Check out this web site...

Posted by: Dean Foust on May 25, 2007

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I recently stumbled across a fascinating web site that provides an early read on future housing activity in scores of cities across the country—using real-time data on home listings. It’s called OSG Boomerang Technology- Hardtack, and it wasn’t designed so much to become a commercial venture as a way for the Dallas-based IT services firm that designed it, OSG Corp., to showcase the capabilities of a new technology platform they’ve created. (More details on who these guys are, and why they built this site, can be found at the end of this blog entry for the curious…)

What makes the Hardtack site unique is that it provides real-time (okay, close to real-time) data on scores of housing markets nationwide – and not data of recent sales, but data on the inventory of homes still for sale in each market, the median and average prices sellers are asking, etc. OSG does this largely by designing “bots” that go out and retrieve listings data regularly from home sales web sites, like Realtor.com, then scrubs it for duplicate listings).

So while the NAR recently reported home sales and prices for April, you could use Hardtack as an early indicator of what sales might look like in coming months. Are sellers dropping prices? Raising prices? Is the number of unsold homes rising or falling? The site shows data in bar charts and graphs, and even has a nifty Google Earth-like feature that lets you view overhead maps of markets.

I spoke with two of the engineers behind Hardtack, Tony Gibson and Bruce Henderson. And to discuss Hardtack’s capabilities, we discussed one of the favorite markets of this blog: Washington, D.C…..

First, a disclaimer that Hardtack is a work in progress, and it doesn’t claim to be representative of the entire U.S. real estate market (for one, Hardtack’s count of unsold homes nationwide is less than the NAR’s count). It’s best used as a resource for spotting trends early. And while Henderson has been collecting data on many markets since he began building the site a year ago, what you’ll see at Hardtack is data since February, when the site went live.

As for the Washington D.C. SMSA, the site shows that the inventory of unsold homes has risen 11% in the past 28 days, and by roughly 37% since late February, vs. an 18% rise in inventory nationwide. Interestingly, the average asking price -- $587,000 – hasn’t budged. Henderson (who liked me, lived in Washington for a period of his life) can’t explain it, but wonders if that’s a sign that a number of sellers have tapped out their equity and can’t afford to cut prices. Same situation with condos – a 47% rise in listings since February, but little movement in asking prices. (Washingtonians, why is that?) You have to figure the dam’s going to break at some point.

I’d love it if readers played around with the site and file reports about other trends around the country.

Finally, I promised earlier that I’d explain why OSG built this site – since my first question upon finding this site was, “Who are these guys and why did they create this?” One of OSG’s specialties is designing systems for large financial-service firms that captures and collects data from a company’s internal databases and then allow top execs to spot emerging trends – for instance, helping a bank to spot real-time trends in demand for mortgages, city-by-city, which types of mortgages are hot, etc.

OSG wanted to provide prospective clients with an example of what the firm is capable of doing, and decided to build their prototype around housing values, in part because it’s a topic of universal interest and partly because their bots could easily collect listings data from NAR chapter sites around the country.

As mentioned earlier, the site show local market trends since February, even though Henderson has a year’s worth of data in his computer. Some data points he shared with me:

Bakersfield, Calif.: 18% rise in inventory since May 2006, and 13% drop in median price, to $280,000.

Bloomington, Ill.: 35% FEWER homes for sale, and a 10% rise in median price of homes currently listed, to $192,900.

Boise, Idaho: 68% rise in inventory since May 2006, yet 1% rise in appreciation. Can this continue?

Boston: 34% more homes, and 12% drop in median price of listed homes, from $450,000 last year to $397,500 at present.

Las Vegas: 41% rise in unsold homes, to 7,201, with a 9% drop in median price, to $336,000. As for condos, inventory of unsold condos now stands at 6,454, a 59% rise in inventory with only a 4% decline in listed prices.

Reader Comments

Brian R.

May 25, 2007 11:21 PM

As to Bruce Henderson's thought that listing prices in Washington, D.C., have not fallen perhaps because the sellers have tapped their equity, and therefore feel unable to cut their prices further, why can't Bruce's (OSG's) system retrieve such information from public records? After all, if a homeowner wants to get at the equity, often the homeowner will do so by refinancing. As such, a new mortgage (with a higher balance) will have been recorded with the county. Granted, the homeowner could tap the equity instead by increasing his Home Equity Line of Credit, in which case a new mortgage would not have to be recorded.

Further as to why prices have not dropped more even though sales are down, as one of your magazine's articles stated this past December ("How Bad Will the 2007 Property Market Be?"), "Home price trends tend to lag 9 to 12 months behind sales trends, according to Stiff [chief economist for Fiserv Lending Solutions]...." If that trend holds, then many, if not most, markets are just beginning to see prices drop (or drop markedly, anyway]. Stiff predicted that prices will be weakest in 2008 and rebound in 2009. Albeit in hindsight, I have to add another comment from that December 2006 article, which is as follows: "It's important to note that the value of homes isn't dropping," according to Santo Rizzo, CEO of Rizzo Realty Group, a Chicago-based national real estate investment firm. One has to wonder on which figures Mr. Rizzo based his statement.

Further as to why perhaps prices have not (yet) dropped to the degree many analysts have predicted, spring is the least likely time to see a price drop. After all, hope springs eternal, and spring is the beginning of the long selling season. (Or at least a long season in the sellers' minds.)

Finally, as to the claim that Boise's market has appreciated 1 percent since May 2006, see the article linked below. As that article states, since July 2006 the median price of a home in Ada County (in which Boise sits) has fallen from $248,900.00 to $229,995.00, according to the local MLS figures. (As a percentage, roughly a 7.6 percent drop.) Also as to Boise, it, like virtually all of the rest of the Northwest, was late in arriving at the housing boom party, and is likewise late in seeing its market cool.

http://www.idahostatesman.com/business/story/85769.html

Bruce H

May 26, 2007 3:29 PM

Brian R. - Outstanding comment, scavenging records of sales, amount financed, foreclosure and other data from the public record; it is something we would very much like to expand into in the future.

I agree with your comment on Boise, please remember this is tracking the asking price only, not what is actually brought and sold. What Hardtack is saying is that for Boise, the median asking price for a property is 1% than the asking price last year. That means on average, appreciation is now flat in Boise, one of the last big bubble towns.

For folks who are counting on the Refi engine to pull them along, this lack of appreciation is really a death knell.

Yes, there are a lot of ways we can expand and enhance our information to cover a broader range of key performance indicators. We hope to implement some of that over the course of the next several months.

WCS

May 27, 2007 5:48 AM

I'm in the Portland, Maine area and love the OSG Boomerang site and have linked to it from my blog.

In Cumberland county, housing inventory has been rising along with the median & average price. I think you are correct about prices not budging due to owners not having the option. Many have gone upside down. Maine was second to New Hampshire compared to the rest of the nation in the increase in foreclosures from March to April 2007 according to April data from RealtyTrac. Foreclosures in Maine were up 73.85%.

Another explanation is that we have many luxury coastal properties and a second/vacation home market that may be most active now as far as listings. Additionally, Portland just had a property tax increase approved by the council. There's also legislation on the table to cut the mortgage interest tax break and increase the property transfer tax:

http://www.maineshakedown.com

Anyway, cheers for the bots, Bruce and Tony! I'll check it often.

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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