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2010

Midland

2nd Quarter Edition

REAL ESTATE QUARTERLY Coldwell Banker Covenant

Home sales register a strong increase over the first quarter and year-over-year. Both average and median prices show a mild increase in the sale price over the previous quarter. Median prices have drifted downward on a year-over-year basis; however, this is not quite alarming. Midland pricing has been essentially flat for the past several years. In today’s economic environment, this market has been surprisingly robust, especially when compared to several of the nation’s residential markets, which have demonstrated very obvious declines. Listing inventory moderately increased; however, sales have kept months of supply tempered at 3.5 months. The sales price-list price ratio reveals that sellers are pricing quite effectively and are not chasing the market. This is largely due to recent price stability. Midland has reported the lowest unemployment rate of all Texas metropolitan areas. Respectable sales velocities, along with declining days on market, demonstrate continued interest in Midland residential real estate, which is a reflection of local employment conditions. The City of Midland, the Permian Basin, and the greater State of Texas have been outperforming most parts of the country. Employment in June has increased for the fifth month in a row for the entire Midland Metropolitan Statistical Area.

Midland Key Stats Average Sales Price Average $/Sq.ft. Median Sales Price DOM Sale % of List Number of Sales Listed Inventory

Q2 ' 2010

Q-Q Change

$194,989 $90 $168,000 58 97.3% 481 554

Q1 ' 2010

0.3% 2.8% 1.8% -26.8% 0.4% 43.2% 10.4%

Y-O-Y Change

$194,458 $87 $165,000 79 96.9% 336 502

Q2 ' 2009

-4.9% 0.4% -6.1% -23.3% -0.4% 13.7% 0.2%

$205,075 $90 $179,000 75 97.7% 423 553

Recently, the Apache Corporation, an oil and gas exploration company, has selected Midland for its regional office. The Apache Corporation is expected to bring annual payrolls in excess of $5 million. Midland has a great deal of notable businesses as major employers, including Schlumberger, Conoco Phillips, Halliburton, Midland Memorial Hospital, and dozens of others. This employment base has served to keep residential real estate activity stable.

ALWAYS INFORMED Key Resale Data

1

Employment

2

New Home Permits

2

Key Housing Indicators

3

Type of Financing

3

Absorption Rate

4

Indicators Housing Total Available Housing Inventory (existing)

Q2 ' 2010

Q2 ' 2009

554

553

Closed (existing) Median Price (soldexisting)

423

481

$168,000

New Home Permits

$179,000

126

90

3-Month Libor

0.51

0.50

30-Year Fixed

4.80

5.45

Prime

3.25

3.25

6-Month CD

0.81

1.30

70,703

69,940

5.4

5.8

Rates (%)

Median Sale Price and Transaction Counts Number of Transactions

Median Price

$200,000

700

$180,000

600

$160,000 $140,000

500

$120,000

400

$100,000 $80,000

300

$60,000

200

$40,000

100

$20,000

Total Employment Unemployment Rate (%)

*Employment figures were recorded in May for Midland County. Source: Permian Basin Board of Realtors, BLS, Bloomberg.

Q2 ' 2010

Q1 ' 2010

Q4 ' 2009

Q3 ' 2009

Q2 ' 2009

Q1 ' 2009

Q4 ' 2008

Q3 ' 2008

Q2 ' 2008

Q1 ' 2008

Q4 ' 2007

Q3 ' 2007

Q2 ' 2007

Q1 ' 2007

Q4 ' 2006

Q3 ' 2006

Q2 ' 2006

Q1 ' 2006

Q4 ' 2005

Q3 ' 2005

Q2 ' 2005

Q1 ' 2005

Q4 ' 2004

Q3 ' 2004

Q2 ' 2004

Q1 ' 2004

Q4 ' 2003

Q3 ' 2003

Q2 ' 2003

Q1 ' 2003

Q4 ' 2002

Q3 ' 2002

Q2 ' 2002

Q1 ' 2002

0

Year-over-Year Change in Median Sale Price and Transaction Counts 50%

Median Price

www.cbcovenant.com

Transactions

1-800-231-2483

25%

-50%

Source: Permian Basin Board of Realtors.

Q2 ' 2010

Q1 ' 2010

Q4 ' 2009

Q3 ' 2009

Q2 ' 2009

Q1 ' 2009

Q4 ' 2008

Q3 ' 2008

Q2 ' 2008

Q1 ' 2008

Q4 ' 2007

Q3 ' 2007

Q2 ' 2007

Q1 ' 2007

Q4 ' 2006

Q3 ' 2006

Q2 ' 2006

Q1 ' 2006

Q4 ' 2005

Q3 ' 2005

Q2 ' 2005

Q1 ' 2005

Q4 ' 2004

Q3 ' 2004

Q2 ' 2004

Q1 ' 2004

Q4 ' 2003

Q3 ' 2003

Q2 ' 2003

Q1 ' 2003

Q4 ' 2002

Q3 ' 2002

-25%

Q2 ' 2002

0% Q1 ' 2002

Coldwell Banker Covenant

$0

Employment

Prepared by Coldwell Banker Premier Realty, Market IQ & Coldwell Banker Covenant.


