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Existing Home Sales Down Sharply in December

Total existing home sales fell 6.4% to a seasonally adjusted rate of 4.99 million in December, according to the latest figures by the National Association of Realtors. Sales are at their lowest level since November 2015 and down 10.3% from a year ago (5.56 million in December 2017).

Total existing home sales include single-family homes, townhomes, condominiums and co-ops.

Existing home sales remained sluggish in 2018 due to rising mortgage rates, growing home prices and tight inventory.

Meanwhile, the new home sales report for December scheduled to be released on Jan. 25 will likely be postponed due to the government shutdown.

The first-time buyer share of existing home sales slightly declined to 32% in December from 33% the previous month. The December inventory decreased to 1.55 million units from 1.74 million units in November. At the current sales rate, the December unsold inventory represents a 3.7-month supply, down from a 3.9-month supply last month.

Homes stayed on the market for 46 days in December, up from 42 days in November and 40 days a year ago. In December, 39% of existing homes sold were on the market for less than a month.

The December median sales price for existing homes was $253,600, up 2.9% from a year ago. This marks the 82nd consecutive month of year-over-year increases. The December median condominium/co-op price of $240,600 was up 2.3% from a year ago.

NAHB economist Fan-Yu-Kuo provides more analysis in this Eye on Housing blog post.

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How are Jurisdictions Spending Your Impact Fees?

Have you ever wondered if the impact fees your company is paying to various jurisdictions are going toward their intended purpose? Interestingly, they often are not.

Over the last 30 years, the Development Planning & Financing Group Inc. (DPFG) has been working with NAHB, HBAs and various home building companies in reviewing, critiquing, and determining the overall fairness and equity of the impact fees proposed by associated jurisdictions.

Over the last seven years, DPFG has conducted a number of in-depth audits of municipalities’ fee programs and we can now conclude greater transparency and oversight are needed related to the expenditure of fees.

Common misuses of fees

Most jurisdictions attempt to utilize fees for the intended purposes. There does, however, appear to be an almost uniform disconnect between the departments that prepare the fee study (e.g., manager, public works and finance departments) and the departments and/or personnel that collect and expend impact fees (accounting and public works departments).

In states with no fee audit requirement, DPFG’s audit findings have found the misuse of impact fees in four general areas:

  • Using fees to correct existing deficiencies. While reviewing a fee study, it was noted that federal and state authorities had cited a jurisdiction for not having sufficient fire stations. The jurisdiction was required by the authorities to use its own non-impact fee funds to construct a second fire station to adequately serve its existing population. During the peer review of the impact fee accounts, we discovered that the jurisdiction expended approximately $935,000 of impact fees it was collecting for fire stations 3, 4, and 5 for the construction of the second fire station.
  • Using specific impact fees to fund non-authorized capital facilities. During a review of a jurisdiction’s water impact fee accounts, for which separate impact fees were being collected for water capacity and water distribution, DPFG uncovered that the jurisdiction had utilized $4.1 million collected for water distribution to finance water capacity projects. The same jurisdiction also expended approximately $2.2 million in impact fees specifically for sewage collection facilities to fund the wastewater treatment plant, for which it was collecting a separate fee.
  • Using fees for the payment of non-capital assets. A jurisdiction funded more than $2.1 million in public works and park department salaries, payroll taxes, health insurance, vacation pay, overtime pay, and even retirement benefits. Fees were used to fund departmental office supplies, cellular service, travel, and meals.
  • Using fees for the repair and maintenance of existing facilities. In another jurisdiction, approximately $218,000 in funds were used to repair and replace existing park facilities rather than to construct new park facilities. The city has agreed to replenish the funds taken from the fee accounts through their general fund.
Ensuring proper expenditure of fees

Most state impact fee statutes are vague and open to interpretation, which often leads to misuse.

A possible solution is enacting impact-fee enabling legislation that outlines specific rules and guidelines for the estimation, collection, and expenditure of impact fees. This legislation should also provide a means for independent third parties knowledgeable in impact fees, public infrastructure, accounting and finance to audit the jurisdiction’s expenditure of impact fees.

