Presentable Market Data

Understanding three views of the current market allows Buyers to maximize their ability to evaluate properties, receiving the highest value in their home search and Sellers to position their property to maximize money in their pocket while minimizing time on market: Macro View: National Market National Media Coverage Metro View: Atlanta Market Quarterly FMLS Market Report Micro View: Your Community Comparative Market Analysis Current Market Overview

Metro Areas Included – 36 FMLS Areas 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

Keller Williams Realty rose from 4 th position in Atlanta Metro market share, to 2 nd position, in three years Keller Williams is the only top five company to increase its Atlanta market share every year since Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

2007 sales of single family detached houses lag further behind those of 2006 through 3Q 2007 YTD 2007 sales are -16.9% below those through 3Q 2006 and -15.7% below 3Q Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

2007 monthly sales show that the slowdown is continuing through the third quarter of the year Sales have steadily run lower than last year in each month of 2007 September 2007 sales should increase somewhat when lag processing catches up, but will still be significantly lower than in either of the last two years 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

Not all segments of the Atlanta home market have declined in 2007 and the degree of slowing varies widely by segment New homes priced in the $1.0-$1.9M range increased over the comparable 2006 period The largest impact was in sales of new homes priced below $200K, which were down by 32% Overall, sales were down 17% compared to YTD 2006 <$200K $200- $499K $ K $750- $999K $1.0- $1.9M$2.0M+Total NEW 909 (-32%) 3,785 (-6%) 658 (-9%) 256 (-4%) 245 (+28%) 27 (-29%) 5,880 (-10%) RESALE 13,920 (-20%) 12,103 (-18%) 1,882 (-3%) 451 (-9%) 332 (1%) 60 (-8%) 28,748 (-18%) TOTAL 14,829 (-21%) 15,888 (-15%) 2,540 (-5%) 707 (-7%) 577 (11%) 87 (-16%) 34,628 (-17%) Year-to-Date September Sales 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas BetterSameWorse Comparison to one year ago:

Sales of detached residences were down by nearly 26% in the third quarter of 2007, compared to 3Q Q 2007 sales were lower again than both 3Q 2006 and 3Q 2005 Year-to-Date closings through September are 17% lower than in Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

Segmenting sales by price range shows that lower price ranges were impacted more than higher price ranges, with those in the <$200k range down more than 21% Sales at price ranges above $500K show little, or no slowing through September, Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

Median sales prices continued to increase during 3Q 2007 The 3Q 2007 median sales price was 2.3% higher than the 3Q 2006 median price, but slightly lower than that of 2Q 2007 Sales of properties in higher price ranges represent a higher portion of total sales this year, likely causing the overall median price to increase 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

The median sales price as a percent of original list price has resumed the decline started in 4Q 2006 These measures for the last 4 quarters were lower than those of all other 2006 and all 2005 quarterly numbers, indicating that a difficult negotiating environment for Sellers continues and could be worsening 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

The median % S/L price ratio normally declines in the higher price ranges Year-to-date 2007 sales show that market slowing has affected all price ranges below $1.0M Continued sales increases in the $1M+ price ranges have prevented a decline in this ratio in those segments 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

The median of Days- On-Market (DOM) has been increasing each quarter of 2007, compared to the comparable periods last year The median of DOM is 15% above that of YTD 2006, and 11% higher than that of Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

Higher priced properties normally take longer to sell than lower priced properties YTD Increases in median DOM occurred in all price segments except the $750-$999K range, where it was flat The largest increase came in the price range between $1.0-$1.9M 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

<$200K $200- $499K $ K $750- $999K $1.0- $1.9M$2.0M+Total NEW 109 Days +12% 129 Days +22% 166 Days +21% 171 Days -4% 197 Days +25% 188 Days +33% 132 Days +19% RESALE 62 Days +11% 57 Days +16% 65 Days +14% 78 Days +4% 99 Days +15% 121 Days +5% 60 Days +13% TOTAL 64 Days +10% 69 Days +17% 83 Days +12% 104 Days +0% 138 Days +30% 143 Days +6% 69 Days +15% Looking at market segments by New/Resale and sales price range, illustrates that median days on market have increased in nearly all segments, vs. the comparable year-ago period The largest increase was in the $2.0M+ new homes market sector (+33%) and the only decline was in the $750-$999K price range for New home sales BetterSameWorse Comparison to one year ago: Year-to-Date September Days on Market 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

The trend towards Sellers paying some, or all, of their Buyer’s closing costs continues through 3Q 2007 Seller’s should be aware of this Buyer need during contract negotiations and include these costs when estimating net proceeds of sale 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

Typically, fewer Buyers ask for Seller-paid closing costs in higher- priced home sales However, all price ranges include some transactions with Seller- paid closing costs 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

Sellers agreeing to pay some or all of their Buyer’s closing costs reduce their net percentage of original list price by an additional 1.4% of their original list price Allowance should be made for Seller-paid closing costs when estimating the net proceeds to Seller in a sales transaction 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

The percentage of transactions where the Seller was required to reduce the listing price in order to attract a Buyer, increased in each quarter of 2007 compared to the comparable period in either 2005 or 2006 The 40% rate in 3Q 2007 is above the high end of the usual range for price reductions, possibly indicating an increasing level of Buyer price resistance in the current market 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

Even though price reductions in general were more frequent in 2007, fewer price reductions were necessary as prices increased, possibly due to Sellers taking an overpriced property off the market rather than reducing the price Price reductions were necessary more often in 2007 than in 2006, in all price ranges except the $1.0-$1.9M range 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

