Altos Research Real Estate Insights - methodology

June 2008 National Real Estate Report Released

Mike Simonsen — Tue, 10 Jun 2008 11:27:03 -0700

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.

Our Complete Real Estate Research Product Line

Mike Simonsen — Sun, 27 Jan 2008 13:28:20 -0800

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!

January 2008 Real-Time National Housing Report

Mike Simonsen — Fri, 11 Jan 2008 14:43:35 -0800

Last month we started publishing the Real-Time National Housing Market Report with Steve at Real IQ. The January 2008 edition was published yesterday. You can download the full report here.

The report was picked up today morning by the Dallas Morning News. Dallas is notable because we've watched demand stay at less-bad-than-most.

Here's the press release that accompanied this months report.

HOUSING PRICES CONTINUED TO DECLINE IN DECEMBER

Time-on-Market Increased as Housing Market Demand Falls Faster than Supply

MOUNTAIN VIEW, CA â January 9, 2008 â Prices of properties listed for-sale fell in 16 of 20 major markets according to the Real-Time Housing Market Report, jointly published by Altos Research, the premier source for real-time real-estate market research, and market analysis consultancy Real IQâ¢.

Prices fell at the fastest rate in San Francisco, down 4.6% during the 4th quarter. Prices also fell by more than three percent in the Las Vegas, San Diego, Los Angeles and Detroit markets during the most recent three month period.

Data in the Real-Time National Housing Market Report is based on analysis of over one million properties currently listed for-sale in 20 metropolitan markets across the country. The report is the most timelysource of housing market data on current market activity.

The report also found that the time-on-market increased in virtually all markets. Miami experienced the longest time-on-market span with an average days-on-market of 143 in December. Minneapolis and Detroit both had the second highest average days-on-market at 136.

âSellers continue to adjust their price expectations downward but not quickly enough to keep pace with declining demand,â said Stephen Bedikian, partner and research director for Real IQ. âUntil we see
declines in both inventory levels and days-on-market, we wonât have any confidence that supply and demand are balancing out.â

For-sale listed property inventories declined in most markets during the past three months except in the Florida markets of Tampa and Miami which posted inventory increases of 10.5% and 4.0% respectively.

Inventories declined dramatically in Boston with a decrease of 21.7%. Inventory also fell more than 15% in Minneapolis, Denver and Seattle. âDeclining inventory levels are essential to a recovery in the housing market,â said Michael Simonsen CEO and co-founder of Altos Research. âHowever, if the economy continues to slow or enters a recession, we may see inventories balloon again in the Spring and downward pricing pressure on sellers will intensify.â

The report examines housing pricing, inventory levels and market conditions in 20 major U.S. metropolitan statistical areas (MSAs): Atlanta, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, 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.

Real-Time National Housing Report Released

Mike Simonsen — Thu, 13 Dec 2007 06:54:00 -0800

When we started this company, one of the things we envisioned was creating a National Housing Market Report -- one that would be a right-now alternative to the laggard OFHEO reports and even the Case Shiller releases. Well today is the day, folks. The Altos Research Real IQ National Housing Market Report is here!

In it we look at 20 major metro markets, publish some key stats about pricing and supply and demand trends and we draw some conclusions about what's happening out there. The U.S. metropolitan statistical areas (MSAs) covered in the report include: Atlanta, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa, and Washington, DC.

We're working in conjunction with Stephen Bedekian from Real IQ. Stephen is an industry leader, writer, and consultant and he helped bring this project together. This being the first issue, it took us a few extra days of editing. In future months, we'll be aiming to publish the report just a few days after month's end.

The latest version of the report is available for download on our financial institutions page. Or you can download the PDF here.

The Press Release headline this month isn't any shocking news - Surprise! Prices are still under pressure! But we're laying the foundation here to be the first to identify the eventual bottom of the market. From the press release:

REPORT: HOUSING PRICES
CONTINUE DECLINE IN NOVEMBER

Time-on-Market
Increased as Housing Market Demand Falls Faster than Supply

MOUNTAIN VIEW, CA
- December 13, 2007 â The listing prices on properties in 18 of 20 major markets across the U.S. fell during the month of November. San Diego experienced the steepest decline with listing prices falling 5.8 percent as the recent wildfires exacted a toll on demand. This information was presented in the newly-launched Real-Time National Housing Market Report*, published by Altos Research, the premier source for real-time, real-estate market research and Real IQâ¢, a market analysis consultancy.

