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Home Equity Growth Slows

Data shows that at the end of the first quarter of 2018, more than 5.2 million (5,206,446) U.S. properties were seriously underwater (where the combined balance of loans secured by the property was at least 25 percent higher than the property’s estimated market value), down by more than 291,000 properties from a year ago — the smallest year-over-year drop since ATTOM Data Solutions began tracking in Q1 2013.

The 5.2 million seriously underwater properties at the end of Q1 2018 represented 9.5 percent of all U.S. properties with a mortgage, up from 9.3 percent in the previous quarter but down from 9.7 percent in Q1 2017.

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“We’ve reached a tipping point in this housing boom where enough homeowners have regained both sufficient equity and sufficient confidence to tap into their home equity — resulting in a noticeably slower decline in seriously underwater properties and slower growth in equity rich properties,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “This tapping of equity could take the form of a cash-out refinance, home equity loan or simply a home sale. We saw the biggest quarterly drop in average homeownership tenure for homeowners who sold in the first quarter since Q4 2008, evidence that more homeowners are reaching that equity-tapping tipping point more quickly and deciding to sell.”

More than 19.5 million (19,513,871) U.S. properties had between 20 and 50 percent equity (LTV of between 80 and 50 percent) at the end of Q1 2018, down by 1,714,099 from a year ago, an 8 percent decrease.

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Homes with 20 to 50 percent equity represented 36.1 percent of all properties with a mortgage as of the end of Q1 2018, down from 36.3 percent in the previous quarter and down from 37.6 percent in Q1 2017.

Equity rich properties represent one in four properties with a mortgage

More than 13.8 million (13,841,082) U.S. properties with a mortgage were equity rich at the end of Q1 2018, up by more than 122,000 from a year ago but still down from a peak of more than 14 million equity rich properties in Q2 2017.

The 13.8 million equity rich properties represented 25.3 percent of all U.S. properties with a mortgage, down from 25.4 percent in the previous quarter but still up from 24.3 percent in Q1 2017.

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Highest share of equity rich properties in coastal California, Honolulu, Seattle

States with the highest share of equity rich homes were Hawaii (41.6 percent); California (41.5 percent); New York (34.8 percent); Washington (33.1 percent); and Oregon (31.8 percent).

Among 98 metropolitan statistical areas with a population of at least 500,000, those with the highest share of equity rich homes were San Jose, California (66.1 percent); San Francisco, California (56.0 percent); Los Angeles, California (45.4 percent); Honolulu, Hawaii (43.1 percent); and Seattle, Washington (39.1 percent).

Highest share of seriously underwater properties in Scranton, Baton Rouge, Youngstown

States with the highest share of seriously underwater homes at the end of Q1 2018 were Louisiana (20.1 percent); Mississippi (18.0 percent); Iowa (17.2 percent); West Virginia (15.9 percent); and Illinois (15.9 percent).

Among 98 metropolitan statistical areas with a population of at least 500,000, those with the highest share of seriously underwater homes at the end of Q1 2018 were Scranton, Pennsylvania (21.9 percent); Baton Rouge, Louisiana (19.9 percent); Youngstown, Ohio (19.5 percent); New Orleans, Louisiana (18.5 percent); and Toledo, Ohio (18.0 percent).

Along with New Orleans, among 51 metro areas with at least 1 million people, those with more than 13 percent of seriously underwater properties were Cleveland, Ohio (16.5 percent); Milwaukee, Wisconsin (16.0 percent); St. Louis, Missouri (14.7 percent); Chicago, Illinois (13.8 percent); Detroit, Michigan (13.6 percent); Virginia Beach, Virginia (13.4 percent); and Kansas City, Missouri (13.4 percent).

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Most Home Prices Are Now Above Pre-Recession Peaks

Data from ATTOM Data Solutions shows that median home prices in 57 of 105 metropolitan statistical areas analyzed in the report (54 percent) were above their pre-recession home price peaks in the first quarter.

