The document summarizes real estate market trends in Maricopa County, Arizona from 2008 to 2011. It notes that after a slow start, the local economy and real estate market were expected to strengthen throughout 2011. It also discusses factors like increasing foreclosures, declining home sales and prices from 2008 to 2010, and projections for modest recovery and growth in 2011-2012.

1. realty.wpcarey.asu.edu

2. Single-family 1.2 million homes Townhouse/condos 150,000 units Apartments 340,000 units Retail 148 million Sq.Ft. Office 63 million Sq.Ft. Industrial 229 million Sq.Ft.

3. Success built on failure Game of checkers After slow start, local economy and real estate market should structurally strengthen throughout the year.

4. To build capital for education, retirement and lifestyle (middle-class investment) Money was cheap and available What have you done for me lately. Hyped information and guidance

5. Just because the bottom is found does not mean that recovery is imminent. The Titanic found bottom . Recovery will not be even or include everyone. What is the driving force for recovery? What will recovery look like?

6. Census Growth? Demographic Role of Housing Ownership—American Dream? Tax deduction Secondary market Buy vs. rent Mobility Affordability

7. Housing market Value recovery Financial services Over hang of homes for sale, vacant and foreclosed Commercial real estate Increasing foreclosures Loss of tenants Loss of revenue

8. Economic and job (income recovery) International, Federal and State deficits Revenues vs. expenses

9. Immigration Infrastructure Education Alternative fuels Sustainable development

10. Success built on failure Deal is the name of the game Understand closely Condition of property Condition of neighborhood Potential demand Competition Idea(s) might not be unique Look at trend

11. Homes are an investment Owner/occupant investor Owner/landlord investor Owner/speculator investor Motivation Long-term: self-sufficiency Short-term: lifestyle enhancement Return Income: Rental, Value-added, Financing Appreciation

12. Stricter underwriting Satisfied homeowner Income concerns Rental vs. owning Consumer confidence Low or no equity—difficulty to sell

13. 2000 2010 Population 3,251,876 4,192,887 White Only 66 percent 60 percent Hispanic 25 percent 30 percent Black 3.5 percent 4.6 percent Asian 2.0 percent 3.2 percent

14. White Hispanic Only Growth (941,011) 34 percent 45 percent 18+ (74%) 80 percent 62 percent

15. YEAR TOTAL ABSOLUTE PERCENT CHANGE CHANGE 2008 1,868,000 ( 47,000 ) - 2.4 2009 1,841,850 ( 26,150 ) -1.4 2010 1,803,170 ( 38,680 ) -2.1 2011F 1,819,400 16,230 0.9 2012F 1,848,510 29,110 1.6

16. Apr Mar Apr Change Change 2010 2011 2011 Yr to Yr Mo to Mo Total Nonfarm 1,703.8 1,704.3 1,714.8 11.0 10.5 Total Private 1,459.7 1,464.5 1,474.8 15.1 10.3 Goods Producing 195.9 191.4 194.5 -1.4 3.1 Service-Providing 1,507.9 1,512.9 1,520.3 12.4 7.4 0.0 Construction 82.7 77.8 80.4 -2.3 2.6 Manufacturing 110.2 110.6 111.1 0.9 0.5 Retail Trade 205.6 205.9 206.5 0.9 0.6 Health Care 194.5 205.0 206.4 11.9 1.4 Tourism 152.8 156.4 157.9 5.1 1.5 Education 101.2 100.1 100.3 -0.9 0.2 Business Services 272.4 262.6 262.9 -9.5 0.3

17. Instrument May May 2010 2011 30 year Mortgage 5.0% 4.6% 1-year Index 0.37 0.19 Prime Rate 3.25 3.25 10-year Treasury 3.42 3.46

18. Permits Maricopa Pinal Pima 2011 ytd 1,323 184 185 2010 5,612 1,500 1,000 2009 6,355 2,130 1,865 2008 10,348 4,027 2,630 2007 21,882 8,147 3,715 2006 27,976 10,788 8,115 2005 43,256 18,191 11,035 2004 48,136 11,495 9,585 2003 39,652 6,730 8,010 2002 34,309 4,433 6,500

