Financial Services Advisor^TM Weekly financial services insights from Compete

FORECLOSURE.COM: WHO'S SEEKING RICHES IN SUB-PRIME'S WAKE

By: Mike Bailey

July 23, 2007

In a recent Compete blog article it was noted that foreclosure.com had recently joined the ranks of sites that receive over 1 million visitors a month. That got us thinking about why the growing interest and what those people were doing once they got to the site.

In a typical recent month (March – May 2007), over 1.2 million people visited foreclosure.com. That volume is up over 22% from same period last year. This is not surprising given the 15%+ default rate on sub-prime adjustable mortgages reported in Q1 2007.

Searchers tend to be male and of middle income ($30k-$60k annual household earnings), and are likely using the site to search out real estate investments. Many foreclosure.com visitors are in their middle years (ages 35-44) – when they may be looking for a second home for vacation purposes – or nearing the end of their working career (ages 55+) and potentially seeking a place to spend their retirement.

Compete measured the number of visitors searching for properties within each state. States that received the most interest from foreclosed property searchers were California, Texas and Wisconsin. Relative to its online population, Wisconsin is also among those states with the highest propensity* to be searched for foreclosures along with Alaska and Wyoming (see accompanying exhibit). As a group, the Mountain region states attract much more than their expected share of foreclosure search activity; other highly active states include the Carolinas and those states most impacted by Hurricane Katrina. States with the lowest search propensity are Illinois, Iowa and New Jersey; other low-interest locales include the Middle Atlantic and West North Central regions.

Compete’s panel behavior reveals that most visitors (85%) are casual in their hunt for foreclosed properties as they visit at most once a month; nonetheless, one out of every 7 visitors comes back multiple times monthly and is actively searching for that next great opportunity.

MONTHLY METRICS: HAVE HOME LOANS HIT BOTTOM?

Financial Services Indicators: Change From May 2007 to June 2007

*Propensity is determined by comparing the number of foreclosure.com visitors searching foreclosed property in each state with the overall number of Internet users in that state.