Short-term risk versus long-term reward - Greater Philadelphia Housing Market - Summer/Fall 2010 Chairman's Report (c) Prudential Fox and Roach, REALTORS®

1. Have you ever looked back on the opportunities you’ve
had in your life and been satisfied that you made the
most of some, yet wonder why you let others slip by?
We all ask ourselves at some time if we’ve made the
right decisions. Of these times, the ones I regret the
most are when I chose not to do something, when I
let caution keep me from taking full advantage of
opportunities presented to me, when hesitation kept
me from reaching out for my dreams. Have you ever
felt this way?
Right now, many people are faced with an unusually
good opportunity to buy a new home. They are treading
cautiously, carefully considering the balance between
present risk and potential reward. I understand why —
we are receiving mixed signals about the economy and
real estate market. Technically, the recession is over, but
it doesn’t quite feel like it. We knew the recovery would
be long and choppy, but we’re impatient because it
seems like the economy has hit an invisible wall. So
what do we do?
A Message from Lawrence F. Flick, IV, Chairman and Chief Executive Officer
Prudential Fox & Roach, REALTORS®
and The Trident Group
1
The Chairman’s Report
SUMMER/FALL 2010
Risk versus Reward
First, let’s look at the facts. Our economy is moving, albeit slowly, in the right direction:
Employment growth
Private sector employment growth
Personal income
Wages and salaries
Local real estate sales
Six out of last nine months
Past seven consecutive months
Nine consecutive months
Seven of the last nine months
Twelve months of improvement
Source: Naroff Economic Advisors, August 2010
Many people are treading
cautiously, carefully
considering the balance between
present risk and potential reward.

2. It’s been a year since real estate sales in our area hit
bottom. In that time, sales grew each month until they
spiked to April 2010’s peak. Activity then decreased in
June and July because many buyers accelerated their
plans to take advantage of the federal tax credit
before its April 30, 2010 deadline. The chart
below illustrates unit sales in Prudential Fox &
Roach/Trident’s market area.
Source: Trend MLS
These are all positive signs in both the economy and
real estate market, yet we seem to be fighting headwinds
that keep us from feeling confident in the recovery. As
consumers, we are saving more and spending less.
Businesses are cautious resulting in slow job growth.
Events in Greece and other parts of Europe have had
the positive effect of bringing interest rates back down
to historic lows, but have negatively affected our stock
market. Economic signals are not as clear as we would
like them to be, and as a result, we tend to hesitate
when planning for the future.
SShhoorrtt--tteerrmm rriisskk vveerrssuuss
lloonngg--tteerrmm rreewwaarrdd
Our current market presents a paradox. It’s a great time
to buy a home, yet the fear of taking a risk can paralyze
consumers. If you’ve been thinking about making a
move, I urge you to consider that despite lack of
confidence about the short-term economic recovery, the
best time to buy a house is now. Here’s why:
• Interest rates are at record lows
• The selection of houses for sale is great
• Prices in our area have stabilized
These favorable conditions will not last. I believe our
real estate market will bump along for another few
months then grow stronger in 2011 and 2012. When
the pace of the recovery accelerates, prices will begin
to rise and interest rates will go up. And here is where
the long-term reward comes in — our local real estate
has proven to be an excellent investment. Over the
past ten years average house values in our region have
increased significantly:
Source: Naroff Economic Advisors, August 2010
2
Atlantic City . . . . . . . . . . . . . . . . . . . . . . 71%
Edison-New Brunswick . . . . . . . . . . . . . . 66%
Ocean City, NJ . . . . . . . . . . . . . . . . . . . . 85%
Philadelphia PSMA . . . . . . . . . . . . . . . . . 91%
Trenton-Ewing. . . . . . . . . . . . . . . . . . . . . 61%
Wilmington. . . . . . . . . . . . . . . . . . . . . . . 59%
Average 10 Year Price Appreciation
Prudential Fox & Roach Realtors®
Marketplace Pending Units Rolling 12 Months
The best investments
are made before they become obvious
to everyone but after the bottom begins
to curve upward. That time is now.

