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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.”

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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.”

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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.

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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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