NEW YORK – Feb. 28, 2012 – The Conference Board’s Consumer Confidence Index, which had decreased in January, increased 9.3 points in February. The Index now stands at 70.8, up from 61.5 in January.

The Present Situation Index that gauges consumers’ outlooks about the current economy increased 6.2 points to 45.0 from 38.8. The Expectations Index, which gauges attitudes about the economy six months in the future, rose 11.3 points – to 88.0 from 76.7 in January.

“Consumer confidence, which had declined last month, posted a sizeable improvement in February,” says Lynn Franco, director of The Conference Board Consumer Research Center. “The Index is now close to levels last seen a year ago. Consumers are considerably less pessimistic about current business and labor market conditions than they were in January. And, despite further increases in gas prices, they are more optimistic about the short-term outlook for the economy, job prospects and their financial situation.”

Consumers’ assessment of current conditions
Those claiming business conditions are “good” increased slightly to 13.3 percent from 13.2 percent, while those claiming business conditions are “bad” decreased to 31.2 percent from 38.3 percent. Consumers’ appraisal of the labor market was also less pessimistic. Those stating jobs are “plentiful” increased to 6.6 percent from 6.2 percent, while those saying jobs are “hard to get” decreased to 38.7 percent from 43.3 percent.

Consumers’ assessment six months in the future
The proportion of consumers expecting business conditions to improve over the next six months increased to 18.7 percent from 16.7 percent, while those anticipating business conditions will worsen decreased to 11.8 percent from 14.6 percent. Consumers’ outlook for the labor market was also more upbeat. Those anticipating more jobs in the months ahead increased to 18.7 percent from 16.4 percent, while those anticipating fewer jobs declined to 16.9 percent from 19.1 percent. The proportion of consumers expecting an increase in their incomes improved to 15.4 percent from 13.8 percent.

Nielsen, a global provider of information and analytics, conducts the monthly Consumer Confidence Survey, based on a probability-design random sample, for The Conference Board. The cutoff date for the preliminary results was Feb. 15.

© 2012 Florida Realtors®

WASHINGTON – Feb. 28, 2012 – Acting Federal Housing Administration (FHA) Commissioner Carol Galante announced a new premium structure for FHA-insured single-family mortgage loans: FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above that amount. Upfront premiums (UFMIP) will increase by 0.75 percent.

The premium changes will impact new loans insured by FHA beginning in April 2012. Details will soon be published in a Mortgagee Letter to FHA-approved lenders.

“After careful analysis of the market and the health of the Mutual Mortgage Insurance Fund (MMI) fund, we have determined that it is appropriate to increase mortgage insurance premiums in order to help protect our capital reserves and to continue encouraging the return of private capital to the housing market,” says Galante. “These modest increases are one of several measures we are taking towards meeting the Congressionally mandated two percent reserve threshold while allowing FHA to remain a valuable option for low- to moderate-income borrowers.”

The Temporary Payroll Tax Cut Continuation Act of 2011 requires FHA to increase the annual MIP it collects by 0.10 percent for case numbers assigned on or after April 1, 2012. FHA is also exercising its statutory authority to add an additional 0.25 percent to mortgages exceeding $625,500 assigned on or after June 1, 2012.

The UFMIP will increase from 1 percent to 1.75 percent of the base loan amount, which FHA says will apply regardless of the amortization term or LTV ratio. FHA will still allow buyers to finance this charge through the mortgage. It’s effective for case numbers assigned on or after April 1, 2012.

FHA estimates that the increase to the upfront premium will cost the average borrower about $5 more per month.

Borrowers already in an FHA-insured mortgage, Home Equity Conversion Mortgage (HECM), and special loan programs outlined in FHA’s forthcoming Mortgagee Letter will not be impacted by the pricing changes announced today.

The official announcement will be posted online in HUD’s mortgage letter web page.

© 2012 Florida Realtors®

The PHSI, a forward-looking indicator based on contract signings, rose to 97.0 in January from a downwardly revised 95.1 in December, and it’s 8.0 percent higher than January 2011 when it was 89.8. The data reflects contracts but not closings.