Midland

2010 2nd Quarter Edition

REAL ESTATE QUARTERLY Coldwell Banker Covenant

In addition to employment, mortgage interest rates have remained historically low. While the Federal Reserve finalized its program of buying mortgage backed securities, the expected increase in rates did not come to fruition. This is likely due to a flight to quality into U.S treasuries, keeping mortgage rates low, since those are connected markets. This has been extremely great news for prospective homebuyers. Single family permit numbers have been on an upward trend since January of 2009, although they have not returned to the levels of 2007 and 2008. This is not at all surprising following America’s boom years. Midland has been permitting proportionately more homes than other metropolitan areas that we track. This is a function of relatively low inventory levels and a local economy that is beginning to see expansion. An abundance of the recent home purchases employed FHA financing, so these sales may have been elevated somewhat by the homebuyer tax credit, which expired April 30th with qualifying closings up to June 30. The closing date of homes that went under contract as a result of the previously mentioned tax credit has been extended to September 30th.

Employment YOY

Employment 8

70,000

6

60,000

4

50,000

2

40,000

0

30,000

-2

20,000

-4

10,000

-6

0

-8 2001-Jan Apr Jul Oct 2002-Jan Apr Jul Oct 2003-Jan Apr Jul Oct 2004-Jan Apr Jul Oct 2005-Jan Apr Jul Oct 2006-Jan Apr Jul Oct 2007-Jan Apr Jul Oct 2008-Jan Apr Jul Oct 2009-Jan Apr Jul Oct 2010-Jan Apr

80,000

Source: Bureau of Labor Statistics, Texas Workforce Commission

Single Family Permits YOY

Permits

70

250%

60

200% 150%

50

100%

40

50%

30

0% -50%

10

-100%

0

-150% 2001-Jan Apr Jul Oct 2002-Jan Apr Jul Oct 2003-Jan Apr Jul Oct 2004-Jan Apr Jul Oct 2005-Jan Apr Jul Oct 2006-Jan Apr Jul Oct 2007-Jan Apr Jul Oct 2008-Jan Apr Jul Oct 2009-Jan Apr Jul Oct 2010-Jan Apr

Coldwell Banker Covenant

20

Source: U.S. Census Bureau

2


2010

Midland

2nd Quarter Edition

REAL ESTATE QUARTERLY Coldwell Banker Covenant

Sale Price as a Percent of List Price 102.0% 100.0%

98.0% 96.0% 94.0% 92.0%

Q1 ' 2001 Q2 ' 2001 Q3 ' 2001 Q4 ' 2001 Q1 ' 2002 Q2 ' 2002 Q3 ' 2002 Q4 ' 2002 Q1 ' 2003 Q2 ' 2003 Q3 ' 2003 Q4 ' 2003 Q1 ' 2004 Q2 ' 2004 Q3 ' 2004 Q4 ' 2004 Q1 ' 2005 Q2 ' 2005 Q3 ' 2005 Q4 ' 2005 Q1 ' 2006 Q2 ' 2006 Q3 ' 2006 Q4 ' 2006 Q1 ' 2007 Q2 ' 2007 Q3 ' 2007 Q4 ' 2007 Q1 ' 2008 Q2 ' 2008 Q3 ' 2008 Q4 ' 2008 Q1 ' 2009 Q2 ' 2009 Q3 ' 2009 Q4 ' 2009 Q1 ' 2010 Q2 ' 2010

90.0%

Note: Scale on Sale Prices as a Percent of List Price begins at 90%. Source: Permian Basin Board of Realtors.

Average Months of Supply (includes all price ranges) 7 6 5 4 3 2 1 Q1 ' 2007 Q2 ' 2007 Q3 ' 2007 Q4 ' 2007 Q1 ' 2008 Q2 ' 2008 Q3 ' 2008 Q4 ' 2008 Q1 ' 2009 Q2 ' 2009 Q3 ' 2009 Q4 ' 2009 Q1 ' 2010 Q2 ' 2010

Source: Permian Basin Board of Realtors.

Coldwell Banker Covenant

Type of Financing Subsidized

0

Rent W/Option

0

TX Veteran

0

Trade/Exchange

0

Lease/Purchase

0

Assumption

0

Other

0

Owner Finance

3

Cash

93

VA

24

Conventional

171

FHA

190

0

20

40

60

80

100

120

140

160

180

200

Source: Permian Basin Board of Realtors.

3


2010

Midland

2nd Quarter Edition

REAL ESTATE QUARTERLY Coldwell Banker Covenant

Days on Market by Price Range

500,000 +

43

400,000 - 499,999

50

300,000 - 399,999

67

250,000 - 299,999

67

200,000 -249,999

59

180,000 - 199,999

34

160,000 -179,999

41

140,000 - 159,999

52

120,000 - 139,999

47

100,000 - 119,999

48

90,000 - 99,999

88

80,000 - 89,999

97

70,000 - 79,999

61

60,000 - 69,999

76

50,000 - 59,999

76

40,000 - 49,999

94

30,000 - 39,999

46

20,000 - 29,999

76

0-19,999

48

0

25

50

75

100

125

Source: Permian Basin Board of Realtors.

Coldwell Banker Covenant

Months of Supply by Price Range

Price Range Less than 60,000 60,000 - 80,000 80,000 - 110,000 110,000 - 150,000 150,000 - 200,000 200,000 - 250,000 250,000 - 310,000 310,000 - 390,000 390,000 - 490,000 Greater than 490,000 Total/Average

Q2 ' 2010 Q2 ' 2010 Months Sold Listed of Supply 18 28 4.7 14 20 4.3 35 53 4.5 118 91 2.3 122 142 3.5 66 68 3.1 54 77 4.3 33 36 3.3 12 14 3.5 9 25 8.3 481 554 3.5

Source: Permian Basin Board of Realtors. Note: Listed represents the number of listings in the final day of Q2, 2010.

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2Quarter Real Estate Report - Midland, TX  

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