#HurricaneIrma Targets #Florida

Posted on September 08, 2017 in Uncategorized | Add Your Voice
Hurricane Irma Targets Florida

Irma is increasingly likely to target parts of the Florida peninsula as a dangerous hurricane this weekend. Parts of Georgia and the Carolinas could then be struck by Irma early next week, according to the Weather Channel.

Most of the property in Florida’s flood zone is not insured, The Associated Press reports. According to Federal Emergency Management Agency data, in just five years, the state’s total number of federal flood insurance policies has fallen by 15 percent. Florida property owners, however, still buy far more federal flood insurance than any other state — 1.7 million policies, covering about $42 billion in assets — but most residents in hazard zones are badly exposed.

“With 1,350 miles of coastline, the most in the continental United States, Florida has roughly 2.5 million homes in hazard zones, more than three times that of any other state, FEMA estimates. And yet, across Florida’s 38 coastal counties, just 42 percent of these homes are covered,” the AP reports.

Situs CEO Steve Powel is currently a Florida resident, after also living in Houston.

“Florida is threatened by a monster storm after Houston, the coastal area and a wide swath of inland Texas have been hammered,” says Situs’ Powel. “Hurricane Andrew made landfall southwest of Miami in 1992 and it destroyed 63,000 homes and caused $26.5 billion in economic loss. But with the explosive growth in the Florida coast, reinsurance firm Swiss Re estimates that if the same storm made landfall today, the damage would be $100 billion. The level of property damage to commercial, industrial and residential real estate in Texas is unprecedented to anything I have experienced. Our thoughts and prayers are with everyone in the path of this devastating storm.”

Why Rhode Island’s Construction Job Boom May Be Trouble for Houston, Florida
America’s smallest state is now the biggest for construction job growth, according to Fox Business.
That may be an ominous sign for Houston and surrounding areas as the region attempts to rebuild from Hurricane Harvey, likely one of the costliest in U.S. history, and potentially for Florida as Hurricane Irma tracks closer.

Rhode Island saw a 13.4 percent jump in commercial and residential building jobs over the past year through June – the biggest annual percentage gain of any U.S. state – based on recent data from the Associated General Contractors of America.​​​​​New England is not the only place construction workers are in demand. Pre-Hurricane Harvey, Houston, one of the nation’s largest markets for new homes, was dealing with a shortage of construction labor.

Now, as Houston begins its rebuilding process, the nationwide need for construction workers will get even stronger, Tim Rood, a former Fannie Mae executive, now Chairman of The Collingwood Group, told Fox Business.

“There is no way to automate wiring and plumbing. … You won’t have AI (artificial intelligence) or bots laying pipes,” he warned.

Still, there is a silver lining, a potential windfall for those willing to take these jobs.

“You are going to have pay people a lot of money to swing a hammer,” Collingwood’s Rood added, as rising labor costs are already contributing to increasing construction costs, making development more expensive.

Harvey Hurts Houston Mortgage Bonds Already Feeling Oil Pain
Declining energy prices have already battered Houston’s real estate market. Now, Hurricane Harvey is making it even worse.

Some $8.9 billion of loans packaged into commercial mortgage-backed securities since the financial crisis are supported by Houston-area offices, malls and hotels, Morgan Stanley analyst Richard Hill said in a note Monday. And, across Texas, almost $30 billion of these loans have exposure to official disaster areas, according to Trepp, a specialist firm that tracks such debt.

Harvey, which has already broken the nation’s rainfall record for a single storm, couldn’t come at a worse time for the epicenter of the U.S. oil industry. A three-year slump in energy prices that’s seen oil average $49 per barrel this year has sent Houston office vacancies soaring and propelled some loans tied to the region’s property on to credit graders’ watch lists.

“The area in general has been on everyone’s radar,” according to Kin Lee, a money manager at Angel Oak Capital Advisors, which manages $7 billion.

While insurance policies historically shield properties from major disaster-related losses, secured debt may now require a closer look.

Commercial mortgage-backed bonds tied to Houston-area buildings have an average 3.5 percent exposure to the city, but that climbs as high as 19.2 percent for some notes, according to Morgan Stanley.

read more: Bloomberg

‘Hurricane Deductibles’ Shift Home-Repair Costs to Consumers
Tens of thousands of homeowners hit by Hurricane Harvey may soon find out they are on the hook for extra payments under their insurance policies, and that number could rise into the millions if Hurricane Irma sweeps through Florida.

The storms are expected to trigger widespread use of “hurricane deductibles,” little-known provisions that allow insurers to shift thousands of dollars of damage costs per home onto consumers.

Homeowners insurance policies in coastal states often allow insurers to charge consumers a higher deductible if certain catastrophes like hurricanes occur.

