4 Misconceptions About Flood Insurance

Many homeowners still think standard property insurance covers flooding – it doesn’t – but some companies do offer credits or money for flood mitigation efforts.

STATEPOINT, Wash. – Many people look forward to spring when the weather warms up and flowers start to bloom, but it also marks the start of the peak time of year for flash flooding in the United States. According to the National Oceanic and Atmospheric Administration (NOAA), 75% of flash floods happen between late April and mid-September. And while you may not want to think about it, when water backs up and overflows, it generally goes where it doesn’t belong and can cause serious damage to your home.

Unfortunately, many homeowners have misconceptions about floods, leaving them unprepared. Here are four of the biggest myths:

1. Homeowners insurance policies cover flood damage. A typical homeowners policy covers water damage from a sink or bathtub overflowing but won’t help with flood damage caused by storms – something many homeowners only discover after it’s too late. However, some insurance companies offer coverage to help fill the gaps, so you don’t have to pay out of pocket for repairs and replacements.

1. Only people who live in flood plains need flood insurance. A national survey commissioned by Erie Insurance found that 53% of homeowners think only people who live in high-risk flood zones should buy flood insurance. However, 25% of flood claims are filed by people who live outside those areas. Additionally, FEMA says floodwater only needs to get a mere 3 inches high to make it likely that you’d need to replace drywall and baseboards.

1. There’s nothing you can do to prevent flood damage. Nothing is foolproof, but there are ways to protect your home from water damage. Install a sump pump along with a battery backup and regularly test it. Improve drainage around your home by clearing leaves and debris from gutters, storm drains and downspouts. You can also install water sensors to alert you of water or leaks within your home.
   
   If a storm is on the way, plan ahead by placing valuables and sentimental items into plastic storage bins, moving items off the floor (especially if they are stored in basements and lower levels of a home) and by making a home inventory. A list of all your personal possessions, along with their estimated values, will help if you need to file an insurance claim.

1. Insurance can only help you after an incident. Many homeowners don’t realize they may be able to get reimbursed for taking steps to protect their homes when flooding is imminent. As one example, under certain circumstances Erie Insurance will reimburse homeowners up to $10,000 for materials such as sandbags and the sand to fill them, fill for temporary levees, pumps or plastic sheeting and lumber used with these items, as well as labor.
   
   “We encourage homeowners to not underestimate the risk of flooding, and to be aware of the significant amount of damage that even a small amount of water can cause,” said Michelle Tennant, vice president of product management, Erie Insurance. “Talk to your independent insurance agent about your home and your neighborhood to make sure you have the coverage that’s right for you.”

Life is unpredictable. So is weather. But one thing is certain: if it can rain (or snow), it can flood. Make sure you’re protected with the right type of insurance.

Reposted with permission
Copyright ©2023 NCW Media, Inc., Cashmere Valley Record. All rights reserved.

Top 5 Home Trends to Watch in 2023

Backyards top the list along with other up-and-coming home trends: outdoor rooms, edible gardens, and ... mirrored walls. Plus, the "renovation generation" is here, and they're not scared of a hammer.

SEATTLE — Move over, chef's kitchens. Functional outdoor space is the new must-have for 2023 home buyers.

Zillow® data find backyards are now being mentioned 22% more often in for-sale listings compared to last year, suggesting this once-overlooked area will be one of the most sought-after spaces in the coming year.

Thinking of upgrading your home before you sell? Here are the features buyers want most.

The evolution of the backyard tops Zillow's top five home trends to watch in 2023, based on Zillow's data and analysis.

The humble backyard

Once overshadowed by chef's kitchens and walk-in closets, is the new luxury for today's home buyers. Backyards are now highlighted in 1 out of every 5 Zillow listing descriptions. Mentions of patios and pools also surged, up by more than 13% and 11%, respectively, in 2022.

"The rising popularity of outdoor features suggests the pandemic has changed the way we want to live for good, priming the backyard for a 2023 evolution," said Amanda Pendleton, Zillow's home trends expert. "When the pandemic forced all entertaining outdoors, homeowners reclaimed their backyards from the kids or the dogs. Now they're rethinking how that space could serve as an extension of their home in new, creative ways."

In 2023, look for outdoor home gyms, natural pools alive with plants, edible gardens, and outdoor rooms for dining, lounging and quiet reflection.

Kitchen islands get their glow up

Today's ideal kitchen now includes a spacious island. This hub can seamlessly flex from breakfast bar to homework headquarters to dinner prep station, which is likely why there was a 19% increase in mentions of this multifunctional feature in listing descriptions on Zillow this year.

"As we redefine the spaces in our homes, kitchen islands are being designed to accommodate dining and entertaining activities in the kitchen rather than the formal dining room," said Kerrie Kelly, creative director at Kerrie Kelly Design Studio. "In 2023, we will see a surge of larger and even double kitchen islands using unique colors and materials."

Instead of islands blending in with the kitchen, expect to see them stand out in contrasting paint colors or wood stains. Different countertop materials, combination wood and stone worktops, and mixed metal fixtures and hardware will become more common. Look for homeowners to increasingly repurpose unique furniture pieces or vintage tables as islands.

Mirrored walls are back

A mirrored wall or ceiling might conjure up 1970s flashbacks, but this throwback feature is primed to make a 2023 comeback in a modern way. Mirrored surfaces reflect light and can make tight quarters feel more spacious. Today's mirrored wall is often antiqued and applied in a grid, adding character and an on-trend Parisian feel. Mirrored walls or ceilings are now appearing 12% more often in listing descriptions on Zillow.

Privacy, please

For nearly three decades, contractors have been taking down walls across America as homeowners and builders embraced open-concept living. However, the pandemic exposed the fatal flaw of the open floor plan once everyone was living, working and schooling at home: the lack of privacy. A soundless space for video calls or a quiet sitting room for reading became more desirable than ever. More than a quarter of all Zillow listings now mention privacy or private spaces, a 7% increase over last year.

As home buyers and homeowners seek out privacy, calm and quiet, expect the closed floor plan to make a return to style in 2023. Closed floor plans create cozy, comfortable, enclosed spaces within a home, allowing for bold color and design statements in each room. Homeowners who have open floor plans will look to compartmentalize their space through furniture layout and design to create private nooks and corners.

The renovation generation

The youngest homeowners will lead a new wave of the pandemic-era renovation boom. A new Zillow survey finds 48% of homeowners younger than 40 have tapped the equity in their home in the past two years, most commonly to pay for home improvement projects. However, 90% of those homeowners under 40 who took out a home equity line of credit or second mortgage, or opted for a cash-out refinance, have yet to spend all the money they borrowed, suggesting 2023 may be the year they complete all the renovation projects on their to-do list.

Look for this younger generation of renovators to focus on projects that make their homes more sustainable, low-maintenance and high-tech. Investing in drought-resistant landscaping and smart-home systems are energy-efficient projects that can help save money, the environment and boost a home's value when it's time to sell.

SOURCE Zillow Group, Inc.
reprinted with permission

How Well Do You Know Florida?

By Kerry Smith

As of April 1, 2020, the state had 21,538,187 residents, says the U.S. Census – a 14.6% jump since the previous census. And Fla. turned 177 years old on March 3.