Nationwide the median home price of $240,000 in Q1 2018 was less than 1 percent below its pre-recession peak of $241,500 in Q3 2005, but still up 9.1 percent from a year ago. Metro areas with Q1 2018 median home prices the furthest above their pre-recession peaks were Houston, Texas (69 percent above); Dallas-Fort Worth, Texas (67 percent above); Denver, Colorado (62 percent above); San Jose, California (60 percent above); and San Antonio, Texas (57 percent above).

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Other major metros with at least 1 million people and with Q1 2018 median home prices at least 30 percent above pre-recession peaks were Nashville, Tennessee (46 percent above); Austin, Texas (45 percent above); Salt Lake City, Utah (42 percent above); Raleigh, North Carolina (35 percent above); Indianapolis, Indiana (31 percent above); and Oklahoma City, Oklahoma (30 percent above).

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“Rising interest rates and recently enacted tax reform that removed some tax incentives for homeownership were not enough to cool off red-hot home price appreciation in many parts of the country, with 30 of the 105 local markets analyzed posting double-digit gains in median home prices in the first quarter,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Home prices are still below pre-recession peaks in 46 percent of local markets, but nearly one-third of even those markets posted double-digit home price appreciation in the first quarter.”

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Median home prices in 48 of the 105 metro areas analyzed in the report (46 percent) were still below pre-recession peaks in Q1 2018, led by Bridgeport-Stamford-Norwalk, Connecticut (25 percent below); New Haven, Connecticut (22 percent below); Allentown, Pennsylvania (21 percent below); Philadelphia, Pennsylvania (20 percent below); and Hartford, Connecticut (19 percent below).

Along with Philadelphia and Hartford, other major metros with at least 1 million people and with Q1 2018 median home prices at least 15 percent below pre-recession peaks were Chicago, Illinois (19 percent below); Baltimore, Maryland (17 percent below); Tucson, Arizona (16 percent below); Las Vegas, Nevada (16 percent below); and New York-Newark-Jersey City (15 percent below).

The Foreclosure Rate Declines By 19%

Data from ATTOM Data Solutions shows shows a total of 189,870 U.S. properties with a foreclosure filing during the first quarter of 2018, up 4 percent from the previous quarter but still down 19 percent from a year ago and 32 percent below the pre-recession average of 278,912 per quarter from Q1 2006 to Q3 2007 — the sixth consecutive quarter where U.S. foreclosure activity has been below its pre-recession quarterly average.

The report also shows a total of 74,341 U.S. properties with foreclosure filings in March 2018, up 21 percent from an all-time low in the previous month but still down 11 percent from a year ago — the 30th consecutive month with a year-over-year decrease in U.S. foreclosure activity.

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An analysis of foreclosure activity by loan origination year shows that 45 percent of all properties in foreclosure as of the end of the first quarter were tied to loans originated between 2004 and 2008, down from 50 percent as of the end of Q4 2017 and down from 51 percent as of the end of Q1 2017.

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“Less than half of all active foreclosures are now tied to loans originated during the last housing bubble, one of several data milestones in this report showing that the U.S. housing market has mostly cleared out the backlog of bad loans that triggered the housing and financial crisis nearly a decade ago,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Meanwhile we are beginning to see early signs that some post-recession loan vintages are defaulting at a slightly elevated rate, a sign that some loosening of lending standards has occurred in recent years. Consequently, foreclosure starts are trending higher compared to a year ago in an increasing number of local markets — some of which are a bit surprising given the overall strength of housing in those markets.”

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A total of 92,703 U.S. properties started the foreclosure process in Q1 2018, up 8 percent from the previous quarter but still down 10 percent from a year ago — the 11th consecutive quarter with a year-over-year decrease in U.S. foreclosure starts.

Counter to the national trend, 82 of 219 metropolitan statistical areas analyzed in the report (37 percent) posted year-over-year increases in foreclosure starts in the first quarter, up from 20 percent of markets posting year-over-year increases in foreclosure starts in Q1 2017.

Twenty-three of 53 metropolitan statistical areas with at least 1 million people (43 percent) posted a year-over-year increase in foreclosure starts in the first quarter, led by Indianapolis, Indiana.

Data: Property Taxes Are On The Rise

ATTOM Data Solutions released its 2017 property tax analysis for more than 86 million U.S. single family homes, which shows that property taxes levied on single family homes in 2017 totaled $293.4 billion, up 6 percent from $277.7 billion in 2016 and an average of $3,399 per home — an effective tax rate of 1.17 percent.

