Rising Sea Levels Pose Significant Risk to Owners of Less Expensive Homes

Less affluent homeowners have more of their wealth stored in their homes, and could face catastrophic losses if their homes are damaged by higher sea levels

– $916 billion worth of U.S. homes could be lost if sea levels rise six feet

– Nearly two-thirds of homes at risk of rising sea levels are in suburban areas

– More than one quarter of all at-risk homes are in Miami

Seattle, WA – Oct. 18, 2017 (PRNewswire) Rising sea levels are expected to impact $916 billion worth of homes in the next 100 years, most of which are low-end or median-value homes.

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Zillow® analyzed the types of homes that could be underwater, absent preventative measures, based on recent estimates of how high sea levels could rise by 2100(i) due to climate change.

The majority of all homes at risk of flooding due to rising sea levels are in suburban areas – 65.4 percent of homes are in suburban areas, compared to 22.6 percent in urban locations and 12 percent in rural areas(ii).

Overall, 39 percent of the homes expected to be underwater in 2100 are among the nation’s most valuable. The rest are near the median value or below – and a quarter are among the least valuable homes. This is significant because less wealthy communities and households are less likely to be able to afford preventative measures to ward off rising seas. For most homeowners, a home is their biggest single investment, and its value is a major share of their overall wealth. Any significant damage to a home is harder to recover from when most of an owner’s wealth is tied up in that same home.

Owners of high-end homes are more likely to live in communities with the resources and connections needed to protect their homes, such as building sea walls or making structural changes that help homes withstand floodwaters. But in markets where the majority of homes at risk of rising water are among the least valuable in the area, these options might be out of reach.

Less than 20 percent of homes in Honolulu that are at risk of flooding due to rising sea levels are high-end homes. That means the majority of homeowners who could lose their homes may be less able to make investments to protect their properties, especially lower income homeowners who have to spend a larger share of their income on mortgage payments(iii).

“We’ve seen the enormous impact flooding can have on a city and its residents,” said Zillow Chief Economist Dr. Svenja Gudell. “It’s harder for us to think about it on a long-term timeline, but the real risks that come with rising sea levels should not be ignored until it’s too late to address them. With organized and committed planning, cities can help protect both current and future residents. Living near the water is incredibly appealing for people around the country, but it also comes with additional considerations for buyers and homeowners. Homes in low-lying areas are also more susceptible to storm flooding and these risks could be realized on a much shorter timeline as we have seen time and time again.”

Miami holds 25.8 percent of all U.S. homes at risk of rising sea levels, which are cumulatively worth $217.3 billion. The three cities with the greatest number of homes threatened by higher sea levels are in the Miami metropolitan area. Fort Lauderdale, Miami Beach and Miami could all lose more than 30,000 homes to sea level increases.

20 Metropolitan Areas with the Most Homes Threatened By Sea Level Increases

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Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

(i) https://www.zillow.com/research/climate-change-underwater-homes-12890/

(ii) Among homes for which Zillow has an urban/suburban/rural designation. About 10 percent of homes are not classified.

(iii) https://www.zillow.com/research/low-income-mortgages-unaffordable-16490/

Google Home Issue Fuels Smart Speaker Privacy Concerns

Source: statista.com

When Amazon unveiled its first smart speaker, the Amazon Echo, in the fall of 2014, the initial reaction from many people was: “why on earth would I voluntarily put a device in my house that allows Amazon to listen to everything that’s going on?”

In response to this (not surprising) reaction, Amazon repeatedly pointed out that the device only starts listening once the code word has woken it up and thankfully that appears to be true. The worst thing that could have happened to Amazon from a PR perspective at that time was for people to discover that the Echo listens in on its users without having been activated. It did not and the device became a runaway success.

For Google, having recently extended its own line of smart speakers, that PR nightmare became reality this week, when a reviewer of the new Google Home Mini discovered that the device was recording conversations without having been prompted to do so. Google quickly issued a statement explaining that a faulty button had wrongfully activated the device and that this button would now be disabled on all devices via a software update. Despite the quick response, many people will see this episode as evidence that smart speakers shouldn’t be trusted, because it confirms one of the most cited concerns with respect to smart speakers as our chart, based on NPR and Edison Research data, illustrates.

Real Estate Infographic

For Least Valuable U.S. Homes, Housing Crisis Recovery Lagging

Homes in the bottom third of the market lost 30 percent of their value during the housing bust and have yet to regain it

– National home values rose 6.9 percent from August 2016, to a Zillow Home Value Index (ZHVI) of $201,900. Home values in Seattle, Tampa, Fla. and San Jose saw the strongest appreciation.