ORLANDO, Fla. – Florida turned 177 years old on March 3, 2022, having joined the United States of America in 1845 as its 27th state.

According to the U.S. Census Bureau, the state had a population of 21,538,187 on April 1, 2020 – a 14.6% increase compared to the 2010 Census.

Official state titles

Nickname: “The Sunshine State”
State Animal: Florida panther
State Bird: Mockingbird
State Freshwater Fish: Florida largemouth bass
State Marine Mammal: Manatee
State Reptile: Alligator
State Saltwater Fish: Atlantic sailfish
State Saltwater Mammal: Porpoise
State Saltwater Reptile: Loggerhead sea turtle
State Flower: Orange blossom
State Tree: Sabal palm
State Beverage: Orange juice
State Fruit: Orange
State Pie: Key lime pie

The U.S. acquired Florida from Spain in 1819, though it wasn’t formally transferred until 1821. On March 30, 1822, it became the “Florida Territory” with the same general boundaries that it has now. It became an official part of the U.S. Census in 1830.

Florida has a land area of 53,633.7 square miles and a water area of 12,106.1 square miles, making it 22% water. By area, it’s the 22nd largest state.

Florida trivia based on the 2020 census:

30.7%: Percentage of Floridians with at least a bachelor’s degree
9,865,350: Total number of housing units
56.2%: Percentage of the labor force employed

Reposted with permission
© 2022 Florida Realtors®

The Florida Wall Street?

The Fla. Wall Street? Developers Focus on West Palm Beach

U.S. financial markets keep some New Yorkers in New York, and developers think a southern hub might give fence-sitting investors another reason to relocate.

WEST PALM BEACH, Fla. – Developers plan to repurpose West Palm Beach as Florida’s answer to Wall Street, with financial firms like Goldman Sachs Group and Steve Cohen’s Point72 Asset Management moving in to help make the state more attractive to New Yorkers driven out of Manhattan by COVID-19.

One particular target: Financiers on the fence about leaving New York City.

Seasonal residents once largely skipped West Palm Beach, but the debut of amenities like the Kravis Center for the Performing Arts, a Restoration Hardware outlet, hotels and ultra-luxury waterfront condominium The Bristol raised its cachet. The Bristol sold out after COVID stuck, while homes in nearby neighborhoods El Cid and SoSo were scooped up at record prices.

Most downtown Class A office space is now owned by Stephen Ross’ Related Cos., including a tower that aspires to be the epicenter of Wall Street South. Goldman Sachs will have a branch in this building, with some of the firm’s most senior trading executives expected to be tenants.

Laura Lofaro, CEO of financial executive-search and consulting firm Sterling Resources International, says it remains uncertain whether West Palm Beach’s financial dreams will bear fruit, however, but real estate entrepreneurs like NDT Development’s Ned Grace are counting on an influx of young adults drawn to the retail, dining, housing and office space under development.

Source: Bloomberg Wealth (09/01/2021) Gordon, Amanda L.; Natarajan, Sridhar; Wong, Natalie

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

Reprinted with permission

Fla.’s May Housing Market Strong, Shows 2020 COVID-19 Impact

By Marla Martin

Florida Realtors’ data: May had more closed sales, more new listings and higher median prices (up 27.7% for single-family homes, 24.1% for condos) than a year ago. 

ORLANDO, Fla. – Florida’s housing market continued to report more closed sales, higher median prices, more new listings and increased pending inventory compared to a year ago, according to Florida Realtors® latest housing data. Note that this month’s May 2020 comparison data reflects the state lockdown and economic uncertainty that occurred last spring during the coronavirus pandemic.

Inventory of existing family homes rose for the first time since March 2020, albeit only a bit. Could this mean we're finally at the start of a long march back toward a balanced market?

“In May, Florida’s housing market continued to show strong year-over-year gains,” says 2021 Florida Realtors President Cheryl Lambert, broker-owner with Only Way Realty Citrus in Inverness. “Of course, in May 2020, Florida remained under lockdown and was feeling the effects of the pandemic. Median prices continue to rise: Part of the reason is that the state is experiencing a greater share of luxury sales in 2021 compared to a year ago, but overall home price appreciation is also a big factor pushing costs higher.”

Closed sales of single-family homes statewide in May totaled 30,985, up 57.9% year-over-year, while existing condo-townhouse sales totaled 15,491, up 155.2% over May 2020. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

The statewide median sales price for single-family existing homes was $344,900, up 27.7% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $250,000, up 24.1% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

May’s housing data offered insight into market trends, according to Florida Realtors Chief Economist Dr. Brad O’Connor.

“Florida’s inventory of existing single-family homes listed for resale increased slightly over the course of the month, rising from 31,618 as of the end of April up to 32,021 by May 31,” he says. “While that’s only a little over a 1% increase, it’s significant because this is the first time Florida’s single-family inventory has increased during any month since March of 2020. It comes on the heels of only a very slight month-over-month statewide decline of just 40 single-family active listings (inventory) from March to April. So that’s two consecutive months where the state’s single-family inventory has been relatively stable.

“Of course, we are still down 58.2% compared to a year ago, so we are by no means out of the woods in terms of the housing shortage – but we can at least take this flattening inventory curve as a sign that we might finally be at the start of a long march back toward a balanced market.

O’Connor explains one reason the decline in single-family inventory appears to have stopped is that the number of existing homes being listed for sale each month generally continues to be in line with recent historical norms prior to the pandemic.

“During May, 34,298 single-family homes came onto the market, which is only 179 fewer new listings than in May of 2018, and just 212 more than May of 2019,” he says. “At the same time, the number of single-family homes going under contract each month, which has been well above historical pre-pandemic norms since June of last year, has been slowly but surely trending back toward those norms in each successive month of 2021.

“This reversion toward historical norms in the level of contract signings is a strong indicator that monthly counts of closed single-family home sales will also move back toward more normal levels, and this appears to have started in earnest in May.”

On the supply side of the market, inventory (active listings) remained tightly constrained in May. Single-family existing homes were at a very low 1.1-months’ supply while condo-townhouse inventory was at a 2.0-months’ supply.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 2.96% in May 2021, down from the 3.23% averaged during the same month a year earlier.

To see the full statewide housing activity reports, go to the Florida Realtors’ Newsroom and look under Latest Releases or download the May 2021 data report PDFs under Market Data on the site.

© 2021 Florida Realtors®

Reprinted with permission

Quick Tips for Homeowners

Mortgage Rates Drop Below 3% – Lowest in 50 Years

By Kerry Smith

The 30-year, fixed-rate mortgage averaged 2.98% this week, according to Freddie Mac – but any uptick in buyer demand will meet a shrinking inventory of for-sale homes.

MCLEAN, Va. – The average 30-year mortgage rate dropped below 3% this week for the first time in at least 50 years. It averaged 2.98% this week, according to Freddie Mac, and is the lowest recorded since Freddie Mac started tracking average mortgage rates in 1971.

However any uptick in buyer demand over all-time-low mortgage rates will meet a shrinking inventory of for-sale homes.

Sam Khater, Freddie Mac’s chief economist, says the drop below 3% “has led to increased homebuyer demand,” and that the “low rates have been capitalized into asset prices in support of the financial markets.”

