Altos Research

Opal Real Estate Investors Summit: Dealmakers Conference

April 2011Miami, FL

Presented by: Scott Sambucci

Analyzing Mortgage Portfolios

Pre-Bid

• Do we want exposure in these local markets?

• Which of these properties are for sale?

• Risk adjusted quality

Diligence

• Is the market tanking? Improving?

• Diamonds in the rough

• Rotten apples

• BPO analysis

Servicing

• Work-out? Foreclose?

• Mark-to-market

• Portfolio analysis

• Loss Mit

Liquidation

• Price vs. time

• Maximize returns

• Leaving money on the table?

• Loss Severity

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

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

Buckhead

But SLOWER

Boise, ID 83702

Los Altos, CA 94022

Price Analysis with sub-markets

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)

AFFORDABILITY AND COMPETITION

Atlanta overcorrecti

ng

Vegas Waterfall

Price-to-inventory Sensitivity Analysis: Las Vegas MSA

Los Altos, CA

vs

Davis, CA

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

Active Market Signals Future Transaction Price

Price reduced$398,000

Inventory 69

Neighbor home listed

$409,000Deal closed$389,000

Transaction Recorded

Buyer financing fails,

Property relisted $394,000

March May July Sept Nov Jan

Closed transaction = 1 data point, months too lateActive Market = 9 months of pricing, price changes, supply and demand, leading

indicators

Offer made$391,000

Home listed$429,000

Inventory 49

From Last Year’s Home Price Presentation

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

Valuation: Past, Present, Future

Altos Forward Valuation Modeling™Geo-local

Machine learning

Altos Real-Time Analytics™ & Listing Intel ™

Today’s Market Conditions(Friday’s data)

AVM – automated, transactions still laggingLinear regressions

HPI – use Case Shiller et al, to estimate “current” valuations

Repeat sales models

Traditional

c. 1998

c. 2005

2007

2011

Appraisal – manual, slow, expensive, old

BPO – manual, expensive, quicker

People

PeopleBackward lookinglagging

ContactScott Sambucci, Market AnalyticsAltos Researcho: (415) 931-7942c: (415) 596-0804e: scott@altosresearch.com

Bloomberg: ALTO