RealtyTrac Presentation at Los Angeles Real Estate Investors Club October 2013

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RealtyTrac Vice President Daren Blomquist shared the latest housing trends at the national, state and local level with members of the Los Angeles Real Estate Investors club, also providing practical tips on how to leverage those trends to grow their business using a service like RealtyTrac.

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  • RealtyTrac started 1996.Track over 100 million properties nationwide.
  • U.S. & State Foreclosure Starts Apr05-May13
  • RealtyTrac Presentation at Los Angeles Real Estate Investors Club October 2013

    1. 1. WELCOME LEVERAGE THE LATEST HOUSING TRENDS TO LAND THE BEST REAL ESTATE DEALS © 2013 Renwood RealtyTrac LLC
    2. 2. WHAT WE’LL COVER TODAY • Latest home sales & price trends • Latest foreclosure trends • Trends in property flipping – Best markets for flipping • Trends in single family rentals/institutional investors – Best markets for buying rentals • Monsters of the housing markets: zombies & vampires • Leveraging the latest trends – Knowing the markets where you want to invest – Buying short sale, auction, bank owned © 2013 Renwood RealtyTrac LLC
    3. 3. REALTYTRAC DATA PRIMER 100 Million+ U.S. Properties 20 Economic & Neighborhood characteristics: schools, crime rates, rents, unemployment, incomes, hazards etc. Estimated Values: 2.2 billion current & historical 120 million+ current & historical loan records 82 million+ Sales/Deed Records back to 2000 Listing data for 1 million+ active listings 20 million current & historical foreclosure records © 2013 Renwood RealtyTrac LLC
    4. 4. 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 © 2013 Renwood RealtyTrac LLC
    5. 5. LATEST HOME PRICE TRENDS © 2013 Renwood RealtyTrac LLC
    6. 6. LATEST HOME PRICE TRENDS Overall home prices up annually for 17 straight months. UP 23 percent from bottom, still 26 percent below peak. Distressed median prices still flat lining © 2013 Renwood RealtyTrac LLC
    7. 7. LATEST HOME PRICE TRENDS Average Annual Pct Change YTD in 2013 is 7 percent for nondistressed properties © 2013 Renwood RealtyTrac LLC
    8. 8. LATEST HOME PRICE & SALES VOLUME TRENDS Sales volume increasing but low inventory helping to push prices up © 2013 Renwood RealtyTrac LLC
    9. 9. STATE LEVEL SALES VOLUME TRENDS Lack of for-sale inventory may be slowing sales in California and Arizona © 2013 Renwood RealtyTrac LLC
    10. 10. SO CAL HOME PRICES © 2013 Renwood RealtyTrac LLC
    11. 11. COUNTIES AND ZIPS WITH MOST APPRECIATION ZIP 91502 90021 90716 90031 90007 91601 91020 90404 91316 93532 90502 91001 90020 90028 90038 90755 91204 91406 91411 91768 2012 2013 Pct Change $237,500 $415,000 75% $335,000 $580,000 73% $168,000 $271,000 61% $225,000 $361,000 60% $308,500 $458,220 49% $315,000 $467,000 48% $367,500 $542,500 48% $511,250 $750,000 47% $345,000 $504,000 46% $123,500 $180,000 46% $243,500 $352,500 45% $423,000 $610,000 44% $250,000 $357,500 43% $455,000 $650,000 43% $516,250 $734,500 42% $272,500 $387,000 42% $263,250 $370,000 41% $300,000 $420,000 40% $370,500 $517,500 40% $194,500 $271,500 40% © 2013 Renwood RealtyTrac LLC
