Knock announces major expansion in Florida with the addition of nine markets

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

Q4 2019 Knock Deals Forecast Finds Miami, Houston, and Las Vegas Among Top 10 U.S. Housing Markets for Predicted Savings Off Original List Prices

housing market forecast home prices
Click for full infographic on the top 10 markets for predicted deals on homes in Q4 2019

Knock, on a mission to make trading-in a home as easy as trading-in a car, today released the results of the Q4 2019 Knock Deals Forecast, predicting which of 45 of the largest U.S. Metropolitan Statistical Areas (MSAs) will have the highest percentage of homes that sell at a discount to their original list prices, or at a “Deal,” among current on-market listings. The study leverages the same machine learning-driven algorithms Knock uses to help determine the market value of its customers’ homes to predict outcomes far more advanced than most housing industry forecasts. Knock also analyzed the rate of deals among historical sales to determine month-over-month and year-over-year trends in market competition.

“The Q4 2019 Knock Deals Forecast unveiled exciting insights into the combined impact of real estate trends and larger socioeconomic shifts on the housing market and associated opportunities and challenges,” said Sean Black, Co-Founder and CEO of Knock. “While the findings point to the continuation of market balancing Knock saw in the Q3 Forecast, we’ve also identified takeaways on seasonality, regions, and price tiers that will help consumers make more informed real-time decisions as we head into the historically slower winter months.”

The National Knock Deals Forecast is developed using Knock’s proprietary machine learning-driven algorithms that determine expected outcomes for listings currently on the market. The algorithms take into account over 200 characteristic, historical, seasonal, and behavioral data points to determine outcomes like final sale prices for homes it predicts are likely to sell. These algorithms are informed and continuously trained by Knock’s licensed real estate agents. In September 2019, 50% of U.S. homes sold within 1.7% of the Knock predicted final sale price, and 70% sold within 2.9% of the predicted final sale price.

Seasonality Takes Softer Effect as the Market Balances 

Knock’s algorithms forecast that 67.0% of listings on the market as of the end of September will sell below their original list prices. This is up 1.6% from the Q3 2019 Forecast, reflecting the expected decrease in competition due to seasonality.

However, year-over-year trends point to a milder reduction in competition during winter 2019. 63.6% of homes sold at a discount in Q3 2019, so Knock’s Q4 2019 Forecast represents a predicted 3.3% quarter-over-quarter increase in the rate of deals. Comparatively, the rate of deals among actual home sales increased 7.5% from Q3 2018 to Q4 2018, more than two times the expected increase in Q4 2019. Historical sales patterns support this trend: Deals increased 1.9% quarter-over-quarter in Q3 2019, compared to 5.2% quarter-over-quarter in Q3 2018.

Graph 1: How Actual & Predicted Home Sale Prices Compare to Original List Prices

The fact that deals have been increasing at a slower pace in 2019 does not necessarily mean competition is rising. Knock attributes the change to a balancing of the market as sellers become more realistic about the market value of their homes. Since inventory of existing-homes was down 2.6% year-over-year in August 2019, according to the National Association of Realtors (NAR), one would expect to see more competition and a drop in the rate of deals. However, deals were up 2% year-over-year in August 2019. More homes are being added to the market at list prices closer to current market value, so sellers of homes that have been on the market longer have to consider accepting lower offers if they want to make the sale. As more of these homes are sold and replaced with inventory priced to market value, we see homes selling below their original list prices less frequently.

The balancing of the market is further evidenced by the average discount buyers are receiving off original list prices, up just 0.3% quarter-over-quarter in Q3 2019, compared to an increase of 0.7% from Q2 2018 to Q3 2018. Still, there are discounts to be found. In Q3 2019, 26.3% of homes sold at a discount of 5% or more. Knock predicts that 32.1% of homes will sell at a discount of 5% or more in Q4 2019.

Graph 2: Variation in Actual & Predicted Home Sale Prices from Original List Prices 

“As seasonality takes hold heading into the holidays, we can expect to see a slowdown in the market, but there will still be plenty of opportunities for buyers to find deals,” said Jamie Glenn, Co-Founder and COO at Knock. “Knock’s Q4 Forecast points to a year-over-year trend in the overall softening of the market that creates even more potential for buyers looking to take advantage of current mortgage rates and decreased competition at this time of year.”

Southern Markets Are Predicted to See the Highest Rates of Deals in Q4 2019

Many of these opportunities are predicted to be in the Southern half of the U.S. as we head into the final months of the year. Six of the top 10 markets in the Q4 2019 Forecast are in the South, including three markets in Florida alone. Miami again tops the markets for deals, with 84.2% of homes predicted to sell at a deal in Q4 2019 after 85.3% did in Q3 2019.

The Southeast and Southwest regions of the U.S. continue to see the highest rates of homes selling below their original list prices. Knock predicts that 70.3% of listings in the Southeast and 68.3% of Southwest listings will sell for a deal, with five of the top 10 markets for deals being in these regions. Western market Las Vegas also joins the top markets for predicted deals in Q4 2019, with 72.0% of homes predicted to sell below their original list prices at an average discount of 3.3%.

Table 1: Top 10 Markets by Rate of Homes Predicted to Sell Below Original List Prices in Q4 2019

Forecast Ranking MSA Percent of homes predicted to sell below original list price Average predicted discount to original list price
  United States 66.96% 3.67%
1 Miami-Fort Lauderdale-West Palm Beach, FL 84.20% 5.67%
2 Chicago-Naperville-Elgin, IL-IN-WI 77.70% 5.13%
3 Houston-The Woodlands-Sugar Land, TX 76.84% 4.81%
4 New Orleans-Metairie, LA 76.07% 5.06%
5 Hartford-West Hartford-East Hartford, CT 75.71% 4.93%
6 Pittsburgh, PA 74.42% 5.68%
7 New York-Newark-Jersey City, NY-NJ-PA 73.16% 4.03%
8 Jacksonville, FL 72.88% 4.68%
9 Tampa-St. Petersburg-Clearwater, FL 72.47% 3.75%
10 Las Vegas-Henderson-Paradise, NV 71.96% 3.25%

Interactive Map 1: Q4 2019 Predictions

Deals Rise in the West as Buyers Escape High Prices 

While Southwest and Southeast markets continue to see the highest rates of deals, we are also beginning to see interesting shifts in the West in line with overall housing trends. In August, the West was the only region that saw a decline in existing-home sales, according to NAR. It also saw the second highest increase in average home prices among regions, up 5.7% year-over-year. Knock’s analysis also reflects this geographic shift in competition. The Western region of the U.S. saw the biggest year-over-year increase in the rate of deals in Q3 2019, up 4.7%.

Table 2: Rate of Homes Sold Below Original List Prices in Q3 2019 by Region

Region Percent of homes that sold below original list price in Q3 2019 Year-Over-Year change in the rate of homes selling below original list prices
West 59.21% + 4.68%
Southeast 66.96% + 1.31%
Midwest 62.31% + 1.10%
Northeast 61.91% + 0.82%
Southwest 67.05% -1.62%

“Many cities in the West that saw increased competition during the recent housing market uptick are now experiencing some of the more significant slowdowns in sales activity,” said Paul Habibi, Economic Advisor to Knock and Lecturer of Real Estate at UCLA Anderson School of Management. “This mild softening of the market seen in Knock’s Q4 Forecast is reflective of other recent studies, and the year-over-year increase in the rate of deals in markets like Los Angeles warrants continued observation.”

Homes that are priced over market value tend to sit on the market longer, which can result in them selling for less than if they had originally been priced to market. Nearly 20% of homes that sold in the West in Q3 2019 were on the market for at least 90 days, and sold at an average discount of 5.2%, compared to 1.9% for the overall region. In a market like Los Angeles, CA where homes are frequently priced $800,000 and above, that difference could have resulted in an additional discount of at least $26,400.

