Real Estate in Brief: Zillow lawsuit dropped, home flipping on the rise and more

by Lauren Brocato

A class-action lawsuit that charged Zillow with deceptive business practices designed to mislead consumers has been dropped. A Federal district court has dismissed the lawsuit last week. The lawsuit claims that Zestimates, Zillow’s algorithm-based property estimate tool, are commonly inaccurate as well as illegal in Illinois. Anyone who appraises a home must be licensed to do so, according to Illinois state law.

The suit filed last year in Chicago by a suburban Chicago homeowner and real estate lawyer, claims that Zillow systematically engages in a confusing, unfair and deceptive marketing schemes that impairs homeowners and sellers.

Judge Amy J. St. Eve of the U.S. District Court in Chicago concluded that “Zestimates are not false or misleading representations of fact.”

  • Despite high home prices, house flipping is on the rise, according to a new report from property data developer CoreLogic. Public records indicate that the ratio of flipped properties to sales reached 6.2 percent in the first quarter of 2018. This is the highest rate since home prices first started rebounding in the first quarter of 2013 following the financial collapse.
  • Mortgage rates are at the highest rate in eight years following a plateau in recent weeks, according to Freddie Mac. Sam Khater, Freddie Mac’s chief economist says that 30-year fixed mortgage rates are up to 4.61 percent which is the highest since May 19, 2011. “Healthy consumer spending and higher commodity prices spooked the bond markets and led to higher mortgage rates over the past week,” said Khater.
  • The national market saw an increase in median home sale price of 7.6 percent since last year, according to Redfin. With a median sale price of $302,200, it is the first time the national price has surpassed the $300,000 mark across all 174 markets tracked by Redfin. Homes are also selling quicker than ever as of last month. In April, the typical home went under contract in 36 days, six days sooner than this time last year.
  • Jerry Giovaniello, senior vice president and chief lobbyist of the National Association of Realtors (NAR), will be retiring at the end of the yearafter almost 40 years with the group. His successor will be announced by the end of the year, according to NAR. Global real estate franchiser ERA announced that Dave Collins has been appointed to the position of chief operating officer of the ERA Franchise System LLC, with 30 years of experience in brokerage engagement under his belt. Freddie Mac has also appointed John Krenitsky as its senior vice president and chief compliance officer following the retirement of the current Chief Compliance Officer Carol Wambeke. By June 1, Krenitsky will be fully transitioned into his new role.
  • OfferPad, the direct home buyer and seller, announced the closing $150 million of new equity and financing last week. Within the next year, OfferPad is expected to purchase and sell more than $1.5 billion of single-family homes. OfferPad is currently buying and selling in Atlanta, Charlotte, Las Vegas, Orlando, Phoenix, Salt Lake City and Tampa.
  • The state of New York is pursuing a lawsuit against the Department of Housing and Urban Development (HUD) and HUD Secretary Ben Carson over the Trump administration recently moving to delay an Obama-era fair housing rule. HUD announced earlier this year that it would delay the Affirmatively Furthering Fair Housing rule, passed during under the Obama administration. This move is one step closer to repealing the law entirely.
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