2013 SHORT SALE & REO TRENDS  With Foreclosure Inventory Analysis
What we’ll cover today • What is RealtyTrac? • Where & Why Foreclosure Starts are Surging • How Short Sales Are Moving Fur...
A BRIEF INTRODUCTION TO REALTYTRAC
WHAT REALTYTRAC IS                           • RealtyTrac publishes the country’s largest database of                     ...
WHAT REALTYTRAC IS NOT                         • The RealtyTrac foreclosure database is not an “MLS for                   ...
WHO RELIES ON REALTYTRAC DATA©RealtyTrac Inc. 2012, Not for Distribution        6
WHO RELIES ON REALTYTRAC DATA©RealtyTrac Inc. 2012, Not for Distribution       7
WHERE FORECLOSURE STARTS SURGING
The Big Picture©RealtyTrac Inc. 2013, Not for Distribution   9
NATIONAL TRENDS                                              More than 10 million                                         ...
NATIONAL TRENDS                                                                               66Percent Bump in Q2        ...
STATES WITH BIG INCREASES©RealtyTrac Inc. 2013, Not for Distribution   12
METROS WITH INCREASES©RealtyTrac Inc. 2013, Not for Distribution   13
WHY THE INCREASE •      Many states coming off artificial lows from last year        thanks to foreclosure processing dela...
Longer Foreclosure Timelines               N.Y.                                                             N.Y.          ...
A Tale of Two Foreclosure Markets©RealtyTrac Inc. 2013, Not for Distribution           16
IMPLICATIONS •      Home prices in some of these markets may break        through a false bottom as these foreclosures are...
PRE-FORECLOSURE SALES ACTIVITY                                              Increased 22 percent                          ...
PRE-FORECLOSURE SALES PRICES                                               But average prices                             ...
OUTNUMBERING REO SALES                      Both hardest-hit sates                       Both hardest-hit sates           ...
OUTNUMBERING REO SALES©RealtyTrac Inc. 2013, Not for Distribution   21
SHORT SALES MOVING FURTHER UPSTREAM
Q3 U.S. RESIDENTIAL SALES©RealtyTrac Inc. 2012, Not for Distribution   23
STATE TRENDS                                              31 states posted annual                                         ...
METRO TRENDS                                               Legislation forcing                                            ...
POTENTIAL POOL OF SHORT SALES©RealtyTrac Inc. 2013, Not for Distribution       26
BUT A SHRINKING POOL                                              Nationwide 1.6 million                                  ...
WHEN & WHERE REOS MAY REBOUND
REOS SHOWING SIGNS OF LIFE                                                    REO activity has                            ...
REO SHOWING SIGNS OF LIFE                                              55percent increase in                              ...
REOS REBOUNDING IN SOME STATES©RealtyTrac Inc. 2012, Not for Distribution        31
METROS WITH INCREASING REOS©RealtyTrac Inc. 2013, Not for Distribution     32
IMPLICATIONS •      More bank-owned homes listed for sale in these states in        the next six months             •     ...
REO SALES ACTIVITY                                              Increased 19 percent                                      ...
REO SALES ACTIVITY          Average REO sales                                               Average REO sales             ...
WHERE REO SALES ARE STILL ON TOP                                        Both states with aa                               ...
WHERE REO SALES ARE STILL ON TOP©RealtyTrac Inc. 2013, Not for Distribution          37
ANALYSIS OF FORECLOSURE INVENTORY
THE BIG PICTURE • 10 million U.S. foreclosure starts since Jan   2006 • 5 million bank repossessions during same time   pe...
THE BIG PICTURE                                               Foreclosure inventory                                       ...
THE BIG PICTURE   85% of REOs    85% of REOs   are NOT Listed    are NOT Listed                               80% of      ...
Short Sales Means More of a Sellers’ Market©RealtyTrac Inc. 2013, Not for Distribution                                    ...
STILL PLENTY OF DELINQUENCIES©RealtyTrac Inc. 2013, Not for Distribution       43
Estimated Absorption Rates  Assuming that no additional properties come onto the  market (and foreclosures stop TODAY):  •...
UNSOLD REO INVENTORY – WHERE?©RealtyTrac Inc. 2013, Not for Distribution       45
FORECLOSURE INVENTORY BY VALUE                                              More than 70 percent of inventory is          ...
2012 ACTIVITY BY SQUARE FOOTAGE                                              More than 75 percent of activity was on      ...
INVENTORY BY YEAR BUILT                                              One-third of activity was on properties              ...
INVENTORY VARIES BY MARKET                                              42% of activity was on properties built           ...
INVENTORY VARIES BY MARKET                                              54% of activity was on properties built           ...
