What is zombie debt…don’t be the VICTIM!

Don’t let “zombies debt” invade your space…knowledge is power.  Wenston DeSue

When you’ve paid off a debt or the statute of limitations expired, you might think the debt can no longer impact you. After all, once a debt reaches a certain age, a debt collector can no longer sue you in court to satisfy the debt. Plus, old debt usually falls off your credit report after seven years.

However, sometimes you still have to be on the lookout for zombie debt. It’s debt that you thought was dead and gone but that a debt collector is trying to revive. In some cases, the zombie debt that a creditor is attempting to collect doesn’t even belong to you.

How zombie debt works

Although debt collectors can’t take you to court to collect on zombie debts, they may be allowed to contact you to collect the money. Since the cost to purchase expired debt is often low — sometimes pennies per dollar — zombie-debt collectors can earn decent profits when consumers agree to repay old debt. Unless the state you’re living in requires a debt collector to disclose that it can’t sue you to collect the debt, you might take actions that revive the debt.

For example, if you pay an expired debt off in part or in full or acknowledge that it’s yours, this could reset the clock on the debt. That means the collector can sue you or report the debt to the credit bureaus, depending on the debt collection laws in your state.

Debts that zombie-debt collectors try to collect

While debt collectors can attempt to collect on any type of debt, here are some of the most common types of debts:

Discharged or settled debts

If you’ve gone through Chapter 7 bankruptcy, some of your debts may be discharged, which means you’re no longer responsible for paying them back. With a settled debt, you should have a written agreement stating you’re no longer legally responsible for the debt.

Time-barred debt

Most types of debt have a statute of limitations, except for federal student loans. This means after debt reaches a certain age, a debt collector can’t sue you for it. The statute of limitations on debt varies according to which state you live in, but it usually ranges from three to six years.

Debt that has fallen off your credit reports

If you have a negative item on your credit report, such as a collection or late payment, a collector can report it to the credit bureaus for up to seven years. However, if you make a payment on a zombie debt or agree to do so, the collector can report the debt to the credit bureaus, restarting the seven-year clock.

Debt that doesn’t belong to you

A debt collector could mistake you for someone else, or someone could steal your identity and make fraudulent charges in your name. If the latter occurs, report the identity theft to the Federal Trade Commission (FTC) immediately and notify your bank and creditors.

How to protect yourself from zombie debt

If debt collectors continue to call you even though your debt is time-barred or the debt isn’t yours, consider taking one of the following approaches.

1. Tell the debt collector to stop contacting you

Under the Fair Debt Collection Practices Act(FDCPA), you have the right to tell a zombie-debt collector not to contact you. To do this, the FTC recommends that you send the collector a certified letter with a return receipt so you can confirm it has been received. If you need help creating a letter, the Consumer Financial Protection Bureau (CFPB) has sample letters on its website.

If a zombie-debt collector violates the FDCPA by harassing or threatening to sue you, file a complaint with the CFPB, report the violation to your state’s attorney general office or sue the debt collector in state or federal court.

2. Validate and dispute the debt

If you don’t think the debt doesn’t belong to you, ask the creditor for a validation notice containing how much the debt is, who the original creditor is and when the debt was incurred. Check this against your records to confirm whether the debt is yours. Afterward, send a dispute letter to the creditor if the debt isn’t yours.

Additionally, if the debt is listed on your credit report, dispute it directly with the three major credit bureaus: TransUnion, Experian and Equifax.

3. Pay off time-barred debt on your credit report

Just because a collector can’t sue you for a debt doesn’t mean it has fallen off of your credit report. Check whether it’s still there by viewing your credit reports for free at AnnualCreditReport.com. Although you can normally only view one free report from each of the three major credit bureaus each year, due to the coronavirus pandemic, you can check all three of your reports for free weekly through April 20, 2022.

If you have a debt that’s still listed, consider negotiating with your creditor to settle for less than you owe. Just make sure to get the collector to agree in writing that it can’t sue you to collect the remaining amount.

