Radar Logic RPX

No, I'm not talking about buying into the Trump Tower. I'm referring to what the Wall Streeters call synthetic investment. Get exposure in your vast financial portfolio to profits in the Manhattan real estate market via a derivative contract. And you never have to worry about dealing with property taxes, garbage collection, cockroaches, or Donald Trump.

On Wednesday, real estate derivatives firm Radar Logic announced their Manhattan Condos Index. Radar publishes these indexes upon which the derivatives contracts are based. Go long and you make money when the New York Condo market is strong. Go short and you make money when the Condo market in Manhattan tanks.

This contract marks the first time a housing futures market has been local enough to accurately hedge against value declines in a specific property. If you already have your Manhattan pied-a-terre, you can lock in your gains.

This product is doubly sexy because most of the people likely to trade this index live in... you guessed it... Manhattan Condos. I'm really looking forward to seeing if they get some volume.

Altos Manhattan Condo Data

So how's the market? Since we publish data and reports for all the Radar Logic markets, on Thursday we released the Altos Manhattan Condos composite. Like all our real estate derivatives data, the Altos Manhattan Condo composite covers the same ground as the Radar Logic version, but watches the properties as they're on the market, so leads the index by several months. Here's what the Manhattan Condo market looks like:

Price per square foot for condos in Manhattan. Data does not include coops. Data as of February 28, 2008. The Radar Logic data is expressed as price per square foot and trades are paid on moves in price per square foot so that's what we're showing here.

Holding up nicely, eh? We'll see how this winter's credit carnage impacts the prices in Manhattan in the coming year. New York has an added dimension that most American cities do not: the cheap dollar means that rich Europeans are seeing bargains in NYC for the first time in a decade. That dynamic is adding to condo demand.

But even if you're not paid in euros, you can now get your slice of the action too. Rock on.

More details on our real estate derivatives products here.  Contact us if you want to see some sample data.

Back in New York this week for the Real Estate Derivatives World shindig hosted by Terrapinn. I know. Paaartay!

It's actually exciting for us as we're beta testing new data products we've designed especially for the real estate derivatives traders. Here's a quick glimpse of the Altos 25-City Composite Price, which tracks the Radar Logic 25 markets and the Altos 10-City Composite Price, which tracks housing markets covered with the Case Shiller national Index.

Altos 25-City Composite and Altos 10-City Composite home price metrics for major metros around the country. Data as of February 22 2008

Full product launch and details soon. If you're interested in the housing futures markets, we should be talking.

Link: Altos Real Estate Derivatives Data

Jonathan Miller published the November Radar Logic RPX housing market report over the weekend. It's easy to spot that Sacramento is leading the nation down.

[aside: Radar Logic is cool. They measure Price Per Square Foot and try to do it across all properties, condos and single family homes, new and existing construction. No small task. The price per square foot approach is intended to measure value of the property regardless of the size of the property itself. In the real estate derivatives trading business, Radar is getting all the mindshare. Case Shiller is falling behind. more here.]

In the report just published for November, Sacramento saw a price-per-square-foot decline of 18%. Zowie. For those of you unfamiliar with California's central valley, this is an area dominated by lots of new construction, in huge projects, partly as Bay Area super-exurb. So the underlying economy in the Central Valley isn't nearly as dynamic as San Francisco, San Jose, or Los Angeles. Also much less dominated by the high-end, Sacramento is feeling the subprime fallout harder than most.

So Radar Logic is publishing for November. What are the real-time stats saying? Sacramento is not seeing any relief yet. Here's our price per square foot for Sacramento through February 1 2008.

Price Per Square Foot for single family homes in Sacramento, CA through Feb 1 2008. Notice the price is slightly higher than the Radar Logic number. That's because we track Condominiums separately and this is for the city of Sacramento specifically. The important factor is the direction.

Sacramento Housing Market Data Links:

Our free Sacramento Real Estate Research page

Here's a solid Sacramento Area Blog for more local flavor.

Money and technology are inseparable. Massive new tradable data sets are being exposed by the Web; new bottoms-up social networks are creating alternative ways of discovering investing ideas; a rising percentage of newswire content is being written and consumed by machines; new classes of monitoring services are revealing deep data that might otherwise go unnoticed and untraded for weeks; and real-time itself is being redefined.

"The conference is, of course, all about the confluence of Wall Street and Web 2.0. And what does that mean? Well, new ways of Web-2.0-style collaborating are changing money and investing, with the zero-sum game of Wall Street changing in the process. At the same time market mashups with new sources of web-based data -- auctions! real estate! pricing! weather! -- are transforming the never-ending hunt for a money-making edge."

I'll be presenting some data and observations on the Housing Futures markets, Case Shiller and Radar Logic RPX. Some cool stuff. If you're thinking about getting into the real estate derivatives trades, this is a session for you. Do try to stop by. Make sure you contact me if you do.

