August 2024 – Page 4

Zillow Group Promotes Jeremy Wacksman to CEO

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Rich Barton remains on the Zillow Group Board of Directors and becomes co-executive chair alongside Zillow co-founder and current executive chair Lloyd Frink Zillow Group, Inc., which is transforming the way people buy, sell, rent and finance homes, announced longtime executive and Chief Operating Officer Jeremy Wacksman has been promoted to chief executive officer and appointed to the Company’s Board of Directors. Wacksman succeeds co-founder Rich Barton, who remains on the Zillow Group Board of Directors and becomes co-executive chair alongside Zillow co-founder and current Executive Chair Lloyd Frink. Wacksman joined Zillow from Microsoft in 2009 and has earned multiple promotions throughout his 15 years at Zillow, including as a product leader, chief marketing officer (CMO) and, for the past three years, as chief operating officer (COO), with responsibility for growing Zillow Group businesses and also overseeing engineering, product, design, marketing, sales and industry relations. “Zillow’s business is firing on all cylinders and performing well through a challenging real estate macro. We’ve built and integrated products, completed strategic acquisitions, enhanced our agent partner network, and leaned in hard on our Mortgages and Rentals businesses,” Barton said. “This is due in no small part to the leadership of Jeremy Wacksman, with the past three years being a time of particularly impressive innovation for the company. Lloyd and I could not be more confident in Jeremy as CEO, in the caliber of the broader team and in Zillow’s bright future.” During his leadership tenure at Zillow, Wacksman has been a driver of innovation in real estate. As a Zillow product leader, Wacksman helped pioneer mobile real estate shopping and, today, Zillow Group apps have three times more daily active users than any other company in the category. As CMO, Wacksman shepherded the pivotal product and consumer marketing strategy that helped Zillow grow into the household brand it is today, with 231 million average monthly unique users and the word “Zillow” searched more than the term “real estate.” When Barton tapped him as COO, Wacksman operationalized Zillow’s housing super app strategy while maintaining strong cost discipline, diversifying revenue streams, growing the Rentals and Mortgages businesses, and successfully acquiring industry software solutions like Follow Up Boss and ShowingTime. He also organized and elevated the talent that now makes up Zillow’s world-class product, engineering and design organizations responsible for innovative product rollouts such as 3D interactive floor plans, Real Time Touring and Zillow Showcase. “With the strength of Zillow’s brand, our highly engaged audience and a steadily growing business portfolio, we are in a great position to capture meaningful transaction share for years to come,” Wacksman said. “The work we’re doing to bring the integrated transaction to life through exceptional tech solutions for consumers and agents will transform residential real estate. I love this company and its mission, and I am honored to lead our extraordinary team into the next phase of Zillow’s growth.” Both Barton and Frink have led the Board of Directors and held Board positions, including the chairmanship, since they founded Zillow in 2004. They will continue to be active in the Company to support Wacksman and the leadership team. SOURCE Zillow Group, Inc.

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Half of Mortgaged Homeowners Once Again Equity-Rich; Portion of Owners Seriously Underwater Drops to Five-Year Low ATTOM, a leading curator of land, property, and real estate data, released its second quarter 2024 U.S. Home Equity & Underwater Report, which shows that 49.2 percent of mortgaged residential properties in the United States were considered equity-rich in the second quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than half of their estimated market values. The portion of mortgaged homeowners in equity-rich territory during the second quarter of 2024 rose from 45.8 percent in the first quarter of 2024, matching a high point reached in the Spring of last year. The increase reversed a series of three straight quarterly declines and marked one of the best gains in the past five years. While equity-rich levels improved, the report also reveals that the portion of home mortgages that were seriously underwater in the U.S. declined to 2.4 percent during the second quarter, or just one in 42. That was down from 2.7 percent in the prior quarter to the lowest level since at least 2019. Seriously underwater mortgages are those with combined estimated balances of loans secured by properties that are at least 25 percent more than those properties’ estimated market values. The second-quarter equity gains came as home prices spiked during the 2024 Spring buying season, with the median national price shooting up 9 percent quarterly to a new record of $365,000. Rising prices helped raise equity levels throughout most of the country by widening the gap between the estimated value of homes and the amounts homeowners owed on their loans. “Homeowner wealth took a notable turn for the better during the second quarter as equity levels piggybacked on some of the biggest home-price spikes we’ve seen in recent years,” said Rob Barber, CEO for ATTOM. “After a period where