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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).

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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.

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Home Affordability Improves In Q3

ATTOM Data Solutions released its Q3 2017 U.S. Home Affordability Index, which shows that home affordability in the third quarter improved compared to the previous quarter in 60 percent of 406 U.S. counties analyzed in the report — although affordability was still worse off than a year ago in 79 percent of those counties.

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The Q3 2017 home affordability index increased compared to the previous quarter (meaning homes were more affordable) in 243 of the 406 counties analyzed in the report (60 percent), including Los Angeles County, California; Cook County (Chicago), Illinois; Harris County (Houston), Texas; Maricopa County (Phoenix), Arizona; and San Diego County, California.

The Q3 2017 home affordability index decreased compared to the previous quarter (meaning homes were less affordable) in 163 (40 percent) of the 406 counties analyzed in the report, including Wayne County (Detroit), Michigan; Middlesex County (Boston), Massachusetts; along with three counties in the New York metro area: Suffolk, Bronx and Westchester.

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The national home affordability index was 100 in the third quarter of 2017, the lowest national affordability index since Q3 2008, when the index was 86. An index of 100 means the share of average wages needed to buy a median-priced home nationwide in Q3 2017 is on par with historic averages (see full methodology below).

“Falling interest rates in the third quarter provided enough of a cushion to counteract rising home prices in most U.S. markets and provide at least some temporary relief for the home affordability crunch,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “More sustainable relief for the affordability crunch, however, will need to be some combination of slowing home price appreciation and accelerating wage growth. Wage growth is outpacing home price growth in about half of all local markets so far this year, an indication that a more sustainable affordability pattern is taking shape in more local markets.”

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Annual wage growth outpaced annual home price appreciation in 193 of the 406 counties analyzed in the third quarter (48 percent), down from 216 counties (53 percent) in Q2 2017 and down from 205 counties (50 percent) in Q1 2017 — the first time since Q1 2012 that at least half of all markets saw wage growth outpacing home price growth.

Counties where wage growth outpaced home price growth in Q3 2017 included Cook County (Chicago), Illinois; Maricopa County (Phoenix), Arizona; Orange County, California; San Bernardino County, California; and Bexar County (San Antonio), Texas.

“With Southern California boasting some of the highest average sales prices in the country, our market is a testament to the importance of local community job growth,” said Michael Mahon, president at First Team Real Estate, covering Southern California.Los Angeles County is experiencing a sluggish job creation environment, creating an even wider gap in housing affordability. But in Orange County, where we are seeing local government partnering with business owners on growth incentives and business owner recruitment, we continue to see an economic environment where wage growth is exceeding the annual cost of housing inflation.”

Since bottoming out nationwide in Q1 2012, median home prices have risen 73 percent while average weekly wages have increased 13 percent over the same period.

Counties where home price growth in Q3 2017 outpaced annual wage growth included Los Angeles County, California; Harris County (Houston), Texas; San Diego County, California; Miami-Dade County, Florida; and Kings County (Brooklyn), New York.

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Charting Hazard Risk

ATTOM Data Solutions found that median home prices in U.S. cities in the 80th percentile for natural hazard risk (top 20 percent with highest risk) have increased more than twice as fast over the past five years and over the past 10 years than median home prices in U.S cities in the 20th percentile for natural hazard risk (bottom 20 percent with lowest risk).

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For the report ATTOM indexed natural hazard risk in more than 3,000 counties and more than 22,000 U.S. cities based on the risk of six natural disasters: earthquakes, floods, hail, hurricane storm surge, tornadoes, and wildfires. ATTOM also analyzed housing trends in 3,441 cities and 735 counties — containing more than 71 million single family homes and condos — broken into five equal quintiles of natural hazard housing risk.

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Median home prices in cities in the top 20 percent (Very High) for natural hazard risk have appreciated 65 percent on average over the past five years and 9 percent on average over the past 10 years while median home prices cities in the bottom 20 percent (Very Low) for natural hazard risk have appreciated 32 percent on average over the past five years and 3 percent on average over the past 10 years.

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“Strong demand for homes in high-risk natural hazard areas has helped to accelerate price appreciation in those areas over the past decade despite the potential for devastating damage to homes that can be caused by a natural disaster — as evidenced by the recent hurricanes that made landfall in Texas and Florida,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “That strong demand is driven largely by economic fundamentals, primarily the presence of good-paying jobs, although the natural beauty that often comes hand-in-hand with high natural hazard risk in these areas is also attractive to many homebuyers.

