2021 Brings in New States Topping the Foreclosure Charts

Key Takeaways

August 26th marked the lifting of the 17-month federal foreclosure moratorium; we at Knock wanted to look into the states most impacted by foreclosures throughout the Covid-19 period and the indicators contributing to their susceptibility. 

Overall, data shows that foreclosures have down-trended nationally year-over-year since 2010. This can be attributed to the economy’s recovery over time from the Great Recession. In the years preceding this event, we have seen many improvements in pertinent metrics vital to our nation’s housing health, including rises in income, investment, and lowering interest rates. This overall increase in economic health has led us to a point in 2020 where foreclosures have hit their lowest levels in a decade. However, with the Covid-19 unemployment spike felt across the country, and the ending of the foreclosure moratorium, we are beginning to see an uptick in foreclosures in 2021, with increases in certain states that have had fewer relative foreclosures historically.

Line graph indicating the downward trend of real estate owned foreclosure transactions from 2015 to 2021

Analysis of the states with the highest percentage of real estate owned (REO) transactions out of total fair market transactions revealed that Virginia and Georgia had taken the lead, outpacing New Jersey and Mississippi, which had the highest percentage of foreclosures in previous years. To dive deeper into the circumstances that caused this shift, we selected a combination of metrics that encompass both current market conditions and longer rooted trends such as, home price appreciation, unemployment rates, debt to income ratios, income inequality, and the time it takes for a foreclosure in a state. 

We found that home price appreciation changes, unemployment rates, and debt to income ratios had a strong correlation to REO transactions when regressed historically, with income inequality showing a moderate correlation. This can be attributed to home price appreciation's integral role in maintaining and growing homeowner’s equity, as a home is one of the largest investments and possible returns made in a person's lifetime. Without the financial capacity to save, unemployment is the leading force in foreclosure rates as high debt to income ratios indicate more long term trends of financial overburden. Furthermore, income inequality plays a part in identifying populations where these aforementioned forces can have a stronger impact. When combined, the foreclosure response to these sensitivities can either be delayed or accelerated by that state's approach to foreclosure processes.  Whether a state has judicial or non-judicial routes ultimately determines its impact on delinquent homeowners.

States with judicial foreclosure processes, meaning the lender must file suit against the homeowner in a court of law, tend to take longer and can span years from the initial notice of delinquency to the loss of a home. Those states with non-judicial foreclosure processes can take as little as 100-200 days. This stark distinction in timing between foreclosure procedures gives homeowners in default in non-judicial states less time to access remedies and come up with missed mortgage payments. Furthermore, another safeguard for some states not seen in the top foreclosure list is those with added protection for homeowners in the foreclosure process. States like California, Colorado, Minnesota, and Nevada all passed laws to increase homeowner protections, further slowing down the process due to the requirements lenders and servicers must comply with under these laws.6

However, the introduction of Virginia, Georgia and New York to the foreclosure top 5 shows an evolution from the states chronically seen at the top of the foreclosure list. Our analysis found that home price appreciation has become a double edged sword when it comes to foreclosures in 2021. Previously, lack of home price appreciation has been attributed to underwater mortgages and high foreclosure rates, but in 2021, we are finding that large increases in home price appreciation is proving just as detrimental to states with higher percentages of at risk homeowners. States with high unemployment, income inequality and debt to income ratios are seeing upticks in foreclosures as homeowners inability to keep up with the tax burdens associated with the drastic year-over-year increases in market values takes effect. In 2021, on average Virginia’s property taxes increased 9%, Georgia’s at 14%, and New York at a whopping 21%. These added tax burdens are disproportionately burdensome to the long term homeowners who stayed put amidst the pandemic as their assessments reflect the market values of the homes that did sell, and the homeowners who could afford them. This additional cost to homeowners is one they are expected to bear as the federal foreclosure moratorium and its forbearance came to an end. 

Chart listing the top 5 foreclosure states from January to September 2021: Virginia, Georgia, New Jersey, Mississippi, New York.

Within these top states, the townships with the most REO’s are; Richmond, VA (11%), Chattanooga, GA (5%), Vineland, NJ (5%), Jackson, MS (2%), and Corning, NY (5%).

This causality in foreclosure rates has shifted from the signifying factors we have grown to know in previous years. Below find the states more synonymous with high foreclosure rates since the Great Recession;

Chart indicating the top 5 foreclosure states in 2019: New Jersey, Mississippi, Delaware, Connecticut, New Mexico

Within these top states, the townships with the most REO’s were; Vineland, NJ (45%), Jackson, MS (13%), Dover, DE (7%), Torrington, CT (12%), and Albuquerque, NM (6%).

These states were some of the slowest to recoup their peak home price values from pre-Great Recession, and those hit hard with unemployment recovery from 2009 to 2019. The percent each state recuperated from their fall from pre-Great Recession home price peak’s by 2019 show: New Jersey (10%), Delaware (-6%), New Mexico (11%), Mississippi (8%), and Connecticut (-11%), compared to the national average home price appreciation recovery of 23%. Since the Great Recession, this failure for many states to regain the home value lost, left many long-term homeowners with underwater mortgages until recently.  

Pandemic-induced housing demand has jump-started home price growth across the country, providing year-over-year increases at nearly 15-20x the average rates felt over the last decade for the states reflected in the 2019 chart above. The HPI growth of the states previously at the top of the foreclosure charts from 2019 to 2021 include Connecticut (22%), New Jersey (20%), Delaware (19%), New Mexico (19%), and Mississippi (14%). In all states, this marked full recuperation of peak home prices from pre-Great Recession times, as well as home price appreciation increases more inline with national averages. If home price appreciation continues for these states with high foreclosure rates in recent years, we expect the percent of real estate owned transactions to remain low in these states.