The average property taxes of $3,399 for a single family home in 2017 was up 3 percent from the average property tax of $3,296 in 2016, and the effective property tax rate of 1.17 percent in 2017 was up from the effective property tax rate of 1.15 percent in 2016.

The report analyzed property tax data collected from county tax assessor offices nationwide at the state, metro and county levels along with estimated market values of single family homes calculated using an automated valuation model (AVM). The effective tax rate was the average annual property tax expressed as a percentage of the average estimated market value of homes in each geographic area.

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States with the highest effective property tax rates were New Jersey (2.28 percent), Illinois (2.22 percent), Vermont (2.19 percent), Texas (2.15 percent), and New Hampshire (2.06 percent).

Other states in the top 10 for highest effective property tax rates were Pennsylvania (2.02 percent), Connecticut (1.99 percent), New York (1.92 percent), Ohio (1.72 percent), and Wisconsin (1.67 percent).

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Among 217 metropolitan statistical areas analyzed in the report with a population of at least 200,000, those with the highest effective property tax rates were Scranton, Pennsylvania (3.93 percent); Binghamton, New York (3.14 percent); Rockford, Illinois (3.03 percent); Rochester, New York (2.93 percent); and El Paso Texas (2.63 percent).

Out of the 217 metropolitan statistical areas analyzed in the report, 125 (58 percent) posted an increase in average property taxes above the national average of 3 percent, including Los Angeles (7 percent increase), Dallas (11 percent increase), Houston (10 percent increase), Philadelphia (4 percent increase), and Miami (5 percent increase).

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Other major markets posting an increase in average property taxes that was above the national average were Atlanta (up 4 percent), Boston (up 5 percent), San Francisco (up 6 percent), Riverside-San Bernardino (up 5 percent), and Seattle (up 6 percent).

States with the lowest effective property tax rates were Hawaii (0.34 percent); Alabama (0.49 percent); Colorado (0.51 percent); Tennessee (0.56 percent); and West Virginia (0.57 percent). Other states in the top 10 for lowest effective property tax rates were Utah (0.58 percent), Delaware (0.61 percent), South Carolina (0.66 percent), Arkansas (0.68 percent), and Arizona (0.68 percent).

Among the 217 metro areas analyzed for the report, those with the lowest effective property tax rates were Honolulu (0.33 percent); Montgomery, Alabama (0.36 percent); Tuscaloosa, Alabama (0.41 percent); Colorado Springs, Colorado (0.42 percent); and Greeley, Colorado (0.45 percent).

ATTOM Acquires Onboard Informatics

ATTOM Data Solutions has acquired Onboard Informatics, a provider of neighborhood data and data-enabled turnkey products to the real estate industry.

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“Onboard has a long and accomplished track record as an innovator in enhancing and democratizing neighborhood data assets, paralleling our own mission of powering real estate transparency,” said Rob Barber, CEO at ATTOM Data Solutions. “This acquisition will benefit existing customers of both companies — and the entire marketplace — by providing complementary datasets in a one-stop data shop.”

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Onboard’s neighborhood data is being integrated into the ATTOM Data Warehouse, which blends property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data for more than 155 million U.S. residential and commercial properties. A persistent, unique ID assigned to every property record in the ATTOM Data Warehouse — the ATTOM ID — will be used to link the new Onboard neighborhood data with all other datasets, and the combined data will be available through ATTOM’s flexible delivery solutions, including bulk file license, APIs and customized reports in a one-stop data shop.”

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“This acquisition by ATTOM will enable Onboard’s customers to conveniently access robust tax, deed and mortgage data, that, when combined with Onboard’s neighborhood data, completes the full property data picture needed to improve decision-making, increase lead generation and grow revenue,” said Marc Siden, CEO and Co-founder of Onboard Informatics.

Founded 15 years, ago, Onboard Informatics fuels sales and feeds decision-making for some of the largest U.S. brands, including Century 21, Coldwell Banker and Weichert. Its data products include area data (neighborhood, metro and residential boundaries along with school attendance zones), point of interest data (restaurants, banks, shopping and more), and community data (crime, population, education, weather and commuter times).

