Metro Phoenix Economic Snapshot 2010 Mid Year Update Lou

January-June 2010 Average Sales Price By City Glendale: $133,694

M E T R O

P H O E N I X

Phoenix: $148,161 As a proud Valley resident, I am pleased to specialize my real estate craft in this community. Turn to me for market facts and statistics, questions about buying or selling, or for “in-the-know” referrals for local goods and services!

Mesa: $166,238 Peoria: $182,312 Litchfield Park: $206,415

WHY WORK WITH ME? Buyers and sellers in today’s challenging market need an experienced, knowledgeable REALTOR now more than ever before. Choosing the wrong agent can make or break your entire transaction. Choosing an agent that excels in the industry, has your best interests at heart and can serve as a trusted advisor for you is critical.

YOU CAN HAVE CONFIDENCE IN MY EXPERTISE How do you know a REALTOR is up-to-date with the latest skills necessary in the industry? I believe in continuing education to keep up with today’s Real Estate trends and have completed my CRS (Certified Residential Specialist), GRI (Graduate of Realtors Institute), ABR (Accredited Buyers Representative) and my CDPE (Certified Distressed Property Expert) designations so that I can more effectively represent you, my client.

HOW IS WORKING WITH ME A BENEFIT TO YOU? I believe in empowering my clients with INFORMATION. I will be available to answer all of your questions in a timely and informed manner, drawing on all of my resources.

I will listen to all of your needs and objectives and work with you to meet that goal. I also offer a “LOVE it or leave it GUARANTEE!” Contact me to hear more about it!

PROFESSIONAL ASSOCIATIONS • Active Arizona Real Estate License • Active member of the National Association of REALTORS®, Arizona Association of REALTORS®, and Scottsdale Area Association of REALTORS® • Board Member of the Fountain Hills Chamber of Commerce • Member of the Fountain Hills Noon Kiwanis.

• Member of StarPower Systems; a top producing real estate agent training network

Tempe: $210,123 Gilbert: $212,772 Chandler: $223,088 Cave Creek: $369,248 Fountain Hills: $519,651 Scottsdale: $552,027 Carefree: $769,102

Paradise Valley: $1,458,505

Statistics gathered from ARMLS. All information deemed reliable but not guaranteed.

(Single-Family Residences)

January-June 2010 Sales Statistics By Zip Code Zip Code

Average Sales Price

Days On Market

List/Sell Price Ratio

M I D -Y E A R U P D AT E

# Closed

85004..............................................$261,750.................. 124...................87%............................5 85008................................................$85,625................... 60....................98%..........................191 85013..............................................$176,457................... 74....................96%..........................112 85016..............................................$226,612................... 72....................93%..........................194 85018..............................................$437,363.................. 107...................93%..........................242 85032..............................................$145,523................... 70....................97%..........................498 85044..............................................$243,196.................. 109...................96%..........................243 85086..............................................$233,633................... 82....................98%..........................736 85087..............................................$213,614................... 94....................98%..........................124 85205..............................................$152,987................... 83....................96%..........................332 85212..............................................$173,641................... 76....................99%..........................302 85226..............................................$226,326................... 73....................97%..........................239 85248..............................................$294,031.................. 102...................95%..........................393 85251..............................................$286,054................... 75....................91%..........................112 85253...........................................$1,463,107.................. 214...................89%..........................172 85254..............................................$313,744................... 92....................96%..........................376 85255..............................................$728,373.................. 121...................93%..........................512 85257..............................................$171,129................... 78....................97%..........................177 85258..............................................$515,006.................. 138...................92%..........................151 85260..............................................$443,988.................. 112...................87%..........................206 85266..............................................$654,688.................. 151...................93%..........................190

602.400.0250 Direct Lisa@MyHassleFreeListings.com RE/MAX Sun Properties 16704 E. Avenue of the Fountains #101 • Fountain Hills, AZ 85268

www.MyHassleFreeListings.com If your home is currently listed, this is not a solicitation for that listing.

85282..............................................$167,100................... 74....................96%..........................210 85283..............................................$175,629................... 80....................95%..........................154 85284..............................................$371,892................... 89....................96%..........................121 85296..............................................$195,481................... 69....................98%..........................500 85326................................................$93,736................... 69....................99%..........................971 85340..............................................$206,415................... 85....................97%..........................364 Statistics gathered from ARMLS. All information deemed reliable but not guaranteed.

(Single-Family Residences)

Produced by Desert Lifestyle Publishing • 480.460.0996 • www.DesertLifestyle.net

Economic Forecast Rain or Shine?