Sources

  1. The investopedia team. “Unemployment Rate.” Investopedia.com, Investopedia, 28 September 2021, https://www.investopedia.com/terms/u/unemploymentrate.asp. Accessed 2021.
  2. Investopedia team. “Debt-to-income(DTI) ratio.” Investopedia.com, Investopedia, 14 March 2021, https://www.investopedia.com/terms/d/dti.asp. Accessed 2021.
  3. Investopedia Team. “House Price Index(HPI).” Investopedia.com, Investopedia, 26 August 2021, https://www.investopedia.com/terms/h/house-price-index-hpi.asp. Accessed 2021.
  4. Investopedia Team. “Gini Coefficient.” Investopedia.com, Investopedia, 28 April 2021, https://www.investopedia.com/terms/g/gini-index.asp. Accessed 2021.
  5. Perez, Yarilet. “Foreclosure Definition.” Investopedia, 2021, https://www.investopedia.com/terms/f/foreclosure.asp. Accessed 6 December 2021.
  6. Loftsgordon, Amy. “Special Foreclosure Protections in Colorado, Minnesota, and Nevada.” Nolo, https://www.nolo.com/legal-encyclopedia/special-foreclosure- protections-in-colorado-minnesota-and-nevada.html. Accessed 6 December 2021.

Data Resources

  1. MLS data - ATTOM data solutions
  2. Unemployment  Rates - U.S. Census Bureau
  3. HPI - Federal Housing Finance Agency 
  4. Debt-to-income ratio - U.S. Census Bureau
  5. Income Inequality/ Gini Coefficient - U.S. Census Bureau
  6. Average days to foreclosure - ATTOM data solutions

Methodology

We at Knock wanted to dive into the dynamics behind foreclosures across the country. We analyzed the states seeing the highest percent of real estate owned foreclosure transactions out of all fair market transactions for the time periods of 2010-2019 and 2021. We chose REO transactions as the measure for this analysis, to show the states who have homeowners in the most final steps of the foreclosure process, and where remedies were ultimately not found. To look into the economic conditions of the states experiencing foreclosure we collected data on their; home price index growth, unemployment rates, debt to income ratio and gini coefficient indexes to determine causality over time of foreclosure rates, and how the impact of those dynamics have changed over time. 

Knock Expands to Detroit, Giving All Homebuyers the Power of a Cash Offer

Knock’s innovative Knock Home Swap™ and Knock GO™ (Guaranteed Offer) home loans provide a more certain, convenient and cost-effective way for homebuyers to win their dream home in today’s red-hot housing market

NEW YORK (Nov. 4, 2021)  Knock, the fast-growing digital homeownership platform that turns all buyers into cash buyers, announced today its innovative home loans that bring certainty, convenience and cost savings to buying and selling homes are now available in Michigan for the first time. Beginning today, homebuyers in the Detroit, Ann Arbor, Flint and Monroe metros can use the Knock Home Swap and Knock GO™ (Guaranteed Offer) to remove the financing contingency on the home they want, giving them a leg up in the red-hot housing market and more control over their largest financial transaction.

So far this year, Knock has expanded to 51 more markets, and is now serving homebuyers in a total of 69 markets in 14 states across the country.

“With fewer homes available for sale and those that are selling fast, it’s a challenging time to be a buyer, so we are excited to give Michigan homebuyers a new way to compete and win in today’s competitive market,” said Knock Co-Founder and CEO Sean Black. “Both the Knock Home Swap and Knock GO™ provide the power of cash and are tailored for how today’s consumer shops with their phone and agent by their side. The Home Swap provides homeowners with the convenience to buy first and sell later, and Knock GO™ gives first-time homebuyers the certainty of both a guaranteed closing and appraisal protection.”

With the Knock Home Swap, a homeowner is pre-funded for a competitively priced mortgage and an interest-free bridge loan, which covers the down payment on the new home, home prep and up to six months of mortgage payments on the old house. Home Swap customers are able to sell their home on the open market for the maximum sale price without the hassle of living through repairs or showings. They also receive Knock’s 30-day closing guarantee 1,2, Home Prep Concierge and backup offer on the old house in the unlikely event that it doesn’t sell within six months. Ninety-eight percent of Knock homes sell in 90 days or less, with 90 percent selling in 30 days or less.

Designed specifically for first-time buyers and others who don’t have a home to sell, Knock GO™ combines a cash-backed, competitively priced conventional mortgage with a closing guarantee and appraisal protection, giving buyers and their agents the ability to make an offer that will stand out from other offers. Knock GO™ is backed by the company’s guarantee that it will fund the loan in the event it isn’t 100% clear to close in 30 days and help offset the difference between the sale price and the home’s appraised value3,4 at no additional cost.

Knock is partnering with agents at five local leading brokerage firms to bring its innovative home loan solutions to homeowners throughout Southeast Michigan, including The Perna Group Realtors – Keller Williams, Keller Williams|Jeff Glover and Associates Realtors, The Integrity Team and Keller Williams Paint Creek, Weichert Realty St. Clair Shores and House Want Realty.

“My goal is to provide the best opportunities and tools to my agents to service their clients at the highest level. Partnering with Knock does exactly that. It allows our agents to reduce the stress and uncertainty for our clients of being in a double payment situation while holding two mortgages, or worse, selling their home without finding one at all. Knock is a game changer,” said Michael Perna, CEO of The Perna Group Realtors – Keller Williams.

Nationwide, the Knock Home Swap and Knock GO™ are available through 270 real estate brokerage firms with over 107,000 agents in approximately 5,200 ZIP codes nationwide. Homebuyers also can learn more and see if they qualify for the Knock Home Swap or Knock GO™ at knock.com.

1Mortgage loans offered by Knock Lending LLC. NMLS 1958445. Equal Housing Lender . For licensing information go to: www.nmlsconsumeraccess.org.

2Terms and conditions apply. See https://knock.com/closing-guarantee for more information regarding the Knock Closing Guarantee.

3Terms and conditions apply. See knock.com/guaranteed-offer/terms for more information regarding the Knock GO™ (Guaranteed Offer).

About Knock

Knock makes home buying simple and certain by transforming all buyers into cash buyers and giving them complete control of the process from their phone. Knock’s flagship Home Swap™ product empowers consumers with a cash-like offer to buy the home they want before selling the home they have, providing the convenience of not having to live through repairs or showings in the process. Knock GO™ (Guaranteed Offer) is a cash-backed home loan solution for first-time homebuyers looking to compete in today’s hot housing market.