As markets continue to top the list on reports like the S&P CoreLogic Case-Shiller Home Price Indices, which reflect data from two months prior to publication, sellers’ expectations of current market value are inflated, leading to price reductions and eventually more deals. Further evidence of this trend in the West is that the three markets that saw the highest increase in homes selling below original list prices in Q3 2019 compared to Q3 2018 were in the West: San Jose, CA (+22.4% YoY), Las Vegas, NV (+18.7% YoY), San Francisco (+13.9% YoY). Las Vegas in particular has been seeing rapid change and made both the top 10 markets for predicted deals in Q4 2019 and the top 10 markets in terms of Q3 2019 home sales.

Table 3: Top 10 Markets by Rate of Homes Sold Below Original List Prices in Q3 2019

Forecast Ranking MSA Percent of homes that sold below original list price Average discount/ (premium) to original list price
  United States 63.60% 2.95%
1 Miami-Fort Lauderdale-West Palm Beach, FL 85.29% 6.63%
2 Chicago-Naperville-Elgin, IL-IN-WI 74.94% 3.83%
3 Las Vegas-Henderson-Paradise, NV 74.80% 3.53%
4 Houston-The Woodlands-Sugar Land, TX 74.37% 4.39%
5 Jacksonville, FL 74.03% 4.18%
6 Orlando-Kissimmee-Sanford, FL 72.77% 3.93%
7 Tampa-St. Petersburg-Clearwater, FL 72.20% 4.46%
8 New Orleans-Metairie, LA 71.78% 4.95%
9 New York-Newark-Jersey City, NY-NJ-PA 70.64% 3.68%
10 Dallas-Fort Worth-Arlington, TX 68.26% 3.42%

A newcomer to the top 10 markets in terms of home sales in Q3 2019 is Dallas-Fort Worth, where deals increased 4.6% year-over-year. Dallas-Fort Worth and fellow Knock Deals Forecast top 10 market Houston are both experiencing Texas’ rapid influx of out-of-state buyers from Western markets like California – some 250,000 of them, according to The Economist. These buyers are attracted to Texas’ booming economy and lower cost of living.

With cash in hand from sales in higher-priced markets like Los Angeles, these buyers could be experiencing greater discounts, contributing to the higher rate of deals seen in Q3 2019. However, as markets like Dallas adjust to these more drastic changes in competition, deals will begin to balance out. The overall 1.6% year-over-year decline in deals in the Southwest in Q3 2019 could be evidence of this starting to take hold.

Interactive Map 2: Q3 2019 Sale Analysis

Higher Prices Create Opportunities and Challenges in Secondary Cities

The Q4 Knock Deals Forecast reflects how higher prices drive opportunities for deals. This is especially true when home sales are analyzed by high, middle, and low price tiers, such as those highlighted in the Case-Shiller Indices. More expensive homes lead Knock’s Forecast in terms of opportunities for deals, at a predicted 70.5% in Q4 2019. This was also the top tier for deals in Q3 2019, with deals on homes priced over $363,740 (Case-Shiller’s definition of High Tier pricing) up 2.37% year-over-year.

Looking at the top 10 markets in terms of Case-Shiller price increases, Knock sees a continued trend in the correlation between price increases and increased opportunities for deals. Two of the top five markets on the latest Case-Shiller Index, Las Vegas, and Tampa, made the top 10 markets on Knock’s analysis in terms of deals among both actual Q3 sales and Q4 predictions.

Tampa is a particularly interesting case study in the impact studies like Case-Shiller have on price inflation. As Case-Shiller’s number three market in terms of price increases as of July 2019, Tampa ranked number seven in terms of homes selling below original list prices in Q3 2019, seeing an average discount of 4.5%. 16.7% of these homes took at least 90 days to sell and sold at an average discount of 9.8%. 22.7% of Tampa homes sold in Q3 2019 were in the high tier range; a discount of 9.8% on a home priced at the bottom of this range results in an average buyer savings of $25,646.

Recent data shows the market-wide impact of homes priced in higher tiers. In March, the U.S. median list price hit $300,000 for the first time in history, according to Realtor.com. Knock sees the impact of these rising prices across markets, particularly in line with the trend of migration from historically more competitive markets to secondary cities.

Markets that stand out in Knock’s analysis of Q3 2019 home sales are Hartford, CT, Pittsburgh, PA, and St. Louis, MO, which were the only three markets out of the Q2 Forecast predicted top 10 that did not make the top 10 in terms of actual sales. Overall in Q3 2019, 63.6% of homes sold for a deal across the U.S., just 1.7% less than Knock’s prediction. These predictions take into account hundreds of data points on recent home sales, pricing trends, and seasonality to accurately predict outcomes for home sales. However, it is difficult to accurately predict more drastic socioeconomic shifts. After validating the accuracy of the analysis and the data in these markets, Knock looked for other evidence as to why the three markets mentioned did not see a higher rate of deals among actual sales in Q3 2019.

Hartford, Pittsburgh, and St. Louis are all markets that have recently been seeing an influx of buyers, particularly millennial buyers, attracted to lower costs of living and either job opportunities or proximity to strong job markets like New York. These three cities have all been identified as some of the top cities for millennial buyers in terms of affordability, according to Redfin. As more millennials begin to enter housing markets like these, competition rises. Take the example of Hartford, where home sales were down 10% and inventory decreased 9% year-over-year in August.

The Q4 Forecast reflects the longer-term impact of this kind of trend in markets like Charlotte. Charlotte has seen a rise in corporations opening headquarters there in recent years and become an attractive option for millennial buyers. In Q3 2019, the market saw just a 2.8% year-over-year in the rate of deals. It also made the top three on the most recent Case-Shiller Indices, reflecting increased competition. It will be interesting to see future data on markets like Hartford as more millennial buyers enter the market.

Charlotte is just one of the markets where Knock offers our unique Home Trade-In. In these markets, Knock uses the same algorithms leveraged in this study to help determine the market value of our customers’ homes and how much they can afford in their next home. By bringing consumers more insights into the true value of homes both in-market and through these Forecasts, home buyers and sellers are able to make more informed decisions. With greater transparency and more accurate pricing through solutions like the Knock Home Trade-In and Knock Deals Forecasts, consumers will be empowered to buy and sell more frequently, increasing overall market fluidity across the U.S.

ABOUT KNOCK

Knock (www.knock.com) is the first online Home Trade-in platform, a revolutionary new approach to home buying and selling that makes it as easy to trade-in your home as it is to trade-in your car. Launched by founding team members of Trulia.com, the company uses data science to price homes accurately, technology to sell them efficiently and a dedicated team of experts and licensed agents that guide consumers through every step of the process. Knock has raised over $600 million in debt and equity, closing its Series B in January 2019, from top tier investors including RRE Ventures, Foundry Group, Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs. The company has offices in New York, San Francisco, Atlanta, Charlotte, Raleigh-Durham, Dallas, Fort Worth, Denver, and Phoenix, with several more on the way.  

Forecast Methodology

Knock trains a suite of machine learning models on historical real estate data going back three years. The models, trained on 200 features across the top U.S. Metropolitan Statistical Areas by population size, are able to predict listing outcomes such as the likelihood in selling, the selling price, when various price drops will occur and by how much, and how long it will take to sell. These models take into account seasonal trends, long-term market trends, and hyperlocal information, inclusive of the real-life pricing activities of individual real estate agents, to make their predictions.

To understand what is happening at the market level, the probable outcomes for each listing are aggregated over all the listings in a market to produce what is likely to happen for the entire market. In order to predict the proportion of upcoming deals to expect in each market, Knock predicts the probability of a listing selling at various levels below the original list price. We also adjust these aggregated probabilities by the likelihood that the listings will sell. These probabilities are then aggregated within each market resulting in a market-wide prediction. Additional factors:

Additionally, Knock analyzed data on 482,918 home sales from July 1, 2019 through September 27, 2019 in the same 45 MSAs across various time frames, comparing data from their original listing to data from their sale. These data include the original list price, final sale price and days on market. e.g. year to date, by month, etc., to determine trends in homes selling below original list prices, and how they compare to the Knock Deals Forecast predictions.

Data for both the predictive and historical analyses sourced from ATTOM Data Solutions.