Local Housing Market

Who’s Buying & What’s Selling

Recession Recovery: Steady or Sporadic?

R E S I D E N T I A L R E A L E S TAT E HOME VALUES The topic of current home values is enough to make any homeowner cringe. The Metro Phoenix area has experienced a 52% decrease in home values from its high in June 2006. In fact, figures from the Federal Housing Finance Agency show that home values in the last year dropped more in Arizona than in any other state. Maricopa and Pinal counties, which make up Metro Phoenix, saw a decrease of 17.6% over the last year. When compared to the national index of a 3.1% decline in home values, it’s clear that our area, once appreciating at a record pace, has suffered.

Now onto the good news. Within the past year, we’ve seen record sales activity particularly in the lower-price-point properties. Many of those listings experienced multiple offers and sales above list price. We are now seeing stabilization and price appreciation in the lower-end home market, and now even a tapering off of price declines in the luxury market. Jay Butler, ASU real estate professor said, “A year ago, people found a lot of inexpensive homes available, either through foreclosures, short sales, whatever. These have been sort of cleaned up, so we’re moving up the ladder of home prices.”

Recently the Arizona State University-Repeat Sales Index marked the second consecutive month in which the index posted a gain rather than a decline. The home price index had been falling for the past three years, but showed a 2.7% gain instead. Median sales prices for single-family homes have risen each month during the first half of 2010 (see the chart “January – June 2010 Sales Statistics”). Home values are certainly moving in the right direction.

The luxury market, which typically lags behind the lower-end market, is now showing small signs of improvement. With higher consumer confidence, improvement with our national economy and wealthy individuals unaffected by unemployment steadily moving off the sidelines, the luxury market is beginning to see a change for the better.

G E N E R A L E C O N O M I C S N A P S H OT RAIN OR SHINE? again. We should see about a 2.5% Just as a meteorologist predicts weather increase in consumer spending this year.

2010 Economic Forecasts patterns, economists use data and indicators to Modest, but at least it’s positive. Adding to determine the state of our economy. So, as far as our economy goes, what can we expect for the remainder of 2010: Rain or shine? While opinions vary among experts, the common consensus appears to be a forecast for partly sunny skies with a chance of showers.

As beaten and battered as many of us feel today, it’s encouraging to note that the US economy is in a better position today than a year or even two years ago. While the gains we’ve experienced have been gradual and incremental, they are solid enough that they should prove to be real and durable.

THE SUNNY SIDE Arguably the most critical component of our recovery is employment and we’ve seen a pickup in not only employment, but also income. Job losses have slowed considerably and employers are beginning to add to their workforce, albeit slowly. Further, hourly wages have increased by 3.5% since August 2007.

The Labor Department released a job openings report for April which shows the number of jobs advertised at 3.1 million – the most openings since December 2008. Here in the Phoenix area, more employers are planning to hire workers in the third quarter than are planning to lay off, according to a Manpower Employment Outlook survey. That makes three consecutive quarters with a planned net gain in local employment.

The economic recovery is gaining strength from the biggest rise in construction spending in a decade and the 10th straight month of expansion for manufacturers. Also helping to drive the growth is business spending and the need to replenish lean inventories.

Exports are expected to return to prerecession levels, as we’ve seen an expansion by more than 14% in 2010, the fastest pace since 1988. Sales to Canada, Mexico and Asia will recover more quickly; while exports to Europe will climb slower due to the financial turmoil in that part of the world.

Also playing a role in our recovery: Rising consumer confidence. The Conference Board Consumer Confidence Index has increased in recent months. As of press time, the Index now stands at 63.3. The monthly index is creeping up from the low of 55 during the financial crisis to the prerecession mark of nearly 100.

Consumers are beginning to make purchases

the positive trend, Americans’ debt levels and savings are improving and household net worth is up over last year. Things are moving in the right direction.

Gross Domestic Product........................... 3.3% Nonfarm Payroll Employment (change in millions)................................... 1.3 Unemployment Rate............................... 9.6% S&P 500 Index Price (year end)................ 1225 Personal Consumption............................ 2.6% Business Capital Investment Growth........ 3.0% Housing Starts (millions)............................ 0.7 New Home Sales (millions)......................... 0.4 Existing Home Sales (millions).................... 5.3 State & Local Govt. Spending..................-1.4%

CLOUDY WITH A CHANCE OF RAIN While positive employment trends may show a sign for recovery, the fact that so many Americans are still out of work is a continual drag on the recovery. Some experts believe it will take until late 2012 to recover the jobs lost in this recession and until 2014 to return to a more normal 5-6% unemployment rate. With millions out of work, we can’t expect consumer spending to increase to prerecession levels Source: SIFMA’s (Securities Industry and Financial Markets anytime soon.