Launched in 2015 by founding team members of Trulia.com, Knock has raised more than $600 million in debt and equity from top-tier investors, including RRE Ventures, Foundry Group, Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs. The National Association of Realtors®, through its investment arm Second Century Ventures, is a strategic investor in Knock, giving its 1.5 million members the ability to market Knock’s homeownership solutions to their clients. Knock currently operates in 69 markets nationwide and plans to be in over 100 markets by 2023.

Contact: pr@knock.com

Most Americans Cannot Afford a New Construction Home

New construction home prices are at unseasonable highs, as the median U.S. new home price of $390,900 in August remained commensurate with July’s record. This increase in pricing is outpacing the national median household income, which has decreased 2.9% from 2019 to 2020 to $67,521 – a decline seen for the first time since 2011, with only modest rebounds so far in 2021, according to preliminary forecasts.1 

According to Fannie Mae’s Chief Economist, Doug Duncan; “Affordability remains a challenge, even with mortgage rates near historic lows; if the pace of income growth doesn’t keep up with inflation and interest rates rise more than expected, we’d expect housing activity to slow from our current projections”.

In September, Fannie Mae lowered its 2022 new construction home sale expectations from 846,000 units to 789,000 amidst the building supply constraints and record home price issues the nation is currently facing, foreshadowing an even longer recovery from years of underbuilding.2  

While facing a shortage of housing supply at all price levels, this gap is expected to disproportionately affect lower-income earners in 2022. Households in the bottom 25th percentile of income are estimated to face a shortage of 2.6 million units versus those above the median income expected to face a gap of 650,000 units.2 

To put things in perspective, the minimum total household income for a mortgage on a $390,900 home, with a 6% down payment, typically falls just under $80,000. At this level, nearly 60% of U.S. households would not be eligible. Knock analyzed the top metro areas with the highest percentage of new construction sales to dive deeper into this affordability issue. 

Based on our analysis, we found the following metro areas at both ends of the affordability spectrum based on required household income for the median new construction mortgage in their area;

When comparing the price paid for a new home, we found the average premium of new construction to existing resale to be $68,454. 

According to the National Association of Home Builder’s 2021 survey What Home Buyers Really Want, 60% of buyers prefer a new construction home over an existing home.3 For first-time homebuyers in particular, who often struggle with saving for a down payment and are most impacted by rising home prices, this makes affording a new construction home more difficult a task than it is for existing homeowners looking for their next home. During the first 10 months of 2021, first-time home buyers’ average purchase price was $229,000.4 A price range that makes up less than 16% of the new construction market as of August, for a population that makes up nearly a third of all buyers.5

Based on median household income, the average time it takes to save for a down payment on a new construction home for first-time homebuyers is 15 years.

These exorbitant savings periods reflect the inability of the average first-time homebuyer to obtain homeownership in many of the pricier metros.

Furthermore, affordability concerns persist at a time when the share of smaller inventory homes built by new construction builders are at all-time highs, according to Zelman & Associates’ research.Homes built in the 0-2,249 square foot range have reached 60% of all homes built in the 10th largest markets in 3Q21, a 35% increase from 1Q15. In terms of the average square footage of single-family housing starts, a decline from 2015 to the present has occurred from 2,689 to 2,477 square feet in 2020 amidst surging new home prices. This trend has begun to reverse in 2021, showing growth to 2,513 square feet and, is projected to continue into 2023. The move to larger homes could further impact the average home price over time.

In conclusion, the current supply chain and affordability issues surrounding new construction challenge pre-Covid notions of the relief to the housing market new construction homes bring. If new construction homes do not align with the buying power of the average consumer, benefits of this additional inventory are felt disproportionately throughout the country and are attenuating a much smaller portion of the building gap issue than previously thought. Moving forward, we expect to see a push back in median new construction home pricing as the reality of homeownership of the majority becomes simply too far out of reach.   

Methodology Section 

To determine new construction affordability in the major metro areas across the country, Knock first pulled the top 50 metros by population size and analyzed the average % of new construction transactions. We found that number to be 8%, and from there cut any metro areas that fell below that to control for increased pricing due to limited availability. We reverse calculated the required income on a mortgage that assumed a 6% down payment, as well as a 3.04% interest rate for a 30-year mortgage. Once that number was determined, we were able to use the ACS median household income figures per income bracket to determine the % of households in that metro area that could not afford a new construction home. The average savings period for FTHB was calculated by taking the median HH income and calculating a 2.4% savings rate per year until the average downpayment was reached.

Sources

  1. Seeking Alpha. “Median Household Income in June 2021.” seekingalpha.com, Seeking Alpha, 4,August, 2021, https://seekingalpha.com/article/4444965-median-household-income-in-june-2021. Accessed 2021.
  2. Volkova, Maria. “Fannie Mae cuts origination forecast for 2022.” housingwire.com, HousingWire, 20,September ,2021, https://www.housingwire.com/articles/fannie-mae-cuts-origination-forecast-for-2022/.
  3. Quint, Rose. “Home Buyers’ Preferences Shift Towards New Construction.” eyeonhousing.org,NAHB, 1 April, 2021, https://eyeonhousing.org/2021/04/home-buyers-preferences-shift-towards-new-construction/. Accessed 2021.
  4. Carroll, Peter. “Who is Most Affected by the Housing Supply Gap?” corelogic.com, Core Logic, 28, April, 2021, https://www.corelogic.com/intelligence/who-is-most-affected-by-the-housing-supply-gap/. Accessed 2021.
  5. National Association of Realtors. “2021 Home Buyers and Sellers Generational Trends Report.” NAR.com, National Association of Realtors Research Group, 16 March 2021, https://www.nar.realtor/sites/default/files/documents/2021-home-buyers-and-sellers-generational-trends-03-16-2021.pdf. Accessed 2021.
  6. Zelman & Associates. “Proprietary Look at Builder Price Points -tug of War to Ensure Between Preference and Affordability.” Zelmanandassociates.com, Zelman & Associates, 7 October 2021. Accessed 2021.
  7. Top 10 Housing Markets with Median Down Payments. Christine Stricker, 2020. attomdata.com, https://www.attomdata.com/news/market-trends/figuresfriday/top-10-u-s-housing-markets-with-highest-median-down-payments-in-q3-2020/.

You can find the full press release here.