equity seemed stagnant or even declining, this brought another boost of good news for homeowners from the enduring housing market boom. Supplies of homes for sale remain limited these days and buyer demand is typically elevated during the Summertime. So, it should be no surprise if home values go even higher and take equity along for the ride.” The latest market pattern reflects a period when the housing market rebounded from several sluggish quarters of price gains and losses. Values surged amid a tight supply of homes combined with the usual Springtime increase in buyer demand. Additional help came from relatively stable home-mortgage rates that hovered back and forth around 7 percent for a 30-year fixed loan as well as a national unemployment rate that fell below 4 percent and investment markets that hit new highs. Equity-rich shares of mortgages climb throughout U.S.The portion of mortgages that were equity-rich increased in 48 of the 50 U.S. states from the first quarter of 2024 to the second quarter of 2024, commonly by more than two percentage points. Measured annually, equity-rich levels were up in 31 states as the nationwide figure of 49.2 percent equity-rich in the second quarter of this year matched the portion from the second quarter of 2023. The biggest quarterly increases came in lower-priced markets, mainly across the South and Midwest regions, led by Kentucky (where the portion of mortgaged homes considered equity-rich increased from 28.7 percent in the first quarter of 2024 to 37.4 percent in the second quarter of 2024), Illinois (up from 28.3 percent to 36.1 percent), Missouri (up from 38.3 percent to 45.5 percent), Oklahoma (up from 28.1 percent to 34.5 percent) and Alabama (up from 35.7 percent to 41.9 percent). At the other end of the scale, equity-rich levels remained the same in two states (staying at 54 percent in Utah and 51.5 percent in South Dakota). The smallest increases were in North Dakota (up from 31.5 percent to 32 percent), California (up from 58.6 percent to 59.4 percent) and Louisiana (up from 20.1 percent to 21 percent). Seriously underwater mortgage levels also improve in most statesThe portion of mortgaged homes considered seriously underwater declined nationwide during the second quarter of 2024 to one in 42. That was down from one in 37 in the first quarter of 2024 and one in 36 in the second quarter of last year – well below the ratio of one in 15 recorded in 2019. The rate decreased in 47 states quarterly and 37 states annually. As with rising equity-rich levels, the biggest decreases in seriously underwater mortgages were clustered mainly in the South and Midwest. The largest quarterly decreases were in Wyoming (share of mortgaged homes that were seriously underwater down from 8.8 percent in the first quarter of 2024 to 2.5 percent in the second quarter of 2024), Kentucky (down from 8.3 percent to 6.3 percent), Illinois (down from 5.2 percent to 4 percent), Oklahoma (down from 6.1 percent to 5 percent) and Alabama (down from 3.6 percent to 2.8 percent). On the flip side, two states saw slight increases in the percentage of seriously underwater homes from the first quarter to the second quarter of 2024. They were Utah (up from 2.1 percent to 2.2 percent) and South Dakota (up from 3 percent to 3.1 percent). The rate was unchanged in three states: New Mexico (2.6 percent), Kansas (2.9 percent) and Idaho (2.4 percent). Largest levels of equity-rich homeowners still in higher-priced markets of Northeast and WestThe 10 states with the highest levels of equity-rich mortgaged properties around the U.S. during the second quarter of 2024 again were in the Northeast or West regions. Those with the largest portions were Vermont (83.5 percent of mortgaged homes were equity-rich), Maine (61.5 percent), New Hampshire (61.1 percent), Montana (61.1 percent) and Rhode Island (60.2 percent). Nine of the 10 states with the lowest percentages of equity-rich properties during the second quarter of 2024 were in the Midwest or South. The smallest portions were in Louisiana (21 percent of mortgaged homes were equity-rich), Alaska (31 percent), North Dakota (32 percent), West Virginia (33.6 percent) and Oklahoma (34.5 percent). Among 107 metropolitan statistical areas around the nation with a population of at least 500,000, upscale markets where median home values topped $400,000 again dominated the list of places with the highest portion of mortgaged properties that were equity-rich during the second quarter. (See ATTOM’s latest Q2 2024 U.S. home sales report) Those markets were led by San Jose,

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Seattle (37.3%), San Jose (30.8%) and Columbus (17.4%) See Highest Gains in New Listings this July According to the Realtor.com® July housing data, the market is becoming more buyer friendly through a combination of rising inventory levels and price cut reductions. Homes actively for sale grew 36.6% in July 2024 relative to the same time last year, hitting a post-pandemic high, while the share of listings with price cuts reached 18.9%, the highest rate since October. “The inventory scars of the pandemic-era housing market are continuing to fade,” said Danielle Hale, Chief Economist of Realtor.com® “Although active listings are still short of the pre-pandemic mark, we saw the gap continue to narrow meaningfully as active listings hit a post-pandemic high. As sellers continue to list homes and buyers become choosier, the time a home spends