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Here’s 2 spots where the Osceola Parkway Extension may be built — both are controversial

Would you rather see a major road built through a costly wildlife/nature preserve or a neighborhood?

This is the dilemma the Central Florida Expressway Authority, which soon must decide where to put the Osceola Parkway Extension, has been facing since last year.

The proposed Osceola Parkway Extension begins one mile west of the Boggy Creek Road and Osceola Parkway intersection, and extends eastward along the Orange/Osceola County line for six miles before turning south into Osceola County to meet the northern terminus of the proposed Northeast Connector Expressway. The project also includes a potential north/south segment linking to State Road 417 in the general vicinity of the Boggy Creek Road interchange.

The goal of the project is to relieve congestion and have regional connectivity. It’s part of the authority’s overall 2040 master plan, which includes other alignments.

One of the current alternatives shows that the extension could go through the 1,700-acre Split Oak Forest preserve, acquired in the 1990s, which is south of the Clapp Simms Duda Road. Environmental conservationists say doing so would defeat the purpose of having protected land that involved millions in funding.

However, if the project does not go through Split Oak, it could mean nine would be taken in the St. Cloud community Lake Ajay Village.

“The board is going to look at all the options. Our job is how are we going to move people in the next 40 years here in Central Florida,” Fred Hawkins, chairman of the Central Expressway Authority, told  Business Journal after the board’s Feb. 8 meeting. “We have to move those people and the to-do list is now, before more development occurs.”

Roughly $70 million has been allocated for the project so far, which would go toward property acquisition and engineering.

He added that going through a community such as Lake Ajay Village, located off Narcoossee Road, likely would be more expensive than going through Split Oak

“The properties directly affected are worth $450,000-$600,000. The property taxes they pay are between $3,000-$5,000 each. Not only will those properties will be affected, but all of them running along this area,” said Stacy Ford, a resident of Lake Ajay Village, during the public comments segment of the meeting. “The worst case for us isn’t that CFX will go through our homes, it’s that CFX puts this road right next to our homes because we don’t get compensation for the impact of that, which is our property values. At minimum, it’s going to be 20 percent.”

And if the project does go through Split Oak forest, Hawkins said there may be land compensated for that loss.

At the next expressway authority meeting on March 8, the board will go over the feasibility and cost of alternative corridors so it can move forward with project development and environment studies.

There are multiple public meetings for those who want to express their concerns regarding how the project may affect their property or commute. The meetings all will run from 5:30-7:30 p.m., and will be held:

  • Feb. 13 at St. Cloud High School
  • Feb. 15 at Lake Nona Middle School
  • Feb. 21 at the Association of Poinciana Villages Community Center

US Economic Observations: January 2018

It is well known that there are issues in the home purchase market, but there is less information on the single-family rental market, which makes up one-half of residential rentals. The CoreLogic Single Family Rental Index reflects rents paid on single-family houses and condos, and using this index we can dissect rent growth by both price tier and metro area.

LPI Blog

Figure 1 shows the 12-month change in our national rental index from 2005 to today. Rents for single-family fell during the Great Recession but then bounced back strongly from their low point in mid-2009 and have been trending up, mirroring home price growth. In October 2017, the index measured rent growth of 2.7 percent from a year ago. We can also show rent changes for the high-end (those rents 25 percent or more above the median rent in that market) and the low end (those rents 25 percent or less below the median in that market). The low-end single-family rental tier lagged the high-end tier from mid-2009 to early 2014, but then the low-end began steadily outpacing the high-end and the difference is growing. This mirrors the same high demand, low- supply forces that have caused low-end home prices to outpace high-end prices, as evidenced by shorter days-on-market and tighter inventory for low-end homes. Investors who entered the market to buy up distressed properties during the housing crisis might be exacerbating this trend in the rental market. High-end rents increased 2 percent in October from a year ago, while low-end rents increased by more than twice as much – 4.2 percent.

LPI Blog

We can also look at the difference between low-end and high-end rent growth by metro area. Figure 2 shows that low-end rents have been increasing in the largest 20 markets, with Seattle leading the large metros with the biggest increase in rents at 7.9 percent in October. Austin had the smallest increase in low-end rents of the large metros. In most of the 20 markets shown in the chart, low-end rents are increasing faster than high-end rents, and the trend is happening all over the country, not just in one region. The one exception is Warren, Mich., where low-end and high-end rents are increasing at about the same rate. The biggest spread in low-end and high-end rent increases was in Charlotte, N.C., where the low-end increased 5.6 percent and the high-end showed no increase.