    12. 12. LATEST HOME PRICE TRENDS – LOCAL MARKETS Cash buyers increasingly winning out in tight credit market with low inventory of homes for sale © 2013 Renwood RealtyTrac LLC
    13. 13. LATEST HOME PRICE TRENDS: NATIONWIDE © 2013 Renwood RealtyTrac LLC Seriously underwater means mortgage amount is at least 25 percent higher than estimated market value
    14. 14. UNDERWATER DATA BY COUNTY • County-level interactive heat map • http://www.realtytrac.com/Content/news-and-opinion/seriously-underwaterhomeowners-county-heat-map-7856 © 2013 Renwood RealtyTrac LLC
    15. 15. HOME EQUITY PROFILES FOR MAJOR METROS • http://public.tableausoftware.com/shared/HTMMWH5ZG?:display_count=yes © 2013 Renwood RealtyTrac LLC
    16. 16. LOCAL UNDERWATER DATA © 2013 Renwood RealtyTrac LLC
    17. 17. LOCAL EQUITY DATA © 2013 Renwood RealtyTrac LLC
    18. 18. 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
    19. 19. LATEST FORECLOSURE MARKET TRENDS © 2013 Renwood RealtyTrac LLC
    20. 20. HOW LONG WILL SHORT SALE SURGE LAST? August foreclosure starts at lowest level since December 2005 © 2013 Renwood RealtyTrac LLC
    21. 21. LATEST FORECLOSURE MARKET TRENDS – METRO MARKETS L-Shaped recovery with clear signs of a U developing © 2013 Renwood RealtyTrac LLC
    22. 22. LATEST FORECLOSURE TRENDS – LOCAL MARKETS Classic U-Shaped Recovery © 2013 Renwood RealtyTrac LLC
    23. 23. LATEST FORECLOSURE MARKET TRENDS – METRO MARKETS Steady plodding © 2013 Renwood RealtyTrac LLC
    24. 24. LATEST FORECLOSURE MARKET TRENDS – METRO MARKETS Still flatlining © 2013 Renwood RealtyTrac LLC
    25. 25. © 2013 Renwood RealtyTrac LLC
    26. 26. LEADING THE RECOVERY © 2013 Renwood RealtyTrac LLC
    27. 27. LAGGING THE RECOVERY © 2013 Renwood RealtyTrac LLC
    28. 28. LATEST FORECLOSURE MARKET TRENDS California time to foreclose now more than 450 days © 2013 Renwood RealtyTrac LLC
    29. 29. LATEST FORECLOSURE MARKET TRENDS RECAP • Foreclosure activity is well past its peak nationwide • Some state and local markets are lagging in recovery because of lingering foreclosures • States that have enacted more aggressive foreclosure prevention legislation over the past few years are susceptible to a rebound in foreclosure activity • For investors this means there will still be opportunity to find discounted foreclosures going forward in some markets over the next two years. © 2013 Renwood RealtyTrac LLC
    30. 30. WHERE FORECLOSURE ACTIVITY IS REBOUNDING © 2013 Renwood RealtyTrac LLC
    31. 31. WHERE FORECLOSURE STARTS & AUCTIONS ARE REBOUNDING
    32. 32. SO CAL ZIP CODES WITH INCREASING FORECLOSURE ACTIVITY Zip City NOD LIS NTS NFS Total Props w / Filings REO 1/Every X HU % ∆ from Q2 13 % ∆ from Q3 12 State County 91390 Santa Clarita California Los Angeles 21 0 13 0 4 38 177 58.33 -49.33 92377 Rialto California San Bernardino 37 0 15 0 6 58 94 56.76 -55.04 92627 Costa Mesa California Orange 17 0 8 0 7 32 734 52.38 -69.52 91324 Northridge California Los Angeles 14 0 12 0 7 33 283 50.00 -49.23 92082 Valley Center California San Diego 14 0 16 0 3 33 211 50.00 -51.47 92236 Coachella California Riverside 27 0 16 0 10 53 182 47.22 -57.60 90066 Los Angeles California Los Angeles 10 0 12 0 3 25 1,013 47.06 -44.44 92131 San Diego California San Diego 17 0 7 0 3 27 449 42.11 -65.38 90025 Los Angeles California Los Angeles 16 0 