1. This Month in Real Estate Released: April 9 14 Research for Buyers and Sellers………. Recent Government Action……………. The Numbers that Drive Real Estate… Commentary……………………………. 9 3 2 RESEARCH

2. Commentary Affordability, low rates, desire to buy provide hope for the U.S. housing market Housing affordability now stands at its best level since 1971. This greater affordability helped boost home sales in February. Especially strong was the activity attributed to first-time home buyers, who represented half of new home purchasers this month. The $8,000 tax credit helped move many of these first-time buyers out of their rentals and into their own homes. In light of weakening global economic indicators and a poorly functional financial system, the U.S. government and Federal Reserve remain proactive, with the Federal Reserve alone purchasing and holding up to an additional $750 billion of agency mortgage-backed securities and $100 billion more in housing agency debt. The Fed moves are designed to provide greater support to mortgage lending and housing markets. While economists expect continued softness in the overall housing market, encouraging buyer signs abound given the historically low mortgage rates and the availability of distressed properties. There are localized opportunities for savvy investors and for those buyers who are qualified, willing, and ready to buy on the cheap. And with rates at historic lows, the question for many borrowers becomes, how long will the good times last? The Fed's actions and mounting federal deficits could weaken the dollar and spur the aforementioned inflationary trend, which could send interest rates back up. In addition, the first-time home buyer tax credit expires at the end of November. Prominent economists maintain that low rates should be available for "at least the next several months." But if fears of inflation cause investors to shun Treasurys, the Fed's impact on long-term interest rates could be short-lived.

3. The Numbers That Drive Real Estate

4. Home Sales - In Millions The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Existing home sales rose 5.1% in February, reversing losses in January. Favorable market conditions and government-granting incentives are gaining traction in attracting a larger wave of first-time home buyers, who accounted for half of all home sales last month. More robust activity is expected in the next few months. A recent House Hunt survey revealed that the U.S housing market appears to be showing early signs of emerging from the worst real estate market in three years. Data released on March 23, 2009 Source: National Association of Realtors Annual Rate of Sales

5. Median Home Price In Thousands The national median home price continues to overcorrect. Home prices stood at 2003 levels in February at $165,400, which translates to a 16% decline from a year ago. “Given the downward distortion in price comparisons due to distressed sales, it’s important for owners to keep in mind that this doesn’t equate to a similar loss of value for traditional homes in good condition,” said Lawrence Yun, NAR chief economist. Regionally, the West is showing signs of recovery with stronger-than-expected sales gains. California is in the lead with median listing prices starting to rise for the first time in three years. Median home price as of February every year (Data released on March 23, 2009) Source: National Association of Realtors

6. Inventory - Months Supply Number of months it would take to sell all the homes on the market at the current rate of sales Continuingly improved affordability conditions and lower interest rates are expected to attract more potential home buyers and help reduce inventory. According to Move Inc., approximately 1 in 4 (23%) Americans expect to buy a home in the next five years. The months supply of homes has fallen to less than 10 months this year in comparison to double-digit levels for most of last year. In February, 3.8 million existing homes were available for sale, representing 9.7 months of supply at the current pace of sales. Latest data release: March 23, 2009 Source: National Association of Realtors Monthly Inventory

7. Mortgage Rates 30-Year Fixed Source: Freddie Mac After the Fed announced that it would expand purchases of mortgage-backed securities and Treasury securities, applications for both purchase and refinance loans jumped 32%. Last month, mortgage rates averaged around 5%, down from 5.1% in February and 6 % a year ago. Buyers continue to enjoy lower mortgage rates as weekly rates fell to 4.78 percent in the first week of April. With rates at historic lows, uncertainty remains as to how long these low rates will last. Increasing federal deficits due to massive government spending could weaken the dollar and prod inflation, which could send interest rates back up. Average Weekly Mortgage Rates

8. Affordability - % of Income The percentage of a median family’s income required to make mortgage payments on a median priced home Quality buyers are continuing to take advantage of stimulus incentives and favorable affordability conditions as evidenced by increasing sales last month. Exceptionally low home prices and mortgage rates continue to give them more buying power. According to NAR President Charles McMillan, “With the drop in interest rates, a median-income family can afford a home costing $20,000 more than a year ago for the same monthly mortgage payment.” Affordability as of February every year. Calculations assume a 20% down payment. Source: National Association of Realtors

9. Recent Government Action

14. Research for Buyers and Sellers

23. Your Local Market Although it is important to stay informed about what is going on in the national economy and housing market, many different factors impact the real estate market in your area. Talk to your Keller Williams agent for assistance interpreting the conditions in your local market. Keller Williams agents are equipped with all the knowledge and information to help navigate you though the process of buying or selling a home in this challenging market.