“There is some evidence in the data that real estate consumers in certain areas are beginning to more heavily factor natural hazard risk into their decisions, particularly when it comes to flood risk,” Blomquist added. “Counter to the national trend, home price appreciation is slower in Florida and Louisiana cities with the highest flood risk than in cities with the lowest flood risk.”

In the state of Florida, median home prices in cities with the highest flood risk were up 8 percent on average from a year ago and up 66 percent from five years ago while median prices in cities with the lowest flood risk were up 10 percent from a year ago and 70 percent from five years ago.

Median home prices in Florida cities with the highest hurricane storm surge risk were up 8 percent from a year ago and 47 percent from five years ago, while median prices in cities with the lowest hurricane storm surge risk were up 11 percent from a year ago and up 67 percent from five years ago.

There was a similar trend in relation to flood risk in the state of Louisiana, which experienced damaging floods in August 2016. Median home prices in Louisiana cities with the highest flood risk were down 20 percent from a year ago and up 2 percent from five years ago while median home prices in the lowest risk cities increased 5 percent over the past year and increased 37 percent over the past five years.

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Co-Borrowers Account For 23% Of Single Family Loans

ATTOM Data Solutions found that more than 2 million (2,033,296) loans were originated on U.S. residential properties (1 to 4 units) in the second quarter of 2017, up 27 percent from a three-year low in the previous quarter but still down 12 percent from Q2 2016.

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 most recent quarter are projected based on available data at the time of the report (see full methodology below).

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The report also found that 22.8 percent of all purchase loan originations on single family homes in Q2 2017 involved co-borrowers — multiple, non-married borrowers listed on the mortgage or deed of trust — up from 21.3 percent in the previous quarter and up from 20.5 percent in Q2 2016.

“Homebuyers are increasingly relying on co-borrowers to help with home purchases, particularly in high-priced markets where sizable down payments are necessary to compete,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “This rising trend in co-borrowing is helping to eke out increases in purchase loan originations despite affordability and supply constraints.”

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Highest share of co-borrowers in San Jose, Seattle, Southern California and Portland

Among 42 cities with at least 1,500 purchase loan originations on single family homes in the second quarter, those with the highest share of co-borrowers were San Jose, California (50.9 percent); Miami, Florida (45.2 percent); Seattle, Washington (39.1 percent); the Southern California cities of Los Angeles (31.1 percent) and San Diego (29.4 percent); and Portland, Oregon (28.8 percent).

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“Climbing home prices are forcing more and more borrowers to consider other options, such as leveraging a parent’s credit, in order to qualify to buy,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. “Given the ongoing concerns about the emergence of another housing bubble, it was encouraging to see that Seattle has the tenth highest average down payment in the U.S. at 14 percent. Such substantial down payments can act as a cushion in the unlikely event that home prices start to reverse the substantial gains that we’ve seen over the past several years.”

Cities with the lowest share of co-borrowers in the second quarter were Memphis, Tennessee (10.3 percent); Mesa, Arizona (12.5 percent); Oklahoma City, Oklahoma (14.2 percent); Gilbert, Arizona (14.4 percent); and Henderson, Nevada (15.1 percent).

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Data Shows That Home Flipping Is On The Rise

ATTOM Data Solutions released its Q1 2017 U.S. Home Flipping Report, which shows that 43,615 single family homes and condos were flipped — sold in an arms-length transfer for the second time within a 12-month period — nationwide in the first quarter of 2017, down 8 percent from the previous quarter and down 6 percent from a year ago to the lowest number of homes flipped since Q1 2015 — a two-year low.

Home flips in Q1 2017 accounted for 6.7 percent of all single family home and condo sales during the quarter, up from 5.8 percent in the previous quarter and 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 (see full methodology below).

One-third (33.3 percent) of all single family homes and condos flipped in Q1 2017 were purchased by the flipper with financing, up from 31.9 percent in Q4 2016 and up from 29.5 percent in Q1 2016 to the highest level since Q3 2008, when 37.6 percent of completed home flips were purchased by the flipper using financing.

