The Luxury Distressed Market: Tough Times Ahead The Luxury Distressed Market: Tough Times Ahead Beth Jo Zeitzer President/Broker R.O.I. Properties SLHT Distressed Property Symposium April 16th, 2009 Page 1

Foreclosures – Buyers Respond To Low Prices  The monthly median sales price (across all areas and types) is at the lowest level of the millennium.  At $118,900, it is lower than the previous low point of $125,900 reached on January 16,  It has now fallen 56% from the peak level of $267,000 reached on June 16, As a Result …  Buyers are back in the market for smokin’ deals.  Investors and first time buyers account for the increase.  Purchases are focused where pricing is lowest – including the west valley and the outer suburbs  Medium-priced areas like Mesa, Gilbert, Chandler and Peoria are also seeing an increase  The move up and top end of the market is not yet participating in the increased buying activity Source: The Cromford Report Page 2

General Market Snapshot Source: The Cromford Report February 26th, 2009 Page 3

REO Market Snapshot Source: The Cromford Report Page 4

$1M-$1.5M Market Snapshot Source: The Cromford Report Page 5

Lender Owned Sales Source: The Cromford Report Page 6

Days Inventory By Price Range Source: The Cromford Report Page 7

Sales Per Month Source: The Cromford Report March, 2002: 5,727 March, 2003: 6,471 March, 2004: 8,677 March, 2005: 9,957 March, 2006: 7,495 March, 2007: 5,900 March, 2008: 4,257 March, 2009: 7,594 Page 8

Investors Are Back Source: The Cromford Report Data based on the “intended use” filed with the county recorder Page 9

Spotlight on: Paradise Valley Sources: The Cromford Report, ARMLS  Active Listings: 581  Pending Listings: 21  Properties Sold Last Month: 9  REOs & Short Sales Sold Last Month: 0  Days On Market – Monthly Sales: 355  Active Listings $/SF: $  Monthly Sales $/SF: $  Median Price – Monthly Sales $1,025,000  Appreciation – Monthly Median: -41.4%  Current NOTS: 42  Active REOS: 9  Active Pre-Foreclosures: 34  Current Pending Distressed Properties (Lender Owned, Short Sale, Pre-Foreclosure): 11  Closed Distressed Sales, Last 6 Months (Lender Owned, Short Sale, Pre-Foreclosure): 19  Of These, Sales Over $1M: 3 of 19 Page 10 Plenty of PV homes for sale, but sales are sluggish. Prognosis – more For Sale signs ahead.

Active Listings - PV Source: The Cromford Report Page 11

Monthly Sales Trends - PV Source: The Cromford Report Page 12

The Distressed Luxury Market  While the low end of the distressed market is trading at high volume, the luxury market remains stagnant  Pricing in the luxury market remains unrealistic especially when compared to banks’ pricing  NOTS are steadily increasing in all luxury markets  Continued economic uncertainty makes it difficult for luxury buyers to commit  Lending standards remain tight, and only those with the best credit may qualify Page 13

Thank You! Page 14