For Sellers • August 4, 2023

Understanding Seller Disclosure Responsibilities: A Guide for Homeowners

by Kevin Farfan

Hello everyone, Kevin Farfan here! As a seasoned realtor in the vibrant city of Tampa, I’ve been immersed in the intricate world of property transactions for years. I’m excited to share my insights today about an aspect of selling property that’s critically important but often overlooked: Seller Disclosure Responsibilities.

Before I dive into specifics, let’s discuss what a seller disclosure is. In simple terms, it’s a document where sellers provide pertinent information about their property. In Florida, the law requires sellers to disclose any facts or conditions about their property that have a substantial impact on its value or desirability, and that others cannot easily observe.

While this definition can encompass a broad range of issues, today, I’ll focus on two important aspects: known Homeowners Association (HOA) assessment fees and any pending HOA lines of credit for community upgrades and repairs. As a seller, being forthright about these matters can help ensure a smoother transaction process and protect you from potential legal complications down the road.

HOA Assessment Fees and Rate Hikes

HOAs are commonplace in Tampa and across Florida. They help maintain community standards and provide shared amenities. However, they come with additional costs to homeowners, often in the form of HOA dues or assessment fees. If you’re aware of a future increase in these fees, it’s your responsibility to disclose this to potential buyers. This increase could significantly impact a buyer’s decision since it’s an ongoing expense they will have to budget for after they purchase the home.

HOA Lines of Credit for Community Upgrades and Repairs

An HOA may decide to take a line of credit for major repairs, renovations, or improvements within the community. These costs are often passed on to homeowners in the form of special assessments or increased HOA fees, sometimes years after the money was borrowed. If you’re aware that your HOA has a line of credit that has not been fully repaid, you must disclose this fact to the buyer. Even if the HOA hasn’t announced how it will recover the costs, it’s a potential financial liability for the buyer that could sway their decision.

In conclusion, maintaining transparency about known issues, including potential HOA fee increases and outstanding lines of credit, is not just an ethical move – it’s a legal obligation. These are facts that can significantly impact the property’s value and the buyer’s quality of life. Ignorance is never bliss when it comes to real estate transactions. The more informed both parties are, the smoother the transaction will be, and the less likely any legal complications will arise.

As always, I am are here to guide you through your real estate journey. We are dedicated to ensuring that your selling process is as seamless and transparent as possible.

Until next time,

Kevin Farfan LLC GRI, PSA, RENE, MRP, C-RETS

Coldwell Banker Realty

213 W. Bloomingdale Ave.

Brandon, FL. 33511

Cell 813-784-7139

website: www.kevinfarfan.com

“I Sell Lifestyles!”

Disclosure: Please note that while I, Kevin Farfan, am a licensed real estate agent with extensive experience in the industry, the information provided in this blog is intended for general informational purposes only and should not be construed as legal advice on any matter. Each real estate transaction is unique, and laws vary by state. Therefore, all sellers are strongly encouraged to seek legal advice from a qualified professional to address any concerns they may have regarding their real estate transactions. Stay informed and always make your decisions based on professional advice tailored to your specific circumstances.

For Homeowners • July 28, 2023

Navigating the Complex World of HOA Loans: An Essential Guide for Homeowners

by Kevin Farfan

Maintaining an attractive, functioning community doesn’t just happen overnight. It requires constant attention, effort, and most importantly, capital. Homeowners’ Association (HOA) boards are faced with the task of juggling these elements to ensure their community thrives, but what happens when the budget doesn’t match the ambition? Enter HOA loans – a controversial yet potentially beneficial financial instrument that has stirred debates amongst many HOA communities.

This blog post aims to shed light on the intricacies of HOA loans, exploring their pros and cons, and helping you navigate your way through this financial maze. By understanding HOA loans more comprehensively, we can better support our community’s development while also protecting our personal finances.