The Real-Time National Housing Market Report is based on an analysis of data from over one million properties currently listed for sale in 20 metropolitan markets across the country and represents the most timely source of housing market data on current market activity.

âReal estate information tends to be highly latent and subject to a lot of revisions,â said Michael Simonsen CEO and co-founder of Altos Research. âIt takes several months before the S&P/Case Shiller Index or the
OFHEO data is released for a given month. When you're making investment decisions or trading derivatives these lag times are simply killers.â

Another key trend noted in the new report was an increase in the time-on-market duration for homes on sale in virtually all markets. Miami experienced the longest time-on-market span with an average days-on-market of 137 in November. Minneapolis had the second highest average days-on-market at 125.

Listed property inventory levels displayed seasonal declines in many markets with the exception of Las Vegas where for-sale property listings increased 6.6% over the past three month. âWhile inventory levels declined in most major markets, the decline in supply could not keep pace with the rapid fall in demand,â said Stephen Bedikian, partner and research director for Real IQ. âWe expect time-on-market will continue to lengthen and apply pressure on homeowner pricing decisions until buyers regain confidence and demand levels off. So far that point is not in sight.â

*The first report was published December 7, 2007 and will be released every month. Report downloads are available from Altos Research.

On Inman TV Today

Mike Simonsen — Fri, 07 Dec 2007 06:01:23 -0800

At the NAR conference in Las Vegas, I did an interview with Joel Burslem from Inman News. The video is up today on InmanTV.

Real Estate Video by - Real Estate Blogger

The video uses a sweet player from WellcomeMat.

Podcast Interview with Me

Mike Simonsen — Mon, 02 Jul 2007 10:30:08 -0700

Drew Meyers from Zillow called up last week and interviewed me about last week's Carnival of Real Estate. If for some reason you don't get enough of my pontificating in written form in this blog, you can hear Drew and I chatter on about Altos Research, the contributors and articles in last week's Carnival of Real Estate, blogging in general, and the state of the real estate market.

Bay Area Price Reductions Heat Map

Mike Simonsen — Wed, 06 Jun 2007 10:15:19 -0700

We've been talking for a while about how the market strength in the Bay Area's housing market has been focused on the economic centers, San Francisco and down the Peninsula, with the market notably cooling the farther you reach into the exurbs.

Thanks to the folks at FortiusOne, who launched GeoCommons at O'Reilly's Where2.0 conference last week, we finally got around to illustrating the heat map of this phenomenon.

In the following snapshot we've created a heatmap of price reductions. Specifically this is our percent-price-reduction stat--for a given zip code, the percent of properties that have had their asking prices reduced. We have some color tweaking to do still, but you can see the picture pretty clearly. The brighter red, the higher the percentage (and the weaker the market).

San Francisco Bay Area Real Estate Market. Percent Price Reductions. Single Family Homes. June 1 2007. Brightest red is over 50% reductions, darkest red around 10%, which indicates strong demand and healthy turnover rates.

If we zoom into the San Francisco, San Mateo County Peninsula and the north end of Santa Clara County, you can see the strength in Mountain View, up through Palo Alto, and in the San Mateo/Burlingame areas. Also, demand levels in the City have stayed strong.

San Francisco and San Mateo Counties, with parts of Alameda, Contra Costa, and Santa Clara Counties. Affluent neighborhoods are seeing robust demand this spring.

You can get details of the markets in Burlingame, San Mateo, Palo Alto, Mountain View etc. on our free research page. From that page, you can go to our map view and look at price trends for each zip code. (Heatmap not yet included.)

Case Shiller March 2007 Price Uptick San Francisco Bay Area

Mike Simonsen — Tue, 29 May 2007 10:58:47 -0700

The S&P/Case-Shiller index for March 2007 was released today. The San Francisco Home Price index showed it's first increase in a year and came in at 211.09 vs. 210.78 in February. This increase should come as no surprise to our clients (or readers of this blog for that matter.) We whispered to clients on February 26 that the March numbers looked like they were heading higher.

(For the uninitiated, the Case Shiller index tracks existing single family home prices. The index compares prices now to January 2000 where the index = 100. These indexes are then traded as options and futures on the Chicago Mercantile Exchange.)

