• Small Business Hiring Rises, Zillow Quits Flipping Houses, Home Price Growth Hits Record

    Small businesses hiring rose in October. (Getty Images)
    Small businesses hiring rose in October. (Getty Images)

    By Richard Lawson
    CoStar News

    Small Business Hiring Rises

    Small business hiring rose for the fifth consecutive month in October to reach the highest level since 2017, according to a monthly payroll company.

    Kicking off a week when monthly jobs numbers start rolling in, Paychex reported that its index with data analytics firm IHS Markit passed 100 for the first time since June 2017. The index hit 100.45, just shy of where the index was in April 2017.

    The reading means hiring has hit the benchmark set in 2004 when economic growth was deemed "normal” for the purposes of creating the index.

    Hourly wages increased to a record level for the Paychex index started a decade ago. “You can see employers are responding to labor market pressures and the impact of many workers leaving their current jobs and seeking new opportunities,” Martin Mucci, Paychex CEO, said in a statement.

    Leisure and hospitality jobs once again led hiring last month. That sector has led the Labor Department and ADP jobs reports for seven consecutive months.

    Texas took the top spot among states again with the Dallas area leading among cities.

    Zillow Quits Flipping Houses

    Online home listing company Zillow told investors on Tuesday that the company is winding down its house-flipping business saying that being able to forecast the future price of a house is too unpredictable now.

    Home prices have soared over the past year on strong demand and tight supply of listings and new construction. There are many anecdotal tales of homes fetching well above list price.

    Zillow, Opendoor, OfferPad, Knock and other so-called iBuyers pitched homeowners on reducing the hassle of listing and showing homes by offering a guaranteed price on their home when selling. The companies use algorithms to determine their offers to owners based on forecasting the future price.

    That worked as long as home values in an area were steady across a majority of homes. "We've determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility," Rich Barton, Zillow’s CEO said in a statement.

    CoStar Group owns HomeSnap and Homes.com that compete with companies such as Zillow.

    Home Price Growth Hits Record

    Homes prices rose in September at the highest annual rate on a closely watched index.

    The CoreLogic Index shows September prices rose 18% from September 2020. Prices grew 1.1% from August.

    Prices for detached housing increase 19.6%, compared to 12.2% for attached housing.

    “Remote work has allowed many employees to buy homes" farther away from their offices, said Frank Nothaft, chief economist at CoreLogic, in a statement. “These homes are often in the suburbs or exurbs, where property prices and population density are lower and single-family detached housing" is more common.

    CoreLogic predicts that price growth will decline to 1.9% by September next year as rising prices keep buyers out of the market.

    Source: CoStar Group, www.costar.com