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I had a conversation with a friend the other day about his current housing situation.In a nutshell, the home he resides in isn’t large enough for his family, nor does it have certain amenities like a swimming pool.At the same time, he loves his home and the very cheap mortgage attached. Like millions of other Americans, he’s got a 30-year fixed in the low 3% range.This has created a dilemma for him and many others, who want to move, but can’t make it pencil at today’s rates and asking prices.But one thought is to rent out his current home and then rent another, as opposed to buying. Or selling for that matter.It’s Possible to Rent Out Your Current Home and Rent YourselfOne trend that has emerged of late is the ‘rent out and rent’ scheme.The way it works is relatively simple. If you’re an existing homeowner, you simply rent out your property to someone else and then go rent a different home.This allows you to keep your low-rate mortgage intact, and it allows you to rent for less than what a new mortgage would cost.It works because the PITI on the old house is so low, and asking rents are pretty attractive in many markets nationwide.Sure, there might be a premium for rent on the new property, but it can still be the cheaper option relative to buying a home.And the homeowner doesn’t need to worry about a large down payment, or losing their original home, which could now be seen as an investment property.Let’s Look at an Example of Rent Out and RentCurrent monthly PITI: $3,500 per monthPotential rent for existing home: $6,000 per monthCost to rent a larger home: $7,500 per monthCost to buy a larger home: $10,000 per month plus $300k downCost to rent out and rent: $1,500 per monthAs noted, I’ve got a friend considering a rent and rent out arrangement. Somewhat incredibly, the property he has his eye on is literally across the street.This makes it easier, at least from a moving point of view. He can probably just lug his stuff over on his own, if he’s up for it.It also allows him to keep an eye on his old property, which can be helpful but also perhaps a bit awkward.Anyway, the house across the street is larger, has a view, and has a swimming pool. These are all wants and needs.However, the price tag is a bit higher, we’ll call it $7,500 per month to rent. The good news is his current mortgage payment (full PITI) is just $3,500 a month.And he can potentially rent his place for $6,000 per month because he got in cheap about a decade ago with that ultra-cheap mortgage rate.If we do the math, it would cost $1,500 more per month to rent the larger home, using the cash flow on his existing property to offset the increased rent.But he gets the larger space, the nicer home, the pool, the view, etc.Perhaps more importantly, he doesn’t need to buy a home at today’s lofty prices and come in with a massive down payment.Assuming they purchased a similar property, they’d need a $300,000 down payment and the mortgage rate would likely be 6-7% versus their current 3% rate. Ouch!This Works When Home Prices Are High and Your Existing Payment Is LowThe reason this strategy works right now is because it’s more expensive to buy a home than rent in many places.You can thank both high mortgage rates and high home prices, which have moved higher in tandem.As I always say, there isn’t an inverse relationship between home prices and mortgage rates.They can both go up together, go down together, or sometimes diverge.This plan also works because many homeowners like my friend got into their current homes when prices and rates were low.So they essentially have a lot of wiggle room to cash flow if renting out their existing properties, which can then be used toward a new home.But instead of buying, they can simply pay a little extra in rent to get what they want, while continuing to enjoy appreciation on the old property.At the same time, any improvements made on the old home benefit them as well. And they can always move back in the future.For the record, this strategy can also be employed with downsizing. So a pair of empty nesters can rent out their larger home and go rent a smaller one.In their case, we’re talking lower rent, potentially leading to some additional cash flow without having to commit to a new home purchase.There Are Pros and Cons to Renting Out and RentingIt’s not without its risks though. When you rent, you’re at the mercy of your landlord. They might want to sell at some point, at which time you’d need to move.You could also be limited in terms of making improvements or changes to the property.In addition, you’re now a landlord yourself, which isn’t always a passive job. And the tenants present new risks, such as failure to pay rent.It’s also possible to find your old home vacant for a month if you’re unable to find a tenant.So you could be in a situation where you have to float two monthly housing payments. If you’re unable to, well, you’ve got a problem.But the advantages are there too. You get the property you want/need for a lot less than what it might cost to buy.And you get to keep your old home, which could be an incredible investment opportunity.You’ve also got optionality. You can rent for a while then go back to your old home. Or decide after a while to buy something.You aren’t necessarily locked in beyond the initial rental contracts in place, which might last a year.It gives you time to determine your next move, assuming you’re not quite sure what you want to do.Unfortunately, this also speaks to the dearth of for-sale inventory available in the housing market today.And the incredible position many homeowners are in, thanks to their low-rate fixed mortgages.

