Britt Fair December 15, 2011 Real Estate 2012: More Uncertainty

Other Unique Home Listings

Slow Cumulative Recovery from “Great Recession”

“Great Recession” Cuts Deeper

Consumers Saving Slows GDP Growth

Business Investment Rebounding

Consumer Confidence & Jobs “Decouple”

Headlines Since August 1  Debt ceiling debate goes down to wire  No big deal - the markets barely moved, and everyone knew it would get done somehow  S&P downgrades US Treasury bonds  Washington expresses disbelief, but rest of the world already knew US was not “risk-free”  Odd market reaction (Treasury rates fell!) – maybe something more important happening  Europe pledges more “bailouts” for PIIGS  Good news that Germany is supportive, but bad news that the problems don’t seem to be fading

Panic in Markets Has Boosted Gold

10-Year US Treasury bond yields Greece is the word Fed’s “QE2” Greece, Round 2

10-Year US Treasury bond history Shows how low interest rates are by any historical measure

 Job gains are too slow for comfort  Tracks US population growth  Private sector up 1.8 million jobs last 12 months, but still down over 6 million jobs vs. December 2007  Misleading drop in unemployment rate  Dropped from 9% to 8.6% in Nov  Not real - people stopped looking  Slow job growth is due to “uncertainty”  Uncertainty of clients’ demand  Uncertainty over future rules, taxes, initiatives, etc. Current Status of Job Market

Metro Employment Change (10/10-10/11) Source: Bureau of Labor Statistics

Employment Change (10/10-10/11) 12 Largest US Metro Areas Source: Bureau of Labor Statistics

Stock market wealth effect: 3-year recovery helped “rich get richer”

NTREIS Dollar Volume Since 2004

DFW Sales By Price 2011 (page 1)

DFW Sales By Price 2011 (page 2)

Today’s Market: NTREIS Sales YTD November 2011

DFW housing since 1999: No Boom/Bust Source: S&P Case-Shiller DFW home prices down 7.9% from Jun’07 peak, but up 3.8% from Feb’09 bottom

Fewer DFW homeowners are “underwater” Source: CoreLogic

Summary & Predictions  2012 housing market will look a lot like 2011  European sovereign debt crisis will continue to cause uncertainty  Mudslinging in US election season will keep negativity  Interest rates will remain remarkably low throughout 2012  DFW economic recovery will outpace national average  Job creation and general business environment are much better here  Oil and gas industry also boosts DFW  City and state finances are healthier than others in US  Home prices appear to have stabilized in DFW  Further free fall of home values appears unlikely  This remains one of the best times in US history to buy a home with the combination of ultra-low mortgage rates and reasonable home prices