Morning Roundup (11/22/2021)– Existing-Home Sales Up, Investors Sue Zillow

Good Morning! Today is Monday, November 11. Kyle Rittenhouse was acquitted on all charges. An SUV that drove into a Wisconsin holiday parade killed at least five people and wounded 40. Two Fox News contributors resigned in protest of a Tucker Carlson documentary featuring debunked conspiracy theories. And in mortgage and housing news… Existing Home Sales: Existing-home sales rose in October for the second month straight, though sales year-over-year are down 5.8%. Zillow Lawsuit: Investors are suing Zillow, saying they made misleading statements about the financial security of Zillow Offers. The law firm helming the claim has put out a call for investors who lost big to join in. Auctions This Week: The Treasury Department is holding auctions for two-,…

Lawsuit Claims Zillow Purposely Mislead Investors With Public Statements

Zillow and some of its top executives are being sued for allegedly making misleading claims in advance of the closure of its iBuying arm, Zillow Offers. Zillow shareholder Dibikar Barua filed a class-action lawsuit against the company in federal court in Seattle alleging that Zillow failed to tell shareholders it was struggling to accurately predict home prices. “Throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects,” the suit reads. It claims that Zillow did not disclose the “significant unpredictability in forecasting home prices” the company was struggling to overcome or its inventory backlog, both of which would have signaled to investors that…

Homebuyer Demand Hits Highest Level Since 2017

Redfin’s Homebuyer Demand Index hit an all-time high since at least 2017 as the number of listed homes remains seasonally elevated compared to past years. The report shows the market speeding up, with an increasing number of homes selling in two weeks or less and demand increasing even as listings trend down.  “The economy is recovering strongly and mortgage rates are still near all-time lows. Those two forces combined have caused homebuying demand to hit a record high,” said Redfin Chief Economist Daryl Fairweather.  For homes sold in the four-week period ending November 14, the median sale price rose 13% year-over-year (YOY) to $357,881, up 30% from 2019 and 2.1% from October. Asking prices were also up 13% YOY, and…

Investors Bought 90,000 Homes In Q3

Investors banking on growing home and rental prices for high returns bought 18.2% of all homes purchased in Q3 2021, up from 16.1% in Q2 and 11.2% year-over-year (YOY), according to a new Redfin report. Real-estate investors purchased a record 90,215 homes, totaling nearly $64 billion and up 80.2% YOY, the second-largest increase on record. Single-family homes made up nearly three-quarters of those purchases, an all-time high, while low-priced properties accounted for only 36%. The typical home purchased by investors cost $438,770. More than 75% of homes purchased by investors were paid for completely in cash. “Increasing home prices fueled by an intense housing shortage have created opportunities for investors to reap big profits,” said Redfin Senior Economist Sheharyar Bokhari.…

Morning Roundup (11/15/2021)– Forbearances Drop Below 2%, Airbnb To Impact Market In 2022

Good Morning! Today is Monday, November 15. The Glasgow climate summit ended with an agreement by nearly 200 countries to cut their carbon emissions in half this decade. An appeals court barred President Biden’s vaccine mandate for large employers. A New York Times report revealed the US hid an airstrike that killed civilians in Syria. And in mortgage and housing news… Forbearances Drop Below 2%: Forbearance exits jumped week-over-week, with nearly 300,000 borrowers leaving their plans, Black Knight reported. Airbnb Will Majorly Impact 2022 Market: Analysts predict Airbnb will expand its inventory 25% in 2022, suggesting it will have a significant impact on the housing market next year. AEI Response: The AEI Housing Center published a response to FHFA’s proposed…

Analysts See Airbnb As A Major Player In 2022 Housing Market

Airbnb is predicted to increase its inventory by 25% in 2022, giving it huge leverage to impact the residential real estate market next year, according to analyst Chris Linsell. During a presentation at the 2021 REALTORS® Conference & Expo, Linsell, senior real estate writer for TheClose.com, said Airbnb’s expansion will likely negatively impact housing affordability and inventory. “Airbnb (is) not just selling their product to consumers, they are selling to the providers of the product. They are selling twice without holding their own inventory. This unique model opens up an incredible level of scalability,” he said. “Many of those housing units are going to come from the residential real estate market.” He noted that the impact on residential housing could…

Morning Roundup (11/3/2021)– Zillow Offers Closing, Mortgage Apps Down

Good Morning! Today is Wednesday, November 3. Republican Glenn Youngkin won the Virginia Governor race, while New Jersey’s is too close to call. The Federal Reserve is likely to announce that it will begin steadily reducing its bond-buying program. The Atlanta Braves won the World Series. And in mortgage and housing news… Mortgage Applications Down: Mortgage applications dropped 3.3% last week, according to MBA’s weekly survey. Zillow iBuying Up In Smoke: Zillow is giving up its iBuying arm, Zillow Offers, after losing $381 million last quarter and will be laying off 25% of its staff. October Home Prices Up: Clear Capital’s October 2021 Home Data Index found home price growth was up 5.3% from last quarter, and up nearly 20%…

Zillow Offers Goes Up In Smoke

Zillow is closing down its iBuying arm, Zillow Offers, citing “unpredictability in forecasting home prices.” Zillow had previously announced it would not buy more homes in 2021, and instead turn its focus to renovating and selling its backstock of inventory. “We’re operating within a labor and supply-constrained economy inside a competitive real estate market, especially in the construction, renovation and closing spaces,” Chief Operating Officer Jeremy Wacksman said of the move. “We have not been exempted from these market and capacity issues.” But Zillow CEO Rich Barton later acknowledged Zillow’s failure was its inability to predict home-price appreciation. Now, two weeks later, it is shuttering altogether. The company dropped the news as part of its third-quarter earnings report. Zillow Offers lost $381 million last…

Zillow Offers Won’t Buy Any More Homes This Year

Zillow’s iBuying division, Zillow Offers, will stop buying new homes for the rest of the year. Zillow Offers has been operating in house flipping for more than three years, buying, renovating, then selling homes. However, it has announced that it will switch gears and focus on its backlog of existing contracts and selling the homes it currently owns. In response to this news, Zillow stock plummeted 10% on Monday. The company cited challenges related to construction and labor contracts. “We’re operating within a labor- and supply-constrained economy inside a competitive real estate market, especially in the construction, renovation and closing spaces,” Chief Operating Officer Jeremy Wacksman said.  “We have not been exempt from these market and capacity issues.” Homebuilders have…

Analysts See Stable Housing Market Ahead

More than 100 economists and real estate experts who participated in Zillow’s Q3 Home Price Expectations Survey say they expect the housing market to remain relatively stable in the coming months. Their predictions are based on the premise that many homeowners have put off listing their homes for fear of having to then buy or rent while prices are high. Improvements in buying conditions may be modest, but the market is cooling, which should put potential sellers at ease. The survey is sponsored by Zillow and conducted quarterly by Pulsenomics. “Across the U.S., home value appreciation rates and annual rent price increases are at historically high levels, and home price expectations are now the highest we’ve recorded in the 12-year…