Higher home prices drove Fannie Mae's 2023 earrings up 35% year over year, CEO Priscilla Almodovar declared during the company's earnings call.Last year, Fannie Mae earned $17.4 billion, compared with $12.9 billion the prior year. In the fourth quarter alone, the government-sponsored enterprise earned $3.94 billion, down 16% from the third quarter's $4.7 billion. For the same period in 2022, it did $1.4 billion."The strength in home prices throughout the year had a direct impact on our earnings, largely due to the release of credit reserves that reflected higher actual and forecasted home prices," Almodovar said.Fellow GSE Freddie Mac reported a 65% gain in fourth quarter net income on Feb. 14, also due to rising home prices."We recognized a $1.7 billion benefit for credit losses in 2023 primarily due to stronger than expected actual and forecasted home prices," Chryssa Halley, chief financial officer pointed out. "Conversely, in 2022, we recorded an over $6 billion provision for credit losses."During the year, for both single-family and multifamily, Fannie Mae provided $369 billion in liquidity.Almodovar, who will soon additionally take on the title of president at the GSE, touted several initiatives undertaken to reduce the upfront cost to borrowers of housing and expanding access, including the use of rental payments and the acceptance of attorney opinion letters in lieu of title insurance.Appraisals is another area where it is looking to cut costs. "We continue to modernize the home valuation process by using models and analytics that allow us to offer less costly appraisal waivers and alternatives," Almodovar said. "Through these options low to moderate income borrowers save an estimated $52 million in upfront costs in 2023."Even though Fannie Mae's net worth as of Dec. 31, 2023 was nearly $78 billion, that was still $243 billion below the level for its regulators to consider the company to be fully capitalized."While our base guarantee fee income grew slightly in 2023, higher interest rates during the year drove a decline in deferred guarantee fee income due to lower refinance activity," Halley said. "This was offset by an increase in income due to higher yields on securities in our corporate liquidity portfolio."In fact, 86% of the acquisitions for its single-family book of business by year-end were purchase mortgage loans, Halley said. Those numbers are in line with recent rate lock data released by Optimal Blue.Still, Fannie Mae's acquisition of $316 billion in single-family loans last year was a nearly 50% decrease compared to 2022 and its lowest volume since 2000, Halley saidIts single-family segment reported net earnings of $3.3 billion in the fourth quarter, down 18% from the third quarter's $3 billion. For the same period in 2022, this business line earned $10.8 billion.Full year profits, though, were 38% higher versus the comparable period, $14.86 billion in 2023 to $10.77 billion for 2022."Nearly 85% of our single family book as of year-end had interest rates below 5%," Halley stated. "So even if interest rates decline meaningfully, most of the borrowers whose loans are in our single family book still would not be incentivized to refinance."The share of single-family borrowers who were considered seriously delinquent at the end of 2023 fell 10 basis points from the prior year, to 0.55% from 0.65%.Fannie Mae executed 17 credit risk transfer transactions during 2023, covering $308 billion of unpaid principal balance. Because of a capital rule change by the Federal Housing Finance Agency in March 2020, Fannie Mae stopped doing CRT altogether for nearly a year-and-one-half until that change was reversed by current Director Sandra Thompson. On the multifamily side, full year net income rose to $2.55 billion from $2.15 billion for 2022. Fourth quarter net income of $639 million was down from $674 million in the third quarter and $2.2 billion one year ago.The year-over-year improvement in multifamily earnings was due to a lower credit loss provision, $495 million in 2023 versus $1.25 billion in 2022. The large 2022 provision was attributed to problems in the seniors housing loan portfolio."Our seniors housing loans did not drive our multifamily provision for credit losses in 2023 because of loss mitigation activities we performed last year and some recovery