Altos Research Real Estate Insights

The folks at IAC (NASDAQ:IACI) broke into five different companies this week with the real estate and mortgage related assets now under the umbrella of a company called Tree.com (NASDAQ:TREE) Is escaping from the conglomerate goo going to help this group prosper? Tree ostensibly has a bunch of internet properties but from where I sit, only two are viable, ahem, branches- LendingTree.com and RealEstate.com.




The former is the web 1.0 mortgage holdover with traffic now supported by TV ads. The latter a straightforward real estate broker with simply the best domain name in the business. The rest of the properties are a collection of, shall I say, unimpressive lending and home-search affiliate web sites.



Needless to say, being a volume mortgage player is a scary business right now. Maybe the secondary markets recover enough to support this model on-going, maybe, um, not. According to their S-1, Tree has limited exposure to the subprime and Alt-A mess. Surprising that they escaped that temptation that hit the etrades, etc. so hard. Good for them.

What does Tree have to offer? As a web site, RealEstate.com is decent enough to get a solid stream of leads by virtue of being many home searchers' very first stop on the internet. (Evidenced by the steady 800k visitors/month). The domain name is a built-in low-cost marketing channel for a brokerage. A really nice asset for sales and to recruit agents (the real business of brokerages). Is it enough? The site risks getting walloped by innovation happening in the intensely competitive home search space. (see Trulia, Estately, Redfin, Roost, Zillow, heck even Realtor.com is lumbering more quickly these days.) The big question for the future of this unit is whether the technology costs of keeping competitive continue to remain cheaper than traditional marketing channels for brokers.

Of Tree's lesser brands, I identify with the business proposition of Improvenet - home contractors and service guys need a better way to be found). But the competition with craigslist has to be brutal. And Angie's List is starting to run away with the premium end of the contractor referral market.

The bottom line for TREE is this: in the internet real estate space, it's a tough time to be an incumbent and a great time to be an innovator. Tree, despite the new name, is the incumbent.

[disclosure: we have realtor clients in the RealEstate.com brokerage and like all our clients we sincerely hope they kick ass.]

We love it when our clients get good blog fodder from our data. We need to be more diligent about showing the link love to 'em. Surfing around with a little insomnia tonight I found a whole set from just the last day or two. Check out these wonderful realtors with great, data-rich blogs:

Wilkas Group in San Mateo

Irina Natchaev dives into the San Gabriel market

Ryan Hartman in Philadelphia (Welcome aboard Ryan!)

Marian Bennett in Half Moon Bay

Here's a special hint: if you're a home buyer or seller looking for data in any of these markets, you can actually subscribe to the detailed local reports from us. But why would you? These marvelous pros will give you the reports for free! How cool is that?!

It's been over a year since we last hosted the Carnival of Real Estate (my how the landscape has changed). We like hosting because it gives us an opportunity to find new voices and highlight the good work going on out there in the blogosphere. Plus, this time around we have a ready-made clever metaphor to use in highlighting the best blogging submissions to the carnival. Not content with a simple gold-silver-bronze metaphor, we thought we'd prowl around the margins of the Olympics to highlight the things that make these games unique. Enjoy.

Let's kick things off with the opening ceremonies

• For articulately exposing an insider tale of don't-believe-your-eyes-trickery, David Blockhus gets this week's award for The Best CGI Enhanced Opening Ceremonies.

The Games are an international affair

• The Countries with Fewer Medals than Michael Phelps award goes, of course, to Canadian John Pasalis at movesmartly.com. John takes a look at an IMF report and why Canada's housing market may be less volatile than the US.

As the week progresses we get to see the competitors up close

• How do you get foreclosed on when someone gives you a new home? Why, take out a $450,000 second mortgage, of course! Since it pains me to read this, TheDigeratiLife gets the Inverted Elbow award.
• Karen Goodman gets Synchronized diving is a sport?! recognition for her straightforward take on St. Louis Market data (and a blog titled, ahem, Real Estate Insights)
• The Underage Gymnasts award goes to Pam Buda for a Cinderella story that has just begun.
• The Seven-Foot-Wingspan award goes this week to Dan Green for his take on the broad reach of the latest trends in mortgage lending.

Finally, no Olympics is complete without The heartfelt story of overcoming personal adversity to rise to glory.

• This week the Bob Costas narrated vignette goes to Riley Smith and the Coconut's tale of a horrifying foreclosure purchase process that actually ends well. [dabbing tears of joy from corner of eye].

