About 5.5 percent of South Florida foreign buyers purchased local homes without even visiting Florida. About 19.7 percent purchased with just one visit to Florida; 25.4 percent purchased with just two visits; 22.1 percent bought after visiting Florida three times.

    South Florida international buyers purchased 10,885 residential properties in 2016 compared to 10,678 the year before, a 1.93 percent increase.

    About 70 percent of MIAMI members work with international buyers. That’s more than double the national figure of 31 percent, according to NAR.

    Survey results reflect MIAMI’s commitment to increasing South Florida’s real estate brand worldwide and the Miami real estate market’s position as a top international destination.

    MIAMI has 160 partner organizations worldwide and conducts international outreach on a global level.

    The 2016 survey provides information on the international residential transactions of MIAMI members from August 2015 through July 2016.

    Click here to access the full report.

    About the MIAMI Association of REALTORS®

    The MIAMI Association of REALTORS® was chartered by the National Association of Realtors in 1920 and is celebrating 97 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations, the Residential Association, the Realtors Commercial Alliance, the Broward Council, the Jupiter Tequesta Hobe Sound (JTHS) Council, the Young Professionals Network (YPN) Council and the award-winning International Council, it represents nearly 45,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local Realtor association in the U.S., and has official partnerships with 160 international organizations worldwide. MIAMI’s official website is http://www.miamire.com

    Tags:
    Real Estate

    NAR says forecast shows now is a good time to buy a home

    <!–
    –>

    MARQUETTE –Existing-home sales are forecast to muster only a small gain in 2017 because of increasing mortgage rates and shrinking consumer confidence that now is a good time to buy a home, according to new consumer survey findings and a 2017 housing forecast from the National Association of Realtors.

    NAR’s Housing Opportunities and Market Experience (HOME) survey, which asked respondents about their confidence in the U.S. economy and housing expectations for 2017, recently found that 68 percent of homeowners think now is a good time to make a home purchase compared to 82 percent in December 2015.

    Even with this dip in buyer enthusiasm, the market did well and existing sales closed 2016 3.3 percent higher than 2015 and reached around 5.42 million  the highest since 2006 when sales totaled 6.47 million.

    In 2017, sales are forecast to grow roughly two percent to around 5.52 million. The national median existing-home price rose to around 5 percent in 2016 and is expected to rise to about four percent in 2017. By the end of next year, mortgage rates are expected to reach around 4.6 percent.

    “Existing-home sales are expected to see little expansion in 2017 because of affordability tensions from rising mortgage rates and home prices continuing to outpace income growth,” said Pam Caron, president of the Upper Peninsula Realtors.  “Ultimately, the market needs to see a growth in for sale inventory, otherwise the nation s low homeownership rate will struggle to rise in 2017.”

    Here are a few of the trends and predictions the Upper Peninsula Realtors expects to see play out in the new year:

    — Tight inventory conditions will continue. Recent data from NAR show that the supply of existing homes for sale is insufficient, and new home construction is not meeting demand. More buyers are competing for a fewer number of affordable homes than a year ago, which will likely continue in 2017.

    — Increasing home prices. With demand rising and listings scarce in many markets, NAR forecasts home prices will increase nationally about four percent in 2017. In cities with the tightest of supply, prices could expand above double digits.

    — Rising mortgage rates. The recent rise in mortgage rates will likely continue in 2017 with additional increases.  With inventory tight and prices already rising far above incomes in some areas, the unwelcoming sign of higher borrowing costs only adds to the difficult barrier of entry for many prospective buyers,  said Car


    Hudson Realtors close on merger with Manhattan group

    The Hudson Gateway Association of Realtors (HGAR) is beginning its outreach to real estate professionals throughout Manhattan now that it has merged with the Manhattan Association of Realtors (MANAR).

    The merger became official on January 1, 2017 after it was previously approved by HGAR, MANAR and the National Association of Realtors (NAR).
    The NAR is America’s largest trade association, representing over 1.1 million members involved in all aspects of the residential and commercial real estate industries.

    “What sets Realtors apart from any other real estate professionals is their adherence to a strict Code of Ethics and Standards of Practice,” explained Richard Haggerty, HGAR CEO (pictured top).

    “Not everyone in the real estate industry is a Realtor and now we can offer that opportunity to thousands of real estate agents and brokers doing business in Manhattan.”

