u.s. treasury making home affordable short sale workshop: washington, d.c

LEVERAGING THE LATEST HOUSING MARKET TRENDS

© 2013 Renwood RealtyTrac LLC

WELCOME

WHAT WE’LL COVER TODAY

• A brief bit on RealtyTrac• How long will the short sale surge last?• Home prices buoying underwater inventory• Where foreclosure starts are surging• The problem and opportunity of zombie

foreclosures• When and where REOs are rebounding• Flipping and institutional investors• Boomerang buyers boomeranging more quickly


REALTYTRAC DATA PRIMER

Economic

Neighborhood & Local

MLS

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?


August foreclosure starts at lowest level

since December 2005



Seriously underwater means mortgage amount is at least 25 percent

higher than estimated market

value

HOW LONG WILL THE SHORT SALE SURGE LAST?


1.8 million fewer underwater in last year

UNDERWATER DATA BY COUNTY

• County-level interactive heat map• http://

www.realtytrac.com/Content/news-and-opinion/seriously-underwater-homeowners-county-heat-map-7856


http://www.realtytrac.com/Content/news-and-opinion/seriously-underwater-homeowners-county-heat-map-7856



HOME EQUITY PROFILES FOR MAJOR METROS


• http://public.tableausoftware.com/shared/HTMMWH5ZG?:display_count=yes

http://public.tableausoftware.com/shared/HTMMWH5ZG?:display_count=yes

http://public.tableausoftware.com/shared/HTMMWH5ZG?:display_count=yes



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



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

Up 60 percent compared to year

ago YTD


• 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


HOME PRICES BUOYING UNDERWATER INVENTORY


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


Annualized residential sales above 5 million for nine consecutive months

ending in June

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.

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


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


WHEN & WHERE REOS ARE REBOUNDING


THE INCREDIBLE DISAPPEARING REOS

U.S. REOs have gradually risen over

past four months since hitting 72-

month low in April

WHEN AND WHERE REOS ARE REBOUNDING


DEEDS IN LIEU INCREASING BUT NOT IN HUGE NUMBERS


Nationwide Deeds in Lieu of Foreclosure

increased 39 percent in 2012 from 2011

THE INCREDIBLE DISAPPEARING REOS

• 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


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

BOOMERANG BUYERS


BOOMERANG BUYERS BOOMERANGING MORE QUICKLY

• The News– HUD just recently changed its guidelines to allow some

homeowners who have gone through foreclosure, short sale or bankruptcy to qualify for FHA financing.

– Now these homeowners can qualify for FHA financing as soon as 12 months after the “last event”

– This is down from a minimum of 36 months

• The Opportunity– Reach out to your list of homeowners who have sold via short

sale in the last year-plus to see if they are interested in buying.– Get lists of homeowners who have lost their home to

foreclosure in your area in the last year-plus

BOOMERANG BUYERS BOOMERANGING MORE QUICKLY


4.6 million completed foreclosures and short sales from 2007 to 2010.

Additional 2.4 million completed foreclosures and short sales in 2011

and 2012

LEVERAGING LOCAL DATA TO HELP HOMEOWNERS


1. Know your market



2. Identify individual homeowners in foreclosure

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



3. Create mailing lists of distressed homeowners

LEVERAGING DISTRESSED TRENDS TIP NO. 3


Identify homeowners who have vacated their homes and get

new mailing addresses

RESOURCES TO LEVERAGE DISTRESSED MARKET TRENDS

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

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

• Professional subscription (address-level access)– Call 877-888-8722 or http://www.realtytrac.com/agentproduct

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


http://www.realtytrac.com/content

http://www.realtytrac.com/content

http://www.realtytrac.com/trendcenter/

http://www.realtytrac.com/agentproduct

http://www.realtytrac.com/agentproduct

http://mega.realtytrac.com/

DAREN BLOMQUISTVICE PRESIDENT, [email protected]


THANK YOU!

mailto:[email protected]