February Edition of This Month in Real Estate National and Local News

1. Commentary 2
Released:
The Numbers That Drive Real Estate 3
February 5, 2010
Recent Government Action 9
Topics for Buyers and Sellers 15
Brought to you by:
KW Research

2. Commentary
January began the new decade with indications that the economy
is beginning to gain traction. Real GDP grew by 2.2 percent in
the third quarter of 2009 and preliminary signals point to a
continued positive trend for the following quarter. GDP is a
measure of total economic growth for the country in a year.
A dip in home sales in December was due in large part to timing.
First time buyers that would have liked to close in December but qualified for the tax
credit bumped their timeline up in order to cash in. News of the credit’s extension
reached many of them after their plans to close in December were set.
Interest rates are back below 5% and home prices are up compared to last year. The
government continues to attempt to minimize the impact of troubled homeowners by
continuing to improve its foreclosure prevention program and has also taken steps to
help foreclosure buyers purchase faster.
Although the unemployment rate is expected to stay high as jobs increase modestly,
experts expect the economy to continue to grow in 2010.
KW Research 2

3. Home Sales 4
The Numbers That Home Price 5
Inventory 6
Drive Real Estate Mortgage Rates 7
Affordability 8
Brought to you by:
KW Research

4. Home Sales
In Millions
After a rising surge for three straight months, existing home sales slowed in
December after first-time buyers rushed to meet the original November tax
credit deadline and evidenced by first timers accounting for 51% of sales in
November compared to 43% in December. “It’s significant that home sales
remain above year-ago levels, but the market is going through a period of
swings driven by the tax credit,” said Lawrence Yun, NAR chief economist.
December sales of 5.45 million remain 15 percent above the 4.74 million-unit
level last year.
Seasonally Adjusted Home Sales
Latest Data Release: January 25, 2010
Source: National Association of Realtors
KW Research 4

5. Median Home Price
In Thousands
Existing-home price was $178,300 in December, 1.5 percent higher than
December 2008 and 8.2 percent above its low in January 2009. It was the first
year-over-year gain in median price since August 2007, attributable to an
increase in the number of mid- to upper-priced homes in the sales.
Latest Data Release: January 25, 2010
Source: National Association of Realtors
KW Research 5

6. Inventory - Number of homes available for sale
In Millions
The supply of homes continued to shrink, falling 6.6 percent to 3.29 million,
representing a 7.2-month supply at the current sales pace. Compared to a
year ago, there are now 11 percent fewer homes on the market. This is the
lowest level of competing homes on the market since March 2006.
Number of Homes Available for Sale - In Millions
11%
decline
from last
year
Latest Data Release: January 25, 2010
Source: National Association of Realtors
KW Research 6

7. Mortgage Rates
30-Year Fixed
Mortgage rates have moved back to less than 5 percent, which have been
categorized by industry experts like Freddie Mac chief economist Frank
Nothaft as “near a record low.” This move that may help boost home loan
demand and lend support to the housing market recovery. On January 28, the
average 30-year fixed-rate mortgage was 4.98 percent.
2009 Average
5.04%
Average Weekly Mortgage Rates
Source: Freddie Mac KW Research 7

8. The percentage of a median family’s income required
Affordability - to make mortgage payments on a median-priced
Percentage of Income
home
Affordability remains at record levels, supported by the lowest mortgage
rates in decades, low home prices, as well as the first-time buyer tax credit.
So far this year, the home price-to-income ratio has fallen well below the
historical average of 25 percent. The ratio now stands at 15 percent.
Historical Average: 25%
Well below the
historical
standard of 25%
Affordability as of December every year. Calculations assume a 20% down payment.
Source: National Association of Realtors
KW Research 8

9. Recent FHA Tightens Requirements
Paperwork Streamlined for Mods
10
12
Government Action FHA Helps Foreclosures Sell Fast
Small Business Lending Proposal
13
14
Brought to you by:
KW Research

