What has been rumored for weeks has now been picked up by most of the mainstream financial media Thursday. It is now being widely reported that Zillow Inc. (NASDAQ: Z) is in discussions to acquire rival Trulia Inc (NYSE: TRLA).
As of 3 p.m. EST Thursday, the combined market cap of the two firms is more than $7.85 billion after both stocks rose sharply - Trulia rising $16.3 per share to a high of $55.94 at 2:40 p.m. EST, up 37%, while Zillow soared nearly $27 per share to a high of $154.43 at 2:16 p.m. EST, up 21%, as the possible acquisition hit the markets.
If the acquisition closes, the landscape of U.S. real estate websites will be greatly altered. According to Bloomberg Business Week statistics from ComScore, this past June, Zillow and Trulia attracted more than 85 million unique visitors. Sources contacted who asked not to be identified seem confident a “big announcement was coming” and speculation was the deal is approaching a $2 billion valuation of Trulia, nearly a $650 million premium based on Wednesday’s close in the market. The sources stressed nothing has been finalized.
If the deal closes, the combined Zillow and Trulia market cap of $7.8 billion would be $2.2 billion more than industry giant Realogy, which operates several of the largest brands in real estate including Century 21, Coldwell Banker, Southeby’s, Better Homes and Gardens Real Estate and ERA. However in comparision Berkshire Hathaway Inc., the majority owner of Berkshire Hathaway HomeServices has the industry’s largest market cap of more than $317 billion.
Stay tuned to RISMedia for continuing updates on this developing story.
By Cory Hopkins
Roughly three years after the housing recovery began, how far do we still have to go until homes in the majority of local markets have regained all the value lost during the recession? In many areas, the answer is years and years, at least.
The housing recovery is still very much in its middle stages. Nationally, home values remain 11.3 percent below their 2007 peak. Looking ahead, U.S. home values are expected to rise another 4.2 percent through the second quarter of 2015, according to the Zillow Home Value Forecast. It will take
“In dozens of markets, homeowners who bought at the peak of the market in 2006 or 2007 will have to wait until 2017 or later to get back to the breakeven point on their homes, a lost decade in which they will have built up no home equity.”
2.7 years for national home values to re-achieve their pre-recession levels, assuming a steady rate of appreciation at the forecasted level.
In other words, national home values won’t get back to their prior peaks until at least the first quarter of 2017, almost a decade after the beginning of the housing recession. And full recovery could take even longer, as the pace of home value appreciation is expected to slow in coming months and years.
Locally, in 50 of the nation’s 100 largest metro markets, it will take three years or more for home values to reach prior peaks. Notable large metros where full recovery in home values will take longer than a decade include Minneapolis (14.5 years), Kansas City (12.5 years) and Chicago (11.7 years).
“In dozens of markets, homeowners who bought at the peak of the market in 2006 or 2007 will have to wait until 2017 or later to get back to the breakeven point on their homes, a lost decade in which they will have built up no home equity. This is reflected in stubbornly high negative equity and effective negative equity rates, with more than a third of Americans with a mortgage lacking enough equity to realistically list their home for sale and buy another,” said Zillow Chief Economist Dr. Stan Humphries. “But there is a silver lining as we navigate these tricky middle innings of the recovery. Because home values remain so far below their peak levels in so many areas, it is still possible for buyers to find bargains. This will be critical to maintaining home affordability over the coming years, especially as mortgage interest rates rise.”
U.S. home values climbed 6.3 percent year-over-year in the second quarter to a Zillow Home Value Index of $174,200, the slowest annual pace of appreciation recorded so far this year and a sign that the market is returning to more normal levels. In a more normal market, home values appreciate at roughly 3 percent per year. Home values nationwide were up 1 percent compared with the first quarter and 0.5 percent from May.
Nationally, rents rose 2.5 percent year-over-year in the second quarter, to a Zillow Rent Index of $1,310 but fell 0.3 percent compared with the first quarter. The quarterly decline was the largest recorded since Zillow first began publishing the Zillow Rent Index in late 2010. U.S. rents were flat month-over-month.
For a deeper analysis and to see what home values and rents are doing in your area, visit Zillow Research.