7 0 2 25 915 38.89 -16.67 92808 Anaheim California Orange 12 0 9 0 4 25 306 38.89 -53.70 92807 Anaheim California Orange 23 0 16 0 8 47 283 38.24 -48.91 91914 Chula Vista California San Diego 20 0 12 0 2 34 148 36.00 -64.58 91791 West Covina California Los Angeles 23 0 11 0 4 38 279 35.71 -55.29 92122 San Diego California San Diego 15 0 9 0 7 31 682 34.78 -60.26 90008 Los Angeles California Los Angeles 32 0 20 0 8 60 263 33.33 -25.00 90621 Buena Park California Orange 15 0 6 0 7 28 373 33.33 -56.25 92071 Santee California San Diego 29 0 18 0 10 57 338 32.56 -61.22 92879 Corona California Riverside 40 0 26 0 8 74 194 32.14 -63.55 91770 Rosemead California Los Angeles 21 0 9 0 3 33 530 32.00 -35.29 91746 La Puente California Los Angeles 16 0 10 0 3 29 245 31.82 -61.33 © 2013 Renwood RealtyTrac LLC
    33. 33. SO CAL ZIPS WITH HIGHEST FORECLOSURE RATES Zip City NOD LIS NTS NFS Total Props w / Filings REO 1/Every X HU % ∆ from Q2 13 % ∆ from Q3 12 State County 92530 Lake Elsinore California Riverside 46 0 34 0 141 221 72 0.00 -19.64 92548 Homeland California Riverside 11 0 12 0 7 30 86 25.00 3.45 92301 Adelanto California San Bernardino 44 0 35 0 20 99 90 -2.94 -60.56 92377 Rialto California San Bernardino 37 0 15 0 6 58 94 56.76 -55.04 92582 San Jacinto California Riverside 23 0 10 0 9 42 105 -20.75 -68.66 92344 HESPERIA California SAN BERNARDINO 21 0 22 0 13 56 109 7.69 -62.91 92337 Fontana California San Bernardino 40 1 32 0 15 88 109 10.00 -60.89 92392 Victorville California San Bernardino 81 0 45 0 27 153 110 -2.55 -67.10 92532 Lake Elsinore California Riverside 28 0 16 0 4 48 113 -18.64 -69.03 92585 Sun City California Riverside 17 0 19 0 14 50 115 2.04 -58.68 92371 Phelan California San Bernardino 19 1 12 0 18 50 116 -9.09 -51.92 92571 Perris California Riverside 57 0 35 0 19 111 117 5.71 -64.76 92883 Corona California Riverside 45 0 30 0 10 85 117 30.77 -59.72 92284 Yucca Valley California San Bernardino 43 0 24 0 31 98 120 1.03 -51.96 92345 Hesperia California San Bernardino 92 2 65 0 45 204 120 0.00 -54.77 93552 Palmdale California Los Angeles 31 0 36 0 16 83 122 -25.89 -72.79 92394 Victorville California San Bernardino 30 0 24 0 17 71 122 -10.13 -70.42 92551 Moreno Valley California Riverside 32 0 23 0 11 66 122 -7.04 -68.12 93543 Littlerock California Los Angeles 12 1 9 0 10 32 128 -28.89 -57.89 92325 Crestline California San Bernardino 23 0 13 0 15 51 132 0.00 -62.22 © 2013 Renwood RealtyTrac LLC
    34. 34. WHERE FORECLOSURE STARTS & AUCTIONS ARE REBOUNDING © 2013 Renwood RealtyTrac LLC
    35. 35. HOW LONG WILL SHORT SALE SURGE LAST? © 2013 Renwood RealtyTrac LLC
    36. 36. WHERE FORECLOSURE STARTS & AUCTIONS ARE REBOUNDING • 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 investors? – Clock is now ticking on delinquent homeowners – Auctions may be good place to buy in next 6 to 12 months © 2013 Renwood RealtyTrac LLC
    37. 37. TRENDS IN PROPERTY FLIPPING © 2013 Renwood RealtyTrac LLC
    38. 38. FLIPPING TRENDS U.S. property flips increased 17 percent from a year ago in the second quarter
    39. 39. FLIPPING TRENDS Arizona flips down 35 percent YoY. Gross profit $21K per flip © 2013 Renwood RealtyTrac LLC
    40. 40. FLIPPING TRENDS Phoenix flips down 36 percent YoY. Gross profit $26K per flip © 2013 Renwood RealtyTrac LLC