– Rents across the country are up 1.9 percent year-over-year, to a Zillow Rent Index (ZRI) of $1,430 per month, with rent in Sacramento, Calif. and Seattle appreciating the most.

– The top and bottom thirds of the market in Detroit have seen the most uneven recovery in terms of homes regaining the value lost following the housing crisis.

Seattle, WA – Sept. 21, 2017 (PRNewswire) Median home values are reaching new peaks in more than half of the nation’s largest housing markets, but a closer look at which homes are regaining value reveals an uneven recovery in the biggest markets.

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More than 50 percent of U.S. homes have reached or surpassed the value they reached during the housing boom period, according to the August Zillow® Real Estate Market Report(i), but the types of homes that are recovering are not the same, particularly in the most populated places. In 24 of the nation’s largest 35 markets, the homes in the bottom third of the market are least likely to have recovered the value lost when the housing bubble burst.

Detroit has seen one of the least balanced recoveries following the Great Recession. Nearly two-thirds of the most expensive homes in Detroit have regained the value lost when the market collapsed. The typical top-tier home value in Detroit is $284,800, higher than it was during the housing bubble. In comparison, homes in the bottom third have only regained 33.7 percent of their lost value, and are now worth a median of $53,000. Only 10.6 percent of these homes have fully returned to their peak values.

As homes are often the most expensive asset someone owns, the recovery contributes to the growing wealth gap across the country. Household incomes show a similar pattern of inequality, according to newly released Census data(ii). The median household income across the United States increased in 2016, but those in the top 20 percent of earners took home more than half of the overall income.

“The housing market as a whole is moving at a steady clip, with high demand and low inventory combining to maintain strong home value appreciation,” said Zillow Chief Economist Dr. Svenja Gudell. “Most new construction has been at the higher end of the market, so demand for the limited supply of entry-level homes is pushing up their values, but these homes also lost more value when the bubble burst. Many of these homeowners are still waiting to see their homes come back to where they were about 10 years ago. Even as headline numbers show an overall recovery, there are still thousands of Americans struggling to bounce back from the housing bust.”

The median home value in the U.S. rose 6.9 percent over the last year to a Zillow Home Value Index(iii) of $201,900. Seattle is the only major U.S. market where home values rose at a double-digit annual pace, up 12.4 percent since last August to a median home value of $453,100. Tampa home values rose 9.3 percent, and the median home is worth $187,400.

Annual rent appreciation grew for the fourth consecutive month, with rents increasing 1.9 percent from last August to a Zillow Rent Index(iv) of $1,430.

Limited inventory leaves few options for buyers. Nationally there were 12.6 percent fewer homes available in August 2017 than there were in August 2016. San Jose and San Diego saw the biggest annual declines in inventory, down 59.4 percent and 37.2 percent respectively.

Mortgage rates(v) on Zillow ended August at 3.62 percent, near the lowest level of the month. Rates moved steadily lower throughout the month after starting at a high of 3.72 percent(vi). Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market.

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Zillow

Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

(i) The Zillow Real Estate Market Reports are a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Real Estate Research. For more information, visit www.zillow.com/research/. The data in Zillow’s Real Estate Market Reports are aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data are typically recorded in each county and publicly available through a county recorder’s office. All current monthly data at the national, state, metro, city, ZIP code and neighborhood level can be accessed at www.zillow.com/local-info/ and www.zillow.com/research/data.

(ii) https://www.census.gov/library/publications/2017/demo/p60-259.html

(iii) The Zillow Home Value Index (ZHVI) is the median estimated home value for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. It is expressed in dollars, and seasonally adjusted.

(iv) The Zillow Rent Index (ZRI) is the median Rent Zestimate® (estimated monthly rental price) for a given geographic area on a given day, and includes the value of all single-family residences, condominiums, cooperatives and apartments in Zillow’s database, regardless of whether they are currently listed for rent. It is expressed in dollars.

(v) Mortgage rates for a 30-year fixed mortgage

(vi) Monthly high occurred on August 1st

Quicken Loans Study Shows Consumers Continue to Be Too Optimistic with Anticipated Home Value

– Quicken Loans’ National HPPI shows appraised values 1.35% lower than homeowners estimated in August

– Home values rose 0.19% nationally in August, with a 2.64% year-over-year increase, according to the Quicken Loans HVI

Detroit, MI – Sept. 12, 2017 (PRNewswire) Appraisals continued to lag homeowner expectations in August, although the difference between appraiser and owner opinions has narrowed. Quicken Loans’ National Home Price Perception Index (HPPI), which compares homeowners’ initial estimates and appraisers’ opinions of home values, showed that appraised values were 1.35 percent lower than homeowners’ expectations in August. This is compared to July when there was a 1.55 percent difference.

