Published on: May 17, 2017


The Federal Reserve left interest rates unchanged at its April meeting, but remains on course to boost rates at least twice before the end of this year.

Some analysts had predicted that the sharp decline in the March employment numbers, compounded by the first quarter’s disappointing 0.7 percent increase in economic growth might give the Fed pause. But a stronger than expected April employment report seemed to confirm the Fed’s view that the negative March results were aberrations and did not reflect a downward shift in the economy’s trajectory.

Employers added 211,000 jobs in April, boosting the three-month average to 174,000 and reducing the unemployment rate to 4.4 percent, its lowest level in more than 10 years. In another encouraging sign for the labor market, the broadest unemployment measure, reflecting people who are working part time or have given up hope of finding a job, dropped to 8.6 percent from 8.9 percent in March.

“The momentum in the job market is really impressive,” Jason Furman, chief economic adviser in the Obama Administration, told the New York Times. I’m frankly surprised that this late into an expansion the economy is still adding jobs well above the steady-state pace,” he added.


The housing market continues to post strong numbers, defying concerns about rising interest rates, rising prices, and shrinking inventories. Existing home sales set their highest pace in a decade in March, rising nearly 6 percent above the year-ago level. Pending sales, a measure of future purchases, declined by nearly 8 percent in March from their February level, in what the National Association of Realtors described as a “slight decline” in momentum.

New home sales also notched their third consecutive monthly gain in March, with an annual sales pace of 621,000 units that beat the year-ago number by more than 15 percent, and blew well past a much more conservative consensus forecast.

Housing starts declined by 7 percent compared with February, which wasn’t what analysts concerned about paltry inventories wanted to see. Although starts were 8 percent higher in the first quarter than in the same period last year, home construction activity is at its lowest level since the Census Bureau began tracking these statistics in 1957, according to an analysis by the Federal Reserve Bank of Kansas City.

Although the inventory of existing homes increased by 5.8 percent in March compared with February, it was still down 6.6 percent year over year. The new home inventory reached its highest level since July of 2009, but the total is still discouraging, representing less than half of what it was in 2006, at the peak of the housing boom.

Home prices, meanwhile continued their upward march in February, rising another 6 percent year-over-year, following a 5.7 percent gain in January, as an increasing number of potential buyers continue to chase an inadequate supply of homes for sale.

Analysts are concerned not only about the mismatch between supply and demand, but also about the increasing gap between the rates at which home prices and incomes are rising. Existing homes prices are 8 percent higher this spring than they were in the spring of 2016, while average wages have increased only a 2.8 during that period.

“So far this year there are no signs that the economy will alleviate the mismatch between incomes and home prices that continues to confound middle-class home buyers in expensive cities,” Nela Richardson, chief economist at Redfin, told Housing Wire.

David Berson, chief economist at Nationwide Insurance, quoted in the same article, agreed. The imbalance in overheated, under-inventoried markets “can’t be sustained,” he said. “It can’t go on forever.”


Finding volunteers willing to serve on their boards is difficult at best, for most condo associations, but it’s about to get a lot more difficult for associations in Florida. The state legislature has passed a law establishing criminal penalties for a broad range of unethical behavior, including: kickbacks, voter fraud, theft of association funds and destruction or withholding of official records if related to an effort to conceal fraud. The legislation also prevents board members or representatives of management companies from purchasing units on which the association has foreclosed, prohibits contracts with service providers that create a conflict of interest, bars associations from hiring attorneys that also represent their properties’ management companies and requires boards to keep official records open for member inspection. Most problematic to industry executives and attorneys: the law would require associations to remove from office any board member accused of criminal offenses and deny them access to association records, but reinstate them if they aren’t convicted.

Legislative sponsors of the bill said it was a necessary response to evidence “widespread abuses by condo boards, some of which have become “mini dictatorships,” Sen. Rene Garcia, the bill’s co-sponsor, said. “This is something that condo owners have been waiting for nearly a decade,” she added.

Industry executives view the measure differently, questioning its underlying assumption (that board members always have “devious” motives) and warning about its impact: “Unbelievable, but still true,” Florida attorney Michael Gelfand, a senior partner in Gelfand & Arpe and a homeowner association mediator wrote in a newsletter alert. “The legislature [has exceeded] all expectations as to how to discourage good individuals from serving as [condominium] directors.”