    Haggerty said the merger deal began earlier this year when chief officials of MANAR approached his organization.
    Both HGAR and MANAR have subsidiary Multiple Listing Services (MLSs) and the plan of merger also calls for an eventual merger of the two MLS.

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    South Florida International Real Estate report – 2016 profile

    According to the new 2016 Profile of International Home Buyers of MIAMI Association of REALTORS® (MIAMI) Members conducted by MIAMI and the National Association of Realtors (NAR), foreign home buyers spent more on South Florida homes and purchased more local residential properties in 2016 than the year before.

    According to the new 2016 Profile of International Home Buyers of MIAMI Association of REALTORS® (MIAMI) Members conducted by MIAMI and the National Association of Realtors (NAR), foreign home buyers spent more on South Florida homes and purchased more local residential properties in 2016 than the year before.

    The fifth annual survey, which includes data from Miami-Dade, Broward, Palm Beach and Martin counties, ranks countries of origin and highlights key characteristics of foreign buyers.

    “Our new South Florida international real estate report shows a more diverse group of countries purchasing Miami real estate,” said Christopher Zoller, the 2017 MIAMI chairman of the board. “Miami continues to be one of the world’s top destinations for international home buyers.”

    More than half of all international home sales in the entire state of Florida (52 percent) happen in Miami-Fort Lauderdale-West Palm Beach, according to NAR’s 2016 Profile International Residential Real Estate Activity in Florida.

    About 80 percent of all South Florida international home sales take place in Miami-Dade County, according to the new MIAMI and NAR report. The report showed a foreign buyer sales volume for the following counties: Broward (16.4 percent), Palm Beach (3.0 percent) and Martin (.4 percent).

    Foreign buyers purchased $6.2 billion of South Florida residential properties in 2016, up from $6.1 billion a year ago, according to the MIAMI and NAR report. International unit sales also increased to 24 percent of total sales in South Florida, up from 22 percent in 2015.

    Top Countries Investing in South Florida

    The countries of origin for consumers purchasing properties in Miami-Dade, Broward, Palm Beach and Martin counties are:

    1. Venezuela (15 percent of South Florida foreign purchases)

    2. Argentina (11 percent)

    3. Brazil and Colombia (10 percent each)

    4. Canada (6 percent)

    5. Mexico, France Peru (4 percent each)

    The top tier countries of origin — Venezuela, Argentina, Brazil, Colombia, Canada, Mexico, France and Peru — account for 64 percent of total South Florida international closed sales.

    By dollar volume, Venezuela, Brazil, Argentina, Canada and Colombia accounted for nearly half of the $6.2 billion of South Florida international home sales in 2016. Venezuelan and Brazilian buyers topped the list with $868 million and $861 million in sales volume, respectively.

    The top tier of countries continues with each at 3 percent of international sales:

    • Italy
    • Ecuador
    • China
    • Dominican Republic
    • United Kingdom

    Next tier countries of origin are: Spain, Germany, Australia, Honduras, South Korea, Russia, India, Costa Rica, Japan, Malaysia, Chile, Panama, Nicaragua and Portugal.

    Top Countries by County

    The top countries of origin for consumers purchasing properties in Miami-Dade are:

    1. Venezuela (17 percent)

    2. Brazil (15 percent)

    3. Argentina (14 percent

    4. Colombia (8 percent)

    5. Italy, Mexico Canada (4 percent each)

    Other top countries include Canada, France, China, the Dominican Republic and Peru.

    The top countries of origin for consumers buying real estate in Broward County are:

    1. Venezuela (18 percent)

    2. Colombia (17 percent)

    3. Canada (13 percent)

    4. Argentina (12 percent)

    5. Brazil (10 percent)

    The top countries of origin for consumers buying real estate in Palm Beach County are:

    1. Canada (30 percent)

    2. Venezuela (9 percent)

    3. Brazil, Germany Italy (7 percent each)

    4. Argentina, Colombia, Ireland Russia (4 percent each)

    The top countries of origin for consumers buying real estate in Martin County are:

    1. Canada (21 percent)

    2. Australia Brazil (13 percent)

    3. Germany Venezuela (8 percent each)

    Additional Survey Highlights

    Foreign home buyers spend more on average on real estate than other buyers, and MIAMI real estate buyers spend even more on average than other international buyers in the state of Florida or nationally.

