2021 – Page 18

Vacant Zombie Properties Decline In Third Quarter As Foreclosure Moratorium Ends

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Zombie Foreclosures Comprise Only One of Every 13,060 Residential Properties in U.S.; Number of Zombie Properties Drops 7 Percent Across Nation in Third Quarter of 2021; But Counts Could Increase as National Foreclosure Moratorium is Lifted ATTOM, curator of the nation’s premier property database, released its third-quarter 2021 Vacant Property and Zombie Foreclosure Report showing that 1.3 million (1,332,706) residential properties in the United States sit vacant. That represents 1.4 percent, or one in 74 homes, across the nation. The report analyzes publicly recorded real estate data collected by ATTOM — including foreclosure status, equity, and owner-occupancy status — matched against monthly updated vacancy data. (See full methodology enclosed below). Vacancy data is available for U.S. residential properties at https://www.attomdata.com/solutions/marketing-lists/. The report reveals that 215,495 properties are in the process of foreclosure in the third quarter of this year, down 3.7 percent from the second quarter of 2021 and down 0.2 percent from the third quarter of 2020. Among those pre-foreclosure properties, 7,538 sit vacant in the third quarter of 2021, down quarterly by 6.7 percent and annually by 5.3 percent. The portion of pre-foreclosure properties that have been abandoned into zombie status dropped slightly, from 3.6 percent in the second quarter of 2021 to 3.5 percent in the third quarter of 2021. Among the nation’s total stock of 98.4 million residential properties, the portion represented by zombie foreclosures remains miniscule. Just one of every 13,060 homes in the third quarter sit empty in the foreclosure process, down from one in 12,256 in the second quarter of 2021 and from one in 12,486 in the third quarter of last year. The third-quarter zombie foreclosure numbers reflect one of many measures showing how strong the U.S. housing market remains, but also one likely to face a downturn to varying degrees across the country over the coming year. The decade-long, national home-price boom has continued roaring ahead in 2021, with double-digit annual gains throughout most the country and almost no blight stemming from vacant properties in foreclosure. That has happened despite economic damage to major sectors of the U.S. economy connected to the Coronavirus pandemic that hit early last year. But the number of foreclosures – and with it, the number sitting vacant – is almost certain to increase because the federal government recently lifted a 15-month moratorium that had prevented lenders from taking back properties from homeowners who fell far behind on mortgage payments during the pandemic. An estimated 1.5 million to 2 million homeowners were in some kind of forbearance when the moratorium ended in July 2021. “Vacant properties in foreclosure, and the resulting potential for neighborhood decay, continue to be a non-issue overall in most of the country. But that could easily change over the coming months as lenders are now free to take back properties from delinquent homeowners,” said Todd Teta, chief product officer with ATTOM. “How much, how fast and where that happens will depend on how different banks approach the situation. Some may decide to vigorously pursue foreclosures to recoup losses from the pandemic while others give homeowners more time to get back on their feet. But it’s hard to imagine that zombie foreclosures will continue be so few and far between across the national landscape.” Zombie foreclosures down in 31 states A total of 7,538 residential properties facing possible foreclosure have been vacated by their owners nationwide in the third quarter of 2021, down from 8,078 in the second quarter of 2021 and from 7,961 in the third quarter of 2020. The number decreased, quarter over quarter as well as year over year, in 31 states. Among states with at least 50 zombie foreclosures during the third quarter of 2021, the biggest decreases from the second quarter to the third quarter of this year are in Maryland (zombie foreclosures down 39 percent, from 151 to 92), Massachusetts (down 26 percent, from 89 to 66), New Mexico (down 24 percent, from 85 to 65), Connecticut (down 12 percent from 75 to 66), Florida (down 11 percent, from 1,021 to 912) and Maine (down 11 percent, from 66 to 59). Largest zombie property counts remain in Northeast and Midwest New York continues to have the highest number of zombie properties in the third quarter of 2021 (2,053), followed by Ohio (939), Florida (912), Illinois (805) and Pennsylvania (366). “There are two reasons we might see an increase in zombie properties as we approach Halloween,” said Rick Sharga, Executive Vice President of RealtyTrac, an ATTOM Company. “First, the CFPB has authorized lenders to pursue foreclosure proceedings on vacant and