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“The business of financing for home flippers continued to grow in the first quarter of 2017 even as the home flipping rate plateaued compared to a year ago and average home flipping returns decreased for the second consecutive quarter,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Home flippers financed an estimated $3.5 billion in purchases for homes flipped during the quarter, up from $3.3 billion in the previous quarter and up from $2.4 billion a year ago to the highest level since the fourth quarter of 2007 — a more than nine-year high.”

Colorado Springs, Denver, Seattle lead markets with most financed home flips

Among 85 metropolitan statistical areas with at least 90 completed home flips in Q1 2017, those with the highest share originally purchased by the flipper with financing were Colorado Springs, Colorado (69.3 percent); Denver, Colorado (54.8 percent); Seattle, Washington (51.6 percent); Boston, Massachusetts (51.3 percent); and Providence, Rhode Island (47.3 percent).

“Seattle has such a high number of flippers who are financing their purchases relative to the U.S. as a whole due to escalating home prices in our region. The decision to finance is proof that these flippers believe the risks of financing are low due to our booming housing market,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market, where the Q1 2017 home flipping rate of 8.0 percent was above the national average and up 7 percent from a year ago. “While the number of home flippers across the nation is not growing, the opposite is true in Seattle. The demand for homes in our market is extremely competitive and this is enabling flippers to still see a return, even amidst rising home prices.”

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Other markets where more than 40 percent of home flips completed in Q1 2017 were originally purchased by the flipper using financing included San Diego, California (46.3 percent); Minneapolis-St. Paul, Minnesota (46.2 percent); Phoenix, Arizona (44.1 percent); San Francisco, California (43.0 percent); and Washington, D.C. (40.5 percent).

“With low interest rates, and available lenders willing to provide non-owner occupied loans, we are seeing many of our investors across Southern California take advantage of leverage financing when participating in housing flips,” said Michael Mahon, president at First Team Real Estate, covering the Southern California housing market.

Highest home flipping rates in DC, Nevada, Alabama, Tennessee, Maryland and Missouri

The District of Columbia had the highest home flipping rate in the nation in the first quarter (10.7 percent), followed by Nevada (9.8 percent); Alabama (9.0 percent); Tennessee (8.9 percent); Maryland (8.5 percent); and Missouri (8.0 percent).

Among 85 metropolitan statistical areas with at least 90 single family and condo home flips completed in Q1 2017, those with the highest home flipping rate were Memphis, Tennessee (15.1 percent); York-Hanover, Pennsylvania (12.5 percent); Fresno, California (11.1 percent); Birmingham, Alabama (10.3 percent); and Las Vegas, Nevada (10.0 percent).

Average home flipping returns decrease for second consecutive quarter

Homes flipped in the first quarter of 2017 were sold for a median price of $200,000, a gross flipping profit of $64,284 above the median purchase price of $135,716, up from a gross flipping profit of $63,500 in the previous quarter and a gross flipping profit of $59,100 in Q1 2016 — a new all-time high going back to Q1 2000, as far back as the data is available.

The $64,284 average gross flipping profit translated into an average 47.4 percent gross return on investment (ROI) for homes flipped in Q1 2017, down from an average 49.0 percent average gross flipping ROI in Q4 2016 and an average 48.5 percent average gross flipping ROI in Q1 2016 — the second straight quarter where the average gross flipping ROI decreased on a year-over-year basis following six consecutive quarters of year-over-year increases.

Highest home flipping returns in Pennsylvania, Ohio, Louisiana, New Jersey, Oklahoma

States with the highest average gross flipping ROI in the first quarter were Pennsylvania (107.1 percent); Ohio (96.3 percent); Louisiana (96.0 percent); New Jersey (87.1 percent); and Oklahoma (85.7 percent).

Among 85 metropolitan statistical areas with at least 90 single family and condos home completed flips in Q1 2017, those with the highest average gross flipping ROI were Pittsburgh, Pennsylvania (141.8 percent); Allentown, Pennsylvania (122.2 percent); Cleveland, Ohio (118.6 percent); Philadelphia, Pennsylvania (111.7 percent); and Baltimore, Maryland (106.0 percent).

Older, smaller homes flipped in first quarter

Nationwide, the median size of homes flipped in Q1 2017 was 1,402 square feet, down from a median 1,409 square feet in the previous quarter and 1,428 square feet a year ago to the smallest median square footage as far back as the data is available, Q1 2000.