Association) Mid-Year 2010 Economic Outlook.

Secondly, until credit availability for consumers as well as businesses loosens up, it’ll be difficult for our economy to momentum? Low interest rates, attractive home grow. Small business employees account for nearly prices and rising consumer confidence should half of all jobs in the US. Until businesses are able play a role in continued home sales for the to secure needed financing, there may be a delay remainder of 2010. in further hiring and expenditures.

WILDCARDS The volatile stock market, the European financial crisis, SB 1070….these are all issues looming with uncertainty that may or may not drag us into a “double-dip” recession or affect our recovery. As we near the end of the year, we’ll have a better idea as to the impact or non-impact of these issues.

INTEREST RATES & THE TAX CREDIT Mortgage interest rates are still at amazingly low levels. At the beginning of the year, the Fed was purchasing mortgage-backed securities, which kept rates low. When that program ended, there was speculation that we’d see a spike in rates.

However, just the opposite has occurred. Interest rates have fallen as the European financial turmoil has boosted international demand for US government securities.

The First-Time Homebuyer Tax Credit and Existing Homebuyer Tax Credit introduced in 2009 and extended into 2010 has done just what it was designed to do: Stimulate home sales.

Nationally as well as locally, buyers came out in force to take advantage of the generous government program. Now that the incentive is gone, can the housing market sustain its

THE ECONOMIC RECOVERY: SPEEDY OR SPORADIC? Researchers for the Federal Reserve Bank of San Francisco are predicting that the recovery from this recession will be faster than after previous recessions. John C. Williams, director of research at the Federal Reserve Bank, believes that the increase in home, car and retail sales point to a fast recovery. “I see no signs of a double dip.

The economy continues to gain momentum, and consumer spending and business investment continue to improve,” Williams said.

On the other hand, Federal Reserve Chairman Ben Bernanke predicts a slow economic recovery and said that interest rates will likely rise even before employment rises. “Even though technically we’ll be in recovery and the economy will be growing, unemployment will still be high for a while and that means that a lot of people will be under financial stress,” Bernanke explained.

So the forecast moving forward for the remainder of 2010 as partly sunny with a chance of showers depicts an economy that’s forging ahead and showing improvement; but there are still several indicators that could send a little rain on the parade before we make it to bright and sunny skies once again.

Information gathered from The Cromford Report, a local real estate research firm, shows that homes in the $1M - $1.5M market now sit at a 22-month supply vs. a 52-month supply in April 2009 and a 93-month supply in December 2008.

Need some more good news? Real estate is cyclical. Even with the recent steep drop in prices, most Arizona homes are worth almost double today than what they were worth in 1991. Can we expect home prices to double again? Consider this: Home prices have been doubling approximately every 12-15 years over the last 100 years.

Population growth projections for the Metro Phoenix area call for over 55,000 new homes each year for the next 10 years to satisfy demand.

(See the chart “Metro Phoenix Population and Housing Needs Forecast”.)

The desirable Valley of the Sun will be a destination for new homeowners for decades to come.

DISTRESSED PROPERTIES For the past 18-24 months, we couldn’t discuss our local housing market without the topic of bank-owned or foreclosure properties.

These distressed properties have become an unwelcome, stable part of our housing landscape and have had an impact on supply & demand, and home values in every part of the Valley and in every price point.

Today, the amount of sales we’re seeing from foreclosures is falling at a steady rate. Foreclosure sales have dominated the mix, with short sales and “normal” (considered neither a short sale nor foreclosure) sales lagging behind. The peak for foreclosure resales was 66.2% in March 2009. We’re now seeing foreclosure sales around 33%.

“It appears foreclosures may have finally made their downward turn,” said Tom Ruff, analyst for The Information Market. Lenders have increasingly steered distressed homeowners into foreclosure alternatives such as loan modifications and short sales.

Metro Phoenix Population & Housing Needs Forecast

2010 2020 2030 Population........................ 4,388,536................... 5,766,480.....................7,453,910 Annual % growth.................. 3.0%........................... 2.8%.............................2.6% Change over decade............................................. 1,377,944.....................1,687,430 New units each year................................................55,120......................... 67,480 Source: U of A, Elliott D. Pollack & Company. New units each year based on 2.5 persons per household.

