the us housing market - it's worse than you think

Copyright Altos Research | www.altosresearch.com | 7/29/2010

It’s worse than you think: The Housing Market in a post-stimulus world

Presented by: Scott SambucciVice President, Data AnalyticsAltos Research


What we’ll cover today

Yep, we’ve blown the punch line already, but…

Look at real-time effects of 2009-2010 housing stimulus

All markets are created equal, but some are more equal than others

Recovery rates vary and micro-markets matter

Finding business opportunities despite current conditions, if you know how to look for them.


About the Altos Research Housing Market Platform

150+ Metropolitan Statistical Areas (and growing every month) covering 17,000 zip codes

2 million active listings updated every week Market Analytics & Leading Indicators available by

zip code, city, county, metro, and National Composites

All data & market analytics for each geography (zip, city, metro) independently calculated


Leading Indicators & Forecasting

0-12 month Forecasting Median Price Price of New Listings Price of Listings Absorbed Market Action Index List-to-Sale Ratios

6-18 month forecasting Percent Price Decreased/Increase Magnitude Price Decreased/Increase Inventory Percent Relisted Days-on-market (mean and median) Tic/Trend/Peakiness/Troughiness

12-24 month forecasting Year-over-Year Price Year-over-Year Inventory Year-over-Year Percent Price Decreased Year-over-Year Days-on-Market

This list in a partial list of market stats published weekly, with over 400 coincidental & leading indicators available

Altos Research also provides market analytics based on Property Characteristics: Square Footage # Beds/Baths Lot Size & Age Price per Bedroom/Bathroom Price per Square Foot (mean &

median)


Applications & Clients

Whole Loan Asset Portfolios RMBS Portfolios REO Disposition Mortgage Origination & Servicing Valuation & Appraisal Equity Researchers Risk Management Homebuilders & Developers Insurance


Altos 10-City Composite (March 2010)


The Supply Effect (90-day RA)


The Supply Effect (weekly)


New Sellers vs. Existing Sellers11/2

/2007

12/1

/2007

12/3

0/2

007

1/2

8/2

008

2/2

6/2

008

3/2

6/2

008

4/2

4/2

008

5/2

3/2

008

6/2

1/2

008

7/2

0/2

008

8/1

8/2

008

9/1

6/2

008

10/1

5/2

008

11/1

3/2

008

12/1

2/2

008

1/1

0/2

009

2/8

/2009

3/9

/2009

4/7

/2009

5/6

/2009

6/4

/2009

7/3

/2009

8/1

/2009

8/3

0/2

009

9/2

8/2

009

10/2

7/2

009

11/2

5/2

009

12/2

4/2

009

1/2

2/2

010

2/2

0/2

010

3/2

1/2

010

4/1

9/2

010

5/1

8/2

010

6/1

6/2

010

7/1

5/2

010

85.0%

87.0%

89.0%

91.0%

93.0%

95.0%

97.0%


Inventory up, Transactions down


Cash for Clunkers, er, The Housing Stimulus

Last of the Housing Bubble

Couldn’t get out – moved into foreclosure process

Initial stimulus effects

Limited effect of stimulus extension.


ECON 101: More supply Lower prices…


… but this year at a faster rate

1/4/

2008

2/6/

2008

3/10

/200

8

4/12

/200

8

5/15

/200

8

6/17

/200

8

7/20

/200

8

8/22

/200

8

9/24

/200

8

10/2

7/20

08

11/2

9/20

08

1/1/

2009

2/3/

2009

3/8/

2009

4/10

/200

9

5/13

/200

9

6/15

/200

9

7/18

/200

9

8/20

/200

9

9/22

/200

9

10/2

5/20

09

11/2

7/20

09

12/3

0/20

09

2/1/

2010

3/6/

2010

4/8/

2010

5/11

/201

0

6/13

/201

0

7/16

/201

0

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

% change ZR inventory % change PPD

Weekly Rate of Change


And for those that still don’t quite get it…


Typical Inventory Trends

Inventory now steadily climbing in 2010 after negative growth from mid-2008 through early 2010.