4. Don’t pay or acknowledge the zombie debt

If the zombie debt isn’t listed on your credit report, consider not making any payments toward it or acknowledging that it’s yours. Remember that In some states, you’ll be legally responsible for the debt if you take one of those actions.

5. Pay your existing debts off on time

To prevent current debt from becoming zombie debt, pay it on time and keep records of your payment history. If you’re struggling to repay multiple debts, consider using a debt consolidation loan to consolidate your debt into one monthly payment, ideally with a lower interest rate.

You can also use a debt payoff calculator to come up with a repayment plan that fits your budget.

The bottom line

When a debt collector contacts you about a debt that has expired, has already been paid off or doesn’t belong to you, you aren’t legally responsible for repaying it. If you’re unsure whether the debt is yours or if it’s expired, ask the collector to provide you with the age of the debt or do your own research. Dispute the debt with the credit bureaus or creditor if you find that an error has been made.

However, if the zombie debt does belong to you and is still listed on your credit report, consider paying it off or settling with the original creditor or debt collector to pay less than what’s owed.

Cited:  BankRate

Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker.  Real estate is the business of exchange and affects every person on the planet.  Real estate on all levels represents resources, access, purpose and often times, power.  These articles represent aspects that affect the business of real estate. 

DROP!

 

NAR: Jan. Pending Home Sales Drop 5.7%

The interesting part is that the “great squeeze” is not being reported.  Wenston DeSue

Buyers have difficulty finding a home, says NAR’s chief economist. He won’t be surprised to see demand decline given current “mortgages, home costs and inventory.”

WASHINGTON – Pending home sales slumped in January, continuing what is now a three-month decline in transactions, according to the National Association of Realtors®’ (NAR) monthly report.

Of the four major U.S. regions that make up NAR’s full report, only the West registered an increase in month-over-month contract activity, and all regions posted a year-over-year decline.

The Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – fell 5.7% to 109.5 in January. Year-over-year, transactions decreased 9.5%. An index of 100 is equal to the level of contract activity in 2001.

“With inventory at an all-time low, buyers are still having a difficult time finding a home,” says Lawrence Yun, NAR’s chief economist.

Alongside persistent supply constraints, Yun says house hunters are contending with a number of additional market issues, including escalating home prices and rising interest rates. Rates jumped by nearly a percentage point in January compared to December, further adding to monthly mortgage costs.

“Given the situation in the market – mortgages, home costs and inventory – it would not be surprising to see a retreat in housing demand,” Yun adds.

NAR expects economic conditions to be volatile in the coming months. The impending conclusion of the Federal Reserve’s asset purchase program in March paves the way for higher interest rates. Russia’s aggression in Ukraine is also likely to affect global oil supply, imposing further burdens on inflation and bringing about more aggressive rate hikes.

“There’s also the possibility that investors may flee toward safer U.S. Treasury bonds, which may result in temporary short-term relief to interest rates,” Yun says.

Realtor.com’s Hottest Housing Markets data in January showed that of the largest 40 metros, the most improved markets over the past year were Orlando-Kissimmee-Sanford, Fla.; Tampa-St. Petersburg, Fla.; Jacksonville, Fla.; Nashville-Davidson-Murfreesboro-Franklin, Tenn.; and Las Vegas-Henderson-Paradise, Nev.

January regional breakdown: Month-over-month, the Northeast PHSI dropped 12.1% to 84.3 in January, a 16.7% decrease from a year ago. In the Midwest, the index fell 5.9% to 104.4 last month, down 5.9% from January 2021.

Pending home sales transactions in the South slipped 6.3% to an index of 134.6 in January, down 8.7% from January 2021. The index in the West increased 1.5% in January to 95.2, down 9.7% from a year prior.

Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker.  Real estate is the business of exchange and affects every person on the planet.  Real estate on all levels represents resources, access, purpose and often times, power.  These articles represent aspects that affect the business of real estate. 