WHO’S BUYING AND WHAT’S SELLING? The government tax credit deadline helped to fuel purchases of homes under the $150,000 mark, many by first-time homebuyers. Now, in the latter part of 2010, there is a smaller percentage of homes selling in the lower price ranges. Earlier in the year, investors made up a large amount of home purchasers, now it appears that there are more long-term buyers vs. speculative buyers. Today, more buyers are financing their homes with long-term mortgages and with the intent of living in them.

There has also been a shift in out-of-state buyers. Canadians represent the dominate group of buyers, dethroning Californians after many years.

California did come in second however, with Washington state third.

Midwesterners continue to purchase heavily in the Valley as well.

WHAT’S IN STORE FOR OUR HOUSING MARKET? The health of our market depends mainly on employment and the local job market. Secondly, there needs to be marked improvement with housing markets across the nation, as many would-be Valley homebuyers need to sell their homes before they can migrate here. Also, the possibility of future foreclosures flooding the market, particularly with the expectation of millions of ARMs resetting in 2011 causing a new wave of distressed borrowers, may have an impact.

If current trends continue, we’ll see modest but steady price appreciation, and more homes selling via short sales and non-distressed sales. With what experts call the official “bottoming out” of our market in April of 2009, every gain and each success since then is building confidence among consumers – which is exactly what our market needs to get back on track.

Top 10 Fastest Growing U.S. Counties 1. Kendall County, IL (Chicago)..........................92.1% 6. Forsyth County, GA (Atlanta).........................77.4% 2. Pinal County, AZ (Phoenix)................. 89.7% 7. Lincoln County, SD (Sioux Falls).................... 70.7% 3. Rockwall County, TX (Dallas).........................88.9% 8. Paulding County, GA (Atlanta).......................67.4% 4. Flagler County, FL (Jacksonville)....................83.9% 9. Williamson County, TX (Austin)......................64.3% 5. Loudon County, VA (Washington, D.C.)..........77.6% 10. Douglas County, CO (Denver).......................64.0% Source: US Census Bureau

January - June 2010 Sales Statistics

Housing Affordability Index

Single-Family Homes | Metro Phoenix

Greater Phoenix Area

Median Sales Price Avg. Days on Market Number of Sales January............... $129,900....................................86.................................. 4,855 February.............. $131,000 ...................................95.................................. 5,440 March.................. $135,589 ...................................96.................................. 7,440 April.................... $135,838 ...................................93.................................. 7,774 May..................... $137,990 ...................................92.................................. 7,679 June.................... $135,000....................................95.................................. 7,885 Source: ARMLS. Information is deemed reliable but not guaranteed.

Data maintained by ARMLS may not reflect all real estate activity in the market.

69.5 2000 Q1

49.3 2005 Q2

26.6 2006 Q3

33.2 2007 Q3

65.3 2008 Q2

83.6 2009 Q2

81.9 2010 Q1

Source: NAHB Housing Opportunity Index

Yearly Market Comparison

Jan-June 2009 vs. Jan-June 2010 | Single-Family Homes

NUMBER OF SOLD LISTINGS

2009 2010 Diff Chg January....... 4,230.........4,853.......... 623...........14.7% February...... 4,849.........5,432.......... 583...........12.0% March.......... 6,827.........7,437.......... 610...........8.9% April............ 7,601.........7,766.......... 165...........2.2% May............. 8,161.........7,662.......... -499.........-6.1% June............ 8,154.........4,724.......... -3,430......-42.1%

DOLLAR VOLUME OF SOLD LISTINGS

2009 2010 Diff Chg $ 777,731,941.............$ 911,304,246............ 133,572,305.............17.1% $ 859,187,212.............$ 1,013,402,466......... 154,215,254.............17.9% $ 1,100,011,643..........$ 1,412,236,023......... 312,224,380.............28.3% $ 1,227,951,267..........$ 1,421,144,753......... 193,193,486.............15.7% $ 1,367,855,390..........$ 1,443,694,329......... 75,838,939...............5.5% $ 1,440,058,524..........$ 939,545,285............ -500,513,239............-34.8%

MEDIAN SALE PRICE 2009 2010 Diff Chg 130,000............129,900........-100...........-0.1% 127,000............131,000........4,000.........3.1% 120,000............135,700........15,700.......13.1% 117,500............135,950........18,450.......15.7% 121,500............137,900........16,400.......13.5% 130,000............137,000........7,000.........5.4%

Source: ARMLS. Information is deemed reliable but not guaranteed. Data maintained by ARMLS may not reflect all real estate activity in the market.