LENDERS WITH MOST REO INVENTORY©RealtyTrac Inc. 2013, Not for Distribution         51
MOST IN-FORECLOSURE INVENTORY©RealtyTrac Inc. 2012, Not for Distribution       52
REALTYTRAC RESOURCES •      Local Stats & Trends (free and embeddable)             •       http://www.realtytrac.com/trend...
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Finding Distressed Listing Leads in 2013

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  • OK, to get us warmed up I’d like to do a quick poll of the room. How many of you have heard of RealtyTrac? Now, how many of you have subscribed to RealtyTrac? Good to know.
  • We also provide foreclosure data to myriad government agencies at the local, state and federal level. And when I say federal level I’m talking about the highest level possible, used in briefings provided to the president by his council of economic advisors. OK, enough name dropping. Although it’s fun the point of the last two slides is simply to show you that RealtyTrac data is trusted and credible. Now let’s move on to the meat of this presentation!
  • Finding Distressed Listing Leads in 2013

    1. 1. 2013 SHORT SALE & REO TRENDS With Foreclosure Inventory Analysis
    2. 2. What we’ll cover today • What is RealtyTrac? • Where & Why Foreclosure Starts are Surging • How Short Sales Are Moving Further Upstream • When & Where REO Listings May Rebound • Analysis of foreclosure inventory • Practical resources©RealtyTrac Inc. 2012, Not for Distribution 2
    3. 3. A BRIEF INTRODUCTION TO REALTYTRAC
    4. 4. 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©RealtyTrac Inc. 2012, Not for Distribution 4
    5. 5. 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.©RealtyTrac Inc. 2012, Not for Distribution 5
    6. 6. WHO RELIES ON REALTYTRAC DATA©RealtyTrac Inc. 2012, Not for Distribution 6
    7. 7. WHO RELIES ON REALTYTRAC DATA©RealtyTrac Inc. 2012, Not for Distribution 7
    8. 8. WHERE FORECLOSURE STARTS SURGING
    9. 9. The Big Picture©RealtyTrac Inc. 2013, Not for Distribution 9
    10. 10. 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©RealtyTrac Inc. 2013, Not for Distribution 10
    11. 11. 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©RealtyTrac Inc. 2013, Not for Distribution 11
    12. 12. STATES WITH BIG INCREASES©RealtyTrac Inc. 2013, Not for Distribution 12
    13. 13. METROS WITH INCREASES©RealtyTrac Inc. 2013, Not for Distribution 13
    14. 14. 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©RealtyTrac Inc. 2013, Not for Distribution 14
    15. 15. 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©RealtyTrac Inc. 2013, Not for Distribution 15
    16. 16. A Tale of Two Foreclosure Markets©RealtyTrac Inc. 2013, Not for Distribution 16
    17. 17. 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.©RealtyTrac Inc. 2013, Not for Distribution 17
    18. 18. PRE-FORECLOSURE SALES ACTIVITY Increased 22 percent Increased 22 percent in Q3 2012 to highest in Q3 2012 to highest level since Q2 2011 level since Q2 2011©RealtyTrac Inc. 2013, Not for Distribution 18
    19. 19. PRE-FORECLOSURE SALES PRICES But average prices But average prices down 55percent from down percent from year ago year ago©RealtyTrac Inc. 2013, Not for Distribution 19
    20. 20. 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©RealtyTrac Inc. 2013, Not for Distribution 20
    21. 21. OUTNUMBERING REO SALES©RealtyTrac Inc. 2013, Not for Distribution 21
    22. 22. SHORT SALES MOVING FURTHER UPSTREAM
    23. 23. Q3 U.S. RESIDENTIAL SALES©RealtyTrac Inc. 2012, Not for Distribution 23
    24. 24. STATE TRENDS 31 states posted annual 31 states posted annual increases in non- increases in non- foreclosure short sales foreclosure short sales in Q3 2012 in Q3 2012©RealtyTrac Inc. 2012, Not for Distribution 24
    25. 25. 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©RealtyTrac Inc. 2013, Not for Distribution 25
    26. 26. POTENTIAL POOL OF SHORT SALES©RealtyTrac Inc. 2013, Not for Distribution 26
    27. 27. BUT A SHRINKING POOL Nationwide 1.6 million Nationwide 1.6 million fewer underwater than fewer underwater than aayear ago year ago©RealtyTrac Inc. 2013, Not for Distribution 27
    28. 28. WHEN & WHERE REOS MAY REBOUND
    29. 29. REOS SHOWING SIGNS OF LIFE REO activity has REO activity has flattened out and even flattened out and even jumped in November jumped in November after falling off aacliff after falling off cliff following robo-signing following robo-signing in October 2010. in October 2010.©RealtyTrac Inc. 2013, Not for Distribution 29