Decoding HOA Loans

Ideally, every HOA should maintain a robust operating budget for routine expenses and a sizable reserve fund for future projects, unplanned repairs, or unforeseen costs. But what if the capital falls short? Here’s where HOA loans come in.

When an HOA borrows money, the lending bank provides the needed funds to complete ongoing or upcoming projects. The HOA then gradually repays this amount over a predetermined period, with added interest. The alternative to this, a one-time special assessment, often places a heavier financial burden on homeowners, pushing many HOA boards towards loans instead.

So, is securing an HOA loan the right move for your community? Let’s delve into the pros and cons.

Weighing the Pros of HOA Loans

Instantaneous Funding

By securing an HOA loan, your community can get its hands on the necessary funds without draining your reserves. This means that the community can expedite essential renovations, repairs, or equipment upgrades without having to stagger the projects due to funding constraints.

Easing the Homeowners’ Burden

From a homeowner’s viewpoint, HOA loans can be more palatable than special assessments. Rather than having to cough up large sums of money in a short span for special assessments, homeowners experience a more manageable, slight increase in their monthly dues due to an HOA loan.

Moreover, the loan payment term aligns with the homeowner’s stay within the community. If a family leaves before the loan tenure ends, their financial obligation towards the loan ceases, passing onto the new owners.

Empowering the HOA Board

An HOA loan can turbocharge your board’s efficiency. With enough funds in the kitty, board members can better execute their responsibilities, whether it’s maintaining infrastructures, resurfacing driveways, or even securing an insurance premium at a discounted rate by paying up-front. The community thus reaps the benefits of a well-managed HOA board that makes effective use of the dues contributed by the homeowners.

Considering the Cons of HOA Loans

Misappropriation of the Loan

Taking out a loan equates to placing your HOA in debt, which could spell disaster if misused. HOA loans should not be used to offset monthly dues or cater to unnecessary expenses. Doing so not only jeopardizes the financial health of the HOA but also burdens the homeowners with excessive dues.

Handling Delinquent Homeowners

Each HOA encounters its share of delinquent homeowners who default on their monthly dues. When dealing with an HOA loan, this could complicate the repayment process and potentially put extra pressure on other homeowners or the reserve funds.

Navigating the Loan Management Process

Securing and managing an HOA loan is a complex task requiring substantial preparation. The bank may ask for a range of information, including the community size, delinquency rates, and recent financial reports. Post-approval, managing the loan to ensure monthly repayments are made timely is an additional burden on the HOA board. Consulting with an HOA management company could prove beneficial in navigating these challenges.

Making the Decision: Should Your HOA Take Out a Loan?

The decision to secure an HOA loan shouldn’t be taken lightly. It’s crucial for all stakeholders to understand what an HOA loan entails and how it impacts the community. With the right knowledge, you can confidently discuss this matter and make informed decisions.

Remember, while HOA loans may provide immediate financial relief for large-scale projects, they also place your community in debt. Therefore, thorough consideration of all aspects, including the pros and cons, is imperative.

If you need further insights or professional assistance, don’t hesitate to engage with an HOA management company. They can guide you through the legal and financial aspects of an HOA loan, ensuring your community’s best interests are always at the forefront.

Kevin Farfan LLC GRI, PSA, RENE, MRP, C-RETS

Coldwell Banker Realty

213 W. Bloomingdale Ave.

Brandon, FL. 33511

Cell 813-784-7139

website: www.kevinfarfan.com

“I Sell Lifestyles!”

For Buyers • July 22, 2023

The Charm of Ruskin, FL: Reasons to Make It Your New Home

by Kevin Farfan

The allure of Florida’s Tampa Bay region is undeniable. Its tranquil parks, sandy beaches, diverse culinary scene, vibrant nightlife, and the affordable cost of living have endeared many. And nestled within Tampa’s SouthShore district, where Tampa Bay meets the Gulf of Mexico, is Ruskin, an endearing bedroom community known for its small-town charm, proximity to water activities, and convenient location, a mere 20 miles from Tampa. If you’re considering a home in the Tampa Bay area, here are some compelling reasons why Ruskin should top your list.