R E S I D E N T I A L R E A L E S TAT E HOME VALUES The topic of current home values is enough to make any homeowner cringe. The Metro Phoenix area has experienced a 52% decrease in home values from its high in June 2006. In fact, figures from the Federal Housing Finance Agency show that home values in the last year dropped more in Arizona than in any other state. Maricopa and Pinal counties, which make up Metro Phoenix, saw a decrease of 17.6% over the last year. When compared to the national index of a 3.1% decline in home values, it’s clear that our area, once appreciating at a record pace, has suffered.

Now onto the good news. Within the past year, we’ve seen record sales activity particularly in the lower-price-point properties. Many of those listings experienced multiple offers and sales above list price. We are now seeing stabilization and price appreciation in the lower-end home market, and now even a tapering off of price declines in the luxury market. Jay Butler, ASU real estate professor said, “A year ago, people found a lot of inexpensive homes available, either through foreclosures, short sales, whatever. These have been sort of cleaned up, so we’re moving up the ladder of home prices.”

Recently the Arizona State University-Repeat Sales Index marked the second consecutive month in which the index posted a gain rather than a decline. The home price index had been falling for the past three years, but showed a 2.7% gain instead. Median sales prices for single-family homes have risen each month during the first half of 2010 (see the chart “January – June 2010 Sales Statistics”). Home values are certainly moving in the right direction.

The luxury market, which typically lags behind the lower-end market, is now showing small signs of improvement. With higher consumer confidence, improvement with our national economy and wealthy individuals unaffected by unemployment steadily moving off the sidelines, the luxury market is beginning to see a change for the better.

G E N E R A L E C O N O M I C S N A P S H OT RAIN OR SHINE? again. We should see about a 2.5% Just as a meteorologist predicts weather increase in consumer spending this year.

2010 Economic Forecasts patterns, economists use data and indicators to Modest, but at least it’s positive. Adding to determine the state of our economy. So, as far as our economy goes, what can we expect for the remainder of 2010: Rain or shine? While opinions vary among experts, the common consensus appears to be a forecast for partly sunny skies with a chance of showers.

As beaten and battered as many of us feel today, it’s encouraging to note that the US economy is in a better position today than a year or even two years ago. While the gains we’ve experienced have been gradual and incremental, they are solid enough that they should prove to be real and durable.

THE SUNNY SIDE Arguably the most critical component of our recovery is employment and we’ve seen a pickup in not only employment, but also income. Job losses have slowed considerably and employers are beginning to add to their workforce, albeit slowly. Further, hourly wages have increased by 3.5% since August 2007.

The Labor Department released a job openings report for April which shows the number of jobs advertised at 3.1 million – the most openings since December 2008. Here in the Phoenix area, more employers are planning to hire workers in the third quarter than are planning to lay off, according to a Manpower Employment Outlook survey. That makes three consecutive quarters with a planned net gain in local employment.

The economic recovery is gaining strength from the biggest rise in construction spending in a decade and the 10th straight month of expansion for manufacturers. Also helping to drive the growth is business spending and the need to replenish lean inventories.

Exports are expected to return to prerecession levels, as we’ve seen an expansion by more than 14% in 2010, the fastest pace since 1988. Sales to Canada, Mexico and Asia will recover more quickly; while exports to Europe will climb slower due to the financial turmoil in that part of the world.

Also playing a role in our recovery: Rising consumer confidence. The Conference Board Consumer Confidence Index has increased in recent months. As of press time, the Index now stands at 63.3. The monthly index is creeping up from the low of 55 during the financial crisis to the prerecession mark of nearly 100.

Consumers are beginning to make purchases

the positive trend, Americans’ debt levels and savings are improving and household net worth is up over last year. Things are moving in the right direction.

Gross Domestic Product........................... 3.3% Nonfarm Payroll Employment (change in millions)................................... 1.3 Unemployment Rate............................... 9.6% S&P 500 Index Price (year end)................ 1225 Personal Consumption............................ 2.6% Business Capital Investment Growth........ 3.0% Housing Starts (millions)............................ 0.7 New Home Sales (millions)......................... 0.4 Existing Home Sales (millions).................... 5.3 State & Local Govt. Spending..................-1.4%

CLOUDY WITH A CHANCE OF RAIN While positive employment trends may show a sign for recovery, the fact that so many Americans are still out of work is a continual drag on the recovery. Some experts believe it will take until late 2012 to recover the jobs lost in this recession and until 2014 to return to a more normal 5-6% unemployment rate. With millions out of work, we can’t expect consumer spending to increase to prerecession levels Source: SIFMA’s (Securities Industry and Financial Markets anytime soon.