abandoned homes now that the government’s moratorium is over. Second, they’ve also given the go-ahead to re-start the foreclosure process on loans that were already 120 days delinquent prior to the moratorium, and it’s not unlikely that over the past 15 months many of those financially-distressed homeowners have vacated their properties.” Overall vacancy rates continue dropping most in midwestern and southern states Vacancy rates for all residential properties in the U.S. declined to 1.35 percent in the third quarter of 2021 (one in 74 properties), from 1.42 percent in the second quarter of 2021 (one in 70) and 1.58 percent in the third quarter of last year (one in 63). States with the biggest quarterly decreases in overall vacancy rates are Oregon (down from 1.8 percent of all homes in the second quarter of 2021 to 1.3 percent in the third quarter), Maryland (down from 1.7 percent to 1.1 percent), Wisconsin (down from 1.4 percent to 1 percent), Mississippi (down from 2.2 percent to 1.9 percent) and Minnesota (down from 1.5 percent to 1.2 percent). Other high-level findings from the third-quarter 2021 data: Among 162 metropolitan statistical areas with at least 100,000 residential properties and at least 100 properties facing possible foreclosure, the highest zombie rates in the third quarter of 2021 are in Portland, OR (13.7 percent of properties in the foreclosure process are vacant); Fort Wayne, IN (12.9 percent); Detroit, MI (11.9 percent); Cleveland, OH (11.8 percent); and Honolulu, HI (11.3

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OfferPad, Inc. (“Offerpad”), a leading tech-enabled platform for buying and selling residential real estate, and Supernova Partners Acquisition Company, Inc. (NYSE: SPNV) (“Supernova”), a publicly traded special purpose acquisition company, completed their previously announced transaction to take Offerpad public. The newly formed company, named Offerpad Solutions Inc. (“Offerpad Solutions”, the “Company” or the “combined company”), uses technology-enabled solutions, including iBuying, to remake the home selling and buying experience by offering customers the convenience, control and certainty to solve their housing needs. Offerpad Solutions common stock and warrants are expected to begin trading on the New York Stock Exchange on September 2, 2021, under the symbols OPAD and OPADWS, respectively. Supernova shareholders approved the transaction at a special meeting on August 31, 2021. Offerpad Solutions expects to use proceeds of approximately $284 million from the transaction to accelerate market expansion, to invest in technology and product development, to pay transaction expenses and for other general corporate purposes including the repayment of indebtedness. Founder and CEO Brian Bair and Offerpad’s management team will continue to lead the combined company. Brian Bair will also serve as Chairman of the Offerpad Solutions board of directors alongside Katie Curnutte, former SVP of Communications and Public Affairs at Zillow; Ken DeGiorgio, President of First American Financial Corp.; Alexander Klabin, founder and CEO of Ancient and Executive Chairman of Sotheby’s Financial Services; Ryan O’Hara, former CEO of Move, Inc. (Realtor.com); Sheryl Palmer, Chairman and CEO of Taylor Morrison Home Corporation; and Roberto Sella, Founder and Managing Partner of LL Funds. In reaction to achieving this significant milestone, Brian Bair explained, “We are taking home buying and selling from chaotic to controlled, from expensive to efficient, and from the past straight into the future. We are just getting started. We have a superior team, combining strong technology backgrounds and real estate experience in every kind of real estate cycle, with the skills and vision to operate as a highly capital-efficient company in our industry. We are excited about the tremendous opportunity ahead of us as more and more buyers and sellers opt for our digital-first experience.” Spencer Rascoff, co-chair of Supernova and former CEO of Zillow, said, “Offerpad Solutions brings together the right mix of real estate expertise, technology-enabled solutions and a customer focused mindset to lead the transformation of the residential real estate experience. We saw a unique opportunity to work with Offerpad and couldn’t be more pleased to partner with the team.” About Offerpad Offerpad’s mission is to provide the best way to buy and sell a home. Period. We use technology-enabled solutions to remake the home selling and buying experience by offering customers the convenience, control, and certainty to solve their housing needs. We combine our fundamental real estate expertise with our data-driven digital “Solutions Center” platform to give users a holistic, customer-centric experience, enabling them to efficiently sell and buy their homes online with streamlined access to other services including mortgage, listing, and buyer representation services.