NY Public Radio Settlement

 NEW YORK PUBLIC RADIO

jiSAG-AFTRA

Ultimately, worker morale is boosted when organizations recognize errors in pay and benefits   Wenston DeSue

SAG-AFTRA and New York Public Radio have reached a global settlement that withdraws the complaints issued to the National Labor Relations Board. A pay increase is included in the settlement.

The settlement includes an extension of just cause protections to reporters and on-air hosts and a one-time 3% wage increase in July 2022 for all bargaining unit employees making under $100,000 per year. Also included are enhancements to NYPR’s parental leave policy; and a resolution of claims brought by the union regarding personnel issues pertaining to individual staff members.

A press release on the settlement states, “Both parties look forward to working together to continue to resolve workplace matters cooperatively, and to serving our audiences across the region and around the world with trusted news, classical music and cultural programming, and the New York conversation.”

Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker.  Real estate is the business of exchange and affects every person on the planet.  Real estate on all levels represents resources, access, purpose and often times, power.  These articles represent aspects that affect the business of real estate. 

NEW FL DBPR Mask Rules

 For all of us certified professionals out there…NO MASK REQUIRED…Wenston DeSue

On Thursday, February 24, 2022, Governor Ron DeSantis and Florida Surgeon General Dr. Joseph Ladapo announced updates to the Florida Department of Health’s COVID-19 Guidance Recommendations.  For your reference, the Department of Business and Professional Regulation is sharing this updated guidance with you as a current and active license holder.  

 

Among other recommendations, the updated guidance provides that businesses are advised to no longer require facial coverings for employees, as there is no proven significant clinical benefit for facial coverings among the general population.  Please visit the link below to access and review the complete FDOH Guidance Recommendations as updated this week:

 

Florida Department of Health COVID-19 Guidance Recommendations (02.24.2022)

 

For questions regarding these recommendations or other resources related to Florida’s COVID-19 response, please visit FLORIDAHEALTHCOVID19.gov or contact the Florida Department of Health at (866) 779-6121.

 

The Department of Business and Professional Regulation looks forward to continuing to work with you and all of our valued stakeholders to ensure that Florida remains the best place in the nation to do business.

Non-Union Contractors CAN Gain Federal Contracts

 Biden has solidified Union labor’s importance in the US   

Wenston DeSue

Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker.  Real estate is the business of exchange and affects every person on the planet.  Real estate on all levels represents resources, access, purpose and often times, power.  These articles represent aspects that affect the business of real estate. 

Despite Biden PLA order, non-union contractors can win federal projects

Although more federal projects will require labor agreements, firms with no union experience can compete for those jobs, attorneys say.

With the stroke of a pen, President Joe Biden doubled down on his support of unions on federal construction projects.

On Feb. 4, Biden (pictured above at the signing) issued an executive order instituting a project labor agreement requirement on federal construction projects worth more than $35 million.

The move aligns with one of Biden's chief policies — strengthening unions at a time when membership in organized labor has declined for decades. Construction's union membership is higher than the nationwide average, but numbers still have steadily dropped since the 1970s.

What is a PLA?

A PLA is similar to a collective bargaining agreement between a union and its employer, but differs in that it applies to a single project and is agreed upon by all parties: general contractors, subcontractors and labor groups.

Typically, the areas a PLA covers include:

• Wages and benefits.
• Apprenticeship and training programs. 
• Jobsite rules, like alcohol and drug policies, harassment policies and break rules.
• Work hours and overtime.
• Jobsite safety. 

A PLA will also cover procedures for resolving any employment disputes and prohibit strikes or work stoppages for the entirety of the agreement, Liz Cappiello, attorney for Washington, D.C.-based law firm Miller & Chevalier, told Construction Dive.

Typically, the GC and trade unions initially agree upon the PLA, under guidance from the agency or owner. Then other subcontractors agree to abide by the PLA when they join the project,  according to Chris Bailey, attorney for St. Louis-based firm Greensfelder. 

"A PLA will generally be in place before bidding on the project begins, so that contractors considering submitting their bids are aware of the requirements of the project," Bailey said.