Association) Mid-Year 2010 Economic Outlook.

Secondly, until credit availability for consumers as well as businesses loosens up, it’ll be difficult for our economy to momentum? Low interest rates, attractive home grow. Small business employees account for nearly prices and rising consumer confidence should half of all jobs in the US. Until businesses are able play a role in continued home sales for the to secure needed financing, there may be a delay remainder of 2010. in further hiring and expenditures.

WILDCARDS The volatile stock market, the European financial crisis, SB 1070….these are all issues looming with uncertainty that may or may not drag us into a “double-dip” recession or affect our recovery. As we near the end of the year, we’ll have a better idea as to the impact or non-impact of these issues.

INTEREST RATES & THE TAX CREDIT Mortgage interest rates are still at amazingly low levels. At the beginning of the year, the Fed was purchasing mortgage-backed securities, which kept rates low. When that program ended, there was speculation that we’d see a spike in rates.

However, just the opposite has occurred. Interest rates have fallen as the European financial turmoil has boosted international demand for US government securities.

The First-Time Homebuyer Tax Credit and Existing Homebuyer Tax Credit introduced in 2009 and extended into 2010 has done just what it was designed to do: Stimulate home sales.

Nationally as well as locally, buyers came out in force to take advantage of the generous government program. Now that the incentive is gone, can the housing market sustain its

THE ECONOMIC RECOVERY: SPEEDY OR SPORADIC? Researchers for the Federal Reserve Bank of San Francisco are predicting that the recovery from this recession will be faster than after previous recessions. John C. Williams, director of research at the Federal Reserve Bank, believes that the increase in home, car and retail sales point to a fast recovery. “I see no signs of a double dip.

The economy continues to gain momentum, and consumer spending and business investment continue to improve,” Williams said.

On the other hand, Federal Reserve Chairman Ben Bernanke predicts a slow economic recovery and said that interest rates will likely rise even before employment rises. “Even though technically we’ll be in recovery and the economy will be growing, unemployment will still be high for a while and that means that a lot of people will be under financial stress,” Bernanke explained.

So the forecast moving forward for the remainder of 2010 as partly sunny with a chance of showers depicts an economy that’s forging ahead and showing improvement; but there are still several indicators that could send a little rain on the parade before we make it to bright and sunny skies once again.

Information gathered from The Cromford Report, a local real estate research firm, shows that homes in the $1M - $1.5M market now sit at a 22-month supply vs. a 52-month supply in April 2009 and a 93-month supply in December 2008.

Need some more good news? Real estate is cyclical. Even with the recent steep drop in prices, most Arizona homes are worth almost double today than what they were worth in 1991. Can we expect home prices to double again? Consider this: Home prices have been doubling approximately every 12-15 years over the last 100 years.

Population growth projections for the Metro Phoenix area call for over 55,000 new homes each year for the next 10 years to satisfy demand.

(See the chart “Metro Phoenix Population and Housing Needs Forecast”.)

The desirable Valley of the Sun will be a destination for new homeowners for decades to come.

DISTRESSED PROPERTIES For the past 18-24 months, we couldn’t discuss our local housing market without the topic of bank-owned or foreclosure properties.

These distressed properties have become an unwelcome, stable part of our housing landscape and have had an impact on supply & demand, and home values in every part of the Valley and in every price point.

Today, the amount of sales we’re seeing from foreclosures is falling at a steady rate. Foreclosure sales have dominated the mix, with short sales and “normal” (considered neither a short sale nor foreclosure) sales lagging behind. The peak for foreclosure resales was 66.2% in March 2009. We’re now seeing foreclosure sales around 33%.

“It appears foreclosures may have finally made their downward turn,” said Tom Ruff, analyst for The Information Market. Lenders have increasingly steered distressed homeowners into foreclosure alternatives such as loan modifications and short sales.

Metro Phoenix Population & Housing Needs Forecast

2010 2020 2030 Population........................ 4,388,536................... 5,766,480.....................7,453,910 Annual % growth.................. 3.0%........................... 2.8%.............................2.6% Change over decade............................................. 1,377,944.....................1,687,430 New units each year................................................55,120......................... 67,480 Source: U of A, Elliott D. Pollack & Company. New units each year based on 2.5 persons per household.