The January index is the highest since April 2010 when it reached 111.3 as buyers were rushing to take advantage of the homebuyer tax credit.

“Given more favorable housing market conditions, the trend in contract activity implies we are on track for a more meaningful sales gain this year,” says Lawrence Yun, NAR chief economist. “With a sustained downtrend in unsold inventory, this would bring about a broad price stabilization or even modest national price growth, of course with local variations.”

The PHSI in the Northeast rose 7.6 percent to 78.2 in January and is 9.8 percent above a year ago. In the Midwest the index declined 3.8 percent to 88.1 but is 10.8 percent higher than January 2011. Pending home sales in the South increased 7.7 percent to an index of 109.1 in January and are 10.5 percent above a year ago. In the West, the index fell 4.4 percent in January to 101.9 but is 0.7 percent above January 2011.

“Movements in the index have been uneven, reflecting the headwinds of tight credit, but job gains, high affordability and rising rents are hopefully pushing the market into what appears to be a sustained housing recovery,” Yun says. “If and when credit availability conditions return to normal, home sales will likely get a 15 percent boost, speed up the home-price recovery, and thereby significantly reduce the number of homeowners who are underwater.”

© 2012 Florida Realtors®

“Sustained job creation is benefiting commercial real estate sectors by increasing demand for space,” says Lawrence Yun, NAR chief economist. “Vacancy rates are steadily falling. Leasing is on the rise, and rents are showing signs of strengthening, especially in the apartment market where rents are rising the fastest.”

NAR forecasts commercial vacancy rates over the next year to decline 0.4 percentage point in the office sector, 0.8 point in industrial real estate, 0.9 point in the retail sector and 0.2 percentage point in the multifamily rental market.

“Household formation appears to be rising from pent-up demand,” Yun says. “The tight apartment market should encourage more apartment construction. Otherwise, rent increases could further accelerate in the near-to-intermediate term.”

The Society of Industrial and Office Realtors® shows a notable gain in its SIOR Commercial Real Estate Index, an attitudinal survey of 297 local market experts.

The SIOR index, measuring the impact of 10 variables, jumped 8.3 percentage points to 63.8 in the fourth quarter, following a gain of 0.6 percentage point in the third quarter. The index remains well below the level of 100 that represents a balanced marketplace, however, which was last seen in the third quarter of 2007.

Most market indicators posted advances in the fourth quarter. While 71 percent of respondents said leasing activity is below historic levels in their market, that’s an improvement from 83 percent in the third quarter. Only 29 percent report there is ample sublease space available.

Office and industrial space remains a tenant’s market – 87 percent of participants feel that tenants are getting a range of benefits ranging from moderate concessions to deep rent discounts.

Construction activity is still low, with 95 percent of experts reporting it as below normal, and 83 percent saying it’s a buyers’ market for development acquisitions; prices are below construction costs in 78 percent of markets.

Participants broadly expect stronger conditions for the current quarter, with two out of three anticipating market improvement.

NAR’s latest Commercial Real Estate Outlook offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS Inc., a source of commercial real estate performance information.

Office markets
Vacancy rates in the office sector are projected to fall from 16.4 percent in the current quarter to 16.0 percent in the first quarter of 2013.

The markets with the lowest office vacancy rates presently are Washington, D.C., with a vacancy rate of 9.5 percent; New York City, at 10.0 percent; and New Orleans, 12.4 percent.

After rising 1.6 percent in 2011, office rents should increase another 1.9 percent this year and 2.4 percent in 2013. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is forecast at 20.1 million square feet in 2012 and 28.1 million next year.

Industrial markets
Industrial vacancy rates are likely to decline from 11.7 percent in the first quarter of this year to 10.9 percent in the first quarter of 2013.

The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 4.8 percent; Los Angeles, 4.9 percent; and Miami at 7.6 percent.

Annual industrial rent is expected to rise 1.8 percent in 2012 and 2.3 percent next year. Net absorption of industrial space nationally is seen at 40.6 million square feet this year and 57.7 million in 2013.

