1. The Truth About Texas Real Estate What your clients should know about how Texas is different Last updated: Feb. 20, 2009

2. The Challenge Homeowners around the country are listening to the national news media and hear only gloom and doom about the real estate industry. What few may realize is that the media’s most alarming headlines come from states like California, Florida, Arizona, Nevada. Things are different here in Texas. As Texas REALTORS®, we are the authoritative resource on our local markets, so our state and local associations have launched a campaign in early 2009 to help us spread “The Truth About Texas Real Estate” with clients and prospects.

3. Why Texas is different: Strong, diverse economy Obviously, the economy drives real estate (and vice versa) and what we hear nationally about the economy isn’t good. But, consider this … The Texas economy is very diverse and its largest industries are performing well, such as oil & gas and government. Texas continues to add jobs each month, in contrast to the national economy, which is losing jobs. Sources: Real Estate Center at Texas A&M University and U.S. Bureau of Economic Analysis

4. Why Texas is different: Strong, diverse economy Sources: Texas Workforce Commission, U.S. Bureau of Labor Statistics, and Real Estate For example, in December 2008: The U.S. economy lost 2.8 million jobs compared to December 2007. Texas gained 154,600 jobs over the same period. All Texas metros experienced positive employment growth rates from December 2007 to December 2008. Texas’ unemployment rate has been less than the national rate for 25 consecutive months. Over the past year, Austin, Dallas / Fort Worth, Houston, and San Antonio each added more jobs than Miami, Los Angeles, and Chicago combined. Center at Texas A&M University

5. Why Texas is different: Enduring home values Through the mid 2000s, places like California, Florida, Nevada, and Arizona saw dramatic spikes in home prices while Texas experienced steady appreciation. As the national economy softened in late 2007, those red-hot real estate markets cooled and prices began dropping dramatically. Texas, in contrast, has remained relatively steady. In fact, home price appreciation in Texas has not fallen below zero in the last 16 years. What the headlines say…What doesn’t make the news… Median sales prices are down 41%...in California Median sales prices are down 5%...in Texas Average sales prices dropped $115,000 in one year…in Arizona Average sales prices are unchanged year-to-date …in Texas Sources: Real Estate Center at Texas A&M University, California Association of REALTORS®, Arizona Regional MLS, OFHEO

6. For example, Texas is one of only eight states that experienced positive appreciation in home values from December 2007 to December 2008.

7. Why Texas is different: Enduring home values Source: First American CoreLogic, Feb. 2009 Over the last year, while nearly every other city in the nation saw home values fall, Texas’ major metros topped the nation in positive home price appreciation. #1 Austin–Round Rock leads the country’s largest core-based statistical areas (CBSA) in home price appreciation with a 3.7% increase in 2008. #2 Houston–Sugar Land–Baytown experienced a price appreciation of 3.3%, over the last year, right behind Austin–Round Rock. #3 Dallas-Plano-Irving homes appreciated 1.92%, third in the nation. #4 San Antonio took fourth place with a 0.17% increase in home price.

8. Why Texas is different: The Magic Number - Unsold Inventory Perhaps the most reliable indicator of future home price trends in Texas is the “months of unsold inventory.” Let’s say you have six homes on the market and sell an average of one home per month, then there are six months of inventory in the local market. Source: Real Estate Center at Texas A&M University The magic number: Economists at the Real Estate Center at Texas A&M say that about 6 ½ months of inventory is a balanced market, where homes are being sold and prices continue to increase at a moderate pace. What’s the magic number right now? Currently, Texas is right at 6 ½ months inventory. In fact, Texas has been at or below the 6 ½ months level of inventory for most of the 21 st century. Currently, the nation is nearly double at 10 to 11 months of inventory.

9. Why Texas is different: Positive, long-term outlook By 2040, the population of Texas will double – and all those people will need a place to live. In fact, the migration has already begun, with Texas claiming the No. 1 spot for relocations in the 2008 Allied Van Lines Magnet States Report for the 4 th consecutive year. Source: State Demographer, Center for Demographic and Socioeconomic Research and Education The Texas economy is strong, not based on a few industries or speculative investments, but based on the sound fundamentals of job growth and diverse industries. In fact, Texas is ranked 4 th among the best states to start a business according to US News & World Report (Jan. 2009). Economists throughout the country cite these factors as key to Texas’ long-term strength.