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Listing Price Growth Continued to Plateau for the Third Consecutive Month, With Median Price of Single-Family Listings Down 1.9% Month-Over-Month Sale-to-List Price Ratio Continues to Benefit Sellers, But Has Fallen Slightly From Its Peak in June Competitive Market Environment Persists Amid Inventory Deficit, With Nationwide Median Days on Market Down 18.4% Year-Over-Year HouseCanary, Inc. (“HouseCanary”), a national brokerage known for its real estate valuation accuracy, released its latest Market Pulse report, covering 22 listing-derived metrics and comparing data between August 2020 and August 2021. The Market Pulse is an ongoing review of proprietary data and insights from HouseCanary’s nationwide platform. Jeremy Sicklick, Co-Founder and Chief Executive Officer of HouseCanary, commented: “While properties across the U.S. continue to sell at record high prices, our latest data reveals that the breakneck pace of housing price growth has likely seen its peak and we expect it to decline in the coming months. Monthly single-family listing prices have plateaued since May, while closed prices continue to edge marginally higher on a month-over-month basis. Additionally, the sale-to-list price ratio has fallen slightly from its peak in June, bolstering our view that home prices – while still remarkably high – are beginning to show signs of cooling. Further, the Biden administration’s recently announced steps to increase the supply of affordable homes may significantly help U.S. homeowners and renters, who have suffered through a housing affordability crisis over the past year-and-a-half as homebuilding struggled to gain traction and the cost of materials ballooned.” Select findings from this month’s Market Pulse are below. Be sure to review the Market Pulse in full for extensive state-level data. Total Net New Listings: Since August 2020, there have been 3,181,376 net new listings placed on the market, which is an 11.2% increase versus the same period in 2019 Percentage of total net new listings over the last 52 weeks, broken down by home price: $0-$200k: 18.6% $200k-$400k: 41.5% $400k-$600k: 20.3% $600k-$1mm: 13.0% >$1mm: 6.6% Percent change in net new listing activity over the last 52 weeks versus the same period in 2019, broken down by home price: $0-$200k: (-16.7%) $200k-$400k: +2.7% $400k-$600k: +35.8% $600k-$1mm: +58.1% >$1mm: +64.9% Monthly Net New Listing Volume (Single-Family Detached Homes): Monthly new listing volume was down 8.5% compared to August 2020 In August, there were 308,286 net new listings placed on the market, representing a 10.7% decrease year-over-year Percent change in net new listing activity year-over-year, broken down by home price: $0-$200k: (-18.7%) $200k-$400k: (-16.2%) $400k-$600k: (-9.3%) $600k-$1mm: +2.4% >$1mm: +4.7% Listings Under Contract: Over the last 52 weeks, 3,418,989 properties have gone into contract, representing a 5.6% increase relative to the same period in 2019 Percentage of total contract volume since August 2020, broken down by home price: $0-$200k: 18.9% $200k-$400k: 41.8% $400k-$600k: 20.0% $600k-$1mm: 12.7% >$1mm: 6.6% Percent change in contract volume over the last 52 weeks versus the same period in 2019, broken down by home price: $0-$200k: (-22.2%) $200k-$400k: (-1.7%) $400k-$600k: +28.0% $600k-$1mm: +50.9% >$1mm: +68.4% Monthly Contract Volume (Single-Family Detached Homes): For the month of August, there were 359,817 listings that went under contract nationwide, which is a 5.3% decrease year-over-year For the month of August, the percent change in contract volume compared to August 2020, broken down by home price: $0-$200k: (-14.0%) $200k-$400k: (-10.5%) $400k-$600k: +6.4% $600k-$1mm: +9.1% >$1mm: +2.2% Median Listing Price Activity (Single-Family Detached Homes): For the week ending August 27, 2021, the median price of all single-family listings in the U.S. was $381,728, a 7.7% increase year-over-year For the week ending August 27, 2021, the median closed price of single-family listings in the U.S. was $390,768,a 17.0% increase year-over-year The median price of all single-family listings in the U.S. is down 1.9% month-over-month and the median price of closed listings has increased by 0.7% month-over-month As a nationwide real estate broker, HouseCanary’s broad multiple listing service (“MLS”) participation allows us to evaluate listing data and aggregate the number of new listings as well as the number of new listings going into contract for all single-family detached homes observed in the HouseCanary database. Using this data, HouseCanary continues to track listing volume, new listings, and median list price for 41 states and 50 individual Metropolitan Statistical Areas (“MSAs”). About HouseCanary Founded in 2013, valuation-focused real estate brokerage HouseCanary empowers consumers, financial institutions, investors, lenders, and mortgage investors, with industry-leading valuations, forecasts, and transaction support. These clients trust HouseCanary to fuel acquisition, underwriting, portfolio management, and more. Learn more at www.housecanary.com