The median year built of homes flipped in Q1 2017 was 1978, the same as in the previous quarter but down from a median year built of 1981 for homes flipped in Q1 2016.

“As the average age of the U.S. housing stock continues to increase across most of the country due to economic, environmental, and regulatory restrictions hampering investments in new construction growth, we will continue to see a renewal of interests in housing flips by investors willing to invest in the time, money, and resources necessary to update and modernize housing stock for lucrative profits,” noted Mahon of First Team Real Estate in Southern California.

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Underwater Homes Decrease

Data from ATTOM Data Solutions shows that as of the end of the first quarter of 2017 there were nearly 5.5 million (5,497,771) U.S. properties seriously underwater — where the combined loan amount secured by the property was at least 25 percent higher than the property’s estimated market value — up from 5.4 million seriously underwater properties in Q4 2016 but still down by more than 1.2 million from the 6.7 million seriously underwater properties in Q1 2016.

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The 5.5 million seriously underwater properties at the end of Q1 2017 represented 9.7 percent of all U.S. properties with a mortgage, up from 9.6 percent in Q4 2016 but down from 12.0 percent in Q1 2016.

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The report is based on publicly recorded mortgage and deed of trust data collected and licensed by ATTOM Data Solutions nationwide along with an industry standard automated valuation model (AVM) updated monthly in the ATTOM Data Warehouse of more than 150 million U.S. properties.

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“While negative equity continued to trend steadily downward in the first quarter, it remains stubbornly high in often-overlooked pockets of the housing market,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “For example, we continue to see one in five properties seriously underwater in several Rust Belt cities along with Las Vegas and central Florida. Additionally, close to one-third of homes valued below $100,000 are still seriously underwater.

“Several of the cities with the biggest quarterly increases in underwater properties saw a corresponding increase in share of distressed sales in the first quarter, creating a drag on overall home values, and in the case of Baton Rouge that increase in distressed sales may be in part attributable to the catastrophic flooding there in August 2016,” Blomquist noted. “Across the country, the share of seriously underwater homes was higher in high-risk flood zones.”

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.

Integration Gives Buyers More Information

ATTOM Data Solutions and Auction.com have expanded their strategic partnership that makes Home Disclosure Reports powered by ATTOM Data Solutions available for properties nationwide posted for sale on Auction.com.

Available on nearly 120 million U.S. properties, Home Disclosure Reports provide information in more than 42 categories, including neighborhood, school, crime and environmental data. Additionally, Home Disclosure Reports are able to pull in-depth public record property profiles that consist of ownership details, loan position, equity, sales history, building permits and property tax information.

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“As the premier disposition company in the market, our mission and focus are to create the most dynamic and trusted real estate market place for buying and selling Foreclosure Sales and Bank-owned properties,” said Jason Allnutt, general manager for Auction.com. “The addition of ATTOM-powered Home Disclosure Reports provides our customers with greater insights and data to help them make more informed and educated decisions.”

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Beginning in January 2017, Auction.com made the Home Disclosure Reports available for select properties following a limited-access trial period. As a result, the number of Home Disclosure reports downloaded by Auction.com customers doubled between January and March. Based on positive user experience during the trial period, Auction.com will continue to make ATTOM’s Home Disclosure Reports available moving forward.

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“The comprehensive and intuitive Home Disclosure Reports are empowering buyers, investors and sellers navigating Auction.com with crucial information they need to know about a property and its neighborhood before completing an online transaction,” said Rob Barber, chief executive officer at ATTOM Data Solutions. “The reports synthesize a myriad of data points from hundreds of disparate data sources into an organized and user-friendly format designed to convey the key details to consumers quickly and clearly. These reports will help further the common mission of ATTOM and Auction.com to make real estate transparent.”

“Home Disclosure Reports provide an added value into listed properties that buyers appreciate,” said Colleen Lambros, chief marketing officer for Auction.com. “It is our goal to ensure that buyers have access into insights that allow them to bid with confidence.”

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The Next Real Estate Boom

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A new white paper titled “Landlord Land” done by ATTOM Data Solutions and Clear Capital analyzes the “who” behind the recent real estate boom that has seen home prices reach near all-time highs nationwide even while the national homeownership rate remains near its 50-year low.