A Small-Town Vibe Close to It All
Ruskin, Florida, offers an inviting small-town ambiance, replete with family-friendly outdoor activities, locally-owned restaurants, and a tranquil, nature-inspired environment. Set near the Little Manatee River and Tampa Bay, you can enjoy breathtaking sunsets, waterside dining, and a variety of activities like kayaking on the river, sunset cruises on Tampa Bay, and deepwater fishing trips in the Gulf.

Despite its small-town feel, Ruskin provides easy access to the city’s hustle and bustle and job opportunities. Bradenton Riverwalk is a quick 19-mile drive to the south, while historic Ybor City and Downtown Tampa lie 21 and 24 miles to the north. For beach lovers, the white sands of Anna Maria Island are just 29 miles or about 45 minutes away. Or, stay closer to home and visit Apollo Beach, a mere 15-minute drive north, where you can enjoy the waters of Tampa Bay and the fascinating TECO Manatee Viewing Center.

Experience the Tranquility of E.G. Simmons Park
Located just five miles from Ruskin’s new homes for sale, E.G. Simmons Park covers 258 acres of native mangroves, open land, and waterways, with an additional 200 acres preserved as a bird and wildlife sanctuary. It’s a haven for nature lovers, offering camping, kayaking, fishing, picnicking, and swimming along 700 feet of beach on Tampa Bay’s shores.
Ruskin Family Drive-In
For a unique, nostalgic movie experience, the Ruskin Family Drive-In is a must-visit. Known as the “last 50’s family drive-in” in the USA, this historic venue is only 3.5 miles from your new home and offers the charm of watching films from the comfort of your car. It also hosts special market events, such as the upcoming Holiday Pop-Up Market.
Vibrant Festivals
Ruskin is known for its community-driven festivals. The SouthShore Seafood & Arts Festival, the biggest outdoor festival in Hillsborough County, takes place every November at E.G. Simmons Park. The festival blends delectable seafood, amazing arts, kids’ activities, and live music, making for two fun-filled days. In the spring, the Ruskin Tomato and Heritage Festival celebrates the town’s agricultural history with delicious food, arts, and crafts, a pageant, and more.
Southshore Yacht Club
After a day of sun-soaked fun, wouldn’t you love to return to a luxurious home? At Southshore Yacht Club in Ruskin, FL, you can! The Somerset Preserve is a collection of stunning single-family homes in this coastal city, offering new luxury homes and the best of waterfront living. The community features a full-service marina with deep-water access, relaxed beachfront dining, water-inspired amenities, and stunning views of Tampa Bay. Plus, it’s close to great shops, restaurants, pristine beaches, and all the offerings of the big city.

To learn more, visit Southshore Yacht Club – Somerset Preserve and contact Kevin Farfan for your showing today!

In sum, Ruskin, FL, offers an unbeatable blend of small-town charm and big-city conveniences, set against a backdrop of stunning natural beauty. It truly is the ideal place to call home.

Kevin Farfan LLC GRI, PSA, RENE, MRP, C-RETS

Coldwell Banker Realty

213 W. Bloomingdale Ave.

Brandon, FL. 33511

Cell 813-784-7139

website: www.kevinfarfan.com

“I Sell Lifestyles!”

Housing Market Updates • July 20, 2023

Insurance Woes: The Brewing Storm in Florida’s Real Estate

by Kevin Farfan

In Florida, there’s a new tempest brewing that’s as impactful as a hurricane, but this one doesn’t involve swirling winds or catastrophic downpours. Instead, it revolves around the insurance industry’s retreat from the state’s property market, a development with grave implications for the Sunshine State’s real estate sector, which continues to attract new residents from across the globe.

