July 2024 – Page 2

Nearly Two-Thirds of Gen Z and Millennials Are Ready to Become Homeowners

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New data reveals that although the younger generations have considerations about affordability, they are ready to own a home and view it as an important part of life. The dream of homeownership remains an integral part of life for Gen Z and Millennials in the U.S., who continue to feel that owning a home is important despite market conditions. In a consumer survey, RE/MAX, the #1 name in real estate, showcases Gen Z and Millennials’ attitudes toward homeownership. Over the past several years, the housing market has seen fluctuating inventory levels, home prices, and interest rates. As the survey reveals, market conditions are not causing prospective buyers to reconsider their plans to purchase. In fact, 63% of Gen Z and Millennial respondents indicate they are interested, eager and ready to become homeowners, even though they have some considerations around housing prices, interest rates, etc. “Homeownership is still an important milestone, and our survey shows that Gen Z and Millennials are ready to achieve it,” says Amy Lessinger, President of RE/MAX, LLC. “While current market conditions have impacted timelines, this next generation of homebuyers is resolute in their desire to achieve homeownership. It’s up to us as real estate agents to provide them with the right tools and guidance to help them reach their goals of homeownership.” Key survey findings include: Gen Z and Millennials are Ready to Become Homeowners Buyers in these generations are ready to purchase a home but have some reservations. Americans View Homeownership as an Important Part of Life Gen Z and Millennials continue to view homeownership as an important life milestone. Millennials are More Confident in Their Financial Readiness Many respondents are confident in their knowledge of the homebuying process and their financial readiness to buy a home. Buyers Want Professional Guidance When Buying and Selling Gen Z and Millennials are planning to use real estate agents when buying or selling a home to help guide them through the housing market and homebuying and selling process To review additional results from the survey, please visit news.remax.com. SOURCE RE/MAX, LLC

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The number of cities with ‘million-dollar’ starter homes has nearly tripled since 2019 A million-dollar price tag no longer means lavish and luxurious living. In more than 200 U.S. cities, buyers will find a price tag of $1 million or more on the typical starter home, a new Zillow® analysis finds. The typical “starter home” — defined for this analysis as being among those in the lowest third of home values in a given region — is worth at least $1 million in 237 cities, the highest number of cities ever. Five years ago, there were only 84 such cities. Nationwide, the typical starter home is worth $196,611, which is comfortably affordable for a median-income household. But a housing shortage that worsened over the pandemic helped drive the cost of all homes to new heights. Starter home values have grown 54.1% over the past five years, even more than the 49.1% increase for the typical U.S. home in the same time frame. That has delayed the first home purchase for many. The median age of a first-time home buyer was 35 last year, a year older than in 2019. “Home buyers are battling affordability and availability today. So much so that $1 million is the norm for a starter home in hundreds of cities,” said Orphe Divounguy, a senior economist at Zillow. “However, it’s looking more and more like there will be some good news ahead for first-time buyers. More homes are for sale, price cuts are on the rise, and buyers have a few more days to weigh their options as homes sit on the market.” Exactly half of all states have at least one city with a typical starter home worth $1 million or more. There are 117 such cities in California, well ahead of New York (31) and New Jersey (21), which have the second- and third-highest numbers. Florida and Massachusetts round out the top five with 11 each. Among metropolitan areas, the New York City metro, which includes parts of New Jersey and Pennsylvania, has the most cities with million-dollar starter homes at 48. The San Francisco metro has the next highest count at 44, followed by Los Angeles (35), San Jose (15), and Miami and Seattle, each with eight. Irvine, with a population of more than 300,000, is the biggest city with $1 million starter homes. Markets with the most-restrictive building regulations tend to have more cities with $1 million starter homes. They are also markets with lower homeownership rates. State Cities with Million-DollarStarter Homes (June 2024) Cities with Million-DollarStarter Homes (June 2023) Cities with Million-DollarStarter Homes (June 2019) California 117 98 53 New York 31 26 13 New Jersey 21 15 2 Florida 11 10 4 Massachusetts 11 9 0 Washington 8 8 5 Texas 7 6 1 Hawaii 5 4 1 Connecticut 4 2 0 Colorado 3 3 1 Wyoming 3 1 0 Maryland 2 2 1 South Carolina 2 2 1 Arizona 1 1 1 Georgia 1 1 1 Kansas 1 1 0 Michigan 1 1 0 Minnesota 1 1 0 Missouri 1 1 0 Nevada 1 1 0 New Hampshire 1 1 0 Virginia 1 1 0 Illinois 1 0 0 Rhode Island 1 0 0 Utah 1 0 0 SOURCE Zillow