    South Florida international home buyers paid $570,000 on average for residential properties. In comparison, all MIAMI buyers spend $352,900 on average. Foreign buyers of Florida Realtors members spend $412,100 on average, while foreign buyers in the U.S. spend $477,500 on average.

    Miami has about double the number of all-cash buyers than the national average. International home buyers in South Florida comprise an even larger percentage of all-cash buyers. According to the new MIAMI and NAR survey, about 72 percent of all international residential transactions in South Florida were made in all-cash.

    South Florida international home buyers prefer condominiums (55 percent) in the central/urban areas (58 percent), which they intend to use mainly as residential rental, vacation home or both (75 percent).

    About 5.5 percent of South Florida foreign buyers purchased local homes without even visiting Florida. About 19.7 percent purchased with just one visit to Florida; 25.4 percent purchased with just two visits; 22.1 percent bought after visiting Florida three times.

    South Florida international buyers purchased 10,885 residential properties in 2016 compared to 10,678 the year before, a 1.93 percent increase.

    About 70 percent of MIAMI members work with international buyers. That’s more than double the national figure of 31 percent, according to NAR.

    Survey results reflect MIAMI’s commitment to increasing South Florida’s real estate brand worldwide and the Miami real estate market’s position as a top international destination.

    MIAMI has 160 partner organizations worldwide and conducts international outreach on a global level.

    The 2016 survey provides information on the international residential transactions of MIAMI members from August 2015 through July 2016.

    Click here to access the full report.

    About the MIAMI Association of REALTORS®

    The MIAMI Association of REALTORS® was chartered by the National Association of Realtors in 1920 and is celebrating 97 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations, the Residential Association, the Realtors Commercial Alliance, the Broward Council, the Jupiter Tequesta Hobe Sound (JTHS) Council, the Young Professionals Network (YPN) Council and the award-winning International Council, it represents nearly 45,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local Realtor association in the U.S., and has official partnerships with 160 international organizations worldwide. MIAMI’s official website is http://www.miamire.com

    Tags:
    Real Estate

    FHA Price Cut Officially Halted Moments After Trump Sworn In

    Image: Bloomberg News

    The Department of Housing and Urban Development has suspended the 25-basis-point reduction in Federal Housing Administration premiums that was previously announced by the outgoing Obama administration.

    The decision, which had been widely expected, was announced in a HUD mortgagee letter shortly after Donald Trump was sworn in as president Friday. HUD said the reduction “has been suspended indefinitely.” The move was effective immediately.

    “FHA will issue a subsequent Mortgagee Letter at a later date should this policy change,” HUD said.

    The reduction in annual premiums had been slated to go into effect Jan. 27 under a policy approved by outgoing HUD Secretary Julian Castro, yet the incoming Trump administration seemed opposed to the idea of the price cut as soon as it had been announced.

    A published report earlier this week quoted a Trump spokesperson as calling the premium reduction a “last-minute policy change by Secretary Castro that could detrimentally impact FHA’s reserves.”

    “The incoming policy team has not seen the model the outgoing administration used, nor their analysis, and nothing was communicated to the incoming team before the announcement was made,” the spokesperson said, according to the report attributed to Politico.

    The mortgagee letter Friday said, “FHA is committed to ensuring its mortgage insurance programs [remain] viable and effective in the long term for all parties involved, especially our taxpayers.”

    “As such, more analysis and research are deemed necessary to assess future adjustments while also considering potential market conditions in an ever-changing global economy that could impact our efforts,” the letter said.

    With Castro having planned to step down Friday, Craig Clemmensen, director of HUD’s Departmental Enforcement Center, will serve as acting HUD secretary. The Senate Banking Committee is slated to vote Jan. 24 on Ben Carson’s nomination to succeed Castro.

    Some in the mortgage industry have read the delay as a sign there is still hope for the premium reduction, while others see a delay as meaning the premium cut will ultimately be abandoned.

    A suspension “leaves the door open to implement the cut in the near future,” National Association of Realtors President William Brown said Thursday, before the news was made official.

    NAR estimates that roughly 750,000 to 850,000 homebuyers would face higher costs and 30,000 to 40,000 new homebuyers will be left on the sidelines in 2017 without the premium reduction.

