May 2024 – Page 5

THE BEST TIME TO SELL A HOME IS IN THE FIRST HALF OF THE YEAR

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New study shows home sellers see 13.1 percent premium in May; Annual analysis also looks at best months and days to sell a home ATTOM, a leading curator of land, property, and real estate data, released its annual analysis of the best days of the year to sell a home, which shows that based on home sales over the past 13 years, the months of May, February and April offer the highest seller premiums – making this month the time to sell your home. An analysis of over 59 million single-family home and condo sales from 2011 to 2023 shows that listing a property in May, February, or April can yield higher seller premiums. The data suggests that from early in the year through summer is not only the busiest season for home buying but also the best time for sellers to list their properties. Therefore, it might be the ideal moment to place your home on the market. May is Prime Time to Sell: Top Months to Sell a Home Infographic Best Months to SellThe analysis also took a more high-level look and showcased how seller premiums faired throughout the year and broke it out by month. The months realizing the greatest seller premiums were as follows: May (13.1 percent); February (12.8 percent); April (12.5 percent); June (12.4 percent); March (12.2 percent); January (10.6 percent); August (10.3 percent); December (10.0 percent); July (10.0 percent); November (9.5 percent); September (9.5 percent), and October (8.8 percent). 2011 to 2023 Sales of Single-Family Homes and Condos Month Number of Sales Median Sales Price Median AVM Seller Premium May 5,360,810 $ 230,000 $ 203,338 13.1 % February 3,641,631 $ 212,000 $ 188,000 12.8 % April 4,880,248 $ 225,000 $ 200,000 12.5 % June 5,834,131 $ 237,500 $ 211,231 12.4 % March 4,805,396 $ 220,000 $ 196,000 12.2 % January 3,748,598 $ 210,000 $ 189,900 10.6 % August 5,739,527 $ 235,000 $ 213,000 10.3 % December 4,695,330 $ 230,000 $ 209,000 10.0 % July 5,611,269 $ 235,600 $ 214,100 10.0 % November 4,470,550 $ 230,000 $ 210,000 9.5 % September 5,102,736 $ 231,750 $ 211,722 9.5 % October 5,118,966 $ 228,500 $ 210,000 8.8 % Best Days to SellATTOM also took a deeper dive to uncover the best days to sell a home. The top 20 days fell in the months of May, February, March, and June. Starting with May 27th being the best day to sell a home, with a seller premium of 16.2 percent. Followed by February 25th (15.9 percent); February 17th (15.8 percent); February 15th (15.7 percent); February 22nd (15.5 percent); May 25th (15.4 percent); March 30th (15.2 percent); March 25th (15.1 percent); February 28th (15.0 percent); and February 24th (15.0 percent). Media Contact:Megan HuntMegan.hunt@attomdata.com Data and Report Licensing:949.502.8313datareports@attomdata.com SOURCE ATTOM

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The Required Household Income to Purchase a Home Exceeds $250,000 in Four California Metros According to the Realtor.com® April housing data, the national required household income to purchase the median priced home rose to $116,000, up $5,900 from a year ago, after accounting for the cost of tax and insurance. For hopeful buyers in California’s major metros of Los Angeles, San Diego, San Francisco and San Jose the household income required to purchase the median-priced home is over double the national figure. April 2024 Housing Metrics – National Metric Change over Apr 2023 Change over Apr 2019 Median listing price +0% (to $430,000) +36.5 % Active listings +30.4 % -35.4 % New listings +12.1 % -21.8 % Median days on market +1 days (to 47 days) -7 days Share of active listings with pricereductions +3.2 percentage points(to 15.5%) +1.0 percentage points “California is a fascinating market not only because the income-required figures are an eye-popping quarter of a million dollars, but because it is a microcosm of the variety we’re seeing in housing markets nationally,” said Danielle Hale, Chief Economist, Realtor.com®. “In areas like San Francisco home prices have fallen enough to offset rising mortgage rates, and the income needed to buy a home has dropped. In other markets, like San Jose and Sacramento, home price declines have been more modest and rising mortgage rates have pushed required incomes higher despite lower home prices. And finally, the majority of major U.S. markets see trends like we’re seeing in Southern California. In Los Angeles, Riverside, and San Diego rising home prices and mortgage rates have combined to push required incomes higher—in some cases like in these California markets, up by double-digits compared to one year ago.” Buying in California Comes at a PriceSix metros across the country required a household income of over $200,000, with California’s largest metros leading the pack: San Jose (household income $361,000), Los Angeles (household income $298,000), San Diego (household income $259,000) and San Francisco (household income $256,000). The major East coast hubs of Boston (household income $226,000) and New York (household income $218,000) closely followed. Counter to the larger household income