the us housing market - it's worse than you think
DESCRIPTION
This presentation includes a look at both national and regional US housing market trends. Scott Sambucci examines several real-time and leading indicators. A look at the Case-Shiller Home Price Index and the effects of the 2009-10 US Housing Stimulus program is also included. This presentation was part of a recording webcast. A video recording of the webcast is available at: https://www1.gotomeeting.com/register/178950865 (Registration required)TRANSCRIPT
Copyright Altos Research | www.altosresearch.com | 7/29/2010
It’s worse than you think: The Housing Market in a post-stimulus world
Presented by: Scott SambucciVice President, Data AnalyticsAltos Research
Copyright Altos Research | www.altosresearch.com | 7/29/2010
What we’ll cover today
Yep, we’ve blown the punch line already, but…
Look at real-time effects of 2009-2010 housing stimulus
All markets are created equal, but some are more equal than others
Recovery rates vary and micro-markets matter
Finding business opportunities despite current conditions, if you know how to look for them.
Copyright Altos Research | www.altosresearch.com | 7/29/2010
About the Altos Research Housing Market Platform
150+ Metropolitan Statistical Areas (and growing every month) covering 17,000 zip codes
2 million active listings updated every week Market Analytics & Leading Indicators available by
zip code, city, county, metro, and National Composites
All data & market analytics for each geography (zip, city, metro) independently calculated
Copyright Altos Research | www.altosresearch.com | 7/29/2010
Leading Indicators & Forecasting
0-12 month Forecasting Median Price Price of New Listings Price of Listings Absorbed Market Action Index List-to-Sale Ratios
6-18 month forecasting Percent Price Decreased/Increase Magnitude Price Decreased/Increase Inventory Percent Relisted Days-on-market (mean and median) Tic/Trend/Peakiness/Troughiness
12-24 month forecasting Year-over-Year Price Year-over-Year Inventory Year-over-Year Percent Price Decreased Year-over-Year Days-on-Market
This list in a partial list of market stats published weekly, with over 400 coincidental & leading indicators available
Altos Research also provides market analytics based on Property Characteristics: Square Footage # Beds/Baths Lot Size & Age Price per Bedroom/Bathroom Price per Square Foot (mean &
median)
Copyright Altos Research | www.altosresearch.com | 7/29/2010
Applications & Clients
Whole Loan Asset Portfolios RMBS Portfolios REO Disposition Mortgage Origination & Servicing Valuation & Appraisal Equity Researchers Risk Management Homebuilders & Developers Insurance
Copyright Altos Research | www.altosresearch.com | 7/29/2010
Altos 10-City Composite (March 2010)
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The Supply Effect (90-day RA)
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The Supply Effect (weekly)
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New Sellers vs. Existing Sellers11/2
/2007
12/1
/2007
12/3
0/2
007
1/2
8/2
008
2/2
6/2
008
3/2
6/2
008
4/2
4/2
008
5/2
3/2
008
6/2
1/2
008
7/2
0/2
008
8/1
8/2
008
9/1
6/2
008
10/1
5/2
008
11/1
3/2
008
12/1
2/2
008
1/1
0/2
009
2/8
/2009
3/9
/2009
4/7
/2009
5/6
/2009
6/4
/2009
7/3
/2009
8/1
/2009
8/3
0/2
009
9/2
8/2
009
10/2
7/2
009
11/2
5/2
009
12/2
4/2
009
1/2
2/2
010
2/2
0/2
010
3/2
1/2
010
4/1
9/2
010
5/1
8/2
010
6/1
6/2
010
7/1
5/2
010
85.0%
87.0%
89.0%
91.0%
93.0%
95.0%
97.0%
Copyright Altos Research | www.altosresearch.com | 7/29/2010
Inventory up, Transactions down
Copyright Altos Research | www.altosresearch.com | 7/29/2010
Cash for Clunkers, er, The Housing Stimulus
Last of the Housing Bubble
Couldn’t get out – moved into foreclosure process
Initial stimulus effects
Limited effect of stimulus extension.
Copyright Altos Research | www.altosresearch.com | 7/29/2010
ECON 101: More supply Lower prices…
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… but this year at a faster rate
1/4/
2008
2/6/
2008
3/10
/200
8
4/12
/200
8
5/15
/200
8
6/17
/200
8
7/20
/200
8
8/22
/200
8
9/24
/200
8
10/2
7/20
08
11/2
9/20
08
1/1/
2009
2/3/
2009
3/8/
2009
4/10
/200
9
5/13
/200
9
6/15
/200
9
7/18
/200
9
8/20
/200
9
9/22
/200
9
10/2
5/20
09
11/2
7/20
09
12/3
0/20
09
2/1/
2010
3/6/
2010
4/8/
2010
5/11
/201
0
6/13
/201
0
7/16
/201
0
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
% change ZR inventory % change PPD
Weekly Rate of Change
Copyright Altos Research | www.altosresearch.com | 7/29/2010
And for those that still don’t quite get it…
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Typical Inventory Trends
Inventory now steadily climbing in 2010 after negative growth from mid-2008 through early 2010.
