Florida Real Estate News in Review
BY: DIANE LOTT, BROKER
PARADISE FOUND REALTY
- INFLATION & RISING INTEREST RATES
- NEW CONDO LAW SB4D
- INCREASED INSURANCE RATES
INFLATION & RISING INTEREST RATES-
In January 2022, the 30-year fixed rate= 3.2%
Current 30-year fixed rate more than doubled in 12 months = 6.5%
Higher Rates = Less Purchasing Power
As rates go up, the amount of home you can afford goes down. For every 1% increase in interest rates, your buying power decreases by about 10%.
*See how much difference even a small rate increase can make:
Example:
Monthly Payment (P&I) $1,500 $1,500 $1,500
Interest Rate 3.0% 3.5% 4.0%
Annual Percentage Rate (APR)*3.1% 3.6% 4.11%
Loan Amount $356,000 $334,000 $314,160
Purchase Price** $445.000 $417,500 $392,700
Higher Rates = More Money Spend on Interest
A higher interest rate also means you’ll spend more money on interest
over the life of your loan, causing you to pay more for your home in the long run.
NEW CONDO LAW SB4D-
An Association is required to perform a Milestone Structural Inspection for each building within its community that is three (3) or more stories high. The Bill established a statewide structural inspection program, requiring Condominium and Cooperative Associations to conduct Milestone Structural Inspections of their buildings and to perform Structural Integrity Reserve Studies to ensure that buildings are safe for continued use. The Bill was designed to ensure proper inspections and requirements be performed at specific times in the building’s existence. This occurred after the Surfside tower collapsed in Miami and has significant financial requirements for the association in adhering to the law.
INCREASED INSURANCE RATES-
Florida was impacted twice this year by Hurricane Ian, on September 28 as a Category 4, and Hurricane Nicole, just 3 weeks later on November 10th as a Category 1. The damage wrought by Hurricane Ian may be the insurance industry’s breaking point in Florida. Hurricane Ian is expected to undermine the already precarious market for property insurance in Florida, supercharging premiums and exposing gaps in coverage. Long before the storm, Florida’s property insurance system was a mess. Hundreds of thousands of Florida homeowners lost their private insurance policies over the last two years, after a dozen companies left the market in the face of billion-dollar annual losses, including several that went under.
Annual premiums already cost Florida homeowners $4,200 on average, triple the national average rate. In fact, most insurers increased their already high rates by 20-30% for 2022 renewed policies. But its unusually high rates of litigation worsen the situation. A lawyer-friendly environment means that Florida sees 79% of the nation’s homeowners’ insurance lawsuits, but only 9% of all claims. The combination between the storms’ damage, fraud and litigation may be the downfall for homeowners to obtain insurance in the future.
Diane
Email: Diane@ParadiseFoundRealtyFl.com
Website: www.ParadiseFoundRealtyFl.com
Phone: 954-294-5060
Your Martin County Concierge Real Estate Company!