required to purchase the median-priced home in the major coastal metros, there were 16 metro areas that required a household income of less than $100,000. The most affordable by this measure were Pittsburgh (household income $67,000), Detroit (household income $69,000), and Cleveland (household income $71,000). List of the 10 Metro Areas with Lowest Required Income to Purchase Median Home Fear Not, Affordable Inventory is Also on the RiseWhile the west coast state experienced a bit of a surge in household required income to purchase the median-priced home, in other parts of the country, affordable inventory is on the rise. The South has been largely driving the increase in availability of homes in the $200,000 to $350,000 price range, and the increase in availability of homes overall. More than half (56.6%) of available inventory in April 2024 was in the South, up from 52.0% last year and 47.7% in April 2019. A rise in homes available for purchase combined with population migration has paved the way for the South to lead the share of nationwide existing home sales, rising from 43.2% in March 2019 to 45.3% in March 2024. Across the country active inventory grew over the previous year with inventory in the South growing 43.0%, 27.4% in the West, 17.6% in the Midwest, and 4.0% in the Northeast. Interestingly, large Florida metros experienced inventory growth driven primarily by an increase in the availability of attached homes (condos, townhomes, or row homes). Median List Price Stays Stable, but Price per Square Foot Inches its Way UpBetween March 2024 and April 2024, the U.S. median list price increased from $424,900 to $430,000, while remaining stable compared to the same median list price in April of last year. This is likely attributed to the mix of homes hitting the market particularly in the South where sellers are listing smaller and more affordable homes. While median list price has remained relatively unchanged, the median list price grew 3.8% on an adjusted per-square-foot basis indicating that homes are retaining value even as inventory grows. Additional details and full analysis of the market inventory levels, income requirements, trends in listing prices and more can be found in the Realtor.com® April Monthly Housing Report. For buyers looking to gain more local-market insights to guide their decision making, visit realtor.com/research to access online tools and better understand ways to partner with an experienced buyer’s agent for help along the way. SOURCE Realtor.com

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40% expect home prices to decline in 2024, up from 32% in 2023 and 17% in 2022 29% expect rents to decline in 2024, up from 16 percent in 2023 49% describe their local real estate market as “overvalued with correction possible” 60% still expect to increase investment property purchases in 2024 Auction.com, the nation’s leading distressed real estate marketplace, released its 2024 Buyer Insights report, which shows that an increasing share of local community developers buying distressed properties at auction expect home prices and rents to decline in their local market. Forty percent of buyers surveyed said they expect home prices to decline in 2024, up from 32 percent in a 2023 survey and up from 17 percent in a 2022 survey. Buyers in the Southeast were most bearish on home prices (46 percent expecting a decline), and buyers in the West were least bearish (35 percent expecting a decline). Nearly half of buyers (49 percent) described their local market as “overvalued with correction possible.” Nearly three in 10 buyers surveyed (29 percent) said they expect rents to decrease in the coming year, up from 16 percent of buyers surveyed in 2023. Buyers in the West were most bearish about rents (35 percent expecting a decline), and buyers in the in the Northeast were least bearish (25 percent expecting a decline). Buyers Still Bullish on Acquisitions Despite being increasingly bearish on retail home price appreciation and rents, buyers were increasingly bullish on property acquisitions. Sixty percent of buyers surveyed said they expect to increase property purchases in 2024, up from 54 percent who expected to increase property purchases in 2023. Most buyers aren’t expecting to lower their maximum bids at auction in 2024. More than half (56 percent) plan to keep their maximum bid calculation relative to property value the same while 21 percent said they plan to increase their maximum bid calculation. The 2024 Buyer Insights Report is based on a January 2024 survey of more than 400 Auction.com buyers from across the country. More than nine in 10 buyers surveyed described themselves as local community developers who purchased fewer than 10 properties in 2023. Other survey findings in the report: To view the full report: https://www.auction.com/lp/in-the-news/2024-buyer-insights-report/ About Auction.com Auction.com is the nation’s leading online marketplace for the disposition of distressed residential properties. The company goes beyond traditional disposition programs, offering tools and services that stabilize neighborhoods, expand homeownership, maximize sales, shorten the sales cycle, yield higher returns, mitigate risks and elevate results. Our seller strategy includes customized and flexible programs, data intelligence and buyer insights, and pioneering technology. This includes Remote Bid®, which expands the buyer base nationwide by letting buyers bid on and win select foreclosure sales from anywhere, and Portfolio Interact™, featuring Bid Interact™. The national footprint for online and in-person auctions includes all 50 states, as well as Washington, DC, and Puerto Rico. Auction.com is headquartered in Irvine, CA, with offices in key markets nationwide. Contact Daren BlomquistAuction.com Tel.949.355.3371 Email: dblomquist@auction.com