and property financials," Halley said. "However, our allowance for seniors housing loans remained elevated."Acquisitions, though, were down 24% from 2022, affected by high interest rates.The current rate environment could also affect the ability of the loans already in the portfolio to refinance prior to maturity.Approximately 20% of outstanding commercial and multifamily loans are expected to mature this year, according figures released earlier this week by the Mortgage Bankers Association. Multifamily across all investor types represents a 12% share of that.Fannie Mae's near-term rate of loans maturing remains low, however, Halley said, at 2% for this year and 3.5% for 2025.Multifamily serious delinquency rates rose to 46 basis points at year-end from 24 basis points on Dec. 31, 2022, driven by the stress in the senior housing portion of the portfolio, Halley said.

A federal court judge in California has penalized four home modification scammers with approximately $19 million in fines and restitution in the first joint case brought by state and Federal Trade Commission officials. Michael Nabati, Armando Solis Barron, Dominic Ahiga (also known as Michael Grinnell) and Roger S. Dyer were found liable in a summary judgment in this case; several corporate entities headed by Home Matters USA, based in Los Angeles, were jointly penalized in a separate default judgment.All of the individual defendants, except Barron, did not oppose the motion or otherwise challenge the allegations raised by the FTC and the California Department of Financial Protection and Innovation.Although Barron did file a response, "the sole evidence submitted in support of his cursory opposition brief — a self-serving declaration — is inadequate to present any dispute of fact and is not executed in compliance with federal law," a footnote in Judge Fernando Aenlle-Rocha's ruling said.Regulators alleged the scam impacted over 3,000 people nationwide, many of whom were elderly and/or veterans. The victims paid for loan modification services that were never rendered, the ruling noted. It stated the defendants "falsely represented that the consumers' homes could not be foreclosed while they were paying for the fraudulent services, the homeowners need not and should not make their regular mortgage payments or communicate with their mortgage providers, and that the services were associated with a government program related to COVID-19 relief."The penalties include nearly $15.9 million jointly and severally against all of the defendants as monetary relief. A separate $50,900 fine was levied against "relief defendant" MostCap Enterprises, which admitted to receiving money from the corporate entities named in the suit.Judge Aenlle-Rocha also instituted $3.1 million in civil penalties against all of the parties. A court-appointed receiver has already recovered $3.5 million.This is the first time the California DFPI teamed up with the FTC in a civil matter, and it resulted in the highest penalties issued to date under expanded authority granted by California's consumer protection law."Our win in this case sends a clear message to scammers who target consumers facing financial hardship: the FTC and our law enforcement partners are focused on fighting fraud and halting it," said Samuel Levine, director of the FTC's Bureau of Consumer Protection, in a press release. "We look forward to more opportunities to partner with the California DFPI on behalf of consumers."When the case was initially filed in September 2022, California officials pointed out the accused were the subject of prior law enforcement actions in Ohio, Washington, Oregon, Connecticut, and North Carolina, as well as action by the State Bar of California.A Google search found a Washington State Department of Financial Institutions consumer alert from March 2023 against a Los Angeles-based company named HomeMatters USA for an unlicensed loan modification scam. None of the individuals named in the alert were defendants in the California matter.A Better Business Bureau page lists multiple complaints against Home Matters USA between 2021 and 2023."Fraudsters everywhere should take note – DFPI will find you, expose you, and hold you accountable. Victims of fraud should likewise take heart. The DFPI has your back," said Commissioner Clothilde Hewlett.