    “For now, we believe that the benefits of the mortgage insurance premium cut will shine through during this review period so it can be quickly put back into place,” Brown said.

    Scott Olson, executive director of the Community Home Lenders Association, agreed. “Based on the prior administration’s lack of communication on the FHA premium reduction, we believe the decision to review such action prior to implementation is prudent,” he said. “We are confident the review will support a premium cut.”

    But others saw it as more likely that the new administration will not adopt the Castro policy.

    “If a delay does materialize, we would likely increase our published odds of a full reversal from 40% to 70%,” said Compass Point analysts Isaac Boltansky and Fred Small in a Jan. 19 note.

    FBR Capital Markets policy analyst Edward Mills said he expects the new administration will reverse the FHA mortgage insurance premium cut.

    “This is consistent with the skepticism that Dr. Carson expressed related to the cut during his confirmation hearing and the strong opposition to the cut by Congressional Republicans,” Mills said in a note Thursday.

    A reversal of the cut will be “positive for the private mortgage insurers, as there was concern the FHA MIP cut would make the FHA product less expensive/more attractive,” he added.

    Senate Democratic leader Charles Schumer, D-N.Y, denounced the Trump administration’s decision to halt the reduction.

    “What a terrible thing to do to American homeowners. President Trump, with the flick of a pen, ended that new policy, making it harder for Americans of modest means to obtain their piece of the rock, the American dream — homeownership,” Schumer said.

    He noted the 25-basis-point premium reduction would save new homeowners on average $500 a year.

    “We urge President Trump to reverse this decision and give new homeowners across America their $500 back,” Schumer said.

    Meanwhile, four candidates have been mentioned for the FHA commissioner post. The selection of the new FHA commissioner “could give us more clarity on the future direction of the FHA and housing policy,” Mills says in his report.

    Shawn Krause, executive vice president at Quicken Loans, and Edward Brady, an Illinois homebuilder and former chairman of the National Association of Home Builders, are potential candidates for the FHA commissioner post. Krause and Brady would “likely push to expand FHA’s role in the market,” Mills said in his Jan. 19 report.

    Meanwhile, other candidates — including Mark Calabria of the Cato Institute and House Financial Services Committee staffer Clinton Jones — would “likely push the FHA to return to its original mission,” Mills said.

    How the GOP’s tax plan could affect the real-estate market


    Home for sale sign
    i
    am real estate photographer via flickr


    Until recently, the mortgage interest deduction was right up
    there with Social Security as a sacrosanct institution on Capitol
    Hill, protected by lawmakers on both sides of the aisle.

    Backed by the powerful National Association of Realtors and
    supported broadly by middle-class homeowners, previous efforts to
    dismantle the mortgage deduction have gone nowhere.

    However, the Better Way tax-reform “blueprint” from
    Republican House Speaker Paul Ryan would essentially get rid of
    the mortgage interest deduction, without policymakers having to
    vote to eliminate it.

    The plan would make the standard deduction far more valuable —
    increasing it from $12,600 to $24,000 for a married couple. This
    would result in far fewer people itemizing their taxes, which is
    necessary in order to claim the mortgage tax deduction.
    (President-elect Donald Trump’s tax plan calls for raising the
    deduction even higher, to $30,000 for joint filers.)


    A general view of the U.S. Internal Revenue Service (IRS) building in Washington May 27, 2015. Tax return information for about 100,000 U.S. taxpayers was illegally accessed by cyber criminals over the past four months, U.S. IRS Commissioner John Koskinen said on Tuesday, the latest in a series of data thefts that have alarmed American consumers. REUTERS/Jonathan Ernst   - RTX1EU8Y
    A
    general view of the U.S. Internal Revenue Service (IRS) building
    in Washington

    Thomson
    Reuters


    Under the House Republicans’ plan, an estimated 38 million of the
    45 million filers (or 84 percent) who currently itemize would opt
    instead for the standard deduction, according to an analysis by the Tax Policy
    Center
    . The GOP proposal states that “far fewer taxpayers
    will choose to itemize deductions, with the vast majority of
    taxpayers finding they are better off by taking advantage of the
    larger, simpler standard deduction instead.”

