Real Estate Report

MacroMarkets today announced that they'll be issuing New York Stock Exchange-traded securities for investors to play the US Housing Market. From the press release:

MacroShares Housing Depositor, a subsidiary of MacroMarkets LLC, filed with the Securities and Exchange Commission for exchange-traded securities
that will allow investors to invest in the upward and the inverse movement of U.S. home prices. MacroShares Major Metro Housing Up and Down securities will be based on the S&P/Case-Shiller Composite-10 Home Price Index and will allow investors to access this important, but illiquid, asset class. When launched, these revolutionary paired securities will have a ten-year term and will feature a 2x (200%) leverage factor. MacroMarkets LLC plans to launch the new securities on the NYSE Arca under the ticker symbols:

• UMM- MacroShares Major Metro Housing Up
• DMM- MacroShares Major Metro Housing Down
  

Looks to me like an ETF, which would be ideal for lowering the transaction costs and the capital requirements that have been dogging the commodities-exchange traded securities. ETFs, remember are exchange traded funds so you can invest pretty directly in an underlying asset class. In oil, for example, you can trade with the ticker symbol USO traded on the Amex.

In the couple years since launching the Chicago Merc-traded housing futures based on the S&P/Case Shiller Index, MacroMarkets is widely acknowledged to have dropped the ball. The traded volume on these markets is tiny and was restricted by steep license fees that MacroMarkets tried to extract from the Street. This winter, MacroMarkets sold to S&P the master license of the Index and droped the license fees. That was Step One. Step Two is to get products into the hands of the people who can use them. It looks like MacroMarkets is focusing on Step Two. Let's hope they learned their lesson and this product gets the volume it deserves.

While we have yet to see these securities trade on the NYSE, they're based on the Case Shiller 10-City Composite, which is good news for Altos (and our customers). We publish the Altos 10-City Composite which, whattya know, follows the same 10 cities.

Altos Research 10-City Composite and 25-City Composite. US Residential Real Estate prices as of June 8 2008.

Our Real Estate Derivatives weekly report is now available to subscribers who want to know where these indexes are heading with a 90-day lead. Beyond just pricing, the reports dive into all the detail real estate data: supply and demand levels, turnover, etc. If you're interested, contact us.

Meanwhile, I'm keeping my fingers crossed to see some trading volume.

We released the latest National Real Estate Report today. You can download it here [PDF].

The data inspects 26 metro markets around the country and tracks home prices, inventory and days on market. We also track the Altos 10-City Composite for a National perspective on the trends.

Here's the press release:

HOUSING PRICES DOWN BY 0.3% IN MAY

Listing Prices Fell in Only 11 of 26 markets

MOUNTAIN VIEW, CA � June 10, 2008 � The Altos 10-City Composite Price Index showed a decline in asking prices of just 0.3% in May. Prices of properties listed for-sale increased in 15 of 26 major markets according to the Real-Time Real Estate Report, jointly published by Altos Research, the premier source for real-time real estate research, and market analysis consultancy Real IQ�.

Asking prices fell at the fastest rate in Las Vegas - down 3.7% during May and 6.5% over the most recent three-month period. Listing prices rose at the fastest rate in Denver up 3.7% and Dallas up 2.2% during May. Prices increased by more than one percent for the month in 11 of 26 markets.

"The weakest markets continue to be concentrated in Florida, California, Arizona and Nevada which all experienced the fastest price increases during the boom times," said Michael Simonsen, CEO and co-founder of Altos Research. "Now these same markets are outpacing others on the downside as foreclosures and price declines continue relentlessly. We�re seeing some stability in many markets outside of these hard-hit states."

Listed property inventories increased substantially with the 10-City Composite markets showing an increase of 7.9% during the first quarter and 3.7% in May. Inventory rose in 25 of 26 markets with the Miami market being the only exception. Inventory actually declined 1.3% in Miami during May and 2.4% during the past three months.

