MReport August 2018

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TH E M R EP O RT | 47 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Which Cities Have the Most Nonowner-Occupied Houses? The cities with the highest percentage of nonowner-occupied homes are in the South and West. W hether they're hoping to get ahold of an older abode or a freshly built one, today's dearth of for- sale stock isn't doing would-be buyers any favors. Every ounce of available inventory makes a difference, including nonowner- occupied properties (i.e., vacation, investment, and second homes). To assess their impact on inven- tory, LendingTree recently identi- fied the U.S. cities with the highest shares of mortgages originated for nonowner-occupied homes. "Many such properties are often bought for cash, however, which means our mortgage-focused study likely understates the effect on the market," the company noted. When dissecting the data, LendingTree detected a definite regional trend, with cities claim- ing the most nonowner-occupied properties located mostly in the South and West. "Southern cities may be at- tracting investors due to low prices and growing populations," LendingTree explained. "Many residents in Southern cities may not be able to access homeowner- ship due to lower median salaries, creating a ready pool of renters." Rapid price appreciation is like- ly luring investors in the West, the study notes. That region's infamously high prices hinder homeownership, thus creating a ready pool of renters. Cities with the fewest non- owner-occupied properties trend in the Northeast and Midwest, where "affordable homes mean the opportunity to be a home- owner is high and less appre- ciation attracts less investors," LendingTree explained. Of the 50 cities studied, Oklahoma City snagged the top slot, with a 15.4 percent share of nonowner-occupied mortgages and a $193,000 nonowner-occupied average loan amount. Philadelphia clocked in at No. 2, with a 14.6 percent share and a $245,000 loan amount. Memphis rocked the No. 3 spot, with a 14.6 percent share and a $126,000 loan amount. Miami; San Francisco; New Orleans; Las Vegas; New York; Los Angeles; and Riverside, California, round out the top 10, respectively. The city with the least nonown- er-occupied mortgages: Detroit, with a 5.2 percent share and a $115,000 nonowner-occupied average loan size. Next comes Cleveland at No. 49, with a 5.7 percent share and a $124,000 loan size. Hartford, Connecticut, chalked up a No. 48 ranking, with a 5.9 percent share and a $237,000 loan size. Finishing out the bottom 50 are Indianapolis (47); Cincinnati (46); Pittsburgh (45); Buffalo, New York (44); Columbus, Ohio (43); Louisville, Kentucky (42); and Salt Lake City (41). The Home Sales and Supply Conundrum Homes are selling at record speeds, in some markets in less than a week on average, while prices continue to climb and many homes sell for more than their list price. H omes went under contract faster than ever in May, according to a report by Redfin. With proper- ties going under contract in 34 days, May broke April's record of 36 days. But that was just the average. According to the report, a typical home in Denver went under contract in just six days. Seattle and Tacoma were close seconds, with homes going under contract in seven days. Boston and Grand Rapids saw the typical home spend eight days on market. Speed was not the only thing on the rise in May. Redfin found that across 174 markets, the national median home sale price rose to $305,600, a 6.3 percent in- crease from last year. Sales in May saw 28 percent of homes go above their list price, which was also a record, Redfin reported. At the same time, nearly a quarter of homes for sale had a price drop in May, the highest percentage of price drops since September of 2017. "Prices are still increasing, but not at the same rate we saw earlier in the spring," said Taylor Marr, Senior Economist at Redfin. "The record percentage of homes sold above list price is at odds with the higher percentage of price drops in May. This tells us that while it's still very much a sellers' market, price growth and rising mortgage rates may be pushing buyers to the limit of what they're able to pay." Then, of course, there is inventory. According to the report, the national market had 2.5 months of supply at the end of the month. Individual markets, however, varied widely. In San Jose, the supply of homes fell 14 percent in May, compared to last year. That drop was the smallest decline in a 16-month stretch of inventory declines, Redfin reported, adding that the numbers show "the intensity of San Jose's inventory shortage." However, the number of newly listed homes in May ticked up 11 percent in San Jose compared to last year. Indianapolis had the largest decrease in overall inventory, with the number of properties for sale down 38 percent from a year earlier. Portland, Oregon, on the other hand, saw the number of homes on the market increase by 35 percent. Overall, the number of newly listed homes for sale increased 4.3 percent com- pared to last May, though the total supply of homes nationally declined 5.4 percent during the same time period.

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