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While perceptions of home values vary, the values themselves are constantly changing. Home values ticked up 0.19 percent in August, according the Quicken Loans’ National Home Value Index. When viewed annually, values rose an average of 2.64 percent compared to August 2016.

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Home Price Perception Index (HPPI)

A home’s value, or its perceived value, can influence whether the owner decides to sell the home, refinance or even access some of their equity. However, the HPPI shows not all homeowners understand their home’s current value. Nationally, appraisals in August were 1.35 percent lower than homeowners’ valuations. Regionally, value perceptions vary widely across the country, from home values being 3 percent higher than homeowners estimated in the West, to 3 percent lower than expected in the Midwest and Northeast. A 3 percent difference may seem small, but depending on the local market, it could make a significant impact on value. For instance, a homeowner in Denver may have upwards of $11,000 in additional equity they can access for home improvements or loan consolidation.

“One of the biggest lessons from the HPPI, is highlighting how regionalized real estate is,” said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. “Homeowners who have a better understanding of their local housing market can make more informed decisions about their home. After all, their house is not just where they live, but one of their bigger assets.”

Home Value Index (HVI)

Home values rose again in August, although at the slowest pace in 2017. The HVI, the only measure of home value changes based solely on appraisals, reported that home values increased 0.19 percent in August. Appraisals posted stronger growth when viewed at a year-over-year basis, increasing 2.64 percent. At a regional level, there was a slight downturn in home values in the South and East – dipping 0.52 percent and 0.58 percent, respectively. The Midwest and West regions each had rising appraisal values, increasing 0.16 percent and 1.34 percent.

“As the sun sets on the summer, some of the intense competition for housing also winds down,” said Banfield. “It’s important to focus on the annual numbers with the HVI. While there can be some monthly variations in the data, especially as seasons start to change, the annual numbers show healthy growth across the country.”

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*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.

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*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.

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*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.

About the HPPI & HVI

The Quicken Loans HPPI represents the difference between appraisers’ and homeowners’ opinions of home values. The index compares the estimate that the homeowner supplies on a refinance mortgage application to the appraisal that is performed later in the mortgage process. This is an unprecedented report that gives a never-before-seen analysis of how homeowners are viewing the housing market. The HPPI national composite is determined by analyzing appraisal and homeowner estimates throughout the entire country, including data points from both inside and outside the metro areas specifically called out in the above report.

The Quicken Loans HVI is the only view of home value trends based solely on appraisal data from home purchases and mortgage refinances. This produces a wide data set and is focused on appraisals, one of the most important pieces of information to the mortgage process.

The HPPI and HVI are released on the second Tuesday of every month. Both of the reports are created with Quicken Loans’ propriety mortgage data from the 50-state lenders’ mortgage activity across all 3,000+ counties. The indexes are examined nationally, in four geographic regions and the HPPI is reported for 27 major metropolitan areas. All indexes, along with downloadable tables and graphs can be found at QuickenLoans.com/Indexes.

About Quicken Loans

Detroit-based Quicken Loans Inc. is the nation’s second largest retail home mortgage lender. The company closed more than $300 billion of mortgage volume across all 50 states between 2013 and 2016. Quicken Loans moved its headquarters to downtown Detroit in 2010, and now more than 17,000 team members from Quicken Loans and its Family of Companies work in the city’s urban core. The company generates loan production from web centers located in Detroit, Cleveland and Scottsdale, Arizona. The company also operates a centralized loan processing facility in Detroit, as well as its San Diego-based One Reverse Mortgage unit. Quicken Loans ranked “Highest in Customer Satisfaction for Primary Mortgage Origination” in the United States by J.D. Power for the past seven consecutive years, 2010 – 2017, and highest in customer satisfaction among all mortgage servicers the past four years, 2014 – 2017.

Quicken Loans was ranked #10 on FORTUNE magazine’s annual “100 Best Companies to Work For” list in 2017, and has been among the top-30 companies for the past 14 consecutive years. The company has been recognized as one of Computerworld magazine’s ‘100 Best Places to Work in IT’ the past 13 years, ranking #1 for eight of the past twelve years including 2017. The company is a wholly-owned subsidiary of Rock Holdings, Inc., the parent company of several FinTech and related businesses. Quicken Loans is also the flagship business of Dan Gilbert’s Family of Companies comprising nearly 100 affiliated businesses spanning multiple industries. For more information and company news visit QuickenLoans.com/press-room.