In recent times, the phrase “hurricanes are expensive” has become a bitter reality for Florida. Every year, these violent storms result in millions, even billions, in damages. The latest blow comes as Farmers, a major home insurer, declared that it would stop issuing new policies in Florida. They are following in the footsteps of several insurance firms that have abandoned the state, citing climate-driven disasters, a surge in litigation, and unfavorable policy decisions.

While Florida’s housing market has shown adaptability in the face of natural disasters, Cyndee Haydon, a Tampa region agent and Chair of the National Association of REALTORS®’ Insurance Committee, flags a different problem. “With interest rates up, affordability becomes a challenge,” she notes. It’s not just about home prices but also escalating insurance costs. Renewal rates are skyrocketing by 25%, 50%, even 100%. As these prices soar, many homeowners are struggling to keep up.

The trouble in Florida’s insurance landscape extends beyond the natural disasters. According to the Insurance Information Institute, Florida is the epicenter for 79% of all homeowner insurance lawsuits. Governor Ron DeSantis’ recent bill limiting litigation has been met with mixed reactions. Proponents argue that it shields insurers from unjust lawsuits, but critics warn that it will impede homeowners from seeking redress for legitimate claims.

Haydon believes this crisis is not confined to Florida and warns of similar insurance woes in states like Louisiana, California, and perhaps Texas. She notes the dilemma faced by homeowners reluctant to pay higher premiums and insurance companies unwilling to incur huge losses year after year.

The frequency and severity of natural disasters are escalating, making it pricier to rebuild or repair homes. Despite insurers’ long-term ability to model for these catastrophes, short-term costs have soared, driving companies like Farmers to withdraw from certain states. The impacts of these rising costs are far-reaching, with some Floridians reportedly leaving the state due to the unaffordable insurance costs.

Florida’s ‘insurer of last resort,’ Citizens, has taken on a whopping 50% more policies over the past year. As private companies retreat from risk, state taxpayers have stepped in to cover the shortfall. Haydon highlights an urgent question facing society: “Is insurance a personal responsibility, or do we look at it as a societal social program?”

The crisis faced by the Florida real estate market is unlikely to remain an isolated issue. Other states, and indeed the Federal government, will be keeping a close eye on developments. Florida’s recent move to mandate flood insurance for all homes covered by Citizens, regardless of whether they have mortgages, is a significant policy shift that others may follow.

The situation has opened up vital discussions on risk preparation for future storms and insurance markets. Haydon muses, “We’ve tended to look historically. But if we model forward, are we not asking questions that would ensure that we are really prepared to cover the risk going forward?”

While there’s uncertainty ahead, there’s a silver lining too. Not all properties insured by Citizens are high-risk. In fact, several thousands of policies have been transferred to private companies. Florida’s insurance saga provides a window into the nation’s future as it grapples with the financial implications of climate change. As Haydon puts it, “Florida may be a model for the country in the most fair and equitable way to address climate financial risk.”

It seems that Florida, one of the most storm-prone states in the country, will have to take the lead in developing innovative policies to protect homeowners and housing markets. The state might set the stage for a national discussion about how to fairly and effectively distribute the cost of climate risk and the role of insurance in that equation.

Kevin Farfan LLC GRI, PSA, RENE, MRP, C-RETS

Coldwell Banker Realty

213 W. Bloomingdale Ave.

Brandon, FL. 33511

Cell 813-784-7139

website: www.kevinfarfan.com

“I Sell Lifestyles!”

Housing Market Updates • July 6, 2023

A Summer Surge: Understanding Rising Mortgage Rates and their Implications

by Kevin Farfan

Kevin Farfan here, bringing you the latest on mortgage rates and how they are shaping the Tampa Bay real estate market. According to the most recent Primary Mortgage Market Survey® (PMMS®) from Freddie Mac released just yesterday, we are seeing an upswing in the rates.

The 30-year fixed-rate mortgage (FRM), a staple in our real estate economy, rose from last week’s average of 6.71% to an average of 6.81%. To put it in perspective, a year ago, the 30-year FRM was considerably lower, averaging at 5.3%. As for the 15-year FRM, it has risen as well, from 6.06% to 6.24% this week.

