TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1196118
48 | M R EP O RT 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 ORIGINATION iBuyer Hotspots A new report showcases the regions of the country where iBuyers are making strong inroads. R edfin reports that iBuyers have purchased more than one out of every 10 homes sold in 2019 in numerous markets. Eight metros—Phoenix, Arizona; Charlotte, North Carolina; Fort Worth, Texas; and Raleigh, North Carolina— reported iBuyer purchase rates of 10% or more through October 2019. iBuyers bought 13.7% of homes in Phoenix's Pecan Creek neighborhood so far in 2019. "The fact that iBuyers have reached over 10% market share in some places could be an indication of how big iBuying could get nationwide once the business model is perfected," Redfin Chief Economist Daryl Fairweather said. "However, it's possible that iBuyers are only doing so well in certain neighborhoods because the homes there are largely homogenous—modest, entry-level homes all built around the same time, typically with two or three bedrooms. "These factors make it easier to use automated tools to value homes well and resell them quickly. As iBuyers begin to expand in more expensive markets beyond the small foothold they currently have, we'll get a clearer picture of whether they are capable of reaching a high level of market share nationwide." The Waddell neighborhood of Glendale, Arizona, saw iBuyers purchase 11.7% of the homes so far in 2019, which is a year-over- year decline from last years' 16.9%. Raleigh had the highest overall share of iBuyers in 2019 at 14.8%—a year-over-year increase from 2018's 6.1%. "iBuyers in Raleigh have been primarily focused on suburban homes priced between $200,000 and $300,000," Raleigh Redfin agent Mark Stephens said. "The iBuyers definitely have a 'type'—most of the homes they're buying are standard two-story homes that were built in the '90s and early '00s. Their uniform nature makes these homes easy to turn around quickly with minor exterior work plus some carpet and paint inside." Conversely, Texas—located near San Antonio—had the lowest average home price of homes sold by iBuyers in Q 3 2019 at $169,000. Homes were purchased in the city at an average price of $235,000. Mabelton, Georgia, had the highest average price for homes sold by iBuyers in 2019 at $300,000. Homebuyers' Shifting Priorities New demands from millennial homebuyers will have an impact on the housing market for years to come. A new decade will usher in a new generation of homebuyers. Millennials are set to overtake the market and they bring with them new ideals, wants, and desires for homeownership. According to Realtor.com, one of those ideals is ditching the high-priced metros and moving into the suburbs. A new study from Realtor. com revealed the top real estate markets for 2020 will be those focused on affordability, relative to nearby pricey metros. "The cities that we expect to do best in 2020 are not necessar- ily big, fancy, coastal cities, but secondary markets where the job market is still pretty good but housing is affordable," said Danielle Hale, Chief Economist of Realtor.com. The city poised to be the top market next year is Boise, Idaho. Boise is home to median-home prices of $295,000, and a local Realtor described the housing market as "absolute craziness." "I don't think you can stand and do a 360-degree turn in this town without seeing construction," said Robert Inman, real estate agent at Boise's Best Real Estate. CoreLogic's October Home Price Index (HPI) noted home prices rose 3.5% and are projected to increase by 5.4% over the next year. The increase in the October 2019 HPI gain, however, was down from October 2018's rise of 5.2%. Idaho continued its streak of leading the nation in apprecia- tion, which it had done for more than a year, reporting an annual appreciation of 10.9% in October. The next closest state was Maine with an appreciation rate of 8%. Connecticut's home prices were unchanged from October 2018. Following Boise is McAllen, Texas, which has a median-home price of $152,000. "We have a growing popula- tion, and they need houses," said Rene Galvan, owner of the local brokerage RGV Realty. Other markets making up the top-10 were: Tucson, Arizona; Chattanooga, Tennessee; Columbia, South Carolina; Rochester, New York; Colorado Springs, Colorado; Winston-Salem, North Carolina; Charleston, South Carolina; and Memphis, Tennessee.