But Khater also says the “countervailing force for the economy has been the rise in new virus cases which has caused the economic recovery to stagnate, and this economic pause puts many temporary layoffs at risk of ossifying into permanent job losses.”

Mortgage rate overview for the week ending July 16

• The 30-year fixed-rate mortgage averaged 2.98% with an average 0.7 point for the week, down from last week’s 3.03%. A year ago at this time, it averaged 3.81%.

• The 15-year fixed-rate mortgage averaged 2.48% with an average 0.7 point, down from last week’s 2.51%. A year ago, it was 3.23%.

• The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.06% with an average 0.3 point, up slightly from last week’s 3.02%. A year ago, it averaged 3.48%.

Reprinted with permission

© 2020 Florida Realtors®

The Home Has 4 Bedrooms, 3 Baths and Giant Toxic Toads

Fla. doesn’t have murder hornets, but perfect breeding weather has sparked a surge in fat, warty cane toads. They’re generally harmless but release a toxin if mishandled.

June 4, 2020

By Adriana Brasileiro

MIAMI – “Who can I call to get rid of these monsters??? I’m dying over here and I have 3 dogs!”

The distressed plea for help was posted late last month by Ohilda Gilbert, a real estate agent, on a Facebook group of South Florida moms. A photo of a fat, warty cane toad next to a pool pump illustrated her post and fired up a conversation with over 200 comments about the dreaded amphibians.

The yellowish-brown cane toads, also known as bufo, marine or giant toads, are making an appearance in South Florida after the recent heavy rains stirred them up from their burrows and gave them plenty of water to breed in. If summer turns out to be wetter than normal, as forecasts are predicting, tadpoles will have better chances of survival, potentially creating a population boom for the largest toad found in Florida – a big concern for many dog owners.

“As long as there is water for them to breed in, the cane toads will thrive,” said William Kern, an associate professor at the University of Florida who specializes in urban pest management. “They will be out above the surface, foraging and breeding. People are probably seeing more of them now.”

Though these scary-looking toads are generally harmless to humans, they can be dangerous for pets. The amphibians, which average between 4 and 6 inches but can grow to 9 inches, have large triangular glands behind the eyes that contain a high load of a milky-white toxin that can kill dogs, Kern said. If a dog bites or licks the slow-moving frog and gets some of the poison in its mouth, it can suffer convulsions, loss of coordination and cardiac arrest.

During the rainy season, when the toads are breeding and generally more active, dog owners must watch out for signs of poisoning: excessive drooling, red gums, vomiting, disorientation, circling, stumbling and falling, and seizures.

If poisoning is suspected, use a hose to wash the dog’s mouth for several minutes, running water through one side of the mouth and out the other, taking care not to flush water down the throat, which could further spread the poison. The advice is to get to a vet as quickly as possible.

The cane toads can also cause environmental damage. They have no predators and eat pretty much anything: small lizards, snakes, bugs, and even smaller native frogs. Cane toads also compete with native frogs for food and breeding areas.

And much like other invasive species such as the voracious Burmese python, cane toads do well in Central and South Florida’s urban environments. With hundreds of man-made lakes and canals, and plenty of bugs year-round, this is paradise for them.

“We have dozens out on the street at night. They are not even scared of people anymore, it’s like there are gangs of them out this year,” said Elizabeth Bonilla, who lives near a canal in Homestead. Her technique for getting them out of her backyard is to stomp and chase them out until they leave. “I can’t bring myself to kill them.”

The Rhinella marina, as the toad is called, is yet another invasive species that was introduced to South Florida by people – but with a misguided purpose. Native to mainland Central America and parts of South America, the toad was introduced in the 1930s in several sugarcane-growing regions, including Hawaii, Australia and South Florida, as a way to control pests. Farmers believed the toads would benefit crops by eating beetles that killed cane plants.

But the plan backfired. As it turned out, cane toads can’t jump very high, so they couldn’t eat the beetles that lived in the upper stalks of the plants. Instead, they ate pretty much everything else, including bird’s eggs and small mammals. And their poisonous glands ensured that would-be predators stayed away.

In Australia, the toads have been especially problematic, having spread widely and establishing large populations in isolated areas where they have wiped out native species of frogs. The Australian government has spent millions on programs to control the invaders.

Wildlife managers in South Florida encourage landowners to kill the invasive cane toads on their property whenever possible, so it’s important to correctly identify them and not confuse them with native southern toads, which are harmless. Southern toads have ridges on their heads and smaller, oval glands. If the toad is more than four inches long and has puffed-up, triangular bags in the area above each shoulder and behind the eyes, it’s likely a cane toad.

Because the toads are not protected by conservation laws, they can be killed, but there’s a catch: Even the poisonous amphibians are protected by Florida’s anti-cruelty law. The recommended method of humanely euthanizing cane toads is to rub a small amount of numbing agent like Orajel on their bellies, placing them in a plastic bag and freezing them for 48 hours, according to American Veterinary Medical Association guidelines. After that, the toads can be disposed of, said the Florida Fish and Wildlife Conservation Commission.

If dabbing lidocaine on a toad’s belly sounds gross, a toad removal company can do the job.

“That’s a business that will probably do well this season,” Kern said.

And homeowners can do a few things to make their backyards less appealing to these monsters: Keep grass short and clear away brush piles and clutter, clean up food scraps from pet bowls or outdoor gills, keep pet food indoors and install bug lights that keep flying insects away, reducing the toads’ main food source.

Reprinted with permission
© 2020 Miami Herald. Distributed by Tribune Content Agency, LLC.

Thinking of helping with a down payment?

The Gift of a Home Down Payment: What You Should Know

by Natalie Campisi

Down payment help is the gold standard of holiday giving – but it’s not as simple as handing over a wad of cash
with a note that says “Happy Holidays!”

NEW YORK – If you’re lucky enough to get down-payment help under the tree this year (or generous enough to give it), be sure you know the rules around gift funds. It’s not as simple as handing over a wad of cash with a note that says “Happy Holidays! Here’s a little something for your new house.”

Down payment gift funds must meet certain requirements or the gift giver and recipient face trouble down the down. From writing a gift letter to rules around repaying gift money, here are basic facts homebuyers and donors should know.

Who can gift a house down payment?

It might seem odd that there are restrictions around who can give someone cash for a down payment. After all, cash is cash, right? Not necessarily. Cash can come with strings attached, which might affect the borrower’s ability to repay the mortgage.

Lenders want to protect themselves against default by making sure the gift money is what it appears to be (e.g. a gift, not a loan) and the borrower can afford the mortgage. If the borrower gets a down-payment loan from a co-worker and calls it a “gift,” their debt-to-income ratio rises, which can affect their ability to repay their mortgage. So, to protect themselves, the GSEs that back mortgages and United States Department of Housing and Urban Development have created rules for donor eligibility.

For conventional loans – which include 30-year fixed-rate mortgages – the giver must be a relative, according to Fannie Mae. People who are considered relatives include a spouse, child, or other dependent, in addition to anyone related by blood, marriage, adoption, or legal guardianship. Domestic partners and fiancées are also eligible to give funds for a down payment.