10. FHA Tightens Lending Requirements
The Federal Housing Administration (FHA) insured almost 30 percent of all purchase loans and 20 percent of
refinances from September 2008 to September 2009, up from about only 2 percent of all loans three years
earlier. The influx of loans combined with falling capital reserves, which cushion against rising defaults, has
led the FHA to announce several measures to strengthen its economic vitality.
On January 20, the FHA announced it will do the following:
1. Raise Insurance Fees - In exchange for FHA backing, borrowers pay an up-front premium.
Previously it was 1.75% of their loan. It’s now risen to 2.25%.
Sales price of: $200,000 x 1.75% = $3,500 $1,000 additional
Sales price of: $200,000 x 2.25% = $4,500
2. Cap Seller Contribution to Buyer’s Closing Costs - Sellers can contribute a maximum of
3%, down from 6%, of the sales price to the buyer’s closing costs. The higher cap created risk by
incentivizing homes to sell at a substantially marked-up price to compensate for contribution.
3% is still a significant proportion to closing costs.
Sales price of: $200,000 x 3% = $6,000 in closing costs
3. Require Higher Down Payments for Poor Credit - Beginning this summer, borrowers with
a credit score below 580 will need to make a down payment of at least 10%. The FHA will still
provide a viable alternative to the 1% of FHA borrowers who fall in this category, whereas most
lenders’ credit score cutoff is 620.
Sources: The Wall Street Journal, Keller Williams Realty Research First-Time Buyer Survey KW Research 10

11. FHA Tightens Lending Requirements
These changes will likely have the biggest impact on first-time buyers. First-Timers are
about half of all buyers in the market right now. According to a Keller Williams Realty Research
study, 73% of first time buyers put down less 3.5% or less. 3.5% is the minimum down payment
for financing to be backed by the FHA.
Concerns have been expressed about how these changes will happen alongside two other
noteworthy changes this spring:
1. The expiration of the home buyer tax credit
2. The end of the Federal Reserve’s purchase of mortgage-backed securities
(which has helped keep rates low over the past year)
The good news is the FHA, an integral player in the market, has stepped up to
protect itself so it can continue helping first-time buyers, those with less cash for a
down payment, and those with less-than-perfect credit obtain home loans.
Additionally, these proactive measures aim to protect the agency from needing taxpayer funds
from the government.
Sources: The Wall Street Journal, Keller Williams Realty Research First-Time Buyer Survey KW Research 11

12. Paperwork Streamlined for Modifications
During 2009, 900,000 troubled homeowners began trial loan modifications under Obama’s
Making Home Affordable program. However less than 67,000 went from the trial phase to
a permanent modification. One of the main culprits for borrowers not qualifying for the
permanent modification is paperwork.
In an effort to streamline paperwork, the Treasury released the following simplified
paperwork requirements:
1. A form requesting a modification
2. Authorization for the bank to obtain tax information from the IRS
3. Proof of income, i.e. two recent paystubs
Beginning June 1, lenders must collect the paperwork before beginning the trial
modification period.
These changes are aimed at increasing the number of people who can avoid foreclosure
and stay in their home. Short sales can provide an alternative for those who don’t qualify.
As the number of defaults and foreclosures slow, home prices are expected to stabilize and
normalize the market.
Source: The Wall Street Journal KW Research 12

13. FHA to Help New Foreclosures Sell Fast
FHA has announced it will lift the 90-day seasoning requirement for one year. The FHA ‘s 90-
day “seasoning” provision requires that a home sold to an FHA buyer must be owned for at least
90 days by the seller before closing. This is intended to prevent buyers from purchasing property
from “flippers” at an overly inflated value.
In the current climate, quickly selling foreclosures has risen in importance
while the prominence of “flippers” has dramatically decreased. Acquiring,
rehabbing, and reselling a foreclosure often takes fewer than 90 days.
Banks have been reluctant to sell foreclosures to FHA buyers if they would
need to push closing back to meet the FHA requirement.
The policy change will allow FHA buyers to purchase HUD-owned and bank-owned properties
along with private sales faster. There are additional stipulations; for more, please visit the press
release.
Quickly moving foreclosures out of the bank’s hands and
into those of home buyers is an important step in stabilizing
home prices, neighborhoods, and communities leading toward
a healthy housing market.
Source: U.S. Department of Housing and Urban Development KW Research 13