Retail markets
Retail vacancy rates are forecast to decline from 11.9 percent in the current quarter to 11.0 percent in the first quarter of 2013.

Presently, markets with the lowest retail vacancy rates include San Francisco, 3.6 percent; Fairfield County, Conn., at 5.1 percent; and Long Island, N.Y., at 5.4 percent.

Average retail rent should rise 0.7 percent this year and 1.2 percent in 2013. Net absorption of retail space is projected at 9.9 million square feet this year and 23.9 million in 2013.

Multifamily markets
The apartment rental market – multifamily housing – is likely to see vacancy rates drop from 4.7 percent in the first quarter to 4.5 percent in the first quarter of 2013; multifamily vacancy rates below 5 percent generally are considered a landlord’s market with demand justifying higher rents.

Areas with the lowest multifamily vacancy rates currently are New York City, 1.8 percent; Minneapolis and Portland, Ore., each at 2.5 percent; and San Jose, Calif., at 2.7 percent.

After rising 2.2 percent last year, average apartment rent is expected to increase 3.8 percent in 2012 and another 4.0 percent next year. Multifamily net absorption is forecast at 209,900 units this year and 223,600 in 2013.

© 2012 Florida Realtors®

HB 1127 by Rep. Ben Albritton (R-Bartow) significantly reduces the amount of money private insurers must front Citizens if Citizens doesn’t have enough money to pay claims following a catastrophic storm. The state-run insurer has about $12.8 billion available to cover claims. Analysts estimate the cost of a 1-in-100 year storm at $23.2 billion.

Currently, private insurers could be required to pay up to 18 percent of the premiums they collect within 30 days if Citizens runs out of money. These companies would then recoup the money from its policyholders – essentially anyone not insured by Citizens except worker’s compensation and medical practice – over a two-year period.

HB 1127 would reduce this financial obligation to 2 percent of premiums and shift repayment of Citizens losses via emergency assessments on a wider pool of policyholders, while lengthening the repayment period.

“If private insurers don’t have to front these monies to Citizens, Florida will become a more attractive market to the private insurance companies already here – and to any outside companies that consider offering property insurance coverage in the future,” says Trey Goldman, legislative counsel for Florida Realtors. “This will lead to more competition, more choices for property owners, and lower assessments.”

The Senate companion bill, SB 1346 by Sen. Steve Oelrich (R-Gainesville), is awaiting action in the Senate Budget Committee, its last stop before heading to the floor.

Also this week, Sen. Jack Latvala (R-St. Petersburg) debuted legislation to speed up the foreclosure process and jumpstart the economy, amid concerns the measure could leave some homeowners unjustly out in the cold.

By a 5-0 vote, the Senate Judiciary Committee approved SB 1890, which combines the contents of two House proposals, HB 213 and HB 1149, that are traveling in that chamber and supported by banks, builders and other lenders. Florida Realtors has no official position.

Backers of the proposal say they are targeting the 30 percent of foreclosed properties that sit abandoned, reducing neighborhood property values and raising public safety concerns. By reducing the time it takes to get those properties unencumbered and available, supporters say, the state’s housing industry – and the economy – will rebound more quickly.

Critics, however, say the bills as written go much further than reducing the inventory of abandoned homes. They are concerned the proposals adversely affect homeowners trying to stay in homes purchased, in many cases, pre-recession – a white-hot period of easy credit, interest only mortgages and escalating home prices.

The Senate bill now travels to Senate Banking and Insurance Committee and is likely to see substantive changes before it reaches the floor.

In other news, the Senate Budget Subcommittee on Finance and Tax voted in favor of a proposed constitutional amendment that would increase the exemption from tangible personal property taxes – taxes levied on businesses’ inventory and equipment – from $25,000 to $50,000.

SJR 1064 would appear as a constitutional amendment on the November ballot if approved by the Legislature. About 156,000 businesses, or almost half of entities paying the tax, would be cleared from the tax roll.