Broadly speaking, this is not a big surge in San Francisco Bay Area home prices. No

Tracking Home Prices for the San Francisco Bay Area.

cause for celebration of the end of the bubble burst yet. We see the light trend sustained for a couple more months and then reversing back down by the time the June numbers are announced later this summer. The seasonal spring surge appears to wearing thin already.

In other notable markets reported today with the S&P Case Shiller Index: Los Angeles, Miami, and San Diego were down the biggest of the 10 major metros that are traded on the Merc. Full data table is here.

Real Estate Derivatives Seminar- NYC May 29

Mike Simonsen — Thu, 10 May 2007 08:15:11 -0700

We'll be attending the Real Estate Derivatives seminar put on by Fritz Siebel and Clare Yang from Tradition Financial Services on May 29 in Manhattan.

TFS is the leading broker of the S&P Case Shiller options and futures products on the Chicago Mercantile Exchange. This seminar is where they discuss the market mechanics, trading strategies, and will probably get into the development of the OTC products forthcoming.

We get lots of questions from readers and clients about the ins and outs of this market, and this seminar is a great place to start for answers. They cover the commercial real estate derivatives as well as residential housing futures markets.

If you're interested in attending the invite is here (PDF file). They have another seminar coming June 19, 2007.

Fritz has been a tireless advocate of this market. His blog is really the go-to source for housing derivatives news and data. Read it here.

Also - We'll have information on our S&P/Case-Shiller leading-data products too. We now have some of the big Wall Street boys building our feed into their trading models. So if you're in that market, give me a buzz. I can share more details at the seminar.

Altos Research clients beat the market by 4 months (again)

Mike Simonsen — Fri, 20 Apr 2007 11:08:00 -0700

The best part of taking a real time approach to market analytics is when the market hits an inflection point.

The AltosResearch.com home page uses this chart, which illustrates one of the catalyst insights for us to form our company. When we first saw our analytics platform illustrating these insight, we realized we had to bring the technology to the world. (Give, give, give. We're all about altruism.)

2005 Price Trends for San Jose.

And, in case you missed it, the San Francisco Bay Area housing market has reached a new inflection point. The first news media reports started emerging last week that Bay Area home prices started climbing again in the first quarter of 2007.

Of course, if you were an Altos Research client, you would have seen the inflection four months ago. Check it:

Bay Area home prices started showing a turnaround in December.

We've been discussing this market change on the blog a bit. We'll continue to do so. The better news is we'll also be rolling out some new products soon that will help our subscribers identify these regional trends.

If you're interested in previewing some regional insights, make sure you drop me a line and let me know which part of the county you're in. If you leave a Meebo message when we're off line, make sure you include your email address.

Measuring the Transition to a Hot Market

Mike Simonsen — Thu, 08 Mar 2007 10:20:40 -0800

This may come as a surprise to many of our readers, but this spring is shaping up to be a pretty hot market in the Bay Area (especially the Peninsula, with the more desirable spots in the East Bay and South Bay trailing, not far behind). We have plenty of anecdotal evidence coming in from our Realtor clients and friends: multiple offers, three-day sales cycles, etc.

So the question is, where in the stats can one turn to measure this transition? Obviously we see the price charts start to march upward with greater demand. But that's not enough, because prices are influenced by lots of exogenous factors and may lag the actual demand a bit. So we decided to explore a different measurement: Days on Market. In a cool market, many properties sit around for a long time. We watched Days on Market climb upward all last year. Now however, if lot of homes are selling quickly with multiple offers, we should see that fact immediately in the Days on Market indicator.

Specifically, when watching a transition from cool to hot, we should see median DoM drop first while the mean DoM stays high. (Remember that median implies half the homes on the market are on for less that this number. And mean is the average of all properties, so a handful of homes that have been for sale for, say, 12 months keeps the average high.)

For example, our client Bart Marchioni recently sold a place in Willow Glen San Jose in 7 days when the average home has been on the market for over 100 days! Good, fresh properties come available and get sold right away, but the stale ones are still sitting around. That's your transition.