Q3 2019 National Knock Deals Forecast Predicts Miami, Chicago and New York Among Top 10 U.S. Markets for Home Price Discounts

Click for full top 10 infographic

Knock, on a mission to make trading-in a home as easy as trading-in a car, today released the results of the Q3 2019 National Knock Deals Forecast, predicting which of 45 of the largest U.S. Metropolitan Statistical Areas (MSAs) will have the highest percentage of homes that sell at a discount to their original list prices, or at a “Deal,” among current listings. Knock also analyzed actual deals among Q2 2019 and Q2 2018 home sales to determine market trends over time.

“In line with the Q2 2019 Knock Deals Forecast, housing commentary during the Spring Homebuying Season pointed toward a shift to more of a buyer’s market,” said Sean Black, Co-Founder and CEO of Knock. “But as the market slows heading into the second half of the summer when families want to be settling in for the new school year, less inventory will mean increased competition for buyers. With our Forecast, Knock aims to provide these consumers with transparency into where homes are most frequently overpriced so that they can negotiate the best deal.”

The National Knock Deals Forecast is developed using Knock’s proprietary machine learning-driven algorithms that predict real time outcomes for listings currently on the market. The algorithms take into account over 200 characteristic, historical, seasonal and behavioral data points to determine outcomes like final sale prices for homes it predicts are likely to sell. In June 2019, 50% of U.S. homes sold within 1.7% of the Knock predicted final sale price, and 70% sold within 2.8% of the predicted final sale price.

Graph 1: Rate of homes selling below, at, above original list prices

Moving Toward a More Balanced Market: Home Prices

Knock forecasts that 65.4% of current on-market listings in 45 of the largest U.S. MSAs will sell below their original list prices. This number is relatively unchanged from the Q2 2019 prediction, reflecting the transition out of the busy Spring Homebuying season and that inventory is at near historic lows with a 4.3 month supply, according to the National Association of Realtors.

Knock did see a 5.5% year-over-year increase in the rate of deals among actual Q2 2019 home sales. Knock also saw a significant year-over-year decrease in the rate of homes selling above their original list prices, down to 23.5% in Q2 2019 from 28.3% at the same time last year – this number is forecasted at 19.5% for current on-market listings.

Graph 2: Home sale prices by range of variation from original list prices 

“While we’re not necessarily seeing the same jump in homes selling below original list prices that we forecasted going into Q2, the good news is that there has been a steady drop in homes selling above their original list prices,” said Jamie Glenn, Co-Founder and COO at Knock. “Buyers are being more cautious, which is forcing sellers to price their homes more realistically. Of course, lower prices combined with seasonality may lead to less inventory, but I think we’ll see buyers being less hasty to pay over market value regardless of availability.”

Among homes predicted to sell at a deal, 30.1% are predicted to sell for 5% or more below original list prices, compared to just 5.2% that are predicted to sell for 5% or more above original list prices. The average predicted discount to home prices across the markets analyzed is 3.13%. This number wasn’t much lower in Q2 2019, at 2.7%, when it was also only up 0.7% year-over-year. However looking at more competitive markets illustrates the shift toward greater balance. For example San Francisco, forecasted to be the worst market for deals heading into Q3 2019, is predicted to have an average premium to original list prices of just 0.7%. On average homes sold for 3.1% more than original list prices in Q2 2019, down from 8.9% in Q2 2018.

San Francisco’s steady softening is a reflection of larger market trends. Comparatively, the greatest instances of increased competition seem to be in markets that have experienced significant economic events. For instance, the Washington, DC area, which is still experiencing the aftermath of Amazon’s decision to make it the company’s only official second headquarters, is the second worst market for deals on our Q3 Forecast. Furthermore, it is the only market in the bottom 10 for Q2 2019 sales to see a year-over-year decrease in the rate of deals, down 4.2% from Q2 2018. On the other hand New York, which Amazon ultimately decided against as a headquarter location, saw a 3.4% year-over-year increase in the rate of deals, and is ranked number eight on the Q3 2019 Forecast. New York is also a prime example of a market that has been seeing extensive domestic migration to secondary cities in recent years.

Moving Toward a More Balanced Market: Locations

Seven of the top 10 markets on the Q2 2019 Knock Deals Forecast were in the south, including four markets in Florida. While Miami continues to be the number one forecasted market for deals headed into Q3 2019, the top 10 are evenly split between MSAs in the North and in the South of the country, with New York and Pittsburgh moving up the list.

Table 1: Top 10 markets with the most current listings predicted to sell below original list prices (listings added within the past 16 weeks)

Forecast Ranking Metropolitan Statistical Area (MSA) Percent of homes predicted to sell below original list price Percent of homes predicted to sell at original list price Percent of homes predicted to sell above original list price Average predicted discount/ (premium) to original list price
  United States 65.41% 13.11% 21.48% 3.13%
1 Miami-Fort Lauderdale-West Palm Beach, FL 84.42% 7.31% 8.27% 5.57%
2 Chicago-Naperville-Elgin, IL-IN-WI 76.95% 9.87% 13.18% 4.44%
3 Hartford-West Hartford-East Hartford, CT 76.45% 7.57% 15.98% 4.10%
4 Houston-The Woodlands-Sugar Land, TX 75.68% 11.55% 12.77% 4.01%
5 New Orleans-Metairie, LA 75.51% 14.16% 10.33% 4.68%
6 Tampa-St. Petersburg-Clearwater, FL 73.20% 15.28% 11.51% 3.97%
7 Pittsburgh, PA 72.95% 12.93% 14.12% 4.62%
8 New York-Newark-Jersey City, NY-NJ-PA 72.78% 8.65% 18.56% 3.91%
9 Jacksonville, FL 72.63% 12.02% 15.35% 4.19%
10 St. Louis, MO-IL 71.34% 13.94% 14.71% 4.85%

Previous editions of the Knock Deals Forecast have found a correlation between rising prices and a higher rate of deals. Many home price reports that create buzz around rising prices are dated by one to two months, and can encourage sellers to list at prices higher than market value, particularly taking factors like seasonality into account.

For instance, the number nine predicted market for deals is currently Tampa, which is also a top three market on the latest S&P CoreLogic Case-Shiller Home Price Indices due to its year-over-year price increase of 5.6% – as of April. However Tampa saw the second highest rate of deals in Q2 2019, with homes selling at an average discount of 4.7%. This number rose to an average 8.7% for the 29.1% of homes that took at least two months to sell. On a home listed at $300,000 that could mean a savings of over $25,000.

Another example of a market in a different U.S. region that is also frequently in the news is Las Vegas, which just missed the Q3 top 10 at number 11, but was the number eight best market for deals among Q2 2019 home sales. Las Vegas has consistently been a top ranked market by Case-Shiller, most recently at number one with a 7.1% year-over-year price increase as of April. However 71.8% of homes that sold in Q2 2019 sold for below original list prices, up 17.0% year-over-year. 24% of Q2 2019 sales in Las Vegas were on the market for over 60 days, and 91.7% of those homes sold at a discount.

“Between decelerating home price increases, mixed reports on inventory and sales, and lower mortgage rates, conversations about the housing market have been somewhat uncertain over the past several months,” said Paul Habibi, Economic Advisor to Knock and Lecturer of Real Estate at UCLA Anderson School of Management. “However this ping-ponging could just be reflective of the market finding its balance, as further evidenced by the reduced instances of homes selling above list prices and geographic variation in the rate of deals reported in this latest National Knock Deals Forecast.”