These upward movements are driven by a potent mix of a strong economy, persistent inflation, and a more assertive approach from the Federal Reserve. But what does it mean for you, the home buyer or seller?

As Freddie Mac’s Chief Economist Sam Khater mentioned, this upward trend, coupled with low inventory, can be a hurdle for potential home buyers. The data suggests that even though home prices remain high and there is general consensus that it’s a good time to sell, homeowners are staying put, with many citing their low-rate mortgage as the main reason. The result? A market short on supply with new listings trailing 20% behind last year’s pace.

On the buyers’ side, the same factors cause a pinch. About 78% of prospective home shoppers anticipate being priced out if both home prices and mortgage rates continue to escalate. In June alone, the 30-year fixed mortgage rates hovered over 6.6%, making the summer market somewhat tricky to navigate.

That said, there is some optimism in the air. Some economists, like Jiayi Xu from realtor.com®, foresee a gradual decrease in mortgage rates towards the end of the year. They predict that the diligent efforts of the Federal Reserve to bring inflation back to the 2% target range may result in a downward pressure on interest rates, potentially nudging mortgage rates closer to 6%.

While the real estate market might be challenging at present due to these dynamics, remember that every market state presents unique opportunities. Whether you’re looking to buy or sell, I’m here to help navigate these complex trends and find the best possible outcome for you. Feel free to reach out at 813-784-7139.

Stay tuned for more updates, and remember, real estate is a long-term investment – so don’t let short-term fluctuations deter you from your dream of homeownership.

Best regards,

Kevin Farfan LLC GRI, PSA, RENE, MRP, C-RETS

Coldwell Banker Realty

213 W. Bloomingdale Ave.

Brandon, FL. 33511

Cell 813-784-7139

website: www.kevinfarfan.com

“I Sell Lifestyles!”

Housing Market Updates • June 13, 2023

The Housing Market’s Twin Pillars: Low Mortgage Rates and High Home Equity

by Kevin Farfan

As the numbers roll in, there is one striking observation that stands out – the robustness of the current housing market. Realtor Kevin Farfan, affiliated with Coldwell Banker Realty, believes that we are witnessing one of the most solid housing markets of our lifetime, perhaps even the strongest. His conviction is backed by two pivotal factors: the prevalence of low mortgage rates on existing homes and the substantial equity homeowners currently possess.

Low Current Mortgage Rates on Existing Mortgages

Diving into the first key indicator, we find that according to the Federal Housing Finance Agency (FHFA), more than 80% of existing mortgages boast a rate below 5% as of the fourth quarter of the previous year. Even more remarkable is that over half of these mortgages have a rate below 4%.

With media chatter revolving around a potential foreclosure crisis or a surge in homeowners defaulting on their loans, these low mortgage rates serve as a beacon of stability. Homeowners with such favorable mortgage rates are highly likely to strive to maintain their mortgages and keep their homes. The reason is simple – they cannot find similar affordability elsewhere, not in purchasing a new home, nor in renting an apartment. The potential to pay more, even after downsizing, due to the prevailing higher mortgage rates, strengthens the resolve of homeowners to hold on to their current properties.

This trend provides a resilient foundation for today’s housing market, as the likelihood of a large-scale foreclosure crisis, similar to what we experienced in 2008, diminishes.

Significant Homeowner Equity

The second factor reinforcing the strength of the current housing market is the impressive amount of equity that American homeowners have accrued. Data from the Census and ATTOM reveal that roughly two-thirds (about 68%) of homeowners either own their homes outright or have at least 50% equity.

This situation, known in the industry as being ‘equity rich,’ serves as a bulwark against the repeat of the 2008 scenario when many homeowners were forced to abandon their properties because they owed more than their homes were worth.

In contrast, the current landscape is drastically different. Homeowners have accumulated significant equity over the past few years, thereby reducing the likelihood of a surge in distressed properties entering the market, as was the case during the crash. The high equity levels also provide a firm foundation for the present housing market.