When a price reduction is required, the Seller negotiates down to a lesser portion of the original listing price than a Seller not requiring a price reduction This difference across the metro area typically ranges between 4-6 percentage points less than for a Seller with no price reduction In 3Q 2007, the 5.4 percentage point difference would amount to a reduction of -$12,900, at the median sales price, compared to a Seller without a price reduction 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

At prices above $200K, the difference in % S/L between each successively higher price range becomes ever greater, or the penalty for a price reduction becomes ever greater For example, the % S/L ratio for a price-reduced property drops by15% compared to 5% for a non- price reduced property, which would amount to a difference of $146,000 to the seller of a $2.0M property 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

Even after taking a price reduction, Sellers realize an equal, or lesser portion of their new list price than those Sellers not required to reduce their price 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

When a price reduction is required, more time is needed to attract a buyer Typically, the Seller with a price reduction needs 2-3 times longer to sell their property than the Seller not required to reduce their listing price The likely results are higher carrying costs, greater inconvenience due to keeping the house in showing condition and delays in finding and moving to a new home 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

Higher-priced properties normally take longer to sell, but when a price reduction is necessary, the time can become much longer For example, the Seller of a $2.0M property, required to take a price reduction, increased time on market by 108 days Conversely, Sellers pricing their property correctly for the current market are able to sell much more quickly 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

Failed listings are shown here as a percentage of total listings in order not to overstate the trend Failed listings as a percent of total finalized listings (exp., WD, closed) rose during the 2 nd half of 2006, reaching a peak in January, 2007 before falling back and then rising recently to a new high The consistently higher rate since the 2 nd half of 2006 is further evidence of Buyer price resistance, since listings usually fail due to overpricing 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

Considering that 59% of 2007 finalized listings are “Failed” listings (likely due to overpricing) and 35% of the remaining 41% (closed), have had a price reduction, it follows that 73% of all finalized listings were overpriced during 2007 Pricing in line with the current market and high-level property condition are essential to sales success, particularly in a slower market Overpriced Listings Expired + Cancelled = 59% Price Reduced: 41% x35%= 14% Percent of Finalized Listings: (59%+14%)= 73% 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Condo/Townhome Residences – 36 FMLS Areas

The supply of active listings continued to grow in each month of 2007 Listing inventory is expressed as the number of months required to sell currently active listings, at the average monthly sales rate for the most recent 12 months Supply has increased by 58% since December, 2006, but may be starting to level off 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

<$200K $200- $499K $ K $750- $999K $1.0- $1.9M$2.0M+Total NEW 8.3 Months +54% 11.7 Months +23% 19.6 Months +27% 25.4 Months +16% 25.8 Months +2% 60.0 Months +98% 13.3 Months +28% RESALE 8.6 Months +68% 9.6 Months +71% 12.6 Months +60% 20.2 Months +50% 22.2 Months +40% 41.7 Months +62% 9.6 Months +69% TOTAL 8.6 Months +67% 10.1 Months +56% 14.5 Months +45% 22.1 Months +34% 23.7 Months +22% 47.3 Months +73% 10.3 Months +59% The listings supply is larger in all market segments, compared to December, 2006 Inventory is expressed in number of months of sales at the average sales rate over the most recent 12 months Months of inventory generally are higher at higher price ranges BetterSameWorse Comparison to December, 2006: YTD September Months Supply of Listings 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas

Sales of Single Family Detached residences continue slowing during 2007 compared to the previous two years. Third quarter sales are down 25% vs. the same period a year ago. The supply of unsold houses continues to grow (+58% since December), year-to-date time on market has increased somewhat (15%) after declining in 2006 and the percent S/L price ratio continues to move lower than in Also, the failed listings percent of finalized listings is higher, the percentage of transactions which followed a price reduction is higher and the percentage of transactions which included Seller-paid closing costs inched higher through September. All of these conditions are the result of market slowing which began in 4Q However, median sales prices have continued to rise and Sellers who price their property correctly with the current market are able to sell their property at a median of 98% of original list price, in a median of 42 days on market. Conclusion: The real estate market in Atlanta entered a “transition” phase in the 4 th quarter of After very strong markets in 2005 and early 2006, interest rates edged up slightly, affecting the borrowing power of some potential Buyers. The low price end of the market was most affected, while the higher priced segments continue to advance. New home sales in the lower price segment, were most severely impacted. Sellers will need to pay close attention to preparation of their property and pricing in line with the slower market and high inventory of listings. 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas SUMMARY

Relevance to Sellers in 2007: Houses have sold at increased prices compared to the previous year, indicating a sound overall real estate market – however, increased time on market, lower % S/L prices and high percentages of transactions requiring a price reduction indicate that pricing at the current market is the key to selling in the least amount of time and at the best price. The biggest concern in 2007 has to be the high inventory of homes for sale at all price levels, indicating a continuation of 4Q 2006 market slowing. Market slowing will continue until inventories return to more normal rates – until then, greater care must be taken in pricing at, or below, the current market in order to sell within normal time periods. Sellers should pay particular attention to comparing their price and condition to currently active listings, to provide better value to Buyers, rather than concentrating mainly on those which sold several months ago under different market conditions. More attractive pricing and condition are the key to a successful sale in any market, but are especially important now. Relevance to Buyers: Builders should be offering Buyer incentives to work down high new home inventory Greater price increases in new homes (+5.6%) than in resales (+2.5%) made resales more attractive in 2007 Market slowing will present better values to Buyers of both resale and new homes Properties that have been price-reduced may set up a more favorable negotiating environment for Buyers Buyers should ask their Sellers to pay some, or all, of Buyer’s closing costs 3Q 2007 Quarterly Metro Market Profile Provided By Keller Williams Realty Single Family Detached Residences – 36 FMLS Areas