This Month in Real Estate - January 2010. US Edition. A nationwide wrap up of the current events and news updates involving real estate in the US

1. Commentary 2
Released:
The Numbers That Drive Real Estate 3
January 8, 2010
Recent Government Action 9
Topics for Buyers and Sellers 15
Brought to you by:
KW Research

2. Commentary
December closed out the year with further indications of a budding recovery, illustrating we’ve
come far from the pessimistic outlook this time last year. Soft home prices, affordable financing
conditions as well as the government’s tax break targeted at the housing market have
contributed to providing the much needed boost to the housing market. Solid gains in home
sale activity helps to pare down inventory to a healthier level, which in turn will likely bring more
stability to home prices.
The most recent Federal Reserve meeting indicated a more positive outlook about our
economic condition as they pointed to plans to reel in emergency programs. Mortgage rates,
which have hovered around 5 percent for most of 2009, are starting to climb again. Economists
expect these unprecedented rates to go back up as Fed’s program to purchase mortgage-
backed securities expires in March and private investors are demanding higher returns.
According to Nar 2009 President Charles McMillan, “Even with price declines in recent years,
the typical home seller saw their equity increase 27 percent.” NAR’s most recent Home Buyers
and Sellers survey reported that 87 percent of survey respondents consider their home a good
investment, and more than half see it as a better investment than stocks. This indicates that
Americans still see homeownership as a source of steady long-term wealth accumulation.
Employment will continue to be closely watched and steps on the road to recovery will likely
continue to come one-by-one. Although concerns remain, many experts are hopeful of a
brighter year 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
Existing home sales surged a record-breaking 44 percent from a year
ago, the highest annual gain since NAR started tracking the data in
1999. The strong gain can be attributed to first-time buyers who
accounted for 51 percent of all home sales, the highest on record
dating back to 1981, as they rushed to beat the deadline for the first-
time buyer tax credit that was due to expire November 30. The previous
high was 44 percent in 1991. Sales activity is at the highest level since
February 2007 when it reached 6.55 million.
Seasonally Adjusted Home Sales
Latest data release: December 22, 2009
Source: National Association of Realtors KW Research 4

5. Median Home Price
In Thousands
Low home prices continue to add the extra boost to home sales.
Existing-home price was $172,600 in November, 5 percent higher from
its low in January. While still 4.3 percent down from a year ago, it is the
smallest decline in two years. Distressed properties, which accounted
for 33 percent of all transactions in November, continue to hold down
the median home price, as they typically sell for 15 to 20 percent less
than traditional homes.
Latest data release: December 22, 2009
Source: National Association of Realtors KW Research 5

6. Inventory - Number of homes available for
sale
In Millions
The supply of homes is now at the lowest level in almost three years. The
supply of existing homes for sale at the end of November declined 1.3 percent
to 3.52 million, representing a 6.5-month supply at the current sales pace,
down from a seven-month supply in October. Generally, a six-month supply is
considered balanced. Compared to a year ago, there are now 15 percent fewer
homes on the market.
15%
Number of Homes Available for Sale decline
from
last year
Latest data release: December 22, 2009
Source: National Association of Realtors KW Research 6

7. Mortgage Rates
30-Year Fixed
Mortgage rates have begun to inch back up as government support runs its
course and interest rates rise. On December 24, the average 30-year
fixed-rate mortgage was 5.05 percent, the first time it has gone above 5
percent since the end of October. According to Amy Crews Cutts, deputy
chief economist at Freddie Mac, “Extraordinary resources have been put
into keeping the rates down and supporting the mortgage market, and it’s
hard to imagine that the rates can go much lower than they are.”
2009 Average Weekly Mortgage Rates
Source: Freddie Mac KW Research 7

8. The percentage of a median family’s income
Affordability - required to make mortgage payments on a
Percentage of Income
median-priced home
Affordability continues to be at a record level thanks to unprecedented
interest rates, 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.
Well below the
historical
standard of
25%
Affordability as of November every year. Calculations assume a 20% down payment.
Source: National Association of Realtors KW Research 8

9. Residential
Retrofit 10
Program
Cash for
Recent Clunky
Appliances
11
Call to Increase
Government Action Lending
Fannie and
12
Freddie 13
Support
Brought to you by:
KW Research

10. Residential Retrofit Program
December 2009
Vice President Biden recently announced a program called “Recovery
Through Retrofit.” In addition to creating energy performance labels, it
will create national energy performance measures for existing homes.
It will provide the following:
1. Access to home energy retrofit information
2. Access to financing for retrofits
3. Access to trained professionals to perform the retrofit
The goal of the imitative is to create more energy efficiency in homes to
benefit the country’s energy consumption. Retrofits include but are not
limited to energy efficient heating, cooling, and water systems,
insulation, roofing, flooring, windows, and solar panels.
Source: National Association of Realtors KW Research 10

11. Cash for Clunky Appliances
December 2009
In efforts to vamp up energy efficiency, the federal government is
implementing a rebate program for appliances. People can swap in
their old “clunky” appliances for new energy-efficient ones, saving
electricity and saving on monthly bills.
A 20-year-old fridge can use three times as much energy
as a new Energy Star-approved fridge. The age of your
appliances impact your actual savings, so check into it
before purchasing.
Important things to know:
1. Plans vary by state. Check out energysavers.gov for details.
2. Buy before it ends. Like the car rebate program Cash for Clunkers,
this program has a set amount of federal money allocated to it. Once
the $300 million is gone, the program will likely end. It is expected to
run out quickly.
Source: The Associated Press KW Research 11