Data in the Real-Time Housing Market Report is based on analysis of over one million properties currently listed for-sale in 26 metropolitan markets across the country. The report is the most timely source of housing market data on current market activity.

For the Altos 10-City Composite, the average days-on-market was 106 � an improvement from 111 in April and 113 in March. Miami experienced the longest time-on-market span with an average days-on-market of 152. San Francisco led all markets with the fastest rate of inventory turnover at an average of 73 days-on-market.

"Continued growth in inventory across virtually all markets will restrain near-term price increases," said Stephen Bedikian, partner and research director for Real IQ. "Markets like Denver and Dallas are showing strength because they did not experience high price inflation during the boom and are showing only limited inventory growth now. Affordability and limited inventory are the keys to a healthy market."

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, Indianapolis, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, Salt Lake City, San Diego, San Francisco, San Jose, Seattle, Tampa, and Washington, DC. The first report was published December 7, 2007 and is released every month. Report downloads are available at: www.altosresearch.com.

Here's a funny Meebo-IM chat I had with a home buyer yesterday. This guy is looking for a negotiating angle with home sellers. Smart!

[15:37] meeboguest: hi

[15:37] mikesimonsen: hi

[15:38] meeboguest: will prices in Milpitas Area continue to fall?

[15:38] mikesimonsen:

[15:39] meeboguest: seriously....how do I negotiate with seller to factor another 10% reduction in price?

[15:40] mikesimonsen: well, you can bring our Milpitas report with you and use it to illustrate not only prices, but demand levels and days on market trends

[15:41] mikesimonsen: you can say, "Look at this, you've got easily another few months before this thing moves and I'm willing to buy now!"

[15:41] mikesimonsen: In the reports it even breaks up the data by price range in that zip code

[15:42] mikesimonsen: so you can say, "The market is even worse for sellers of homes like this. So you're lucky you found me!"

[15:42] meeboguest: thanks...I am even luckier if that report is free

[15:43] mikesimonsen: for $19 you're getting a bargain!

[15:43] mikesimonsen: I'll expect a thank-you bottle of wine when you get your price

15:43] meeboguest: how do i get the report?

[15:44] mikesimonsen: go to this page, register, and buy the basic report: http://www.altosresearh.com/research/CA/MILPITAS

[15:44] meeboguest: thanx

[15:45] mikesimonsen: you bet! good luck!

What do you think the chances are that the Seller's Agent is prepared with market data to counter-negotiate? My guess is that they'll get blindsided by this aggressive buyer's approach. Maybe, just maybe, we can motivate the seller's agent to prepare better in the future...

Our latest National Real Estate Report is out this morning. The headline this month is that while the Altos National 10-City Composite price fell by 0.6% from last month, prices only fell in 7 of the 25 markets covered in the report. Maybe some signs of life? Too soon to call. Probably just spring.

Here's where you can download the full PDF May 2008 National Real Estate Report.

Here's a chart of our two national housing market composite price metrics.

National Real Estate Prices as measured by the Altos 10-City and Altos 25-City Composites. Data through the first week of May 2008

Here's the full press release:

Housing Prices Down by 0.6% in April 2008

National real estate report sees prices falling in only 7 of 25 metropolitan markets. Real-time real estate data also indicates rising inventories and stabilizing market time in many parts of the country.

Mountain View, May 8 2008 - The Altos 10-City Composite Price Index showed a decline in asking prices of 0.9% over the past three months and continued that decline in April with a decrease of 0.6% for the month. Prices of properties listed for-sale fell in only 7 of 25 major markets according to the Real-Time Real Estate Report, jointly published by Altos Research, the premier source for real-time real estate research,

Asking prices fell at the fastest rate in Las Vegas down 2.7% during April. The largest three-month declines occurred in Las Vegas and Philadelphia, off 5.1% and 4.5% respectively. Listing prices rose at the fastest rate in Denver up 2.6% and Charlotte up 2.1%. Prices also increased by more than one percent in April in Boston, Houston, Dallas and San Francisco.

