Veros anticipates home depreciations in 10% of markets due to COVID-19

Veros Real Estate Solutions’ annual VeroFORECAST report expects the average residential real estate prices to depreciate in up to 10% of the nation’s largest 100 housing markets through the first quarter of 2021, due to several factors related to the COVID-19 pandemic.

The Q1 2020 VeroFORECAST quarter-over-quarter annual report projects the average, home price appreciation will increase 1.9% by Q1 2021. Back in January, VeroFORECAST projected a price increase of 3.9% through December 2020. At only 1%, the report projected, “markets with depreciation are almost non-existent compared to previous quarters.”

Drastic unemployment and economic uncertainty changed the forecast for the next 12 months.

Between Q1 2020 and Q1 2021, the ten markets forecast to see higher price increases are primarily in Washington, Arizona, and Idaho, and one in Colorado, mostly driven by very low housing supply compared to demand. Hence, the average annual forecast appreciation of the top ten markets is 5.6%, down from nearly 8% during last quarter’s update. Another example, the average annual forecast depreciation for Chicago, IL dropped from 0.7% over the previous forecast to -2.3%. 

“Housing supply is a key discriminator” between the top and worst forecast market performance, along with population trends, both slow growth and declines that are contributing to low demand in the ten least-performing, very slow-growth metros, according to Veros.

“Right now, we see economic variables at odds across the country,” said Eric Fox, Veros Vice President of Statistical and Economic Modeling. “On one hand, we have historically low interest rates that typically stimulate demand and increased prices. On the other hand, unemployment is rising rapidly and GDP is falling quickly, which normally drives house prices down.”

Furthermore, many people have taken their homes off the market, reducing supply, while buyers sit on the sidelines reducing demand, albeit temporarily, he added. “The combination of all of these factors results in mild forecast depreciation on average for the next quarter with a return to normal appreciation rates later in the year and into 2021.”

The report acknowledges the current situation bares no similarity to the downturn that began in 2007 due to risky lending. Currently prices are experiencing “only a modest, short-lived” appreciation softening through the second quarter of 2020, and expected to rebound in the long-term. The Q1 2020 report analyzed data from 334 Metropolitan Statistical Areas,  that represent 82% of U.S. residents.

“We are in an unprecedented time,” but the United States has proven its strength prior to the COVID-19 pandemic, said Darius Bozorgi, CEO of Veros Real Estate Solutions. “While we expect a softening of house prices in the near-term, we anticipate a rebound when the COVID-19 pandemic subsides. The fundamental economic principles under which housing has been operating in recent years are solid. Real estate prices will be poised to recover when we see employment return across the nation.”

Tavant launches AI powered residential real estate shopping platform

Artificial Intelligence (AI) powered fintech Tavant has launched Proptech, a new real estate shopping platform designed to simplify residential property purchases for millennials and other homebuyers looking for innovative digital lending options.

In 2019, Tavant received over $30 billion in private equity financing from Venture Capital firms to run Proptech, according to a company release.  

Proptech brings to the forefront of loan originations a combination of deep industry expertise and next-generation digital technologies. It taps on Tavant’s expertise in implementing AI and machine learning capabilities to streamline home search, online purchases, Automated Valuation Model appraisals, real-time real estate data validation, digital brokerage transformations, mobile app development, and real estate agent connectivity portals.

With the overwhelming majority of homebuyers being millennials, demand for digital lending innovation is growing fast. Yet, the real estate financing industry has been adopting digital transformation “at a much slower pace” than market demand, said Hassan Rashid, Chief Risk Officer at Tavant.

Emerging technologies such as Internet-of-Things, smart homes, automated property valuation models, machine learning enhanced pricing, and augmented reality/virtual reality, “are transforming the way end-users interact with real estate providers” and experience mortgage lending.

Today’s businesses must adapt to the changing global environment, improve margin, speed-to-market, and cost-savings, Rashid said, which is why one in four mortgages in the United States have touched Tavant’s platform.

Founded in 2000 in Santa Clara, California, Tavant provides AI powered solutions to customers across North America, Europe, and Asia-Pacific.

Volly announces new integration partnership with FundingShield

Woburn, Mass., based Volly, a software-as-a-service provider of marketing and point of sale automation for mortgage companies and banks, has entered into an integration partnership with FundingShield, which specializes in fraud prevention, regulatory compliance and settlement risk management technology solutions for mortgage lenders, real estate, title and legal industries. 

The integration allows lenders to utilize FundingShield’s fraud and risk management technology through Volly’s POS to ensure loans are originated and closed in a secure setting. “This integration will allow clients to more efficiently process loans, stay better protected from fraud and more efficiently grow their businesses,” said Volly CEO Jerry Halbrook in a release.

Volly’s fully integrated SaaS platform provides marketing automation and custom websites integrated with digital and print marketing capabilities.

FundingShield brings to the partnership its Guardian Service technology designed to provide loan level data assurance.

The fintech confirms settlement information, validity of personal liability insurance coverage, digital account confirmation, approved and authorized loan closing parties, and the licensing of real estate professionals. Offers risk mitigation throughout the life of the loan and operates one of the industry’s largestlive proprietary databases of title and settlement parties.  

The team looks forward to providing “wire fraud prevention, risk and regulatory compliance management tools via a seamless integration powered by our plug ‘n’ play, malleable, scale-able and secure products,” which can be leveraged by both mortgage lenders and borrowers, said Ike Suri CEO of FundingSheild.

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