In recent years, some public agencies have progressed toward Community Workforce Agreements (CWA), a specific type of PLA that promotes public policy, such as prioritizing training, employment or hiring of businesses run by women and minorities, Mark Johnson, labor relations consultant for Seattle-based labor consulting firm M. L. Johnson & Associates, told Construction Dive. 

With the Biden order, some PLAs on these federal projects will also be CWAs, Johnson said. 

What's in the executive order?

Labor groups say PLAs protect workers and prevent work stoppages to help deliver projects better, but builders and employer groups claim they disadvantage contractors that don't typically work with unions.

However, the executive order requires organizations to allow all contractors and subcontractors to compete for work, regardless of their collective bargaining experience, according to Cappiello.

Notably, only projects that receive money directly from federal procurement will fall under the executive order, meaning construction projects financed through grant dollars to non-federal organizations such as states will be exempt. 

That doesn't mean, however, that other entities won't require PLAs, Terry said. Some agencies and groups can still require them on projects funded indirectly, or under the $35 million cost threshold.

"That would be a blue state inclination," Terry said of agencies requiring PLAs even when exempt. 

It's still unclear whether the federal government will mandate uniform aspects of the PLAs, or if stakeholders will decide details on a project-by-project basis. 

Getting ready

For a contractor with no familiarity or experience entering a PLA, "the scariest thing is you won't know what you don't know," Bailey said.

"Obviously, you'll want to read the PLA carefully before entering into it to see if it’s something that works for you and your company because those are the rules under which you’ll be operating for the duration of the project," he said.

GCs will need to carefully document their adherence to the PLA terms from all subs on the project.

When it comes to determining wages, Terry said, look to the Davis-Bacon Act. Contractors already must meet prevailing wage requirements for public works projects. With a PLA, expect wages slightly higher than the area's prevailing wage, he said.

Terry encouraged builders without PLA experience to "sharpen their pencils" to find ways to save money, especially because trade unions may add riders that benefit their skilled workers. For example, a group may try to secure wages for their graveyard shift workers higher than those wages agreed upon in the PLA. 

"Every PLA I've been involved with — and I've been involved with a lot — have a lot of riders, that are trade-specific riders that affect the PLA," Terry said.

Favorability

Opponents of the PLA enforcement say non-union builders would have to drop more cash than usual to staff these projects.

"By mandating PLAs on these large-scale projects, the EO gives an advantage to union contractors because those contractors' labor costs are unlikely to change and those contractors are already familiar with unions and operating under such agreements," Bailey said, indicating non-union builders are less likely to bid on projects.

But Johnson said that non-union builders can, and likely will, bid on and win projects that fall under this executive order. 

Terry echoed that idea, and emphasized the prevailing wage issue. 

"You can continue to be a non-union company, just realizing that this is the way the federal government intends to do business from now on, with the discretionary aspects," he said. "My primary advice is to appreciate the Davis-Bacon aspect, this is not tremendously dramatic."

Regardless, for the foreseeable future, "entering a PLA will be part of doing business with the federal government on certain projects," Cappiello said.

Cited: Construction Dive

PLEASE Recognize The Shift!

 Collaboration in the Workforce means SUCCESS!

Wenston DeSue

CERIDIAN Recognizes!

In today’s talent landscape, the balance of power has shifted in favor of job seekers and employees. As the pandemic has made clear, workers do not fear leaving their jobs if employers won’t meet their expectations. 

To build a resilient workforce, logistics and construction firms must start by investing in the employee experience. When employees feel heard, supported, and valued by their employers, they are more likely to remain engaged, motivated, and invested in successfully steering the company through disruption. 

Our essential playbook will help you address the three main barriers to attracting and retaining talent in today’s environment. You will learn:

• How to appeal to Millennial and Gen Z workers
• The importance of employee recognition
• How to cultivate a connection among gig workers and distributed employees

Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker.  Real estate is the business of exchange and affects every person on the planet.  Real estate on all levels represents resources, access, purpose and often times, power.  These articles represent aspects that affect the business of real estate. 

