Jeremy Morgan - West USA Realty

10/16/2021

What HOA Boards Need to Know About Neighbor-to-Neighbor Harassment.

Google the synonym for "neighborly," and words like "amicable," "chummy," and "friendly" appear. But, remove the “-ly," and the definition of neighbor is merely "one living or located near another." So how is it that neighbors can sometimes be so un-neighborly? And why should the association care?

Community associations are great places to live. Residents look out for one another, share the financial burden of maintaining common property, and agree to a set of rules that promote good behavior. But a community association is made up of people with unique personalities, ideas, and opinions. Diversity of opinion can undoubtedly be a positive, as long as they are expressed positively, but when a neighbor expresses themselves in a harassing or discriminatory way within a community, the association, as a housing provider under the Fair Housing Act (FHA) and Housing and Urban Development’s (HUD) definition, can be responsible for addressing it.

Neighbor-to-neighbor harassment is regulated under the FHA when a homeowner is subjected to “unwelcome conduct that is sufficiently severe or pervasive as to interfere with… the use or enjoyment of the dwelling;…or the provision or enjoyment of the services or facilities in connection therewith” because of or as related to the homeowner being a member of a protected class (race, color, religion, gender, disability, familial status, or national origin* (24 CFR 100.600)). It's essential to keep this definition in mind. Mr. Jones yelling at everyone who parks in front of his house is likely not harassment under this definition. Mr. Jones only yelling at pregnant women who park there may be since he is singling out people based on their gender and familial status.

Whether an association has any responsibility to involve itself in resident interactions seems antithetical to most people’s idea of a community association’s purview. In fact, it wasn’t so long ago that community managers and boards were trained to steer clear of neighbor conflicts. A 2016 clarification of the FHA provision about “hostile environment harassment” by HUD made it clear that under the "Third Party Liability Rule," Associations can be held liable when the association board or management knew or should have known about the harassment and had the power to act, but failed to do so. Associations must be aware of their role in reviewing neighbor-to-neighbor harassment concerns and to have a process for addressing them. Not following through could be a violation of the FHA. So, how can association boards be prepared to handle these complex issues?

An ounce of prevention is worth a pound of cure. Adopting an anti-discrimination policy with a clear process for reporting and addressing discrimination and harassment is the first step. It should be clear that discriminatory harassment is not tolerated within the community. Your community manager can work with the association’s attorney to provide a sample homeowner code of conduct as a starting point. Social media platforms are magnets for nastiness, so a good social media policy and a moderator are critical. These policies should note that the platform follows the same code of conduct as other interactions in the community. Adding disclaimers on social media platforms may also demonstrate the association’s commitment to maintaining an anti-discriminatory environment but remember that a disclaimer won’t necessarily release the association of an obligation to act if comments cross the line. If the Board or manager participates in the platform at all, it may be assumed that the association should have been aware of harassment conducted through it. An association attorney can help draft good social media policies and disclaimers and provide guidance for moderating and participation.

When the association is aware of possible discrimination or harassment, take prompt action. While adoption and publication of the rules is the first step, enforcing those rules is often the challenge. The association should have a straightforward, written process addressing an issue when it arises. It’s important that associations don’t wait until a formal report is filed and delay the process unnecessarily. Just because a policy provides a timeline for review doesn't mean waiting until the time is set to expire is wise. The longer someone is subjected to harassing behavior, the more likely it could be considered "pervasive." A review and investigation are necessary to gather information. The Board should consider:

•Can the person exhibiting the behavior be identified?

•Is the behavior ongoing?

•What is the impact?

•Does it interfere with a resident’s use of facilities/common areas?

•Is there a protected class involved?

If the answers are "yes," a cease-and-desist letter may be the first step. If that isn't effective, mediation is an option. In either case, understand that most board members and managers are not qualified to handle these issues independently. In addition, know that completely resolving the problem may not be in your power under the enforcement provisions of the Governing Documents. Rely on experts. Involve your association attorney or a professional mediator early in the process to ensure compliance with FHA regulations within the authority provided in the Governing Documents.

Finally, the Board’s most vital role is to protect the association. Just because the Board has done all it can to comply with the law and address neighbor-to-neighbor harassment doesn't mean a claim won't be filed. Review insurance policies to ensure they don’t exclude discrimination or Fair Housing claims. A suit for a failure to act on harassment and discrimination is literally a “federal case” and can be costly to defend. Documenting all action and communication on the issue is essential. Should the association find itself in court, it will be necessary to demonstrate that the association took action consistent with established policies. Being able to show each step of the process will be critical to the defense.

Association involvement in neighbor disputes may seem like a heavy burden for volunteer board members. Clearly communicated policies and prompt and consistent processes, coupled with expert legal support, can help boards navigate this complex responsibility, and with any luck, encourage a community of neighbors who are neighborly.
*Some states may have additional protected classes. Review your State’s Fair Housing policies for specific guidance.