If signed by the governor, the legislation and most of its key provisions would take effect in July.


Real estate executives are becoming increasingly concerned about the global economic outlook and less confident about the housing market outlook, according to the latest Imprev Real Estate Thought Leader Confidence Survey. Confidence levels have declined across the board over the past two years, with only 30 percent of respondents expecting the economy to improve this year, down from 45 percent in the 2015 survey. The number expecting conditions to worsen nearly doubled, from 9 percent to 23 percent.

“Real Estate leaders are clearly less bullish about the coming year than they were two years ago,” Renwick Congdon, Chief Executive Officer of Imprev, said in a press statement. But he also noted “an interesting trend.” While executives are less upbeat the global economy, they remain confident in their state and local economies. “In fact,” Congdon noted, “their confidence grows stronger the closer the economy is to home.” Only 13 percent feel better about the global economy than they did a year ago, but 35 percent of the respondents said their confidence in their local economy has grown.

Confidence in the housing outlook has also slipped: Only about a third of this year’s respondents expect housing demand to increase this year, compared with nearly half who held that bullish view in 2015.

Real estate investors and lenders, on the other hand, have a much more positive view of the commercial real estate market. More than half the respondents to the June Akerman Survey said they are optimistic, up from 38 percent a year ago. Prospects for deregulation and tax cuts on the Trump Administration’s agenda are largely responsible for their upbeat mood. They are not worry-free, however. More than 25 percent said economic uncertainty could impair prospects, an equal number acknowledged anxiety about government gridlock, and 14 percent expressed concern about the impact of rising interest rates.


The U.S. Supreme Court has opened the door for cities to sue lenders under the Fair Housing Act for discriminatory lending practices resulting in foreclosures that deprive communities of real estate tax revenue. But the court also set a high bar for proving those claims. In a 5-3 decision, the court ruled that Miami could sue Wells Fargo & Co. and Bank of America for claims the court held fell within the “zone of interest” established by the FHA giving the city standing to pursue its claim.

The city argued that “widespread housing discrimination” reflected in the lending practices “diminishes tax revenues, while demanding disproportionate amount of resources, diverting law enforcement, fire departments, and building and safety efforts, and endangering the entire community.”

The majority joined by Chief Justice John Roberts, generally agreed with that argument, but said the city must demonstrate that the banks’ actions were the “proximate cause” of the harm the city alleged.

The Eleventh Circuit grounded its decision on the theory that proximate cause under the FHA is ‘based on foreseeability’ alone,” the majority opinion said. “We therefore lack the benefit of its judgment on how the contrary principles we have just stated apply to the FHA. Nor has any other court of appeals weighed in on the issue,” the court added. The case now goes back to the Eleventh Circuit which ruled initially in the city’s favor, to answer that question.


More than half the non-homeowners responding to a recent Gallup poll said they expect to purchase a home in the next five years, but a Freddie Mac survey of current renters found that nearly half of them think renting is a better choice and have no intention of becoming homeowners.

Fannie Mae and Freddie Mac have outlined their plans for executing their “duty to serve” three currently under-served markets: Manufactured housing, affordable housing and rural housing.

Critics accuse journalists of producing “fake news,” but researchers at the Federal Reserve Bank of San Francisco have concluded that their reports on economic conditions may be a better indicator of economic trends than the closely followed consumer sentiment surveys.

The average mortgage was just under $325,000 in the first quarter – the highest since the Mortgage Bankers Association began tracking this data in 1990.

Nests aren’t emptying as fast as they used to, or perhaps as quickly as some parent might wish. The number of young adults in their late twenties or early thirties, still living with parents or grandparents has more than doubled in the past 30 years, from 9 percent in 1980 to 22 percent in 2015.



A Federal Appeals Court has ruled that derogatory comments about disabled owners who requested a Fair Housing Act accommodation may constitute illegal harassment under that statute. That decision, by the Third Circuit Court of Appeals (Revock v. Cowpet Bay West Condominium Association), came in a dispute between a condominium association (Cowpet Bay) and two of its residents (Barbara Walters and Judith Kromenhoek), who requested a waiver from the community’s no-pet rule to allow them to have dogs they said they needed to deal with their emotional disabilities.