FHA loans offer a broader eligibility range, according to data from the Department of Housing and Urban Development (HUD). Givers can include family members, friends (“with a clearly defined and documented interest in the borrower”), labor unions and employers. Charitable organizations can make contributions toward a down payment. FHA borrowers can take advantage of down-payment assistance programs for eligible homebuyers, including first-time and low-income buyers.

Those who can’t gift down-payment money to homebuyers include:

• Sellers

• Real estate agents or brokers

• Homebuilders

• Anyone with a vested interest in selling the house

How much of a home down payment can be gifted?

For both conventional and FHA loans, the total amount of the down payment can be gifted, in most cases.

FHA loans require a minimum of 3.5% down with credit scores greater than or equal to 580. For credit scores between 570 and 500, FHA requires 10% down. In both instances, the entire down payment can come from an eligible donor.

Family members may also give FHA borrowers equity credit as “a gift on property being sold to other family members,” according to HUD.

For conventional borrowers, the only time there’s a requirement that borrowers must use their own funds for a portion (5% or more) of the down payment is when the loan-to-value ratio is equal to or above 80%, and the property is either a second home or two- to four-unit principal residence.

What is a down-payment gift letter?

Whenever an eligible party gives money for a house down payment, they have to write a gift letter, says Kevin Eyman, president of Mountain Mortgage in Medford, Oregon.

“When someone gifts funds it’s usually done at closing or close to closing, that’s what family members do because they want to make sure the money is used for the home purchase,” Eyman says. “In order to give someone money for a down payment, they have to write a letter explaining who they are and what the money’s for.”

This letter is a straightforward statement explaining just the facts: who the donor is, how much they’re giving, where the money’s coming from and that they don’t expect to be repaid. The letter should also include when the funds were transferred as well as the giver’s contact information.

Both the giver and the homebuyer must sign the letter, which doesn’t have to be notarized.

Conventional-loan requirements include extra steps If the down payment is made up of gift money and the borrower’s own money. In that case, the relative or partner must prove that they have lived with the homebuyer for the past 12 months and will continue to live together in the new house.

How do I prove I received the gift money?

Lenders want to make sure that the down-payment money has been received by the homebuyer in order to proceed with the loan. Buyers can provide:

• A copy of the gift giver’s check or withdrawal slip and the homebuyer’s deposit slip

• A copy of the gift giver’s check to the closing agent

• A settlement statement showing receipt of the donor’s monetary gift

• Copy of certified check

• Proof of wire transfer

Is the gift money taxed?

The IRS currently gives people a lifetime gift exemption of up to $11.4 million, which applies to any gifts you make over the course of your lifetime. Anytime you gift more than $15,000 (for a single person) or $30,0000 (married) in one year, the excess counts against your lifetime amount. Keep in mind, the $15,000 limit might change annually due to factors like inflation.

“Being this close to the end of the year, the gift-giver may want to consider withholding $15,000 (or $30,000 if married) of the gift for January, so as to avoid wasting their gift tax exemption,” says Michael Olivia, senior partner at Westpac Wealth Partners. (This way the giver could take the full exemption in both years.) “The gift-giver would write a check, or if they’re less trusting of the gift receiver, open a joint account and transfer the down payment. These assets would then be included in the clients’ financial loan underwriting.”

Your lender will know exactly what you need to provide when you’re using gift money for a down payment. Be sure to talk with them about gift-money requirements early on in the process so you don’t unwittingly stall your closing.

Finally, the person who receives a down payment gift does not have to report the gift to the IRS or pay gift or income tax on its value, according to the IRS.

Copyright © 2019 Missoulian, Natalie Campisi

Reprinted with permission

Fla. Building Code May Get Update Thanks to Rising Seas

by Alex Harris

The last Fla. building code update required new coastal construction to be elevated one foot. Three years later, there’s a call for it to be raised by another foot.

MIAMI – The last time the Florida building code changed, it required any new construction along the coast to elevate buildings a whole foot. Just three years later, that doesn’t look like enough. There’s a call to go up yet another foot.

The rising base elevations of homes are a clear sign that – despite waffling political rhetoric from the federal and state level – the people who plan and build in coastal Florida consider the threat of sea rise very real.

“If we’re going to build a resilient Florida, the hurricanes aren’t going away. Climate change isn’t going to stop,” said Craig Fugate, Florida’s former director of emergency management and FEMA head under Barack Obama. “We cannot keep building the way we always have and expect a different outcome in future disasters.”

Florida’s long and winding coastline is packed with people, with more arriving by the day. That makes the state more vulnerable to sea level rise and increasingly powerful hurricanes than any other.

But as of 2019, Florida’s massive, nationally renowned statewide building code still doesn’t have much to say about how to build with climate change in mind. That could change this year, as a new Florida International University (FIU) study commissioned by the Florida Building Commission makes its way through the building code bureaucracy.

One of its first recommendations: bring all new construction along the flood-prone coast up another foot.

“The building code doesn’t currently take sea level rise into account,” said Tiffany Troxler, associate director of science for the FIU Sea Rise Solutions Center and co-author of the report. “One recommendation was simply to try to account for that uncertainty that we cannot currently account for, including sea level rise, to add one foot to the elevations that are already recommended.”

Another idea involves following in South Florida’s footsteps and developing a region-specific sea level rise curve that’s updated every five years to guide building. The South Florida projection calls for two feet of sea rise by 2060 and is due to be updated in 2020.

A third recommendation calls for the state to review groundwater maps before allowing septic tanks to be installed. Rising groundwater from sea rise has already caused dangerous (and gross) septic failures across Miami-Dade County, a problem that could cost $3 billion to solve in Miami-Dade alone.

Elevating buildings, however, was the report’s most dramatic suggestion, and potentially the most impactful.

Every extra foot a building is built over the base flood elevation, the minimum height for new construction to qualify for flood insurance, is a discount on flood insurance. Elevating a single foot could drop annual flood insurance premiums 17%. A second foot could shave 37% off a premium.

Roderick Scott, board member of the Flood Mitigation Industry Association, said agencies that grade a city’s credit (and determine how much it will pay for bonds) have increasingly started factoring in how a city is adapting to sea level rise.

“If you don’t have a foot of freeboard, you’re going to have higher bonding costs,” he said.

Florida wouldn’t be the first flood-prone place to require extra height on new buildings. New Jersey and New York instituted two feet of freeboard after Superstorm Sandy. Annapolis, Maryland, requires two feet. Nashville calls for four feet.

Even Miami and Miami Beach have a minimum freeboard of one foot, with the option to go up to five feet.

In Fugate’s time with the Obama administration, the president even signed an executive order mandating all federal buildings be built two feet above FEMA’s base flood elevation. It was reversed under President Donald Trump.

Two feet in Florida makes sense, he said.

“It’s a good first step, but in New Orleans they go three feet above. And the other challenge is this only happens for homes that occur in the flood zones,” he said. “We’re seeing a lot of flooding outside of the special risk areas. If we’re only doing it in the high-risk areas, what does it do for the people outside of that? It does not appear FEMA is updating their flood maps soon enough or fast enough.”

A Florida example of this, he noted, is Hurricane Michael in the Panhandle. More than 80% of homes flooded by the storm weren’t in FEMA flood zones, so they weren’t required to have insurance or elevate their homes very far off the ground.