Knock Launches Knock GO™(Guaranteed Offer), Making Homebuyers Cash Buyers

Homebuyers in 65 markets can now turn to Knock to get a competitive home loan to make a non-contingent, cash-backed offer to win the home of their dreams

NEW YORK (Oct. 4, 2021) — Knock, the fast-growing digital homeownership platform that brings certainty and convenience to buying and selling homes, announced today the launch of Knock GO™ (Guaranteed Offer), its innovative cash-backed home loan solution for first-time homebuyers looking to compete in today’s hot housing market. With Knock GO™ homebuyers in 65 markets nationwide can now make a non-contingent, cash-backed offer to win their dream home with the added assurance Knock is there to bridge the gap should the appraisal come in below the sale price.

Designed specifically for first-time buyers and others who don’t have a home to sell, Knock GO™ combines a cash-backed, competitively priced conventional mortgage with a closing guarantee and appraisal protection, giving buyers and their agents the ability to make an offer that will stand out from other offers. Knock GO™ is backed by the company’s guarantee that it will fund the loan in the event it isn’t 100% clear to close in 30 days and help offset the difference between the sale price and the home’s appraised value1,2  at no additional cost.

“In today’s housing market many buyers are losing their dream home to offers that waive financing, appraisal and other contingencies. Both buyers and sellers need to be guaranteed that their transaction is going to close, and Knock GO™ provides the certainty it will,” said Knock Co-Founder and CEO Sean Black. 

Founded in 2015,  Knock’s flagship Home Swap™ empowers homeowners with the certainty of a non-contingent offer to buy the home they want before selling the house they have for top dollar, giving them the convenience of not having to live through repairs or showings or sell to investors at a discount.  With the introduction of Knock GO™, Knock is expanding its reach to all homebuyers whether they are looking to both buy and sell or just buy a home. 

Similar to Knock Home Swap™, Knock GO™ is a fully digital experience available through more than 250 leading brokerage firms with over 100,000 agents in 65 markets nationwide. Homebuyers also can learn more and see if they qualify for a Knock GO™home loan at knock.com/go

About Knock

Knock is on a mission to make homeownership simple and certain. Whether you are a homeowner looking to buy a new home before selling your current home or a first-time buyer, Knock offers a fully digital end-to-end solution that brings certainty, convenience and cost-savings to the often stressful and complicated process of homeownership. The Knock Home Swap™ empowers a customer to buy their new dream home before selling their old one. Knock GO™ (Guaranteed Offer) provides homebuyers with the best features of a cash offer in a competitive home loan to win the home they want without paying more. 

Launched in 2015 by founding team members of Trulia.com, Knock has raised more than $600 million in debt and equity from top-tier investors, including RRE Ventures, Foundry Group, Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs. The National Association of Realtors®, through its investment arm Second Century Ventures, is a strategic investor in Knock, giving its 1.5 million members the ability to market Knock’s homeownership solutions to their clients. Knock currently operates in 65 markets nationwide and plans to be in over 100 markets by 2023.

1Terms and conditions apply. See knock.com/guaranteed-offer/terms for more information regarding the Knock GO™ (Guaranteed Offer).

2Mortgage loans offered by Knock Lending LLC. NMLS 1958445. Equal Housing Lender . For licensing information go to: www.nmlsconsumeraccess.org.
Contact: pr@knock.com

Knock Expands to Portland, Ore., Giving Homeowners the Power to Make a Non-Contingent Offer on Their New Home Before Listing

The Knock Home Swap™ is now available in 65 markets nationwide through more than 250 brokerage firms with over 100,000 agents

NEW YORK (Sept. 20, 2021) -- Knock, the fast-growing homeownership platform that brings certainty and convenience to buying and selling homes, announced today that Portland, Ore., area homeowners have a new way to compete and win their dream home. Beginning today, they can use the Knock Home Swap to unlock the equity in their current house to make a strong non-contingent offer on their new home before they list.

With Knock’s expansion into Portland-Vancouver-Hillsboro, Ore., Wash., Eugene-Springfield, Ore., Salem, Ore., Albany-Lebanon, Ore., Corvallis, Ore. and Longview, Wash., homeowners in 65 markets nationwide can now use the Knock Home Swap to gain a competitive advantage in today’s hot housing market, while also avoiding the stresses associated with selling a home, including repairs and open houses.

“The Home Swap provides a fully digital end-to-end solution that allows a consumer to work with their own agent to buy their new home and then list and sell their current house on the open market for the maximum sale price,” said Knock Co-Founder and CEO Sean Black. “At Knock, we believe home is everything, and we are excited to partner with the region’s leading brokers and agents to give homeowners throughout Portland Metro and the I5 Corridor to Eugene a better way to buy and sell homes.”

With the Knock Home Swap, a consumer is pre-funded for a competitively priced mortgage and an interest-free bridge loan, which covers the down payment on the new home, home prep and up to six months of mortgage payments on the old house. A homeowner can qualify for the Knock Home Swap from their mobile device and then confidently shop for their dream home with their own agent by their side and in the app. In addition, they have the advantage of waiting until they have moved into their new home to prep and list their old house on the open market, so there's no living through repairs and showings or selling for less than full value.

As part of its commitment to certainty and convenience, Knock offers Home Swap customers a 30-day closing guarantee 1,2 and its Home Prep Concierge, which includes access to the company’s approved contractor network as well as managing the payment of client-approved work until closing. Additionally, Knock provides a backup offer on the old house in the unlikely event that it doesn't sell within six months. Ninety-eight percent of Knock homes sell in 90 days or less, with 90 percent selling in 30 days or less.

Knock is partnering with hundreds of agents at 11 local leading brokerage firms to bring the Home Swap to homeowners throughout the Portland metropolitan area, including Keller Williams Realty Professionals; Keller Williams Realty Sunset Corridor; Keller Williams Realty Capital City; Keller Williams Realty Eugene & Springfield; Keller Williams Southern Oregon; Keller Williams Realty Mid-Willamette; Keller Williams Realty Portland Central; Keller Williams Realty Portland Elite; Soldera Properties; The Hasson Company -- Drew Coleman Team and Ross Seligman, Living Room Realty.