So there you have it folks. I've been mildly ambivalent about these games, but there's always entertainment to be found when dig a little. Hopefully you'll find the same with this week's carnival. Next week hosted at ValleyMarket.com (Alaska!)

Our latest National Housing Market Report is out. This one examines data through end of July 2008. You can download the PDF here.

Here's the press release:

Real Estate Report: National Housing Prices Down by 0.8% in July

Report measures current real estate data in major markets around the country. Data shows Las Vegas continuing to lead as the weakest US housing market with real estate prices down another 4% in July. Current real estate data shows some summertime price stability in Midwestern markets Detroit, Cleveland, Indianapolis, and Minneapolis

MOUNTAIN VIEW, CA August 5, 2008 - The Altos 10-City Composite Price Index showed a decline in asking prices of 0.8% in July and 1.3% for the past three months. Prices of properties listed for sale fell in 13 of 26 major markets according to the Real-Time Real Estate Report, published by Altos Research, the premier source for real-time real estate data, and market analysis consultancy Real IQ.

Asking prices fell at the fastest rate in Las Vegas - down 4.0% during July - and 7.5% over the most recent three-month period for an annualized rate of 30%. Listing prices rose at the fastest rate in Detroit - up 4.8% in July - followed by Cleveland where prices were up 2.7%. Prices were also up slightly in the Midwestern markets of Indianapolis and Minneapolis.

"While prices continue to fall in coastal and Western markets, prices appear to have stabilized in Midwestern markets that were previously declining," said Michael Simonsen, CEO and co-founder of Altos Research. "The real test will come in the fall when markets typically experience a seasonal slowdown which will be exacerbated by high job losses and foreclosures."

Asking prices fell at the fastest rate in Las Vegas - down 4.0% during July - and 7.5% over the most recent three-month period for an annualized rate of 30%. Listing prices rose at the fastest rate in Detroit - up 4.8% in July - followed by Cleveland where prices were up 2.7%. Prices were also up slightly in the Midwestern markets of Indianapolis and Minneapolis.

Listed property inventories declined with the 10-City Composite markets showing a decrease of 2.0% in July. Inventory rose in just 6 of 26 markets with the biggest decreases occurring in Detroit and Cleveland.

"Broadly declining inventory is a positive sign in the near-term, particularly for the Midwestern markets which all showed inventory declines," said Stephen Bedikian, partner and research director for Real IQ.

For the Altos 10-City Composite, the average days on market was 111, a slight increase from 109 in June. Thirteen of 26 markets had an average days-on-market of 100 or more. By far, the market with the slowest rate of inventory turnover was Miami at an average of 156 days-on-market, nearly a full month more than the next slowest market - Tampa. Austin led all markets with the fastest rate of inventory turnover at an average of 78 days-on-market.

Data in the Real-Time Housing Market Report is based on analysis of over one million properties currently listed for sale in 31 metropolitan markets across the country. The report is the most timely source of housing market data on current market activity.

The report examines housing pricing, inventory levels and market conditions in 31 major U.S. metropolitan statistical areas (MSAs): Atlanta, Austin, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa, and Washington, DC. The Real-Time Real Estate Report is released every month.

Altos scores the big spread in BusinessWeek today! I was really happy to fulfill this request. The folks at BW wanted a national real estate slide show that wasn't just yet another chronicle of the market meltdown. They wanted to see where things were good too. Grown weary of all-bad-California-all-the-time, they also asked to take a look at 20 or so major metros around the country. So we suggested that we pick a nice sampling of metros, and then find the best and worst performing zip codes in each (in terms of median home price over the last year.)

And you know what? We found some very interesting trends. Aside from poor Las Vegas, we are able to find some healthy pricing trends in every metro we sampled.

What do the up markets have in common? Well, almost without exception, they're the nice parts of town. The biggest down zip codes? Again almost without exception, the hardest hit markets are the cheapest parts of town.

The phenomenon is working like this: There are a few folks who are well financed, and they for the first time in years, get to buy in the best neighborhoods without a ton of competition. Mortgages are still historically cheap, if in fact you can get one. While at the low end, no one can get financing, and of course those with the craziest mortgages are now selling or foreclosing. The mayhem starts at the bottom.

Check out the full article. Fascinating reading.

Wow. Do you read AgentGenius? If you're in the real estate biz, you should. Heck, if you use the interwebs in your business at all, you should. They've pulled together a group of stellar writers. I already liked the work going on over there and then they go produce a conference roundup like this. Rock on.