As a starting point, industry associations may want to consider a broader effort to implement more specific legislation related to the estimation, collection, and expenditure of impact fees. By providing more detailed guidelines and implementing regular peer reviews of fee accounts, both the public and private sectors can feel more confident that jurisdictions are utilizing impact fees for their intended purpose, which is to provide necessary infrastructure for new growth.

Carter T. Froelich, CPA, is managing principal of the Southwest and Mountain Regions of Development Planning & Financing Group IncThis post was adapted from an article in the Fall 2018 issue of Best in American Living. Read the full article here

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January 2019 Associate Spotlight – Steven Trentadue Regions Mortgage Loan Originator

Steven Trentadue, a Regions Mortgage Loan Originator, is one of the newest members of the Home Builders and Contractors Association of Brevard. Steven was a member years ago and decided it was time to rejoin the association to continue taking advantage of the many benefits he once did before.

Employed by one of the nation’s strongest and largest financial institutions, Steven is able to open doors for Brevard County residents. He takes great pride in his role, providing a variety of competitive mortgage loan products and rates available through Regions Mortgage.

Through a personal client interview, Steven is able to select a loan product that will meet your homeownership goals. Whether you are a first time homebuyer or are refinancing your home, Steven is ready, willing, and able to guide you through the loan process with unparalleled customer service.

CLICK HERE for more information or call Steven at 321-757-4578

January 2019 Newsletter

Click here to read the January 2019 HBCA Newsletter

December 2018 Associate Spotlight – Accent Outdoor Lighting

Doing business for the past 15 years, Accent Outdoor Lighting creates outdoor lighting at its finest. President Justin VanderVeen uses his professional experience in LED and low voltage landscape lighting to transform your home or business into a truly unique property.

VanderVeen rejoined the HBCA of Brevard in September 2018 in hopes to share his specialty niche business with other building professionals

A property with professionally installed landscape lighting is more valuable and safer. A landscape lighting plan involves much more than just putting a light under a tree or near an entryway. Each fixture must be chosen to have the correct elements, beam spread, projection, location and wattage. The fixtures then need to be installed in conjunction with a design that will enhance your architecture and landscaping to the fullest extent.

For more information on creating an innovative and unique landscape plan, visit www.AccentLightsFL.com or Call Justin at 321-303-9760.

December 2018 Builder Spotlight – A&E Custom Homes

Andy Bader and Ed Montanez, owners of A&E Custom Homes, joined the HBCA of Brevard in 2015 to support the building industry and connect with other like minded professionals.

Establishing A & E Custom Homes in 2008, Andy and Ed have stood by their belief that the best way to ensure the highest level of quality and craftsmanship, is to be on the job site ensuring homes are built to their standards.

At A & E you can expect to have the old fashioned buyer/builder relationship. A & E Custom Homes maintains an attention to detail and quality that is unmatched in the industry. Homebuyers extend their faith and A & E delivers a topnotch home of the finest quality.

A & E Custom Homes include many of the features that other builders consider as upgrades.

For more information visit MyAEHome.com

or Call 321-684-8578

December 2018 Newsletter

Click here to read the December 2018 HBCA Newsletter

November 2018 Newsletter

Click here to read the November 2018 HBCA Newsletter

November 2018 Associate Spotlight – Mack Insurance Group

Providing peace of mind, Mack Insurance Group has been in business for 25 years. Tenille Perry, Personal Lines Account Manager of the Melbourne office, joined the HBCA of Brevard just shy of a year ago. The goal to connect with like minded building industry professionals and stay up to date on the building changes in Florida.

Mack Insurance specializes in giving you peace of mind when it comes to protecting your assets, both personal and commercial, preserving your way of life. Many people pay for insurance policies but are never fully taught what they do or how they work. Clients of Mack Insurance Group understand how their hard earned money is protecting them, their families and their business. Mack Insurance Group represents over 100 insurance carriers, giving their clients a great coverage at a great price.

For more information or to receive a quote today

Visit MackInsGroup.com or Call 321-259-5900

John Wilkinson Resume

John Wilkinson

Contractor with 20+ years of experience in construction, estimating, inspections, handy work, and repairs seeking a position in Construction Supervision.   Self-starter with good communication skills.

Click Here For Resume

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