It says something about the world we live in when a work of fiction makes a lot more sense than the news headlines. If you haven’t watched Succession on HBO (or Amazon), it’s worth a look. In any case, let’s look at the week that was.
Notorious TL;DR
For all you VIP members, there were two posts.
[VIP] Q4/2019 iBuyer Comparison: Phoenix Market – Zillow, Opendoor, Offerpad
I finally compiled all the data I have from Phoenix so wrote up a post presenting them. Looks like the trend towards iBuyer continues to grow strongly, but I was struck by the difference between Zillow and the other two.
Furthermore, I am really impressed by Opendoor’s continued strength in Phoenix. The gap between Zillow and Opendoor is widening. That surprised me.
Well, go ahead and read the whole thing if you’re interested.
[VIP] Agents Know iBuyer is For Real
I wrote up my thoughts on something that struck me while looking into the new crop of instant offers aggregators. I think it’s becoming clear that although the top leadership in real estate continues to downplay, doubt and dismiss the iBuyer phenomenon, the agents with boots on the ground know that iBuyer is for real, is here to stay, and are acting accordingly.
I’ll think about this even more over the next few weeks and months, but take a read and let me know what you think.
Quick Takes
What’s been happening in and around the world of real estate?
Keller Williams to Waste a Lot of Money Release its New Website & App
I mean, the money’s already spent. So it’s hard to say they’re going to waste a lot of money. But looks like KW will be releasing its new website and mobile app in Q1 of 2020. The Inman News press release story talks it up a bunch, then says:
The largest concern KW likely faces with its app is getting consumers to use it. It’s not a small hurdle, as homeshoppers have more than enough to choose from.
The answer, according to Inman parroting KW public relations, is steering:
The first tactic will, of course, be one-on-one, agents encouraging their clients to engage to use it.
“The differentiator for us, is that we don’t expect a consumer is just going to find out about the app on their own,” said Annie Switt, Keller Williams vice president of marketing. “The behavior we imagine is that an agent is reaching out to their consumers and setting up a saved searched for them because of the interaction Command and the app will have with one another.”
Supposing that first tactic doesn’t drive… oh, I don’t know… 180 million monthly uniques to this new app, then what? No one dare disturb the sound of silence.
African American Homeownership Rate Drops to Lowest Since 1968
It’s not yet clear how much political impact this little piece of news will have, but we are in an election year and the race card has not yet been maxed out by any of the candidates. So this little piece of information, especially in light of the Long Island scandal, could come up again and again and again in the next several months.
Keep an eye on politics.
By the way, I’m pretty sure the underlying reason is marriage. Here’s a study by the National Institute of Health, with a striking couple of paragraphs:
The United States shows striking racial and ethnic differences in marriage patterns. Compared to both white and Hispanic women, black women marry later in life, are less likely to marry at all, and have higher rates of marital instability.
…
Today’s racial and ethnic differences in children’s family experiences are striking. In 2014, 70 percent of non-Hispanic white children (ages 0–18) and roughly 59 percent of Hispanic children were living with both of their biological parents. The same was true for only a little more than one-third of black children.
Since marriage is the single most associated factor for homeownership (Urban Institute), we’re not likely to see this trend reverse until we see far higher marriage rates in the African American community. And NAR can’t do squat about that issue.
On a related note… Millennials are not getting married. Just thought you should know.
Re-default on Modified Mortgages is Up, Up, and Up
In other cheery news, we get word from an Op/Ed in MarketWatch that people are simply not paying enough attention to re-default rates in modified mortgages.
This is an old item, but I only saw it today because someone sent it to me.
Basically, the millions of mortgages that were modified either permanently or temporarily are re-defaulting at an alarming rate. The most problematic quote:
Until 2018, Fannie Mae published re-default rates for its modified loans in its quarterly Credit Supplement report. The table below shows the consistent rise in these rates:
In early 2018, these re-default statistics disappeared from Fannie Mae’s Credit Supplement, which was renamed Financial Supplement. Fannie Mae did report in its annual 10-K Report for 2018 that the 12 month re-default rate had climbed to 39%. Based on Fitch Ratings data, the re-default rate for Fannie Mae loans modified three or more years ago could be approaching 50%.
I don’t know about you, but I’m having really strong flashbacks to 2008 and 2009 right about now. Sheesh.
Housekeeping Notes
I’m home this week, and hope to get more writing done. After that, I’m off on the road off and on for two weeks. If any of you will be at the OREA Reality conference in Niagara Falls, drop me a line. Maybe we could grab a drink or something. 🙂
Otherwise, I’ll see you around the blog and the Lounge.
Thank you all!
-rsh