In Conclusion,

We are navigating through one of the most secure housing markets in our lifetime, where homeowners are highly motivated to maintain their current favorable mortgage rates and are buoyed by substantial equity. The real estate landscape of today bears a fundamental difference from that of 2008. If you’re interested in taking advantage of this favorable market or simply want more information, contact Kevin Farfan at Coldwell Banker Realty at 813-784-7139. His expertise in real estate can help guide your journey in this robust market.

For Buyers • June 9, 2023

Navigating Tampa’s Real Estate Market: A Glimpse into First-Time Homebuyer Confidence

by Kevin Farfan

Kevin Farfan, a distinguished Tampa-based Realtor affiliated with Coldwell Banker Realty, is keen on sharing the latest market trends and insights. One recent development of note is the rising confidence among potential homebuyers. According to a new report from Chase, 44% of these individuals are optimistic about their financial readiness to purchase a home in the coming year, representing a 12% increase from the previous year.

Chase’s First-Time Homebuyer Study, based on the responses of 1,900 U.S. consumers in Q4 2022, reveals that even amid economic fluctuations, the aspiration of homeownership remains robust. About 58% of respondents said that they are likely to purchase in the next 12 months, and a whopping 70% still perceive homeownership as an essential step to building wealth.

Here are some key findings from the study:

A significant number of respondents (two-thirds) have improved their credit score and implemented budgeting techniques to save more for a home.
There’s a diverse mix of first-time homebuyers. Black Americans represent 21% of first-time homebuyers in 2022, Hispanic Americans 13%, and single women 22%.
Millennials, many of whom are married or partnered, make up a large proportion of first-time homebuyers (56%). Still, a notable portion (40%) are single. Gen X constitutes 25% of first-time homebuyers, and even some Boomers (7%) are entering the homebuying process for the first time.
One-quarter of first-time homebuyers moved in with their parents or family as a money-saving strategy, up 12% YoY.
Most respondents are aware of the financial changes and activities needed to qualify for a loan, and know how much money they need to purchase a home.

Despite these promising statistics, many potential homebuyers are unsure if they will ever save enough to purchase a home. As Sean Grzebin, Head of Consumer Originations for Chase Home Lending, pointed out, “The homebuying process can be complex… it’s critical that homebuyers have the right knowledge, tools and experts to help them.”

Here is where Kevin Farfan comes into play. With a commitment to client satisfaction and an expert understanding of the Tampa housing market, Kevin is the real estate advisor you need on your side. As Grzebin emphasized, first-time buyers are ready to make necessary lifestyle adjustments to achieve their homeownership goals, despite market uncertainty and lengthened timelines. It’s vital, therefore, to have an expert like Kevin guiding you through the complexities of the real estate journey.

Whether you’re a first-time homebuyer, an investor, or looking to sell or buy a property, reach out to Kevin Farfan at 813-784-7139. Let his expertise in the Tampa Bay area’s vibrant real estate market be your guiding light on the path to homeownership.

Kevin Farfan LLC GRI, PSA, RENE, MRP, C-RETS

Coldwell Banker Realty

213 W. Bloomingdale Ave.

Brandon, FL. 33511

Cell 813-784-7139

website: www.kevinfarfanllc.com

“I Sell Lifestyles!”

Housing Market Updates • May 27, 2023

The Current Real Estate Climate: Rising Mortgage Rates and New Lending Programs

by Kevin Farfan

Hello Tampa! Kevin Farfan here, your trusted Coldwell Banker Realty-affiliated Realtor. I’m here to talk about some significant developments that have been unfolding in the mortgage and housing markets recently. Let’s dive into the impact these changes might have on our vibrant Tampa real estate landscape.