Copyright Altos Research | www.altosresearch.com | 7/29/2010
Florida Inventory Trends
SFH Inventory remains flat in Tampa, Orlando & Miami
Miami Condo Inventory still falling, coincided with price declines
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Stable/Low Beta markets
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Local Trends Matter
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Homeownership Rates
“Home Vacancies Rise as U.S. Ownership Falls to Lowest in Decade” Kathleen Howley, Bloomberg (July 27)
“Apartment Rentals Surge in U.S. on Foreclosures, Jobs” Prashant Gopal, Bloomberg (July 27)
Copyright Altos Research | www.altosresearch.com | 7/29/2010
Homeownership Rates & Demand
MAI measures demand at given inventory levels. Moving sharply negative post-stimulus
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S&P/Case-Shiller Home Price Index
April & May 2010 were higher. Expect this trend to continue into
June & July Smoothing and heading lower by
early Fall
Copyright Altos Research | www.altosresearch.com | 7/29/2010
Active Market Price Reductions(lower is better)
MSA percent_price_decreased
minneapolis-st-paul-msa 49.0%
denver-aurora-boulder-msa 45.0%
portland-beaverton 44.5%
chicago-naperville-joliet 44.3%
phoenix-mesa-scottsdale 44.2%
seattle-tacoma-bellevue 43.6%
dallas-fort-worth-arlington 40.5%
nc-charlotte-gastonia-concord 40.0%
oh-cleveland-elyria-mentor-msa 40.0%
boston-cambridge-quincy 39.8%
tampa-st-petersburg-clearwater 38.5%
new-york-jersey-long-island 38.0%
atlanta-sandy-springs-marietta 36.6%
mi-detroit-warren-livonia-msa 36.4%
san-diego-carlsbad-san-marcos-msa 33.8%
san-francisco-oakland-fremont-msa 33.8%
washington_dc_msa 32.3%
miami-fort-lauderdale-miami-beach 31.3%
los-angeles-long-beach-santa-ana 30.7%
las-vegas-paradise-msa 26.5%
Copyright Altos Research | www.altosresearch.com | 7/29/2010
YoY Active Market Price Reductions(lower is better)
MSA yoy_percent_price_decreased
denver-aurora-boulder-msa 13.8%
san-diego-carlsbad-san-marcos-msa 11.8%
boston-cambridge-quincy 9.9%
minneapolis-st-paul-msa 8.0%
oh-cleveland-elyria-mentor-msa 6.8%
dallas-fort-worth-arlington 6.6%
san-francisco-oakland-fremont-msa 5.6%
new-york-jersey-long-island 4.0%
portland-beaverton 3.8%
nc-charlotte-gastonia-concord 3.4%
phoenix-mesa-scottsdale 3.2%
chicago-naperville-joliet 2.2%
atlanta-sandy-springs-marietta 2.0%
seattle-tacoma-bellevue 0.2%
los-angeles-long-beach-santa-ana -0.9%
tampa-st-petersburg-clearwater -1.9%
mi-detroit-warren-livonia-msa -8.4%
miami-fort-lauderdale-miami-beach -8.7%
washington_dc_msa -12.3%
las-vegas-paradise-msa -34.1%
Copyright Altos Research | www.altosresearch.com | 7/29/2010
New Sellers vs. Existing Sellers(higher is better)
name PNL % of MAP
miami-fort-lauderdale-miami-beach 82%
phoenix-mesa-scottsdale 86%
tampa-st-petersburg-clearwater 89%
mi-detroit-warren-livonia-msa 90%
denver-aurora-boulder-msa 90%
atlanta-sandy-springs-marietta 91%
dallas-fort-worth-arlington 91%
san-diego-carlsbad-san-marcos-msa 93%
boston-cambridge-quincy 93%
nc-charlotte-gastonia-concord 94%
oh-cleveland-elyria-mentor-msa 95%
minneapolis-st-paul-msa 95%
chicago-naperville-joliet 95%
washington_dc_msa 95%
los-angeles-long-beach-santa-ana 96%
portland-beaverton 97%
las-vegas-paradise-msa 98%
seattle-tacoma-bellevue 99%
san-francisco-oakland-fremont-msa 99%
new-york-jersey-long-island 100%
Copyright Altos Research | www.altosresearch.com | 7/29/2010
The Cliff Notes Version
A little more stable:
San Francisco-Oakland-Fremont
Las-Vegas-Paradise Washington DC metro
A little less stable:
Minneapolis-St. Paul
Denver metro Chicago-Naperville-
Joliet Phoenix-Mesa-
Scottsdale
Copyright Altos Research | www.altosresearch.com | 7/29/2010
So now what?
Despite general bearishness, selected markets showing resiliency to climbing inventory levels
Recovery period dependent on inventory The more local you get, the more volatile Vital to get local b/c if you generalize (ie
use County or MSA data), you’re going to be wrong.
You know that the trend matters, but are you using lagging data for forecasting analysis?
Copyright Altos Research | www.altosresearch.com | 7/29/2010
Do you really know where the market is going?
Phoenix 85057 Home Prices Altos Forecast
BPO based on June comps $184,000
Altos real-time market data
Copyright Altos Research | www.altosresearch.com | 7/29/2010
For Webcast Attendees
Free Portfolio analysis Data for up to 25 zips including 1-year
historical. Contact Scott Sambucci directly for
submission formatting. Presentation slides available upon
request:
[email protected](415) 931 7942
Copyright Altos Research | www.altosresearch.com | 7/29/2010
Whole Loan & RMBS Portfolio Data Requests
Submit list of loans, property addresses or underlying asset zip codes to Altos Research
Altos Research Housing Market Data Platform yields real-time market analytics and leading indicators for each zip code submitted.
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All data files available for download as .CSV file for easy integration into any spreadsheet model or database application.
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Data Visualization
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Real-time Market Trend Reports
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