Table 2: Top 10 markets with the most homes sold below original list prices in Q2 2019

Forecast Ranking Metropolitan Statistical Area (MSA) Percent of homes that sold below original list price Percent of homes that sold at original list price Percent of homes that sold above original list price Average discount/ (premium) to original list price
  United States 61.52% 15.00% 23.48% 2.65%
1 Miami-Fort Lauderdale-West Palm Beach, FL 86.48% 7.55% 5.96% 6.98%
2 Tampa-St. Petersburg-Clearwater, FL 74.09% 14.33% 11.58% 4.66%
3 Chicago-Naperville-Elgin, IL-IN-WI 73.23% 11.86% 14.91% 3.39%
4 Orlando-Kissimmee-Sanford, FL 73.04% 15.10% 11.86% 4.01%
5 Jacksonville, FL 72.98% 15.19% 11.83% 3.97%
6 New Orleans-Metairie, LA 72.23% 15.02% 12.74% 4.81%
7 Houston-The Woodlands-Sugar Land, TX 71.97% 13.76% 14.27% 3.98%
8 Las Vegas-Henderson-Paradise, NV 71.76% 15.13% 13.11% 3.10%
9 New York-Newark-Jersey City, NY-NJ-PA 70.07% 9.05% 20.88% 3.62%
10 Hartford-West Hartford-East Hartford, CT 67.52% 11.69% 20.79% 3.73%

Knock is building an end-to-end home buying and selling marketplace that will provide consumers with more transparency into and control over the home buying and selling process. At the core of this platform are Knock’s proprietary algorithms, which help determine the market value and time to sell of our Home Trade-In customers’ homes. These machine learning-driven models apply insights previously held exclusively by real estate agents to data that can be accessed by the average home buyer and seller. With the quarterly National Knock Deals Forecasts, Knock processes data on the entire U.S. market through these algorithms with the goal of empowering buyers with information about the realities of the market and encouraging sellers to price their homes to true market value, to ultimately increase overall market fluidity.

Q3 Predictions: Interactive Map of the Findings

Q2 Sales: Interactive Map of the Findings

ABOUT KNOCK

Knock (www.knock.com) is the first online Home Trade-in platform, a revolutionary new approach to home buying and selling that makes it as easy to trade-in your home as it is to trade-in your car. Launched by founding team members of Trulia.com, the company uses data science to price homes accurately, technology to sell them efficiently and a dedicated team of Licensed Experts to guide consumers through every step of the process. Knock has raised over $600 million in debt and equity, closing its Series B in January 2019, from top tier investors including RRE Ventures, Foundry Group, Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs. The company has offices in New York, San Francisco, Atlanta, Charlotte, Raleigh-Durham, Dallas, Fort Worth, Denver and Phoenix, with several more on the way.  

Methodology

Knock trains a suite of machine learning models on historical real estate data going back three years. The models, trained on 200 features across the top U.S. Metropolitan Statistical Areas by population size, are able to predict listing outcomes such as the likelihood in selling, the selling price, when various price drops will occur and by how much, and how long it will take to sell. These models take into account seasonal trends, long-term market trends, and hyperlocal information, inclusive of the real life pricing activities of individual real estate agents, to make their predictions.

To understand what is happening at the market level, the probable outcomes for each listing are aggregated over all the listings in a market to produce what is likely to happen for the entire market. In order to predict the proportion of upcoming deals to expect in each market, Knock predicts the probability of a listing selling at various levels below the original list price. We also adjust these aggregated probabilities by the likelihood that the listings will sell. These probabilities are then aggregated within each market resulting in a market-wide prediction. Additional factors:

Additionally, Knock analyzed data on 525,826 home sales from April 1, 2019 through June 30, 2019, as well as 652,819 home sales during the same period last year, in the same 45 MSAs across various time frames, comparing data from their original listing to data from their sale. These data include the original list price, final sale price and days on market. e.g. year to date, by month, etc., to determine trends in homes selling below original list prices, and how they compare to the Knock Deals Forecast predictions.

Data for both the predictive and historical analyses sourced from ATTOM Data Solutions.

Knock Deals Forecasting Model 2.0: Updates Methodology

Starting with this Q3 2019 National Knock Deals Forecast, the Knock model treats selling at exact list price as its own type of outcome. The model previously treated selling at list price as being both 0%-1% above list and 0%-1% below list. If before the model thought it was 30% likely to sell for exactly list, that likelihood would get split between above and below list 0%-1%. Therefore this number was split approximately evenly between homes that sold below original list prices and homes that sold above original list prices.

Additionally, the model has been updated to more accurately make actual predictions on the variation ranges from original list prices, e.g. 0%-5% below original list prices. Knock previously applied an interpolation to the predicted to sold ratio categories, but now directly predicts the original list price outcomes.


[1] 2.0 version of machine learning-driven Knock Deals Forecast algorithm more accurately predicts homes expected to sell at exactly list price, bringing predicted deals more in line with forecasted market patterns. Q2 prediction adjusted using new model provided, showing greater accuracy to the actual Q2 sales numbers.

Q2 2019 National Knock Deals Forecast Predicts Phoenix, Houston and Orlando Among Top 10 U.S. Markets for Deals on Home Prices

(Click to view)

Knock, on a mission to make trading-in a home as easy as trading-in a car, today released the results of the Q2 2019 National Knock Deals Forecast, predicting which U.S. markets will have the highest percentage of homes that sell below their original list prices, or at a “Deal,” heading into Q2 2019. Knock also analyzed actual deals among Q1 2019 home sales, and how these compared to the predictions made in the Q1 2019 Forecast.

“As we head into Spring Homebuying Season, I’m extremely excited to release our second National Knock Deals Forecast of where home buyers across the U.S. can find savings – whether in their current market or as they make the move to another city,” said Sean Black, Co-Founder and CEO of Knock. “Our findings will help more buyers take advantage of opportunities for savings that can make a life-changing move possible for them and their families.”

Knock conducted a machine learning-based analysis of over 200 data points related to current on-market homes to determine which of the largest U.S. MSAs will have the highest percentage of deals heading into Q2 2019, and how that compared to both the Knock forecasted deals and actual home sales in Q1 2019. In February, 70% of U.S. homes sold within 3% of the Knock predicted final sale price, and 50% sold within 1.7% of the predicted final sale price.

The Shift to a Buyer’s Market Accelerates

Knock forecasts that 75% of current on-market listings will sell below their original list prices heading into Q2 2019. While this is lower than the Q1 2019 Forecast of 77%, it reflects a significant year-over-year increase that is in line with the upward trend in deals over the course of the past three months. In Q1 2019, 72% of homes sold below their original list prices, representing a 7% increase over Q1 2018.

“The Q1 Forecast, which may have seemed to be a big jump over 2018, was actually much closer to the reality of home sales in Q1 2019 than home sales at the same time last year, or even at the end of 2018,” said Jamie Glenn, Co-Founder and COO at Knock. “It’s clear that we’re at an inflection point in the shift to more of a buyer’s market, and the Q2 Forecast provides insights into where and how buyers can capitalize on that.”

Knock also analyzed sales by the percent they varied from original list prices, accounting for typical price fluctuation due to marketing tactics and negotiations, which the analysis qualifies as homes selling within 2% of the original list price (between 2% below and 2% above original list price). In Q1 2019, 59% of homes sold for at least 2% below original list prices, which was 5% more than predicted and an 8% increase over the same time period last year.

Overpricing Takes Its Toll in Hot Markets

Click for interactive map of Q2 predictions, also below

As the market cools, we see a widening of the gap between list prices and sale prices both for accurately-priced and overpriced listings. While a home may have been priced at market value when it was first listed in December or January, that market value may have changed, creating more opportunities for buyers. This difference is even more extreme among homes that have sat on the market, particularly if they were originally priced too high. After years of price increases, many sellers’ expectations have not caught up with the market. They continue to unrealistically overprice their homes, which can lead to extended days on market and create a stigma around their property, eroding their perceived value and leading to greater savings for buyers.

This is the case even in hotter markets. For instance, in the latest S&P CoreLogic Case-Shiller Indices, Phoenix was one of the top three cities in terms of year-over-year price gains. However, Phoenix is also one of the top 10 markets on the Q2 Forecast, with 80% of homes predicted to sell below original list prices. In Q1 2019, 73% of homes sold below original list prices, and 56% sold at a discount of 2% or more, up 5% over Q1 2018.

34% of Phoenix homes that sold in Q1 had been on the market for at least two months. 92% of these homes sold below their original list prices, compared to 73% of the overall market. 52% of these homes sold for 5% or more below their original list prices, compared to just 28% of all homes sold in Phoenix in Q1. That means a savings of $12,500 or more on a $250,000 home. Knock predicts 72% of current on-market listings will take at least two months to sell; 31% of current on-market listings have already been on the market for two months or longer.