First off, the 30-year fixed mortgage rate has seen a bit of a spike recently due to ongoing debates around the debt ceiling. According to the latest Primary Mortgage Market Survey® from Freddie Mac, rates have risen to 6.57%, an 18 basis point climb from last week. This increase is undoubtedly putting some strain on both buyers and sellers. However, Freddie Mac Chief Economist Sam Khater suggests this predicament could present an opportunity for builders to help alleviate the nation’s housing shortage. If that’s the case, we could potentially see an increase in new construction here in Tampa, providing buyers with more options.

Unfortunately, the rise in mortgage rates is also causing a drop in mortgage applications. For the second consecutive week, the volume of applications has decreased, this time by 4.6% on a seasonally adjusted basis. The Mortgage Bankers Association (MBA) notes that even with a slight uptick this week, activity remains nearly 28% below last year’s pace. As a Realtor, I understand how this might seem discouraging, but remember that every market shift presents its own set of opportunities.

In light of these challenges, it’s encouraging to see some innovative solutions emerging. Rocket Mortgage has just launched its ONE+ home loan program, requiring homeowners to put down just 1% of the purchase price. The company will cover the remaining 2% to meet the typical threshold for conventional loans. This could be a real game-changer for some buyers in the Tampa area, especially those who may be struggling with the initial down payment requirements.

Lastly, there’s been a lot of discussion about the Federal Reserve’s interest rate hikes. After several increases and finally reaching a target of over 5%, many are wondering if the Fed will pause its rate hikes in the upcoming meeting. It seems the Fed’s members are somewhat divided on this issue, so we’ll be waiting for the outcome of the next meeting to gain more clarity.

While the market’s current conditions may present challenges, they also offer unique opportunities. Remember, every real estate journey is unique, and I’m here to help you navigate this ever-evolving landscape. Whether you’re a first-time homebuyer, a seasoned investor, or a seller, don’t hesitate to reach out with your questions or concerns.

Stay tuned for more updates, Tampa, and remember, your home, your future—it’s all part of our commitment to you.

Kevin Farfan LLC GRI, PSA, RENE, MRP, C-RETS

Coldwell Banker Realty

213 W. Bloomingdale Ave.

Brandon, FL. 33511

Cell 813-784-7139

website: www.kevinfarfan.com

“I Sell Lifestyles!”

Housing Market Updates • May 24, 2023

Mortgage Rates Rise, Applications Fall: The Current State of the Housing Market

by Kevin Farfan

In recent weeks, the real estate market has been navigating a volatile landscape of rising mortgage rates. According to the latest Primary Mortgage Market Survey from Freddie Mac, mortgage rates have climbed to 6.39%, echoing the figures we saw a fortnight ago. Surprisingly, the 15-year fixed-rate mortgage has remained steady at 5.75%.

Freddie Mac’s Chief Economist, Sam Khater, indicates that despite the continuous rise in home prices, the surge in mortgage rates has not deterred potential homeowners. “While affordability remains a hurdle, homebuyers are getting used to current rates and continue to pursue homeownership,” Khater states.

The Impact on Mortgage Applications

The rising mortgage rates have had a tangible impact on mortgage applications, which fell by 5.7% this week, as per the most recent Mortgage Applications Survey from the Mortgage Bankers Association (MBA). Joel Kan, MBA’s vice president and deputy chief economist, notes that “most borrowers have lower rates on their mortgages, and those who are in the market are extremely rate sensitive.” This sensitivity may explain the recent drop in applications.

Debating the Future of Loan Level Pricing Adjustments

Meanwhile, there’s an ongoing debate around the Federal Housing Finance Agency’s new loan level pricing adjustments. Kenny Parcell, President of the National Association of REALTORS®, recently testified before Congress to argue against these fees, calling them potentially harmful and unnecessary. He warned that failing to address this issue might leave housing unattainable for many.

Embracing Digital Innovations

While the market grapples with these challenges, companies are harnessing technology to streamline operations. For instance, Guaranteed Rate has teamed up with Gateless to utilize its smart underwriting system, Smart Underwrite. This platform empowers lenders to digitally read and interpret critical loan data and documentation instantaneously upon receipt. Importantly, it adheres to Freddie Mac and Fannie Mae guidelines.