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Lima One Capital, a leading nationwide lender for real estate investors, has named Josh Woodward as its new President and Chief Executive Officer. Woodward joined Lima One in 2013 as one of the company’s first six employees. He has served as Chief Financial Officer, playing an integral role in building Lima One’s accounting, finance, capital markets, servicing, and special servicing teams, as well as in the development of its FixNFlip, New Construction, and Rental30 products. During his tenure, the company has grown to more than 300 employees and surpassed $2 billion per year in residential real estate investment loan originations. “I have been fortunate to work with an incredible group of people over the last 11 years and I am very grateful for this opportunity to serve our special organization,” Woodward said. “Our loans have helped provide financing for over 30,000 houses and apartments across the country. We will continue to be one of the top business-purpose lenders in the nation by focusing on our core values, outstanding service for our customers, and operational excellence.” Woodward has claimed industry honors as a Finance Leader in mortgage by HousingWire (2021) and as a Rising Star in real estate by HousingWire (2024), IMN’s SFR Industry Awards (2022), and Business Insider (2021). He was also named one of Greenville, S.C.’s best and brightest in 2016. Prior to joining Lima One, Woodward worked in Bank of America’s Enterprise Capital Management Group. He earned his MBA from the University of North Carolina’s Kenan-Flagler School of Business, specializing in Corporate Finance, and his B.S. from Clemson University. Woodward replaces Jeff Tennyson, who retired in July as Lima One’s CEO. Over the last six years, Tennyson has led Lima One through significant growth, and he leaves Lima One with a very strong industry-leading position. Lima One wishes Jeff all the best in his future endeavors. Contact:Robert Neelyrneely@limaone.com

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Austin, TX, Oklahoma City, OK, and Birmingham, AL, grab the top three spots with a combination of affordable rental options, economic opportunity, and short commutes With a surge of would-be renters in the market right now, a new report, Top 10 Markets for Renters, from Realtor.com® found cities in the South and Midwest rank highest for their rental affordability, rental availability, economic growth and shorter than average commute times, making them prime destinations for those seeking both opportunity and quality of life. Austin, Texas took the top spot with a rent-to-income ratio of 19.7% and a high rental vacancy rate of 9.0%, leading to strong affordability and availability for renters. Oklahoma City ranked second, followed by Birmingham, Ala., San Antonio and Minneapolis. Each of these leading cities is experiencing economic growth, attracting many young professionals. Austin (No. 1 on the list) and Raleigh (No. 9) were also named top rental markets for 2024 college graduates. “Over the last year, we continued to see strong demand for rental properties, especially among younger generations prioritizing the benefits of renting, like flexibility and relative affordability, while home prices and mortgage rates remain high,” said Danielle Hale, Chief Economist at Realtor.com®. “Despite high demand, there are some bright spots in the rental market around the U.S. in cities and towns that offer renters good job opportunities, a decent commute, flexible lease terms, maintenance free amenities, and more rental options to choose from at relatively affordable prices.” While no cities from the Northeast or West made it into the top 10, Lawrence, Mass., in the Boston metro area, is the top rental market in the Northeast, and Denver leads in the West; however, the relatively low rental affordability and low rental vacancy rates in both of these markets caused them to rank below the top 10. These Cities Lead the Way When It Comes to Affordable