WHO’S BUYING AND WHAT’S SELLING? The government tax credit deadline helped to fuel purchases of homes under the $150,000 mark, many by first-time homebuyers. Now, in the latter part of 2010, there is a smaller percentage of homes selling in the lower price ranges. Earlier in the year, investors made up a large amount of home purchasers, now it appears that there are more long-term buyers vs. speculative buyers. Today, more buyers are financing their homes with long-term mortgages and with the intent of living in them.

There has also been a shift in out-of-state buyers. Canadians represent the dominate group of buyers, dethroning Californians after many years.

California did come in second however, with Washington state third.

Midwesterners continue to purchase heavily in the Valley as well.

WHAT’S IN STORE FOR OUR HOUSING MARKET? The health of our market depends mainly on employment and the local job market. Secondly, there needs to be marked improvement with housing markets across the nation, as many would-be Valley homebuyers need to sell their homes before they can migrate here. Also, the possibility of future foreclosures flooding the market, particularly with the expectation of millions of ARMs resetting in 2011 causing a new wave of distressed borrowers, may have an impact.

If current trends continue, we’ll see modest but steady price appreciation, and more homes selling via short sales and non-distressed sales. With what experts call the official “bottoming out” of our market in April of 2009, every gain and each success since then is building confidence among consumers – which is exactly what our market needs to get back on track.

Top 10 Fastest Growing U.S. Counties 1. Kendall County, IL (Chicago)..........................92.1% 6. Forsyth County, GA (Atlanta).........................77.4% 2. Pinal County, AZ (Phoenix)................. 89.7% 7. Lincoln County, SD (Sioux Falls).................... 70.7% 3. Rockwall County, TX (Dallas).........................88.9% 8. Paulding County, GA (Atlanta).......................67.4% 4. Flagler County, FL (Jacksonville)....................83.9% 9. Williamson County, TX (Austin)......................64.3% 5. Loudon County, VA (Washington, D.C.)..........77.6% 10. Douglas County, CO (Denver).......................64.0% Source: US Census Bureau

January - June 2010 Sales Statistics

Housing Affordability Index

Single-Family Homes | Metro Phoenix

Greater Phoenix Area

Median Sales Price Avg. Days on Market Number of Sales January............... $129,900....................................86.................................. 4,855 February.............. $131,000 ...................................95.................................. 5,440 March.................. $135,589 ...................................96.................................. 7,440 April.................... $135,838 ...................................93.................................. 7,774 May..................... $137,990 ...................................92.................................. 7,679 June.................... $135,000....................................95.................................. 7,885 Source: ARMLS. Information is deemed reliable but not guaranteed.

Data maintained by ARMLS may not reflect all real estate activity in the market.

69.5 2000 Q1

49.3 2005 Q2

26.6 2006 Q3

33.2 2007 Q3

65.3 2008 Q2

83.6 2009 Q2

81.9 2010 Q1

Source: NAHB Housing Opportunity Index

Yearly Market Comparison

Jan-June 2009 vs. Jan-June 2010 | Single-Family Homes

NUMBER OF SOLD LISTINGS

2009 2010 Diff Chg January....... 4,230.........4,853.......... 623...........14.7% February...... 4,849.........5,432.......... 583...........12.0% March.......... 6,827.........7,437.......... 610...........8.9% April............ 7,601.........7,766.......... 165...........2.2% May............. 8,161.........7,662.......... -499.........-6.1% June............ 8,154.........4,724.......... -3,430......-42.1%

DOLLAR VOLUME OF SOLD LISTINGS

2009 2010 Diff Chg $ 777,731,941.............$ 911,304,246............ 133,572,305.............17.1% $ 859,187,212.............$ 1,013,402,466......... 154,215,254.............17.9% $ 1,100,011,643..........$ 1,412,236,023......... 312,224,380.............28.3% $ 1,227,951,267..........$ 1,421,144,753......... 193,193,486.............15.7% $ 1,367,855,390..........$ 1,443,694,329......... 75,838,939...............5.5% $ 1,440,058,524..........$ 939,545,285............ -500,513,239............-34.8%

MEDIAN SALE PRICE 2009 2010 Diff Chg 130,000............129,900........-100...........-0.1% 127,000............131,000........4,000.........3.1% 120,000............135,700........15,700.......13.1% 117,500............135,950........18,450.......15.7% 121,500............137,900........16,400.......13.5% 130,000............137,000........7,000.........5.4%

Source: ARMLS. Information is deemed reliable but not guaranteed. Data maintained by ARMLS may not reflect all real estate activity in the market.

