Fall Housing Outlook Webinar with RIck Sharga

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

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WHERE REAL ESTATE IS MOVING

About Auction.com

Auction.com: The Leading Online Real Estate Marketplace

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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

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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

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Low Inventory Driving Price Gains, Stalling Recovery

And Rising Interest Rates Could Impact Affordability

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But the Number of Underwater Homes is Declining…

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…And Largely Concentrated in a Few States

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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

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REO Activity Increasing…

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…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%

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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

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Household Formation Improving…

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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

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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

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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

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WHERE REAL ESTATE IS MOVING

Rick Sharga Executive Vice President Auction.com rsharga@auction.com Follow me on Twitter: @ricksharga