The single-family rental market is an important and often overlooked segment of the and is affected by rising demand and constrained supply just like the rest of the housing market. The demand and supply pressures are especially apparent for lower-cost homes, for which rents are increasing at a much faster rate than for higher-cost homes

February 06, 2018, Irvine, Calif. –

  • Largest Price Gains During 2017 Were in California, Idaho, Nevada, Utah and Washington
  • Affordability Continues to Erode, Especially in Low-Price Range
  • Home Prices Projected to Increase by 4.3 Percent by December 2018

CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its CoreLogic Home Price Index (HPI) and HPI Forecast for December 2017, which shows home prices are up both year over year and month over month. Home prices nationally increased year over year by 6.6 percent from December 2016 to December 2017, and on a month-over-month basis home prices increased by 0.5 percent in December 2017 compared with November 2017,* according to the CoreLogic HPI.

Looking ahead, the CoreLogic HPI Forecast indicates that home prices will increase by 4.3 percent on a year-over-year basis from December 2017 to December 2018, and on a month-over-month basis home prices are expected to decrease by 0.4 percent from December 2017 to January 2018. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“The number of homes has remained very low,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Job growth lowered the unemployment rate to 4.1 percent by year’s end, the lowest level in 17 years. Rising income and consumer confidence has increased the number of prospective homebuyers. The net result of rising demand and limited for-sale inventory is a continued appreciation in home prices.”

According to CoreLogic Market Condition Indicators (MCI) data, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 35 percent of metropolitan areas have an overvalued housing market as of December 2017. The MCI analysis categorizes home prices in individual markets as undervalued, at value or overvalued by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals such as disposable income. Also, as of December, 28 percent of the top 100 metropolitan areas were undervalued and 37 percent were at value. When looking at only the top 50 markets based on housing stock, 48 percent were overvalued, 14 percent were undervalued and 38 percent were at value. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.

“Home prices continue to rise as a result of aggressive monetary policy, the economic and jobs recovery and a lack of housing stock. The largest price gains during 2017 were in five Western states: California, Idaho, Nevada, Utah and Washington,” said Frank Martell, president and CEO of CoreLogic. “As home prices and the cost of originating loans rise, affordability continues to erode, making it more challenging for both first time buyers and moderate-income families to buy. At this point, we estimate that more than one-third of the 100 largest metropolitan areas are overvalued.”

*November 2017 data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.

Methodology

The CoreLogic HPI is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 40 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the “Single-Family Combined” tier representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties. The indexes are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

CoreLogic HPI Forecasts are based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate. With a 30-year forecast horizon, CoreLogic HPI Forecasts project CoreLogic HPI levels for two tiers—“Single-Family Combined” (both attached and detached) and “Single-Family Combined Excluding Distressed Sales.” As a companion to the CoreLogic HPI Forecasts, Stress-Testing Scenarios align with Comprehensive Capital Analysis and Review (CCAR) national scenarios to project five years of home prices under baseline, adverse and severely adverse scenarios at state, Core Based Statistical Area (CBSA) and ZIP Code levels. The forecast accuracy represents a 95-percent statistical confidence interval with a +/- 2.0 percent margin of error for the index.

More Than A High Appraisal

Homes appraised above contract price had above-market appreciation rates

Housing Trends

For homebuyers, the outcome of appraisal is one of these three scenarios: (1) appraised value closely matches sales price, (2) appraisal falls short of sales price or (3) appraisal is higher than sales price. If a home sells for less than its appraised value, does that mean that the buyers got ‘a bargain,’ and should anticipate above-average appreciation during their ownership period?  Conversely, if a home sells for more than its appraised value, does that mean the buyers may have ‘overpaid,’ and could expect a below-market rate of price growth during the length of time they own the home?

Evidence seems to support the hypothesis that there is “money left on the table” in high-appraisal transactions. When property price appreciation was calculated for twice turned-over in the California market – first sale observed with a full appraisal and sales closing price in 2010 or later, and then a second time with a sale by the owner – homes previously appraised with a sizable premium above the contract sales price were found to have above-market appreciation rates.