These deductibles were widely put in place after Hurricane Katrina in 2005 and have been standard in many states for years. But they have rarely been triggered on a large scale because few hurricanes have landed in the U.S. over the past decade.

Harvey made landfall as a Category 4 hurricane last month before weakening to a tropical depression as it moved inland. Irma, a Category 5 hurricane, made landfall in the northeast Caribbean on Wednesday and could reach the U.S. later this week. Florida Gov. Rick Scott on Monday declared a state of emergency in all of the state’s 67 counties.

Proponents say hurricane deductibles make insurers more willing to offer policies in high-risk areas and encourage homeowners to take steps to prevent storm damage.

But consumer advocates say hurricane deductibles can be confusing and prohibitively expensive for homeowners.

read more: Wall St Journal

Amazon to Build $5 Billion Warehouse, Employ 50,000 Workers
Amazon is in the market for a second home.

The Seattle-based online retailer said Thursday it plans to open a second headquarters somewhere in North America that will house up to 50,000 employees and cost $5 billion to build and operate.

The rapidly growing company is soliciting bids for the project, dubbed Amazon’s “HQ2,” and said it would prioritize metropolitan areas with more than 1 million people that are within 45 minutes of an international airport and near a strong university system.

The company also said incentives offered by state and local governments will be “significant factors” in the decision.

“We expect HQ2 to be a full equal to our Seattle headquarters,” Amazon’s Chief Executive Jeff Bezos said in prepared remarks. “Amazon HQ2 will bring billions of dollars in upfront and ongoing investments, and tens of thousands of high-paying jobs. We’re excited to find a second home.”

Amazon’s announcement is likely to set off a frenzy among state and municipalities eager to recruit the e-commerce juggernaut to their areas by offering the right mix of tax incentives and allowances. Amazon has received more than $1 billion in incentives since 2000 from state and local governments to help the company build its warehouses, according to Good Jobs First, a group that is critical of corporate tax credits.

read more: Wall St Journal

Industry Optimistic About Growth — Except Affordable Housing
According to Freddie Mac ,a significant majority of the multifamily industry believes the rental housing market will continue to grow, fueled by increasing demand and a growing population. At the same time, however, a plurality of participants is less optimistic about the outlook for affordable housing as compared to just one year ago.

The survey gauged the attitudes of industry participants in sectors such as property development; building and construction; property management; lending, financing and investing; and government and trade associations.

Specifically, the survey found that 60 percent of industry participants anticipate the multifamily housing market will grow over the next 3-5 years, while only about 15 percent see it slowing down. Of those who believe the industry will grow, nearly one-third cite supply and demand as the justification for this continued growth, while another 17 percent cite population growth.

“The findings of this survey indicate a general consensus around the strength of the multifamily market. Confidence in market fundamentals remains high among industry participants, largely due to strong demand fueled by lifestyle preferences and demographic changes,” said David Brickman, executive vice president of Freddie Mac Multifamily. “However, many participants are also seeing that same demand is exacerbating the affordability crisis for many families. It underscores the need for increased investment in the acquisition and preservation of affordable rental housing.”

When it comes to affordability, 42 percent of respondents express declining optimism about the outlook for affordable rental housing today as compaed to last year. When asked about top challenges in offering affordable housing, 40 percent cite costs, such as those associated with land and construction, as the greatest challenge – the largest reason by far. When asked how they are responding to affordable housing challenges, most could not cite specific action they are taking to address these issues.

How Low Can Mortgages Go?
30-year fixed mortgage rate have dropped to a year-to-date low for the third consecutive week, according to Freddie Mac.

  • 30-year fixed-rate mortgage (FRM) averaged 3.78 percent with an average 0.5 point for the week ending September 7, 2017, down from last week when it averaged 3.82 percent. A year ago at this time, the 30-year FRM averaged 3.44 percent.
  • 15-year FRM this week averaged 3.08 percent with an average 0.5 point, down from last week when it averaged 3.12 percent. A year ago at this time, the 15-year FRM averaged 2.76 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.15 percent this week with an average 0.4 point, up from last week when it averaged 3.14 percent. A year ago at this time, the 5-year ARM averaged 2.81 percent.

“The 10-year Treasury yield fell 9 basis points this week, reaching a new 2017-low for a second consecutive week,” says Sean Becketti, chief economist, Freddie Mac. “The 30-year mortgage rate followed, dropping 4 basis points to a year-to-date low of 3.78 percent.”

The Yield on the 10-Year Treasury Hits 10-Month Low. More Refis?
The yield on the benchmark 10-year Treasury fell to 2.09 percent early Tuesday, the lowest reading in 10 monthsas markets grew jittery about possible military action against North Korea.

