2010 NIFA Housing Innovation Marketplace, 1/27/2010

Recent (2009) Trends in Single Family Housing Sales Across Omaha

Steven Shultz

University of Nebraska at Omaha

Website: www.unorealesate.org

Parts of this research have been supported by a NIFA Housing Study Grant:

“Community Development and Property Value

Appreciation in Omaha”

Today’s Presentation1) SF Price Appreciation Omaha (2006-2009)

2) SF Loan Types, Omaha: 2000-2009

3) Douglas County Foreclosures: 2000-2009

4) Sub-Prime Lending (Omaha): 2006-07

5) Speculation’ about the causes of Omaha price depreciation & foreclosures

6) Ongoing research efforts

Alternative Appreciation Calculations

*

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2) Repeat Sales (Case & Shiller or OFHEO)

1) Non-Parametric (National Association of Realtors)

3) Hedonic Regression (Crone & Voith)

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Omaha Single-Family Housing Price Appreciation (2000-09)(based on median values of existing homes sales with outliers removed)*

(Also: these median estimates are likely more optimistic than hedonic or repeat-sale price indices)

* Based on analyses of the median sale prices of 64,700 arms-length existing single-family housing sales in the Omaha Area Board of Realtors multiple listing service database from January 2000 through December, 2000. The study includes the Greater Omaha community (including the cities of: Bellevue, Elkhorn Gretna, La Visa, Omaha, and Papillion). Existing homes are defined as those with an age at the time of sale of less than 2 years. Sales were treated as outliers and removed from the analyses if their sale prices were less than $20,000 or greater than $525,000, and if they contained less than 350 finished square feet of living area or more than 5300 square feet of living area. Sales that were either condominiums or detached homes, or homes within the 100-year floodplain were also dropped. A total of 10,480 sales were dropped from the original sale database

** Hedonic price analyses based on multiple regression from 2000 to 2008 were reported in a previous UNO study (www.unorealesate.org)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

App

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Appreciation Rates

•2006-2008: +2% (vs -4% from Hedonic

estimates*)

•2008-2009: -3.6%

•2006-2009: -2.1%

•Range of 2006-09 Appreciation (across zip-codes): -10% to

+6%

Appreciation by Zipcodes(Hedonic Modeling & 2006-2008)

Housing Appreciation by House Value (2006-09)

Sources of Mortgages in Omaha

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Govt

Conventional

Cash

Government Sponsored Mortgages (2000-2008)

% By Market Segment

Percent> 0%

< 60%

Percentage of Mortgages that are Sub-Prime by Census Tract

- 41lender had at least 25% of their mortgages classified as sub-prime. - 13% of all 2006-2007 mortgages were sub-prime

Douglas County Foreclosure Info 2000-2008

0

200

400

600

800

1000

1200

1400

1600

1800

2000 2001 2002 2004 2006 2007 2008

Default Notices

Foreclosures

• Self-cure rates of 43% (2000-08)

• 1.9% if a homes getting notices (07-08)

• Price Discounts: Avg: 16%

Foreclosure Notices as a Percentage of Total Housing By Zip Code (2007-2008)

warning: these are outdated numbers

Some Speculation

Ongoing Research

1. Additional Estimates of Price Appreciation (up to 2009) based Hedonic Price Models & Repeat Sales (release by zip-codes)

2. Price appreciation: tract (cookie cutter) vs. traditional homes

3. Further Analyses of the nature and impact of serial sub-prime lenders in Omaha

4. Finishing up the original NIFA project (what factors influence price appreciation)