Financial services stakeholders are issuing more guidelines around appraisal bias, describing how examiners should ensure firms mitigate risks. The Federal Financial Institutions Examination Council on Monday laid out principles to ensure fair real estate valuations at a time when discrimination in the field is under scrutiny. The directives outline how reviewers should check a firm's financial risks and ensure they're following consumer protection laws. "The failure of internal controls to identify, monitor, and control valuation discrimination or bias could negatively affect credit decisions, potentially exposing an institution to legal and compliance risks or affecting an institution's financial condition," the FFIEC's six-page statement read. The release comes almost a year after some of the same agencies that are part of the FFIEC issued proposed rules around computer-generated appraisals. Consumers in recent years have filed lawsuits against bank and non-bank lenders over alleged instances of appraisal bias, while regulators have taken numerous steps to combat such discrimination.The FFIEC includes Consumer Financial Protection Bureau and the National Credit Union Administration, among other banking regulators. Monday's statement didn't specifically mention mortgages or independent mortgage banks, but cited the Truth in Lending Act and other home finance-related regulations as relevant statutes. Examiners should review how a company's board and senior management ensure their operations entail risk-free appraisals, the FFIEC said.That guidance, described as consumer compliance principles, suggests reviewers check a wide range of a companies' policies, procedures, training, auditing and third-party risk management regarding valuation bias. Also included are principles to check a financial institution's risk profile arising from potential bias, which FFIEC describes as "safety and soundness." That lengthy oversight includes aspects covered in the above principles, along with further risk assessments of a firm's financial profile.Poor findings in examinations should reflect in a firm's Uniform Interagency Consumer Compliance Rating System, or UFIRS, the statement said. The Federal Deposit Insurance Corp.'s most recent annual report in 2022 said 42 insured institutions with total assets of $163.8 billion were designated as "problem institutions" based on their UFIRS rating.Housing stakeholders, including the White House, have made attempts in recent years to combat such discrimination and address smaller changes unfairly influencing valuations. Fannie Mae last week said it won't tolerate appraisals that reference crime, a move following an update to the Uniform Standards of Professional Appraisal Practices in January. 

Guild Mortgage's acquisition of Academy Mortgage started to come together at the end of last year."Adam [Kessler, CEO of Academy Mortgage] and I have known each other for a long time and really been very friendly competitors," said Guild's CEO Terry Schmidt Wednesday. "We knew and felt like the type of people that our companies were attracting into our organizations were very alike because we both have similar cultures.""We just recently started discussing a transaction…at the end of 2023 really," Schmidt added.The deal will close at the end of the first quarter, during which Academy Mortgage employees will fully transition over to the San Diego-based shop, she said. The asset purchase will bring a little more than 800 loan officers to the shop, with the addition of sales operations, underwriters and processors. Guild's CEO declined to provide details regarding the price tag of the purchase. With Guild cementing its place as a top 10 lender in the country, it is looking to keep on growing. "It's a great time to continue to grow, so that's what we're planning,"  Schmidt said.Since 2022, Guild has purchased six mortgage shops, including First Centennial Mortgage, Cherry Creek Mortgage and Legacy Mortgage.