Florida Inventory Trends

SFH Inventory remains flat in Tampa, Orlando & Miami

Miami Condo Inventory still falling, coincided with price declines


Stable/Low Beta markets


Local Trends Matter


Homeownership Rates

“Home Vacancies Rise as U.S. Ownership Falls to Lowest in Decade” Kathleen Howley, Bloomberg (July 27)

“Apartment Rentals Surge in U.S. on Foreclosures, Jobs” Prashant Gopal, Bloomberg (July 27)


Homeownership Rates & Demand

MAI measures demand at given inventory levels. Moving sharply negative post-stimulus


S&P/Case-Shiller Home Price Index

April & May 2010 were higher. Expect this trend to continue into

June & July Smoothing and heading lower by

early Fall


Active Market Price Reductions(lower is better)

MSA percent_price_decreased

minneapolis-st-paul-msa 49.0%

denver-aurora-boulder-msa 45.0%

portland-beaverton 44.5%

chicago-naperville-joliet 44.3%

phoenix-mesa-scottsdale 44.2%

seattle-tacoma-bellevue 43.6%

dallas-fort-worth-arlington 40.5%

nc-charlotte-gastonia-concord 40.0%

oh-cleveland-elyria-mentor-msa 40.0%

boston-cambridge-quincy 39.8%

tampa-st-petersburg-clearwater 38.5%

new-york-jersey-long-island 38.0%

atlanta-sandy-springs-marietta 36.6%

mi-detroit-warren-livonia-msa 36.4%

san-diego-carlsbad-san-marcos-msa 33.8%

san-francisco-oakland-fremont-msa 33.8%

washington_dc_msa 32.3%

miami-fort-lauderdale-miami-beach 31.3%

los-angeles-long-beach-santa-ana 30.7%

las-vegas-paradise-msa 26.5%


YoY Active Market Price Reductions(lower is better)

MSA yoy_percent_price_decreased

denver-aurora-boulder-msa 13.8%

san-diego-carlsbad-san-marcos-msa 11.8%

boston-cambridge-quincy 9.9%

minneapolis-st-paul-msa 8.0%

oh-cleveland-elyria-mentor-msa 6.8%

dallas-fort-worth-arlington 6.6%

san-francisco-oakland-fremont-msa 5.6%

new-york-jersey-long-island 4.0%

portland-beaverton 3.8%

nc-charlotte-gastonia-concord 3.4%

phoenix-mesa-scottsdale 3.2%

chicago-naperville-joliet 2.2%

atlanta-sandy-springs-marietta 2.0%

seattle-tacoma-bellevue 0.2%

los-angeles-long-beach-santa-ana -0.9%

tampa-st-petersburg-clearwater -1.9%

mi-detroit-warren-livonia-msa -8.4%

miami-fort-lauderdale-miami-beach -8.7%

washington_dc_msa -12.3%

las-vegas-paradise-msa -34.1%


New Sellers vs. Existing Sellers(higher is better)

name PNL % of MAP

miami-fort-lauderdale-miami-beach 82%

phoenix-mesa-scottsdale 86%

tampa-st-petersburg-clearwater 89%

mi-detroit-warren-livonia-msa 90%

denver-aurora-boulder-msa 90%

atlanta-sandy-springs-marietta 91%

dallas-fort-worth-arlington 91%

san-diego-carlsbad-san-marcos-msa 93%

boston-cambridge-quincy 93%

nc-charlotte-gastonia-concord 94%

oh-cleveland-elyria-mentor-msa 95%

minneapolis-st-paul-msa 95%

chicago-naperville-joliet 95%

washington_dc_msa 95%

los-angeles-long-beach-santa-ana 96%

portland-beaverton 97%

las-vegas-paradise-msa 98%

seattle-tacoma-bellevue 99%

san-francisco-oakland-fremont-msa 99%

new-york-jersey-long-island 100%


The Cliff Notes Version

A little more stable:

San Francisco-Oakland-Fremont

Las-Vegas-Paradise Washington DC metro

A little less stable:

Minneapolis-St. Paul

Denver metro Chicago-Naperville-

Joliet Phoenix-Mesa-

Scottsdale


So now what?

Despite general bearishness, selected markets showing resiliency to climbing inventory levels

Recovery period dependent on inventory The more local you get, the more volatile Vital to get local b/c if you generalize (ie

use County or MSA data), you’re going to be wrong.

You know that the trend matters, but are you using lagging data for forecasting analysis?


Do you really know where the market is going?

Phoenix 85057 Home Prices Altos Forecast

BPO based on June comps $184,000

Altos real-time market data


For Webcast Attendees

Free Portfolio analysis Data for up to 25 zips including 1-year

historical. Contact Scott Sambucci directly for

submission formatting. Presentation slides available upon

request:

[email protected](415) 931 7942

mailto:[email protected]


Whole Loan & RMBS Portfolio Data Requests

Submit list of loans, property addresses or underlying asset zip codes to Altos Research

Altos Research Housing Market Data Platform yields real-time market analytics and leading indicators for each zip code submitted.


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All data files available for download as .CSV file for easy integration into any spreadsheet model or database application.


Data Visualization


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the us housing market - it's worse than you think

Real Estate

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