Reinaldo Borges, an architect and member of Miami’s Resilience Board, called freeboard one of the most effective strategies to protect a property from sea rise, but said he has a hard time convincing clients to elevate a home or building if they’re not required to.

“When you give a developer a minimum, typically they go with the minimum. Rarely do they go above it,” he said. “Unless you codify things, things don’t just happen.”

The biggest barrier to adding more freeboard is cost. Homes built directly on the ground, known as slab on grade, are some of the cheapest to build. Homebuilders across the country have fought local governments trying to add more freeboard, saying it will drive up prices and exacerbate affordable housing issues. The report passed an initial panel review, the full building commission has yet to review it for proposed 2020 code changes.

“For an additional one foot, that’s a considerable increase,” said Truly Burton, government affairs director for the Builders Association of South Florida. “We just did it 18 months ago.”

Elevating a 2,000-square-foot home can range from just under $900 per foot for concrete block piers to almost $5,000 per foot using only dirt, according to a 2006 study from the American Institutes for Research updated with 2017 construction costs. Proponents argue the discounted insurance premium pays off the investment over time.

Burton said her organization has supported previous requirements to keep homes hurricane safe, and they see sea rise as a serious issue. But in the balance between affordability and resiliency, Burton said, they try to stay “right in the center.”

“You gotta stay safe. We build houses that are affordable, please God. And they have to be safe,” she said.

Fugate said higher freeboard upsets the profit margins for homebuilders, who are in the business of transactions, not long-term risk. And if those buildings aren’t strong enough to withstand a hurricane or a flood, rebuilding takes longer and costs more.

“The question is which is more expensive? Building resilient homes or rebuilding them all post-disaster?” Fugate said. “I think Florida’s got some rude awakenings that there are no good, cheap, easy answers to adapting to climate change.”

© 2019 Miami Herald, Alex Harris. Distributed by Tribune Content Agency, LLC.

Reprinted with permission

Homeowners Don't Sell as Inventory Declines

From Florida Realtors

Study: Thanks in part to low recession-era mortgage rates and seniors’ desire to age in place, the average tenure for same-homeownership today is five years longer.

ORLANDO, Fla. – A study released by realtor.com finds that low mortgage rates have made it cheaper to buy a home – but only if you can find the right property, which remains challenging. A separate study by Redfin found that one of the reasons for a tight inventory is that current homeowners are living in their homes an average of five years longer than they once did.

“Owning a home continues to be a priority for buyers as we head into the cooler months of the year,” says George Ratiu, realtor.com’s senior economist. “Driven by the tailwind of sub-4% mortgage rates, the steady demand for housing is drying marketing inventory at an accelerating pace. With dwindling supply, prices maintain their upward pressure, [exacerbating] affordability challenges for first-time buyers.”

Inventory nationwide fell by 6.9% year over year in October, realtor.com says. That equates to a loss of 98,000 listings compared to a year ago. Meanwhile, the median list price was $312,000 – a 4.3% annual increase.

In a separate study, Redfin attempted to gauge the average length of time homeowners currently stay in their homes, and median home tenure increased in all 55 metros analyzed, leading to decreased inventory for first-time homebuyers in many places.

In places like Salt Lake City, Houston, Fort Worth, San Antonio and Dallas, homeowners remained in their homes for more than 20 years on average. “It’s hard to justify selling when there aren’t many, if any, affordable options,” says Dallas Redfin agent Christopher Dillard.

The study outlined a few reasons homeowners aren’t selling:

• Taxes: Many local governments reduce property tax burdens for senior citizens, which have made it more affordable for older people to stay in their homes longer. In Texas, where homeowners tend to stay put the longest, homeowners over the age of 65 have the option to defer property taxes until the home is sold.

• Aging in place: Homeowners age 67 to 85 remain homeowners longer, causing a shortage of 1.6 million homes, according to a report by Freddie Mac. That means there are fewer affordable homes for sale for first-time homebuyers, making a market more competitive.

• Convenience: Homeowners who already have walkable access to amenities like schools, parks and shops are more likely to stay put.

In addition, some homeowners have ultra-low mortgage rates thanks to a purchase or refinance during the recession. For some of these people, a move even to a smaller home could end up costing more if current rates are a percentage point or two higher.

© 2019 Florida Realtors®

5 Sweet Tax Deductions When Selling a Home

The new tax code can be confusing but check for tax deductions or exemptions – like legal fees, escrow fees or other costs directly tied to the sale of your home.

LAWTON, Okla. – You may be wondering if there are tax deductions when selling a home. And the answer is: You bet!

But there’s also a new tax code – aka the Tax Cuts and Jobs Act – causing quite a bit of confusion this filing season. Rest assured that if you sold your home last year (or are planning to in the future), the tax deductions may amount to sizable savings when you file with the IRS.

You’ll want to know all the tax deductions (as well as tax exemptions or other write-offs) at your disposal. So here’s a rundown.

1. Selling costs

Good news! These deductions are still allowed under the new tax law as long as they are directly tied to the sale of the home and a married couple – or a single taxpayer – lived in the home for at least two out of the five years preceding the sale. Another caveat: The home must be a principal residence and not an investment property.

“You can deduct any costs associated with selling the home-including legal fees, escrow fees, advertising costs, and real estate agent commissions,” says Joshua Zimmelman, president of Westwood Tax and Consulting in Rockville Center, N.Y.

This could also include home staging fees, according to Thomas J. Williams, a tax accountant who operates Your Small Biz Accountant in Kissimmee, Fla.

Just remember that you can't deduct these costs in the same way as, say, mortgage interest. Instead, you subtract them from the sales price of your home, which in turn positively affects your capital gains tax.

2. Home improvements and repairs

Score again. The new tax law left this deduction as well. If you renovated a few rooms to make your home more marketable (and so you can fetch a higher sales price), now you can deduct those upgrade costs as well. This includes painting the house or repairing the roof or water heater.

But there’s a catch, and it all boils down to timing.

“If you needed to make home improvements in order to sell your home, you can deduct those expenses as selling costs as long as they were made within 90 days of the closing,” says Zimmelman.

3. Property taxes

This deduction is still allowed, but your total deductions are capped at $10,000, Zimmelman says.

If you were dutifully paying your property taxes up to the point when you sold your home, you can deduct the amount you paid in property taxes this year up to $10,000.

4. Mortgage interest

As with property taxes, you can deduct the interest on your mortgage for the portion of the year you owned your home. However, the rules have changed slightly from last year.

Just remember that under the new tax code, new homeowners (and home sellers) can deduct the interest on up to only $750,000 of mortgage debt, though homeowners who got their mortgage before Dec. 15, 2017, can continue deducting up to the original amount up to $1 million, according to Zimmelman.

Note that the mortgage interest and property taxes are itemized deductions. This means that for it to work in your favor, all of your itemized deductions need to be greater than the new standard deduction, which the Tax Cuts and Jobs Act nearly doubled to $12,200 for individuals, $18,350 for heads of household, and $24,400 for married couples filing jointly (for comparison, it used to be $12,700 for married couples filing jointly).