Valuable information just for you!

M E T R O

It has been a pleasure to research and compile this information for you in my semi-annual Metro Phoenix Economic Snapshot.

It’s my goal to present our local market’s economy and the state of our housing market in a smart, concise format.

This synopsis of information is meant to arm you with facts and statistics to help you make well-educated decisions regarding real estate and other financial moves.

P H O E N I X

Now you have a trusted advisor!

I invite you to turn to me as your trusted advisor in real estate.

As a member of the Premier Marketing Group and an agent at Realty Executives for over twenty years, I have the experience and expertise to guide you through your real estate transactions with ease. Working with an agent that is organized, meticulous with details and a true professional is more important than ever.

Plus, I truly care about you, my client, and put your best interests and needs ahead of anything else. Please call me today!

Terri is a graduate of the University of Arizona with a Bachelor of Science Degree in Mechanical Engineering. She is a member of the Premier Marketing Group, Scottsdale Professional Networking Association and past Office Representative for many years. Terri serves on the Steering Committee of Realty Executives Scottsdale Sales Meeting Group and is acting Treasurer.

Terri is also active in the community with Vista Del Camino, Habitat for Humanity, Susan G. Komen Breast Cancer Foundation (Team Captain - 5 years; 2004 & 2006 Race Award - Largest Small Corporate Team) and Chairperson of Ancala Hospitality Committee.

She is a member of Realty Executives 100% Club and recipient of the 2003 Rich Rector Community Service Award.

Exceeding Expectations Everyday

TERRI LOU, CRS, GRI

10607 N. Hayden Road #100 • Scottsdale, AZ 85260 480.948.9450 • terrilou@realtor.com If your home is currently listed, this is not a solicitation for that listing.

January-June 2010 Average Sales Price By City Glendale: $133,694 Phoenix: $148,161 Mesa: $166,238 Peoria: $182,312 Litchfield Park: $206,415 Tempe: $210,123 Gilbert: $212,772 Chandler: $223,088

M I D -Y E A R U P D AT E

Cave Creek: $369,248 Fountain Hills: $519,651 Scottsdale: $552,027 Carefree: $769,102

Paradise Valley: $1,458,505

Statistics gathered from ARMLS. All information deemed reliable but not guaranteed.

(Single-Family Residences)

January-June 2010 Sales Statistics By Community Community

Average Sales Price

Days On Market

List/Sell Price Ratio

# Closed

Ancala.........................................$1,228,821.................. 491...................91%...........................16 Bellasera.........................................$532,944.................. 145...................94%............................9 Boulders..........................................$840,126.................. 212...................92%...........................17 DC Ranch......................................$863,666.................. 176...................91%...........................63 Desert Highlands........................$1,266,000.................. 349...................91%...........................10 Desert Mountain.........................$1,415,365.................. 326...................86%...........................59 Eagle Mountain.............................$748,088.................. 145...................93%...........................17 Estancia.......................................$1,049,140.................. 165...................80%...........................35 FireRock.......................................$1,317,380.................. 333...................87%...........................21 Gainey Ranch...............................$887,750.................. 234...................88%...........................16 Grayhawk......................................$623,613.................. 139...................94%...........................57 Hidden Hills.....................................$503,134.................. 136...................94%...........................21 Ironwood Village...........................$330,414.................. 101...................96%...........................29 Legend Trail....................................$482,903.................. 114...................95%...........................28 McCormick Ranch........................$397,025.................. 139...................94%...........................16 McDowell Mountain Ranch.........$513,985.................. 126...................96%..........................122 Mirabel...........................................$970,171.................. 353...................83%...........................22 Scottsdale Mountain....................$566,883.................. 150...................94%...........................31 Scottsdale Ranch..........................$530,162.................. 171...................92%...........................38 Sincuidados...................................$715,250.................. 190...................94%...........................10 Silverleaf......................................$2,844,714.................. 190...................92%...........................18 Stonegate......................................$536,750.................. 124...................93%...........................23 Terravita..........................................$467,832.................. 127...................95%...........................48 Troon North.....................................$860,710.................. 229...................91%...........................38 Troon Village..................................$712,694.................. 106...................91%...........................16 Whisper Rock..............................$1,881,875.................. 516...................89%............................8 Winfield...........................................$531,045.................. 303...................90%...........................11 Statistics gathered from ARMLS. All information deemed reliable but not guaranteed.

(Single-Family Residences)

Produced by Desert Lifestyle Publishing • 480.460.0996 • www.DesertLifestyle.net

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