    41. 41. BEST MARKETS FOR FLIPPING © 2013 Renwood RealtyTrac LLC
    42. 42. WHAT YOU BUY MATTERS - FLIPS Flipping data for 3-bedroom single family homes built in 1990 or later Metro Number of 2012 Flips Avg Purchase Price Avg Flip Price Gross Profit Gross Return Pct Las Vegas 1,525 $124,849 $246,347 $121,498 97% Atlanta 1,396 $91,873 $102,096 $10,223 11% Riverside-San Bernardino, CA 1,004 $185,429 $210,177 $24,748 13% Cape Coral, FL 802 $98,747 $113,979 $15,232 15% Denver 591 $223,323 $230,417 $7,094 3% Sacramento 496 $198,369 $225,917 $27,548 14% Miami 486 $132,476 $177,256 $44,779 34% Orlando 480 $98,122 $205,727 $107,605 110% Sarasota, FL 356 $116,428 $157,443 $41,014 35% Port St. Lucie, FL 273 $89,894 $130,380 $40,486 45% Jacksonville, FL 271 $80,249 $119,345 $39,096 49% Seattle 250 $220,018 $231,263 $11,245 5% ©RealtyTrac Inc. 2013, Not for Distribution
    43. 43. WHAT YOU BUY MATTERS - FLIPS Flipping data for 2-bedroom single family homes built 1920 to 1950 Metro Number of 2012 Flips Avg Purchase Price Avg Flip Price Gross Profit Gross Return Pct Los Angeles 981 $247,660 $328,077 $80,417 32% San Francisco 273 $251,091 $317,343 $66,252 26% Denver 249 $149,778 $197,265 $47,487 32% Riverside-San Bernardino, CA 201 $102,571 $131,716 $29,145 28% Sacramento 146 $120,761 $146,443 $25,682 21% Miami 132 $88,442 $125,562 $37,121 42% San Diego 119 $232,261 $310,801 $78,540 34% Seattle 108 $152,905 $203,199 $50,294 33% Cincinnati 107 $46,327 $48,944 $2,616 6% Detroit 102 $57,455 $56,325 ($1,131) -2% Portland 102 $146,713 $199,693 $52,980 36% Atlanta 91 $68,715 $84,178 $15,464 23% ©RealtyTrac Inc. 2013, Not for Distribution
    44. 44. TRENDS IN SINGLE FAMILY RENTALS/INSTITUTIONAL INVESTORS © 2013 Renwood RealtyTrac LLC
    45. 45. RENTAL ROI STILL GOOD IN MANY MARKETS © 2013 Renwood RealtyTrac LLC
    46. 46. FLIPPING & INSTITUTIONAL INVESTORS U.S. institutional investor purchases accounted for 10 percent of all residential sales in August © 2013 Renwood RealtyTrac LLC
    47. 47. FLIPPING & INSTITUTIONAL INVESTORS Institutional investors only accounted for 4 percent of all residential sales in LA County in August, down from 6 percent a year ago. © 2013 Renwood RealtyTrac LLC
    48. 48. HOW SINGLE FAMILY HOMES ARE BEING PURCHASED © 2013 Renwood RealtyTrac LLC
    49. 49. TOP 25 HIDDEN GEM SINGLE FAMILY RENTAL MARKETS © 2013 Renwood RealtyTrac LLC
    50. 50. TOP SATURATED SINGLE FAMILY RENTAL MARKETS # 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ©RealtyTrac Inc. 2013, Not for Distribution Metro Area Atlanta-Sandy Springs-Marietta, GA Charlotte-Gastonia-Concord, NC-SC Macon, GA Memphis, TN-MS-AR Jacksonville, FL Tampa-St. Petersburg-Clearwater, FL Winston-Salem, NC Las Vegas-Paradise, NV Lakeland, FL Orlando-Kissimmee, FL Albuquerque, NM Palm Bay-Melbourne-Titusville, FL Athens-Clarke County, GA Greensboro-High Point, NC Miami-Fort Lauderdale-Pompano Beach, FL Deltona-Daytona Beach-Ormond Beach, FL Phoenix-Mesa-Scottsdale, AZ Montgomery, AL Bakersfield, CA Reno-Sparks, NV Detroit-Warren-Livonia, MI Boise City-Nampa, ID Sarasota-Bradenton-Venice, FL Vallejo-Fairfield, CA Gainesville, GA Investor % 24% 20% 18% 18% 18% 17% 16% 16% 16% 14% 14% 14% 14% 13% 12% 12% 12% 12% 11% 11% 11% 11% 11% 10% 10% 50
