Housing Prices 📈 Affordability 📉

August 14 2020

For people who were looking for a pandemic real estate deal, bitter disappointments ensue as housing prices shrug off the shutdown economy.

Home prices continued to rise during the second quarter of the year, although at a slower pace than before the advent of the pandemic. The National Association of Realtors (NAR) said its quarterly survey of metropolitan areas found that single-family home prices rose on an annual basis in 96 percent or 174 of the 181 markets it covers.

Prices increased in 96 percent of the markets in the first quarter of the year as well. However, in those pre-coronavirus days the gain was 7.7 percent year-over-year. In the second quarter, prices were up 4.2 percent to a national median of $291,300.

Median suburban home prices at the end of June were up 3.3% year over year, according to a new analysis by Zillow Group Inc., as people search for more space. But median urban home prices at the end of June were flat from a year earlier, Zillow said. The urban sales growth was dragged down by NYC and San Fransisco. But elsewhere in the nation, urban sales were rising in prices just as fast as those of suburbs.

A lack of homes for sale is a big reason why home prices have continued to rise despite high unemployment. Nationally, the inventory of homes on the market as of Aug. 8 was down 36% from a year earlier, according to Realtor.com. Record-low interest rates have boosted demand, but some sellers are holding off on listing their houses until the pandemic ends, brokers say.

Housing affordability is an even bigger challenge now than ever given the double whammy dealt by the pandemic and the unemployment that has followed. Technology, which improves efficiencies in both the construction and the transaction process, will be a key player in addressing this issue.

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Affordable Housing Startups:

Katerra is a Japanese-funded American technology-driven offsite construction company. It was founded in 2015 by Michael Marks, former CEO of Flextronics and former Tesla interim CEO, along with Fritz Wolff, the executive chairman of The Wolff Co.

PadSplit, an Atlanta-based co-living start-up, is working to create more living options by taking existing single-family homes and apartments and subdividing them to accommodate more bedrooms, with shared common spaces and bathrooms. The company hopes to make finding a place to live close to work easier and less expensive with water, Internet, washers and dryers, and parking, all in one fixed weekly payment.

FlyHomes seeks to even the odds by making a cash offer on an average income earner’s behalf. The Seattle company sticks with its clients through every step of the home-buying journey, helping to inspect the property, sharing detailed pricing analyses and leveraging its negotiators to take care of the paperwork. Once FlyHomes makes a cash offer and secures the home on a buyer’s behalf, buyers have 30 days to sort out their financing. The startup also recently expanded its offerings to include mortgages, title and escrow, and home repair and renovation services.

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Since last week, PrivCo has added:
1,069 Updated Companies | 87 M&A Deals | 172 Funding Activities

Funding & Deal Highlights:

Coda, a San Francisco area-based startup which helps users collaborate in online documents that function as their own lightweight apps, has raised $80M in a funding round that values the company at $636M.

Bodyport, the digital health company focused on the detection and management of heart disease, announces the close of an $11.2M Series A investment round. Boehringer Ingelheim Venture Fund (BIVF) led the round and was joined by existing investors Playground Global and Initialized Capital, among others. The investment brings Bodyport’s total funding to $15.8M and will help the company deepen key health partnerships and support the launch of a virtual cardiac clinic that brings intelligent interventions to its remote monitoring technology.

H.I.G. Growth Partners (“H.I.G.”), the dedicated growth capital investment affiliate of H.I.G. Capital, is pleased to announce that it has led a $33M round of Series D funding for Mode Analytics (“Mode”), a leader in advanced analytics and business intelligence.

SiFive, Inc., a San Mateo, Calif.-based provider of commercial RISC-V processor IP and silicon solutions, raises $61M in Series E funding.

springbig, a Boca Raton, Fla.-based provider of cannabis CRM and loyalty marketing technology, completes an $11.5M Series B funding round.

Parsable, a San Francisco startup that is helping digitize industrial front-line workers, announces a $60M Series D.

Simpplr, a provider of intranet software to companies, raises $10M in Series B extension funding to help those companies engage with and manage employees, especially those now working remotely.

Cybersecurity startup Elisity emerges from stealth with $7.5M in seed funding from Atlantic Bridge Associates. The company, whose founding team includes industry veterans, says its immediate focus is scaling up engineering, sales, and marketing teams ahead of its platform’s public launch.

Ligand Pharmaceuticals Incorporated and Pfenex Inc. announce the signing of a definitive agreement for Ligand to acquire all outstanding shares of Pfenex for $12.00 per share in cash or $438M in equity value on a fully-diluted basis. In addition, Ligand will pay $2.00 per share or $78M as a Contingent Value Right (CVR) in the event a predefined regulatory milestone is achieved by December 31, 2021, for a total transaction value of up to $516M. The closing of this transaction is subject to customary conditions and is expected to occur in the fourth quarter.

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