“Not only will our customers now be able to access a broader set of property-related data from one vendor, they’ll also have more flexible options for consuming that data through the various ATTOM data delivery solutions including the ability to consume neighborhood data as bulk files,” said Jonathan Bednarsh, president and co-founder of Onboard Informatics.

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Foreclosures At A 12-Year Low

Data from ATTOM Data Solutions shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 676,535 U.S. properties in 2017, down 27 percent from 2016 and down 76 percent from a peak of nearly 2.9 million in 2010 to the lowest level since 2005.

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Those 676,535 properties with foreclosure filings in 2017 represented 0.51 percent of all U.S. housing units, down from 0.70 percent in 2016 and down from a peak of 2.23 percent in 2010 to the lowest level since 2005.

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ATTOM’s year-end foreclosure report is a count of unique properties with a foreclosure filing during the year based on publicly recorded and published foreclosure filings collected in more than 2,500 counties nationwide, with address-level data on more than 23 million foreclosure filings historically also available for license or customized reporting. See full methodology below.

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The report also includes new data for December 2017, when there were 64,651 U.S. properties with foreclosure filings, up 1 percent from the previous month but still down 25 percent from a year ago — the 27th consecutive month with a year-over-year decrease in foreclosure activity.

“Thanks to a housing boom driven primarily by a scarcity of supply, which has helped to limit home purchases to the most highly qualified — and low-risk — borrowers, the U.S. housing market has the luxury of playing a version of foreclosure limbo in which it searches for how low foreclosures can go,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “There are a few notable local market exceptions playing a different version of foreclosure limbo in which a backlog of legacy foreclosure activity left over from the last housing crisis is still winding its way through a labyrinthine foreclosure process, resulting in incongruous jumps in various stages of foreclosure activity in markets such as New York, New Jersey and DC.”

Data Shows That The Median Down Payment Is Rising

Data from ATTOM Data Solutions shows that the median down payment for single family homes and condos purchased with financing in the third quarter was $20,000, up from $18,161 in the previous quarter and up from $14,400 in Q3 2016 to a new high as far back as data is available, Q1 2000.

The loan origination report is derived from publicly recorded mortgages and deeds of trust collected by ATTOM Data Solutions in more than 1,700 counties accounting for more than 87 percent of the U.S. population. Counts and dollar volumes for the two most recent quarters are projected based on available data at the time of the report (see full methodology below).

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The average down payment of $20,000 was 7.6 percent of the median sales price of $263,000 for financed home purchases in the third quarter, up from 7.1 percent in the previous quarter and up from 6.1 percent in Q3 2016 to the highest level since Q3 2013 — a four-year high.

“Buying a home has become a full-contact sport in many markets across the country, and buyers with the beefiest down payments — not to mention all-cash buyers — are often able to muscle out those with scrawnier savings,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “Despite the increasingly competitive nature of homebuying, the number of residential property purchase loans nationwide increased to a 10-year high in the third quarter.”

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The median down payment was more than $50,000 in 12 of the 99 metropolitan statistical areas analyzed in the report, led by San Jose California ($247,000); San Francisco, California ($170,000); Los Angeles, California ($118,000); Oxnard-Thousand Oaks-Ventura, California ($105,000); and Boulder, Colorado ($99,900).

“Across Southern California factors such as low available listing inventory have resulted in many consumers turning to cash or leveraging investment accounts for cash as alternative methods for funding home ownership and beating out competitors for acceptance of their purchase offers in a highly competitive market,” said Michael Mahon president at First Team Real Estate, covering the Southern California market.

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Other markets with median down payments above $50,000 were San Diego, California; New York, New York; Fort Collins, Colorado; Bridgeport, Connecticut; Boston, Massachusetts; Seattle, Washington; and Naples, Florida.

“Rising home prices in the Seattle area combined with changes in the mortgage underwriting process have pushed the median down payment over $50,000 and the average down payment to over $100,000,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. “We’ve also seen an increase in new mortgages which is an indication of rising home sales. Most interesting to me is the big jump in new lines of credit which is likely a result of frustrated buyers deciding to stay in their existing homes and remodel rather than deal with the highly competitive Seattle housing market.”