ARK Homes For Rent

by Carole VanSickle Ellis
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ARK Homes For Rent has Laser Focus on Resident Experience By Carole VanSickle Ellis When ARK Homes For Rent founder Jordan Kavana founded the data-driven single-family-residential management company that would eventually evolve into ARK Homes, the idea of SFR as an industry was barely a blip on the industry radar. That company, which prided itself on handling the entire spectrum of property management from research and acquisition to renovations, renting, and resale all in-house, worked with strategic partners to complete more than $5 billion in real estate transactions in the southeastern United States before establishing ARK Homes in 2021. Kavana, who now serves as chairman of the company, continues to guide corporate focus toward the SFR residential experience, debuting innovative products and health and wellness strategies to complement and optimize ARK’s fully integrated management and investment strategy. “Because we are a fully integrated property ownership and management company, we have full control over ARK Homes For Rent’s growth, its resident experiences, and operations,” said CEO John Isakson. “ARK Homes prides itself on being as focused on the residential experience as on the real estate.” “The SFR industry is a small, intimate vertical,” observed COO Miles Adams. “Our willingness to embrace technology, innovation, and continuous improvements makes ARK Homes stand out. We are really proud of our work, especially from a people perspective.” New Homes Net Optimal Results Isakson explained that one of the most important ways ARK Homes For Rent demonstrates commitment to resident experience is the company’s determination to acquire only new construction homes. This keeps repairs and maintenance to a minimum in most cases, he said, as well as helping both ARK Homes and residents avoid the inconvenience and expense associated with the major capital expenditures that often accompany renovation and maintenance (R&M) in older properties. “If you look at our competitors in this space who do acquire older homes, you can see their R&M and CapEx rates are much higher,” Isakson concluded. “Our strategy is unique and so successful partly because we only buy new homes,” Adams chimed in. “This makes our product particularly attractive in the southeast and in Texas.” The Southeast remains a hot spot for new and relatively affordable new construction, permitting more residents access to this type of rental property even if personal preference, interest rates, or general affordability issues prevent them from owning the home. “The rental rates on a new-construction home acquired by ARK Homes For Rent are also typically significantly less than what it would cost a resident to own the same home in the same location,” Isakson noted, citing a recent article in the Wall Street Journal in which two ARK Homes residents described their decision-making process around opting to rent in the Atlanta, Georgia, area instead of buying a home. “They preferred to have that $400 or $500 in their pockets each month rather than own the home,” he continued. “In our resident base, we are seeing a big move away from homeownership and the financial strain that can be associated with it.” In that WSJ article, satisfied ARK Homes resident Alicia Couch described the decision this way: “It is not that we cannot afford to buy; it is that we don’t want to and we don’t feel like it’s worth it.” She said they planned to buy new furniture and repaint their daughter’s bedroom, taken three vacations in the last 12 months, and added to their savings as a result of renting from ARK instead of buying a home. She also noted the benefits of not having to deal with landscaping issues, such as mowing the lawn. “It is all about making sure we have the right properties and we are communicating with residents in the right ways to enrich their lives,” Adams said. “We are constantly expanding and evolving solutions throughout our company.” Prioritizing Health & Wellness in Residents and Residences Another element that makes ARK Homes stand out among other SFR providers is its ARK Homes For Rent app featuring its ARK Living platform, a proprietary software received by every resident upon acceptance of their application. The app features many typical features associated with SFR residential apps, including access to repair and maintenance professionals, pest control, and rent payments. However, ARK