Industry Trends – July 2009

The end of August is near, and that means it’s time for the monthly Industry Trends report.  We’ve mentioned a couple times already that endorsement volume for the year is running almost neck and neck with last year – it’s a virtual dead heat as 2009 numbers trail 2008 by 21 units. But what makes this interesting is when we begin looking at things on a geographic basis (State, County, and even Zip Code). This is where we see the divergent growth patterns that make a market a market, and why some of you are seeing weakness while others are seeing strength for the year.

  • Of the top 10 states by volume, California, Texas, New York, Illinois, Virginia and New Jersey are experiencing growth this year, with New York leading the way at 47.1%. Heading up the down states, FL has slid 29% vs. last year. (Not on this report, but falling sharply, are Nevada, Michigan and West Virginia)
  • From a competitive standpoint, Florida looks a little oversaturated at the moment. 7 of the top 10 zip codes in terms of competition are in Florida. If you are primarily in the 33012, 33155, 33147, 33165 or 33175 zip codes, you are probably finding it hard to find new business these days – particularly with the refinance boom largely behind us.
  • Market penetration is moving up, in some cases significantly: DC is now at 6.7%, CA 3.6%, MD 3.5%, FL and OR at 3.0%. At the city level, in Opa Locka, FL over 16% of the eligible homeowner households have taken out a reverse mortgage. In Compton, CA, the number is up to 14%. Take a look at the top 10 cities by market penetration on page 2 – all of these areas have been hit hard by the recession and home price declines.

We get asked all the time by readers how they can use our reports to make more money.  It’s the right question to ask given the scarcity of risk capital these days and we’re sure each of you are thinking hard before committing resources toward anything.  Compare your company’s state volume changes  over the past year against our table on page 1.  If you’re in any of these 10 states, are you performing better or worse than the industry average?

We see many lenders start utilizing better information as a tool to understand where opportunities are being missed, and manage their sales and marketing efforts to ensure that they don’t miss a rising tide as the market changes.  A great example is found just outside our front door here in Orange County, CA, where loan unit volume is up 147% so far year to date and total MCA is up an astonishing 229%!

If you’re licensed in California and missing out on this opportunity that’s a lot more expensive than any report we sell.  Check out our Retail reporting solutions and stay on top of your game as the market changes!

Industry Trends - July 2009