Company executives told HW that the new index data, in development at the firm for that past year and a half, combines both paired-sales and price-per-square-foot indices to offer multiple perspectives, rather than a single model. The Clear Capital “HDI,” as company officials call it, also offers data insight in near real-time, via rolling quarters based on current data, rather than on a monthly or quarterly basis.
“Existing valuation products are key to viewing value at a distinct point in time, but our new HDI adds critical context and dimension — so you know what the market was doing before, during and after that valuation,” said Kevin Marshall, Clear Capital’s president. “The ability to provide timely insight into how market forces affect each property value helps our lending and servicing customers, our vendors, and our staff determine the most accurate property values possible.”
Clear Capital isn’t the only provider, however, moving into the new neighborhood or local-level data frenzy that is quickly coming to dominate collateral risk management and loan level pricing strategies; while the specifics surrounding the type of data reported and modeling efforts used will vary significantly between firms, other companies are also looking to stake a claim in more granular property data, as well.
Jacksonville-based Lender Processing Services, Inc. (LPS: 24.92 +2.85%) — a giant in the mortgage default services space — also announced Monday that it was jumping headlong into hyper-local property and loan data, with its Neighborhood Outlook product offering. The platform provides forecasts of value, as well as delinquency and inventory trends for the immediate neighborhood surrounding a specified property. The idea is that servicers can get a feel for what property value in the future might look like, when deciding what price to take on a short sale, among other uses.
“The continuing increase in mortgage defaults, foreclosures and REO inventories demand the origination, capital markets and servicing industries use more detailed information about properties and localized market trends in their decision making,” said Jon Davis, managing director of LPS Applied Analytics’ Valuation Solutions group, in a press statement.
“A nationwide trend might not always prove true for a specific neighborhood. In fact, frequently, there are significant variances from nationwide and even regional trends. Neighborhood Outlook enables us to drill down to the neighborhood level to understand a property’s current value and its likely direction in the near future.”
Denver-based Integrated Asset Services rolled out a neighborhood-level home price index earlier this year, called the IAS360. The company’s own HPI measures the monthly change in median house sales nationwide, regionally and in 360 counties, with a one month lag on the data; the index is part of the company’s related housing data services offering that provides a granular view of neighborhood market conditions and local price volatility to servicers and investors.