MReport Jan 2019

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TH E M R EP O RT | 55 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 Budget Blues In regions are consumers able to meet their financial obligations? I n an attempt to track con- sumer spending trends, a recent study by LendingTree ranked the 50 largest metro areas based on where consum- ers can most or least afford their financial obligations. According to LendingTree writer Vivian Giang, contrary to popular belief, some of the most expensive cities in the U.S have people living well within a budget. The report draws atten- tion to the link between a good education and higher incomes, both factors that are of paramount significance to affordability. LendingTree analysts based their findings by comparing anonymized credit reporting data of LendingTree users from August 2018 and average household income from the latest U.S. Census Bureau data. The resulting ranking was based on info such as the number of credit inquiries in the past two years, the use of revolving credit lines, non-housing debt, and mort- gage balances. Based off of a 100-point scale, the top 10 cities where people are best at spending within their means are: 1. San Jose, California - 73.6 2. San Francisco - 70.6 3. Raleigh, North Carolina - 68.0 4. Minneapolis - 67.5 5. Boston - 66.5 6. New York - 66.2 7. Milwaukee - 63.9 8. Pittsburgh - 62.5 9. Kansas City, Missouri - 62.3 10. Denver - 62.1 San Jose, San Francisco, Raleigh topped the list because they have a large number of residents earn- ing high-incomes, which in turn helps them pay their bills and exorbitantly-priced houses. In sharp contrast, San Antonio was ranked at No. 50 on LendingTree's list. While there is a consensus that people are flocking to markets such as San Antonio, the report reveals the plight of many in cities such as these to be struggling with their monthly payments. Las Vegas and Riverside are also among cities that have low-income earners, higher rates of unemployment, and increased expenditure on vehicles often beyond purchasing powers. The report also touches upon the perils of poor financial habits and a lack of financial education. Consolidating loans to cut down on multiple payments, free credit report monitoring to adjust debt repayment strategy, refinancing existing loans or mortgage to lower interest rates, avoiding hard credit inquiries, timely payment, and planned budgets are some of the solutions the report suggests as tools to manage money more efficiently. A better financial insight that emphasizes the need to spend wisely and education that ensures a high income seems to be the need of the hour to thrive in expensive and economically lucra- tive markets across the country. Beware of the Bargain Trulia researched "bargain" homes across the country and whether they live up to their hype. I n a recent market study, Trulia reviewed listing descriptions in the nation's 100 largest housing markets to determine how many of the homes listed as "bargains" actually were. Ultimately, buyers should beware when seeing this term or other similar terms. "Much like Black Friday dis- counts, listings touting bargains and deals may help bring prospec- tive shoppers to the door," wrote Alexandra Lee, a housing data ana- lyst at Trulia. "But also like Black Friday, once in the door, you might just end up spending more on that home than you bargained for." In 35 percent of the 100 largest markets, homes described with terms such as "bargain" on aver- age were not listed for below their estimated value, according to Lee's research. So are there any places where home shoppers can take sellers at their word when it comes to "bargain" pricing? The metros with the highest percentage of "bargain" listings with prices below their actual value were found in San Jose, California (86.2 percent), San Francisco, California (83.2 percent), and Camden, New Jersey (78.8 percent). However, if there is any surprise that San Jose and San Francisco made the top of the list, Lee pointed out, "While these pricey Bay Area metros appear to have a sizeable share of deals on the market, they also see the most homes sold above asking." Also, while bargain listings tended to come with bargain asking prices, they were few and far between in San Jose and San Francisco. Just 1.7 percent of listings in San Francisco included bargain lingo and in San Francisco only 2.3 percent. On the other hand, Camden ranked highest for a percentage of listings claiming to be bargains with 7.1 percent of listings making the claim. Camden also ranked higher than any other metro for the percentage of discount on its "bargain" homes. Homes adver- tised as deals or bargains were listed for an average of 21.1 percent below their estimated value. In San Jose, the average discount on the listing price was 9.5 percent, and in San Francisco, the average discount was 10.5 percent. However, in San Jose and San Francisco, around three-quarters of all homes sold for more than their asking price. In San Jose, the average home sold for 8.5 percent above its asking price, and in San Francisco, homes sold for an average of 11 percent above asking. In Camden, on the other hand, homes sold for 6.9 percent below their list price. Following Camden on the list of metros with the highest percentage of listings advertised as bargains were Bridgepoint, Connecticut, with 6.7 percent of listings; Lake County, Illinois, with 6.1 percent; and Cape Coral, Florida, with 5.8 percent. In Bridgepoint and Lake County, a majority of homes list- ed as bargains had asking prices below their estimated value—56.6 percent in Bridgepoint and 71.1 percent in Lake County. However, such was not the case in Cape Coral, where just 36.5 per- cent of bargain listings were priced below their value, and the average bargain listing was priced 3.1 percent higher than its estimated value. The lesson for home shoppers this holiday bargain season: "As with most things in life, we found that some 'deals' were too good to be true," Lee said. Navigating the dynamic terrain of the single-family rental marketplace requires careful planning and strategic partnerships. Get equipped to craft an effective SFR investment plan at the 2019 Single-Family Rental Summit, where subject-matter experts and skilled practitioners will come together to offer viable solutions related to property management, acquisition, disposition, and financing. At the 2019 Five Star Fintech Summit, subject-matter experts representing leading mortgage and tech companies will discuss the latest advances in financial technology and how these innovations are being implemented to streamline processes, increase transparency, and reduce costs across the financial services sector. STAR SPONSOR: AUCTION.COM CORPORATE SPONSOR: MORTGAGE CONNECT MEDIA SPONSORS: CRYPTO PR LAB, MREPORT MARCH 13–14, 2019 THE GUEST HOUSE AT GRACELAND MEMPHIS, TENNESSEE MARCH 11–13, 2019 THE GUEST HOUSE AT GRACELAND MEMPHIS, TENNESSEE REGISTER TODAY! CALL 214.525.6700 OR EMAIL CONCIERGE@THEFIVESTAR.COM. CORPORATE SPONSORS: APPRAISAL NATION, DIRECT LENDING PARTNERS, HOME DEPOT RENOVATION SERVICES, RCN CAPITAL, SAFEGUARD PROPERTIES, SUNSET EQUITY, VERISK TWO GREAT EVENTS BACK TO BACK

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