Freddie Mac funded fewer homes in 2023 than the year prior, but rising home prices lifted its profits.The government-sponsored enterprise Wednesday reported fourth quarter net income of $2.9 billion, up slightly quarter-over-quarter and 65% higher from the final months of 2022. Greater net revenues and a credit reserve release in single-family operations drove those increases, said Chris Lown, executive vice president and chief financial officer. "An improvement in house prices drove an $872 million benefit for credit losses this year, versus a provision of $1.8 billion in the prior year," he said in an earnings conference call. "In 2022, the provision for credit losses was driven by deterioration in housing market conditions."House prices rose 6.6% last year compared to 4.9% in 2022, according to Freddie Mac's estimations. The benefit for credit losses has fluctuated in the past few quarters, at $467 million over the final months of 2023 compared to $575 million over the same period in 2022. In the third quarter of 2023, the figure was just $263 million.Those credit provision shifts helped Freddie Mac record $10.5 billion in net income for the year, up 13% from 2022's $9.3 billion. Gains were also tempered by a $313 million expense in the third quarter tied to a judgment in favor of shareholders also entangling GSE rival Fannie Mae. Last year's sluggish purchase and refinance markets sent Freddie Mac's new business activity down $241 million annually to $300 billion over 2023. Fourth quarter performance also deteriorated, with $73 billion in single-family business representing a 35% quarterly decline and 16% annual drop. In terms of homes funded, the GSE powered 955,000 mortgages last year compared to 1.8 million in 2022. Lown pointed out 51% home purchases were made by first-time homebuyers, the highest percentage Freddie Mac has seen since it began tracking the statistic three decades ago. The serious delinquency rate for single-family business was 55 basis points, unchanged quarterly and down from last year's 66 bps. The multifamily serious delinquency rate was 28 bps in the fourth quarter, up 12 bps annually. Lown attributed that jump to senior housing and small-balance loan portfolios. He said 89% of such loans have credit enhancement coverage.Single-family net income was up 80% year-over-year at $2.7 billion, while multifamily profit was steady at $300 million. Revenues for both segments were relatively flat both quarterly and annually: Net revenue for single-family was $4.8 billion, and the mark for multifamily was $600 million. The GSE at-large reported noninterest expense of $2.1 billion in the fourth quarter. Its net worth was $47.7 billion at the end of the year, a sizable increase from the $37 billion net worth it reported in 2022. Departing CEO Michael DeVito, set to retire during the first quarter, did not appear on Wednesday's call.Freddie Mac's long-term outlook on home prices is also more growth-oriented than its prediction 14 months ago. Its forecast assumes prices rising 2.8% this year and 2% in 2025, compared to its previous projection of a 1.8% decline by 2025.

Gate House Strategies, the consulting firm co-founded by Brian Montgomery, the former Housing and Urban Development official, is now offering fair lending and other compliance management services through a new subsidiary.Among the founding partners at the new business, Gate House Compliance, is Michael Waldron who was the founder of Compliability Solutions, and the former chief compliance officer at Community Loan Servicing (formerly known as Bayview)."Today government agencies regulating the financial services industry expect C-suites and boards of directors to pay close attention to the letter and spirit of the law," said Waldron.In addition, Paul Hancock, a civil rights attorney with K&L Gates, who previously led the Department of Justice's fair housing and fair lending enforcement program, is also in a collaboration with Gate House Strategies.Gate House Compliance formed an alliance with CrossCheck Compliance, a nationwide regulatory compliance and risk management consulting firm. Federal Housing Commissioner and Assistant Secretary, U.S. Department of Housing and Urban Development Brian Montgomery, speaks during a hearing of the Senate Banking, Housing, and Urban Affairs Committee examining regulatory response to the current economic crisis, on Capitol Hill in Washington DC, Thursday, October 23, 2008. Photographer: Chris Kleponis/ Bloomberg News CHRIS KLEPONIS/BLOOMBERG NEWS "We've put together on one platform a combination of compliance experts and services that we believe is the first of its kind," said Montgomery in a press release."Our collective team possesses the experience and knowledge needed to deliver results for lenders in their compliance ecosystem."Montgomery rose to be deputy secretary of HUD in 2019 after twice serving as Federal Housing Commissioner.The new venture will offer clients a wide range of services, including but not limited to: fair lending and servicing assessments; consumer protection compliance to avoid claims of unfair, deceptive and abusive acts and practices; compliance monitoring and targeted reviews; risk mitigation strategies; examination and audit support; reviews of practices for equity and discrimination; and guidance on black box modeling, algorithms, and artificial intelligence.The new venture already has created a proprietary management system called Gate House Compliance 365, which, on a subscription basis, provides a comprehensive approach to help navigate the increased scrutiny and risks they face from the myriad of fair lending rules and regulations.Other key people at Gate House Compliance are Liz Scholz, senior advisor in compliance, risk, and client strategies, and Jack Bobbitt, who will support the firm's operations. Scholz was a former Federal Housing Finance Agency official for 12 years where she led activities in examination, regulatory policy and board monitoring of Fannie Mae and Freddie Mac. Bobbitt was a former assistant secretary for administration at HUD, and has experience in sales, marketing, operations management and business development.Montgomery's partners in Gate House Strategies, former HUD officials Hunter Kurtz, Dror Oppenheimer, Keith Becker and Michael Marshall are also partners in the new venture.