Navigating the Real Estate Landscape

As your trusted realtor based in Tampa, I’m committed to guiding you through the complexities of the current housing market. Although rising mortgage rates and home prices can seem daunting, it’s important to remember that these trends often come with opportunities as well. Whether you’re thinking about purchasing a home or exploring refinancing options, I’m here to provide the expert advice you need to make well-informed decisions. Stay tuned for more updates and insights as we continue to navigate the ever-evolving real estate market.

Kevin Farfan LLC GRI, PSA, RENE, MRP, C-RETS

Coldwell Banker Realty

213 W. Bloomingdale Ave.

Brandon, FL. 33511

Cell 813-784-7139

website: www.kevinfarfan.com

“I Sell Lifestyles!”

Housing Market Updates • May 24, 2023

Rising Demand Fuels New Home Sales Amid Low Inventory

by Kevin Farfan

Hello there! Kevin Farfan, your go-to realtor in Tampa, back again with some intriguing updates from the real estate sector. You may have noticed some shifts in the housing market recently, and one trend worth mentioning is the impressive increase in new home sales.

April marked the seventh consecutive month of growth in new home sales, largely driven by low inventory prompting a surge of demand into the new construction market. Based on recent data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, new home sales rose by 4.1% to a rate of 683,000, significantly above March’s revised rate of 656,000.

Compared to last year’s revised rate of 611,000, we’re seeing an 11.8% increase. This trend indicates a substantial shift in demand towards new construction, a direct result of the ongoing inventory challenges.

As Alicia Huey, Chairman of the National Association of Home Builders (NAHB), pointed out, “A lack of existing inventory supported sales of newly built, single-family homes in April.” Encouragingly, the more affordable price ranges of $200,000 to $400,000 have experienced substantial sales growth.

Breaking it down regionally, sales climbed 11.8% to 76,000 in the Midwest and 17.8% to 443,000 in the South. In contrast, the Northeast experienced a steep 58.6% drop to 24,000, and the West saw a 9.1% decline to 140,000 in sales. On a year-to-date basis, new home sales fell in all regions.

The median new home sales price was $420,800, with an average sales price of $501,000. Both figures mark a decrease from March’s median of $449,800 and average of $562,400. Interestingly, growth was seen in the lower price ranges. The number of sales in the $200,000 – $299,999 range doubled compared to last year, and the $300,000 – $399,999 bracket also demonstrated considerable growth.

NAHB Chief Economist Robert Dietz commented, “April saw an increase in new home sales as buyers sought new construction even as builders struggle to keep up with demand because of a shortage of distribution transformers and skilled construction workers.”

However, 2023 sales are still down by 9.7% on a year-to-date basis due to elevated interest rates, and we may see a further weakening of sales in the months ahead considering the recent rise in interest rates.

As of the end of April, there were 433,000 new houses available for sale, amounting to a 7.6 month supply. It’s worth noting that a six-month supply is generally considered balanced.

Dr. Lisa Sturtevant, Chief Economist at Bright MLS, highlighted that “This spring, new home sales are a more important part of the market than they would be in a more typical year… the share increased to about 14%.”

In conclusion, the surge in demand for new homes signifies a significant shift in buyer behavior and market dynamics. As your trusted realtor, my aim is to provide you with insights and guidance as we navigate these evolving trends together.

Stay tuned for more updates!

Kevin Farfan, your Tampa real estate expert, signing off.

Kevin Farfan LLC GRI, PSA, RENE, MRP, C-RETS

Coldwell Banker Realty

213 W. Bloomingdale Ave.

Brandon, FL. 33511

Cell 813-784-7139

website: www.kevinfarfan.com

“I Sell Lifestyles!”

Coldwell Banker - Central Brandon

Accessibility Statement | Fair Housing Notice

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