on the market is extending, thereby helping the housing market move in a more buyer-friendly direction. In response, sellers are curbing expectations and reducing listing prices more often which could set the stage for more sales this fall, especially if mortgage rates continue to decline.” July 2024 Housing Metrics – National Metric Change over Jul 2023 Change over Jul 2019 Median List Price Per Sq.Ft. +3.1 % +52.3 Median listing price +0.0% (to $439,950) +37.7 % Active listings +36.6 % -28.6 % New listings +3.6 % -24.5 % Median days on market +5 days (to 50 days) -8 days Share of active listings with price reductions +3.4 percentage points(to 18.9%) +1.3 percentage points Inventory Hits Post-Pandemic HighJuly brings a growth in inventory across the country as all four regions saw active inventory grow year-over-year. Nationwide the total number of homes for sale increased by 22.6%, growing for the ninth straight month and surpassing last month’s rate of 22.4%. While inventory still sits below pre-pandemic levels, the gap between the 2017-2019 and present day levels is getting smaller. In particular, the South and the West experienced the most gains, with a growth in listings of 47.6% and 35.4%, respectively. The two regions are also closing the pre-pandemic and present day gap in inventory the most, with the South’s inventory hovering 14% below pre-pandemic levels, while the West’s inventory sits at 19.4% below. There is still a sizable difference in the gaps that need to be closed in the Midwest and the Northeast, where inventory still sits below pre-pandemic levels by 46.8% and 55.5%, respectively. “In addition to seeing inventory levels rise to heights not seen since before the pandemic, buyers are also seeing sellers cut prices on a much larger share of homes than last year,” said Realtor.com® Senior Economist Ralph McLaughlin. “These are signs that the housing market is healing from an unhealthy state and becoming more balanced.” Sellers Warm Up to Listing Homes and Cutting PricesWith the recent decrease in mortgage rates, more sellers are getting into the market and have seemingly open minds as the share of listings with price cuts increased to 18.9%; the highest since October of last year. While all 50 of the top metros saw share of listings with price cuts increase year-over-year, the metros that saw the most include Denver (32.4%), Austin (31.4%), and Tampa (30.6%). Additionally, newly listed homes on the market grew by 3.6% this month compared with the same time last year, but measurably lower than June 2024’s 6.6% figure. This marks the ninth consecutive month of an increased number of newly listed homes, leading to more options and availability of homes for those who are eager to buy. Homes Linger on Market LongerWhile options for homes are on the rise, the time homes are spending on the market is also growing. This month, the typical home spent 50 days on the market, which is the fourth month in a row where time spent on market is more than it was during the previous year, meaning buyers have more of an opportunity to scoop up a home they’ve been eyeing than in previous months. That being said, while it’s five more days than the time the typical home spent on the market in July 2023, it’s still more than a week (8 days) less than the time spent in July from 2017-2019. Additional details and full analysis of the market inventory levels and additional trends in listing prices and more can be found in the Realtor.com® July Monthly Housing Report. SOURCE Realtor.com

PURE Property Management

by Carole VanSickle Ellis
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Making Property Management Better for Everyone By Carole VanSickle Ellis At the beginning of 2024, roughly 10 million individuals in the United States owned rental properties. Of those 10 million, 51% work with a property manager to manage those investments, and those property management firms take between 8% and 12% of monthly rents, generating nearly $100 billion in annual revenue for these valuable services. Despite this professional management, in 2023, only about one-third of investors reported being “happy” with their cash flow, and many professed to a general dissatisfaction with their property management strategies and managers. This, said Joe Polverari, general partner and co-founder at boutique proptech property management company PURE Property Management, is something that must change. “Property management has historically been something of a ‘walled garden’ where companies have focused on keeping customers rather than actually making them happy,” Polverari explained. “The interesting thing about property management that made us want to get involved in the space is that there are very few innovation-focused participants in the industry. We could see if we had the right level of innovation, technology focus, talent, and the capital to back those things up, we could change the way the industry works for the better.” Polverari, who founded the company with longtime friend Mike Catalano in 2020, has spent the majority of his career buying, selling, and operating tech companies. “Mike is the one with real estate experience, and I am the one with experience looking at industries that are big and ‘suboptimal’ and figuring out ways to improve them,” Polverari explained. “After I sold my last business, we realized the time had come to bring our talents together and start a business that would benefit the massive asset