“As the cooling of the market starts moving West, Phoenix is just one example of how the combined effects of a shift to a buyer’s market and continued overpricing will take their toll in the form of more savings for home buyers,” said Paul Habibi, Economic Advisor to Knock and Lecturer of Real Estate at UCLA Anderson School of Management. “Given the accuracy of the Q1 National Knock Deals Forecast, buyers who have been challenged by affordability can look to these predictions for insights into how a home purchase might be possible for them this Spring home buying season.”

Deals Head South for Spring Buying Season

Phoenix is just one example of the overall Forecast’s shift South: Seven out of the top 10 MSAs for deals in Q2 2019 are predicted to be Southern markets. In addition to Phoenix, Houston, New Orleans and four markets in Florida make the list.This is an increase over the five out of 10 Southern markets that made the top 10 in Q1 2019 both in terms of predictions and actual sales.

Knock’s prediction that the number one market for deals in Q1 2019 would be Miami was in line with actual sales. Knock forecasted that 89% of homes would sell below original list prices, and 88% did in Q1 2019. Average days on market of Miami homes sold in Q1 2019 were 82, which plays a role in driving the high rate of deals. 79% of homes sold for at least 2% below their original list prices, even higher than Knock’s prediction of 74%.

Orlando is another newcomer to the top 10, with 80% of homes predicted to sell below original list prices in Q2 2019. This aligns with the Q1 2019 prediction of 79%, as well as with actual sales at 78% deals, which is an increase of 5% over the same time last year. While not one of the most affordable housing markets to live and work in, Orlando, like other Florida markets, is desirable for retirees and other out-of-state buyers, who are attracted to the state’s lower tax rates and warmer weather for both primary and secondary residences. Particularly as spring home buying season takes hold in the North, buyers can expect to see decreased competition for homes in some of these overpriced Southern markets, creating more opportunities for deals.

Table 1: Top 10 Markets Where Listings Are Predicted to Sell Below Original List Prices in Q2 2019

MARKET PREDICTED PERCENT DEAL
(As of 03/24/2019; listings added in the past 16 weeks)
AVERAGE PREDICTED DISCOUNT/(PREMIUM) TO ORIGINAL LIST PRICE AVERAGE PREDICTED FUTURE DAYS ON MARKET
United States 75.45% 3.34% 25.35
Miami, FL 89.65% 6.46% 38.69
Houston, TX 82.74% 3.99% 23.47
New Orleans, LA 82.64% 5.30% 27.89
Tampa, FL 82.24% 4.89% 23.94
Jacksonville, FL 81.96% 4.71% 33.45
Chicago, IL 81.50% 3.31% 25.25
Phoenix, AZ 80.33% 3.31% 19.99
Hartford, CT 79.99% 4.38% 46.81
Orlando, FL 79.57% 4.15% 24.49
St. Louis, MO 78.40% 4.40% 21.90

Seasonality also plays a role in some Northern markets like Pittsburgh and Cincinnati dropping off the top 10 as we head into the second quarter of the year. While the difference between the rate of deals in some markets is relatively small, allowing for easy movement up and down the ranking, there were a couple of interesting outliers in terms of actual home sales in Q1 2019. New York, for example, saw significant out of state migration in Q1 2019, perhaps contributing to 78% of homes selling below their original list prices. This was in line with New York’s predicted rate of deals, also at 78%, but the market jumped to number eight in terms of actual sales from its predicted spot of 20.

Click for interactive map of Q1 home sales, also below

Perhaps the biggest surprise of the analysis was that Houston, TX dropped from its number two predicted spot to number 13 in terms of actual Q1 2019 home sales. This is also a significant change from the same time period a year ago, when it would have been number four on the list. There are a couple of factors that could account for this variation. For instance, the area saw a 7.5% year-over-year increase in the middle market of price ranges in February, a highly competitive range with less opportunity to find deals. This is somewhat unexpected for that time of year. Additionally, price increases were relatively flat, up just 1.4% year-over-year, which may mean fewer opportunities for negotiation on less overpriced homes. Still, in line with historical and seasonal patterns and days on market holding steady, Houston holds the number two spot again in the Q2 2019 Forecast, with a predicted rate of deals revised down from 84% to 83%.

Table 2: Top 10 Markets Where Listings Sold Below Original List Prices in Q1 2019

MARKET HISTORICAL PERCENT DEAL
(3/1-3/24/2019)
AVERAGE DISCOUNT/(PREMIUM) TO  ORIGINAL LIST PRICE AVERAGE DAYS ON MARKET
United States 72.17% 4.12% 57.61
Miami, FL 88.23% 7.15% 82.49
Chicago, IL 82.14% 4.94% 59.08
New Orleans, LA 80.95% 6.21% 70.01
Hartford, CT 79.44% 6.09% 75.82
Tampa, FL 78.60% 5.64% 60.21
Jacksonville, FL 78.53% 4.94% 77.20
Orlando, FL 78.23% 4.79% 61.02
New York, NY 77.95% 5.04% 72.03
Cleveland, OH 77.27% 6.16% 71.24
Providence, RI 76.89% 5.58% 67.00

61% of home sellers are also buying their next home at the same time, according to Zillow. One of the greatest roadblocks to market fluidity is these consumers’ inability to afford their next home while selling their old one. By providing them with transparency into pricing patterns and insights into where they can find the best deals through regular national Knock Deals Forecasts, Knock aims to help more sellers move into their next home more quickly, increasing inventory and overall market fluidity. Knock already provides these insights to both buyers and sellers in the markets it is currently operational in – Atlanta, Charlotte, Raleigh-Durham, Dallas-Fort Worth and Phoenix – in the form of its unique Knock Deals Home Search Tool and associated alerts.

DATA SET 1: FULL ANALYSIS

ABOUT KNOCK

Knock (www.knock.com) is the first online Home Trade-in platform, a revolutionary new approach to home buying and selling that makes it as easy to trade-in your home as it is to trade-in your car. Launched by founding team members of Trulia.com, the company uses data science to price homes accurately, technology to sell them efficiently and a dedicated team of Licensed Experts to guide consumers through every step of the process. Knock has raised over $600 million in debt and equity, closing its Series B in January 2019, from top tier investors including RRE Ventures, Foundry Group, Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs. The company has offices in New York, San Francisco, Atlanta, Charlotte, Raleigh-Durham, Dallas, Fort Worth and Phoenix, with several more on the way.  

REPORT METHODOLOGY

Knock trains a suite of machine learning models on historical real estate data going back three years. The models, trained on 200 features across the top U.S. Metropolitan Statistical Areas by population size, are able to predict listing outcomes such as the likelihood of selling, the selling price, when various price drops will occur and by how much, and how long it will take to sell. These models take into account seasonal trends, long-term market trends, and hyperlocal information, inclusive of the real-life pricing activities of individual real estate agents, to make their predictions.

To understand what is happening at the market level, the probable outcomes for each listing are aggregated over all the listings in a market to produce what is likely to happen for the entire market. In order to predict the proportion of upcoming deals to expect in each market, Knock predicts the probability of a listing selling at various levels below the original list price. We also adjust these aggregated probabilities by the likelihood that the listings will sell. These probabilities are then aggregated within each market resulting in a market-wide prediction. Additional factors:

Additionally, Knock analyzed data on 239,105 home sales from January 1, 2019 through March 24, 2019, as well as 314,842 home sales during the same period last year, in the same 42 MSAs across various time frames, e.g. year to date, by month, etc., to determine trends in homes selling below original list prices, and how they compare to the Knock Deals Forecast predictions. Data for both the predictive and historical analyses sourced from ATTOM Data Solutions.

Knock Welcomes Yelp COO Jed Nachman to its Board of Directors

Online consumer marketplace veteran brings over two decades of experience to his new role of Independent Director of the Board

Jed Nachman, COO, Yelp

On a mission to make trading-in your home as easy as trading-in your car, Knock announced that Jed Nachman, Chief Operating Officer of Yelp Inc. – the company that connects people with great local businesses – has joined its Board of Directors.