So we dove into the Bay Area housing market data to see where the hottest markets are emerging. We looked for zip codes with greater than 15 single family homes for sale, then we looked for those with the greatest percentage difference between the median days on market and the average DoM. What we found confirms what we're hearing from clients are the hottest markets. Here are the 10 hottest Bay Area housing markets ranked by percent difference in median and mean days on market:

City (click any city name for the free research page)	Zip	Median Price	Median Time on Market (approx)*	Mean Time on Market (approx)*
San Jose	95130	$810,000	newly listed	8 weeks
San Carlos	94070	$1,098,000	less than 1 month	12 weeks
San Leandro	94579	$598,888	less than 3 weeks	8 weeks
Los Altos	94024	$1,649,000	less than 1 month	11 weeks
San Francisco	94110	$849,000	less than 3 weeks	7 weeks
Palo Alto	94301	$2,599,000	less than 5 weeks	13 weeks
San Mateo	94402	$1,388,000	less than 6 weeks	15 weeks
Oakland	94618	$1,124,000	less than 1 month	9 weeks
Sunnyvale	94086	$758,900	less than 3 weeks	7 weeks
San Ramon	94582	$1,098,000	less than 5 weeks	11 weeks

* Days on Market rounded to nearest week. See also this post on recent DoM methodology changes we did.

So in West San Jose (Cupertino and Saratoga schools!) half the properties on the market are newly listed. But the average property has been on the market for two months. Sales rates have stayed high so this is not driven by a buildup of new inventory.

Note the theme we've been talking about for a while here: ALL of these markets are close in. These top ten zip codes are from a sample of several hundred in 12 Bay Area counties. Four of these are Peninsula towns, two in the South Bay and three in the East Bay. If the trend holds, and the number of buyers continues to grow, expect the market strength to bleed further out from the Bay Area's geographic heart. If it does, you'll be the first to know.

Flipping homes in a down market

Mike Simonsen — Thu, 22 Feb 2007 13:22:00 -0800

Peter Coy at Business Week's Hot Property is wondering whether Flipping is still a good business.

Here's the news Peter: Flipping, well executed, can indeed still be a great opportunity, even in this market. (When we say "flip" we'll generally mean fixer-uppers where the investor adds value by improving the property. This is different from pure speculative flipping where you just buy and hold for a few months because the market is roaring. I'm a huge fan of the former and don't have nearly the huevos required to participate in the latter.)

Consider these stats and some simple math that we measured this week for the Palo Alto real estate market:

The median price per square foot is over $800.
A diligent fix-and-flipper can knock down some walls, add square footage at maybe $300 per. In a few months you can literally double your investment with some room to cushion against market risk.
Properties at the low end of the market in Palo Alto this week are around $1 million and about 45 years old. These are your fix-and-flip candidates depending of course on lots of variables, like neighborhood.
We classify about 8% of the properties on the market in Palo Alto this week as Flips.

So this is a no-brainer right? Not so fast. In a market like Palo Alto, your primary challenge is that a zillion spec developers know these economics already and they're likely to beat you to the property. The best opportunities are gone in a flash, even in this market. (Maybe especially in this market.) In most markets of course the opportunity is less evident because prices are closer to construction costs.

We look at other factors too, for example, what percentage of a property values in a local market is tied to the lot size (which you're stuck with)? Look further south in Morgan Hill and you'll notice that price per square foot is just over $400. Still room to profit. However, is there room to take a bottom of the market property, improve it, and sell it as top-of-the-market prices?

Homes for Sale in Morgan Hill, by price quartile. February 2007

You can get into a property in Morgan Hill for around $650k. The top quartile of homes for sale in Morgan Hill are $1.5 million. Notice though that the lot size in Morgan Hill is a compelling influence on the price. Flipping opportunities in Morgan Hill are significantly more scarce than Palo Alto.

How long can it last?

In fact the gaping difference between construction costs and sales prices is one of the most compelling arguments supporting the Housing Bubble. In many areas it is still incredibly profitable to build. Economic nature abhors an arbitrage gap. So build we shall, until the gap is no more. Either prices fall or construction costs rise. Or Both.

We're confident that the value of the fix and flip will always be an important part of the real estate cycle though profitability of the the flip may ebb and flow. What we know for sure is that there continue to be flip opportunities to the diligent, the clever, and the lucky.

Days on Market, Relisting, and Stale Fish

Mike Simonsen — Fri, 09 Feb 2007 11:28:45 -0800

Some readers have asked lately about a recent jump in our Days on Market statistic. I thought it makes sense to explain it here. We recently did a methodology change where we increased the look-back window for watching properties.

