Home sales in Sandy Springs are -21.4% lower year-to-date in 2008 than in 2007 Sales through 3Q 2008 were -42.1% lower than in Q 2008 sales were higher than those of 3Q Q 2008 Sandy Springs Home Sales (FMLS Areas 131)

Home sales in Sandy Springs declined in each quarter of 2007 compared to the same period in the previous year, but the decline has reversed in the last 2 quarters in Q 2008 Sandy Springs Home Sales (FMLS Areas 131)

After several quarters of fairly stable median sales prices, there was a decline of 10% in 3Q 2008, even though the 3Q median price was above that of the first two quarters of 2008 Either the median in 3Q 2007 was abnormally high, or Sellers have done a better job of adjusting sales price expectations during the sales slowdown The year-to-date median sales price is down -3.3% 3Q 2008 Sandy Springs Home Sales (FMLS Areas 131)

The percent of original list price at which homes sell indicates the amount of price concession a Seller had to give to their Buyer during contract negotiations This % S/L ratio becomes lower when Buyer price resistance increases, degrading the net sales price to the Seller This ratio dropped to the lowest level of the last three years during 1Q 2008, recovered 2 percentage points in 2Q 2008, than fell again to well below historical levels 3Q 2008 Sandy Springs Home Sales (FMLS Areas 131)

Median Days on Market (DOM) increased substantially in 1Q 2008 from 4Q 2007, but have dropped during the last two quarters in 2008 YTD DOM for 2008 are running 18.6% higher than in Q 2008 Sandy Springs Home Sales (FMLS Areas 131)

The overall market trend toward Sellers paying some, or all, of their Buyer’s closing costs was evident in Sandy Springs during this period Year-to-date 2008, closing costs are being paid by Sellers in 60% of sales transactions and appear to have stabilized in the range of 50%-60% of transactions 3Q 2008 Sandy Springs Home Sales (FMLS Areas 131)

“Failed” listings are those which have either expired or withdrawn from marketing and are shown here as a percent of total finalized listings (expired, withdrawn and closed) A downward trend was in place since the peak in December, 2007, however nearly 73% of all 3Q 2008 listings ended up in this category, due to overpricing 3Q 2008 Sandy Springs Home Sales (FMLS Areas 131)

When Sellers initially price their home too high for the existing market, a price reduction is usually necessary in order to attract a buyer The percentage of transactions which follow a list price reduction normally ranges 25%-35%, across the metro area Reductions spiked to 52% in 3Q 2008 and again in 1Q 2008, and have remained much higher than usual in most periods after 2Q Q 2008 Sandy Springs Home Sales (FMLS Areas 131)

When Sellers are required to reduce their list price, their eventual % S/L ratio usually drops by 5-6 percentage points below that of the Seller not required to take a price reduction In Sandy Springs during 2008, that difference was above that range (-6.6 percentage points) In 3Q 2008, at the median 2008 sales price, this would represent -$38,700 less than for a Seller not required to reduce their list price 3Q 2008 Sandy Springs Home Sales (FMLS Areas 131)

Even after a price reduction, those sellers usually end up with a Sales price/New List price ratio nearly equal to, or lower than sellers not having to reduce their list price 1Q 2008 was an exception to that with price-reduced Sellers realizing a higher percentage of their reduced list price 3Q 2008 Sandy Springs Home Sales (FMLS Areas 131)

A price reduced property also takes longer to sell than a non-price reduced property In 3Q 2008, it took 3.2 times longer to sell a price-reduced property than one without a price reduction The results are higher carrying costs, greater inconvenience due to keeping the house in showing condition and delay in finding and moving to a new home 3Q 2008 Sandy Springs Home Sales (FMLS Areas 131)

We now see that in 3Q 2008, out of every 100 finalized listings, 73 failed to sell and 27 sold Of the 27 listings which sold, 14 (52%) had a price reduction before a Buyer was found Therefore, if 73 failed due to overpricing and another 14 required a price reduction in order to sell, 87 out of every 100 listings were overpriced in 3Q 2008, resulting either in no sale, or sale at a much-reduced price after a much-longer listing period 3Q 2008 Sandy Springs Home Sales (FMLS Areas 131)

Homes being listed for sale compete for buyers with the other listings currently on the market, based upon price and condition When there are more listings on the market, prices must be in line with the current market and properties must be in top condition in order to sell quickly, at top dollar The number of months it would take to sell the September, 2008 listings is 38% higher than in September of 2007, at 16.5 months 3Q 2008 Sandy Springs Home Sales (FMLS Areas 131)

Sales in 3Q 2008 were above those of 3Q 2007 representing the first quarterly increase in the last 7 quarters. Year to date sales were 21% lower through September. Slower sales resulted in Sellers receiving a lower median sales price (-10%), less of their original list price (-2.3 percentage points), longer sell times (+12%) and a greater incidence of list price reductions before attracting a Buyer (+9 percentage points) than in the same period in Also 73% of listings failed to sell and 87% of listings were initially overpriced in the current market, causing high rates of expirations, withdrawals and list price reductions. The supply of active listings has been reduced compared to recent months, but still remains high at 16.5 months supply. CONCLUSION: The high number of active listings in this market has increased pressure on Sellers to offer their property for sale at the low end of their price range and prepare them to be in top condition, relative to competing listings. Sellers who have done that were able to sell at a median of 95.7% of their original list price in a median of 39 days on market. 3Q 2008 Sandy Springs Home Sales (FMLS Areas 131) Summary