"While this is not shaping up to be a typically strong spring selling season," said Stephen Bedikian, partner and research director for Real IQ, "we are now seeing price stability or price increases in most markets. During April, only the most troubled markets such as Las Vegas, Miami, Tampa, Philadelphia and Phoenix, continued to show asking price declines."

For-sale property inventories increased in 19 of 25 markets during April. Inventory in the Altos 10-City Composite markets rose just 0.8% for the month and 5.6% during the most recent three-month period. 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. For the Altos 10-City Composite, the average days-on-market was 111 an improvement from 119 in March and 122 in February. Miami and Detroit experienced the longest time-on-market spans with an average days-on-market of 153 and 143 respectively. Austin led all markets with the fastest rate of inventory turnover at an average of 67 days-on-market.

"Inventory buildup is typical during the spring selling season but so far it has been fairly modest and that is reflected in the decline in average days-on-market," said Michael Simonsen, CEO and co-founder of Altos Research. "Tight mortgage credit, foreclosures, and economic fears continue to put pressure on the real estate market but if inventory growth remains restrained, we may see supply and demand balance out. "

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.

The data from Q1 2008 is in. We published our National Real Estate Report today. Key Highlights:

• The Altos 10-City Composite dropped by 1.3% in March and 1.7% in the first quarter of this year.
• Biggest price declines we saw this month are in Las Vegas and San Francisco.
• Dallas, Houston, and Charlotte continue to hold their own. Each city had a modest price increase in March.
• We see some Days-on-Market stabilization. This implies that the springtime has eased the carnage just a bit.

Read the full National Real Estate Report (PDF Download).

Here's the press release.

MOUNTAIN VIEW, CA – April 3, 2008 – The Altos 10-City Composite showed a decline in asking prices of 1.7% over the past three months and continued that decline in March with a decrease of 1.3% for the month. Prices of properties listed for-sale fell in 14 of 23 major markets according to the Real-Time Real Estate Report, jointly published by Altos Research, the premier source for real-time real-estate research, and market analysis consultancy Real IQ™.

Asking prices fell at the fastest rate in Chicago - down 3.9% during March - driven by a large increase in for-sale property inventory of 12.3%. The largest quarterly declines occurred in San Francisco and Las Vegas, off 5.3% and 5.2% respectively. Prices were also down by more than two percent for the quarter in San Diego, Detroit, Los Angeles, Tampa, Washington, D.C. and Minneapolis. Listing prices were up by at least one percent for the quarter in Charlotte, Dallas and Houston.

As the typically strong spring selling season gets underway, we are seeing sellers marking down prices to move their homes,” said Michael Simonsen, CEO and co-founder of Altos Research. “The seasonal inventory buildup is only going to exacerbate the near-term supply-demand imbalance and put more pressure on sellers to reduce their price expectations.”

For-sale listed property inventories increased in 17 of 23 markets during March and all markets showed increases during the first quarter. The Altos 10-City Composite experienced an increase of 4.7% for the month and 7.4% during the first quarter.

Data in the Real-Time Housing Market Report is based on analysis of over one million properties currently listed for-sale in 23 metropolitan markets across the country. The report is the most timely source of housing market data on current market activity.

For the Altos 10-City Composite, the average days-on-market was 118 – an improvement from 121 in February and 124 in January. Miami and Detroit experienced the longest time-on-market spans with an average days-on-market of 146. San Francisco led all markets with the fastest rate of inventory turnover at an average of 65 days-on-market, followed closely by Austin at 67 days. Listing price reductions by San Francisco sellers over the quarter appears to be stoking demand and reducing average time-on-market.

The slight decline in average days-on-market is a positive sign,” said Stephen Bedikian, partner and research director for Real IQ, “but it’s likely to be only temporary as the inventory build up overwhelms tepid demand and drives time-on-market back upward.”