14. Obama proposes $30B for Small Business Loans
$8B (2%) decrease in
Small businesses are a major driving force of the economy. More than 95
small business lending from
percent of businesses in the United States have less than 500 September 2008 to September 2009.
employees. They tend to have less capital “cushion,” which can make it
more difficult to weather a recession. However, the number of small
businesses generally is not significantly impacted by recessions.*
Unemployed workers turn to entrepreneurship as an alternative, driving
innovation and growth. Available funds are a critical part of this by helping
existing businesses to bridge the gap and start-ups to grow and expand.
President Obama announced plans to create jobs through aiding small
business during the State of the Union Address. The first steps in this
direction have been announced but will need Congressional approval. The
initiative would open up $30 billion of the federal money for
community banks who commit to increasing small business lending.
Participating banks would pay the government a 5%-1% dividend on the
capital they receive depending on the level of lending. Others have discussed
the possibility of having the Small Business Administration lend directly
rather than going through community banks.
Supporting small business will be an important component to lowering *In the 1990-1992 recession, 1,068,124 small
businesses were closed. 1,085,737 were created.
unemployment and an overall firmer economy, but the method is up for A net of more than 17,000 jobs were gained. In
discussion. Look for continued discussion of small business lending and steps 2001, more businesses were closed than opened,
but in the following two years, there was a net
toward improving it this year. gain nearly 55,000 small businesses.
Sources: The Washington Post, U.S. News & World Report KW Research 14

15. Topics for Home Pricing Research 16
Buyers, Sellers, and Staging Stats 17
Owners
Brought to you by:
KW Research

16. Pricing Research
Here is a sneak peek at conclusions from KW Research’s most recent
Home Seller’s Survey. The full report will be available in March.
Price it right.
• Sellers who listed their home at the price originally recommended by their agent
sold it:
− 38 days faster
o This would save a mortgage payment and taxes and insurance, for example:
For a $200,000 home with a 20% down payment and 6.5% interest rate, the principal
and interest alone would be $1,101*
− For 2.25% higher
o 2.25% of $200,000 is $4,500*
− With 1 less price reduction
o The average price reduction was $11,042.
* Averages based on national survey data. Actual dollar amounts are for example only.
Source: Keller Williams Realty Research Getting the Home Sold KW Research 16

17. Staging Stats
Staging can be an important component, not only in selling a home but also in attracting
buyers to tour it in person. Even with all of the commonly accepted advantages of staging, Top reasons for
only about 1 in 3 sellers stage their home. not staging
include the
Pictures of the home, that are then posted online and viewed following: Seller
by potential buyers, often look their best if the home has been staged. did not believe
was necessary, or
The National Association of Realtors 2009 Profile of Home Buyers and Sellers he/she didn’t
found that, as a result of viewing a home online: • 77% of buyers drove by or viewed the home want to incur
• 61% walked though the home costs.
• 22% requested more information
The Keller Williams Realty Research Getting The Home Sold study found it typically took between
2-6 hours to stage a home and cost an average of $523, including the cost of a staging professional
and items purchased or rented.
The average increase in list-to-sell in staged homes: 1.08%
The average cost of staging: $523
Potential benefit based on a $200,000 home:
$2,160 -523 = $1,637
The study found staged homes had more showings and a higher list-to-sell
percentage than those that were not staged. Staging had advantages at all
price points, but the finding showed that staging is particularly important for
homes over $600,000.
Source: Keller Williams Realty Research Getting The Home Sold KW Research 17

18. 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 associates are equipped with all the knowledge and
information to help you navigate through the process of buying or
selling a home in this challenging market.
KW Research 18

19. About Keller Williams Realty
Founded in 1983, Keller Williams Realty, Inc., is an international real estate
company with more than 74,175 associates and 693 offices located across the
United States and Canada. The company began franchising in 1991, and
following years of phenomenal growth and success, became the third-largest
U.S. residential real estate firm in 2009.
The company has succeeded by treating its associates as partners and shares
its knowledge, policy control, and company profits on a system-wide basis.
Focusing on helping associates realize their fullest potential, Keller Williams
Realty is known as an industry leader in its family culture, unmatched
education, profit sharing business model, phenomenal coaching program, and
technology offerings. The company provides associates with all the tools
needed to grow and thrive in today’s market.
www.kw.com
KW Research 19

20. About Paul W. Drury
• Originally licensed as an agent in Ohio in 1986, Paul began with
Lehman Johnson Real Estate in Elyria. He acquired his Real Estate
Brokerage License in 1992 and became an Associate broker with West
Shore Realty. In 1995 he moved his brokerage license to Continental
Realty Investment where he began to focus on additional work with
commercial and investment real estate. During these years he also
performed professional appraisals with The Appraisal House.
• In 2001 he began Drury Realty Consulting and worked as an
independent Real Estate Consultant and worked on his own until 2009
when he joined Keller Williams Realty, Greater Cleveland West. “Being
a part of the Keller family provides me with tools and serves
unachievable strictly on my own, provides me with the tools and
networking of a huge national network, while still enabling me to
work, act, and function as the manager of my own business. It’s the
best of both worlds.” – Paul
• Paul's Home Page
KW Research 20