The House version of the bill, HJR 1003, stalled Wednesday when a discussion of the measure on the floor was postponed. House sponsor Rep. Eric Eisnaugle (R-Orlando) said he will make technical changes to the constitutional amendment language before pressing ahead.

© 2012 Florida Realtors®

The previously reported 0.2 percent decrease in October was revised downward to reflect a 0.7 percent decrease. For the 12 months ending in November, U.S. prices fell 1.8 percent. The U.S. index is now 18.8 percent below its April 2007 peak and the level is roughly the same as the February 2004 index.

The FHFA monthly index is based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included. Conforming refers to a mortgage that both meets the underwriting guidelines of Fannie Mae or Freddie Mac and that does not exceed the conforming loan limit. It doesn’t consider mortgages guaranteed by the FHA, VA or other federal government entities. Mortgage transactions on condominiums, cooperatives, multi-unit properties, and planned unit developments are also excluded.

© 2012 Florida Realtors®

The campaign includes print ads in English, Spanish and Chinese. One print ad features a veteran who faced discrimination because housing units were not accessible to people using wheelchairs. A second ad shows a doormat with the phrase “Not Welcome,” and helps consumers identify and report possible acts of housing discrimination. Another ad portrays an expectant mother who qualified for a mortgage but was later turned down for a loan because she went on maternity leave.

“Housing discrimination is wrong in whatever form it takes,” says John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “Now is the time to end housing discrimination.”

The campaign also includes two sets of radio PSAs, in both English and Spanish. The PSAs portray people who experienced housing discrimination and encourage those who suspect discrimination to report it to HUD. The PSAs are available at HUD.gov/fairhousing.

“Where we live determines so much in life, including access to good education, health care and job opportunities. It is vital that people around the country be aware of their rights under the Fair Housing Act,” adds Shanna L. Smith, president and CEO of the National Fair Housing Alliance.

The PSAs encourage consumers to call (800) 669-9777 or to visit www.HUD.gov/fairhousing if they suspect discrimination, and will be distributed to outlets nationwide in space donated by the media.

© 2012 Florida Realtors®

ORLANDO, Fla. – Feb. 22, 2012 – Florida’s housing market reported gains in median sales prices and a reduced inventory of homes for sale in January, according to the latest housing data released by Florida Realtors®.

“We’re seeing positive signs of a strengthening recovery in Florida’s housing market,” says 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “In both the statewide single-family and condo-townhome markets, pending sales are higher and the statewide median sales price rose – up 5.3 percent to $129,000 for single-family homes and up 18.8 percent to $95,000 for condo-townhomes. Improving the availability of affordable financing to qualified buyers and investors would continue to stabilize Florida’s housing market and economy.”

The median is the midpoint; half the homes sold for more, half for less. Sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes, according to housing industry analysts.

The national median sales price for existing single-family homes in December 2011 was $165,100, which is 2.5 percent below the previous year, according to the National Association of Realtors® (NAR). In California, the statewide median sales price for single-family existing homes in December was $285,920; in Maryland, it was $222,934.

Florida statewide sales of existing single-family homes totaled 12,044 in January 2012, down 5.5 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing.

Looking at Florida’s year-to-year comparison for sales of condos/townhomes, a total of 5,963 units sold statewide last month, down 22.6 percent from those sold in January 2011. According to NAR, the national median existing condo price in December 2011 was $160,000.

“Even though closed sales are down from a year ago, there are two really bright spots in Florida’s housing market,” said Florida Realtors Chief Economist Dr. John Tuccillo. “One is a significant increase in pending sales. In fact, pending sales have been up every month since May. The barrier that stands between pending sales and closings is the difficulty consumers are experiencing in obtaining financing.

“The second positive is inventories, which are now at a point close to a balanced market,” Tuccillo said. The months supply of inventory stands at 6.4 for both the single-family homes market and the condos/townhomes market.

The interest rate for a 30-year fixed-rate mortgage averaged 3.92 percent in January 2012, down from the 4.76 percent average during the same month a year earlier, according to Freddie Mac.