class of single-family rentals.” Catalano has been active in real estate investing, sales, and property management for more than two decades. As a result of this long-term immersion in the industry, he had a close-up view of how technology and property management could be combined to create a better experience for real estate investors and residents of SFR properties. “Property management is a highly fragmented industry,” Polverari said. “There are about 40,000 property management companies in the United States that focus largely on local SFR management, and most SFR assets are owned by small investor-owners who own 10 properties or fewer. When you see a market that is fragmented, it naturally speaks to the question: Can it be consolidated, and would that make the industry better for customers and more valuable economically?” In the case of property management, Catalano and Polverari ultimately decided the answer to this question was a resounding, “Yes!” The result was PURE Property Management, a comprehensive property management platform that handles every element of SFR investing and management from acquisitions and market analysis to leasing, rent collection, and maintenance. “When we got started, there were no formal ‘best practices’ in place in the property management space,” observed Jennifer Stoops, PURE’s vice president of industry relations. “The property management industry is extremely disjointed. Everyone is doing pretty much the same thing, but they are all doing it slightly differently and using, in most cases, about a dozen distinct software tools in order to manage assets. PURE is taking what has been historically a very reactive industry and trying to change it into a proactive industry that is focused and simple.” Bringing a Positive Light to Renting & Rental Ownership When Catalano and Polverari first began examining the possibility of a proptech property management company, they knew they needed what Stoops calls “a fresh set of eyes” to truly effect change in the industry. The two brought in several leading property management companies and a team of technology experts in order to achieve this perspective, ultimately starting PURE with four property management companies willing to implement the newly developed processes and solutions. While this may sound complicated, PURE employees and the company’s leadership team explain the entire process is one based in simplification of existing practices. “We want to improve the property management experience, simplify it, and make it satisfying for everyone involved,” Stoops said. “We are not just serving owners; we are serving the residents, too.” The company started out with its team of four property management companies in 2020, debuting just after the global COVID-19 pandemic shut down much of the United States in the spring of that year. However, in October 2020 when PURE officially launched, it had become evident that the consistency and technology touted by the founders and initial members would be exactly what many investors were desperately seeking at a time when every state was enacting different regulations to keep their populations at home. “When we first got started, there was a lot of capital being deployed [into rental real estate] because of the [pandemic-related] stimulus and low interest rates, and there was a strong and obvious need for technology-driven business models,” Polverari recalled. He continued, “Ultimately, that led to a mindset shift in property management and real estate that there is a need for the ability to conduct business and commerce with less friction. That has created an environment where innovation can really start to flourish.” A People-First Strategy for Acquisitions Since October 2020, PURE has acquired more than 70 property management companies using what the company describes as a “people-first strategy” that is highly flexible and designed to fit many types of sellers in the property management space. This has enabled the company to acquire and establish anchor presences in Los Angeles and Orange Counties in California, as well as in Albuquerque, New Mexico; Dallas-Fort Worth, Texas; Denver, Colorado; Nashville, Tennessee; Portland, Oregon; and Tacoma, Washington. As of the end of 2023, PURE also had expanded existing services’ reach in Arizona, California, North Carolina, and Washington, the company reported. The accelerated pace of growth resulted in Catalano being named a HousingWire (HW) 2022 Vanguard for “outstanding leadership, vital contributions to [his company], and the dynamic way [he] is changing the industry.” “Because

Santa Fe, New Mexico

by Carole VanSickle Ellis
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“The City Different” Continues to Stand Out from the Crowd in 2024 By Carole VanSickle Ellis In 1912, when New Mexico became the 47th state in the United States, its capital city, Santa Fe (“Holy Faith,” an abbreviation for the original name La Villa Real de la Santa Fe de San Francisco de Asís, or the Royal Town of the Holy Faith of Saint Francis of Assisi), was already more than three centuries old. Founded in 1610, Santa Fe boasts incredible weather with more than 320 days of sunshine each year, carefully preserved historic architecture, and a booming real estate market. However, while the city is still making lists for housing appreciation and even made the 2023 nSkope Predictive Analytics list of cities where retirees are most likely to sell their homes for a