"We are excited to partner with Knock to provide even more resources to our clients and ultimately open more doors of opportunity. In today's competitive real estate market, the Knock Home Swap provides much needed certainty and convenience while allowing clients to make the most competitive offers possible,” said Leslie Hilbert, General Manager of the Xperience Brokerage Network, which includes Keller Williams Realty Professionals, Keller Williams Sunset Corridor, Keller Williams Capital City, Keller Williams Eugene & Springfield and Keller Williams Southern Oregon. “With the Home Swap, clients no longer have the anxiety of not being able to place a strong non-contingent offer. the hassle and expense of moving twice or the stress of coordinating closings."

Nationwide, the Knock Home Swap is available through 255 real estate brokerage firms with over 103,000 agents in approximately 4,900 ZIP codes nationwide.

About Knock
Knock is on a mission to empower people to move freely. The Knock Home Swap™ makes it easy for consumers to buy their new dream home before selling their old one, skipping the hassles of living through repairs and showings, paying only one mortgage at a time, and having home prep covered upfront, so their old house sells for the highest possible price. Knock currently offers the Home Swap in 65 markets and plans to be in over 100 markets by 2023.

Launched in 2015 by founding team members of Trulia.com, Knock has raised more than $600 million in debt and equity from top-tier investors, including RRE Ventures, Foundry Group, Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs. The National Association of Realtors®, through its investment arm Second Century Ventures, is a strategic investor in Knock, giving its 1.5 million members the ability to market the Knock Home Swap to their clients.

Contact: pr@knock.com

1Terms and conditions apply. See https://knock.com/closing-guarantee for more information regarding the Knock Closing Guarantee.

2Mortgage loans through Home Swap Program offered by Knock Lending LLC. NMLS 1958445. Equal Housing Lender . For licensing information go to: www.nmlsconsumeraccess.org.

Knock Expands Presence in Arizona, Florida, Minnesota, Tennessee and Texas to Empower More Homeowners to Buy Before They Sell

The Knock Home Swap™ is now offered in 59 markets coast-to-coast, including Prescott and Yuma, Ariz., The Villages in Florida, Duluth, Rochester and St. Cloud, Minn., Knoxville and Memphis, Tenn. and Sherman-Denison, Texas

NEW YORK (AUG. 19, 2021) -- Knock, the fast-growing real estate technology company that is bringing convenience, certainty and cost savings to the process of buying and selling homes, today announced that it is building on its existing presence in Arizona, Florida, Minnesota, Tennessee and Texas to bring the Knock Home Swap to homeowners in nine additional markets. With the Home Swap, a consumer is able to make a strong non-contingent offer that empowers them to buy and move into their new home before they list, alleviating the need to time a sale with a purchase, moving twice and living through repairs and open houses.

With today’s announcement, the Knock Home Swap is available in 59 markets coast-to-coast. The expansion into Prescott and Yuma, Ariz., The Villages in Florida, Duluth, Rochester and St. Cloud, Minn., Knoxville and Memphis, Tenn. and Sherman-Denison, Texas, builds on the company’s established presence throughout Arizona, Florida, Minnesota, Tennessee and Texas.

“With the Knock Home Swap, homeowners can unlock the equity in their old house so they can buy their dream home and then repair and list their old house on their timeline for the maximum sale price,” said Knock Co-Founder and CEO Sean Black. “Based on our rapid growth, it’s clear that homeowners across the country are looking for a more digital, streamlined real estate experience that includes the expertise of a real estate professional. We are excited to bring the Home Swap and the certainty, convenience and cost-savings it provides to more homeowners.”

The Knock Home Swap offers homeowners an end-to-end digital solution that includes a competitively priced mortgage and an interest-free bridge loan, which covers the down payment on the new home, home prep and up to six months of mortgage payments on the old house. A homeowner can qualify for the Knock Home Swap from their mobile device and then confidently shop for the home they want with their own agent by their side and in the app. In addition, they have the advantage of waiting until they have moved into their new home to prep and list their old house on the open market, so there's no living through repairs and showings or selling for less than full value.

As part of its Home Prep Concierge, Knock provides access to its contractor network and manages the payment of client-approved work until closing. Additionally, Knock provides a backup offer on the old house in the unlikely event that it doesn't sell within six months. Ninety-nine percent of Knock homes sell in 90 days or less, with 83 percent selling in 30 days or less. 

The Knock Home Swap is being offered by 55 local brokerage firms in the nine expansion markets. Consumers can also visit Knock.com to learn more.

For Meisha Cleland, who recently used the Knock Home Swap to purchase her new home in Prescott Valley, Ariz., before listing her house in Mesa, the Home Swap eliminated the need to move twice. “In the past when I’ve bought and sold a home, I’ve needed the money from the sale of my house for the down payment on my new home. It has meant having to sell my house and find temporary housing while looking for a new home. The Home Swap eliminated a step in the process, and it allowed me to be a more competitive buyer,” Cleland said.

Nationwide, the Knock Home Swap is available through 245 real estate brokerage firms with 100,000 agents in approximately 4,700  ZIP codes throughout Arizona, Southern California, Colorado, Florida, Georgia, Illinois, Minnesota, North Carolina, South Carolina, Tennessee and Texas. Knock plans to offer the Home Swap in over 100 markets by 2023.

About Knock

Knock is on a mission to empower people to move freely. The Knock Home Swap™ makes it easy for consumers to buy their new dream home before selling their old one, skipping the hassles of living through repairs and showings, paying only one mortgage at a time, and having home prep covered upfront, so their old house sells for the highest possible price. Knock currently offers the Home Swap in 59 markets and plans to be in over 100 markets by 2023.

Launched in 2015 by founding team members of Trulia.com, Knock has raised more than $600 million in debt and equity from top-tier investors, including RRE Ventures, Foundry Group, Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs. In 2021, Knock was one of eight companies selected by Second Century Ventures, the strategic investment arm of the National Association of Realtors®, for its REACH program, which helps technology companies scale across the real estate vertical and its adjacent markets.

Contact: pr@knock.com 

Knock Brings Its Buy Before You Sell Platform to Chicago Homeowners, Becoming the First Major PropTech Company to Enter the Nation’s Third Largest Housing Market

The Knock Home Swap™ is now offered in 50 markets coast-to-coast, including seven of the nation’s 10 largest housing markets

NEW YORK (JULY 29, 2021) -- Knock, the fast-growing real estate technology company that is bringing convenience, certainty and cost savings to the process of buying and selling homes, today announced that the Knock Home Swap is now available to homeowners throughout the Chicago metropolitan area. With the Home Swap, a consumer is able to make a strong non-contingent offer that empowers them to buy and move into their new home before they list, avoiding the repairs, open houses and other stresses that come with selling a home.