10. What about foreclosures? #1 Nevada (7 x Texas) – More than 7% of homes received a foreclosure notice in 2008 #2 Florida (4 x Texas) – 4.52% of homes received a foreclosure notice in 2008 #3 Arizona – 4.49% of homes received a foreclosure notice in 2008 The foreclosure problem is very real, it’s just not centered in Texas. Source: RealtyTrac ArizonaTexas 2007-2008203%14% 2006-2007655%15% Foreclosures are up nationally, but have been primarily driven by the three hardest- hit markets in the U.S.:

11. What about foreclosures? In fact, more than 40% of all foreclosure filings in the U.S. in 2008 occurred in California and Florida. Despite having one of the largest real estate markets in the U.S., Texas falls a mere 27 th on the list of foreclosure rates for 2008. Source: RealtyTrac 2008 U.S. Foreclosure Market Report™ Many say it’s our home equity lending law, which is considered the strictest in the country. Driven by Texas REALTORS®’ influence at the Capitol, this constitutionally protected law ensures Texans won’t borrow too heavily against their homes’ equity. This has helped insulate our state from much of the mortgage meltdown that has aggravated the national housing crisis. How did we dodge the foreclosure crisis?

12. What this means for your clients The average Texas family spends six years in their home. The statewide median home price in December 2002 was $128,500. The median home price in December 2008 in Texas was $140,900 So, if your client is an average Texan, his home value increased 9% over that period. That fact would shock most consumers listening to national news. It means their homeownership opportunities are not as bleak as they may believe. Consider this … Source: Mortgage Bankers Association

13. Did your clients also know? … 91% of Texas homebuyers were not rejected by lenders last year? … Mortgage rates are at all-time lows, like 4.89% for a 30-year fixed rate mortgage, which translates to a $150,909 loan for $800/month? … First-time homebuyers can now qualify for a tax credit of up to $8,000 that they don’t have to pay back?

14. What we’re doing We believe Texans deserve to know the Truth About Texas Real Estate, so the Texas Association of REALTORS® has launched a public awareness campaign to deliver it.

15. What we’re doing Dubbed the “Ask a Texas REALTOR®” campaign, this statewide effort features a Web site (TexasRealEstate.com), radio and billboard ads, public relations support, and more to let Texans know how Texas is different – and encourage them to consult with a Texas REALTOR® to find out about their local market.

16. What we’re doing We’ve supplemented the content on TexasRealEstate.com, Texas REALTORS®’ consumer Web site, to inform homeowners about this critical information and help them go “Inside the News” to find out what applies in our state.

17. What you can do 1.First and foremost, you can help us spread the word. Share this information with the clients and colleagues you encounter everyday. The more we all know about Texas real estate, the better prepared we are to give expert advice and help consumers make good real estate decisions. 2.Check back regularly at TexasRealtors.com/AskATexasRealtor to find more resources to inform your clients and for regularly updated statewide market information.TexasRealtors.com/AskATexasRealtor 3.Take advantage of the resources offered through this campaign; for example …

18. What you can do Use TAR’s free RSS news feed to automatically pull the latest headlines from TexasRealEstate.com over to your Web site; Place an “Ask a Texas REALTOR®” print ad in your local newspaper; Add TexasRealEstate.com as one of your Web sites on LinkedIn and other social networking sites; Put “Ask a Texas REALTOR®” banner ads on your Web site, and link them to TexasRealEstate.com; and Get these and other resources at: TexasRealtors.com/AskATexasRealtor

19. Questions and comments? In an online survey, 86% of Texas REALTORS® felt this campaign was critical to counter the national news media’s doom and gloom, and tell consumers the truth about Texas real estate. We hope you agree and will help spread the message that, here in Texas, things are different. Ask a Texas REALTOR® ! To join this effort, please visit TexasRealtors.com/AskATexasRealtor TexasRealtors.com/AskATexasRealtor