RentThe ratio of median rent to household income shows the percentage of income spent on housing. Lower is better, since that typically means households have more income to spend on other things. The top markets as a group are located in metro areas that have an average rent-to-income ratio of 21.0%, suggesting rents made up 21% of a typical household income, on average. A traditional rule of thumb is that no more than 30% of a household’s gross income should go to housing expenses. Among the top 10 markets, the rent-to-income ranged from a low of 17.7%, seen in Oklahoma City, to 23.8% in Nashville, Tenn. More Rental Vacancies Means More Options for RentersA common feature among the top 10 markets is a favorable rental vacancy rate. With more rental options to choose from, renters in these cities may wield greater bargaining power when negotiating with landlords. The top markets as a group are located within metro areas that have an average rental vacancy rate of 8.8%, surpassing both the town/city average of 6.4% and the metro average of 6.9%. Among the top 10 markets, the rental vacancy rate ranges from 5.2% to 12.3%. Birmingham (12.3%), boasts the highest rental vacancy rate and Norfolk, Va. (5.2%) has the lowest rate. Additionally, cities in Southern metros such as Nashville (9.2%) and Austin (9.0%) both rank prominently for rental availability. One important explanation for the higher vacancy rates in the top markets could be the surge in new multi-family construction and completion in the South and Midwest, which expanded the overall rental inventory. Economic Opportunities Lead to a Stable Job Market and More OpportunitiesA lower forecasted unemployment rate indicates that renters might face less competition when looking for jobs, suggesting better job security. The top 10 markets as a group are located within metro areas that have an average forecasted 2024 unemployment rate of 3.3%, lower than the 4.0% forecasted town/city average. The unemployment rates in the top 10 markets ranged from a low of 2.9%, in both Minneapolis and Nashville, to a high of 3.5% in Birmingham, Ala., and San Antonio. The top markets as a group are located within metro areas that have a high average online job posting index. The online job opening market is measured by the Indeed Job Posting Index; the higher the index, the greater the increase in job availability compared to that pre-pandemic baseline. Nashville experienced the highest increase of job openings when compared to the pre-pandemic period. Additionally, cities like San Antonio and Sandy Springs, Ga., both rank high for job openings. Shorter than Average Commutes Common Across the Top 10 Cities In addition to abundant rental options and relatively affordable rents, these top markets also offer benefits that may enhance their quality of life. For example, many renters in our top 10 markets benefit from shorter commutes. The top cities on our list boast an average expected commute time of 25 minutes in 2024, this translates to a potential saving of 43 hours per year for a commuter traveling five days a week. The top cities and towns had average commutes ranging from a low of 24 minutes – seen in Oklahoma City, Birmingham, Ala., Minneapolis and Kansas City, Kan. – to a high of 27 minutes in Sandy Springs, Ga. SOURCE Realtor.com

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Returns on Typical U.S. Home Sales Increase Slightly to 56 Percent; Margins Generally Flat Even as Median U.S. Home Price Hits New High During Spring Buying Season; Median Raw Profits Rise Back Over $130,000 ATTOM, a leading curator of land, property, and real estate data, released its second-quarter 2024 U.S. Home Sales Report, which shows that home sellers earned a 55.8 percent profit margin on typical single-family home and condo sales in the United States during the second quarter. That figure was largely unchanged, rising about one percentage point from the first quarter of 2024, but remaining down one point from the second quarter of last year. The nationwide investment return barely moved, and still was far behind a highwater mark hit in 2022, despite the median U.S. home price shooting up during the 2024 Spring home-buying season to a new record of $365,000. The price surge did help boost typical raw profits for sellers back over $130,000. That nearly marked a new all-time peak. But it failed to broadly boost profit margins – the percentage return on investment – around the country because the renewed price surge was not enough to outpace spikes recent sellers had been absorbing when they originally bought their homes. “The second-quarter profit report offers a mixed bag of plusses