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Homes are also taking longer to sell, but prices are up 15% from a year ago Pending home sales rose 9%, the slowest growth since June 2020, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. More home sellers have started slashing their prices—another sign of softening seasonal homebuyer demand. Still, prices remain elevated, up 15% from a year earlier. Additionally, the actual number of pending sales fell to the lowest level since April 2021. “The housing market has clearly become slightly more favorable to buyers,” said Redfin Chief Economist Daryl Fairweather. “Homes are taking longer to sell, which gives buyers more time to make thoughtful decisions about whether to make offers. Home prices have plateaued, so buyers shouldn’t feel rushed to buy before prices rise further. And the fact that more sellers are dropping their list price is a sign that sellers have to be realistic about their price expectations.” Key housing market takeaways for 400+ U.S. metro areas: Unless otherwise noted, this data covers the four-week period ending August 29. Redfin’s housing market data goes back through 2012. The median home-sale price increased 15% year over year to $359,983. Asking prices of newly listed homes were up 10% from the same time a year ago to a median of $354,665, the lowest level since late April. This was down 1.8% from the all-time high set during the four-week period ending June 27. New listings of homes for sale were nearly flat (-0.1%) from a year earlier. The number of homes being listed is in a typical seasonal decline, down 10% from the 2021 peak reached during the four-week period ending June 27. Active listings (the number of homes listed for sale at any point during the period) fell 22% from 2020. Active listings were up 17% from their 2021 low set during the four-week period ending March 7, but have declined 1% from their 2021 peak hit during the four-week period ending August 8. 48% of homes that went under contract had an accepted offer within the first two weeks on the market, above the 44% rate of a year earlier, but down 8 percentage points from the 2021 peak set during the four-week period ending March 28. 35% of homes that went under contract had an accepted offer within one week of hitting the market, up from 32% during the same period a year earlier, but down 8 percentage points from the 2021 peak reached during the four-week period ending March 28. Homes that sold were on the market for a median of 18 days, up from the all-time low of 15 days seen in late June and July, and down from 33 days a year earlier. 51% of homes sold above list price, up from 32% a year earlier. This measure has been falling since the four-week period ending July 11, when it peaked at 55%. On average, 5.1% of homes for sale each week had a price drop, up 1 percentage point from the same time in 2020, and the highest level since the four-week period ending October 13, 2019. The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, decreased to 101.5%. In other words, the average home sold for 1.5% above its asking price. This measure was down 0.7 percentage points from its peak hit during the four-week period ending July 11 and up 2.3 percentage points from a year earlier. Other leading indicators of homebuying activity: Mortgage purchase applications increased 1% week over week (seasonally adjusted) during the week ending August 27. For the week ending August 26, 30-year mortgage rates increased slightly to 2.87%. From January 1 to August 29, home tours were up 11%, compared to a 37% increase over the same period last year according to home tour technology company ShowingTime. The Redfin Homebuyer Demand Index edged up slightly from the previous week to its highest point since the week ending April 11, and was up 21% from a year earlier during the week ending August 29. The seasonally adjusted Redfin Homebuyer Demand Index is a measure of requests for home tours and other services from Redfin agents. To view the full report, including charts and methodology, please visit:https://www.redfin.com/news/housing-market-update-pending-sales-up-9pct/ About RedfinRedfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country’s #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.