21. What we have to offer sellers
• Sellers now have access to tools unimaginable just a few
years earlier. Keller Williams Realty doesn’t spend
valuable resources promoting its own name. Instead it puts
resources into the best tools and resources for education
and training, providing the highest quality real estate
professionals into local communities.
• Properties put up for sale by Paul are also listed in KWLS, a
national MLS, implemented by Keller Williams the third
largest company in the US; local MLS; NEOHREX (Northern
Ohio Real Estate Exchange); and on national sites such as
Trulia, Zillow, CyberHomes, and others.
KW Research 21

22. What we have to offer sellers ( Cont’d)
• Other tools brought to bear by Paul include branding using
unique web addresses with a virtual tour that can be
emailed or the link can posted anywhere, to include Craig’s
List and Back Page. Examples of properties sold recently
using this method include:
– 947 Gulf Road in Elyria (sold in 28 days) http://947gulfroad.com/
– 359 Gayle Drive in Sheffield Lake (sold in 57 days) http://359gayledrive.com/
– 327 Gayle Drive in Sheffield Lake (sold in 18 days) http://327gayledr.com/
– 810 Sandalwood Drive in Elyria (Sold in 19 days) http://810sandalwooddr.com/
• Not Planning to sell in the near future?
– Would you still like to monitor what is happening in your
neighborhood or area?
– Contact Paul now for a free periodic market update. No cost. No
obligation.
KW Research 22

23. Properties currently for sale
• Properties currently for sale:
– 37101 Hunters Trail in Avon - http://37101hunterstrail.com/
– 4435 Porter Road in North Olmsted - http://4435porterroad.com/
– 19593 Whitehead Road in Wellington - http://19593whiteheadrd.com/
– 1 Grover Court in Grafton – http://1groverct.com
– 416 Winckles Street in Elyria – http://416wincklesst.com
– 149 Woodview Drive in Elyria – http://149woodviewdr.com
• Would you like to see one of these homes? Click on the link
for a tour.
• Would you like your home or property promoted like
these?
– Contact Paul for a free, no obligation, consultation today
at 440-385-5650.
KW Research 23

24. What we have to offer buyers
• Buyers of Real Estate also have access to tools
unimaginable just a few years before. Since Keller Williams
doesn’t spend its money promoting its own name, it puts
its resources into providing the best tools and resources to
its systems, education, and training, thus providing the
most professional real estate team members back into the
communities.
• Paul is available most hours of the day directly without
having to speak with assistants and he monitors his email
regularly.
KW Research 24

25. What we have to offer buyers (Cont’d)
• Buyers can access Paul’s website at www.druryrealty.com
and conduct their own searches as well as create their own
search profiles for searching for properties anywhere in
Ohio. If relocating out of Ohio, Keller Williams offers one of
the finest relocation referral networks in the nation. While
we may not be the biggest firm in Northern Ohio yet, we
are in many areas of the national already.
• Paul’s website is easy to manage and he can set up search
profiles for you so you get notified at about 8:30 am of any
new properties that come available. He also has profiles set
up on national websites such as Trulia providing for
greater access to search tools.
KW Research 25

26. Investors & Shoppers – Foreclosure Watch
• Are you shopping for the deal of a century for your
new home?
• Are you in the market to buy a home at a steep
discount and try and fix it up and “flip it”?
• Are you looking for a home for someone else?
• Want to know what is happening in your marketplace?
• Send Paul an email today and request free market
updates at paul@druryrealty.com
• Call Paul directly at 440-385-5650.
• No cost. No commitments. No obligations. No fuss. No
kidding.
KW Research 26

27. Follow Paul on line…
Home Web Page On Twitter
• www.druryrealty.com • - www.twitter.com/PaulWDrury
On Zillow On FaceBook
• www.zillow.com/profile/PaulWDrury • - www.facebook.com/paul.w.drury
On Trulia On LinkedIn
• www.linkedin.com/in/paulwdrury
• www.trulia.com/profile/paulwdrury
On the Real Estate Global
Network
• www.realestateglobalnetwork.com/profile/PaulWDr
ury
KW Research 27