MReport February 2018

TheMReport — News and strategies for the evolving mortgage marketplace.

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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 Name Your Price, Buyers Tell Homeowners Home sellers had a windfall in 2017 with buyers paying more than the list price on 24.1 percent of home sales during the year. H ome sellers have had a windfall in 2017 with buyers paying more than the list price on 24.1 percent of home sales during the year, according to a report by real estate website Zillow. The report said that approximately one in four U.S. homes sold above the asking price as a combination of factors led to sellers netting an average of additional $7,000 over their initial price offer. The report indicated that the share of homes selling above list price has grown considerably since the beginning of the housing recov - ery in 2012 when slightly more than one in six home sales closed above asking price. This share of homes selling above their asking price has risen every year in the past three years. The typical price increase for homes that sold above the listed price was 3.1 percent in 2017. Low mortgage rates, limited sup - ply and high demand, demographic shifts, and a strong economy were some of the factors that have led to this surge in prices, the report said. Additionally, a shortage of home inventory, especially at the entry level and a growing demographic of young first-time buyers looking to start families have also been respon - sible for this kind of market. Cities where the lucrative tech market is booming were more likely than others to see this trend, according to the report. More than half the sellers in San Jose, San Francisco, Salt Lake City, Seattle, and Provo sold their homes for more than their asking price. The report indicated that in each of these markets, on an average, sellers made at least an additional of $20,000 over their initial asking price. The largest difference in ask - ing price and what a house sold for was found in San Jose, where the average home sold above list netted sellers an additional $62,000. The Budget for Homebuyers Looking for Luxury Homes $5 million is the new $1 million when it comes to buying a luxury home. $ 5 million is the new $1 million when it comes to buying a luxury home, according to data released by Trulia last month. The report, which examined trends in luxury living found that in terms of all home values across 100 larg - est metros in the U.S., 4.3 percent homes are currently valued at $1 million or more. The report indicated that in expensive cities like San Francisco listings priced at $5 million or more made up 3 percent of all listings. Long Island, New York, came in a close second, with 2.2 percent list - ings priced at $5 million or more. So why has $5 million become the new threshold for buying a luxury home? According to the report, the bar for owning a million-dollar home has dropped considerably over the years as these homes become more preva - lent in the housing market. Among the largest 100 metros surveyed for the report, homes valued at $1 million or more comprise 4.3 percent of all homes, a share that has gone up 3.8 times since 2002. For example, in San Francisco, homes in the million-dollar plus range make up two-thirds of the housing market representing a share that has nearly tripled over the last five years. The share of these homes was 22.4 percent in 2012. In neighboring Oakland, California, the share of homes costing $1 million or more grew nearly five times from 5.1 percent in 2012 to 23.8 percent in 2017. As a result of these rising prices, the report indicated $5 million-plus homes are the new threshold for entry into luxury real estate. Over the past year, the share of $5 million-plus homes increased 19.8 percent. Despite the fact that the median home price of all listings in the last year was $282,900, 86 of the largest 100 metros had at least one listing priced at $5 million or more, the report said.

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