Two other residents (Alfred Felice and Lance Talkington) objected strenuously to the presence of the animals in the Virgin Islands community. They expressed their dissatisfaction in strongly worded blogs, questioning whether Walters an Kromenhoek had a legitimate need for the animals, referring to them as “miscreants” and “totally selfish, spoiled brats,” suggesting that other owners should “ostracize” them, and urging the board to fine the two owners severely for violating the no-pet rule.

The board did not officially reject the accommodation requests, but it did begin fining the two owners $50 per day, waiving collection of the fines pending legal advice. However, after the election of a new president replacing one who had aggressively pursued the enforcement action, the board approved the accommodation requests. This ended the open hostility, but the owners sued the association, the former president, and the two bloggers (Felice and Talkington) for violating the Fair Housing Act. (Although HUD had rejected their claim, the Appeals Court noted, this did not preclude them from pursuing the civil action.)

A District Court granted summary judgment for all of the defendants and the plaintiffs appealed. Further complicating matters, while the litigation was pending, both plaintiffs and one of the defendants died. So the first question before the Appeals Court was whether a claim brought under the Fair Housing Act survived those deaths. The Court concluded that it did, allowing the executor of Walters’ estate to stand in for her, and allowing the attorneys for the deceased defendants to stand in for them.

Having resolved that preliminary question, the court addressed two issues: Whether the bloggers’ activities constituted harassment under the Fair Housing Act, and whether the condominium association had improperly rejected legitimate fair housing accommodation requests. On both questions, the court, found that “genuine issues of material fact” precluded summary judgment.

On the harassment issue, the Third Circuit relied heavily on a new HUD regulation, issued last year, (Quid Pro Quo and Hostile Environment Harassment and Liability for Discriminatory Housing Practices Under the Fair Housing Act), even though, the justices acknowledged, “No party brought this regulation to our attention or asked [that we] rely upon it.” The new regulation, which has proven somewhat controversial, makes it clear that “hostile environment harassment” related to a handicap violates the Fair Housing Act provision barring “interference” with the right to enjoy housing.

For purposes of this case, the court focused on language defining hostile environment harassment as “unwelcome conduct that is sufficiently severe or pervasive as to interfere with…“the availability, sale, rental, or use or enjoyment of a dwelling.” The regulation specifies that harassment “can be written [or] verbal” and may consist of a single incident, if it is “sufficiently severe to create a hostile environment.”

The court found that based on the evidence presented (at least nine harassing messages posted publicly over a period of more than five months), “a reasonable jury could find that the harassment was sufficiently severe or pervasive as to ‘interfere’ with [the plaintiffs’] housing rights.” A jury could also find the ‘causal connection’ the regulation requires between the harassing contact and the plaintiffs’ disabilities, the court said. Given that there were material issues of fact for a jury to resolve, the court concluded, the lower court should not have granted summary judgment on the harassment claim.

The Appeals Court also reversed the summary judgment decision on the second issue – whether the association had improperly denied the plaintiffs’ accommodation requests. The association argued that while the board failed to respond to the requests, it did not actually reject them, and eventually approved both. But the court pointed to previous decisions by various federal courts holding that an accommodation refusal may be “actual or constructive,” and that “an undue delay in granting a reasonable accommodation may amount to a refusal.”

The association had also cited the fact that the plaintiffs were never required to give up their dogs as evidence that the board had not refused their accommodation requests. But the court rejected this argument as well. “[The association] did not have to deny Walters and Kromenhoek their emotional support animals in order to ‘refuse’ a reasonable accommodation,” the court said. “As a matter of law, [the association] may have refused a reasonable accommodation by declaring [the plaintiffs] in violation of the ‘no dogs’ rule, by fining them fifty dollars a day, or through undue delay.”

The parties offered differing accounts on two issues: Whether the plaintiffs had refused to allow the board to review their requests, or simply insisted on assurances that their medical information would remain private; and whether board members actually reviewed the information the plaintiffs had submitted. The “disputes of fact” on both questions “preclude summary judgment” on the accommodation denial claim, as well, the court concluded, remanding the case to the district court for a trial on the merits.


“[The proposal] is a backdoor way of rendering the mortgage interest deduction close to worthless.” ─ Mark Zandi, chief economist for Moody’s Analytics Inc., describing a Republican tax reform proposal that would significantly increase the standard deduction.

Marcus, Errico, Emmer & Brooks specializes in condo law, representing clients in Massachusetts, Rhode Island and New Hampshire.