Living also contains a popular wellness element Isakson credits as the reason for ARK’s high level of resident engagement. “It is one of the most robust programs in the industry,” he said proudly. The ARK Living app was designed not just to fulfill logistical requirements for residents and management teams, but also to create community and promote wellness, Adams explained. “We do not want to offer just the commodity of a roof and four walls. We want to make sure our residents have access to custom content that will help them with the things they are interested in from a personal perspective, be it better sleep, exercise, meditation, or other elements of their resident experience.” Isakson called the acceptance rate for the app since its debut earlier this year “tremendous,” and he credited founder Jordan Kavana with the idea for the program. “The idea is that the app answers the question, ‘How can we do good, create value, and also help retain our residents?’” Isakson said, noting the ARK Homes For Rent resident tends be getting married or is already married, has children or is planning on having children in the near future, thinking hard about school systems, and “simply does not want to move all the time.” He concluded, “It cannot be ‘just about the rent check;’ it has to be about community and a sense of wellbeing. When we achieve that, we provide people a place to live that truly feels like home.” Creating the Best Opportunities in the “Forever Renter” Trend In 2022, ApartmentList.com reported that the percentage of Millennial renters who were planning to “rent forever” had hit an all-time high of 18%, up from 11% just four years (and a global pandemic) prior. At that time, Forbes contributor

Bridgeport, Connecticut

by Carole VanSickle Ellis
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“Park City” Real Estate Bucks Post-Pandemic Trends, Presents Headwinds By Carole VanSickle Ellis All around the United States, luxury real estate markets are softening, but Bridgeport, Connecticut, also known as “Park City” for its 1,300 acres of public parks, is home to one of only three luxury markets bucking the trend. In the northeastern town that shares a metropolitan statistical area (MSA) with Stamford, Connecticut, luxury property listings increased toward the end of 2023 while prices in this housing tier continued to rise. In fact, the entirety of the Bridgeport market is still going strong in 2024 due to ongoing, strong demand for housing in the area and limited inventory. Bridgeport is part of a cluster of northeastern markets designated by Realtor.com as some of the hottest housing markets in the country. These markets, wrote Realtor.com economic research analyst Hannah Jones in June of last year, “boast strong employment conditions…high housing demand, and tight inventory.” For real estate investors, the Bridgeport market is more accessible than many other northeastern markets due to the availability of land for multifamily development and a relatively large number of older WWII-era homes in need of updates and renovations. “About 40% of Bridgeport’s housing stock was built prior to 1940 and would benefit from the kinds of energy-saving, cost-saving upgrades that would occur more routinely in a housing market that features significant new production,” noted city planners in a 2023 housing analysis. “Bridgeport is home to a great concentration of construction-related businesses… [and] this industry-cluster uniquely positions the city to capitalize on increased housing production,” the research team concluded. “Residential development can be a core industry within Bridgeport just as it is in the U.S.” “[Bridgeport] has been sort of a diamond in the rough, but we are getting discovered,” local developer John Guedes told the New York Times in late 2023. Guedes. His construction firm had just acquired a former Holiday Inn and announced plans to convert the 268-room hotel into roughly 100 one- and two-bedroom luxury apartments catering to young professionals. Guedes predicted his residents would likely “take the train for work to New York City” and would pay rents averaging $2,750 a month. The project has been underway since 2022, when the hotel closed its doors and fell victim to hospitality industry struggles in the wake of the COVID-19 pandemic. Guedes’s company, Primrose Companies, recently received approval to move forward with a riverfront condominium development on the Housatonic River after a local judge ruled its application for development rights could not be denied by the municipal Planning and Zoning board, which had bogged down the process for six years. Guedes expects those townhouse units to list for just under $500,000. The ruling is important for Guedes and other local developers because the judge stated in the ruling, “If an application conforms to regulations, the board has no discretion and must approve it.” As is the case in many markets presently, Bridgeport’s housing inventory struggles with affordable housing availability. For investors, the acquisition process is challenging because many owners are electing not to sell due to difficulties finding and financing