From the moment a first-time homebuyer begins searching until the final closing papers are signed could be as short as three months or as long as three years. Along the way, the journey is filled with twists, turns and probably some bumps in the road. So how do you navigate the journey? Once you get “in the game,” you should start setting the top criteria for your home early on. Establishing your most important factors upfront will help you stay on track as you move through the home buying process. It also will help you know when to compromise and when to stick to your original list.
As the homebuying process evolves, your criteria may change as well. Nobody ever gets everything on their list. In fact, many homebuyers, around the closing table, have a chuckle as they compare their
The important thing is to prioritize what you really must have vs. what you want to have.
original list of criteria to what they eventually got.
Here are the three phases of the home buying journey where your criteria will be established.
1. Dreaming: Leveraging the Internet and online listings, homebuyers in this next generation of real estate have the opportunity to consider all options, get a feel for what they want, see what’s out there and start to understand their must-haves, nice-to-haves and the bonus stuff.
As the journey evolves, you should begin to nail down requirements and prioritize your wants and needs. The search often changes, and part of the process is to learn what works and what doesn’t. But starting out with a fairly concrete, realistic “wish” list will inform your search.
2. Getting in the game: Any serious homebuyer working with a great local agent, and with a bank pre-approval in hand, will take the home search up a notch. At this point, it’s important to determine the two biggest pieces of the puzzle: price and location. Without these criteria, you’d simply be shooting from the hip.
Price trumps all criteria. What you can afford generally dictates where you’ll live as well as the type of home you’ll purchase. Location is one of the three magic words in real estate, and it comes a close second in the home search. The thing about location is that it can’t ever be taken away from you. But a home can be altered to adapt to a location. Many homebuyers, keen on a certain neighborhood or school district, will consider buying a property that needs work or one that’s not ideal for their situation simply to be in the right location.
3. Compromising: After determining price and location, a homebuyer needs to consider things such as number of bedrooms, bathrooms and the size of the home. While there are times when you’ll choose size over location, generally the location informs the size.
After that, considerations such as a finished basement, large lot, pool or open floor plan, while important, may get trumped because of location and price.
The important thing is to prioritize what you really must have vs. what you want to have. Also, try to think ahead. Are today’s top priorities likely to remain your top priorities a few years from now? Or would it make more sense to get a three-bedroom house, for instance, instead of a two-bedroom home, as you may have children later or might need a home office down the road.
It’s not easy to set your criteria for buying a home, given how important the purchase will be. But if you don’t, you’ll be all over the map in your home search, wasting valuable time and effort. And if you’re busy chasing properties that don’t really meet your needs, you may overlook something that does.
Brendon DeSimone is the author of Next Generation Real Estate: New Rules for Smarter Home Buying & Faster Selling, an insider’s guide for navigating and better understanding the complex and ever-evolving world of buying and selling a home. DeSimone is the founder and principal of DeSimone & Co, an independent NYC real estate brokerage providing individualized services and a fresh, hands-on approach. Bringing more than a decade of residential real estate experience, DeSimone is a recognized national real estate expert and has appeared on top media outlets including CNBC, Good Morning America, HGTV, FOX News, Bloomberg and FOX Business. Consumers often call on Brendon for advice and to help them find a real estate agent. You can follow him on Twitter or Google Plus.
Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow or AOL.
The 30-year fixed mortgage rate on Zillow Mortgages dropped eight percentage points from this time last week, landing at 3.97 percent. The 30-year fixed mortgage rate hovered between 3.96 and 4.08 percent for the majority of the week, before settling at the current rate on Tuesday.
“Rates dropped below 4 percent on Thursday amid the uncertainty and turmoil following the MH17 flight disaster and ongoing military activity in the Middle East,” says Erin Lantz, vice president of mortgages at Zillow. “This week, despite a fair amount of domestic economic data slated for release, we expect events in the Middle East and Ukraine will continue to put a damper on rates.”
Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site, and reflect the most recent changes in the market. These are not marketing rates, or a weekly survey.
The rate for a 15-year fixed home loan is currently 3.01 percent, while the rate for a 5-1 adjustable-rate mortgage (ARM) is 2.77 percent.
For more information, visit http://www.zillow.com/mortgage-rates.