Yanling Mayer Blog Post

As shown in Figure 1, excess rates of price appreciation averaged about 3.3 percent per year.  By comparison, closely appraised homes appreciated at about the market average, while homes with appraised value below their contract sales price appreciated 0.3 percent per year slower than the market.  Excess appreciation rates were annualized price gains at re-sale—annualized percentage difference between prior purchase price and subsequent re-sale price, in excess of average market appreciation during the same ownership period.  The CoreLogic county-level Home Price Index (HPI) was used as the benchmark of market-wide appreciation.

Yanling Mayer Blog Post

Figure 2 shows that high-appraisal homes – whether a distressed sale or not – had above-market price appreciation, averaging 3.15 percent among non-distressed sales or 3.9 percent among distressed sales. Real estate owned (REO) and short sales exhibited above-market appreciation rates across all three appraisal valuation outcomes, likely driven by their below-market pricing to motivate sales.  Investors’ value-enhancing repair and refurbishing work could also be a factor for their higher re-sale values – despite that only homes that were held for at least 18 months since initial purchase/appraisal were included in the analysis.  For both non-distressed and distressed sales, median prices of high- and low-appraisal homes were lower than closely appraised homes. Since both high- and low-appraisal homes may have drawn disproportionately from lower-priced homes, faster price appreciation experienced by low-valued homes alone could not explain away the large disparities in price appreciation between the two.[1]

In Figure 3, sample homes were further sub-grouped by the year in which they were initially purchased and appraised. Given significant market dynamics during 2010-2015, property appreciation rates were likely to vary depending on the timing of initial purchase.  They ranged between 2 and 5 percent, reaching the highest during the 2012 market bottom when market-wide underpricing was likely the severest.

Yanling Mayer Blog Post

A city-level breakdown is shown in Figure 4. Stockton (5.87 percent) and Riverside (5.22 percent) had the highest excess price gains, followed by San Francisco (4.62 percent), Los Angeles (4.35 percent), Bakersfield (4.24 percent), and San Jose (4.04 percent).  Due to the use of county-wide HPIs for benchmarking, some cities – such as Oakland, Riverside and others – that may have experienced faster-rising prices than its county as a whole could well see across-the-board positive excess price appreciation.

Regardless of the reason(s) why a home may have sold for less than its appraised value, the buyers appear to have benefitted by having a faster-than-market appreciation during their ownership tenure.

How Will the New Tax Changes Affect You?

Tax Changes

The first change you need to be aware of is the requirements of the sale of your principal property. The second is the reduction of the limit on mortgage interest. The third is the elimination of state and local taxes.

Regarding the requirements of the sale of your principal property, the original proposal was that if the property was a homestead property, you would have to live in it for five out of the last eight years in order to avoid paying any capital gains taxes when selling it. That’s been changed so you only have to stay in the home for two out of the previous five years to sell the property without having to pay any capital gains taxes.

This change doesn’t impact you very much if you’re looking to sell your home. If you’re living in the property as part of a married couple, then you have up to $500,000 in gains that you don’t have to pay taxes on. If you’re single, you have up to $250,000 in gains that you don’t have to pay taxes on.

Regarding the reduction of the limit on mortgage interest, previously you could buy a home for up to $1 million and get the mortgage deduction when doing your taxes. They were proposing reducing that sum from $1 million to $500,000, but they agreed that you could reduce the itemized deduction on your mortgage for up to $750,000.

This change will only affect people who are buying homes in a higher price range—primarily those buying over the $750,000 range. However, if you’re buying a home for $1 million and you’re putting down 20% or more, it may not affect you that much. If you’re buying a home that’s more expensive than that, there will probably be tax implications.

Lastly, regarding the deduction of local and state taxes in relation to your property, the original law was to take that away completely so you weren’t allowed to claim that on your taxes. The new change allows you to do so for up to $10,000. Basically, if your taxes are more than that, it will have an effect on you whether you’re buying or selling.

If you have any other questions about these new tax rules and how they affect the real estate market, don’t hesitate to reach out to us. We’d be happy to help you.

7 things to know today and Orlando housing market

 

Good morning, Orlando!

