1. 1 Barb Bottitta CSR, GRI, ABR, SRS, SRES Lehigh Valley Real Estate Today

2. The Numbers That Drive U.S. Real Estate 1.Home Sales 2.Home Prices 3.Inventory 4.Mortgage Rates 5.Affordability 2

3. In Q3 2010, all 50 states experienced a decrease in sales … AK HI Below 10% Below 20% Home Sales Direction (Year-Over-Year Change) OH Source: National Association of REALTORS® Below 30% Below 40% 3

4. In Q4 2010, all states except for Virginia experienced an increase in sales … AK HI OH Source: National Association of REALTORS® Sales Increased Sales Decreased Home Sales Direction (Year-Over-Year Change) 4

5. 5 Average Lehigh Valley Sale Price (In $100Ks) Over the last 2 ½ Years, the average sale price peaked at $211,00 in June 2010, but dropped back to $200K or lower for all of 2011, before it jumped back over that mark to $206,000 this past June. $206K Statistics from LVAR Average Sale Price = Total Price of all properties sold, divided by the number of sales $200K $211K

6. Monthly Lehigh Valley Home Sales 6 Units

7. 7 Average Lehigh Valley Sales April 2010 through June 2012 Statistics from LVAR

8. 8 Lehigh Valley Absorption Rates April 2010 through June 2012 Months Statistics from LVAR

9. 9 Lehigh Valley Absorption Rates by School District, June 2012 Statistics from LVAR

10. Mortgage Rates (30-Year Fixed) Source: Freddie Mac Mortgage rates averaged 4.69% in 2010, an all-time low since Freddie Mac started tracking in 1971… and theyve just kept going down, setting record lows for 6 consecutive months. 10.3% 6.0% 5.0% 3.56% 10

11. Affordability (In Thousands) Given the historical rate of home appreciation rates, home prices are a huge bargain. Are 2010 homes undervalued by18%? Source: National Association of REALTORS® Historical appreciation rate = 4% $153K $222K $173K $211K 11

12. Affordability: Lets put this in perspective … 198920102011 Bread $0.67$2.49$2.78 Gas (gal.) $0.97$2.73$2.84 New Car $15,350$28,400$30,000 Existing Home $94,000$173,000$166,100 Mortgage Rate 10%4.69%4.45% Monthly Payment $825$896$837 In 1981, home mortgage payments were 36% of family income. In 1989 – 24% and in 2011 – 13% 12 Source: Keller Williams International

13. Barbs Top 10 Things You Should Know about Real Estate 10.Distressed Properties: Short Sales and Bank Foreclosures (REOs) are not for everyone: Hurdles to overcome: As is property condition Increased paperwork & complexity Increased chance for multiple offers Bank REO process is long & arduous Buyer probably is not getting a steal Buyer must be patient 13

14. #9 - Aging in Place Did you know? Half of older women age 75+ live alone. Persons reaching age 65 have an average life expectancy of an additional 18.1 years. The 85+ population is projected to increase from 4.6 million in 2002 to 9.6 million in 2030. Median # of years home owners are staying in their homes has increased from 8 to 10 yrs 14

15. #8 – Todays Agent must be tech savvy Info Sources Used in Home Search 20092010 Internet90%89% Real estate agent8788 Yard sign5957 Open house4645 Print newspaper advertisement4036 Home book or magazine2623 Home builder1816 Relocation company43 Television87 Billboard65 Every source was used less except one – the Realtor! 15 Source: Keller Williams International

16. #7 – Down payments of 5% or less have not disappeared Both first-time and repeat buyers are putting less than 20% down, even though a down payment of 20% will typically provide the best financing terms. 68% of first-time buyers and 28% of repeat buyers had a down payment of 5% or less in 2011. 16 Source: Keller Williams International

17. #6 – Yes, its still the economy Employment will remain a challenge over the next few years, which impacts the market by tempering GDP and holding back demand for home buying. To get back to 6% unemployment, 13.3 million jobs need to be added over the next 3 years. Thats 400,000 jobs/month 17 Source: Keller Williams International

18. The Four Keys to Housing Recovery 18 Source: Keller Williams International

19. #5 – Condition is the key for serious buyers Homes in better condition sold for an average of 96% of list price compared to 92% of list price for homes in poorer condition. The most common updates: Paint 44% Floorings 25% Lighting Fixtures 20% 19 Source: Keller Williams International

20. #4 – Staging is well worth the effort Staged Homes sell faster. Staged homes get higher offers. Staged houses look better in the MLS pictures, getting more potential buyers to actually come see the house in the first place. Staged houses have an edge over competing properties, and the staging can often sway the final decision. 20 Source: HomeStaging.com

21. #3 – Mortgage Pre-approval is a must Pre-approval for buyers is the norm in todays market – 64% of buyers get pre-approved by mortgage brokers or banks 21 Source: Keller Williams International

22. #2 – Price it right the first time! For the 48% of sellers who set their listing price according to their agents interpretation of the market value of their house: Sold faster – 56 days compared to 105 Sold for 6.7% higher list-to-sell ratio Experienced fewer price reductions (4 to 6 weeks between price reductions of between $5,000 and $15,000 22 Source: Keller Williams International

23. Barbs Top 10 23 1. 2. Price it right the first time! 3.Buyers should be pre-approved. 4.Staging is well worth it. 5. Condition is key for Buyers. 6. Lower unemployment is key to the housing recovery. 7.Down payments of 5% are still feasible. 8.Your Realtor should be tech savvy. 9.Aging in Place – the senior market. 10.Short Sales & Foreclosures.

24. #1 – The end is in sight – we have hit bottom We have been in a Buyers Market for the last 6 years because: home prices have been low, Mortgage rates are at an all-time low and Inventory has been high. Prices have stabilized (weve had our pricing correction), it doesnt seem likely that interest rates can go any lower & we are reaching an inventory balance. 24 Source: Keller Williams International

25. Thank You! – Questions? Slides & absorption graphs for all LV School Districts available at www.LVhomeExpert.com/Rotarywww.LVhomeExpert.com/Rotary Barb@LVhomeExpert.com 610-398-8408 25

26. First-Time Home Buyers 26

27. Info Sources Used in Home Search 20092010 Internet90%89% Real estate agent8788 Yard sign5957 Open house4645 Print newspaper advertisement4036 Home book or magazine2623 Home builder1816 Relocation company43 Television87 Billboard65 Every source was used less except one – YOU! 27

28. What Buyers Want Most from Agents Help with the price negotiations 14% Help buyer negotiate the terms of sale 12% Help with paperwork 10% Determine what comparable homes were selling for 6% Help determining how much home buyer can afford 3% Help find and arrange financing 2% Other 3% 28

29. 200520092010 Good financial investment94%87%85% Better than stocks*5447 About as good as stocks*2630 Not as good as stocks*79 Not a good financial investment134 Dont know51011 Buyers View of Home as a Financial Investment 29 2011