3. Those who bought at the top of the market in 2005
and 2006 may not yet see an increase in value, but
over the long-term their investment will grow. Soon
the market will return to a more normal rate of sales
and appreciation.
The best investments are made before they become
obvious to everyone but after the bottom begins to
curve upward. That time is now.
There is a practical side to homeownership — building
equity, taking advantage of income tax deductions, and
benefiting from long-term
appreciation. But there is an
emotional side as well. We choose
homeownership because we want to
have control of our future. Each
property is unique, and we are drawn
to the one we feel we were meant to
have. We are willing to take a
calculated risk to attain long-term
security, and we benefit from
meeting our current needs, as well!
WWhheenn yyoouu llooookk bbaacckk,,
wwhhaatt wwiillll yyoouu ssaayy??
When thinking about your future, it’s important to
carefully consider the balance between risk and reward.
My favorite quote is by Mark Twain — “Twenty years
from now you will be more disappointed by the things
you didn’t do than by the ones you did do. So throw off
the bowlines. Sail away from the safe harbor. Catch the
trade winds in your sails. Explore. Dream. Discover.”
Whether it is ten or twenty years from now, will you be
disappointed in the things you didn’t do? Or will you
catch the winds of opportunity and live your dreams?
My wish for you is that it be the latter.
3
Lawrence F. Flick, IV
Chairman and Chief Executive Officer
Prudential Fox & Roach, Realtors® and The Trident Group
Prudential Real Estate just compiled results of an
online survey of homeowners and those who stated
they intended to buy a home within two years. It found
that consumers realize that the complexity of today’s
market requires greater sophistication:
• 69% agree that buying a home is a much bigger
decision than it used to be
• 76% agree that buying or selling a home is more
complicated than in the past
• 89% agree that previously “any home used to sell”
but that marketing a home today must be much
more sophisticated
Based on these answers, it’s no surprise to see that:
• 93% agree that finding an agent and real estate
firm they can trust is more important than ever
Relationships built on trust take time to develop. Many
consumers strive to do their homework through online
research, keeping up on the latest news. Unfortunately
not all information we see online is reliable, which
can adversely affect decision making of potential
buyers and sellers. That’s why it is crucial to select
a professional Realtor®
with the knowledge,
experience and creativity to guide you through the
process. When buying, it’s important to tap current
opportunity. When selling, it’s important to understand
that we are in a value-driven market. From a strategic
standpoint, sellers who ensure their house is in great
condition, use accurate pricing, and employ staging
techniques will experience success. Prudential Fox &
Roach can assist you in all these vital areas. We are
the market leader with a history of trust and integrity
dating back to 1886. The expertise of our
professionals is unmatched. And the consultants of
The Trident Group will make the process easy and
convenient while helping you settle on time, with
great service and value.
What do consumers want in a Realtor®?

4. An Independently Owned and Operated Member of the Prudential Real Estate Affiliates, Inc.
AN INDEPENDENT VIEW
4
Joel L. Naroff, Ph.D. is the
President and founder of
Naroff Economic Advisors.
He is a consultant to
Prudential Fox & Roach,
Realtors® and The Trident
Group. A nationally
recognized economic
forecasting expert, Joel was
awarded the Lawrence Klein
Award for Blue Chip forecasting excellence and was the
Bloomberg Business News top economic forecaster in
2008. In 2007, he received the National Association of
Business Economists Outlook Award and was named the
top economic forecaster by MSNBC in 2006.
The economy has been growing for one year now
and private sector employment gains have been posted
every month during 2010. Yet households are
concerned and consumer confidence is near recession
levels. The reason for this disconnect is the pace of
job increases, which has been less than stellar. That
has left many feeling uncertain about their future,
restrained spending and helped create the sluggish
recovery. However, there is little reason to believe that
we will fall back into a double-dip recession. The
expansion may be less than hoped for, but it is likely
to continue.
There is a positive aspect to the softer growth: interest
rates remain at historically low levels. Firms have little
pricing power so inflation is modest. Also, the Federal
Reserve has pledged to keep rates down to encourage
growth. We have also seen that home prices have
bottomed in most places and are beginning to rise
again. The combination of low cost mortgages and
a growing belief that you can buy a home without it
losing value should lead to steady improvement in
the housing market.