Intercontinental Exchange has entered into a licensing agreement with REdistribute, a joint venture owned by a number of multiple listing services that would allow the mortgage technology behemoth to gain additional access to real estate listing data.This multi-year licensing agreement is in addition to existing pacts for data with The Realty Alliance and the National Association of Realtors.Several use cases for this information exist in the mortgage spectrum."Banks and government agencies would access this information for multiple uses, including underwriting, risk management and portfolio management," said Ben Graboske, president of mortgage data & analytics, ICE Fixed Income & Data Services. "It could also help servicers with loss mitigation on loan modification offers and other distressed borrower workouts."REdistribute started in business in 2022 and now it includes data from more than 40 multiple listing services. Between the three arrangements, ICE's property listing services coverage now includes over 90% of such information, it stated."Our mission is rooted in the recognition that the work product of an MLS — that is, the real estate listings they produce — can, and should, bring additional value back to the MLS and its participating brokers," said Amy Gorce, CEO of REdistribute, in a press release. "We're delivering clean, standardized MLS data directly from the source, and specifically on behalf of the producers of that data."In Intercontinental Exchange's earnings report for the fourth quarter, $70 million of revenue came from ICE Mortgage Technology's data and analytics business, $56 million more than for the same period in the previous year.A likely contributor to that year-over-year growth was the addition of Black Knight's own operations in that line. Graboske was a Black Knight executive prior to the September closing of the much delayed, hard fought, acquisition.

U.S. mortgage rates rose last week to a two-month high, reversing some of the momentum in the nation's housing recovery.The contract rate on a 30-year fixed mortgage increased 7 basis points in the week ended Feb. 9 to 6.87%, the highest since early December, according to Mortgage Bankers Association data released Wednesday. The MBA's index of applications for home-purchase mortgages fell 2.5% to 149.6, a five-week low. In January, the gauge reached the highest level since April, but has declined in each of the last three weeks.Meantime, the MBA's overall index for mortgage applications, which tracks both home purchases and refinancing, slipped 2.3% last week. The MBA's index for refinancing fell 2.1%.The MBA survey uses responses from mortgage bankers, commercial banks and thrifts and has been conducted weekly since 1990. The data cover more than 75% of all retail residential mortgage applications in the US.

