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WHERE REAL ESTATE IS MOVING WHERE REAL ESTATE IS MOVING
2015 Fall Real Estate Update Rick Sharga Executive Vice President October 15, 2015
What We’ll Cover Today
• A Few Words About Auction.com
• Existing and New Home Sales Trends
• Delinquencies and Foreclosures
• Investor Activity
• Closing Thoughts
• Q & A
2
WHERE REAL ESTATE IS MOVING
About Auction.com
Auction.com: The Leading Online Real Estate Marketplace
4
NUMBERS
INVESTORS
MILESTONES
$32 Billion Of assets sold
165,000 Assets sold
2 Million Unique Monthly
Visitors
2007 Company founded
2008 Online platform
2015 Auction.com Select
Real Estate is Moving Online
5
91% Sold rate
88% Sold first 3 weeks
SPEED
65% Owner occupants
53% Financed
3.4 Unique bidders/asset
BUYER MIX
RESULTS
96% List Price
Real Estate is Going Mobile
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TRANSPARENT FAST RESULTS
WHERE REAL ESTATE IS MOVING
Existing & New Home Trends
Existing Home Sales Roughly Flat Compared to 2014
Prices Continue to Increase, But Still Off Peak
Top Metro Areas Outpace National Prices
10
Low Inventory Driving Price Gains, Stalling Recovery
And Rising Interest Rates Could Impact Affordability
12
But the Number of Underwater Homes is Declining…
13
…And Largely Concentrated in a Few States
14
New Home Sales Sluggish, and Far Off Peak Levels
New Home Inventory Still Near 40-year Low…
Housing Starts Continue to Lag…
…And Are Still Skewed Toward Multifamily
WHERE REAL ESTATE IS MOVING
Foreclosures: The Worst is Behind Us
US Foreclosure Activity Continues to Decrease
Delinquent Loan Backlog is Shrinking
21
REO Activity Increasing…
22
…But Foreclosure Starts Continue to Decline
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And 60% of Foreclosure Starts are Repeat Foreclosures
Over 80% of Loans in Foreclosure are Pre-2010 Vintage
Number of Zombie Foreclosures Down by 43%
26
And No Longer a Major Problem in Most Markets
WHERE REAL ESTATE IS MOVING
Investor Activity
Investor Purchase Prices Moderating in All Regions
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Price to Appraisal Ratio Increasing Slightly
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Driven by Increases in Major Metros
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South & West Regions Have Recovered Strongly
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Top 5 Hottest Metro Areas in the US All in Those Regions
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WHERE REAL ESTATE IS MOVING
Potential Headwinds
What Could Derail – or at Least Slow Down – the Market
• Shift towards renting instead of home buying
• Volatility of foreign market economies
• Weak job growth and workforce participation
• Lack of credit availability
• Government regulations
35
Household Formation Improving…
36
But Homeownership Rates Continue to Fall
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Government Agencies Continue to Dominate Lending
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So Credit Continues to be Tight Except for High-FICO Borrowers
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And Borrowing Hasn’t Kept Pace with Sales Volume
40
What Could Derail – or at Least Slow Down – the Market
• Shift towards renting instead of home buying
• Volatility of foreign market economies
• Weak job growth and workforce participation
• Lack of credit availability
• Government regulations
41
WHERE REAL ESTATE IS MOVING
Closing Thoughts
What’s in Store for the Rest of 2015 and 2016
• 2015 sales volume will improve from 2014
» Existing home sales between 5.2-5.3 million units
» New home sales will approach 500,000
» Existing home prices likely to appreciate between 5-6%
• Foreclosure inventory will continue to decline
» Judicial foreclosure states should work through backlog by end of 2016
• Lack of credit will continue to hamper recovery
» Domestic and foreign investors continue to play a vital role
• 2016 should deliver the next step in the recovery
» More existing home inventory, slight uptick in new home stock, slowing home price appreciation, entry of more Millennials into the market
43
WHERE REAL ESTATE IS MOVING
Rick Sharga Executive Vice President Auction.com [email protected] Follow me on Twitter: @ricksharga