altos research: distressed residential overview
DESCRIPTION
A loTRANSCRIPT
Altos Research
Opal Real Estate Investors Summit: Dealmakers Conference
April 2011Miami, FL
Presented by: Scott Sambucci
Analyzing Mortgage Portfolios
Pre-Bid
• Do we want exposure in these local markets?
• Which of these properties are for sale?
• Risk adjusted quality
Diligence
• Is the market tanking? Improving?
• Diamonds in the rough
• Rotten apples
• BPO analysis
Servicing
• Work-out? Foreclose?
• Mark-to-market
• Portfolio analysis
• Loss Mit
Liquidation
• Price vs. time
• Maximize returns
• Leaving money on the table?
• Loss Severity
Finding distressed opportunities
• Dependent on acquisition, servicing, holding, disposition strategy
• Local matters within the macro-environment– i.e. Silicon Valley vs Fremont– i.e. Buckhead vs. Lilburn
• Slice sub-markets into price zones– i.e. rehab vs. as-is– workout vs. foreclosure
Geo-local Analysis
• Leading: List Price, Price of New Listings
• Demand: Percent of Properties with Price Reductions
• Psychological: Percent of Properties Relisted, cumulative days on market
• Supply: Population per inventory
Buckhead
But SLOWER
Boise, ID 83702
Los Altos, CA 94022
Price Analysis with sub-markets
Signals for work-out opps Short sale attempt initiated
(3/10)
Asking price
reduced, (8/10)
Short sale fails (10/11)
Bank re-sells at ~60% of initial
ask (3/11)
AFFORDABILITY AND COMPETITION
Atlanta overcorrecti
ng
Vegas Waterfall
Price-to-inventory Sensitivity Analysis: Las Vegas MSA
Los Altos, CA
vs
Davis, CA
Altos Research:Real-Time Housing Market Analytics
• Altos Research is the premier vendor of real-time analytics for housing market and asset valuation– What’s for sale? – How much is the property worth? – How’s the market?
• The only national source of primary data in the active housing market with applications specifically developed for mortgage analysis
• 20,000+ zip codes / 200+ MSAs
Active Market Signals Future Transaction Price
Price reduced$398,000
Inventory 69
Neighbor home listed
$409,000Deal closed$389,000
Transaction Recorded
Buyer financing fails,
Property relisted $394,000
March May July Sept Nov Jan
Closed transaction = 1 data point, months too lateActive Market = 9 months of pricing, price changes, supply and demand, leading
indicators
Offer made$391,000
Home listed$429,000
Inventory 49
From Last Year’s Home Price Presentation
AltosEvaluate™ Mortgage Analytics Suite• AltosEvaluate Web Application
– Analysis of each property in portfolio– Web application and market reports
• Forward Valuation Modeling™– 3, 6, and 12 month geo-local forecasts– By zip, property type, and price range
• Active Market Analytics™ data files– Local market trend statistics and leading indicators– Published weekly by zip code. 20,000 zip codes – CSV data files for import into housing models
• Listing Intel™ data files– Details on 2 million+ homes listed for sale this week– Active market comparables for pricing, supply, and fraud detection– Property forensics– Listing History, Listing Match, Listing Comps– CSV data files for import into property analysis systems
Valuation: Past, Present, Future
Altos Forward Valuation Modeling™Geo-local
Machine learning
Altos Real-Time Analytics™ & Listing Intel ™
Today’s Market Conditions(Friday’s data)
AVM – automated, transactions still laggingLinear regressions
HPI – use Case Shiller et al, to estimate “current” valuations
Repeat sales models
Traditional
c. 1998
c. 2005
2007
2011
Appraisal – manual, slow, expensive, old
BPO – manual, expensive, quicker
People
PeopleBackward lookinglagging
ContactScott Sambucci, Market AnalyticsAltos Researcho: (415) 931-7942c: (415) 596-0804e: [email protected]
Bloomberg: ALTO