Florida's southwestern coast — long one of America's fastest-growing regions — is losing some of its boomtown swagger as a home-insurance crisis and other soaring costs make homes unaffordable.Homeowners from Sarasota south to Naples, known for its eight-figure waterfront mansions, are having a tougher time selling their properties, and the buildup in inventory has caused home prices to fall at some of the fastest rates in the nation. Realtors point to rising insurance costs that were exacerbated by Hurricane Ian in 2022, prompting some homeowners to list their homes for sale and would-be buyers to walk."You've got people that went through the storm and just want to move on, and don't really think the affordability is here anymore because of insurance," said Marlissa Gervasoni, president of the Royal Palm Coast Realtor Association. "From what I'm seeing, I believe they are looking for areas that might be less costly."Southwest Florida has been one of America's fastest-growing regions for decades, historically luring retirees from the Midwest drawn to its warm winters, prevalence of golf courses and relatively affordable housing. In recent years, agents have said they're seeing more newcomers from the Northeast and other regions, and the area's rise in home prices has outpaced the nation overall. However, several factors are converging and hitting the region's normally hot real estate industry all at once, said Amir Neto, director of the Regional Economic Research Institute at Florida Gulf Coast University. Developers are bringing a wave of multifamily residential projects online just as a pandemic-fueled surge of migration slows and high mortgage rates weigh on housing demand, Neto said.Add to the mix an insurance crisis, and a seller's market is becoming a buyer's one, he said.Homeowners policies across Florida started soaring in 2020 because of what insurers and state regulators attributed to rampant lawsuits and fraud. Rates in the state climbed as much as 33% annually, then shot up another 42% last year in the aftermath of Hurricane Ian, according to the industry-funded Insurance Information Institute.Ian, a Category 5 storm that was the third-costliest in U.S. history, led some insurers to pull out of the state or limit new policies. Floridians paid $6,000 on average for insurance last year, about triple what they paid in 2019. By comparison, the average US homeowner paid about $1,700 in 2023, the III said. In Fort Myers, where hundreds of homes and business were destroyed by Ian, "we're seeing anywhere from a 50-to-100% increase in spending depending on the age of the home," said Gervasoni, head of that area's Realtors board.Florida legislators have passed laws recently to bring insurers back into the state and lower rates, but they remain high.Today, Cindy Blackburn and her husband feel stuck in what was once their Cape Coral dream home, unable to sell and move closer to family up north.Hurricane Ian blew ashore not far away on a barrier island called Cayo Costa, damaging the Blackburns' roof and everything underneath. For a time, they lived in an RV while contractors rebuilt their house, all the while battling with an insurance company that put up obstacles to getting reimbursed, Blackburn said. Ultimately, they self-funded most of the $250,000 in repairs.By last summer, the Blackburns were ready to sell their home and move to Tennessee or North Carolina. They listed it in August, but it languished until last month and they took it off the market. Their broker at the time never disclosed they couldn't sell the property while they still had an insurance claim pending, Blackburn said. They've since found a new agent, Gervasoni, and are hoping a lawyer can resolve their insurance claim."This was to be our retirement house, and having gone through what we've gone through, we've realized this is not where we belong," said Blackburn, 59.Likewise, homes for sale are piling up in some cities.Active listings of single-family homes in the Cape Coral-Fort Myers area were up 62% last month compared with a year earlier, while those in Punta Gorda — which is 100 miles south of Tampa — were up 139% in December from a year ago, according to local Realtors boards. Supply is up in Naples, too, but not by as much.Some of the spike is a fluke. After Hurricane Ian ravaged the region in September 2022, thousands of people, like the Blackburns, suffered damage to their homes and filed insurance claims. Now that most of those claims have been resolved, people can put their homes up for sale.Prices have taken a hit. Of the 12 metropolitan areas with the sharpest drops in median sales prices in the past year, four are in Southwest Florida, according to the National Association of Realtors. Prices in the Naples-Immokalee-Marco Island area fell 5.9% in the fourth quarter of 2023 from a year earlier, the third-steepest drop in the group, NAR data show."It needed to happen, or else we were going to price everyone out of the market," said Tony Barrett, president of the Realtor Association of Sarasota and Manatee. He calls the slowdown a "reset" rather than a down market. The rise in listings — which is also happening in the broader state of Florida, but to a lesser degree — stands in contrast to the national trend, as high mortgage rates have discouraged homeowners from moving. To be sure, some of the state's increase in supply represents a normalization from extremely low levels, but it's also due to higher insurance costs and the rise in home prices in recent years, said Brad O'Connor, chief economist at the statewide Florida Realtors."Affordability has eroded in a big way," O'Connor said.