It was a good year for Orlando-area Home Sales, says Allyn Maycumber of WeKnowNona, as both home sales and the median price showed increases over the year-ago period, the Orlando Regional Realtor Association reports.

Home sales last year totaled 37,198, an uptick of 3.8% above 2016’s 35,829. In addition, Orlando’s annual median home price of $220,000 is 10% higher than the 2016 annual median price of $200,000.

ORRA President Lou Nimkoff said the median price was driven during 2017 primarily by a combination of strong buyer demand and very low inventory levels, and “Realtors expect prices to continue their upward trend in 2018, albeit at a slower rate.”

“We also expect low inventory to continue to exert its influence on the market in 2018, especially in the highly desired lower-priced categories,” said Nimkoff. “In fact, the lack of affordable housing in Orlando is a concern that Realtors anticipate will be at the forefront of community discussion in 2018.”

Meanwhile, a look at sales county by county shows Lake County was 7.2% above 2016; Orange County, 2.8%; Osceola County, 7.9%; and Seminole County, 3.8% below 2016.

And be sure to check out these other Tuesday headlines:

TRENDING

Rumor: A new Orlando theme park to be announced in 2018 

Disney Springs lands among New York Times’ top places to visit in 2018

Lucky’s Market to open its 2nd C. Fla. store, hire 150 people

Lucky’s Market, a natural foods grocer, plans to open its second Central Florida store this spring in a 30,000-square-foot space at 1720 E. Highway 50 in Clermont that formerly was occupied by Sweetbay Supermarket. More here.

Here’s what ULA is shooting to space in January from Florida’s Space Coast

United Launch Alliance’s Atlas 5 rocket will launch from Cape Canaveral on Jan. 18,between 7:40-8:20 p.m., carrying a missile detection satellite to orbit. Click here to see photos of what ULA is shooting into space.

Orlando International Airport food vendor to hire 145 new workers

Beverage and food provider for traveler HMS Host, the Orlando International Airport’s primary food concessionaire, will host a job fair this week to hire 145 people. The in-person hiring event will be on Thursday, Jan. 18 at the Hyatt Regency Orlando International Airport. More here.

Orlando gas prices face upward pressure

Area gas prices are holding steady, but there is upward pressure on prices at the pump due to rising oil prices, AAA said. The most expensive gas in Florida is in West Palm Beach-Boca Raton ($2.58) and Miami ($2.53). The least expensive gas price averages in Florida are in Orlando ($2.39), Jacksonville ($2.39) and Tampa-St. Petersburg-Clearwater ($2.39).

Equifax was 2017’s most-complained-about finance company

Atlanta-based Equifax Inc., which was hit with a massive hacker attack last year, not surprisingly received the most consumer complaints in 2017, a new report says. In fact, in 49 states (every one except North Dakota) Equifax (NYSE: EFX) received the most complaints.

Whirlpool, Apple partner on home appliance front

Whirlpool Corp. and Apple Inc. will now be involved in how consumers use their home appliances. Whirlpool, the Benton harbor, Mich.-based maker of consumer appliances, said Apple Watch users will be able to control various home appliances later this year. More here.

Central Florida communities are among the fastest-growing in the nation

Ten Central neighborhoods  including four in Central Florida. are among the 50 fastest-selling master-planned community in the country last year, according to John Burns Real Estate Consulting.

Collectively, the top 50 communities sold 28,311 last year, up 20 percent from 2016 and representing roughly 4.5 percent of all new home sales in the nation.

Among notable trends, Florida’s share grew to 28 percent of the nation’s home sales in 2017, up from 20 percent the prior year, according to John Burns Real Estate Consulting.

Click on the slideshow to see which communities in Florida made the cut, including which one nabbed the No. 1 spot. And go here for a look at the complete list.

What salary do you need to afford an average home in Orlando and 49 other cities?

Median home prices have risen in most major U.S. cities over the last year, including Orlando. So when factoring in interest, taxes and insurance payments, how much would you really need to make to afford a home?

 

See the slideshow with this story to find out where Orlando and 49 other large cities rank, including where national numbers fit among them, according to HSH.com.

With little new housing supply, continues to be a problem in most cities, the researchers conclude.