Special thanks to Kathleen N. Machado, Shareholder-Community Association Practice Group at Rees Broome, P.C., Tysons Corner, VA, for her input for this article.

The information contained in this article is provided for informational purposes only and should not be construed as legal advice. No recipient of this content should act or refrain from acting without seeking the appropriate legal or other professional advice.

10/15/2021

Home Affordability Drops & Seller Hesitancy Rises

Home Affordability Drops to 13-Year Low

In the latest reported data from Realtor.com, home affordability dropped to a 13-year low in September 2021. Per this data, the median US household would need +32% more income than presently available in order to cover mortgage payments.

This is the lowest home affordability level since November of 2008.

Home Prices Likely to Flatten in 2022

Coupled with this 13-year low in home affordability, Realtor.com indicated in its just released Housing Report that the home prices are likely to flatten in 2022.

Flattening home prices offer home sellers little incentive to sell.

In some markets, home prices may even turn “negative.” Possible “negative” markets during 2022, according to Realtor.com, could include:

Chicago
Dallas
Las Vegas
San Francisco
Miami
Detroit

Even Less Inventory?

With such flattening or even “negative” home pricing possible (and even likely in 2022) due to such devastating levels of home affordability, sellers could well be de-incentivized to list their homes for sale. Such seller hesitancy “could” result in nationwide housing inventories hitting record lows in 2022.

Home Sales Likely to Slow

This combination of a 13-year low in home affordability, rising seller hesitancy and likely more limited housing supplies, Realtor.com is predicting that home sales are likely to drop -1.8%.

A drop of -1.8% in home sales would come in the midst of two very positive economic indicators for homebuyers: continuing low mortgage interest rates and consumers’ savings rates being up +10%, a level of savings not seen for a decade.

Thanks to Realtor.com and CNBC.

Search real estate for sale, discover new homes, shop mortgages, find property records & take virtual tours of houses, condos & apartments on realtor.com®.

10/03/2021

FANNIE MAE SAYS HOME SALES TO COOL!

Fannie Mae projects cooling home sales for the remainder of this year and into 2022.

Fannie Mae Economic Forecasters Expecting Waning Demand

Despite an uptick forecast of 3.3% annual growth from August’s 3.1% projection, Fannie Mae economists are expecting cooling home sales into 2022. Due primarily to low supplies of for-sale homes, Fannie Mae is projecting that combined new and existing home sales will decrease by nearly -2% next year.

Even if new home sales were to increase next year, such an increase would not offset Fannie’s expected drop in existing home sales because of lacking inventory.

“Actions Speak Louder than Words”

Homebuyers are living out the old saying that “actions speak louder than words.” Homebuyers are not signing as many pending sales contracts as they were just a few months ago nor are homebuyers signing as many purchase mortgage applications. They’re also not participating in as many bidding wars as they were just a few months ago.

Translation of homebuyer actions, or, if you will, inactions into words? Homebuyers are saying, “Enough! Enough competition for too few houses! Enough too-high prices!” They’ve packed up their dreams of homeownership and taken them out of the marketplace.

Fannie’s Assessment & Projections of New and Existing Home Sales 2020 – 2022

To repeat, Fannie Mae is projecting that sales of new and existing homes will decline by nearly -2% next year.

Take a look at its assessment of 2020 home sales and its projections of home sales for the duration of this year and 2022:

2020

– Existing home sales – 5,640,000

– New home sales – 822,000

2021

– Existing home sales – 5,887,000

– New home sales – 790,000

2022

– Existing home sales – 5,676,000

– New home sales – 881,000

Fannie Mae Projects Double-Digit Annual Home Price Appreciation to Decline “Dramatically” in 2022

Fannie’s economists are expecting double-digit home price appreciation to continue but decline through 2021 Fannie is expecting home price appreciation to slip to 16.2% in Q3 2021 and to 14.8% in Q4 2021. Then, according to Fannie’s projections, declining appreciation will begin at 12.1% in Q1 2022.

Appreciation rates are then expected to fall dramatically for the remainder of 2022. Beginning at 6.8% in Q2 2022, home price appreciation will, according to Fannie, slip to 6.6% in Q3 2022 and to 5.1% in Q4 2022.

Fannie Anticipating Only “Modest Increase in Home Supply as Foreclosure Moratorium Ends”

Fannie’s projections about “only a modest increase in the number of homes placed on the market as the foreclosure moratorium ends” stand with those from ATTOM Data Solutions and CoreLogic. Fannie attributes “only a modest increase” in foreclosures to an improving labor market and the high levels of home equity due to soaring price increases.