BIG THINGs in THE NYC!

 

La Guardia Airport just completed a $4B renovation project…now that’s MAJOR!

Wenston DeSue

Cited:  Construction Dive

Dive Brief:

• New York City's LaGuardia Airport opened its second skybridge to passengers on Jan. 28, marking the final milestone of the nearly six-year renovation of Terminal B. The old airport was notorious for its poor condition; former Gov. Andrew Cuomo called it "outdated, overcrowded and unworthy of the Empire State."
• The Terminal B renovation is valued at $5.1 billion, including $4 billion in construction costs, and the project overall has a price tag of $8 billion. LaGuardia Gateway Partners (LGP), the public-private partnership that manages the project, is made up of Vantage Airport Group, Skanska, Meridiam and JLC Infrastructure. A Skanska-Walsh joint venture led design-build work, while HOK and WPS were responsible for architecture and engineering.
• The overall project is now about 95% complete, according to a spokesperson for LaGuardia Gateway Partners. The final piece of the original terminal must be demolished in order to open the remaining gates and the taxiway underneath the new western skybridge. Skanksa-Walsh is doing the remaining work.  

Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker.  Real estate is the business of exchange and affects every person on the planet.  Real estate on all levels represents resources, access, purpose and often times, power.  These articles represent aspects that affect the business of real estate. 

Moodys Office Predictions Low!

 The Office Building sector will need to reconfigured to adjust to the new COVID “norms”.  Wenston DeSue

Performance Metrics Continue to Buck Expectations

We had continued to project rising vacancy rates for the office sector through 2021, given uncertainty about return-to-office plans and ongoing concerns about the pandemic. This flew in the face of economic projections that called for economic growth of over 5.5% in 2021 – the highest rate of growth for US GDP since 1984. We evinced surprise when office vacancies began falling faster than many expected. They dropped in the third quarter by 30 basis points and again in the fourth quarter by 10 basis points, to end the year at 18.1%. The national vacancy rate is now 40 basis points lower than what may well be (in retrospect) the pandemic peak of 18.5%, recorded in the second quarter of 2021.

Asking and effective rents were basically unchanged at the national level, ending the fourth quarter at $34.46 PSF and $27.74 PSF, respectively. Year-over-year asking and effective rent growth rates of -0.2% and -0.8% paint the picture of a tumultuous period, with both types of rent posting positive (if marginal) increases in the middle of the year.

Cited: moodys.com

Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker.  Real estate is the business of exchange and affects every person on the planet.  Real estate on all levels represents resources, access, purpose and often times, power.  These articles represent aspects that affect the business of real estate. 

Construction Opportunities…Time To Go To Work!

 

Construction faces over half-a-billion-worker shortage…

Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker.  Real estate is the business of exchange and affects every person on the planet.  Real estate on all levels represents resources, access, purpose and often times, power.  These articles represent aspects that affect the business of real estate. 

The labor market is being hit from all sides.  Now there’s not only material costs, but labor shortages abound.  

Wenston DeSue

Dive Brief:

• Construction needs more than half a billion workers above its current pace of hiring in order to meet demand in 2022, according to an analysis released Wednesday by Associated Builders and Contractors. Predictive models from ABC indicate the industry needs 650,000 additional workers.
• For every $1 billion in additional construction spending, construction gains 3,900 jobs, ABC found. As massive infrastructure spending enters the pipeline, the industry will have a lot of hardhats to fill.
• Anirban Basu, chief economist for ABC, described the workforce shortage as the "most acute challenge" the industry faces, even in the face of sluggish spending growth.

Dive Insight:

"After accounting for inflation, construction spending has likely fallen over the past 12 months," Basu said in a release. "As outlays from the infrastructure bill increase, construction spending will expand, exacerbating the chasm between supply and demand for labor."