    Under current rules, taxpayers can itemize and
    deduct the interest paid on up to $1 million on a mortgage, and
    home equity debt of up to $100,000. The mortgage interest
    deduction is the third-most expensive subsidy in the tax code,
    costing the federal government about $70 billion per
    year, according to the Tax Foundation.

    Even with Republican control of the House, Senate and the White
    House, the Republican tax plan is nowhere near a done deal.
    Nearly three-quarters of Americans recently polled by the National Association of
    Home Builders
     say that they support the government
    providing tax incentives that encourage homeownership, and
    lobbyists for the real estate and construction industries are
    already gearing up to fight the provision.


    Paul Ryan
    Paul
    Ryan.

    Mark Wilson/Getty
    Images


    If the blueprint were to become law, it would have ramifications
    for millions of taxpayers, homeowners and sellers, but the
    overall impact on the housing market (and your wallet) may be
    smaller than you think. Here’s what you need to know:

    1. Home values could fall in the
    short-term. 

    The total elimination of the mortgage interest deduction might
    push prices down around 7 percent, according a recent paper from the Federal Reserve. The
    impact might be smaller if the deduction is not fully repealed.
    That’s a relatively small decrease compared to the double-digit
    decline seen after the housing bubble burst in 2006, but it would
    mean a paper loss of nearly $17,000 on the average $240,000 home.
    Still, the impact of increasing the standard deduction, rather
    than eliminating the mortgage-interest deduction, would likely
    have a smaller impact.

    2. But only a small portion of taxpayers uses the
    mortgage-interest deduction. 

    While it enjoys broad support, the vast majority of homeowners
    don’t benefit from the mortgage interest deduction as it
    currently stands. The benefit is only available to those who have
    a mortgage on their home and who itemize their taxes.

    Only about 20 percent of taxpayers currently claim the deduction,
    and it has an average benefit of just over $2,000, according to the Tax Policy Center. “You go to
    [mid-tier markets] like Texas, Florida, and Arizona, and no one
    talks about buying a home to save on taxes,” says John Burns of
    John Burns Real Estate Consulting, which provides data and advice
    to real estate investor. “It’s not even part of the equation
    anymore.”

    3. Most consumers would still be better off
    buying. 

    It’s cheaper to buy than to rent a home in most parts of the
    country, and that wouldn’t change with the elimination of the
    mortgage deduction. “This doesn’t fundamentally affect the
    rent-versus-buy decision,” says Trulia Chief Economist Ralph
    McLoughlin. “It makes it less of a better deal to buy than to
    rent, but buying still remains a good financial option if a
    household can stay in their home for seven years.”


    Couple Homeowners
    Flickr
    / Dorret


    calculation
    by Politico
     finds that a homeowner with a
    $65,000 annual salary would see the tax benefits of buying a
    $263,000 condo plummet from $3,325 a year to $166. Tying up your
    assets and losing the ability to easily relocate may not be worth
    that much, although there are other benefits of homeownership,
    such as growing equity and protection from rising rents, and
    there are many emotional incentives that compel people to become
    home owners.

    4. Middle-income homeowners would feel the biggest
    bite. 

    Any impact on home prices would likely be concentrated on more
    moderately priced homes, where the owners aren’t paying enough in
    interest to outweigh taking the new deduction but aren’t in a
    high enough tax bracket to get a huge
    break. The Tax Policy Center estimates that
    middle-income taxpayers would see an average tax cut of only $260
    per year under the Republican plan. That’s hardly enough to
    offset even a modest loss in home equity, although long-term
    demand would likely see prices bounce back over time.

    5. High-income homeowners would benefit. 

    The wealthiest homeowners would benefit from both the tax cut and
    continued access to the mortgage-interest deduction, since they’d
    likely continue to itemize. Those making more than $1 million a
    year typically save nearly $9,000 thanks to the deduction. Under
    the Republic tax plan, the top quintile of taxpayers would also
    receive an average tax cut of $11,000 a year.

    Due to larger mortgages and a higher tax rate, wealthy borrowers
    already benefit disproportionately from the mortgage interest
    deductions, which wouldn’t change. Wealthy taxpayers often choose
    to finance the purchase of a home even though they could pay
    cash, as part of a broader tax planning strategy.

    Foreclosure rates fall, while home sales climb in Havasu – Today’s News

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