Fannie Mae Forecasting Gentle Rise in Mortgage Rates Next Year

Fannie is projecting mortgage interest rates to remain comparatively low to pre-pandemic rates with an average of 3.2% during the final three months of 2022. Even this modest increase, Fannie expects mortgage lenders to do -25% less business in 2022 than they have done this year.

Thanks to Fannie Mae.

09/01/2021

Why you don’t want to wait for market correction to buy.

Thanks Kevin Gallegos, NEXA Mortgage

08/05/2021

CDC Issued New Eviction Ban Effective through October 3.

A new federal eviction ban was issued by the Centers for Disease Control and Prevention (CDC) on August 3 after the former moratorium expired on July 31. This new eviction ban was initiated as the delta variant of the COVID-19 virus continues to explode throughout the country and as some 11M Americans continue to be behind on their rental payments.

Research confirms that evictions lead to spikes in virus infections and death.

This new federal moratorium on evictions will last through October 3. Eviction protections could affect some 90% of renters. The ban is targeted at areas of the country where COVID infections are soaring.

US Supreme Court May Dispute New Moratorium

After three eviction moratorium extensions issued via the CDC and the White House since the onslaught of the COVID pandemic, the US Supreme Court ruled in June 2021 that an eviction ban policy could only be renewed through legislation initiated by the US Congress. It’s unclear at this time how the Court may respond to this new eviction ban since it was authorized by the CDC, not the White House.

If the Supreme Court does nullify the new eviction ban based upon its former order in June, this new moratorium could, at the minimum, buy states and cities “extra” time to distribute the $45B in rental assistance designed to provide aid to landlords and renters alike. Only $3B of that $45B of designated federal assistance for landlords and renters had been distributed by the states by the end of July.

According to Diane Yentel, President of the National Low Income Housing Coalition, said, “This is a tremendous relief for millions of people who were on the cusp of losing their homes and, with them, their ability to stay safe during the pandemic.”

Concerns about New Eviction Ban from Real Estate Professionals

With evictions now off the table through October 3, some real estate professionals say that this new moratorium is no longer needed since the economy appears to be recovering. Other professionals are saying that the new eviction ban puts landlords and renters alike between “a rock and a hard place.” Property owners who don’t receive rents can’t maintain their properties and/or pay their mortgages which can lead to foreclosures and renters who are already behind in their rent payments incur more debt without considering their down-the-line credit scores and/or their ability to rent places in the future.

Some real estate investors are simply “giving up and preparing to sell” their rental properties.

Thanks to CNBC and Inman.

07/28/2021

Top 5 Arizona housing market predictions for 2021

The housing market is looking extremely strong for the Phoenix area in 2021. Realtor.com’s most recent forecast predicts home sales in the Valley will jump 11.4% over last year’s levels, which is more than the national average. The combination of beautiful weather, prestigious restaurants and shopping, specialty education options, a reasonable cost of living and now the ability to work from home, continues to draw people from out of state to the area. For residents looking to sell or buy, and for those looking to move to Phoenix, there are several housing market predictions to count on through the New Year.

Prediction 1

The first of our housing market predictions is mortgage rates will stay grounded. Currently, the 30-year fixed rate is hovering around an all-time low of 2.75%, which is actually a 50-year low. Refinancing rates are hovering around 2.45%, but these numbers change on the daily. If you’re interested in saving money on your monthly mortgage payments or considering a cash-out refinance, make sure to compare rates from multiple mortgage lenders.

Prediction 2

Next, inventory will stay sparse. While the low rates have brought home buyers into the market, high demand and low inventory has increased prices. This is good news if you plan on selling. Buyers have adapted to virtual tours and many who are looking to relocate are comfortable making an offer sight unseen in order to seal the deal. In fact, it’s not uncommon to have a home go under contract in just a few hours because inventory is so low.

Prediction 3

First-time home buyers will remain a strong force as well. While younger Gen-Z buyers are expected to play a growing role in the housing market, the largest group of Millennials are now in their mid-30s. This is bringing a wave of demand from renters looking to buy their first homes. Additionally, the oldest Millennials are increasingly contributing to the trade-up market.

Prediction 4

This next trend might sound a little crazy, but it’s actually one of the smartest moves you can make right now. Home rental prices are also on the rise, so if there’s any way to hold onto your home and rent it out, do it. There’s a large number of renters who aren’t able to find a place to live because rental inventory is low. Now, if you’re thinking you’d rather not mess with the responsibility of a rental, let’s talk numbers for a second. The average rental home in the Phoenix metro area currently rents for over $2,000 a month and in some neighborhoods, well over $2,500 a month. In many cases, it makes sense to keep your home and rent it out. There are ways to use the equity in your current home in order to buy your next home without selling it.

Prediction 5

Lastly, buyers are putting down a lot more cash. We expect to see buyers continue to put more than 20% down in order to avoid paying for mortgage insurance. Buyers will not only have lower mortgage payments and possibly lower interest rates, but sometimes an appraisal isn’t needed which could save an average of $600. Another plus? Sellers see it as a positive move when they’re reviewing multiple offers.