another home in the area. A Prime Location for Commuters, but More Single-Family Housing is Needed Thanks to a median home price more than $100,000 lower than national prices, more than $450,000 lower than median prices in New York City, Bridgeport has emerged as an ideal location for commuters to the Big Apple. Trips into New York City and surrounding areas are entirely manageable by train, bus, or ferry. Commuters on the Metro-North railroad reach Manhattan in less than an hour. To serve this commuting population, Bridgeport has a number of multifamily developments currently underway. However, local inventory of single-family residences remains low. In 2023, Bridgeport posted a 61% year-over-year increase in housing permits, but most of those permits were for multifamily buildings. Interest in multifamily assets from out-of-state investors has also pushed demand for these developments (and their price tags) higher, creating a space in the market for investors willing to think creatively about the creation and acquisition of single-family properties. Connecticut Realty Trust chairman Robert Kligerman told the Hartford Business Journal in late 2023 rising prices in the distressed multi-family sector pushed his family company into build-to-rent single family residential (SFR) construction and duplex developments. Kligerman leveraged the purchase of a multifamily property with an attached 35 acres approved for single-family development in neighboring Danbury to ultimately build 23 duplex-style houses and 19 single-family homes that will be exclusively rentals. The community includes a pool, clubhouse, and dog park, and residents pay between $3,400 and $4,500 a month in rent for their units. However, there is an ongoing need for more single-family housing. In March 2024, Construction Coverage ranked Bridgeport in its “Bottom 15” for small cities with single-family homes. Currently, only about 41% of housing in Bridgeport is single-family. Local real estate professionals and analysts blame the failure of local, residential construction to “bounce back” after the 2008 housing crisis. According to data from the Connecticut Department of Economic and Community Development, residential construction rates were far below peaks reached in the early 2000s and actually falling in 2015 and 2016, when the rest of the country was marking the start of recovery from the Great Recession and the housing and financial meltdowns. A combination of suppressive factors contributes to Bridgeport’s lack of single-family residential construction, writes CT Mirror housing reporter Ginny Monk. “The state faces a shortage of construction workers as well as rising costs of land and materials,” she said, adding, “Many construction projects are also slowed or halted by what experts say are restrictive local zoning ordinances.” For an investor able to acquire properties for renovation or develop new single-family units, there is great opportunity in Bridgeport. Connecticut has tried to incentivize developers to build more units of all types and consistently include “middle-income units” through a combination of tax credits, loans, and grants, but experts say inventory will not loosen any time soon. Nandini Natajaran,

Building the Future

by John Ryan, NPLA
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The Digital Transformation of Construction & Renovation Finance By John Ryan A digital transformation is coming quickly to the construction and renovation lending industry. Two main catalysts have contributed to this emerging shift — the rapid advances in technology and an influx of private capital seeking to fill the void left by the regional bank system pullback. Business leaders and staff are using this period of higher interest rates to invest in operational efficiencies, data driven risk management, and the client experience to scale more safely and keep costs in check ahead of the next cycle. Even now with interest rates high, industry estimates of the full residential construction, renovation, and bridge lending wallet are around $450B annually. That number can be debated and broken down by business line, asset type, what’s addressable, lender type, etc. but in the end one thing is clear, there is considerable opportunity. In order to capitalize on this opportunity, lenders are embracing technology that will revolutionize the way construction funds are managed, from enhancing the precision of risk analysis to streamlining communication among stakeholders. By adopting digital platforms, the industry can move away from its reliance on outdated methods and shift toward a future where financial decisions are data-driven, timely, and more secure. The regional bank retreat was not merely a reaction to immediate financial pressures, it also reflected a broader reassessment of risk and return in the construction sector, historically viewed as high-risk by financial institutions. But now technology can help mitigate some of the age-old fears of construction lending and be a tool for the continued institutionalization of the industry. And private money lenders have been first movers to act and we are now seeing a tremendous influx