By making this change, we more accurately reflect the actual total time on market, even for properties that have come on and off the market, especially including those that have been off the market for 30 days before being relisted.

In January 2007 we increased our look-back window. We'll now identify more properties as they've come on and off the market. Thus the big jump in our Days on Market statistic.

What we found was that in some markets, we can find a significant chunk of properties that have really been on the market for long periods and these properties were previously under-reported in our stats. We've seen a notable decline in the number of properties relisted (with the sole intention of "refreshing" a listing) in Silicon Valley since last fall when the local MLS changed its rules. In San Jose California we've observed a drop from nearly 25% of homes on the market having been relisted down to 9%. That's real progress.

Those rules however do not impact a property that for example was on the market all last summer, was pulled off over the holidays and put back on the market in January. A soon-to-be-announced Altos partner calls these properties "stale fish." We've adjusted our nets to catch more stale fish. We're still dolphin-safe though.

This change effected our the trend charts in most communities a little bit. In some areas, though, you might notice a big jump in the DoM stat that week in January 2007. This change is the reason for the jump. Inset is a snapshot of the current Days on Market trend for San Jose Homes.

Can the Riff Raff determine the value of your home? My-Currency.com

Mike Simonsen — Wed, 31 Jan 2007 13:10:44 -0800

I've said frequently I am a huge fan of the predictive power of futures markets. Today the DEMO 2007 conference brings us the latest prediction market innovation in the form of an ambitious startup and new Altos Research partner (more on that below), My-Currency.com

[update] My Currency's DEMO Demo is here.

The concept behind "predictive markets" is that the collective wisdom of enough properly incented people can provide insights beyond the abilities of any individual.

Usually the incentive is your cash. My Currency does a cool twist and incents its market players (Realtors or other service providers for example) by tracking their reputation with points on how well they trade on a market. Later, a consumer can come to the sight poking around for say, South of Market Condo market information and find the experts with the best reputation for knowledge in that part of town. Could be a great marketing channel.

The company has already been positioned as the anti-Zillow. And the concept may have some legs. You know how everyone has an opinion of the Zillow price for your home? Well My-Currency let's you put your reputation where your mouth is.

trading home prices in San Francisco

You can also track the market by neighborhood with their futures market
on price-per-square-foot by zip code. The spot pricing in this market
is provided by Altos Research.

San Francisco Housing Market futures trading with My-Currency.com

We experimented last year with a futures market at inklingmarkets.com. There we set up the San Jose median home price market (which by the way successfully predicted San Jose home price changes in 2006). My suspicion is that My Currency, by being focused on real estate, has an advantage over the ad hoc markets of Inkling. In any market, liquidity is the key. So My-Currency should have better volume of real estate traders than someone like Inkling.

The user interface for making a trade on the My Currency market is really simple and it's kinda fun too. Give it a shot and let's see how your expertise flies. I'm trading on the indexes. Is that inside information? Maybe. Can you beat me? If you know your neighborhood!

Joel at FoREM, as usual, has a thoughtful and insightful review.

VentureBeat covered My-Currency's launch story yesterday.

Seattle PI Interview

Mike Simonsen — Mon, 08 Jan 2007 02:54:30 -0800

We were covered in The Seattle Post Intelligencer this weekend. Aubrey Cohen published a local real estate article on Saturday and included some stats and quotes from us. Here's a sample:

Melvey's [Widnermere] own analysis of the number of sales versus the number of homes listed shows that Seattle is still a seller's market.

"Definitely inventory dropped a lot during the holidays, but the activity level didn't drop off as much as I expected it to," he said.
"It certainly seems to me that the market is still really healthy."
Altos Research numbers show the average house is now spending 69 days on the market.

"Ten weeks is pretty long, compared to the levels of the last few years," Simonsen said. He said 36 percent of properties currently on the market have had their prices reduced -- relatively high, but lower than reductions of more than 40 percent seen in many San Francisco Bay Area markets.

Simonsen predicted that Seattle would start seeing slight year-over-year price declines this spring or summer, although he said the city had a strong economy, and its housing market would fare better than outlying areas.

"While we see some positive things to keep the bottom falling out, we don't see any big catalyst that will let prices jump upwards," he said.

Full article available at the Seattle PI.