The report examines housing pricing, inventory levels and market conditions in 23 major U.S. metropolitan statistical areas (MSAs): Atlanta, Austin, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Indianapolis, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa, and Washington, DC. The first report was published December 7, 2007 and will be released every month.

Altos Links:

National Real Estate Data

Dallas Real Estate Data

Houston Real Estate Data

Charlotte Real Estate Data

The February Existing Home Sales numbers were released yesterday by NAR. You probably saw the headlines. Home sales were, gasp, up!

Today the latest Case Shiller Index was released. In typical fashion, they're just getting around to telling us what happened in January. Guess what? It was ugly. Here, courtesy Fritz at TFS, are the 20 Case Shiller Markets vs. their market peaks.

Altos Links: For those of you with more than a passing interest in knowing thhe real estate data before these lagging indicators get published, Altos has two things for you:

1. Our monthly national real estate report publishes in real-time the housing price trends for all the markets covered by Case Shiller. CSI for January was published today. The Altos National Real Estate Report for February and March have already been published. April comes out next week.
2. Our full real estate data feeds are for institutions that make a living in the housing markets. You can now get data feeds for nearly 10,000 zip codes in over 40 metro markets around the country. We're publishing now an Altos National Composite price for the same markets as the Case Shiller 10. This is important because the derivatives trades are being done on the national index.
   

Highlights from the March 2008 National Real Estate Report:

• The Altos 10-City Composite median home price declined by 0.4% in February. That's a slightly slower pace than the 1.6% three month decline from December 2007 - February 2008.
• Central cities like Denver and Dallas continue to outperform the coastal bubblevilles. By outperform, I mean housing prices were essentially flat. The Dallas Morning News already picked up the story. As I said in the article, Dallas never climbed as high as say, San Diego, so it has less to fall.

Here's the press release

MOUNTAIN VIEW, CA - March 12, 2008 -
The Altos 10-City Composite showed a decline in asking prices of 1.6% over the past three months and continued that decline in February with a decrease of 0.4% for the month. Prices of properties listed for sale fell in 15 of 22 major markets according to the Real-Time Real Estate Report, jointly published by Altos Research, the premier source for real-time real estate
research, and market analysis consultancy Real IQ™.

Asking prices fell at the fastest rate in San Diego, down 3.0% during February and 5.2% for the most recent three-month period. Prices also fell by more than two percent in the Detroit, Los Angeles and Las Vegas markets during February. Prices increased in Chicago, Charlotte, New York, Dallas, Phoenix and Houston during February and were flat in Seattle.

"We are seeing some stability in asking prices as a result of seasonal reductions in inventory during the past winter months," said Stephen Bedikian, partner and research director for Real IQ. "Unfortunately we also saw an increase in listed property inventories this month which is atypical this early in the year. Only a sustained reduction in inventory will arrest the market's fall nationally."

For sale property inventories increased in 19 of 22 markets during February. The Altos 10-City Composite showed a supply increase of 2.5% for the month. Property inventories declined in only three markets: Chicago, Indianapolis and San Francisco.

Data in the Real-Time Real Estate Report is based on analysis of over one million homes currently listed for-sale in 22 metropolitan markets across the country. The report is the most timely source of real estate data available.

"Inventory growth combined with the recent rise in mortgage rates and reported job losses does not bode well for future price stability," said Michael Simonsen, CEO and co-founder of Altos Research. "We expect housing price declines to resume in earnest during the next several months."

The Real-Time Real Estate Report also found that time-on-market remained high. Miami and Detroit experienced the longest time-on-market spans with an average days-on-market of 146 and Minneapolis was close behind at 145 in February. Seventeen of 22 markets had an average days-on-market of over 100. Denver led all markets with the fastest rate of inventory turnover at an average of 77 days-on-market, followed by Dallas at 79 days.

The report examines housing pricing, inventory levels and market conditions in 22 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.

Links:

The Altos Real Estate Data services

This month's National Real Estate Report PDF

RealIQ

The New York Times last week carried a story on the tale of two housing markets.