With today’s announcement, the Knock Home Swap is available in 50 markets coast-to-coast, including seven of the nation’s 10 largest housing markets. Knock launched its flagship Home Swap product a year ago in three markets, and has experienced unprecedented growth as homeowners look for a more stress-free way to buy and sell homes.

As part of its commitment to simplify the real estate process, Knock also announced the Knock Closing Guarantee, which promises an on-time closing in 30 days or consumers will receive $5,0001, 2.  

“A majority of today’s home sellers are also home buyers, so while they are benefiting from record home prices and quick sales, they face unprecedented competition and uncertainty when it comes to buying their next home,” said Knock Co-Founder and CEO Sean Black. “The Knock Home Swap provides an end-to-end fully digital solution that empowers homeowners to unlock the equity in their current house so they can buy and settle into their new dream home before listing. They avoid the hassles of a traditional sale and have the advantage of selling on the open market for the maximum price.”

Black added, “We are thrilled to be the first major PropTech company to launch in Chicago and we’re looking forward to helping more homeowners move freely by continuing to solve the pain points that often hold them back.”

The Knock Home Swap offers homeowners an end-to-end solution that includes a competitively priced mortgage and an interest-free bridge loan, which covers the down payment on the new home, home prep and up to six months of mortgage payments on the old house. A homeowner can qualify for the Knock Home Swap from their mobile device and then confidently shop for the home they want with their own agent by their side and in the app. In addition, they have the advantage of waiting until they have moved into their new home to prep and list their old house on the open market, so there's no living through repairs and showings or selling for less than full value.

As part of its Home Prep Concierge, Knock provides access to its contractor network and manages the payment of client-approved work until closing. Additionally, Knock provides a backup offer on the old house in the unlikely event that it doesn't sell within six months. Ninety-nine percent of Knock homes sell in 90 days or less, with 83 percent selling in 30 days or less. 

Knock is partnering with 10 local brokerage firms to bring the Home Swap to Chicago, including Century 21 Affiliated; HomeSmart Realty Group; john greene Realtor; Kale Realty; Keller Williams Momentum; Keller Williams ONEChicago; Keller Williams Preferred Realty; RE/MAX Mi Casa; RE/MAX Next and Worth Clark Realty.

“The Knock Home Swap gives our clients more freedom, flexibility, and a leg up in a fast-moving market. It also provides a refreshing option for those financing their next home purchase that otherwise did not exist in the Chicagoland market,” said Scott Parker, Sales Manager, VP Sales & Marketing, john greene Realtor. “There is a lot of innovation taking place in the real estate industry. Our filter for innovation is to look for products and services that match our company's mission statement: to provide an elevated real estate experience that leads to lifelong relationships.”

Nationwide, the Knock Home Swap is available through 230 real estate brokerage firms with 97,000 agents in approximately 4,500 ZIP codes throughout Arizona; Southern California; Colorado; Florida; Georgia; Illinois; Minnesota; North Carolina; South Carolina; Tennessee and Texas. Knock plans to offer the Home Swap in over 100 markets by 2023.

About Knock

Knock is on a mission to empower people to move freely. The Knock Home Swap™ makes it easy for consumers to buy their new dream home before selling their old one, skipping the hassles of living through repairs and showings, paying only one mortgage at a time, and having home prep covered upfront, so their old house sells for the highest possible price. Knock currently offers the Home Swap in 50 markets and plans to be in over 100 markets by 2023.

Launched in 2015 by founding team members of Trulia.com, Knock has raised more than $600 million in debt and equity from top-tier investors, including RRE Ventures, Foundry Group, Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs. In 2021, Knock was one of eight companies selected by Second Century Ventures, the strategic investment arm of the National Association of Realtors®, for its REACH program, which helps technology companies scale across the real estate vertical and its adjacent markets.

Contact: pr@knock.com 

1Terms and conditions apply. See https://knock.com/closing-guarantee for more information regarding the Knock Closing Guarantee.

2Mortgage loans through Home Swap Program offered by Knock Lending LLC. NMLS 1958445. Equal Housing Lender . For licensing information go to: www.nmlsconsumeraccess.org.

Total Real Estate Commissions for the US Projected to Hit $100 Billion in 2021 for the First Time Ever, Reinforcing the Value an Agent Brings to the Transaction

Although there has been speculation that real estate agents may be replaced by technology, agent commissions tell a very different story. Despite some downward pressure on commission rates, home sales are at record highs, and based on our Knock analysis of transaction volume, price appreciation, and agent adoption; we project that commission dollars will exceed $100 billion for the first time ever in 2021.1

Regardless of the technology enhancements that make it easier for consumers to shop for and sell homes on their own,  89% of consumers choose to rely on agents’ expertise to navigate these dynamics with more certainty.2 This percentage has continued to trend upwards from previous years.3

And there is good reason; agents’ invaluable local market knowledge and personal touch have proven to outweigh other methods available in this complex transaction process. Their firsthand knowledge of neighborhoods and other nearby homes is a resource buyers turn to to make competitive yet fair offers on homes. 

We at Knock wanted to take a closer look at what this might mean for the industry. While we estimate 2020 commission revenue to be just shy of $100 billion (at $90.5 billion), based on 2021 forecasts of 7.1 million homes sold and average home sale price, we estimate 2021 commission revenue to be $104 billion, a number that could quite possibly be making history:

Furthermore, with total commissions growing, we can’t help but notice some of the nation’s largest public brokerages’, Realogy and Remax, stock prices are increasing too. After years of declining stock value, both companies have begun what appears to be a comeback that coincides with increased home sales starting in 2020 to present. While we can’t quite ascertain all of the forces that have gone into this increase, Ryan M. Schneider, Chief Executive Officer, President, and Director of Realogy, commented on the resiliency of commission rates in regards to their business’s performance, “People have been talking about disruption of the average broker commission rate forever. And unlike some other things that have been challenging in this industry that one is actually kind of hanging in there. And in fact, again, even in this crazy high demand market, the numbers are actually ticking up a bit. So agents add a lot of value, and we watch this closely, but this has not been the thing that has been challenging for either Realogy or the industry when you look at the past however many years.”4 This point makes it even more clear that real estate agents, and the value they bring to each transaction has and won’t, go to the wayside. 

