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?
© 2013 Renwood RealtyTrac

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

HOME EQUITY PROFILES FOR MAJOR METROS
• 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 yea
it would still take more than 15 yea
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 & 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

DAREN BLOMQUIST
VICE PRESIDENT, REALTYTRAC
DAREN.BLOMQUIST@REALTYTRAC.COM
THANK YOU!

U.S. Treasury Making Home Affordable Short Sale Workshop: Washington, D.C.

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