As you know, Altos Research specializes in real-time market analytics in the housing market. What's less obvious are some of the cool ways people use our stuff. As any successful startup, I suppose, we have lots of customers using our real estate data in ways totally unexpected initially.

Recently, people have been asking us for a more complete list of the Altos Research services and a little about who uses them. I thought I'd assemble a list here for easy consumption, organized by the types of folks on our customer list. (Apologies in advance that this post is a little more salesy than usual. Just looking to provide a little insight into our company. Do check out some of the sites I link to below. There's a lot of great work out there.)

Real Estate Agents and Teams

Product: Our Professional Subscription. Personalized reports + AltosCharts and lead generation forms for web sites.

Usage: Home Buyer and Seller information, lead generation, blogging

Reference Customers: We have hundreds of professional subscribers, but a really great usage of the system for driving web leads is done by the Harper Team in San Ramon, CA. Our friend Chris Iverson with the Ventoux Group at Keller Williams in Palo Alto is highly effective at integrating market analytics into his listing presentations and working with buyers. He teaches a class on the topic. Chris Schweiger in Scottsdale is one of many Altos-bloggers. [A more complete list of Altos-bloggers coming soon.]

Real Estate Brokerages, Title Company Offices

Product: Professional Subscription, site licenses, occasional customization

Usage: We frequently set up office-level subscriptions for brokers who sponsor for their whole team.

Reference Customers: Paragon Real Estate Group in San Francisco. Fortune International in Miami is another. Oakville Properties is a client with offices in the Bay Area, Las Vegas, and Orlando.

Home Buyers and Sellers, Independent Investors, Appraisers, some Agents

Product: Market Analysis Details Reports, per city. Our Basic subscription.

Usage: People want to know more about the market than their competition and don't need the personal marketing/branding benefits of our Pro subscription level. When we started this company, we naively thought this group would be our bread and butter. In truth, our local market free research pages drives a lot of our web traffic and is only indirectly responsible for driving our major sources of revenue. Note that we're now available in over 20 metros around the country (Here's Portland!) We open up more each week.

Some of these folks will add the AltosCharts to their subscription so they can build their own reports, query different stats on the fly and learn about any zip code in their region.

Reference Customers: We have tons of basic subscribers all around the country now, even some international (folks who tend to be researching the condo markets in Las Vegas and Miami. Surprise, surprise). My favorite quote was from a real estate investor, Dan, who said, "I LOVE your reports! I'd have had to spend a YEAR compiling this kind of information for myself!" [his caps, not mine.]

Financial Firms, Banks, Hedge Funds, Lenders

Product:AltosCharts and AltosStats Data. Bulk data subscriptions.

Usage: Trading and fundamental analysis. We have a growing stable of Wall Street players that feed on our data pipe--from the bulge-bracket banks to long/short hedge funds. The most obvious application for our real-time market data is the housing futures markets. I write occasionally about how our data leads the Case Shiller Index by three months in basically all the markets we cover. The Radar Logic RPX is actually getting more attention on Wall Street these days and we'll be publishing some latest analysis there very soon too. Our trading clients tend to use our market data as an input into massive "quant" analytics systems. They suck in CSV files, where ours is one of many input sources, bringing a unique perspective.

In addition to the real estate derivatives markets, some of our Wall Street subscribers use our data for fundamental analysis in their equities trades. For example, if you're a hedge fund thinking of going long a regional bank in the South East, you might want to understand how the trends in the local housing market are going to impact their loan portfolio.

Reference customers: Most of these folks prefer to remain, ahem, anonymous. Though a good example is Tradition Financial Services, one the leading real estate derivatives brokers, who use our data for spot-pricing the housing market and publishing research for their derivatives clients.

Real Estate Web Sites and Consumer/Investor Portals

Product: AltosCharts - local market data

Usage: We're seeing a number of really innovative startups working on providing great decision making tools for consumers and particularly investors in real estate. These folks turn to Altos to easily answer for their site visitors/members, "Hows the market?" They integrate AltosCharts into the user

Reference Partners: DeedQuest is doing some cool real estate investor products. CondoDomain is building a national condominium site for consumers.

Agent Marketing and Technology Providers

Product: AltosCharts and Partner Program

Usage: These partners provide web sites, marketing, blogging, lead generation tools to real estate agents. We love our partners. We find great symbiotic relationships, because we're all helping real estate pros market more efficiently in an internet world.

Reference partners: Kevin and Pat at Domus, RealBird, BringTheBlog are all great examples.

Who knew the real estate ecosystem was so complex? And we've only just scratched the surface. 2008 is rocking already. We'll have some big announcements, new partners, and new products coming this year. Stick around!