RealtyTrac Inc. has been the bearer of bad news through much of the housing downturn.
The Irvine-based company, which employs about 130 people, is considered a leading authority on home foreclosure data, which there has been a lot more of lately due to fallout from the housing crash.
Chief Executive James Saccacio calls his company’s services “the democratization of data” in the housing market, where hard-to-gather information historically has been kept out of the hands of the public.
“We’re about creating transparency,” Saccacio said. “You hear a lot about transparency, but not too many people do anything about it.”
Saccacio was one of seven entrepreneurs honored at the Business Journal’s annual Excellence in Entrepreneurship award luncheon held March 18 at the Hyatt Regency Irvine.
The down housing market has been a boost for RealtyTrac. But the company was profitable during the run-up in housing values earlier this decade, according to Saccacio.
RealtyTrac’s monthly reports are cited prominently by the country’s biggest media outlets, and its data on more than 1.5 million distressed homes increasingly is used by individuals and investors looking to find bank-owned homes on the cheap.
The company’s Web site gets more than 3 million unique hits a month, according to Saccacio. Individuals, Realtors, businesses and government agencies pay a monthly subscription to get the company’s detailed property data.
But RealtyTrac hasn’t always been that popular.
The company began in 1996 with all the problems of a startup, Saccacio said.
When he came across the company in 2000, it still was working to get its feet underneath it and needed funding.
“They were a little early to market. They still had the characteristics of a startup,” Saccacio said.
He personally funded the company along with a handful of others, primarily friends and family.
Saccacio previously was the principal of Transition Management Group, a turnaround specialty company.
“I’ve always loved the underdogs,” he said.
Saccacio heard plenty of naysayers during his first few months at RealtyTrac. Their common refrain: “There’s no market for this,” he said.
When Saccacio joined, sales of foreclosed homes where borrowers were upside down on their mortgages made up less than 1% of the national housing market. They made up a similar amount in California.
Now, those sales make up more than half of the monthly sales here in Southern California.
When the housing market was hot, plenty of critics questioned the wisdom of RealtyTrac’s business plan. But the company was able to forge a couple key partnerships, including a 2002 deal with Yahoo Inc.
The company also found that individual investors,many of whom were being priced out of the then-thriving housing market,liked scouring its data for home buying deals.
The Yahoo pact gave the company belief it could succeed, Saccacio said.
Within 13 months of his joining the company, RealtyTrac,which at the time still only counted a handful of employees,began turning a profit.
It’s been rapid growth since then, in terms of subscribers as well as RealtyTrac’s data gathering. The company now aggregates foreclosure data from more than 2,200 counties, covering more than 90% of U.S. households.
It adds estimated property values, comparable sales, loan history, tax lien and bankruptcy records, trustee and lender information and property details. The company updates its database twice daily.
By 2003, RealtyTrac’s Web site started getting 1 million monthly views. It doubled that volume by 2005.
Traffic isn’t likely to slow down any time soon.
The company reports that foreclosure filings in the U.S. climbed 30% in February from a year earlier, even with the efforts of the government and mortgage lenders to prevent more people from losing their homes.
A total of 290,631 homes received default or auction notices or were seized by lenders in February, the company said a few weeks ago.
Properties that got foreclosure filings for the first time totaled 161,976. That’s the highest level in RealtyTrac’s records.
A rebound in the housing market shouldn’t hurt RealtyTrac’s business, Saccacio said. Subscribers aren’t expected to go away.
The site “is about investment opportunities,” he said. “It’s about home buying opportunities.”