of private capital into the housing construction and renovation sector where it is desperately needed. As a lender considers undergoing a digital transformation, it is critical for the key stakeholders to understand the industry landscape today, where it’s going, and how to get started on making a decision on which technology solution is right for them. The Current Technology Landscape Today, the industry is served by a host of Loan Operating Systems (LOS) which primarily focus on loan structuring. This includes the upfront ingestion of a loan, document management, and ongoing data exchange with servicers. A few long established, proficient vendors and a swath of homegrown systems serve the market needs. Borrower portals are either non-existent, embedded in the LOS platform, or again, homegrown technology with varying degrees of borrower adoption. Once a loan is approved, the bulk of construction and renovation loans are managed through a complex web of spreadsheets, emails, and text messages. These manual processes are opaque and hard to scale, posing significant operating challenges including a lack of efficiency and transparency often leading to delays, cost and staffing overruns, and the inability to capitalize on potential opportunities for innovation and growth. A traditional non-digital approach to construction fund-control also increases key-person risk and intuition or “gut feelings” rather than data-driven insights. While large-scale projects may benefit somewhat from structured processes like the G702 forms, smaller residential construction and renovation projects lack standardized procedures, leaving them vulnerable to inconsistencies and inaccuracies in budget monitoring and risk assessment. Tech-forward and well-capitalized lenders may build internal systems to manage the workflow with their clients. The results may serve the lender well, however it’s important to note lenders bear the upfront cost of development and ongoing opex related to technology ownership and staffing and therefore are spending time and resources for non-core competency business. Further, most home-grown workflows are internal staff focused and do not tackle the more challenging aspects of providing a well adopted self-service program for customers with high borrower satisfaction. Other lenders use older technology or captive software systems provided by inspection companies. However, actual decisioning and customer experience typically remain in offline spreadsheets where staff are still inputting draws on the behalf of borrowers. Lacking a true auditable transaction flow, over-disbursement errors can still occur. The broader construction and renovation lending ecosystem also involves numerous stakeholders, including lenders, note buyers, warehouse lenders, borrowers, contractors, and government entities, each with their own preferences and requirements. Aligning these diverse perspectives requires extensive communication and decision-making, potentially leading to inefficiencies and delays. Technology provides the architecture to streamline this system. Thankfully, private lenders and their capital partners are leading the charge in demanding innovative, off-the-shelf construction portfolio solutions and technologies to enhance risk controls, streamline lending processes, and leverage data for predictive analytics and reporting. Embracing a technological edge naturally improves the client experience, adding to the many reasons professional real estate investors and developers favor private lenders. What Does the Future of Construction Finance Look Like? The future is digital. At TrustPoint, we offer the construction and renovation lending industry a modern SaaS platform to streamline operations through our smart, purpose-built workflow. Our proprietary technology takes unstructured data and structures it to enable our innovative data-driven portfolio risk management and analytics. Our solution includes auditable fund control, integration with third party vendors, project health scoring, predictive insights into loan performance, cash forecasting visibility, and much more. The platform’s technology leverages the latest in artificial intelligence to analyze vast amounts of data in real-time, enabling lenders to assess the risk and viability of construction projects with unprecedented speed and accuracy. The integration of AI-powered decision engines into construction finance platforms represents a significant leap forward in how financing decisions are made. This exciting journey has only just begun. It is essential to evaluate your return on investment (ROI) when evaluating the cost of adding technology. TrustPoint’s returns come from improved scalability, auditability, and decision making with granular budget tracking, integrated inspection, approval, risk-scoring, and more. Lenders experience higher customer satisfaction (TrustPoint has an 86 NPS) and reduced support load with a highly utilized borrower portal (89% of borrowers self-service through our platform) and real time transparency into request status. They gain enhanced visibility and performance insights for leadership and investors with portfolio