To see the full statewide housing activity report, go to Florida Realtors Media Center at http://media.floridarealtors.org/ and look under Latest Releases, or download the report under Market Data at: http://media.floridarealtors.org/market-data.

The January 2012 Florida Realtors home sales release marks a new statewide housing market reporting partnership between Florida Realtors Industry Data and Analysis department and a new vendor partner, 10K Research and Marketing. Housing sales data from the state’s 63 local Realtor organizations is collected and organized with the goal of providing unique, localized market reports to the local Realtor boards and associations within Florida Realtors, enabling the groups and their Realtor members to serve as the definitive voice of real estate in their respective local markets.

At the same time, Florida Realtors is providing comprehensive statewide housing market statistics – but this new data series only includes statewide numbers. Beginning with this January 2012 housing data report, Florida Realtors is no longer reporting any market data for Realtor members’ sales in the state’s metropolitan statistical areas, as had previously been reported in partnership with the University of Florida’s Bergstrom Center for Real Estate Studies.

© 2012 Florida Realtors®

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – increased 4.3 percent to a seasonally adjusted annual rate of 4.57 million in January from a downwardly revised 4.38 million-unit pace in December and are 0.7 percent above a spike to 4.54 million in January 2011.

Lawrence Yun, NAR chief economist, said strong gains in contract activity in recent months shows buyers are responding to very favorable market conditions. “The uptrend in home sales is in line with all of the underlying fundamentals – pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents.”

Total housing inventory at the end of January fell 0.4 percent to 2.31 million existing homes available for sale, which represents a 6.1-month supply at the current sales pace, down from a 6.4-month supply in December.

“The broad inventory condition can be described as moving into a rough balance, not favoring buyers or sellers,” Yun said. “Foreclosure sales are moving swiftly with ready homebuyers and investors competing in nearly all markets. A government proposal to turn bank-owned properties into rentals on a large scale does not appear to be needed at this time.”

Total unsold listed inventory has trended down from a record 4.04 million in July 2007, and is 20.6 percent below a year ago.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc. in Miami, said buying power is enticing more potential homebuyers. “Word has been spreading about the record high housing affordability conditions and our members are reporting an increase in foot traffic compared with a year ago,” he said. “With other favorable market factors, these are hopeful indicators leading into the spring home-buying season. We’re cautiously optimistic that an uptrend will continue this year.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was a record low 3.92 percent in January, down from 3.96 percent in December; the rate was 4.76 percent in January 2011; recordkeeping began in 1971.

The national median existing-home price for all housing types was $154,700 in January, down 2.0 percent from January 2011. Distressed homes – foreclosures and short sales that sell at deep discounts – accounted for 35 percent of January sales (22 percent were foreclosures and 13 percent were short sales), up from 32 percent in December; they were 37 percent in January 2011.

“Home buyers over the past three years have had some of the lowest default rates in history,” Yun said. “Entering the market at a low point and buying at discounted prices have greatly helped in that success.”

All-cash sales were unchanged at 31 percent in January; they were 32 percent in January 2011. Investors account for the bulk of cash transactions.

Investors purchased 23 percent of homes in January, up from 21 percent in December; they were also 23 percent in January 2011. First-time buyers rose to 33 percent of transactions in January from 31 percent in December; they were 29 percent in January 2011.

Forty-seven percent of NAR members report that contracts settled on time in January; 21 percent had delays, and 33 percent experienced contract failures. Contract cancellations are unchanged from December but were only 9 percent in January 2011. Most contract failings are caused by lenders that decline mortgage applications and failures in loan underwriting appraisals that come in below the negotiated price.

Single-family home sales rose 3.8 percent to a seasonally adjusted annual rate of 4.05 million in January from 3.90 million in December, and are 2.3 percent above the 3.96 million-unit pace a year ago. The median existing single-family home price was $154,400 in January, down 2.6 percent from January 2011.

Existing condominium and co-op sales increased 8.3 percent to a seasonally adjusted annual rate of 520,000 in January from 480,000 in December, but are 10.3 percent lower than the 580,000-unit level in January 2011. The median existing condo price was $156,600 in January, up 2.0 percent from a year ago.

