Presented by Scott Sambucci from Altos Research at the Opal Real Estate Investor Conference, this presentation reviews the stae of the US housing market and examines leading indicators based on the active market.
2. Altos Research answers the question “How’s
the market, right now?”
Our clients are anyone who has an exposure
to the real estate market
Financial institutions, investors, and thousands of
real estate professionals around the country.
The only national source of primary research
in the active housing market
Unique statistics and applications for analysis and
action
10. 2008 -Default spike
exactly correlated with
market trough
Pre-2007 “normal”
1
markets: defaults
correlate to FICO, LTV
2
2009 – market conditions
stabilized, new defaults
decline
11. Assumption: “If a borrower is deep
underwater, he’ll walk away.”
Reality:
CA list prices rose 8% in 1H2009
Inventory dropped by 30%
New defaults fell 24% in Q4
LTV is still lousy on these properties
In a rapidly changing market, LTV impact
weakens and FICO approaches irrelevancy.
13. Real-time, local view
Home price stats
Median price, PNL, PLA
Home price distribution stats
Min, max, stdev
Price quartiles distribution
Supply and demand
Inventory, median DOM, mean DOM, new listings, listings
absorbed
Housing Market Psychology™ indicators
% relist, %price reduced, Market Action Index
14. FICO? LTV?
The last 36 months have taught us that external
housing market variables are by far the most
important variable in determining mortgage
default rates
Home Price direction, inventory, time to sell
Impact the borrower psychology and drive decisions
Declining market: “I’ll never get out. It’ll never sell.”
Up market: “This is getting better! I see light at the
end of the tunnel”
15. Must be real-time, local
Lagging Case-Shiller insufficient
Ask price trends
price of new listings vs. price of absorbed
YOY Inventory
Absorption rate vs. inventory (Market Action
Index)
Relist %
DOM
16. Scott Sambucci, VP Data Analytics
M: (415) 596-0804
O: (415) 931 7942
scott@altosresearch.com
T: @AltosResearch
Bloomberg: ALTO
www.altosresearch.com
blog.altosresearch.com