 

Overall across the nation, an average salary of $55,390 would pay for a home that averaged $254,000, which is a 5.26 percent increase from 2016. That’s if the homebuyer put a 20 percent down payment — the salary needed increases to $63,941 if only buying with a 10 percent down payment, reports HSH.com.

While most markets in the 50 largest U.S. states saw a decline from the second quarter to third quarter of 2017, almost all saw rises in median home prices from this time last year.

Orlando-area home prices still on the rise

Home prices in the Orlando-Kissimmee-Sanford metropolitan statistical area increased by 6.8% in November compared with the year-ago period, a new report from CoreLogic shows.

On a month-over-month basis, home prices, including distressed sales, increased by 0.8% in November compared with October.

Nationwide, home prices nationally year over year by 7% from November 2016 to November 2017, and on a month-over-month basis home prices increased by 1% in November compared with October, CoreLogic reports.

Looking ahead, the CoreLogic forecast indicates that home prices will increase by 4.2% on a year-over-year basis from November 2017 to November 2018, and on a month-over-month basis home prices are expected to decrease by 0.4% from November to December.

“Rising home prices are good news for home sellers, but add to the challenges that home buyers face,” said Frank Nothaft, chief economist for CoreLogic. “Growing numbers of first-time buyers find limited for-sale inventory for lower-priced , leading to both higher rates of price growth for ‘starter’ homes and further erosion of .”

Cities Higher at Risk for Bubble

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Are we in a housing bubble? Whenever house prices increase faster than general inflation for a year or two, we hear that question more often. Can the market sustain the new higher price, or has something artificially or temporarily inflated these prices?

Nationally, over the past five years, the increase in house prices has outpaced inflation by 34 percent cumulatively since 2012 (figure 1). Though noteworthy, the increase is less than half the pace seen between 1997 and 2006, which saw house price growth outpace inflation by 87 percent.

Locally, there are areas of concern

Of course, real estate is local, so we should also ask if there are any regional housing bubbles. We examined the same two key factors to measure the likelihood that a metropolitan statistical area (MSA) is in a bubble, and we offer a method that ranks the largest MSAs against each other based on these factors.

We began with the 37 largest MSAs and looked at the real increase in house prices since their lowest point following the crisis (the trough) and our measure. We then sum the rankings and re-rank the MSAs most likely to be in a bubble, our “bubble watch” rank.

The top 10 MSAs are ranked high on both home price growth and lack of affordability measures. But further down the list, the rank could be driven by one measure or the other.

Mortgage Credit Risk Increased in Q2 2017

Housing Credit Insights Trends Through Q2 2017

The CoreLogic Housing Credit Index is a robust credit index that measures mortgage credit risk using six mortgage credit attributes. The HCI spans more than 15 years, covers all loan products in both the prime and subprime lending segments and includes all 50 states and the District of Columbia, permitting peak to trough business cycle comparisons across the U.S.

The CoreLogic Housing Credit Index (HCI) measures the variation in mortgage credit risk attributes and uses loan attributes from mortgage loan servicing data that are combined in a principal component analysis (PCA) model. PCA can be used to reduce a complex data set (e.g., mortgage loan characteristics) to a lower dimension to reveal properties that underlie the data set.

 

The HCI combines six mortgage credit risk attributes, including borrower credit score, loan-to-value (LTV) ratio, debt-to-income (DTI) ratio, documentation level (full documentation of a borrower’s economic conditions or incomplete levels of documentation, including no documentation), status of investor-owned (whether property is a non-owner-occupied investment or owner-occupied primary residence and second home), and property type (whether property is a condominium or co-op). It spans more than 15 years, covers all loan products in both the prime and subprime lending segments and includes all 50 states and the District of Columbia, permitting peak-to-peak and trough-to-trough business cycle comparisons across the U.S. The CoreLogic Loan-Level Market Analytics data include loan-level information, both current and historical, from servicers on active first-lien mortgages in the U.S. and the Non-Agency Residential Mortgage Backed Securities (RMBS) data include loan-level information from the securitizers. In addition, CoreLogic public records data for the origination share by loan type (conventional conforming, government, jumbo) were used to adjust the combined servicing and securities data to assure that it reflects primary market shares. These changes across different dimensions are reflected in the HCI. A rising HCI indicates increasing credit risk and a declining HCI indicates decreasing credit risk.