    30. 30. REO SHOWING SIGNS OF LIFE 55percent increase in percent increase in November first November first annual increase in annual increase in REOs since Oct 2010 REOs since Oct 2010©RealtyTrac Inc. 2012, Not for Distribution 30
    31. 31. REOS REBOUNDING IN SOME STATES©RealtyTrac Inc. 2012, Not for Distribution 31
    32. 32. METROS WITH INCREASING REOS©RealtyTrac Inc. 2013, Not for Distribution 32
    33. 33. IMPLICATIONS • More bank-owned homes listed for sale in these states in the next six months • On average it takes 195 days from when a property becomes an REO to when it is sold • While banks are preferring short sales to REOs all things being equal, not all properties can be sold via short sale. • Banks are not completely done with purging their balance sheets of non-performing assets via REO.©RealtyTrac Inc. 2013, Not for Distribution 33
    34. 34. REO SALES ACTIVITY Increased 19 percent Increased 19 percent in Q3 2012 from in Q3 2012 from previous quarter previous quarter©RealtyTrac Inc. 2013, Not for Distribution 34
    35. 35. REO SALES ACTIVITY Average REO sales Average REO sales price up 77percent price up percent from year ago from year ago©RealtyTrac Inc. 2013, Not for Distribution 35
    36. 36. WHERE REO SALES ARE STILL ON TOP Both states with aa Both states with short foreclosure short foreclosure process like GA, TX process like GA, TX And states with aa And states with large backlog of REOs large backlog of REOs like IL and OH like IL and OH©RealtyTrac Inc. 2013, Not for Distribution 36
    37. 37. WHERE REO SALES ARE STILL ON TOP©RealtyTrac Inc. 2013, Not for Distribution 37
    38. 38. ANALYSIS OF FORECLOSURE INVENTORY
    39. 39. THE BIG PICTURE • 10 million U.S. foreclosure starts since Jan 2006 • 5 million bank repossessions during same time period • 1.9 million pre-foreclosure (short sales) • 1.5 million properties still in foreclosure process or bank-owned©RealtyTrac Inc. 2013, Not for Distribution 39
    40. 40. THE BIG PICTURE Foreclosure inventory Foreclosure inventory rising again after hitting rising again after hitting 57-month low of 1.3 57-month low of 1.3 million in May 2012 million in May 2012©RealtyTrac Inc. 2013, Not for Distribution 40
    41. 41. THE BIG PICTURE 85% of REOs 85% of REOs are NOT Listed are NOT Listed 80% of 80% of for Sale for Sale Defaults and Defaults and Auctions not Auctions not yet listed for yet listed for sale sale©RealtyTrac Inc. 2013, Not for Distribution 41
    42. 42. Short Sales Means More of a Sellers’ Market©RealtyTrac Inc. 2013, Not for Distribution 42
    43. 43. STILL PLENTY OF DELINQUENCIES©RealtyTrac Inc. 2013, Not for Distribution 43
    44. 44. Estimated Absorption Rates Assuming that no additional properties come onto the market (and foreclosures stop TODAY): •20-month supply of bank-owned REOs •21-month supply of default & auction properties •20-month supply of delinquent properties SOURCE: RealtyTrac©RealtyTrac Inc. 2013, Not for Distribution 44
    45. 45. UNSOLD REO INVENTORY – WHERE?©RealtyTrac Inc. 2013, Not for Distribution 45
    46. 46. FORECLOSURE INVENTORY BY VALUE More than 70 percent of inventory is More than 70 percent of inventory is valued at $200,000 or less valued at $200,000 or less©RealtyTrac Inc. 2013, Not for Distribution 46
    47. 47. 2012 ACTIVITY BY SQUARE FOOTAGE More than 75 percent of activity was on More than 75 percent of activity was on properties with 2000 square feet or less properties with 2000 square feet or less©RealtyTrac Inc. 2013, Not for Distribution 47
    48. 48. INVENTORY BY YEAR BUILT One-third of activity was on properties One-third of activity was on properties built after 1990 built after 1990©RealtyTrac Inc. 2013, Not for Distribution 48
    49. 49. INVENTORY VARIES BY MARKET 42% of activity was on properties built 42% of activity was on properties built before 1981 before 1981©RealtyTrac Inc. 2013, Not for Distribution 49
    50. 50. INVENTORY VARIES BY MARKET 54% of activity was on properties built 54% of activity was on properties built after 1991 after 1991©RealtyTrac Inc. 2013, Not for Distribution 50
    51. 51. LENDERS WITH MOST REO INVENTORY©RealtyTrac Inc. 2013, Not for Distribution 51
    52. 52. MOST IN-FORECLOSURE INVENTORY©RealtyTrac Inc. 2012, Not for Distribution 52
    53. 53. 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©RealtyTrac Inc. 2012, Not for Distribution 53

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