5. But what’s up with capital gains tax for sellers?

Lawmakers tried to change the capital gains rule, but it managed to survive – so it’s still one home sellers can use. It isn’t technically a deduction (it’s an exclusion), but you’re still going to like it.

As a reminder, capital gains are your profits from selling your home – whatever cash is left after paying off your expenses, plus any outstanding mortgage debt. And yes, these profits are taxed as income. But here’s the good news:

You can exclude up to $250,000 of the capital gains from the sale if you’re single, and $500,000 if married. The only big catch is you must have lived in your home at least two of the past five years.

However, look for the rules of this exemption to possibly change in a future tax bill.

Ralph DiBugnara, president of Home Qualified and vice president at Residential Home Funding, says lawmakers might push to change this so that homeowners would have to live in the property for five of the past eight years, instead of two out of five.

Reprinted with permission

Copyright © 2019, The Lawton Constitution. All rights reserved.

Buying or Selling a "Smart" Home?

Here is a useful infographic for sellers and buyers of “smart” homes.

Important Flood Insurance News

FEMA: Flood insurance overhaul starts next year

WASHINGTON – March 19, 2019 – The Federal Emergency Management Agency (FEMA) announced the rollout of National Flood Insurance Program (NFIP) updates that will become effective next year.

While FEMA released few specific details about the new program, it appears to downplay the role of flood zones in determining a home's cost of coverage in favor of other variables, such as the distance from a potential flooding source rather than an all-or-nothing "in a flood zone" or "not in a flood zone" test.

As part of Monday's announcement, FEMA noted important dates: The new program becomes effective on Oct. 1, 2020, and homeowners will find out how much their policy will go up or down on April 1, 2020.

FEMA said the new plan would assess properties individually and consider multiple variables, such as the potential for hurricanes, the homes distance from a body of water and the risk from coastal surges. It would also consider new "loss-estimation technology" that can account for threats from climate change and a home's replacement cost.

Florida – home to about 35 percent of all NFIP policies – could see a big impact from the proposed changes. It's likely that homeowners in current flood zones would see an increase in their flood insurance premiums, but the state already pays more into NFIP than it gets back in post-flood claims, so some homeowners should see their rates go down.

NFIP currently expires on May 1, 2019, and Congress is working on a solution to extend it for at least a few years. Should lawmakers reach agreement, it's unclear how a legislative fix might impact the just-announced FEMA regulatory fix.

Under U.S. law, FEMA is limited in its ability to raise rates. It's also unclear how those limitations might impact increases under NFIP's new risk model.

Source: The Wall Street Journal, March 19, 2019, Lalita Clozel © 2019 Florida Realtors®

Reprinted with permission

The Trouble with Online Estimates.....

Zillow spends $1M trying to improve its ‘Zestimates’

SEATTLE – Feb. 4, 2019 – Zillow's estimate of a home's value, called the Zestimate, can be powerful: Some homeowners track them like a stock, and when it gets to a certain point, they may decide to sell. Home shoppers gauge the estimate against the list price of a home. Others use it just to gawk at their neighbor's home values.

But it's far from perfect: In Seattle, the Zestimate is off by a median of 4.7 percent compared to the actual sale price, according to the company – a $35,000 difference on the typical house. Real-estate brokers have long complained that the numbers give sellers, in particular, a distorted view of their home's true worth.

Now the Zestimate, that little number that appears at the top of every home's Zillow page and updates daily, is in line to get more accurate.

On Wednesday, the Seattle-based company awarded a $1 million prize to the winners of a public contest to improve its algorithm. The winning team, three guys from Raleigh, Toronto and Morocco who teamed up despite never having met in person, came up with a way to beat Zillow's own data scientists to a better estimate.

The contest started a year and a half ago with 3,800 teams from 91 countries and was narrowed down to 100 finalists last year. The teams were given seven years' worth of data on a sample of millions of homes across the country, and were tested to see how closely their estimated values for each home matched up with the actual sale prices of homes that sold in the ensuing months.

Jordan Meyer, the American on the winning team, reduced his workload at his day job as CTO of an analytics company and poured about six hours a day into the contest, communicating with his teammates, Moroccan computer science professor Chahhou Mohamed and Canadian artificial intelligence startup founder Nima Shahbazi, on the messaging application Slack.

Meyer started by finding every data source he could – the exact longitude and latitude of houses could be used to determine the proximity to streets and therefore determine noise near the house. Slight differences in distance from a body of water could influence a home price by thousands of dollars. In the end each home had hundreds of different data points.

But the strategy that set them apart was trying wildly different algorithms and merging the ones that worked together to get the best blended average.

"It was extremely hard," Meyer said in an interview. He called the process "relentless experimentation" and echoed Shahbazi, who said in a statement: "For every idea that worked, there were a hundred that didn't work. But we kept going."

Zillow has slowly improved its Zestimate from a median error rate of 14 percent when it started in 2006 to 5.7 percent when the contest began in mid-2017. It's now down to 4.5 percent nationally (it's higher in some cities and lower in others), and once the winners' tweaks to the algorithm are incorporated, the company expects the error rate to dip to about 4 percent.

"We're happy with the progress we're making." said Stan Humphries, Zillow's chief analytics officer. "You're going to get some way off. We do 115 million of these every day," referring to the number of homes on Zillow with a Zestimate, "so yes, we get concerned when we're off, and we're committed to making them even more accurate. This is an important number. The implications of getting it right are really important."

Humans are still better than machines

Homes nationally sell on average for about 2 percent less than the list price set by brokers, according to data from Redfin. Brokers have access to information that an algorithm often doesn't – the Zestimate relies on publicly available data and voluntary input from homeowners, which can give an incomplete picture of a house.

"There are way too many factors for a certain algorithm to work," said Sam Mansour, a managing broker with John L. Scott in Lynnwood. He said he constantly has to battle with clients who cling to their Zestimate. "I've been to homes and people say 'my Zestimate is worth X amount,' and I'm like, 'no, no.'"

He said he's also heard of homeowners who use their Zestimate, and the company's one-year forecast of their home value, to justify how much they'd like to borrow against their home. (Zestimates aren't used in official proceedings, like a home appraisal or a home-equity loan.)

Mansour said the biggest factor a computer can't track is the emotional appeal of a home, which can vary wildly from buyer to buyer and is a primary driver in how much people offer. And certain attributes that get plugged into algorithms are going to be weighed differently by various buyers – a large lot might appeal to some, but to others, it just means extra yard work.

Sometimes Zillow is really off – the median error rate of 4.5 percent nationally means half of home values are wrong by more than 4.5 percent.

Zillow says about 1 in 8 Zestimates winds up being wrong by at least 20 percent. That includes the 2016 home sale made by Zillow CEO Spencer Rascoff – who sold his Seattle home for 40 percent less than his Zestimate. In some counties where public data isn't great or there aren't many homes, Zestimates don't exist, or the median error rate can be above 10 percent.

Zillow is the most-clicked real estate site in the nation and was the first to offer a home-value estimator, but these days other websites like Redfin and realtor.com also offer their own home-value estimates.

The winners of the prize agreed to split their $1 million share evenly. As for what Meyer will do with his cut?

"I'll be investing in real estate for sure," he said.

