Knock is a real estate company that promotes a “trade-in” transaction model. Knock buys your new home on your behalf, you move into that home while Knock pays the mortgage and utility payments on that home, Knock sells your old home and then you buy your new home, the home in which you are now living, from Knock.
Will Knock’s “trade-in” transaction model work going into 2019? Knock’s Deals Forecast generated by data from Knock’s proprietary machine-learning models said yes.
Knock found that 62% of all homes in US metros sold below their original listing prices in 2018. Knock predicts that 77% of all current on-market listings will sell below list prices in 2019.
Knock also found that 83% of the homes on the market for at least 2 months were expected to sell below their original list price, compared with the above 77%. Also, Knock predicts that home priced within $450,000-$500,000 will have the highest percentage of deals.
The national average of savings for Knock’s trade-in clients was 4.01% in 2018. Knock predicts the national average of savings for its clients to be 6.8% in 2019.
According to Knock’s economic advisor, Paul Habibi, Knock’s clients in its top 10 selling markets had transaction rates and sales rates that will look like this in 2018…
City Rate of Deals Aver Savings DOM Sold – List
Miami 89.3% 6.80% 38 85.08%
Houston 84.29% 4.84% 22 73.68%
Chicago 83.51% 5.11% 25 75%
Jacksonville 83.39% 5.15% 31 72.86%
New Orleans 83.61% 5.75% 30 77.52%
Hartford 82.92% 5.79% 45 72.78%
St. Louis 82.61% 5.20% 22 66.8%
Pittsburgh 81.39% 5.93% 27 70.34%
Tampa 80.77% 4.67% 22 73.13%
Cincinnati 80.73% 4.70% 22 67.89%
Habibi said, “Average savings are on the rise in these markets. Given the slowdown in home price increases just beginning to take hold, we can expect home sellers to continue to set their original list prices on the higher end. This has potential to result in greater deals for homebuyers (who are working with Knock).”
Continuing, Habibi said, “Particularly as we head into January, historically one of the best months for deals, the combination of seasonality and the slowing market make for the perfect recipe for increased deal rates predicted by Knock’s Deal Forecast.”
Source: Knock’s proprietary machine-learning models