AUSTIN, Tex. — The real estate market these days is a tale of two Americas, and one of them is not doing too badly.

In the America of big-city housing markets, especially on the coasts and in the struggling industrial Midwest, the huge run-up in values in recent years has given way to big drops in prices and sales volume. Millions of people owe more than their houses are worth.

But in the other America, specifically in cities like Austin; Grand Forks, N.D.; Yakima, Wash.; and Salem, Ore., the available evidence suggests the real estate market is holding up. Prices there never boomed as crazily as they did in the big cities, and now, even though volume is down almost everywhere, prices in many of these towns are firm or rising.

We'll leave aside the fact falling prices in the struggling industrial towns and the falling prices on the coast are barely related to each other and focus instead on the last statement.

Are home prices in Austin, Texas indeed holding up? Let's look:

Comparing home price trends in Austin Texas, Phoenix Arizona, and San Diego CA

From our perspective, Austin is indeed holding up better than some of the most bubbly markets, like Phoenix and San Diego.

Keep in mind though that in every market, the answer is: it depends. It depends on your price point, it depends on your neighborhood. In fact if we dive into Austin a little deeper, we find where that even though the prices haven't adjusted deeply, we can see where market demand is indeed cooling.

Days on Market for homes in Austin Texas. Data as of February 15 2008. Each line is a price quartile. First Quartile are the most expense 25% of homes on the market.

Days on market is climbing steadily across all price points. Despite a seasonal improvement in market time, The high end of Austin is on the market for a pretty long time right now. Buyers are in no hurry.

Furthermore, in Austin, when you look at the price quartiles, you can see the top of the market is squeezing but the bottom remains reasonably solid. This often implies, as the Times suggests, that the underlying economy is strong, immigration is positive, and people aren't so worried about their jobs. Here's the chart of home prices in Austin, by quartile. Note the slight squeeze at the top end of the market.

Real Estate Price trends in Austin Texas as of February 15 2008

So I'll conclude with a cautious agreement with the Times. Yes indeed there are markets so far escaping major carnage. Many of these markets didn't have the incredible upside in the past few years, so that stands to reason. Finally though, nearly all markets are showing signs of weakness. The key worry for all these markets is that they're following the economy, not leading it. If a recession evolves into full bloom, I don't see how anyone is spared.

Links:

Austin Real Estate Report

San Diego Real Estate Report

Phoenix Real Estate Report

Last week we published the February editition of our National Housing Market report [PDF download]. I was traveling and forgot to add it to the blog, so here it is. We've expanded the coverage this month and added a few more cities ebyond the initial 20 covered by the Case Shiller Index. We'll add a few more important cities in the upcoming versions of the reports too.

Here are the highlights from this month's report.

• Listing prices declined in 19 of 22 markets during January. Prices only increased in the New York metro area during January and were flat in Dallas and Phoenix.

• The largest monthly decline of 3.6% occurred in San Francisco. Over the three month period, listing prices in San Francisco have fallen by 6.1% from $708,551 to $665,100. The other California markets of Los Angeles and San Diego logged declines of more than 2% for the month of January.

• Property inventories declined in most markets except in the Northwestern markets of Seattle and Portland. Inventories tightened sharply in the Midwestern markets of Cleveland and Detroit with decreases of 10.4% and 5.4% respectively during January. Seasonal declines in listing inventories are typical during the winter months.

• Markets with the longest time-on-market are Miami and Minneapolis at an average of 144 days-on-market. Miami’s days-on-market only increased slightly from the previous month’s 143 days while Minneapolis jumped over 5% from 136 to 144 days. Sixteen of 22 markets had an average days-on-market of over 100.

• Denver led all markets with the fastest rate of inventory turnover at 61 days, followed closely by Dallas and San Diego at 80 days. The sharp decrease in Denver’s days-on-market indicator – almost 39% during the past three months – coupled with an inventory reduction of over 11% during the same period, should be a positive for listing prices in the coming spring selling season.