“We’re incredibly excited to welcome Jed to the Board of Directors at Knock, where we’re building the next great consumer brand by transforming one of the most outdated and stressful processes in the U.S.: Home buying and selling,” said Sean Black, Co-founder and CEO of Knock. “Jed’s depth of consumer experience at a recognized company like Yelp will bring extensive value to our team as we continue to look for ways to further enhance our customers’ experiences.”

One of Knock’s original investors, Nachman brings over two decades of corporate and revenue leadership experience at consumer-facing brands to his new role. He has been an executive at Yelp since early 2007, most recently in the role of Chief Operating Officer and prior to that Chief Revenue Officer. During his tenure at the company, Yelp’s annual revenue has grown from approximately $1 million to nearly $1 billion, and the company underwent an initial public offering in 2012.

“I’m proud to be joining the Board of Directors at a company like Knock that is disrupting the complex real estate industry for the benefit of consumers,” said Nachman, “Knock clearly values consumer experience. Its hundreds of four and five star reviews on both Zillow and Trulia place it in a rarefied space for a consumer-facing company, and I look forward to helping them take that approach to the next level to help even more people across the U.S.”

Nachman’s experience and insights hold incredible value for Knock as it continues its rapid growth. The company announced that it raised $400 million in Series B equity in debt in January 2019, and plans to leverage that capital to drive its expansion to new markets, and advance the technology behind its unique Home Trade-in platform.

Prior to Yelp, Nachman held senior roles at Yahoo! HotJobs. He is an active tech investor and advisor, and also serves on the Board of Directors for Evercommerce. Additionally, Nachman is an active real estate investor. Jed resides in Marin County with his two children and wife Honey, who has been a real estate agent for the past 17 years.

ABOUT KNOCK
Knock (www.knock.com) is the first online Home Trade-in platform, a revolutionary new approach to home buying and selling that makes it as easy to trade-in your home as it is to trade-in your car. Launched by founding team members of Trulia.com, the company uses data science to price homes accurately, technology to sell them efficiently and a dedicated team of Licensed Local Experts to guide consumers through every step of the process. Knock has raised over $600 million in debt and equity, closing its Series B in January 2019, from top tier investors including RRE Ventures, Foundry Group, Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs. The company has offices in New York, San Francisco, Atlanta, Charlotte, Raleigh-Durham, Dallas, Fort Worth and Phoenix, with several more on the way.   


Knock expands West with Phoenix launch of its Home Trade-in platform

Addresses home buyers’ and sellers’ critical need for a solution that is more advanced than traditional real estate, but doesn’t require giving up equity like new “home-flipper” approaches established in the Phoenix metro area

On a mission to make trading-in your home as easy as trading-in your car, Knock announced the expansion of its revolutionary Home Trade-in platform to Phoenix, AZ, the company’s first market in the Western half of the U.S. and its sixth market to date.

“We’re excited about this significant milestone in Knock’s expansion, and about the real difference we believe we will make for home buyers and sellers in this competitive market,” said Sean Black, Co-founder and CEO of Knock. “In Phoenix, options have been limited to traditional methods, which leave sellers who are also buying with uncertainty, stress and inconvenience, and new home flipper-like companies that trap them into giving up a significant portion of their equity. The Knock Home Trade-in solves for all this and more.”

71% of home sellers are also buying their next home at the same time. Launched by founding team members of Trulia like Black, Knock buys the seller’s new home on their behalf with its cash, helping them win bidding wars and get a 3 to 5 percent discount, so they can move in before Knock represents them in the sale of their previous home on the open market where it is exposed to competition. Knock’s data science and technology-driven platform, combined with the insights and guidance of its team of local real estate experts native to Phoenix, make for an advanced, full-service solution.

“Knock is going to change the game not only for buyers and sellers, but also the overall Metro Phoenix real estate industry,” said Angel Johnson, who recently joined Knock as a Phoenix Licensed Local Expert, or Knock agent. “There’s hasn’t been anything like this out here where you have an entire team helping you throughout the process the way Knock does.”

Johnson, who has been practicing real estate in the Phoenix area for over 15 years, is one of several full-time local real estate experts Knock hired ahead of the launch. The company is continuing to hire for its Phoenix team, as well as multiply the two dozen local agents and contractors it has already recruited in Phoenix to join its proprietary network.

While many national reports speculate the housing market is cooling, Phoenix is still very much a sellers’ market, with home prices up 6.1 percent year over year and demand exceeding supply. It will continue to be competitive: Phoenix added 76,900 jobs in December alone, and Arizona is the fourth fastest growing U.S. state, with people from northern states and California attracted to its booming economy, lower cost of living and wide variety of nature and outdoor activities.

At the same time, signs are pointing toward buyers increasingly being deterred by overvalued home prices: In January closed sales were down 12.6 percent year over year, and listings under contract were down 15 percent. In 2018, 66 percent of listings that did sell did so for less than their original asking price, according to the latest National Knock Deals Forecast. Knock can help local buyers compete with out-of-state non-contingent offers, getting them into a new home faster and effectively freeing up more inventory. Knock can also provide support to customers in its other markets of Atlanta, Charlotte, Raleigh-Durham, Dallas and Fort Worth, who are looking to sell there and buy in Phoenix as it continues to grow.

ABOUT KNOCK
Knock (www.knock.com) is the first online Home Trade-in platform, a revolutionary new approach to home buying and selling that makes it as easy to trade-in your home as it is to trade-in your car. Launched by founding team members of Trulia.com, the company uses data science to price homes accurately, technology to sell them efficiently and a dedicated team of Licensed Local Experts to guide consumers through every step of the process. Knock has raised over $600 million in debt and equity, closing its Series B in January 2019, from top tier investors including RRE Ventures, Foundry Group, Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs. The company has offices in New York, San Francisco, Atlanta, Charlotte, Raleigh-Durham, Dallas, Fort Worth and Phoenix, with several more on the way.   


Knock Raises $400 Million Series B to Develop National Home Trade-in Platform

New York/San Francisco-based home trade-in platform raises Series B financing to fuel rapid advancement of its platform technology and continued national expansion

Knock, on a mission to make trading-in your home as easy as trading-in your car, announced the closing of $400 million in Series B equity and debt financing led by Foundry Group with participation from existing investors RRE Ventures, Corazon Capital, WTI, and FJ Labs, and new investor Company Ventures. Foundry Group Partner Seth Levine joined Knock’s board of directors. With this additional financing, Knock plans to continue its nationwide expansion and accelerate the development of the proprietary technology behind its unique Home Trade-in platform — the first-ever.

“At Knock we believe the only way to revolutionize the real estate industry is by addressing both home buying and selling, given 71% of consumers are doing both at the same time, which is why we’re creating a marketplace solution with our Home Trade-in platform,” said Sean Black, Co-founder and CEO of Knock. “As we celebrate the success of the Trade-in with this latest round of funding, we are excited to have found investors and partners in Foundry Group, which has successfully helped other marketplace companies like Rover and Havenly scale platforms that transform traditional industries for a better, technology-powered consumer experience.”

Led by founding team members of Trulia like Black and Co-founder and COO Jamie Glenn, Knock launched in 2015 to bring greater certainty, convenience and cost-effectiveness to the home buying and selling process, which it has accomplished through its Home Trade-in platform. This additional funding will enable the company to buy more new homes on its customers’ behalf before representing them in the sale of their old ones on the open market.

“At Foundry we love working with passionate founders who are on a mission to fundamentally change an industry. The Knock team is exactly that — combining years of experience in real estate technology with a fundamental drive to change the way consumers buy and sell homes,” said Levine. “This is an unstoppable combination that we believe will transform the outdated real estate industry.”

Knock has experienced rapid growth since its founding, launching in five markets: Atlanta, GA, Charlotte, NC, Raleigh-Durham, NC, Dallas, TX and Fort Worth, TX. Along with its market expansions, the company’s headcount has multiplied in the past two years to 100 full-time employees distributed across 15 states. The engineering, product and data science team comprises one-third of the employee base, demonstrating the company’s commitment to developing a truly technology-centric solution.