profit, the real estate market in the “City Different” appears likely to remain, well, a little bit different for investors interested in the American Southwest. “We continued to see some price appreciation at the end of 2023 and into the first quarter of 2024, however…we are seeing pullback from buyers,” wrote Barker Realty analysts in the brokerage’s Q1 2024 Market Digest residential market report. The team noted Santa Fe “feeder markets” like Austin, Texas, have already begun to show signs of cooling and observed, “Santa Fe has typically lagged behind the major markets when these shifts occur, and, in March, we began to see the first signs of a cooling locally with homes staying on market longer than they have since before the pandemic.” Total units sold in Santa Fe County dropped by 28% year-over-year in March 2024. By May of this year, the decline in demand seemed to be leading to a leveling off of home prices in the Santa Fe area as well, with home values hovering just over $580,000, a 4.2% price change year-over-year (vs. a 51.9% price increase since May 2019). In 2023, in response to skyrocketing home values during and after the COVID-19 pandemic, the Santa Fe city council had resurrected a Great Recession-era 3% tax on transactions for homes valued at $1 million or more. At that time, more than 400 homes priced higher than $1 million were being bought and sold annually in the Santa Fe area. However, that effort was struck down by a First Judicial District Court judge in May. Interestingly, it appears nearly three-quarters of Santa Fe voters support the so-called “mansion tax,” so investors in the area should monitor developments around the policy. Relaxed Building Codes Create a Friendly Environment for New Multifamily Construction Another result of local concerns about the lack of affordable housing in the Santa Fe area has been the ongoing relaxation of regulations governing “vertical building” in the metro area. Vertical structures have multiple floors, and most people think of skyscrapers and high-rise multifamily condominiums or apartments when they hear this term. In the Santa Fe area, there is a centuries-old trend of intense concern over the preservation of the city’s historic architecture, which is reflective of the low-slung (horizontal), adobe structures encountered by the Spanish when they began exploring the region in the 1500s. At that time, Pueblo Indians were living in much of the Rio Grande Valley in “multifamily” buildings that could house hundreds of households and were sometimes several stories high. Spanish colonists used the same mud-earth-and-straw construction materials to make bricks for homes with round walls, corner fireplaces, flat roofs, and covered porches. These buildings were the predecessors of the Spanish Pueblo style that remains popular (and in the case of older buildings, protected) in Santa Fe today, and they played a key role in Santa Fe’s decision to dub itself “The City Different” in response to the “City Beautiful” movement of the early 20th century. Local planners at the time explained the city was already beautiful, so they would focus on elements that made it unique instead. In an effort to protect historic buildings and cultivate architectural tourism, buildings erected in the original style and original “horizontal” height of just a few stories in the Santa Fe region are often protected by historic preservation policies. Santa Fe is one of the National Trust for Historic Preservation’s “Dozen Distinctive Destinations in America” as a result of this architectural heritage, and construction higher than 25 feet in height is still carefully regulated, although housing ordinances passed in 2016 did remove many roadblocks to developing multifamily residential development for builders willing to pay a fee to the Santa Fe Affordable Housing Trust Fund. “Our version of density is three stories,” said then-mayor Alan Webber in a statement about the policy. He explained the move was designed to create more housing in the area while preserving “Santa Fe’s small-town feel, architectural heritage, and mountain views.” Because the fee negates developers’ obligations to preserve 15% of new multifamily units for affordable housing, the result of this policy has been a slew of mid-rise, luxury-living developments. Local investors report the most attractive of these are located in walkable areas, pet-friendly, and offer high-end amenities like quartz countertops, “wood-style” flooring, and high ceilings. These buildings offer high-end, multifamily living and cater mainly to affluent professionals and their families. A Concerted Effort to Support Construction & Renovation Since 2020, when Santa Fe was fully involved in the pandemic-era “zoom town” phenomenon, city planners and legislators have remained laser-focused on creating policies to support the creation and construction of properties priced in such a way as to be realistically available to buyers and renters in the area. Examples of these programs include $50,000 no-interest loans and grants for homeowners to renovate existing homes after purchase and financial support for developers building affordable rental units. The local lack of affordable housing has impacted Santa Fe school systems because even with recent pay raises, many Santa Fe teachers say they cannot afford to live in the metro area unless they opt to rent with roommates. In response, the city’s branch of the National Education Association (NEA)