2019 – Page 7 – REI INK

New Report: 56% of Foreclosure Sales Owner-Occupied a Year Later

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Auction.com, the nation’s largest distressed real estate marketplace, released its Q2 2019 Seller Strategy report on September 3. The report provides data-driven insights for several key disposition metrics, including time to sell, sales execution and neighborhood stabilization. The study examined various disposition strategies used during the last year for more than 23,000 properties that went to foreclosure auction in the second quarter of 2018 via the Auction.com platform. The platform accounts for nearly 50 percent of all properties sold at foreclosure auction nationwide. “By synthesizing the rich transactional data from our market-leading platform with public record and MLS data, we’re able to provide a holistic view of the disposition metrics that matter to distressed property sellers,” said Auction.com CEO Jason Allnutt. “At the top of that list are execution of the sale price relative to credit bid, time to sell a property and impact on the surrounding neighborhood.” The primary disposition strategies analyzed were third-party sales at foreclosure auction, along with two types of disposition strategies for properties that reverted back to the foreclosing lender at the foreclosure auction (REO): online auction via a “Day 1 REO program” and traditional REO sales via the Multiple Listing Service (MLS). Among the major findings included in the report: Properties sold via “Day 1” REO online auction sold on average 95 days faster than REOs sold via the MLS. Properties sold to third parties at foreclosure auction executed higher relative to credit bid at the foreclosure sale than properties sold as REO—both MLS and Day 1 REO sales. 56% percent of properties sold to third parties at foreclosure auction were owner-occupied one year after the foreclosure auction date, compared to 43 percent of properties that reverted to the lender (REO) at foreclosure auction. Properties in Opportunity Zones that sold to third-party buyers at foreclosure auction executed 5 percentage points higher relative to reserve than properties located outside of Opportunity Zones. The full report is available upon request. Auction.com is the nation’s largest online real estate transaction marketplace focused exclusively on the sale of bank-owned and foreclosure properties. It is headquartered in Irvine, California, with offices in Silicon Valley, California, and Plano, Texas. Investors include CapitalG (formerly Google Capital) and Stone Point Capital.

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Award-winning fintech platform Fund That Flip has raised $11 million from growth equity firm Edison Partners. The company, launched in 2014, plans to use the capital to expand its market share of the trillion-dollar residential real estate investment industry. Fund That Flip provides short-term loans to experienced real estate redevelopers who buy and renovate residential properties. After origination, Fund That Flip offers accredited and institutional investors the opportunity to purchase fractional shares of the loan and earn an 8-9% annualized yield. In 2016, Fintech Venture Fund led Fund That Flips seed round. Since then, Fund That Flip has doubled its revenue, loan origination volume and customer base each year. The company was recently named No. 42 on the 2019 Inc. 500 list of fastest-growing private companies in America. Historically low levels of single-family home construction have created an affordability challenge for many potential U.S. home buyers. The average age of a single-family home is 37 years old, so millions of properties require significant investment to bring them up to the standards that meet the preferences of modern home buyers. Real estate redevelopers who leverage Fund That Flip’s financing to renovate aging or neglected properties are able to deliver a like-new home at an affordable price. “Our mission is to enable our clients to create wealth and improve communities by investing in real estate. This additional capital is going to further advance the mission to more clients and communities across the country,” said Matt Rodak, Fund That Flip’s CEO and founder. “Edison Partners has an impressive track record of investing in market leaders, and we’re incredibly excited and honored to have them as a partner as we expand our product offerings, technology and services.” Jennifer Lee, vice president at Edison Partners, led the investment and will join the board of directors at Fund That Flip. “Fund That Flip’s offering is well-timed with the growth of the residential real estate industry’s addressable market,” said Lee. “As affordability continues to concern many home buyers, the renovation and recycling of existing homes offers an attractive, sustainable solution. We look forward to helping the Fund That Flip team accelerate their vision of being the destination platform for residential real estate investors.” With the capital, Fund That Flip plans to scale distribution around its core product set in existing and new markets. The company also plans to develop additional residential loan products and provide new ways for institutional and accredited investors to fund their offerings.

Women in Real Estate: Sarah Fishburne

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I’m one of the lucky ones when it comes to a career path. Since I was 3 years old I was telling people I was going to be an interior designer. And it came true! My journey took me from the world of design firms to The Home Depot. Here’s how it happened.

Women in Real Estate: Erica LaCentra

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My start in the real estate investing industry was a case of being in the right place at the right time. As a recent college grad working as an executive assistant within the ticketing industry, I had no idea what the future had in store for me. But, I knew I wanted to be more than a secretary.

The Exurbs are Returning, But Not Necessarily for the Right Reasons

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The exurbs, a region where people live in a metropolitan area outside the main city and suburbs, showed the most substantial gains in single-family home growth, according to a report the National Association of Home Builders released during the final week of May.

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First American Financial Corporation’s April 2019 First American Real House Price Index reveals that: Real house prices decreased 0.9% between March 2019 and April 2019. Real house prices declined 0.72% between April 2018 and April 2019. Consumer house-buying power—how much one can buy based on changes in income and interest rates—increased 1.5% between March 2019 and April 2019, and increased 6.7% year over year. Average household income has increased 2.7% since April 2018 and 56.2% since January 2000. Real house prices are 15% less expensive than in January 2000. While unadjusted house prices are now 2.8% above the housing boom peak in 2006, real house-buying power-adjusted house prices remain 40.7% below their 2006 housing boom peak. The RHPI measures the price changes of single-family properties throughout the U.S. adjusted for the impact of income and interest rate changes on consumer house-buying power over time at national, state and metropolitan area levels. Because the RHPI adjusts for house-buying power, it also serves as a measure of housing affordability. “Two of the three key drivers of the RHPI, household income and mortgage rates, swung in favor of increased affordability in April. The 30-year, fixed-rate mortgage fell by 0.33 percentage points and household income increased 2.7% compared to April 2018,” said Mark Fleming, chief economist at First American. “When household income rises, consumer house-buying power increases. Declining mortgage rates have a similar impact on affordability, so in April homebuyers received a double shot of house-buying power to jolt affordability in their favor nationally. The five states with the greatest year-over-year increase in the RHPI are Wisconsin (4.7%), Rhode Island (4.3%), New Hampshire (3.5%), Georgia (2.8%) and Ohio (2.4%). The five states with the greatest year-over-year decrease in the RHPI are North Dakota (7.4%), Wyoming (6.6%), Louisiana (4.3%), Vermont (3.9%) and Oklahoma (3.6%). Among the Core Based Statistical Areas tracked by First American, the five markets with the greatest year-over-year increase in the RHPI are Providence, R.I. (5.9%), Las Vegas (5.2%), Salt Lake City (4.4%), Orlando, Fla. (3.9%), and Atlanta (3.7%). Among the CBSAs tracked, the five markets with the greatest year-over-year decrease in the RHPI are San Jose, Calif. (8.6%), Seattle (6.3%), Portland, Ore. (4.5%), San Francisco (4.3%) and Los Angeles (3.1%).