how real estate agents can leverage the latest distressed market trends

LEVERAGING THE LATEST DISTRESSED MARKET TRENDS

WELCOME

WHAT WE’LL COVER TODAY

• A brief bit on RealtyTrac• How long will the short sale surge last?• The problem and opportunity of zombie

foreclosures• The incredible disappearing REOs• Flipping and institutional investors• Home prices buoying underwater inventory• Tips on leveraging all these trends to help build

your business

REALTYTRAC DATA PRIMER

Economic

Neighborhood & Local

Sales & Loan

Valuation& Prop Details

Foreclosure

REALTYTRAC DATA PRIMER

County-Level Public Documents• Pre-foreclosure, foreclosure auction and REO• Sales & Loan• Valuation and property characteristics

MLS• Listing status, price and other info• Property description and more characteristics

Publicly available datasets• Neighborhood features, amenities, red flags• Macro housing and economic metrics

HOW LONG WITH THE SHORT SALE SURGE LAST?

HOW LONG WILL SHORT SALE SURGE LAST?

June foreclosure starts at lowest level

since December 2005

Seriously underwater means mortgage amount is at least 25 percent

higher than estimated market

HOW LONG WILL THE SHORT SALE SURGE LAST?

1.5 million fewer underwater in last year

Distressed median prices still flat lining

Average Annual Pct Change YTD in 2013 is 7 percent – will take 3.5

more years at minimum to get all seriously underwater borrowers

back with positive equity

Up 53 percent compared to year

ago in Q2 2013

At pace of 700,000 short sales a year it would still take more than 15 years

to sell off all of the 11.3 million seriously underwater homes

• Other considerations that could slow short sales– Rising home prices give lenders hope to hold out for REO– Rising home prices give homeowners hope to hold on• But these homeowners could be future equity sales

– Top 5 lenders less motivated to do short sales as they fulfill requirements under the national mortgage settlement

– Expiration of Mortgage Forgiveness Debt Relief Act

LEVERAGING DISTRESSED TRENDS TIP NO. 1

Foreclosure Inventory and

Prices

Historical Foreclosure Discounts

1. Know your market

Local, state and national

foreclosure rates

Recent default, auction and REO trends

WHERE FORECLOSURE STARTS & AUCTIONS ARE REBOUNDING

YoY Pct Increases:• Maryland: 365%• Connecticut: 47%• New York: 36%• New Jersey: 27%• Oregon: 59,200%

YoY Pct Increases:• Florida: 100%• Arkansas: 71%• Illinois: 65%

• Wisconsin: 45%• Washington: 21%

• Why are foreclosure starts and auctions rebounding?– Pent-up foreclosure activity from robo-signing, national

mortgage settlement and state legislation/court rulings– Rising prices may be helping to motivate foreclosure

• What are implications for real estate agents?– Clock is now ticking on delinquent homeowners– Auctions another source of finding distressed

buyers/sellers in the form of investors

LEVERAGING DISTRESSED MARKET TRENDS TIP NO. 2

©RealtyTrac Inc. 2013, Not for Distribution

Filter by property value and

characteristics

Filter by property type

Filter by equity/LTV

Filter by lender name and auction date

Filter by listing status and bankruptcy status

Target potential short sale listings with advanced search

filters

Create mailing lists of distressed homeowners in

default or scheduled for foreclosure auction

THE PROBLEM & OPPORTUNITY OF ZOMBIE FORECLOSURES

THE PROBLEM AND OPPORTUNITY OF ZOMBIE FORECLOSURES

• The problem– More than 167,000 vacant homes nationwide, 20

percent of all homes in the foreclosure process– Homeowners often don’t realize they still own the

property and are responsible for taxes etc.

• The opportunity– Homeowners who have exhibited a desire to let go of

the property– Lenders who don’t want to foreclose

Identify homeowners who have vacated their homes and get

new mailing addresses

THE INCREDIBLE DISAPPEARING REOS

U.S. REOs dropped to a 71-month low in

April 2013

Nationwide Deeds in Lieu of Foreclosure

increased 39 percent in 2012 from 2011

• REOs are down but not out– Recent rise in foreclosure starts and scheduled

foreclosure auctions in some markets will translate into bank repossessions in the next 6 to 12 months

– Rising home prices mean banks may be willing to tackle the increasingly costly and complex REO process to get a higher price out of a property down the road

Find unlisted bank-owned homes

FLIPPING & INSTITUTIONAL INVESTORS

U.S. property flips increased 17 percent from a year ago in the

second quarter

U.S. institutional investor purchases

increased 16 percent from year ago in Q2

Find repeat investor clients by attending foreclosure auctions and order lists of the most

active institutional investors in your market.

Find repeat investor clients and other buyers by showing up as the local expert when they are

searching for auctions or other properties.

HOME PRICES BUOYING UNDERWATER INVENTORY

4.5 million homes nationwide would transition from short sales to

equity sales with 10 percent increase in home prices; 8.3 million

with a 20 percent rise

LEVERAGING DISTRESSED TRENDS BONUS TIP

Establishing a relationship with a distressed homeowner may not always lead to a distressed sale today; in today’s market it could very likely lead to a

non-distressed sale tomorrow.

LEVERAGING DISTRESSED MARKET TRENDS WITH REALTYTRAC

• Real Estate News & Reports (free)• http://www.realtytrac.com/content

• Local Stats & Trends (embeddable)• http://www.realtytrac.com/trendcenter/

• Professional subscription (address-level access)• http://www.realtytrac.com/agentproduct

• Download data/create lists: http://mega.realtytrac.com

how real estate agents can leverage the latest distressed market trends

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