As a result, Knock announced a number of revolutionary product advancements in the past year alone, including its unique predictive home search tool Knock Deals. Fueled by this tool, Knock also released its inaugural National Knock Deals Forecast, a first-ever predictive study of home price outcomes for on-market listings across 45 top U.S. metros, driven by the company’s proprietary data science and machine learning-based algorithms.

“By combining our platform technology with national machine learning-driven housing insights and the real life, in-home experiences of our team as we grow across the U.S., we’re bringing a level of transparency to real estate that will enable a more certain, convenient and cost-effective experience for home buyers and sellers,” said Glenn.

This latest round of funding brings the total equity and debt raised by Knock to over $600 million. In January 2017, the company announced its Series A round led by RRE Ventures with additional funding from Corazon Capital, Redpoint, Greycroft, Correlation Ventures, Great Oaks Venture Capital and FJ Labs.

ABOUT KNOCK
Knock (www.knock.com) is the first online Home Trade-in platform, a revolutionary new approach to home buying and selling that makes it as easy to trade-in your home as it is to trade-in your car. Launched by founding team members of Trulia.com, the company uses data science to price homes accurately, technology to sell them efficiently and a dedicated team of Licensed Local Experts to guide consumers through every step of the process. Knock’s top tier investors include RRE, Foundry Group, Redpoint, Greycroft, Corazon Capital, Correlation Ventures,Great Oaks Venture Capital and FJ Labs. The company has offices in New York, San Francisco, Atlanta, Charlotte, Raleigh-Durham, Dallas and Fort Worth, with several more on the way.  

ABOUT FOUNDRY GROUP
Foundry Group is a venture capital firm focused on investing in technology companies and the next generation of venture capital fund managers. In addition to providing the necessary venture capital to get a company up and running, Foundry Group is committed to leveraging its experience in starting and growing companies, expertise in the technology industry, and network of relationships to help great entrepreneurs turn great ideas into great companies. Foundry Group is based in Boulder, Colorado, and invests in companies located across the United States and in Canada. For more information, visit www.foundrygroup.com.

National Knock Deals Forecast Identifies Miami, Houston and Chicago as Top 3 U.S. Markets for Deals on Home Prices Heading into 2019

Click image link for full infographic 

Knock, on a mission to make trading-in a home as easy as trading-in a car, today released the results of the inaugural National Knock Deals Forecast, predicting which U.S. markets will have the highest percentage of homes that sell below their original list prices heading into 2019, and how these compare to homes sold in 2018.  

“Knock has developed six predictive algorithms to determine how much our Home Trade-in customers’ homes will sell for and when, and we’re excited to bring these insights to consumers nationwide,” said Sean Black, Co-founder and CEO of Knock. “By applying these algorithms, which we call Knock Deals, to the top U.S. markets, we hope to help more home buyers find and act on the best deals, and increase overall market fluidity.”

Leveraging its proprietary predictive algorithms, the company analyzed on-market listings in the largest U.S. MSAs to determine the markets with the highest percentage of homes predicted to sell below their original list prices, or what Knock defines as a “deal.” Knock factors in nearly 200 data points to determine the probability of each home selling at various levels above or below its original list price, and then aggregates those probabilities to get a market-wide prediction. In November, 80% of U.S. homes sold within 4% of the Knock predicted final sale price, and 50% sold within 2% of the predicted final sale price.

Knock also analyzed all 2018 listings sold through the end of November to determine where the most homes sold below their original list prices in 2018. The number one predicted MSA for deals heading into 2019, Miami, also saw the highest rate of deals in 2018.  

“While there’s no denying that home prices have been steadily on the rise, list prices are clearly increasing above realistic levels, corroborated by the study’s findings that over 60% of homes sold well below their original list prices in 2018,” said Paul Habibi, Economic Advisor to Knock and Lecturer at UCLA Anderson School of Management. “The National Knock Deals Forecast builds on these historical sale patterns to predict where home buyers can find the most savings across current on-market listings.”

2018: Overpriced listings led to greater savings off home values

See interactive map of 2018 home sale findings here.

While the rate of home price increases has begun to slow, they are still up 5.1% year over year, according to the S&P CoreLogic Case-Shiller Indices. As prices have gone up, so have home sellers’ expectations of their home values. When sellers price homes aggressively, they often sell not just below their original list prices, but below market value because they sit on the market for a longer period of time. For homes that sold in November, Knock found that 92% of listings that had been on the market two months or more sold below their list prices — 22% more than the rate of all listings that sold below their original list prices in November. Additionally, on average these homes sold for 1.5% less than the overall market.

The effects of unrealistically overpricing homes are also reflected in the difference between sale prices and original list prices of all recently sold homes. In November, Knock found that 70% of listings sold below their original list price across markets. While the annual average is lower at 61%, it is still reflective of the vast majority of markets —  at least 60% of homes sold below original list prices in 27 of the 45 markets Knock analyzed.   

While seasonality plays a role, even in the month with the lowest rate of deals, May, over 55% of listings sold below their original list price. Additionally, a certain degree of price inflation is common, but Knock determined this also was not the main factor in homes selling below original list prices. 39% of 2018 U.S. listings did sell within 2% of list prices, but another 48% of homes sold for 2% or more below list prices. Comparatively, just 13% of homes sold for 2% or more above list prices.

Take the top market Miami, for example: 76% of listings sold at least 2% below original list prices, compared to 3% of listings selling 2% or more above original list prices. Of course, the ratios are very different in a market like SanFrancisco, where 58% of listings sold at least 2% above original list prices. But given that the majority of all U.S. listings still sold 2% or more below list price, it’s clear that these underpriced markets are the exception rather than the norm.

2019: Southern markets to drive increased deals

See interactive map of Q1 2019 forecasted home sale findings here.

Based on predictions of all listings that hit the market in the past six weeks, five out of the 10 top markets for deals are in the Southern half of the U.S. Miami continues to top the list, with Houston, TX, Jacksonville, FL, New Orleans, LA and Tampa, FL also having some of the highest predicted rates of deals heading into 2019.

Average savings are on the rise in these markets. Given that the slowdown of home price increases is just beginning to take hold, we can expect home sellers to continue to set their original list prices on the higher end, which has the potential to result in greater deals for home buyers. Particularly as we head into January, which has historically been one of the best months for deals, the combination of seasonality and the slowing market make the perfect recipe for the increased rate of deals predicted by the Knock Deals Forecast.

For instance, Miami homebuyers saved an average 4.4% off original list prices in 2018, and Knock predicts the average savings will be 6.8% across current on-market listings added within the past 16 weeks. On a home priced within the $450,00-$500,000 range, the range with the highest predicted percent of deals, that could mean an additional savings over 2018 of as much as $10,000.

Days on market are expected to play a similar role heading into 2019 as Knock saw in 2018. 83% of homes that had been on the market for at least two months at the time of the prediction are expected to sell below original list prices, compared to 77% overall. Additionally, average predicted savings for this segment of homes is 6.5%, which is 2.5% more than the nationwide average. To again cite the example of Miami, average predicted savings on homes that have been on the market for at least two months spikes to 10.2%. On a $500,000 home that has lingered on the market, this could mean a savings of up to $50,000 for the buyer.

71% of home sellers are also buying their next home at the same time. One of the greatest roadblocks to market fluidity is these consumers’ inability to afford their next home while selling their old one. By providing them with transparency into pricing patterns and insights into where they can find the best deals through regular national Knock Deals Forecasts, Knock aims to help more sellers move into their next home more quickly, increasing inventory and overall market fluidity. Knock already provides these insights to both buyers and sellers in the markets it is currently operational in, in the form of its unique Knock Deals Home Search Tool and associated alerts.

REPORT METHODOLOGY

Knock trains a suite of machine learning models on historical real estate data going back three years. The models, trained on 200 features across the top U.S. Metropolitan Statistical Areas by population size, are able to predict listing outcomes like the likelihood in selling, the selling price, when various price drops will occur and by how much, and how long it will take to sell. These models take into account seasonal trends, longer-term market trends, and hyperlocal information, inclusive of the real-life pricing activities of individual real estate agents, to make their predictions.