Regionally, existing-home sales in the Northeast rose 3.4 percent to an annual pace of 600,000 in January and are 7.1 percent above a year ago. The median price in the Northeast was $225,700, which is 4.2 percent below January 2011.

Existing-home sales in the Midwest increased 1.0 percent in December to a level of 980,000 and are 3.2 percent higher than January 2011. The median price in the Midwest was $122,000, down 3.9 percent from a year ago.

In the South, existing-home sales rose 3.5 percent to an annual level of 1.76 million in January, unchanged from a year ago. The median price in the South was $134,800, which is 0.3 percent below January 2011.

Existing-home sales in the West jumped 8.8 percent to an annual pace of 1.23 million in January but are 3.1 percent below a spike in January 2011. The median price in the West was $187,100, down 1.8 percent from a year ago.

© 2012 Florida Realtors®

“Besides knowing the basics of what a standard homeowners insurance policy covers, consumers should ask a series of questions – and receive satisfactory answers to each of them – before buying a new policy or renewing an existing one,” says Michael Barry, vice president, media relations, Insurance Information Institute (I.I.I.). I.I.I. is a nonprofit, communications organization supported by the insurance industry.

According to I.I.I., there are six basic questions everyone should ask before buying or renewing a homeowners insurance policy:

1. How much would it cost to rebuild my home in its current location in the event of a total loss? Ideally, a homeowners insurance policy should cover the cost of building a new home from scratch. In general, homeowners policies cover partial or total damages caused by fire, hurricane, hail, lightning or any other disaster if it’s listed in the policy. Flood and earthquake-related losses must be insured separately because both perils are excluded in standard homeowners insurance policies.

2. How much is my personal property worth in the event of a total loss? A homeowners insurance policy should cover the cost of replacing all personal property (furniture, appliances, clothing) should it be stolen or destroyed by fire, hurricane or another insured disaster. Most companies provide personal property coverage equal to about 50 to 70 percent of the amount of insurance on the home’s structure. (A $100,000 policy for the structure would have perhaps $50,000 to $70,000 worth of personal property coverage.)

However, the best way to determine personal property coverage in a specific situation is to conduct a home inventory. I.I.I. provides online software to help homeowners catalog and value possessions (link underlined to: https://www.knowyourstuff.org/iii/login.html) as well as an iPhone app.

3. How much liability protection do I need? Liability covers homeowners against lawsuits for bodily injury or property damage caused to other people, including damage caused by pets. The liability portion of a policy pays legal defense costs and any court awards – but only up to the limit set in the policy. It’s effective not just inside the home but also anywhere in the world. Liability limits generally start at about $100,000, and many insurance agents will recommend at least $300,000. Homeowners with significant assets may want more; others may want less.

4. What level of additional living expense coverage do I need? The Additional Living Expenses (ALE) provision is found in standard homeowners insurance policies. It pays for the costs of living away from home if damage from an insured disaster makes the house uninhabitable. ALE covers hotel bills, meals and other expenses above customary living expenses.

ALE coverage differs from company to company. Many policies provide coverage equal to about 20 percent of dwelling protection. For example, if the structure of your home is insured for $100,000, you would have $20,000 of ALE coverage. Some companies impose a time limitation, such as 12 to 24 months.

5. Should I buy a separate flood and/or earthquake insurance policy? Flood coverage is available from the federal government’s National Flood Insurance Program (NFIP) and from a few private insurers. Earthquake coverage is usually available in the form of a supplemental policy.

6. Do I qualify for any discounts? Homes with smoke detectors, burglar alarms or dead-bolt locks often get a premium rate discount. Sophisticated sprinkler systems and alarms that ring at monitoring stations often reduce homeowners insurance premiums too. Ask an agent. If you are at least 55 years old and retired, for instance, you may qualify for a discount of up to 10 percent at some companies. If you have completely modernized your plumbing or electrical system recently, a few companies may provide a price break.

© 2012 Florida Realtors®