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» VISIT US ONLINE @ DSNEWS.COM 61 has already been highlighted—we do expect a softening of the overall market, but would note that specific micro-markets are still witnessing very strong residential housing growth and we expect those markets to remain strong over the next year (e.g. Dallas, Texas; Denver, Colorado; and the Pacific Northwest). is requires us to allocate adequate resources to ensure appropriate coverage for those markets, all while ensuring continuity in the markets that are starting to soften a bit. With respect to the default/portfolio space, while we expect to continue to see a gradual decline in the overall volume of assets, we have seen a strong uptick in the volume of portfolio trades over the past two years and expect that trend to continue, ensuring a strong demand for alternative valuation products over the next year plus. In addition, as the NP assets work their way through the different stages of default, we expect to see an increase in valuation services demand for disposition decisioning. All this to say that our forecast for the next year (and longer) remains very optimistic, both in the front end origination space as well as the default/portfolio space. VALUATION TOM O'GRADY CEO, Pro Teck Valuation Services Forecasting the 2017 housing market would have been easier before the presidential election. Most pundits believed that Hillary Clinton was going to win, and any changes to the regulatory or financial markets would have been minor shifts based on similar ideology. Not so with Donald Trump's victory. Trump's transition team website has harsh words for Dodd-Frank, and states changes will be made to make it easier for banks to loan. How this is done and what specific changes are made is still very much a mystery. If we assume no drastic changes in the short-term, I'd call 2017 the year we get "back to supply and demand fundamentals." Lower foreclosures, increasing new home construction and loosening of credit policy should all help improve the health of the 2017 housing market. Foreclosed properties sell at a discount; have too many and they impact the entire market by slowing price appreciation. Today, 21.6 percent of the top metros in the country have foreclosure as a percentage of market sales over 10 percent, down from 35.6 percent 12 months ago. We believe this reduction will continue in 2017, leading to more market-based selling. Inventory is tight because new construction came to a standstill after the housing crash, leaving a four year gap in the creation of new housing. As more new supply becomes available, months of remaining inventory should rebound to historic norms. For interest rates, most anticipate a mod- est increase and further actions to make credit available to more people–all these factors combined should help the nation's real estate market to return to supply and demand market fundamentals, with fewer foreclosures and more new home sales. Finally, there are some concerned that a few markets like San Francisco are approaching or passing bubble peak. We believe these values are based on strong market fundamentals. Today's access to credit and underwriting is much more conservative than the loose credit and subprime lending that led to the bubble and housing crisis of the prior decade. VALUATION BRIAN MINGHAM President, National Real Estate Solutions Since 2008 our economy has struggled with employment and income gains, and both are currently starting to grow slowly. With these items in conjunction with the housing crisis our recovery has been very slow and prolonged, and we will still feel the effects into 2017. In the heart of the crisis, property values were crushed and familys lost enormous wealth and more importantly their homes and their community. Property values have come back most of the way in many part of our country because of historic low rates that help affordability and many investors, both small and large, taking this inventory and making it safe and livable housing across the U.S. With the 2016 election behind us, the President Elect, Donald Trump, is considered to be a pro-banking president, and some of the laws passed during the past few years like Dodd-Frank and the Affordable Care Act will most likely be gutted and will allow banks to begin taking more risk with less regulation and EXPERT OPINION "With respect to the default/portfolio space, while we expect to continue to see a gradual decline in the overall volume of assets, we have seen a strong uptick in the volume of portfolio trades over the past two years and expect that trend to continue, ensuring a strong demand for alternative valuation products over the next year plus." –TAMI RUND EXPERT OPINION "Today, 21.6 percent of the top metros in the country have foreclosure as a percentage of market sales over 10 percent, down from 35.6 percent twelve months ago. We believe this reduction will continue in 2017, leading to more market-based selling." –TOM O'GRADY

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