Source: Real Trends for Average Commission Rate, NAR for Existing Home Sales and Average Sale Price data, and Census Bureau for New Home sales and average price.

Methodology

For the total commission revenue calculation, Knock looked at MBA Mortgage’s finance forecast of new and existing home sales for the years 2020 and 2021 and multiplied them by the industry average (4.94%) commission rates for existing home sales.5/1 For new construction sales, we assumed the commissions earned would reflect half that amount. Via this method, we were able to quantify what we believe the gross transactional value is using the average home price in the US for both years, after applying the % of home sellers who are using agents to find the total commission revenue.6/2 For retrospective percentages of home sellers using agents, we referenced the Housing Wire report’s finding on their studies done from 2001 to present. 5

Commission rate assumption: Commission rates are based on 300+ large brokerages of annual data plus inputs from national data from Realogy and Keller Williams, representing 35-40% of all transactions. 

Resources

  1. Ostrowski, Jeff. “Real estate commissions fall to new lows as homes fly off the market.” bankrate.com, Bankrate,2021, https://www.bankrate.com/real-estate/real-estate-commissions-fall/. Accessed 2021.
  2. National Association of Realtors. “Highlights From the Profile of Home Buyers and Sellers.” nar.realtor.com, National Association of Realtors, 2020, https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers. Accessed 2021.
  3. Housing Wire. “More Americans are using real estate agents than ever before.” housingwire.com, 2018, https://www.housingwire.com/articles/47376-more-americans-are-using-real-estate-agents-than-ever-before/#:~:text=More%20Americans%20are%20using%20real%20estate%20agents%20to%20buy%20and,even%20among%20the%20younger%20generations.&text=Higher%20income%20ear. Accessed 2021.
  4. Motley Fool. “Realogy Holdings Corp (RLGY) Q1 2021 Earnings Call Transcript.” fool.com, Motley Fool, 2021, https://www.fool.com/earnings/call-transcripts/2021/04/29/realogy-holdings-corp-rlgy-q1-2021-earnings-call-t/. Accessed 2021.
  5. Mortgage Bankers Association. “Mortgage Finance Forecast Archives.” mba.org, Mortgage Bankers Association, 2021, https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary/mortgage-finance-forecast-archives. Accessed 2021.
  6. National Association of Realtors. “Existing Home Sales/Sales Price of Existing Homes.” cdn.nar.realtor.com, National Association of Realtors, 2021, https://cdn.nar.realtor/sites/default/files/documents/ehs-04-2021-overview-2021-05-21.pdf. Accessed 2021.

Knock Announces A Major Expansion in Florida With The Addition Of Nine Markets, Including Fort Myers and Naples

Homeowners in 49 markets across the country now have the advantage of buying their dream home with a non-contingent offer before they sell, giving them the upper hand in today’s hot housing market 

NEW YORK (JUNE 17, 2021) -- Knock, the real estate technology company that is bringing convenience, certainty and cost savings to the process of buying and selling homes, today announced a significant expansion in Florida, giving homeowners in nine additional markets, including Naples and Fort Myers, the ability to make a non-contingent offer and close on their new dream home before even listing their old house. 

Since launching the Home Swap in Florida in October 2020, Knock has partnered with more than 40 brokerages to allow nearly all homeowners living in the Sunshine State to buy before they sell. With today’s announcement, the Knock Home Swap is available in 49 markets in 10 states coast-to-coast, including 14 Florida metros: Daytona Beach; Fort Myers; Jacksonville; Lakeland; Miami/Fort Lauderdale; Melbourne; Naples; Orlando; Port St. Lucie; Punta Gorda; Sarasota; Tampa; Vero Beach and West Palm Beach. 

“Buying a home when you have one to sell is never easy. In the current housing market where there are a limited number of homes for sale and the competition is high, many people are choosing to stay put rather than realize their dream of a new home,” said Knock Co-Founder and CEO Sean Black. “At Knock, we are leveraging technology to flip the process, allowing homeowners to make a non-contingent offer on the home they want before they even list their current house. It’s given thousands of homeowners the confidence they need to make the move that’s right for them, and we’re excited to make the Home Swap available throughout the state of Florida.”

The Knock Home Swap offers homeowners an end-to-end solution that includes a competitively priced mortgage and an interest-free bridge loan, which covers the down payment on the new home, home prep and up to six months of mortgage payments on the old house. A homeowner can qualify for the Knock Home Swap from their mobile device and then confidently shop for the home they want with their own agent by their side and in the app. In addition, they have the advantage of waiting to prep and list their home on the open market for the maximum sale price after they have moved, so there's no living through repairs and showings or selling for less than full value.

As part of its Home Prep Concierge, Knock provides access to its approved contractor network and manages the payment of client-approved work until closing. Additionally, Knock provides a backup offer on the old house in the unlikely event that it doesn't sell within six months. Ninety-nine percent of Knock homes sell in 90 days or less, with 83 percent selling in 30 days or less. 

Tiffany Stokes and her husband had been planning to buy a larger house this year, but quickly realized just how competitive the Orlando, Fla., housing market is once they began looking. The couple learned about the Knock Home Swap from their agent, Melanie Thomas of eXp Realty. 

“Without the Home Swap, our purchase would have been contingent on the sale of our old house, and in today’s market, sellers aren’t accepting contingent offers,” Stokes said. “The Home Swap allowed us to be competitive and it alleviated the stress associated with

buying and selling at the same time. We were able to buy our new home, and now that we've closed we can begin the process of prepping and listing our old house. It's just so much more convenient.”

As part of its expansion, Knock is partnering with Keller Williams Realty Fort Myers & The Islands; Keller Williams Realty Naples; Keller Williams Realty Suncoast; Keller Williams Realty Island Life Real Estate; RE/MAX Alliance Group; Better Homes and Gardens Synergy; Keller Williams Realty Port St. Lucie; Keller Williams Realty Vero Beach and Keller Williams Realty Treasure Coast.