An estimated 1.2 million construction workers will leave for other industries in 2022, ABC found, but an anticipated 1.3 million will offset that departure — leaving other industries for construction. Nevertheless, the age of the workforce raises concerns, as fewer young workers join and stay on jobsites, and veterans of the industry retire.

The number of workers ages 25-54 dropped 8% over the last decade, while the number of older workers has increased proportionally.

"According to the Centers for Disease Control and Prevention, the industry's average age of retirement is 61, and more than one in five construction workers are currently older than 55," Basu said.

The number of entry-level laborers has increased 72.8% since 2011, Basu said, while the total number of workers has grown by less than 25%.

"The roughly 650,000 workers needed must quickly acquire specialized skills," Basu said. "With many industries outside of construction also competing for increasingly scarce labor, the industry must take drastic steps to ensure future workforce demands are met."

ABC CEO Michael Bellaman emphasized how construction workers will be essential to fulfill the projects associated with the $1.2 trillion Infrastructure Investment and Jobs Act. He railed against regulations attached by the Biden administration. 

Some of those regulations include President Joe Biden’s recent executive order mandating the use of project labor agreements on federally funded construction projects over $35 million.

"More regulations and less worker freedom make it harder to fill these jobs," Bellaman said in a statement.

Cited: Construction Dive

Financial Discrimination is ripe for Justice!

 There is a saying that “we all aren’t free, until we all are free…”  This is no more evident in the under-appraising of property owned by Black and Brown groups.  I hope that the legal system no only takes up the case, but goes to the ends of the earth to rectify this egregious setting precedent.

Wenston DeSue

DOJ Focusing on Appraiser Fair Housing Lawsuit

The Civil Rights Division filed a “statement of interest” in a San Francisco appraisal case where value rose by $500K after removing signs of Black ownership.

ST. LOUIS – The Department of Justice’s Civil Rights Division on Valentine’s Day filed a statement of interest in a private discrimination lawsuit where the homeowners allegedly received an appraisal for nearly $500,000 less than the actual value because they are Black.

In 2020, Tenisha Tate-Austin and Paul Austin, a Black couple in San Francisco, sought to refinance their home mortgage. Janette Miller, a licensed appraiser, named a defendant in the lawsuit, appraised the couple’s home at $995,000. However, a few weeks later, another appraiser set the home’s value at $1,482,500.

They received the second and more significant appraisal after getting a Caucasian friend to pose as Tate-Austin.

The couple said Miller used coded phrases like “Marin City is a distinct area” when she valued the property. They said those comments were related to their race and complained to their mortgage lender.

For the second appraisal, they hid photos and artwork with distinguishing African American characteristics and replaced them with those belonging to their white friend.

“We had a conversation with one of our white friends, and she said, ‘No problem. I’ll be Tenisha,” Tate-Austin told reporters last month. “I’ll bring over some pictures of my family.’ She made our home look like it belonged to her.”

The couple filed a fair housing discrimination lawsuit against Miller and her company, Miller and Perotti Real Estate Appraisers, Inc., and AMC Links, LLC.

Miller and her company have filed a motion to dismiss the case, claiming that the couple failed to state a claim upon which a court could grant relief.

“The United States respectfully submits [our] statement to provide an overview of the FHA and to address two questions of law raised in the defendants’ motion,” the DOJ said in a statement.

“The defendants assert that the FHA does not apply to residential appraisers. The statute’s text and caselaw make clear that it does. Second, the defendants lay out the elements of a prima facie case and argue that the plaintiffs have failed to allege these elements,” the DOJ stated.

“But the plaintiffs need not allege facts that make out a prima facie case at this stage. The act simply requires that the plaintiffs allege a plausible entitlement to relief as a result of the defendants’ “discriminatory housing practices.”

Austin said he and Tate-Austin researched the market well and upgraded their home before the first appraisal.

“We did our homework,” Austin told the Reparations Task Force in a panel on the racial wealth gap in October. “We believe the white lady wanted to devalue our property because we are in a Black neighborhood, and the home belonged to a Black family.”