    51. 51. THE MONSTERS OF THE HOUSING MARKET: ZOMBIES & VAMPIRES © 2013 Renwood RealtyTrac LLC
    52. 52. THE PROBLEM AND OPPORTUNITY OF ZOMBIE FORECLOSURES Nationwide vacant foreclosures account for one in every five properties in foreclosure © 2013 Renwood RealtyTrac LLC
    53. 53. THE PROBLEM & OPPORTUNITY OF ZOMBIE FORECLOSURES © 2013 Renwood RealtyTrac LLC
    54. 54. THE PROBLEM & OPPORTUNITY OF ZOMBIE FORECLOSURES • The problem – More than 150,000 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 © 2013 Renwood RealtyTrac LLC
    55. 55. VAMPIRE REOS © 2013 Renwood RealtyTrac LLC
    56. 56. LOCAL VAMPIRE REOS ZIP 90044 90003 91335 90047 91331 92410 92346 92324 93552 92545 92405 92335 91342 92234 90650 92201 92376 92307 93550 © 2013 Renwood RealtyTrac LLC State California California California California California California California California California California California California California California California California California California California County Los Angeles Los Angeles Los Angeles Los Angeles Los Angeles San Bernardino San Bernardino San Bernardino Los Angeles Riverside San Bernardino San Bernardino Los Angeles Riverside Los Angeles Riverside San Bernardino San Bernardino Los Angeles City Los Angeles Los Angeles Reseda Los Angeles Pacoima San Bernardino Highland Colton Palmdale Hemet San Bernardino Fontana Sylmar Cathedral City Norwalk Indio Rialto Apple Valley Palmdale Pct REO Occupied 81% 78% 73% 70% 69% 64% 64% 61% 59% 59% 57% 57% 57% 57% 55% 55% 55% 54% 54%
    57. 57. THE PROBLEM & OPPORTUNITY OF ZOMBIE FORECLOSURES © 2013 Renwood RealtyTrac
    58. 58. LEVERAGING HOUSING TRENDS: KNOW YOUR MARKET Local, state and national foreclosure rates Recent default, auction and REO trends © 2013 Renwood RealtyTrac LLC
    59. 59. LEVERAGING HOUSING TRENDS: FIND MARKETS WITH REBOUNDING FORECLOSURES Foreclosure Inventory and Prices Historical Foreclosure Discounts 3. Know your overall market © 2013 Renwood RealtyTrac LLC
    60. 60. LEVERAGING HOUSING TRENDS: FIND-OFF MARKET HOMES Find pre-foreclosures and scheduled auctions in your neighborhood © 2013 Renwood RealtyTrac LLC
    61. 61. LEVERAGING HOUSING TRENDS: CONTACT HOMEOWNERS Create mailing lists of distressed homeowners in default or scheduled for foreclosure auction © 2013 Renwood RealtyTrac LLC
    62. 62. LEVERAGING HOUSING TRENDS: TARGET MOTIVATED SELLERS Identify homeowners who have vacated their homes and get new mailing addresses © 2013 Renwood RealtyTrac LLC
    63. 63. FIND MOTIVATED SELLERS WITH EQUITY © 2013 Renwood RealtyTrac LLC
    64. 64. FIND MARKETS/HOMES WITH GOOD POTENTIAL CAP RATES • Buy for $20K (possibly less at auction) • Rent for $1000 a month • Est. carrying costs at $500 a month • Cash flow of $500 a month • Cap rate of 30%! © 2013 Renwood RealtyTrac LLC
    65. 65. FIND MARKETS/HOMES WITH GOOD POTENTIAL CAP RATES • Buy for $105k (REO) • Rent for $1,284 a month • Est. carrying costs at $514 a month • Cash flow of $770 a month • Cap rate of 9% © 2013 Renwood RealtyTrac LLC
    66. 66. FIND HOMES/MARKETS WITH GOOD FLIPPING POTENTIAL • List price $46,500, Est. After-Repair Market Value: $117,088 • Sold back to bank for $23,600, so they are motivated to sell low © 2013 Renwood RealtyTrac LLC

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