Priorities have changed in 2021 in response to COVID-19 and many buyers aren’t waiting for a return to normal. Instead, they’re anticipating a ‘new normal’ in which they live, work and entertain and their home has become the true definition of a sanctuary. As always, it’s extremely important to hire a real estate professional who will meet your needs and put your interests first.

Thanks to Asher Cohen founder of Scottsdale-based BUYAZRE.com

07/27/2021

Fannie & Freddie Eliminating Mortgage Refinancing Fee

Fannie Mae and Freddie Mac eliminating 50-basis point refinancing fee. No refinancing fee on loans backed by Fannie/Freddie as of August 1, 2021.

No More Mortgage Refinancing Fees as of August 1, 2021

The Acting Director of the Federal Housing Finance Agency Sandra Thompson announced that Fannie Mae and Freddie Mac are no longer collecting the Adverse Market Refinance Fee as of August 1, 2021.

This 50-basis point refinancing fee was originally intended to help Fannie and Freddie cover at least $6B in anticipated pandemic losses. But, now that the vast majority of borrowers with mortgages backed by Fannie and Freddie have exited forbearance (due to) the success of the COVID relief programs, Thompson said that this refinancing fee is no longer needed.

Thompson Expects Fee Cancellation to Help Borrowers Save Money

Thompson fully expects that lenders will pass along any cost savings that result in the elimination of this refinancing fee on to borrowers. Such cost savings would be equal to $500 for every $100,000 refinanced. For example, a borrower refinancing a $280,240 mortgage (80% of a median home price in May of $350,300) would save approximately $1,400 with the elimination of this fee.

Greg McBride, chief financial analyst with Bankrate, believes this fee cancellation is a win/win for borrowers and lenders as long as lenders don’t use this fee cancellation to “pad their profit margins.” McBride said, “Repealing this ill-conceived and misappropriated fee is a win for borrowers and lenders alike. Some of the savings will make it into the pockets of consumers but how much the borrower sees will be dependent on (borrowers) shopping around for the best deal.”

Number of Borrowers in Forbearance Dropped More Than 50% in April 2021

Due to COVID relief packages, the percentage of single-family mortgages guaranteed by Fannie and Freddie that were in forbearance dropped to 2% in April. When comparing the now even less than 2% of single-family mortgages currently in forbearance to the high of 5% in May 2020, the timing of this refinancing fee cancellation seems more than warranted.

Thanks to the Federal Housing Finance Agency, Bankrate and Inman.

07/16/2021

Here’s some good news for buyers who have been desperately trying to win contacts on homes. Inventory is rising across the US.

Key Highlights New listings increased +5.5% y/y and +10.9% m/m in June, according to com More supply could cool home prices “Good News on Horizon for

07/04/2021

Happy 4th of July, hope you all have safe and joyful holiday!

07/01/2021

All About Biophilic Interior Design

Architects and interior designers strive to improve living spaces so their clients will be happier and more productive. One increasingly popular approach is called biophilic design, which "seeks to connect occupants more closely to nature," according to Archdaily.com.

Biophilia simply describes the affinity and love humans have for the natural world and its life forms. It's the reason we have house pets, indoor plants, and install skylights, wood floors and granite countertops in our homes. We screen windows and doors to let in the fresh air. We are willing to pay much more money for homes with views of the ocean or lake, the mountains, or park-like landscapes.

Humans spend 90% of their time indoors, so we're happier when we can bring the outdoors inside, which explains the booming houseplant industry, reports Fastcompany.com.

We're simply happier, more focused, and healthier in a biophilic environment, and there are numerous studies confirm the direct positive effect nature has on our well-being.

So how can you incorporate biophilic design into your environment? LifestyleAsia.com suggests that objects, materials, textures, colors, shapes, and sequences that mimic nature will stimulate visual, auditory, haptic, and olfactory connections to the natural world. Start with plenty of natural light. Add a water feature, such as a small entry fountain. Use walls to hang landscape paintings or botanical wallpaper. Add fragrant plants, flowers and candles with pine, lavender, and other soothing scents.
You'll soon see that furniture, art, décor and architecture can work together to create a peaceful haven.

Wether you simply add a few pieces of nature (for those who struggle with plants), or a large botanical wall…(for those with a green thumb), you will still benefit from the addition.

06/20/2021

To all the Amazing Father’s out there..

06/10/2021

Home ownership can be tricky and frustrating sometimes but here are a few tips to help you save the things most homeowners need more of…time and money, and also prevent the future headaches we don’t.

Make today Special!

Learn what not to put in a garbage disposal, whether flushable wipes are really flushable, and how close can you plant a tree to your house, plus answers to other home ownership questions.