Nomad Sets Its Sights on Becoming the Leader in the Landlord Insurance Industry

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Think of Nomad as Your Perfect Tenant After completing a successful venture capital raise, PJ O’Neil and Matt Thelen launched Nomad in Denver, Colorado, in 2020. Having been landlords themselves, O’Neil a “deliberate” landlord and Thelen an “accidental” landlord, they both knew of the potentially troubling consequences of tenants not paying their rent. Before co-founding Nomad, their paths crossed going back to their college days, but they did not even realize it or know what the future held in store for them. O’Neil and Thelen both attended the University of Colorado—Boulder; O’Neil earning a degree in Economics and Mathematics and Thelen earning a degree in Business and Finance. Later, they both earned their MBAs at the University of California—Berkeley. Post-MBA, O’Neil had several key positions within the industry prior to becoming the CEO of Nomad. Immediately prior to Nomad, he was the Expansion General Manager for Opendoor where he launched their Raleigh, San Antonio, Nashville, Minneapolis-St. Paul and Denver markets. Thelen, the “software guy”, was the Director of Strategy, Research & Insights for SendGrid. SendGrid was a high-growth and profitable SaaS category leader which was acquired by Twilio in early 2019. Thelen then became their Director of Business Operations. The Nomad Model Nomad is a valuable solution for rental property owners, residents, property managers and real estate agents. Nomad offers a Guaranteed Rent program to residential landlords, who for a small premium, can be assured of receiving timely rental payments for a term of 1-3 years. Along with receiving guaranteed rent, Nomad will also price, market, screen, and lease the properties, leaving the landlords to focus on property management. For the renters, Nomad offers rewards to their good tenants…in other words, they provide exemplary customer service. Along with their Guaranteed Rent program, they also offer the Nomad Mortgage program. The mortgage program qualifies a potential borrower based on credit score and rental amounts with no income verification. Getting Ready to Grow Currently, the co-founders are getting ready for their next round of capital raising which will allow them to expand beyond their current markets of Denver, Boulder, and Phoenix. But there is much more to the expansion strategies of these two entrepreneurs who are only in their mid-thirties. Nomad views their partners as extremely valuable force multipliers. One such partner is PlanOmatic, whom PJ was introduced to while at Opendoor. PlanOmatic enables Nomad to scale with extra “boots-on-ground” and they leverage PlanOmatic’s Property Insights product including condition reports, 3D home mapping, digital tours, and professional photography to help take their business to the next level. During the pandemic, PlanOmatic-provided 3D images were extremely important to Nomad so they could continue to grow while other companies were scaling back. PlanOmatic’s Property Insights now continues to allow Nomad to view property conditions virtually and eliminate multiple onsite vendor visits. A Value-Add Product A premium product offered by Nomad is Guaranteed Rent + Property Management. This upgrade is perfect for hands-off property owners who want all the benefits of traditional property management with the 2-years guaranteed rent only offered by Nomad. Additionally, landlords receive property marketing on 20+ websites, two months of rent paid upfront, preventative maintenance services, a dedicated account rep, and access to Nomad’s exclusive tenant network. All of these add up to a time-savings of over 120 hours typically incurred by DIY landlords. For additional information, visit www.nomadlease.com or email PJ O’Neil at pj@nomadlease.com.