Cited: realtor.com

Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker.  Real estate is the business of exchange and affects every person on the planet.  Real estate on all levels represents resources, access, purpose and often times, power.  These articles represent aspects that affect the business of real estate. 

Miami is “cool runnings”…

 Miami…cooling?

Wenston DeSue

Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker.  Real estate is the business of exchange and affects every person on the planet.  Real estate on all levels represents resources, access, purpose and often times, power.  These articles represent aspects that affect the business of real estate. 

It would seem the sky’s the limit when it comes to pricing for South Florida’s high-rise living with sales prices reaching new heights in January. House hunters, however, are catching some relief — as prices steadied or dipped for the first time in months. Median sales prices increased for condos for the fifth month in a row in Miami-Dade and Broward counties, according to new housing data from the Miami Association of Realtors. In Miami-Dade, prices grew to $360,000 in January, up from $355,000 in December. Prices rose in Broward to $240,000 in January, slightly higher than $236,000 the month before. The month-to-month growth mirrors a year-over-year jump in condo sales prices. Miami-Dade experienced a 27% rise in condo prices to $360,000 in January 2022 from $280,000 in January 2021. Prices rose by 15% in Broward, to $240,000 in January from $209,000 a year ago.

Read more at: https://www.miamiherald.com/news/business/real-estate-news/article258518653.html#storylink=cpy

Where Is The Opportunity Zone?

 With higher prices comes lower opportunities for affordability….Wenston DeSue

Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker.  Real estate is the business of exchange and affects every person on the planet.  Real estate on all levels represents resources, access, purpose and often times, power.  These articles represent aspects that affect the business of real estate. 

Hot Real Estate Market Impacted ‘Opportunity Zones’

Fla. has over 400 Opportunity Zones to create affordable housing and encourage development, but rising prices and demand have dampened their impact.

TAMPA, Fla. – The 2017 tax reforms signed into law by former President Donald Trump created what’s called a qualified opportunity zone to encourage home construction in low-income areas. Florida is home to over 400 of these zones, where the U.S. Census Bureau identified concentrations of low-income residents and a need for more affordable and workforce housing.

The affordable housing construction program has kept home prices lower in some areas, but costs still rose significantly along with the rest of the U.S. housing market.

A study by real estate data curator ATTOM found home prices in 56% of the opportunity zones went up by at least 20% from October to December of 2021. While price increases were lower in opportunity zones, cost surges did occur even where financial opportunity exists to keep housing affordable.

According to the Florida Department of Economic Opportunity, the 2017 Tax Cuts and Jobs Act allows state governors to designate up to 25% of their low-income census tracts for use as an opportunity zone. And construction companies building housing on those locations got big financial boons for doing so. Builders whose bids were accepted for development in the zones were able to have their capital gains taxes deferred and reduced for years.

“Investments are made in Opportunity Zones through U.S. Treasury Qualified Opportunity Zone Funds, which must invest over 90% of their assets in Qualified Opportunity Zone properties and businesses,” according to a statement from the DEO  “Qualified Opportunity Zone Funds attract investors through possible tax benefits.”

The financial benefit of the zones gains value over years, depending on how long the funding investment is held. The DEO says the benefits for construction companies are aimed to continue through at least the end of 2026, if not longer.

• Taxes are deferred on capital gains rolled into Qualified Opportunity Zone Funds and the original tax bill through Dec. 31, 2026, or the sale of the Opportunity Zone investment, whichever is earlier
• Taxes are reduced on capital gains held in Qualified Opportunity Zone Funds for certain lengths of time; for investments held for five years, the cost basis for tax purposes is increased by 10% and for investments held for seven years, the cost basis increases an additional 5%
• The rolled over capital gain appreciates tax-free if the investment in the Qualified Opportunity Zone Fund is held for 10 years or longer

As municipalities work to address housing needs that have only increased since the passage of Trump’s tax law, the pricing issue remains a core difficulty in America’s economic situation.