© 2019 The Seattle Times, Mike Rosenberg. Distributed by Tribune Content Agency, LLC.

Reprinted with permission

Are you a Florida Voter? See Why Your Should Vote "Yes" on Amendment 2

Amendment 2 protects Florida by preserving an annual cap on non-homestead property tax increases.

In 2008, Florida voters approved a constitutional amendment that limited how much certain property taxes could increase each year. In 2019, that yearly cap will expire – unless Amendment 2 passes on the November 2018 ballot.

Amendment 2 is not a tax cut or tax increase. It simply keeps a cap – already in place – on how much local governments can increase certain property taxes every year. Homeowners who have a homestead exemption will not see their assessments affected by this amendment. It only affects those that own non-homestead property.

What is non-homestead property? Simply put, non-homestead property is any property that does not have a homestead exemption or other special exceptions under Florida law. Common examples of non-homestead properties include businesses, rental properties, and second homes.

If Amendment 2 doesn’t pass and the cap isn’t renewed, non-homestead property taxes could increase by unlimited amounts every year. Seasonal residents as well as local businesses could see their property taxes increase by 30%, 50%, or even higher – and that would be devastating. Renters could also see their rents skyrocket as landlords pass the extra taxes on to them.

“Amendment 2 is for Everybody” isn’t just a catchphrase, it’s the truth. Anyone that owns non- homestead property in Florida will benefit. Keeping property taxes low for out-of-state businesses and residents that are looking to invest in Florida property is good for all of us because it helps grow Florida’s economy, and brings jobs to our state.

It limits the tax burden on residents and families, protects renters from rent increases on by higher taxes, and ensures Florida remains an affordable place to live, work, and do business. Most importantly, Amendment 2 is not a tax cut, so it will not impact funding for local services such as schools or emergency services. This cap was approved overwhelmingly by Florida voters 10 years ago and its renewal is on the ballot again with strong bipartisan support. But it will expire unless we vote “YES” on Amendment 2.

Reprinted with permission

Paid political advertisement paid for and approved by Amendment 2 is for Everybody

1563 Capital Circle SE, #111, Tallahassee, FL 32301

Is Your Building Project Taking Longer Than Expected?

Builders: Labor shortages are ‘significant and widespread’

WASHINGTON – Sept. 6, 2018 – According to an industry-wide survey released by Autodesk and the Associated General Contractors of America (AGC), 80 percent of construction firms are having a hard time filling hourly craft positions that represent the bulk of the construction workforce.

"Labor shortages in the construction industry remain significant and widespread," says Ken Simonson, AGC's chief economist. "The best way to encourage continued economic growth, make it easier to rebuild aging infrastructure and place more young adults into high-paying careers is to address construction workforce shortages."

Of more than 2,500 survey respondents, 80 percent said they are having difficulty filling hourly craft positions, Simonson noted. Craft worker shortages are severe in all four regions of the country, with 81 percent of contractors in the West and South reporting a hard time filling hourly craft positions, 80 percent rate in the Midwest and 77 percent in the Northeast.

Simonson says construction employment expanded between July 2017 and July 2018 in 281 out of 358 metro areas that the association tracks – more than three out of four – according to an analysis of federal construction employment data. But growing demand for construction workers helps explain why so many firms think it will be hard, or get harder, to find hourly craft workers this year.

"It's evident that we need to reskill the future workforce," says Sarah Hodges, senior director, construction business line at Autodesk. "Technology can help bridge this gap, and more firms are bringing training in-house to implement digital strategies such as building information modeling, or BIM, to ease staffing challenges and train the next generation of industry professionals."

Tight labor market conditions are prompting firms to change the way they operate, recruit and compensate workers, Simonson adds. Sixty-two percent of construction firms report increasing base pay rates for craft workers because of difficulty filling positions; 24 percent have improved employee benefits and 25 percent are providing incentives and bonuses.

In addition, 25 percent are increasing use of labor-saving equipment, and an equal percent report using virtual construction methods. However, 47 percent of firms say they've put higher prices on their bids and 44 percent report that already-underway projects cost more because of labor shortages.

Forty-six percent report it takes longer than originally scheduled to complete projects and 27 percent are putting longer completion times into their bids because of workforce shortages.

© 2018 Florida Realtors®

Reprinted with permisssion

New hurricane insurance targets only the higher deductibles

TALLAHASSEE, Fla. – June 11, 2018 – In Florida, discussions about hurricane insurance often focuses more on what isn't covered than what is covered.

Did water rise up through your sliding glass door and damage your wood floor and drywall? Sorry, you need flood insurance for that. Damaged roof tiles didn't exceed your $6,000 deductible? Whip out the credit card. Evacuating and need gas and lodging? Hit the ATM on the way out of town.

Now, homeowners can buy coverage that fills in those gaps. A new insurance product has emerged in Florida that reimburses out-of-pocket expenses not covered by traditional insurance.

Called StormPeace, it's offered by a company, Assured Risk Cover, that promises to wire money to policyholders' bank accounts within 72 hours after storms with no inspections, no adjusters and no deductible.

Policyholders have 45 days to submit proof of loss – receipts, contractors' estimates, even a handwritten affidavit, said Alok Jha, founder and CEO of the Pleasanton, Calif.-based company, which began offering policies to Floridians in 2017.

Homeowners can purchase up to the amount of their hurricane deductible, capped at $60,000. The coverage can be used for a wide range of hurricane-related expenses, including food spoilage, generators, gasoline, damaged fencing, downed trees, flood damage from storm surge, damaged car ports, evacuation expenses and more.

After Hurricane Irma's journey through Florida last year, nearly a third – or 297,000 – of 924,400 insurance claims were closed with no payment, according to the Florida Office of Insurance Regulation. Many of those were because the estimated cost to repair damage fell short of policyholders' deductibles, leaving policyholders to make up the difference.

In a telephone interview, Jha said he left his career in catastrophe risk software modeling about five years ago to concentrate on doing "something meaningful rather than just making money."

After developing and patenting the concept behind StormPeace, he found a venture capital firm to back the company financially and has purchased "tens of millions of dollars" in reinsurance from a major global reinsurance provider, he said.

Homeowners can purchase as little as $1,000 in coverage for the year at prices that depend on where their home is located but average 6 percent of their coverage limit.

Although using it to supplement traditional homeowner insurance policies is the ideal approach, the product is also available to anyone without traditional insurance, including renters and owners of manufactured homes.

The amount of the payout depends on the strength of the storm and how close it gets to a policyholder's home. As the storm passes, the company sends its policyholders an email telling them how much money they can claim.

"As long as the hurricane triggers are met, how the loss occurred doesn't matter," Jha said.

Jennifer Peeples, owner of a Sarasota insurance agency, said she decided to try it out last year and paid $303 for up to $5,000 in coverage. "When the storm passed 26 miles from my home as a Category 2, I got an email saying I qualified for $750 and two days later it was in my account," she said.

She used the money to replace spoiled food, broken fence boards and screens blown out of her screened porch, and to clean up downed limbs in her backyard, she said.

Since then, Peeples has become one of the product's biggest cheerleaders. All nine of her employees are now covered, she said, adding one in four of the agency's new and renewing customers buy it after hearing how it works.

