why is – or isn’t – real estate rebounding? james saccacio, ceo realtytrac

Why Is – Or Isn’t – Real Estate Rebounding?

James Saccacio, CEO RealtyTrac

A BRIEF INTRODUCTION TO REALTYTRAC

2©RealtyTrac Inc. 2011, Not for Distribution

James J. SaccacioCEO, RealtyTrac949-502-8300 Ext. [email protected]/realtytracTwitter:@jsaccacioBlogs.forbes.com/jimsacaccio

mailto:[email protected]

• RealtyTrac publishes the country’s largest database of foreclosure and bank-owned properties– Data from over 2,200 counties, covering over

92% of U.S. housing units

• #1 online Foreclosure marketplace – over 2 million foreclosure and bank-owned properties nationwide

• Unmatched property evaluation and transactional tools– HomeScore, Equity & Loan Info, Property

Analyzer, Online Offers, Foreclosure-MLS Match, and much more

• 90 Million Assessor Property Records just added!

ABOUT REALTYTRAC


WHO RELIES ON REALTYTRAC DATA



©RealtyTrac Inc. 2011, Not for Distribution 6

WHAT WE’LL COVER TODAY

• Why is – or isn’t – real estate rebounding?

• In-depth look at Shadow Inventory– Nationwide– California


WHY IS - OR ISN’T - REAL ESTATE REBOUNDING?


WEAK U.S. DEMAND


GOVERNMENT INTERVENTION

10

• 2008-2010: Neighborhood Stabilization Program– $7 billion awarded to states and local governments to

purchase and redevelop foreclosures and abandoned homes

• 2009: Modification Incentives (HAMP): 2009

• 2010: Short Sale Incentives (HAFA): 2010

• 2011: Help for unemployed homeowners (EHLP)– Up to $50,000 to help unemployed borrowers pay mortgage– Alabama received $162 million for unemployed borrowers

• Numerous state laws extending foreclosure processAlabama is one of a few exceptions with no big changes to

state foreclosure law• HARP II: Refinancing for underwater homeowners who are

current on their mortgages, with no cap on LTV

©RealtyTrac Inc. 2011, Not for Distribution

MEDIAN PRICE VS. MEDIAN INCOME


SLOPPY FORECLOSURE PRACTICES


Artificial drop-off in foreclosure activity

triggered by robo-signing

Artificial drop-off in foreclosure activity

triggered by robo-signing

U.S. Monthly Foreclosure Activity

LONGER FORECLOSURE TIMELINES


California timeline about at national average

California timeline about at national average

N.Y. timeline longest in country

N.Y. timeline longest in country

IN-DEPTH LOOK AT SHADOW INVENTORY


SHADOW INVENTORY OF SUPPLY


Built by Skyrocketing Foreclosures & Plummeting Home Prices

Up 0.2 percent

from July to

August 2011

Up 0.2 percent

from July to

August 2011

U.S. SHADOW INVENTORY OF SUPPLY


10 Percent Jump in Default Notices in

October

10 Percent Jump in Default Notices in

October

SOURCE: RealtyTrac U.S. Foreclosure Market Report


17

SOURCE: Mortgage Bankers Association Q3 2011 National Delinquency Survey



18

Loans with an LTV of at least 125 percent as of Sept 2011

Loans with an LTV of at least 125 percent as of Sept 2011



COMING OUT OF A RAIN DELAY



21

Avg. REO prices 40% lower than avg. prices

of non-foreclosures

Avg. REO prices 40% lower than avg. prices

of non-foreclosures



22

19 Percent Increase from

Q1 to Q2

19 Percent Increase from

Q1 to Q2



23

Tied record-high for

short sale discount

in Q2 2011

Tied record-high for

short sale discount

in Q2 2011


IMPLICATIONS FOR THE HOUSING MARKET


ESTIMATED ABSORPTION RATES


• 13-month supply of bank-owned REOs

• 17-month supply of default & auction

properties

• 41-month supply of delinquent properties

• 30- to 45-month supply of distressed

property

• Based on 265,000 distressed properties

sold each quarterSOURCE: RealtyTrac

CALIFORNIA SHADOW INVENTORY OF SUPPLY


COMING OUT OF A RAIN DELAY




17 Percent Jump in Default

Notices in October 2011

17 Percent Jump in Default

Notices in October 2011




SOURCE: Mortgage Bankers Association, Q3 2011 National Delinquency Survey

SERIOUSLY UNDERWATER CALIFORNIA LOANS: 2 MILLION


27 percent of all outstanding California mortgages had an LTV of at least 125 percent as of Sept 2011.

27 percent of all outstanding California mortgages had an LTV of at least 125 percent as of Sept 2011.

SOURCE: RealtyTrac

THE MOST DEPRESSED HOUSING MARKETS


SOURCE: CoreLogic, Zelman & Associates

CALIFORNIA BANK-OWNED SALES



CALIFORNIA PRE-FORECLOSURE SALES

CALIFORNIA PRE-FORECLOSURE SALES AVG PRICES & DISCOUNTS


CALIFORNIA UNEMPLOYMENT RATE


California Unemployment Rate – 11.9% in Sept. 2011

SOURCE: U.S. Bureau of Labor Statistics

ESTIMATED CALIFORNIA ABSORPTION RATES


• 9-month supply of bank-owned properties

• 14-month supply of default & auction

properties

• 19-month supply of delinquent properties

• 28- to 33-month supply of distressed

properties

• Based on 69,897 distressed sales per

quarter SOURCE: RealtyTrac

2010 MIGRATION PATTERNS


SOURCE: United Van Lines, January 2011

JIM’S CALIFORNIA SCORE CARD

National Average Days to Foreclose: 336 DaysCalifornia Average Days to Foreclose: 363 Days +Short Sale Discount: 35% +REO Discount: 50% +Annualized Home Sales: 409,000 +Delinquency Trends: Flat -Default Trends: Rising -Delinquency/Default Direction: Rising -Home Price Direction: Down -Unemployment Rate: (Above Natl. Avg.) 11.9% -Migration Pattern: neutral

GRADE: A B C D F


THANK YOU!


James J. SaccacioCEO, RealtyTrac949-502-8300 Ext. [email protected]/realtytracTwitter:@jsaccacioBlogs.forbes.com/jimsacaccio

mailto:[email protected]

why is – or isn’t – real estate rebounding? james saccacio, ceo realtytrac

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