April 2010: Real Time Housing Market Data & Housing Prices

Altos Research

Real-Time Real Estate Market Analytics Altos Research answers the question

“How’s the market, right now?” Our clients are anyone who has an

exposure to the real estate market Financial institutions, investors, and thousands

of real estate professionals around the country.

The only national source of primary research in the active housing market Unique statistics and applications for analysis

and action

Active Inventory: 20-City Composite

Days-on-Market: 20-City Composite

Housing Price Trends: 20-City Composite

Altos 20-City Composite

Sep-

07

Oct-0

7

Nov-0

7

Dec-0

7

Jan-

08

Feb-

08

Mar

-08

Apr-0

8

May

-08

Jun-

08

Jul-0

8

Aug-0

8

Sep-

08

Oct-0

8

Nov-0

8

Dec-0

8

Jan-

09

Feb-

09

Mar

-09

Apr-0

9

Apr-0

9

May

-09

Jun-

09

Jul-0

9

Aug-0

9

Sep-

09

Oct-0

9

Nov-0

9

Dec-0

9

Jan-

10

Feb-

10

Mar

-10

Apr-1

0

$360,000

$370,000

$380,000

$390,000

$400,000

$410,000

$420,000

130

140

150

160

170

180

190

200

Altos-20 Composite CSI-20

Looking Ahead: 2011

Sep-

07

Nov-0

7

Dec-0

7

Jan-

08

Feb-

08

Apr-0

8

May

-08

Jun-

08

Jul-0

8

Sep-

08

Oct-0

8

Nov-0

8

Dec-0

8

Feb-

09

Mar

-09

Apr-0

9

May

-09

Jul-0

9

Aug-0

9

Sep-

09

Oct-0

9

Dec-0

9

Jan-

10

Feb-

10

Mar

-10

May

-10

Jun-

10

Jul-1

0

Aug-1

0

Oct-1

0

Nov-1

0

Dec-1

0

Jan-

11

$350,000

$360,000

$370,000

$380,000

$390,000

$400,000

$410,000

$420,000

$430,000

$440,000

$450,000

110

120

130

140

150

160

170

180

190

200

Altos-20 Composite CS-20

Price of New Listings

Active Sellers w/ Price Reductions

What Really Drives Mortgage Risk?

Pre-2007 “normal” markets: defaults correlate to FICO,

LTV

2009 – market conditions stabilized, new defaults decline

1

2

2008 -Default spike exactly correlated with market trough

Many now rely only on LTV Assumption: “If a borrower is deep

underwater, he’ll walk away.” Reality:

CA list prices rose 8% in 1H2009 Inventory dropped by 30% New defaults fell 24% in Q4 LTV is still lousy on these properties

In a rapidly changing market, LTV impact weakens and FICO approaches irrelevancy.

New Delinquencies Peak at Market Trough

New delinquencies

perfectly correlated to

market conditions

Altos RMBS Local Market Intelligence™ Real-time, local view Home price stats

Median price, PNL, PLA Home price distribution stats

Min, max, stdev Price quartiles distribution

Supply and demand Inventory, median DOM, mean DOM, new

listings, listings absorbed Housing Market Psychology™ indicators

% relist, %price reduced, Market Action Index

What Really Drives Mortgage Risk?

FICO? LTV? The last 36 months have taught us that

external housing market variables are by far the most important variable in determining mortgage default rates

Home Price direction, inventory, time to sell Impact the borrower psychology and drive

decisions Declining market: “I’ll never get out. It’ll never

sell.” Up market: “This is getting better! I see light at

the end of the tunnel”

Active Market Variables Drive Borrower Actions

Must be real-time, local Lagging Case-Shiller insufficient

Ask price trends price of new listings vs. price of

absorbed YOY Inventory Absorption rate vs. inventory (Market

Action Index) Relist % DOM

Contact Info

Scott Sambucci, VP Data AnalyticsM: (415) 596-0804O: (415) 931 7942

scott@altosresearch.comT: @AltosResearchBloomberg: ALTO

www.altosresearch.comblog.altosresearch.com