Where Are Homebuyers Flocking?

ATTOM Data Solutions has released its Q2 2017 Pre-Mover Housing Index, which shows that the markets with the highest pre-mover indices during the second quarter — predictive of strong sales activity in the third quarter — were Colorado Springs, Colorado; Chicago, Illinois; Washington, D.C.; Reno, Nevada; and Lexington, Kentucky.

Using data collected from purchase loan applications on residential real estate transactions, the ATTOM Data Solutions Pre-Mover Housing Index is based on the ratio of homes with a “pre-mover” flag during a quarter to total homes in a given geography, indexed off the national average. An index above 100 is above the national average and indicates an above-average ratio of homes that will likely be sold in the next 30 to 90 days in a given market (see full methodology below).

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The top five markets — among 122 total metro areas analyzed for the report — all posted a pre-mover index above 200, or twice the national average. Other markets in the top 10 for highest pre-mover index in the second quarter were Tampa-St. Petersburg, Florida (198); Kingsport-Bristol, Tennessee (195); Lancaster, Pennsylvania (191); Jacksonville, Florida (189); and Charleston, South Carolina (188).

Among the same 122 metro areas analyzed for the report, those with the lowest pre-mover indices in the second quarter were San Francisco, California (31); Rochester, New York (32); Honolulu, Hawaii (36); Providence, Rhode Island (44); and Grand Rapids, Michigan (46).

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“Markets with a healthy mix of access to good jobs and relatively affordable housing attracted the most interest from pre-movers in the second quarter, a harbinger of strong home sales activity in the third quarter,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Meanwhile in some of the nation’s hottest housing markets, there was more pre-mover interest in outlying counties further away from jobs but with more affordable homes to purchase. We see this pattern playing out in places like Denver, New York, Seattle, and Southern California.”

“With increased equity positions across Southern California, we have noticed an increasing phenomenon of the use of reverse mortgages, as well as increasing inventory of single family home rentals,” said Michael Mahon, president at First Team Real Estate, covering the Southern California housing market. “Consumers are leveraging home equity into cash for retirement, as well as investment returns, in purchases such as single family home rentals.”

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Using data collected from purchase loan applications on residential real estate transactions, the ATTOM Data Solutions Pre-Mover Housing Index is based on the ratio of homes with a “pre-mover” flag to total homes in a given geography, indexed off the national average. Any index above 100 is above the national average and indicates an above-average ratio of homes that will likely be sold in the next 30 to 90 days in a given market. Historical pre-mover data going back to Q1 2014 shows that 59 percent of homes with a pre-mover flag sell within 30 days of the estimated loan settlement date that is provided in the pre-mover data, and 76 percent sell within 90 days of that settlement date.

Distressed Sales Drop To 10-Year Low

ATTOM Data Solutions released its Q3 2017 U.S. Home Sales Report, which shows that distressed home sales — including bank-owned (REO) sales, third-party foreclosure auction sales, and short sales — accounted for 12.5 percent of all home sales in Q3 2017, down from 13.5 percent in the previous quarter and down from 14.1 percent in Q3 2016 to the lowest level since Q3 2007.

“Distressed sales nationally are now the exception rather than the rule, and we would expect the distressed sale share to return to the pre-recession norm of single-digit percentages within the next year given the current downward trajectory,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Distressed sales have become more localized in nature, with some of the biggest increases from a year ago in markets experiencing regional economic weakness or a natural disaster event that has triggered a jump in foreclosure activity.”

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Distressed sales share increases in Corpus Christi, Indianapolis, Cedar Rapids, Baton Rouge

Among 146 metropolitan statistical areas with a population of at least 200,000 and at least 100 distressed sales during the quarter, those with the highest share of distressed sales were Atlantic City, New Jersey (35.2 percent); McAllen-Edinburg, Texas (24.5 percent); Montgomery, Alabama (23.7 percent); Akron, Ohio (23.2 percent); and Youngstown, Ohio (22.5 percent).