and minuses that added up to an overall picture of not much change for sellers,” said Rob Barber, chief executive officer for ATTOM. “Prices jumped back upward, which was great news for owners. So did raw profits. Profit margins also remained historically elevated. But the bottom-line profit-margin trend didn’t move much at all because soaring prices are far from a new thing. Even greater price improvements will be needed to kick margins up over the rest of the year.” The latest price and profit numbers reflect a period when the national median home value shot up 9 percent quarterly and 6 percent annually. Those gains came amid the usual Springtime rise in demand among house hunters, combined with home-mortgage rates remaining relatively stable at just below 7 percent for a 30-year fixed loan, and historically tight supplies of homes for sale that made bargains few and far between. The price increases, however, did not boost investment returns notably because median values had been rising about 8 percent quarterly and 7 percent annually during the time when homeowners were buying the properties they then sold during the second-quarter of this year. Those similar price patterns largely cancelled each other out. Profit margins tick upward quarterly while still down annually in majority of nation Typical profit margins – the percent difference between median purchase and resale prices – increased from the first quarter of 2024 to the second quarter of 2024 in 94 (58.8 percent) of the 160 metropolitan statistical areas around the U.S. with sufficient data to analyze. But they remained down annually in 100, or 62.5 percent, of those metros. They also were down in about three quarters of those areas from the second quarter of 2022, when the nationwide return on median-priced home sales peaked at 64.3 percent. The higher end of the housing market – metro areas where home values mostly topped $350,000 – absorbed the brunt of the year-over-year softening of profit margins. About three quarters of those areas saw typical margins decline compared to about half of lower-priced markets. Metro areas were included if they had sufficient population and at least 1,000 single-family home and condo sales in the second quarter of 2024. The biggest year-over-year decreases in typical profit margins came in the metro areas of Hilo, HI (margin down from 80.5 percent in the second quarter of 2023 to 45.3 percent in the second quarter of 2024); Port St. Luce, FL (down from 95 percent to 73.9 percent); Daphne-Fairhope, FL (down from 49.8 percent to 34 percent); Crestview-Fort Walton Beach, FL (down from 60.7 percent to 45.1 percent) and Naples, FL (down from 84.9 percent to 69.2 percent). The biggest annual profit-margin decreases in metro areas with a population of at least 1 million in the second quarter of 2024 were in Honolulu, HI (return down from 51.8 percent to 38.5 percent); Austin, TX (down from 50.3 percent to 40.3 percent); Nashville, TN (down from 72.9 percent to 63.3 percent); Seattle, WA (down from 94.4 percent to 85 percent) and San Antonio, TX (down from 34.9 percent to 27 percent). The biggest annual improvements in returns on investment came in Syracuse, NY (margin up from 51.6 percent in the second quarter of 2023 to 71.8 percent in the second quarter of 2024); Rockford, IL (up from 54.8 percent to 74.5 percent); Scranton, PA (up from 79.9 percent to 97.7 percent); Lansing, MI (up from 50.1 percent to 62.7 percent) and Roanoke, VA (up from 45.1 percent to 56.1 percent). The largest annual increases in profit margins among metro areas with a population of at least 1 million came in Rochester, NY (up from 66.2 percent to 76 percent); Cleveland, OH (up from 53.5 percent to 61 percent); Hartford, CT (up from 65.8 percent to 73.3 percent); Chicago, IL (up from 39.5 percent to 46.1 percent) and Providence, RI (up from 73.3 percent to 78.8 percent). Investment returns still exceed 50 percent in two-thirds of U.S. Despite the latest trends, returns on investment for median-priced home sales during the second quarter of 2024 surpassed 50 percent in 106 of the metro areas analyzed (66.3 percent). That was down from almost three quarters of those areas in the second quarter of last year but far above the level of about 10 percent five years ago. The investment return leaders among areas with a population of at least 1 million in the second quarter of this year were San Jose, CA (typical return of 109.6 percent); Seattle, WA (85 percent); San Francisco, CA (83.6 percent); Boston, MA (81.3 percent) and Miami, FL (80.3 percent). Among areas with a population of at least 1 million, those with the lowest typical returns were in