To understand what is happening at the market level, the probable outcomes for each listing are aggregated over all the listings in a market to produce what is likely to happen for the entire market. In order to predict the proportion of upcoming deals to expect in each market, Knock predicts the probability of a listing selling at various levels below the original list price. We also adjust these aggregated probabilities by the likelihood that the listings will sell. These probabilities are then aggregated within each market resulting in a market-wide prediction. 

Additionally, Knock analyzed data on home sales through November 30, 2018 in the same 45 MSAs across various time frames, e.g. year to date, by month, etc., to determine trends in homes selling below original list prices, and how they compare to the Knock Deals Forecast predictions heading into 2019.

Additional factors:

Data for both the predictive and historical analyses sourced from ATTOM Data Solutions.

DOWNLOAD THE FULL ANALYSIS DATA HERE

ABOUT KNOCK
Knock (www.knock.com) is the first online home trade-in platform, a revolutionary new approach of home buying and selling that makes it as easy to trade-in your home as it is to trade-in your car. Launched by founding team members of Trulia.com, the company uses data science to price homes accurately, technology to sell them quickly and a dedicated team of local licensed experts to guide consumers through every step of the process. Knock’s top tier investors include RRE, Redpoint, Greycroft, Corazon Capital, Correlation Ventures,Great Oaks Venture Capital and FJ Labs. The company has offices in New York, San Francisco, Atlanta, Charlotte, Raleigh-Durham, Dallas and Fort Worth, with several more on the way.   

Knock Teams Up with Atlanta Home Builders to Help Consumers Trade-in Their Home

Home Trade-in company is already working with 10+ Atlanta builders to buy customers’ new homes by the holidays, and then get their old homes ready for sale by the new year when the market is hot

On a mission to make trading-in a home as easy as trading in a car, Knock is working with with over 10 top home builders in Atlanta, including Ashton Woods Homes, Brock Built Homes, Century Communities, Jim Chapman Communities, John Wieland Homes, Kerley Family Homes, KM Homes, Paran Homes, Peachtree Residential Homes, Pulte Homes, Traton Homes and Windsong Communities.

Knock will buy a customer’s new home from a builder on their behalf, so they can move in by the end of year holidays while Knock gets their home ready to sell by the new year when more buyers are entering the market.  

“Timing the purchase of a new home while trying to sell an existing home, is very complicated and stressful for the consumer, and it is risky for a builder to accept an offer on one of their houses that is contingent on the sale of another home,” said Sean Black, Co-founder and CEO of Knock. “We are thrilled to be working with these builders to remove this contingency for their customers, so they can give their families the incredible gift of a beautiful new home for the holidays.”

71% of people who are selling a house are buying their next home at the same time, but they need the equity from the home they’re selling in order to secure the mortgage on their next home. Many builders won’t accept that mortgage contingency. Knock buys the customer’s new home from the builder on their behalf, effectively removing their mortgage contingency and enabling them to move in quickly. Knock then makes any improvements to the customer’s previous home to get it market ready and then lists the home so the customer gets the most competitive offers.

“We are excited to be partnering with Knock to offer their unique Home Trade-In solution to our customers,” said Adam Brock, Executive Vice President of Brock Built. “Our goal is to help our buyers achieve their dreams through homeownership, and the majority of them need to sell a home, in order to buy with us. This partnership gives our customers an incredible opportunity to get into their brand new Brock Built dream home in time for the holidays.”

There are over 2,700 move-in ready new homes in Atlanta right now, according to NewHomeSource.com. The builders Knock is working with, such as Brock Built, have a combined 190 communities with 685 move-in ready homes currently available across the Greater Atlanta area. This is the perfect time for consumers to take advantage of the Knock Home Trade-In. Knock will purchase their new dream home with its cash in as little as two weeks, so the customer can celebrate the end of year holidays in their brand new house, and then get their existing house ready for sale by the new year when buyers begin to flood the market.  

How the Knock Trade-In works:

Step 1: Knock helps customers finds their new home

Step 2: Knock buys the new home with cash and no contingencies

Step 3: Customer moves into the new home

Step 4: Knock completes repairs, lists and sells their old home

Step 5: Customer buys the home back from Knock

ABOUT KNOCK
Knock (www.knock.com) is the first online home trade-in platform, a revolutionary new approach to home buying and selling that makes it as easy to trade-in your home as it is to trade-in your car.  Launched by founding team members of Trulia.com, the company uses data science to price homes accurately, technology to sell them quickly and a dedicated team of local licensed experts to guide consumers through every step of the process. Knock’s top tier investors include RRE, Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs. The company has offices in New York, San Francisco, Atlanta, Charlotte, Raleigh-Durham, Dallas and Fort Worth, with several more on the way.   

Knock introduces “Knock Deals” home search tool powered by its proprietary predictive pricing algorithm

Exposes its unique high-tech, high-touch lens on the market to empower home buyers and sellers through first-of-its-kind ranking of real estate listings

Knock, the first Home Trade-In platform, today announced the official release of Knock Deals: A first-of-its kind home search tool that allows consumers to search for homes on the market by Awesome to Awful deals as  determined by its data science-driven ranking of listings. Knock Deals factors in multiple proprietary algorithms that predict each listing’s final sale price and when it will actually sell to apply a ranking to the quality of the listing price, and allow users to search listings by those rankings. These rankings inform buyers if a home is an Awesome Deal they should act on now, or an Awful Deal they should wait out.

“Knock’s proprietary predictive algorithms are the foundation of our Home Trade-In platform because they enable us to determine the right listing price and estimated time to sell for each customer’s previous house, as well as help them get the best possible deal on their next home,” said Sean Black, Co-Founder and CEO of Knock. “We are excited to expose this intelligence to consumers, empowering them to make more informed decisions not only about their new home purchase, but also how to realistically price their existing home.”

The Knock Deals ranking provides consumers with a first-of-its-kind, curated  lens on the market. In addition to traditional factors like number of bedrooms and price range, Knock’s home search tool allows users to filter by the ranking: Awesome, Good, Fair, Poor or Awful. As of August 2018 in Atlanta for example, 80% of Knock’s predictions were within 4% of the final sale price, while 50% were within 2.5% of the final sale price. Comparatively, original list prices only came within 4% of the final list price 50% of the time, and within 9% of the final list price 80% of the time.

Whether the consumer is a buyer or seller, Knock Deals rankings empower them with knowledge previously only held by real estate agents. Depending on when they’re looking to buy, this new lens will help them act quickly or plan for future purchases. As a seller, the consumer gains a realistic picture of what their home is worth and why to better inform them in conversations with their agent and potential buyers.

“Knock is on a mission to bring greater certainty, convenience and cost-savings to the real estate transaction,” said Jamie Glenn, Knock’s Co-Founder and COO. “From a product perspective, that means developing tools that create more transparency and efficiency for the consumer, saving them time, money and stress. Knock Deals is a shining example of that.”

Knock’s predictive algorithms are machine learning-based and factor in hundreds of data points to determine final sale price of the home, future days on market and the likelihood that an active listing will have a price change  within the next 14 days. This data includes the property’s current list price, comparable homes for sale, seasonality and recent and historical sales transactions, as well as proprietary Knock home inspection data.

Additionally, the algorithms are influenced by the real life actions of real estate agents in an area over time; for example, if an agent has historically priced homes high and then made multiple price reductions over time. The algorithms also learn constantly from the real-life inspections and pricing decisions of Knock’s Licensed Local Experts, or full-time salaried agents, about factors like the most comparable home sales and how upgrades and unique features of the home affect its sale price.  

Knock Deals is an important new tool in the consumer-friendly platform the company is building. It provides real-time transparency into the predicted sale price of listings currently on the market and when price changes will occur, making it a dynamic, immediately useful tool for home buyers, as opposed to a feature highlighting the estimated market value of each and every home. Knock already offers the first-ever Home Trade-In, and ultimately aims to create more fluidity in the market, which will help to balance out inventory and prices and provide more people with the flexibility they’ve come to expect today, without having to give up on the American Dream of owning a home.