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Altos Research: Distressed Residential Overview
1. Altos Research
Opal Real Estate Investors Summit:
Dealmakers Conference
April 2011
Miami, FL
Presented by: Scott Sambucci
2. Analyzing Mortgage Portfolios
Pre-Bid Diligence Servicing Liquidation
• Do we want • Is the • Work-out? • Price vs.
exposure in market Foreclose? time
these local tanking? • Mark-to- • Maximize
markets? Improving? market returns
• Which of • Diamonds • Portfolio • Leaving
these in the rough analysis money on
properties • Rotten • Loss Mit the table?
are for sale? apples • Loss Severity
• Risk • BPO
adjusted analysis
quality
3. Finding distressed opportunities
• Dependent on acquisition, servicing,
holding, disposition strategy
• Local matters within the macro-
environment
– i.e. Silicon Valley vs Fremont
– i.e. Buckhead vs. Lilburn
• Slice sub-markets into price zones
– i.e. rehab vs. as-is
– workout vs. foreclosure
4. Geo-local Analysis
• Leading: List Price, Price of New Listings
• Demand: Percent of Properties with
Price Reductions
• Psychological: Percent of Properties
Relisted, cumulative days on market
• Supply: Population per inventory
8. Signals for work-out opps Short sale
attempt
initiated (3/10)
Asking price
reduced,
(8/10)
Short sale fails
(10/11)
Bank re-sells at ~60%
of initial ask (3/11)
15. Altos Research:
Real-Time Housing Market Analytics
• Altos Research is the premier vendor of
real-time analytics for housing market
and asset valuation
– What’s for sale?
– How much is the property worth?
– How’s the market?
• The only national source of primary data
in the active housing market with
applications specifically developed for
mortgage analysis
• 20,000+ zip codes / 200+ MSAs
16. Active Market Signals Future Transaction
Price
Home listed
$429,000 Buyer financing fails,
Inventory 49 Neighbor home Property relisted
listed $394,000
$409,000
Deal closed
$389,000
Price reduced
$398,000
Inventory 69
Transaction
Offer made
Recorded
$391,000
March May July Sept Nov Jan
Closed transaction = 1 data point, months too late
Active Market = 9 months of pricing, price changes, supply and demand, leading
indicators
18. AltosEvaluate™
Mortgage Analytics Suite
• AltosEvaluate Web Application
– Analysis of each property in portfolio
– Web application and market reports
• Forward Valuation Modeling™
– 3, 6, and 12 month geo-local forecasts
– By zip, property type, and price range
• Active Market Analytics™ data files
– Local market trend statistics and leading indicators
– Published weekly by zip code. 20,000 zip codes
– CSV data files for import into housing models
• Listing Intel™ data files
– Details on 2 million+ homes listed for sale this week
– Active market comparables for pricing, supply, and fraud
detection
– Property forensics
– Listing History, Listing Match, Listing Comps
– CSV data files for import into property analysis systems
19. Valuation: Past, Present, Future
Geo-local
Machine learning Altos Forward Valuation Modeling™ 2011
Today’s Market Conditions Altos Real-Time Analytics™ & 2007
(Friday’s data) Listing Intel ™
Repeat sales models HPI – use Case Shiller et al, to estimate c. 2005
“current” valuations
Linear regressions AVM – automated, transactions still lagging c. 1998
People BPO – manual, expensive, quicker
Backward looking Traditional
lagging
People Appraisal – manual, slow, expensive, old
20. Contact
Scott Sambucci, Market Analytics
Altos Research
o: (415) 931-7942
c: (415) 596-0804
e: scott@altosresearch.com
Bloomberg: ALTO