The Florida Association of Insurance Agents endorsed it and has urged its members to offer it to their customers, association president Jeff Grady said.

"We did research on the company and thought they were real professionals, that they knew their stuff," Grady said. "We believed they have strong backing and a thoughtful idea. We want to see if it takes hold in the marketplace."

Another believer is former longtime Florida Insurance Commissioner Kevin McCarty, who has agreed to join the company's board of advisers, the company announced last week.

Neither Jha nor Grady are aware of any competitors offering similar products to homeowners.

But Jha said he wouldn't be surprised if competitors emerge, or even if traditional insurers begin offering comparable coverage to customers.

And that has already happened. In April, Ormond Beach-based Security First Insurance Co. submitted a proposal to offer supplemental Hurricane Expense Coverage for items that have been excluded from their policies.

Depending on what customers choose, coverage would kick in when a loss is caused by sustained hurricane force winds of at least 74 mph or gusts of at least 96 mph.

Benefits would include removal of debris by the company, payment of up to $500 for evacuation expenses and food spoilage, plus payment for damage to awnings, fences, docks or other structures over water, outbuildings, screen enclosures, pool cages and carports.

Security First's proposal is under review by the Office of Insurance Regulation, according to Karen Kees, spokeswoman for the Florida Office of Insurance Regulation.

StormPeace, meanwhile, undergoes no state review because it is sold through an unregulated surplus carrier. In October 2016, an attorney for the state office told StormPeace that it had no objection to the product but might take future administrative actions "should evidence arise" that the company is making false or misleading claims or operating in violation of the law.

Jha hopes to expand to Texas and Louisiana next year and eventually all states on the East Coast and Gulf of Mexico vulnerable to hurricanes, he said.

Sales in Florida so far this year are strong, he said, although he declined to provide specific numbers. But he said the company has exceeded its 2017 sales in just the first eight weeks.

Peeples said her agency has sold 117 policies in the past six weeks. "It's been a very successful program for us," she said.

Copyright © 2018 the Sun Sentinel (Fort Lauderdale, Fla.), Ron Hurtibise. Distributed by Tribune Content Agency, LLC.

© REPRINTED WITH PERMISSION    2018 Florida Realtors®

IRS: Some home equity loans are still tax deductible

 WASHINGTON – Feb. 22, 2018 – The Internal Revenue Service (IRS) announced that homeowners can continue to deduct interest paid on home equity loans in many situations.

Saying it's "responding to many questions received from taxpayers and tax professionals," the IRS clarified the tax law changes recently enacted and their impact on secondary home mortgages.

"Despite newly-enacted restrictions on home mortgages, taxpayers can often still deduct interest on a home equity loan, home equity line of credit (HELOC) or second mortgage, regardless of how the loan is labelled," the IRS said in a media release. The Tax Cuts and Jobs Act of 2017, enacted Dec. 22, suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit "unless they are used to buy, build or substantially improve the taxpayer's home that secures the loan."

The IRS says that interest on a home equity loan used to build an addition onto an existing home is, for example, tax deductible. However, interest on that same loan is not deductible if used to pay for non-home expenses, such as paying off a credit card.

"As under prior law, the loan must be secured by the taxpayer's main home or second home (known as a qualified residence), not exceed the cost of the home and meet other requirements," the IRS says.

New dollar limit on total qualified residence loan balance

For anyone considering a mortgage, the new tax law imposes a lower dollar limit on mortgages qualifying for the home mortgage interest deduction. Beginning in 2018, taxpayers may only deduct interest on $750,000 of qualified residence loans ($375,000 for a married taxpayer filing a separate return).

Those limits apply to the combined amount of loans used to buy, build or substantially improve the taxpayer's main home and second home.

Examples;

In January 2018, a taxpayer takes out a $500,000 mortgage to purchase a main home with a fair market value of $800,000. In February 2018, the taxpayer takes out a $250,000 home equity loan to put an addition onto the main home. Both loans are secured by the main home and the total does not exceed the cost of the home. Since the total amount of the two loans doesn't exceed $750,000, all of the interest paid on the loans is deductible. (However, the interest on the home equity loan would not be deductible if the taxpayer used the proceeds for personal expenses.)

In January 2018, a taxpayer takes out a $500,000 mortgage to purchase a main home. The loan is secured by the main home. In February 2018, the taxpayer takes out a $250,000 loan to purchase a vacation home. The loan is secured by the vacation home. Because the total amount of both mortgages doesn't exceed $750,000, all of the interest paid on both mortgages is deductible. However, if the taxpayer took out a $250,000 home equity loan on the main home to purchase the vacation home, then the interest on the home equity loan would not be deductible.

In January 2018, a taxpayer takes out a $500,000 mortgage to purchase a main home. The loan is secured by the main home. In February 2018, the taxpayer takes out a $500,000 loan to purchase a vacation home. The loan is secured by the vacation home. Because the total amount of both mortgages exceeds $750,000, not all of the interest paid on the mortgages is deductible. A percentage of the total interest paid is deductible (see Publication 936).
For more information about impacts from the new tax law, visit the Tax Reform page on IRS.gov.

© REPRINTED WITH PERMISSION    2018 Florida Realtors®

Thinking of Remodeling the Kitchen?

Kitchen survey: ‘Storage’ top homeowner priority

NEW YORK – Jan. 16, 2018 – The majority of homeowners in a recent survey prioritized storage over all other functions of their kitchens, according to the 2018 U.S. Houzz Kitchen Trends Study of more than 1,700 homeowners.

Storage, at 63 percent, trumped other priority uses for homeowners in the kitchen like easy to work, play and live (38 percent), to entertain (32 percent), or to clean (32 percent).

Homeowners are remodeling kitchens to add more storage and organization, such as with recycling baskets, cookie sheet and tray organizers, revolving corner trays, deep drawer organizers, and pull-out or swing-out trays and shelves.

Countertops are the most common major feature upgraded during a kitchen renovation and most commonly splurged-on item, the Houzz survey finds. Further, engineered quartz has become the most popular countertop material choice (43 percent) overtaking granite (34 percent).

To add more storage and counter space, nearly two in five homeowners surveyed said they're adding kitchen islands.

"Our annual kitchen trends surveys reveal that consumer preferences for products, design and technology vary not only across urban, suburban and rural areas, but also evolve over time," says Nino Sitchinava, principal economist at Houzz. "Countertops in particular are having a real moment today as homeowners focus on decluttering surfaces for a sleek and tidy kitchen post-renovation."

The average amount spent on a major kitchen remodel – which includes replacing at least all of the cabinetry and appliances – for a 200-square-foot or greater kitchen is $42,000, according to Houzz. A major remodel of a smaller kitchen averages $25,800.

The Houzz survey also showed the following most popular trends in the kitchen:

Color: White kitchens with white backsplashes, countertops, and wall finishes continue to dominate.
Flooring: Natural hardwood is the most popular, but it's declining as wood-like flooring like engineered wood or laminate rise.
Cabinets: Shaker cabinets are the most popular door styles among those updating cabinets, followed by flat-panel and raised panel.
Source: Houzz

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© 2018 Florida Realtors
Reprinted with permission Florida Realtors. All rights reserved.