May 2023 Newsletter

homebldr Product Updates

Our Investment Potential Dataset solution is now live in Austin, TX.

Until now, our products have been focused on providing due diligence, financing, and renovation services for specific properties submitted by customers. But what if you haven't found any properties promising enough to investigate further? Our Investment Potential Dataset solution helps real estate professionals, investors, and wholesalers find high-quality investment opportunities that meet their buy-box criteria.

This new product helps source high-quality investment opportunities by assessing the investment potential of many properties at once. This product takes specified property characteristics into account (i.e. location, size, price, features, etc.) and maps every relevant property to proprietary fields that quantify investment potential:

• After-Repair Value (ARV)

• Gross Profit Margin (%)

• Investment Potential Score/Grade

• Investment Strategy Category

• Seller Likelihood Score for Off-Market Properties (Still in BETA)

If you are interested in a demo of our Investment Potential Dataset solution, please reach out to [email protected]!

National Housing Market

Inventory:

• Inventory is still very low, but is slowly increasing and is ~20% higher than this time last year.

• We started 2023 with ~70% more inventory than we started 2022 with, which means the YoY gap in inventory is shrinking and we could have the same or less inventory than one year prior by July or August.

New & Pending Listings:

• Homes going under contract increased for the first three weeks in May and then dipped ~5% in the last week.

• Throughout all of 2023, homes under contract rose as inventory rose. This means that as more and more homes were hitting the market, there was sufficient demand from buyers for those homes. However, in the last week of May, inventory rose and homes under contract didn’t rise with it. This is likely due to mortgage rates increasing above 7% resulting in a reduction in buyer demand.

• Conclusions can’t be made based on one week of data, but if these trends hold true (inventory increasing while home sales doesn’t change or decreases), it would likely lead to home price declines.

Median List & Sale Prices:

• Median sale prices have increased since January and are continuing to increase MoM.

• Median price of homes under contract is also increasing. While still lower than this point last year, the gap between prices last year and this year is shrinking.

• If the price of homes under contract continues to increase, or even holds steady for the next month, we could have YoY price gains as soon as early July.

Price Reductions:

• Price reductions are low but are increasing slightly, which normally happens at this point in the year.

• We currently have less price reductions than this time in 2019 may soon have less than the same time in 2018.

Things To Watch For:

• The recently passed debt limit deal allows the US to avoid an economic catastrophe and may lead to modest mortgage rate declines in the second half of 2023.

• Seasonal home price declines (which typically begin in June) have not shown up in the data yet. If the extremely low inventory levels continue to prop up prices, we may see YoY price gains later this summer.

• How long will mortgage rates stay above 7%? This appears to be a threshold that causes buyer demand to shrink significantly.

• If price reductions continue their slow rise, we may soon have less price reductions than we did in 2018 and 2019.

Austin, TX Single Family Housing Market

• Much like the national housing market, sale prices for single family homes in Austin, TX declined in the second half of 2022 and have rebounded throughout 2023.

• While sale prices are down ~13% compared to this time last year, sale prices are up nearly 7% since the start of 2023.

• Seasonal declines in inventory and home sales throughout the winter followed by increases in the spring can be expected, however, demand rising with inventory is indicative of a strong market.

• If the gap between listings and home sales grows larger, that would put a negative pressure of home prices.

• See raw data below:

Top Active Deals in Austin, TX for Under $500K

The following properties present three of the best single family fix & flip investment opportunities with a list price of $500K or less that were listed in Austin, TX in May 2023:

1) 1801 Kendra Cove, Austin, TX 78757

Current List Price: $400,000

After-Repair Value (ARV): $710,000

Gross Profit Margin: 77.6%

Fix & Flip Score (Out of 100): 97.1

2) 1165 Nickols Avenue, Austin, TX 78721

Current List Price: $340,000

After-Repair Value (ARV): $596,000

Gross Profit Margin: 75.3%

Fix & Flip Score (Out of 100): 96.5

3) 1204 Perez Street, Austin, TX 78721

Current List Price: $399,000

After-Repair Value (ARV): $699,000

Gross Profit Margin: 75.1%

Fix & Flip Score (Out of 100): 96.0