The ATTOM study found that of the more than 5,000 zones they surveyed at the end of 2021, the single-family homes in more than half of the country had their prices jump 16.1%. At a time when real estate values are rising every month and inventory continues to shrink, ATTOM said the median prices in 76% of the opportunity zones had risen beyond the 16% national gain.

Prices in the qualified opportunity zones, areas of between 1,200 to 8,000 residents, grew as part of the same 10-year surge experienced in the rest of the U.S., according to ATTOM.

“Gains in Opportunity Zones again pretty much matched what was going on elsewhere and even beat out the rest of the market in some ways,” said Todd Teta, chief product officer with ATTOM. “While Opportunity Zone markets remained depressed, the increases probably reflected the trickle-down effect of buyers priced out of more expensive neighborhoods. The gains also represented an ongoing sign of vitality in lower-income areas – something that ups the ante for investors looking to take advantage of Opportunity Zone tax breaks.”

Teta also said the neighborhoods near the poorest parts of the U.S. rose the national housing boom throughout the end of 2021, even as the speed of the price increases slowed down. In Florida, the DEO provides a map of different locations that could qualify for the development program. The U.S. federal government provides their own interactive map of opportunity zones by state online.

Florida has 427 potential locations or regions that could qualify for the QOZ funds and development. Under the law, the 25% portion that can be selected to use would mean about 106 or 107 different areas could benefit, if builders are interested and approved to begin construction.

The Internal Revenue Service calls the zones an economic tool to allow investment in “distressed areas” of the U.S. and spur economic growth, job creation and provide tax benefits to investors for aiding low-income communities through the programs.

The latest quarterly reports from Florida Realtors showed the median price of a home for sale in the state was about $350,000. In the opportunity zones, ATTOM reported the national median for a home in a low-income area was between $200,000 to $299,999, though 25% of the locations were above the national median home price of $315,000.

Florida remains more expensive as more people move to the state, and development stalls due to lack of materials. Due to the ongoing issues with material costs and delivery, even if the projects are submitted for approval and given the go-ahead, a clear timeline for construction is difficult to forecast.

Keep An Eye on “the Rate”…

 

There is an old saying…NEVER look at the “how much do you want your monthly payment to be…”

Average Mortgage Rate Increases Again, Hits 3.92%

It’s been almost two years since a 30-year, fixed-rate mortgage averaged 3.92% (May 2019 at 3.99%). One year ago, the 30-year FRM averaged 2.81%.

WASHINGTON (AP) – Average long-term U.S. mortgage rates jumped again last week, approaching levels not seen since 2019.

The average rate on a 30-year loan rose last week to 3.92% from 3.69% the previous week, mortgage buyer Freddie Mac reported Thursday. A year ago, the long-term rate was 2.81%.

The last time the 30-year rate was higher was in May of 2019 when it reached 3.99%.

The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, rose to 3.15% from 2.93% one week earlier. It stood at 2.21% a year ago. It last breached 3% in March of 2020, just as the pandemic was breaking in the U.S.

The Federal Reserve has signaled that it would begin the first in a series of interest rate hikes in March, reversing pandemic-era policies that have fueled hiring and growth but also contributing to inflation levels not seen since the early 1980s.

The Labor Department reported last week that consumer prices jumped 7.5% last month compared with 12 months earlier, the steepest year-over-year increase since February 1982. Higher costs for nearly everything have burdened consumers, offsetting pay raises and reinforcing the Federal Reserve’s decision to begin raising borrowing rates across the economy.

The price for a new home has jumped about 14% in the past year and as much as 30% in some cities. Housing has been in short supply even before the pandemic, and higher prices and rising interest rates will make it even harder for homebuyers.

“As rates and house prices rise, affordability has become a substantial hurdle for potential homebuyers, especially as inflation threatens to place a strain on consumer budgets,” said Sam Khater, Freddie Mac’s chief economist.

Cited: realtor.com

Wenston DeSue

Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker.  Real estate is the business of exchange and affects every person on the planet.  Real estate on all levels represents resources, access, purpose and often times, power.  These articles represent aspects that affect the business of real estate.