Analyst Barry Habib of MBS Highway predicted that if the 10-year bond closes below 2.105 percent at the close of business Tuesday, the yield could drift lower to 1.98 percent over the short term. Habib noted: “Stocks are due for a pullback.”

In general, when investors flee the stock market looking for a safe haven they turn to U.S. Treasuries. The result is an increase in bond prices and a drop in yields.

Lower rates could translate into more refinancing, but could cause hedging problems for Fannie Mae and Freddie Mac and make selling servicing rights more difficult because of prepayment fears.

Last week, the Mortgage Bankers Association noted that for the week ending August 25, the refinance share of new mortgage applications increased to 49.4 percent.

read more: Inside Mortgage Finance

Homeowners Face Airbnb Nightmare
Drew Grewal faced fines of nearly half a million dollars because his Miami Beach home was being listed illegally on Airbnb.

In Miami Beach — as in New York, San Diego and many other U.S. cities — short-term rentals of the kind facilitated by Airbnb, VRBO, Tripadvisor and others are strictly limited. Laws, fees and taxes vary regionally, but fines for violations are typically high. In Miami Beach, the fines run at $20,000 for a first violation and rise from there.

When the first notice arrived on Jan. 19, Grewal thought the city of Miami Beach must be mistaken. He hadn’t used Airbnb as a host in years. Then it dawned on him that his long-term tenants might be responsible, despite a clause in their lease barring them from using his place for transient occupancy.

An agent checked up on the property for him and confirmed his suspicions. The yard had been trashed, with some patio furniture shredded. Somebody had installed electronic locks — presumably so guests could check in and out.

Grewal expected it may take time to clear his name with the city or to evict his tenants if they didn’t fix the situation. But he figured a tech start-up like Airbnb should be able to remove the listing pretty easily.

First, he had to figure out where the listing was, since Airbnb’s site doesn’t let users search by address to check whether properties they own might be listed illegally. He was looking for a place for four or six adults, since the house has three bedrooms.

He eventually found the unauthorized listing on March 17. It was promising a “Tropical, Eclectic Home … Sleeps 12!!”

That day, he emailed Airbnb’s customer service team with a link to the listing in question. He said: “I am the homeowner of this property. This is being rented by tenants I have a year-long contract with without my authorization. It needs to be removed immediately.”

Grewal’s misery has plenty of company. Other homeowners and real estate professionals are facing similar troubles in Miami Beach and beyond.

read more: CNBC

Airline Flies into Real Estate Business
After 18 years flying as an airline for the price conscious, Allegiant Travel Co. wants to add real estate development to its list of corporate activities. The company is embarking on an audacious plan to build a 22-acre resort compound with a hotel, condominiums, bars and restaurants on the Florida Gulf Coast in Port Charlotte.

The real estate offshoot, called Sunseeker Resorts, will have a 75-room hotel, along with about 720 condo units, ranging from $650,000 to $1.1 million based on size. The property, when finished in late 2019 or 2020, will also include North America’s largest private-resort swimming pool.

Longer term, Allegiant wants to tout its success with the Sunseeker property as a bid to begin managing other leisure-destination hotels for fees, further diversifying its revenue, President John Redmond said Tuesday. It also sees lucrative opportunities in developing new food and beverage brands and restaurants it can use at other locations, plus meeting and banquet space, a marina with boat slip leases, and the ability of owners to rent their condos as part of the hotel operation.

All this new business development is, of course, far afield from the core operation of running an 88-jet airline with nationwide, less-than-daily service from small burgs to leisure destinations in Florida, Las Vegas, and Phoenix — a model that has proved wildly profitable. The airline is simultaneously working this summer to improve its operational reliability, which suffered earlier this year, while also shifting to an all-Airbus fleet by 2020.

read more: Bloomberg

Part Two: Millennial Women Have More Debt, But Better Credit, Than Men
A survey of millennials finds a gender divide within that generation on debt and credit. Millennial women owe more money, yet their credit scores were higher than their male counterparts.

“While millennial women had higher levels of student and other types of debt, with an average of more than $68,000 compared to $53,000 for millennial men, the women were better at paying it down, suggesting that they may be more responsible borrowers,” says Situs RERC Assistant Vice President Jennifer Rasmussen.

Rasmussen, who has a Ph.D. in psychology, broke it all down on the Jim Bohannon Nationwide Radio Show.
>>>>>>>Click Here for Part Two<<<<<<<<<<<

Our thoughts go out to all those in the Hurricane zones in Texas, Florida and the Gulf coast … be safe!

Have a prosperous day and great weekend ahead.

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Lou Giserman
Senior Media Consultant
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