Why this originator insists the Florida mortgage industry remains resilient and thriving?
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| Hurricane Irma seen striking Miami, Florida via GETTY IMAGES |
Christian J. Plocica initially trained as an educator, earning his Bachelor's degree in Health and Physical Education from SUNY Cortland. He followed this career path for nearly eight years, working in the warmth of Florida’s Seminole County Public School system.
However, after nearly a decade in teaching, he took a significant leap into the mortgage industry.
In an interview with MPA, Plocica shared that his first role in the mortgage field was as an originator with Orlando-based The Mortgage Firm Inc. He remained there for eight years before moving on to co-found VIP Mortgage Group, where he now serves as Chief Operating Officer.
Living and working in Florida, Plocica is no stranger to the impact of hurricanes on real estate and mortgage transactions. With these storms being a regular occurrence, the real estate sector faces unique challenges that often require quick adaptation.
Plocica explained that hurricanes can significantly affect pending real estate transactions: "Whenever FEMA declares a disaster area, lenders automatically place a hold on applications for homes currently under contract," he shared.
For homes potentially affected by storms, lenders require a reinspection to verify that no damage occurred. Despite dealing with hurricanes regularly, Plocica noted that, in his 12 years in the industry, he hasn’t personally seen a loan fail due to storm-related damage, though others in the state haven’t been as fortunate.
Even with these challenges, Florida’s popularity remains undiminished. As of April 2024, the state’s population exceeded 23 million, driven by Florida's appealing lifestyle, favorable climate, and absence of state income tax. This represents a 15% increase since 2015, and though the growth rate may slow slightly, the state is still projected to welcome over 300,000 new residents each year over the next five years.
Florida’s growth, despite the known risks, reflects a broader acceptance of the state's storm-related challenges. Many people are now moving inland to avoid coastal areas most vulnerable to hurricanes. Additionally, the state’s stringent building codes, significantly improved since Hurricane Andrew in 1992, mean that most homes are now more resilient against storm damage.
Still, hurricanes continue to affect housing availability, especially in the state’s already limited inventory. “If a seller needs to delay listing their home due to hurricane damage repairs, it tightens an already competitive housing supply,” Plocica explained.
Insurance is another critical issue in Florida. As hurricanes have continued to occur, insurance premiums have surged, impacting housing affordability. "Back in 2012, I would estimate insurance at about $1,500 a year. Now, I’m seeing quotes start at $2,800 to $3,000 annually," Plocica shared. This steep increase is pushing some buyers out of the market, as higher premiums can raise debt-to-income ratios, potentially disqualifying buyers who would have previously qualified.
Beyond insurance concerns, Florida’s housing market faces additional pressures, particularly from rapid home price increases during the pandemic. According to Plocica, while a typical home appreciation rate is between 3-5% annually, recent years have seen home values increase by 18-20% in a single year. This fast appreciation has made it harder for first-time homebuyers, especially those whose income growth hasn’t kept pace with property values.
While he is hopeful that the situation may ease if mortgage rates decline, Plocica remains cautious about predicting when that might happen. He noted that there was a brief period recently when rates dipped, but they have since risen again due to market fluctuations. He believes refinancing could become more accessible if rates decrease, though he doesn’t want to speculate on when this might happen.
Despite these issues, Florida’s appeal remains strong. The state’s population continues to grow, largely driven by people relocating from other states, particularly retirees and families drawn by Florida’s lifestyle and lack of state income tax. "I don’t think the challenges will stop people from moving to Florida," Plocica noted.
For Plocica, navigating Florida’s complex housing market requires a team approach. He describes his role not only as a mortgage originator but as part of a larger financial advisory team, assisting clients in understanding the full scope of their investment. "You wear three hats – originating the loan, providing financial advice, and sometimes being a therapist. Clients have many questions, and it’s essential to listen and offer sound advice,” he explained.
Collaboration with realtors is also vital, particularly in assessing area-specific risks. "No one professional has all the answers. Working as a team means that if there’s something I don’t know, the realtor might be able to provide that insight,” he added.
Despite hurricanes, rising costs, and a competitive housing market, Florida’s sustained popularity shows little sign of decline. “I don’t foresee people avoiding Florida because of increased risks,” Plocica observed.
According to the National Center for Disaster Preparedness at Columbia University, here are the 20 U.S. counties most vulnerable to hurricanes, along with their vulnerability scores:
Broward County, Florida – 72.70
Palm Beach County, Florida – 72.09
Charleston County, South Carolina – 68.17
Horry County, South Carolina – 66.31
Miami-Dade County, Florida – 65.10
Beaufort County, South Carolina – 64.93
Berkeley County, South Carolina – 62.76
Chatham County, Georgia – 62.50
Dorchester County, South Carolina – 60.97
Onslow County, North Carolina – 60.75
Brevard County, Florida – 59.98
Georgetown County, South Carolina – 59.61
Harris County, Texas – 57.89
New Hanover County, North Carolina – 57.73
Orange County, Florida – 57.02
St. Lucie County, Florida – 55.83
Florence County, South Carolina – 55.80
Collier County, Florida – 54.98
Carteret County, North Carolina – 54.74
Volusia County, Florida – 54.55
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