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“Though prices in several markets are nearing pre-bust levels, the composition of both the supply and demand of today’s real estate market is starkly different than a decade ago,” said Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital. “As such, it’s imperative for all market participants to understand the nuances of the New Normal Real Estate Market.”
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Leveraging proprietary data from ATTOM Data Solutions and Clear Capital Analytics, along with insights from national and local market experts, the white paper follows the arc of the recent housing boom starting with the rise of institutional investors as early as 2009 in some markets. It then traces the eventual pullback of institutional investor acquisitions followed by a brief uptick in first-time homebuyers and a more sustained surge in smaller rental investors that in turn is feeding a renewed home flipping frenzy.

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A housing recovery that is highly dependent on real estate investors is a bit of a double-edged sword.

Rapidly rising home values have been good for homeowner equity, but also have caused an affordability crunch for the first-time homebuyers.

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“A housing recovery that is highly dependent on real estate investors is a bit of a double-edged sword,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Rapidly rising home values have been good for homeowner equity, but also have caused an affordability crunch for the first-time homebuyers the housing market typically relies on for sustained, long-term growth.”

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“There are a few hard money lenders here, and they bring people who are not fulltime investors and people who are end users … to the (foreclosure) auction and are outbidding anyone who is a traditional investor,” said Chris Richter, CEO at Audantic Real Estate Analytics, a Seattle-based company providing predictive analytics for real estate investors.
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“Early on it was the mid-size investors all the way up to the large institutions (that) had the most urgent need for capital,” said Ryan McBride, COO at Colony American Finance, an Irvine, California-based company providing financing for real estate investors. “We see a lot more opportunities from the smaller, midsized operators, and so that is where we are focusing our efforts: the broad base of the pyramid.”

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We have one Google engineer who just bought his sixth house. He said ‘this is fantastic, real estate is so expensive here and I don’t want to be tied just to Bay Area real estate.’

I’ve noticed more millennials or their parents calling me and saying … ‘my son wants to buy a house and we’re willing to help with the down payment.’

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“A lot of demand is people in the Bay Area and New York City looking to buy in the Southeast,” said Gary Beasley, CEO and founder at Roofstock, an online marketplace for single family rentals. “We have one Google engineer who just bought his sixth house. He said ‘this is fantastic, real estate is so expensive here and I don’t want to be tied just to Bay Area real estate.’”

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“I’ve noticed more millennials or their parents calling me and saying … ‘my son wants to buy a house and we’re willing to help with the down payment. He’s been living with several other friends in an apartment … and they want to continue to live together,’” said Edward Krigsman, Managing Broker with Windermere Real Estate in Seattle.

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Home Flipping Reaches 10-Year High

Data from ATTOM Data Solutions shows that 193,009 single family homes and condos were flipped — sold in an arms-length transfer for the second time within a 12-month period — in 2016, up 3.1 percent from 2015 to the highest level since 2006, when 276,067 single family homes and condos were flipped.

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Home flips in 2016 accounted for 5.7 percent of all single family home and condos sales during the year, up from 5.5 percent in 2015 to a three-year high but still well below the peak in 2005, when 338,207 single family homes and condos were flipped representing 8.2 percent of all sales.

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For this 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 (see full methodology below).

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The report also shows that 126,256 entities — including both individuals and institutions — flipped homes in 2016, up less than 1 percent from 2015 to the highest number since 2007, when 143,266 entities flipped properties.

Meanwhile, the share of flipped homes that were purchased by the flipper with financing increased to an eight-year high of 31.5 percent in 2016 while the median age of homes flipped increased to 37 years — a new high going back to 2000, as far back as data is available — and the median square footage of homes flipped decreased to 1422 — a new record low going back to 2000.

“Home flipping was hot in 2016, fueled by low inventory of homes in sellable or rentable condition along with a flood of capital — both foreign and domestic — searching for the returns and stability available with U.S. real estate,” said Daren Blomquist, senior vice president at ATTOM. “The combination of more home flips and a greater share of financing for flip purchases resulted in a 19 percent jump in the estimated dollar volume of financing for home flip purchases, up to $12.2 billion for the flips completed in 2016 — a nine-year high. Investors are increasingly willing to move to secondary and tertiary housing markets with older, smaller properties that are available at a deeper discount.”

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