2013 Short Sale Trends

2013 SHORT SALE TRENDS
With Practical Steps to Finding Short Sale Listings

What we’ll cover today

• What is RealtyTrac?

• Where & Why Foreclosure Starts are Surging

– Bonus: Best Short Sale Markets

• How Short Sales Are Moving Further Upstream

– Bonus: listed and unlisted foreclosure inventory

– Bonus: zombie foreclosures

• Practical Steps to Finding Short Sale Listings

• Practical resources
©RealtyTrac Inc. 2012, Not for Distribution 2

A BRIEF INTRODUCTION TO REALTYTRAC

WHAT REALTYTRAC IS

• 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 Foreclosure site – 1.5 million foreclosure and bank-owned
properties nationwide
– More coverage, more detailed information than any
other national provider

• Unmatched property evaluation and transactional tools
– HomeScore, Equity & Loan Info, Comp Sales, Online
Offers, Foreclosure-MLS Match, and much more


WHAT REALTYTRAC IS NOT

• The RealtyTrac foreclosure database is not an “MLS for
foreclosure records”

• Most of the properties in the RealtyTrac database are NOT
on the MLS anywhere

– Less than 20% of the homes in foreclosure are listed

– Only 15% of REOs are listed

– Many MLS organizations prohibit including any REO or
foreclosure information in the property listings
– RealtyTrac gives you advanced notice that it will likely be
‘For Sale’ in the near future.


WHO RELIES ON REALTYTRAC DATA


WHERE FORECLOSURE STARTS SURGING

The Big Picture


NATIONAL TRENDS

More than 10 million
More than 10 million
starts and nearly 55
starts and nearly
million completions
million completions
(REO) since January
(REO) since January
2006
2006


NATIONAL TRENDS

66Percent Bump in Q2
Percent Bump in Q2
2012 corresponding
2012 corresponding
with National
with National
Robo-signing controversy came
Robo-signing controversy came Mortgage Settlement
Mortgage Settlement
to light in late 2010,
to light in late 2010,
accelerating downward trend
accelerating downward trend


STATES WITH BIG INCREASES


METROS WITH INCREASES


BOOMERANG FORECLOSURE STARTS


SECOND BOOMERANG IN CALIFORNIA?


WHY THE INCREASE

• Many states coming off artificial lows from last year
thanks to foreclosure processing delays.

• Those delays were caused by a variety of issues that
impacted some states more than others
• Fallout from robo-signing (paperwork and documentation)
• Intervention by the courts
• Lack of court resources to handle foreclosure volume
• Attorneys general investigation into five major lenders, with a
settlement finally reached in April
• Wave of recent legislation in non-judicial states


Longer Foreclosure Timelines N.Y.
N.Y.
timeline
timeline
longest in
longest in
country
country

Texas is
Texas is
shortest in
shortest in
country
country


A Tale of Two Foreclosure Markets


IMPLICATIONS

• Home prices in some of these markets may break
through a false bottom as these foreclosures are listed
and sold in 2013.

• More properties foreclosed (REO) in the next six to 12
months and more REO listed for sale in the next 12 to
18 months.

• More distressed homeowners interested in listing their
homes as short sales in the next six to 12 months in
these markets.


PRE-FORECLOSURE SALES ACTIVITY

Increased 19 percent
Increased 19 percent
in Q3 2012 to highest
in Q3 2012 to highest
level since Q2 2010
level since Q2 2010


PRE-FORECLOSURE SALES PRICES

Average prices
Average prices
increase on annual
increase on annual
basis after 88
basis after
consecutive quarters
consecutive quarters
of decreases
of decreases


OUTNUMBERING REO SALES

Both hardest-hit sates
Both hardest-hit sates
like California, Florida
like California, Florida
and Arizona
and Arizona

And states with
And states with
longest foreclosure
longest foreclosure
processes like NY & NJ
processes like NY & NJ


OUTNUMBERING REO SALES


THE BIGGEST SHORTS

Banks are more willing
Banks are more willing
to take big losses with
to take big losses with
aashort sale
short sale


BEST MARKETS FOR SHORT SALES

All markets had at least
All markets had at least
200 short sales in
200 short sales in
fourth quarter and
fourth quarter and
average time from
average time from
foreclosure start to sale
foreclosure start to sale
of less than one year.
of less than one year.


SHORT SALES MOVING FURTHER UPSTREAM

2012 U.S. RESIDENTIAL SALES


STATE TRENDS

26 states posted annual
26 states posted annual
increases in non-
increases in non-
foreclosure short sales
foreclosure short sales
in 2012
in 2012


METRO TRENDS

Legislation forcing
Legislation forcing
lenders’ hands in
lenders’ hands in
metros like Las Vegas,
metros like Las Vegas,
Seattle and Portland
Seattle and Portland


POTENTIAL POOL OF SHORT SALES


BUT A SHRINKING POOL

Nationwide 1.6 million
Nationwide 1.6 million
fewer underwater than
fewer underwater than
aayear ago
year ago


LISTED PRE-FORECLOSURES DOWN

With some notable
With some notable
exceptions mostly in
exceptions mostly in
judicial states
judicial states


MORE INVENTORY IN PIPELINE


MORE POTENTIAL SHORT SALES?


KNOW YOUR LOCAL MARKET TRENDS


TARGET POTENTIAL SHORT SALES

Filter by property
Filter by property Filter by equity/LTV
Filter by equity/LTV
Filter by property
Filter by property
value and
value and type
type
characteristics
characteristics

Filter by lender name
Filter by lender name Filter by listing status
Filter by listing status
and auction date
and auction date and bankruptcy status
and bankruptcy status


TARGET POTENTIAL SHORT SALES


FILTER OUT REO AND FOR SALE


SELECT PROPERTY TO VIEW DETAILS


See Foreclosure
See Foreclosure
Details
Details

LTV and Equity
LTV and Equity

Outstanding loans
Outstanding loans
and position
and position

Owner contact info
Owner contact info
(including current
(including current
mailing address) and
mailing address) and
trustee and lender info
trustee and lender info


DOWNLOAD PROPERTY INFO


DOWNLOAD IN BULK WITH MEGA


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

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

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

• Buyer leads (exclusive territories)
• Call 800.306.5930


2013 Short Sale Trends

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