19. Optimistic Pessimism Consensus 2010 Actual: 7,112 2011 16,900 6,000 12,260 2012 27,800 10,000 18,290 Source: Greater Phoenix Blue Chip

20. Major issue is competition with foreclosed homes Market simulation: Entry level Infill Age restricted Green

21. Area First Qtr. First Qtr. 2010 2011 Maricopa County $ 227,250 $221,900 Peoria 264,440 210,000 South Phoenix 155,700 144,180 Surprise 167,990 167,840 Gilbert 227,025 218,130 Avondale 149,615 146,640 Goodyear 209,315 219,995

22. Area First Qtr. First Qtr. 2010 2011 Pinal County $133,100 $163,500 Apache Junction 162,585 167,920 Casa Grande 114,000 124,355 Maricopa 120,370 124,355 Queen Creek 139,900 150,235

23. SALES ACTIVITY Maricopa Pinal 2011 27,950 4,080 2010 106,975 12,765 2009 112,725 12,140 2008 81,700 9,985 2007 54,570 3,580 2006 67,035 3,860 2005 110,835 6,110 MEDIAN PRICE 2010 $142,000 102,500 2009 140,000 105,000 2008 186,000 134,000 2007 255,000 193,500 2006 260,600 205,000

24. Area First Qtr. First Qtr. 2010 2011 Maricopa County $145,500 $130,050 Peoria 165,245 149,665 S. Phoenix 114,750 96,840 Maryvale 64,395 52,000 Surprise 139,125 125,000 Mesa 135,675 119,000 Glendale 119,000 100,000

25. Median Market Market Market Sales Price Share Share Share (%) (%) Total 10,265 125,000 Foreclosed 3,745 126,645 36 Traditional 6,520 125,000 64 REO 2,610 114,465 40 25 Foreclosure related 6,355 62

26. 2008 2009 2010 Maricopa County 3.3% 3.8% 3.9% Pinal County 4.8 5.3 5.6

27. 2008 2009 2010 Maricopa 7.6% 7.3% 9.4% Casa Grande 2.7 2.6 4.4 Apache Junction 7.1 8.7 9.3 Maryvale 9.3 8.9 7.8 Gilbert 2.9 3.5 4.8 Surprise 6.5 7.3 6.9 Avondale 8.0 8.0 6.9 Buckeye 11.6 15.9 14.6

28. Areas 2009 2010 United States $172,100 $176,900 Phoenix 137,000 144,700 San Diego 350,500 392,800 Las Vegas 142,900 142,300 Dallas 140,500 134,700 Atlanta 123,500 122,700 Source: NAR

29. Area First Qtr. First Qtr. 2010 2011 Maricopa County 156 178 Peoria 159 178 Avondale 225 251 Surprise 159 180 Glendale 190 229 Chandler 154 175

30. Permits 2011 337 2010 353 2009 561 2008 1,085 2007 7,203 2006 6,187 Median New Unit Sales Price 2010 201,960 2009 169,475 2008 170,875 2007 245,155

31. Sales Activity 2011 ytd 4,560 2010 16,955 2009 13,735 2008 9,420 2007 11,550 Median Resale Home Price 2011 $ 85,000 2010 95,000 2009 108,000 2008 150,000 2007 179,000

32. Area First Qtr. First Qtr. 2010 2011 Maricopa County $100,040 $ 85,000 Peoria 77,280 74,865 North Scottsdale 170,840 156,990 South Scottsdale 125,000 107,520 Downtown 99,390 102,550 Union Hills 110,000 81,833 Glendale 54,900 46,000

33. UNITS AUTHORIZED 2011 ytd 4 2010 408 2009 637 2008 6,365 2007 6,676 2000’s 51,680 1990s 51,608 1980s 137,436