12. Government Calls for Increased Lending by Banks
December 15, 2009
According to the FDIC, lending has fallen for five
consecutive quarters – even though banks have become
profitable again and have started to repay government
loans. Banks lent $600 billion less from September 2008
to September 2009, representing a 7 percent decline.
Banks site a lack of qualified borrowers as the primary
reason and point to the trend of decreased borrowing
during recessions.
The goals of banks and the government appear to be in
line now with each bank representative talking about
getting aggressive with small business lending over the
next year. Goals for 2010 small business lending include
$5 billion for Bank of America and $4 billion for Chase.
As banks continue to be profitable, they can be expected
to use the proceeds to repay the government as well as
increase their efforts to make good loans. Small
business owners should expect an increase in the
amount of loans available during 2010 compared to
2009. Holding true to the trend in 2009, a good credit
score and steady employment will likely continue to be
important conditions of obtaining a mortgage.
Sources: The Washington Post, FDIC KW Research 12

13. Fannie & Freddie Get Unconditional Federal Support
December 24, 2009
On December 24, the government announced it will provide unconditional financial
support to Fannie Mae and Freddie Mac. This will expire in 2012, after which the firms
will have approximately $290 billion allocated to them.
• September 2008: Bush administration took over Fannie Mae and Freddie Mac at the height of the
financial crisis and promised $200 billion to keep them afloat.
• Earlier in 2009: Obama doubled the $200 billion to $400 billion.
• December 24, 2009: The president announces the government will provide unconditional financial
support to Fannie Mae and Freddie Mac for 2010-2012.
• December 29, 2009: Analysts predict that Fannie and Freddie will begin purchasing delinquent
loans.
These two institutions play an integral role in both the housing and lending industries.
• When a bank makes a conventional mortgage loan, it will then sell that loan to Fannie Mae or
Freddie Mac.
• This frees up the bank to then make more loans and repeat the process.
When Fannie and Freddie stop buying mortgages from the banks, mortgage credit
freezes, banks stop lending, and houses can’t sell. Such was the case last year at the
height of the credit crisis. Confidence in these firms is a key component to the flow of
credit and this unconditional financial support intends to bolster that confidence.
Despite the short-term unconditional federal support, experts say it is critical for the real
estate industry, the lending industry, and the economy that these companies keep their
long-term vitality in mind over the next three years.
Source: The Washington Post KW Research 13

14. Tips to Save
Topics for Home Buyers, Energy and Add 15
Value
Making
Sellers, and Owners Maintenance
Routine
16
Brought to you by:
KW Research

15. Tips to Save Energy and Add Value
When it comes to energy efficiency, look for smart features and expertise to help you save
energy and money and add value to your home.
1.Begin with a right-sized home. If the home you buy is simply too large for you or your
family’s needs or plans, you stand a good chance of wasting energy through excessive
heating and cooling costs. If it’s too small, you’ll feel cramped and uncomfortable. It’s a big
investment, so seek balance and buy it “right” from the outset.
2.Purchase ENERGY STAR appliances such as your TV, dishwasher, washer and dyer, and
microwave. And especially the refrigerator, as it alone contributes about 10 percent of the
energy use in a home. Also, unplug electronics not in use or turn off power strips to avoid
phantom charges.
3.Install efficient lighting such as compact fluorescent (CLF) or LED bulbs in every fixture.
Lighting accounts for about 6 percent of an energy bill each year.
4.Get an energy audit and have tests performed to identify ways of
improving your efficiency. You can always upgrade your heating,
ventilation, and air conditioning (HVAC) system as well as your
thermal envelope, which includes insulation, windows, and doors
and the seals or weather-stripping around them.
Visit energy.gov/energytips for more tips.
KW Research 15

16. Making Home Maintenance Routine
Home ownership has its wonderful benefits, and as one of
the single biggest financial assets many people own,
preparing, planning, and making home maintenance a
routine are important.
Personal finance experts recommend setting aside at
least 1 percent of your home price each year in a
separate account for maintenance and repair costs.
Automatically deducting the funds from your paycheck or
automatically transferring it between accounts each month
can make this easy. Some years homeowners will have less
than 1 percent in maintenance costs or repairs and some
years they will have more. When something big and
unexpected happens; for example it’s finally time to replace
the roof; this will provide the financial cushion to take care of
it and the peace of mind knowing one of their biggest assets
is well taken care of.
Source: MSN Money KW Research 16

17. 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 17

18. 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 18

19. 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 19

20. 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 20

21. 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 21

22. 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/
• 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 22

23. 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 23

24. 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 24

25. 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
• No cost. No commitments. No obligations. No fuss. No
kidding.
KW Research 25

26. Follow Paul on line…
Home Web Page On Twitter
• - www.twitter.com/PaulWDrury
• www.druryrealty.com
On Zillow On FaceBook
• www.zillow.com/profile/PaulWDrury • - www.facebook.com/paul.w.drury
On Trulia On LinkedIn
• www.trulia.com/profile/paulwdrury • www.linkedin.com/in/paulwdrury
KW Research 26