Metros with the smallest share of distressed sales in Q3 2017 were San Jose, California (3.1 percent); Salt Lake City, Utah (3.3 percent); Austin, Texas (4.1 percent); San Francisco, California (5.2 percent); and Provo-Orem, Utah (5.5 percent).

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Counter to the national trend, 29 of the 146 metros analyzed for distressed sales (20 percent) posted a year-over-year increase in the share of distressed sales, led by Corpus Christi, Texas (up 33 percent); Indianapolis, Indiana (up 30 percent); Cedar Rapids, Iowa (up 29 percent); Baton Rouge, Louisiana (up 25 percent); Provo, Utah (up 22 percent); and Oklahoma City, Oklahoma (up 22 percent).

Major metros with an increase in the share of distressed sales compared to a year ago included New York, New York (up 6 percent); Dallas, Texas (up 13 percent); Houston, Texas (up 7 percent); Philadelphia, Pennsylvania (up 1 percent); and Phoenix, Arizona (up 6 percent).

Median sales prices exceed pre-recession peaks in 66 percent of local markets

The median sales price nationwide in the third quarter was $248,000, up 10 percent from a year ago to a new all-time high — 3 percent above the pre-recession high of $241,900 in Q3 2005. It was the second consecutive quarter where median home prices nationwide were above the pre-recession peak.

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Median home prices increased to new all-time highs in 55 of 126 metro areas analyzed for home price appreciation in the report (44 percent), including Los Angeles, Dallas, Atlanta, Detroit and Seattle. Median home prices have exceeded pre-recession peaks since the end of the recession in 83 of the 126 metro areas (66 percent).

Median home prices are still below pre-recession peaks in 43 of 126 metropolitan areas analyzed for home price appreciation in the report (34 percent), including New York (6 percent below); Chicago (10 percent below); Philadelphia (2 percent below); and Washington, D.C. (3 percent below).

Markets with median home prices in Q3 2017 still furthest below the pre-recession peak were York, Pennsylvania (60 percent below); Naples, Florida (24 percent below); Modesto, California (21 percent below); Bridgeport, Connecticut (20 percent below); Mobile, Alabama (19 percent below); and Las Vegas, Nevada (19 percent below).

Home Flipping Plateaus

ATTOM Data Solutions released its Q2 2017 U.S. Home Flipping Report, which shows that 53,638 single family homes and condos were flipped nationwide in the second quarter of 2017, a home flipping rate of 5.6 percent of all home sales during the quarter. The home flipping rate of 5.6 percent in Q2 2017 was down from 6.9 percent in the previous quarter but unchanged from a year ago.

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For the report, a home flip is defined as a property that is sold in an arms-length sale for the second time within a 12-month period based on publicly recorded sales deed data collected by ATTOM Data Solutions in more than 950 counties accounting for more than 80 percent of the U.S. population.

The report also shows an average gross flipping profit of $67,516 for homes flipped in the second quarter, representing a 48.4 percent return on investment (ROI) for flippers — down from 49.0 percent in the previous quarter and down from 49.6 percent in Q2 2016 to the lowest level since Q3 2015. After peaking at 51.1 percent in Q3 2016, average gross flipping ROI nationwide has decreased for three consecutive quarters.

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“Home flippers are employing a number of strategies to give them an edge in the increasingly competitive environment where flipping yields are being compressed,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Many flippers are gravitating toward lower-priced areas where discounted purchases are more readily available — often due to foreclosure or some other type of distress. Many of those lower-priced areas also have strong rental markets, giving flippers a consistent pipeline of demand from buy-and-hold investors looking for turnkey rentals.

“In markets where distressed discounts have largely dried up, flippers are showing more willingness to leverage financing when acquiring properties, often purchasing closer to full market value and then relying more heavily on price appreciation to fuel their flipping profits,” Blomquist added.

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More than 35 percent of homes flipped in Q2 2017 were purchased by the flipper with financing, up from 33.2 percent in the previous quarter and up from 32.3 percent a year ago to the highest level since Q3 2008 — a nearly nine-year high.

The estimated total dollar volume of financing for homes flipped in the second quarter was $4.4 billion, up from $3.9 billion in the previous quarter and up from $3.4 billion a year ago to the highest level since Q3 2007 — a nearly 10-year high.