“In today’s competitive market, some homeowners are afraid to list their home because they’re not sure they’ll be able to find a new one,” said Mark Olesh, Regional Director, Keller Williams South Florida Region and Operating Principal of Keller Williams Realty Fort Myers & The Islands. “Since the Knock Home Swap allows you to buy first, you have the time you need to find the home you dream about, and then sell your home for the maximum price. Homeowners have the upper hand.” 

Nationwide, the Knock Home Swap is available through 215 real estate brokerage firms with 90,000 agents in approximately 4,100 ZIP codes throughout Arizona; Southern California; Colorado; Florida; Georgia; Minnesota; North Carolina; South Carolina; Tennessee and Texas.

Knock plans to offer the Home Swap in over 100 markets by 2023.

About Knock

Knock is on a mission to empower people to move freely. The Knock Home Swap™ makes it easy for consumers to buy their new dream home before selling their old one, skipping the hassles of living through repairs and showings, paying only one mortgage at a time, and having home prep covered upfront, so their old house sells for the highest possible price. Knock currently offers the Home Swap in 49 markets in 10 states and plans to be in over 100 markets by 2023.

Launched in 2015 by founding team members of Trulia.com, Knock has raised more than $600 million in debt and equity from top-tier investors, including RRE Ventures, Foundry Group, Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs.
Contact: pr@knock.com

Pandemic Did Not Facilitate Cross-Country Moves, According to Knock Survey

Homebuyers opted for smaller cities within their current state, a trend that is likely to continue in the short-term

NEW YORK (June 3, 2021) -- The desire for more space and flexibility to work remotely prompted Americans to rethink what they want in a home over the past year. While for some it meant relocating to a different state, nearly six of every 10 pandemic homebuyers opted for a new, often less populated city in the same state, according to a new survey released today by Knock, the real estate technology company that is empowering people to move freely.

According to the survey of more than 2,000 homeowners, the pandemic encouraged younger generations of homeowners to move, a trend that will continue in the coming year. Among those who moved during the pandemic, 58% were either millennials or Gen Z. However, rather than moving across the country, many are choosing less-populated suburban and rural areas in their existing state.

“Almost overnight, our homes took on a whole new meaning. In addition to where we live, they became where we work, go to school, workout and everything in between. It prompted us to re-evaluate what we want and need our home to be,” Knock Co-Founder & CEO Sean Black said. “Although the pandemic may have ignited this trend, it’s not likely to subside anytime soon. People are placing a higher value on where they live, and for many, it means putting where they live ahead of being close to the office, especially now that so many have the ability to work remotely, at least part of the time. It also could mean we will see people moving more often, especially as technology helps to simplify the process of buying and selling homes.”

Pandemic buyers sought out less populated areas in their current state

Among those who purchased a home during the pandemic, nearly three-quarters (72%) moved to a new area, with 59% moving to a new city in the same state. Nearly four-in-10 (39%) of these buyers selected a city/town with fewer than 10,000 people. 

This is significantly higher than those who moved before the pandemic, with a little over half (54%) reporting they moved to a new area and 41% saying they moved to a new city within the same state. In addition, only 29% of people who purchased their home prior to the pandemic live in a city/town with fewer than 10,000 people.

Southerners led the rest of the country in home purchases during the pandemic. Fifty-one percent of those who moved during the pandemic live in the South, compared to 38% who moved prior to the pandemic. Nearly one-in-five who moved during the pandemic live in either the Midwest (19%) or West (19%) and one-in-10 live in the Northeast (11%). 

Who’s moving, to where and why?

Nearly one-quarter (24%) of homeowners surveyed plan to purchase a new home within the next year. Moreover, these homeowners skew younger, with nearly half (49%) being either Gen Z or millennials. 

Of those homeowners who plan to move within the next year, the trend toward in-state moves to less populated areas is likely to continue, at least in the short term. More than two-thirds (69%) of homeowners expecting to buy a new home in the next year would like to relocate to a new area, and 43% want to move to a city/town with fewer than 10,000 people.

Millennials and Gen Z will help continue to fuel the shift to smaller towns and cities. Thirty-seven percent of millennials and Gen Z want to buy their next home in a city or town with fewer than 10,000 people. Roughly one-third (32%) of Gen X and one-quarter (25%) of Baby Boomers/Silent Generation future homebuyers feel similarly.

Analyzing longer-term, overall moving trends, a majority of those considering a move will likely remain in the region where they currently live, with Westerners and Southerners more likely to stay put and Midwesterners and Northeasterners more likely to move. 

Eighty-six percent of those currently living in the West and 84% of Southern movers plan to remain in their current region. In the Midwest, 70% plan to stay in the region, while 17% plan to move to the South, 6% plan to move to the West and 1% plan to move to the Northeast. Of those currently living in the Northeast, just over two-thirds (67%) plan to stay in the region, while a quarter plan to move to the South, 6% plan to move to the West and 1% plan to move to the Midwest.

California leads the list of top moving destinations at 12%, followed by Florida (11%) and Texas (9%).

A desire for a larger home (40%), quiet neighborhood (39%) and outdoor space (37%) were the top reasons prompting homeowners to make a move. 

You can view the full blog post here.

Methodology

Findings are based on an online survey of 2,012 U.S. homeowners nationwide over the age of 18 conducted by HarrisX from April 28 through May 4, 2021. The sampling margin of error of this poll is plus or minus 2.18 percentage points. The results reflect a nationally representative sample of adult homeowners in the United States. Results were weighted for age, gender, region and race/ethnicity where necessary to align them with their actual proportions in the population.

About Knock

Knock is on a mission to empower people to move freely. The Knock Home Swap™ makes it easy for consumers to buy their new dream home before selling their old one, skipping the hassles of living through repairs and showings, paying only one mortgage at a time, and having home prep covered upfront so their old house sells for the highest possible price. Knock currently offers the Home Swap in 40 markets in 10 states and plans to be in over 100 markets by 2023.

Launched in 2015 by founding team members of Trulia.com, Knock has raised more than $600 million in debt and equity from top tier investors, including RRE Ventures, Foundry Group, Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs.

Media contact: pr@knock.com