February 2016 - The Industry's Best Kept Secret

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56 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T ANALYTICS THE LATEST accounted for nearly one-quarter of all home sales at 23.9 percent. "The cash share was 32 percent in September, far below the 47 percent peak in January 2011, but still above the long-term average of about 25 percent in more normal market conditions," CoreLogic Chief Economist Frank Nothaft said. "Two factors that have moved the cash share lower are the drop in REO sales—often purchased by investors for cash— and the strong U.S. dollar, which has discouraged foreign buyers." The cash sales share remained near one-half in a handful of states in September. Alabama had the highest cash sales share for September with 48.2 percent, followed by West Virginia (46 percent), Florida (45.2 percent), New York (44.1 percent), and Kentucky (39.6 percent). The cash sales share was higher than 47 percent in five metro areas during September, four of which were located in Florida: Miami-Miami Beach-Kendall (50.8 percent); West Palm Beach-Boca Raton-Delray Beach (50.6 percent); Philadelphia, Pennsylvania (48.9 percent); Fort Lauderdale-Pompano Beach- Deerfield Beach (47.9 percent); and North Port-Sarasota-Bradenton (47.2 percent). Syracuse, New York (14.1 percent), had the lowest cash sales share in September. "Two factors that have moved the cash share lower are the drop in REO sales— often purchased by investors for cash—and the strong U.S. dollar, which has discouraged foreign buyers." —Frank Nothaft, CoreLogic Young Demographic Making a Comeback Would-be buyers ages 25 to 34 may soon re-enter the housing market. M any factors have contributed to the lessening number of young home - owners over time—excluding a brief spike during the housing boom—but this may be about to change in the near future. These prospective homebuy - ers may be about to make their unexpected grand entrance back into the housing market. Fannie Mae's most recent Housing Insights report found that young homeowners have been "away" from the housing market due to demographic and social shifts, which include changes in the age distribution of the population, longer educational careers, delayed marriage and childbearing, and rising minority population shares. The report showed that owner-occupants ages 25 to 34 fell more than 300,000 annually on average from 2007 to 2012, according to the Census Bureau's American Community Survey (ACS). However, these declines have subsided a bit since 2012, with the number of young homeowners de - clining by less than 100,000 in 2013 and staying mostly flat in 2014. Fannie Mae believes that the number of young homeowners could go three ways. It could con - tinue to decline at the recent pace, remain constant at current levels, or recover slightly, returning by decade's end to the long-term trend. "A return to modest growth in young homeowners could have several implications for the hous - ing industry, including creating the need to adjust the size, type, and geographic location of new housing construction, to expand education and counseling efforts targeted at inexperienced home - owners, and to step up efforts to provide services and technologies suitable for youthful home buy- ers," Fannie Mae said. Fannie indicated that the rise in young-homeowner numbers could " lead to increased demand for starter homes" and "increase de - mand for services and technologies that are designed to serve youthful homebuyers as they search for housing and mortgages." "It's difficult to predict, but given that young adults are expe - riencing steady job gains and the beginnings of an income recovery, and given their persistently strong aspirations for homeownership, stability or modest improvement in homeownership rates is cer - tainly plausible. Recent efforts to expand mort- gage credit for first-time home- buyers also could help nudge the young-adult homeownership rate in a positive direction," Fannie Mae concluded.

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