How Realtors Can Best Work With Investors in a Small Market

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Learn to Speak the Investor Language by Scott Russell As a real estate professional, I have years of experience working with investors for both residential and commercial investment properties in Asheville, in particular. With moving patterns shifting due to the pandemic, investment properties are becoming more relevant, especially when it comes to apartment buildings and single-family residences. Therefore, if you’re a realtor working in a small market, you need to be strategic about how you market your services to investors if you want to guarantee the success of your real estate business. Since competition can be tough in a small market, investors have plenty of options to choose from. Here is some helpful information on how you can best work with investors in a small market so you can conduct worthy business in a professional and financially-sound manner. Speak Their Language The best way to work with investors and provide valuable service is to get into the investor’s mind. Do not equate real estate investors to first-time homebuyers or traditional buyers and sellers because they speak a different language. They don’t want to talk about how great the countertops look and why the color palette is great. The good news is that you don’t need to be a professional investor yourself to work with real estate investors successfully. All you need to do is familiarize yourself with the investor’s niche and strategy. For instance, what types of investment properties is the investor targeting? What’s their strategy when investing in these homes? Some investors prefer to fix and flip, while others buy, hold, and then sell when the market becomes favorable. Once you figure out the type of investor you’re dealing with, you will be in a better position to spot great deals that suit their needs. It’s important to understand that investors look at properties differently, and as a realtor, it’s your job to see things from their perspective. Investors like to hear about what their return on investment (ROI) is going to be and other concepts like net present value and cash-on-cash exchanges. These financial terms are key in the investment world. Net present value (NPV) is defined as an investment measure that tells an investor whether the investment is achieving a target yield at a given initial investment. The net present value is simply the present value of all future cash flows, discounted back to the present time at the appropriate discount rate, less the cost to acquire those cash flows. In other words, NPV is simply value minus cost. Cash-on-cash return is a quick real estate financial calculation used to measure the percentage of cash received in a given month or year compared to total cash invested. Cash on cash is expressed as a percentage while actual cash flow is expressed as a dollar amount. Streamline Your Communication Once you spot a great deal that your investor client may be interested in, it’s important to pass it along quickly before another investor snatches the offer. That means you need to streamline your communications process to inform the investor of any new properties. Investors are used to acting quickly, and they will appreciate you bringing bargains to their table, as this increases their ROI. However, the only way they can benefit is if you provide the information as quickly as possible. One thing that can help you respond quickly to your investor’s needs is to incorporate technology into the process. If your investor has no problem working on multiple deals, it means you may have a ton of paperwork to go through. However, you can cut out some of the work by going paperless and perhaps taking advantage of a real estate transaction platform to facilitate transactions quickly and nail more deals for your client. Add Extra Value to the Business Relationship If you want to become the go-to realtor for your investor clients, you need to find additional ways to make your services valuable. As mentioned, you can start by learning to speak the language of your investor and finding out what their investment strategy and goals involve. You can take things a step further by helping the investor pre-screen real estate investment properties. This can be achieved by finding out which formula investors use to evaluate and select their purchases. You also need to do your market homework and provide your investor with helpful information about the current hot markets and potential ones. You can connect your investors with tradespeople, contractors, tax advisors, and other referrals they may be looking for. Finally, you can add more value to your services by joining a real investor group to spruce up your knowledge of the real estate investment market. This can help you learn more about what real investors in your area are interested in and which properties have the potential to excite them. How Investors Can Help On the flip side, investors can make life easier for realtors by providing as much information as possible. For instance, they should be clear about their criteria when assessing a property and what qualities they look for in an investment home. They should also be clear about what role they expect the realtor to play and the kind of relationship they need. These tips can help set the tone for a successful relationship between realtors and investors in a small market. By banding together, a realtor and an investor can both be prosperous. Suppose you’re an investor with a reputable and capable realtor. In that case, your bottom line can be improved by working with an expert with skills that complement yours and that allow your operations to become more efficient.