What s Really Happening to the REO Stock? An analysis of three cities: Atlanta, New York, and Miami

Size: px

Start display at page:

Download "What s Really Happening to the REO Stock? An analysis of three cities: Atlanta, New York, and Miami"

Octavia Hancock
6 years ago
Views:

1 What s Really Happening to the REO Stock? An analysis of three cities: Atlanta, New York, and Miami AREUEA Mid-Year Meeting June 1, 2012 Ingrid Gould Ellen Josiah Madar Max Weselcouh

2 Motivation Federal, state, and local policies focused on REOs Neighborhood Stabilization Program (NSP) Vacant Property Registries Land Banks Federal REO Management Practices REO to Rental Pilot Why focus on REOs? Concentrated neighborhood effects Depressing overall housing market 2

3 Three Different Housing Markets Index = 100 in 2000 Q1 FHFA Home Price Index Miami MSA New York MSA Atlanta MSA 0 3

4 Data and Methods Public Deed Transfer Records Fulton County Assessor s Office New York City Department of Finance Miami-Dade County Clerk s Office Text Search of Buyer and Seller Names Bank Names Government Entities (FHA/VA, GSEs) Investor Names (e.g. LLC, LP, Inc.) 4

5 Main Stages of the REO Lifecycle 5

6 REO Stock January 2006 December ,500 10,000 7,500 Miami-Dade County 5,000 Fulton County 2,500 0 New York City 6

7 Median Days in REO by Year of Entry into REO Fulton County New York City Miami-Dade County

8 REO Stock, as of End of 2011 by Owner REOs FHA GSE Private Fulton County 4, ,535 2, % 31.2% 57.8% New York City 1, % 12.5% 71.7% Miami-Dade County 7, ,257 5, % 16.9% 79.5% 8

9 Spatial Concentration of REOs Fulton County New York City Miami-Dade County Properties that Entered REO, Share of Census Tracts with 1 REO 100% 48% 96% Avg. Number of REOs per Census Tract* Avg. Share of Properties that Entered REO* 17.8% 0.8% 6.4% Share of Census Tracts with >10% of Properties Entering REO 73.0% 0.0% 27.3% % of REOs in the top 10% of Census Tracts with the most REOs 30.4% 60.6% 34.8% Properties in REO at the End of 2011 Share of Census Tracts with 1 REO 99% 35% 91% Avg. Number of REOs per Census Tract* Avg. Share of Properties Currently in REO* 2.5% 0.3% 1.3% Share of Tracts with >10 Properties in REO 78.4% 0.3% 76.7% % of REOs in the top 10% of Census Tracts with the most REOs 33.6% 54.7% 30.5% * Tracts with at least one REO 9

10 Spatial Concentration of REOs Fulton County New York City Miami-Dade County Properties that Entered REO, Share of Census Tracts with 1 REO 100% 48% 96% Avg. Number of REOs per Census Tract* Avg. Share of Properties that Entered REO* 17.8% 0.8% 6.4% Share of Census Tracts with >10% of Properties Entering REO 73.0% 0.0% 27.3% % of REOs in the top 10% of Census Tracts with the most REOs 30.4% 60.6% 34.8% Properties in REO at the End of 2011 Share of Census Tracts with 1 REO 99% 35% 91% Avg. Number of REOs per Census Tract* Avg. Share of Properties Currently in REO* 2.5% 0.3% 1.3% Share of Tracts with >10 Properties in REO 78.4% 0.3% 76.7% % of REOs in the top 10% of Census Tracts with the most REOs 33.6% 54.7% 30.5% * Tracts with at least one REO 10

11 Neighborhood Exposure Rates for REO Inflow by Year Entering REO Fulton County New York City Miami-Dade County % white % black % hisp % asian % white % black % hisp % asian % white % black % hisp % asian % 74.5% 4.1% 1.6% 17.1% 51.3% 23.3% 6.6% 25.6% 23.0% 49.2% 1.7% % 68.8% 4.5% 1.9% 21.1% 50.5% 20.3% 6.5% 24.3% 22.2% 51.3% 1.8% % 60.0% 4.8% 2.3% 18.7% 50.4% 22.0% 7.2% 23.8% 22.0% 52.0% 1.8% % 55.1% 5.1% 2.6% 22.6% 47.6% 22.3% 6.1% 24.2% 20.9% 52.8% 1.8% % 52.0% 5.2% 2.6% 20.4% 48.9% 22.7% 6.7% 24.6% 21.4% 51.9% 1.8% Race/Ethnicity of Population (2010) 45.3% 44.2% 5.9% 3.0% 35.0% 24.5% 27.0% 9.7% 15.3% 15.8% 66.4% 1.5% 11

12 NYC Miami-Dade County Fulton County REO Share of All Arm s Length Sales 30% 20% 10% 0%

13 Small Investors Play a Big Role Fulton County New York City Miami-Dade County Likely % Likely % Small Likely % Likely % Small Likely % Likely % Small Individuals Investors Investor Investors Individuals Investors Investor Investors Individuals Investors Investors Investors ,232 1, % 29.9% % 50.3% % 26.6% ,247 3, % 29.9% % 37.8% 3,730 1, % 19.1% ,248 2, % 28.2% % 36.9% 6,875 2, % 24.2% ,595 1, % 24.6% % 44.7% 5,913 3, % 28.0% ,682 1, % 21.1% % 49.7% 6,295 3, % 29.6% 13

14 Median REO Purchase Price by Year of Sale out of REO $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Fulton County $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 New York City Miami-Dade County $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 14

15 Fulton County NYC Miami-Dade Share of Sales out of REO Flipped within 30% 3 Months 20% 10% 0% % 12 Months 20% 10% 0%

16 Policy Implications REO accumulations vary tremendously Recent reductions in stock The REO Problem may resolve itself But liquidation rates have also slowed HUD owned properties linger in REO longer May need to be watched closely by local governments or managed differently by HUD Federal policies could have a big role in some markets Concentrations in minority neighborhoods confirm need for place-based policies 16

17 17

Independence, MO Data Profile 2015

Independence, MO Data Profile 2015 , MO Data Profile 2015 5 year American Community Survey (ACS) Jackson County, Missouri Data sources: U.S. Census Bureau, American Community Survey (ACS), 2011 2015 (released December 8, 2016), compared