1. IREM Breakfast Feb 2, 2012

2. PPMLS Disclosure "Based on information from the Pikes Peak REALTOR® Services Corp. (RSC), for the period January 2005 through December 2011. RSC information may not reflect all real estate activity in the market and is provided as is without warranty or guaranty." This is the source for most of my data. ** Notes in italics were not on the original slides, but added as commentary. **

3. PPAR Membership How many Realtors? Approx 3,545 in 2006 Approx 2,638 in 2011 These numbers are corrected from the original presentation. Note: Between 1986 and 1991 PPAR dropped from 3,416 to 1,947. Down 43% vs 2011 which was down 26% Comparison: Inventory at the end of 1990 was 3,556 with total sales for the year at 4,220. At the end of 2011 inventory was at 3,285 with total sales of 8,459. That is roughly double the sales with similar supply. In the late 80’s we were selling approx 3-5% of what was available each month. In 2011 it was often 15-16%. The lowest was 10% and the highest was 19.8%.

4. The Mountain Top ( Those were the days) ‘05: 14,891 Sales at $234K Avg ’06: 13,751 Sales at $248K Avg ‘05: 13,124 SF sales at $245K ‘06: 11,911 SF sales at $260K ‘05: Avg 65 DOM, ‘06 Avg 77. 98.4% SP/LP

5. 2011 Sales Results 9,439 Residential Sales Down 31.4% from ’06; Up.5% from ’10; SF/Pat up 3.3%, C/T down 14% As of the end of June SF was down 3.5% from 2010 and CT down 22%. Second half much better, $209,844 Avg Sales Price Down 15.4% from $248K in ’06; Down 4% from ‘10 94 DOM (vs 77 in ’06; 87 in ‘10) 96.8% SP/LP (vs 99% in ‘06; 97.1 in ‘10)

6. Single Family/Patio Homes (90% of sales) ‘11: 8,436 Sales, $217,691 Avg, 96.9% SP/LP, 93 DOM. ‘10: 8,212………., $229,022….…, 97.2%..........., 85. ’06: 11,930…….., $260,944……, 98.4%..........., 74. Since ‘06 the avg SF sales price down 17% and sales down 31%. CT price down 14% and sales down 35%. Currently 3,287 Active Listings: $330,973 Avg, 137 DOM (Price 50% too high compared to avg sales price) Current Supply Will Last 4.6 Months! (based on sales of last 6 months) Sluggish market: Prices down, DOM up, and sales up because of value pricing and pent up demand.

7. Vacant Land Sales (max 40 ac) ’11: 320 Sales, $108,163 Avg, 87% SP/LP, 231 DOM. ‘10: 306.…….., $85,408……., 88%.........., 216. ’06: 836…….., $107,635……, 92%..........., 190. Currently 1,720 Active Listings: $126,302 Avg, 427 DOM Current Supply Will Last 64.5 Months! (Based on sales of the last year) Down slightly from 67 month supply one year ago.

8. Closer Look at 2011 First Half: Jan 1 st - June 30 th SF/P Sales Down 5.8% from ’10 C/T Sales Down 22.3% from ’10 Second Half: July 1 st – Dec 31 st SF/P Sales Up 12.6% from ’10 C/T Sales Down 5.5% from ‘10

9. Distressed Properties (Disclosed in MLS) 19.2% of sales in 2011 21.3% of sales in 2010 23.6% of sales in 2009 7% of sales in ‘06 (1,004) some may have learned not to disclose Short Sales fearing lack of showings (??). New rule.

10. Inventory in 2011 15,711 New Listings in 2011 (9,439 Sales = 60%) For comparison only 19,203 in 2010 (Sales = 49%) 23,943 in 2006 (Sales = 57%) Some frustrated Sellers waiting?

11. Current Supply/Demand (Based on 6 mo sales) Under $250K: 3.5 Months $250K-$350K: 6 Months $350K-$500K: 6.9 Months $500K-$750K: 11.7 Months $750K-$1M: 21.5 Months Over $1M: 37.6 Months

12. High End Market Sales Over $750K 198 in 2006 vs 92 in 2011 Sales Over $1M 70 in 2006 vs 42 in 2011

13. 6 Years History: Sales/Avg Price ‘06: 13,751/$248K ‘07: 11,349/$248K ‘08: 9,399/$229K ‘09: 9,822/$209K ‘10: 9,360/$218K ‘11: 9,439/$210K

14. The Bright Spot: Leases/Rent ‘06: 3,053/$989 ‘07: 3,637/$1,011 ‘08: 4,156/$1,030 ‘09: 4,552/$1,056 ‘10: 4,732/$1,109 ‘11: 5,124/$1,163

15. Sales vs Rentals 2006 vs 2011 Sales Down 31% Avg Sales Price Down 16% Leases Up 68% Avg Lease Price Up 18% Prediction is that this market will stay strong

16. Neighborhood Prices ‘06-’11 What really happened to values? Averages don’t paint an accurate picture of what is going on. CEN Built 1900-1960: From 15 sales at $368K in ‘06 to 11 sales at $343K in 2011, Down 7%. BRI: Built ‘95-’02: From 52 sales at $314K to 35 at $301K, Down 5%. EAS-N/E Built ‘75-’85, 2,000-2,500 sq ft: 31 Sales at $204K to 22 Sales at $178K, Down 13%. PWR Built ‘95-’02: 87 at $226K to 75 at $202K, Down 10%; PWR Built ‘70-’90: 32 at $183K to 23 at $158K, Down 13.5%. S/E Built ‘70-’90: 36 at $151K to 28 at $127K, Down 16%. S/E Built ‘95-’02: 16 at $198K to 15 at $167K, Down 16%. F/V Built ‘70-’90: 43 at $171K to 31 at $133K, Down 22%. F/V Built ‘95-’02: 58 at $204K to 41 at $179K, Down 12.5%. FAL,PEY,EYR,C/R: Built 1990-’02, on 4-12 Acres: 10 sales at $246K to 15 at $189K, Down 23%. All are 3/2/2 minimum and lot size of.12-.4 acre.

17. Neighborhood Prices Cont’d. N/W: Built ‘90-’02: From 18 sales at $502K to 14 at $492K: Down 2%. S/W: Built 1990-’02: From 18 sales at $818K to 16 at $661K, Down 19%. TRI: Built ‘95-’02, on.4-3 Acres: From 18 at $548K to 17 at $416K, Down 24%. BLA: Built ’90-’02, on 4-9 Acres: From 11 sales at $385K to 14 at $383K, Unchanged. All are 3/2/2 and.12-.4 Acre unless noted otherwise.

18. Future of Foreclosures? Continued Foreclosures? 2011: 2,217 Deeds issued, 3,603 Starts. 2010: 2,537 Deeds, 4,828 Starts. 4,754 total in 2010 and ‘11 but only 2,340 accounted for in the MLS. Where are the rest of them? 2009: 2,331 Deeds, 5,470 Starts (Peak) Comparing to late 80’s and early 90’s. Previous Peak of 3,476 dropped 15-20% for 3 years and then dropped 50% in 1992 and 45% in ‘93. 2010 Down 12% and 2011 Down 25%. Prediction: will be down 15-20% in 2012.

19. What is Holding Colo Spgs Back? High Unemployment: 8.6 in Nov ‘11 Fear: Lack of Confidence Distressed Properties in the Market Sellers in Waiting (Including Banks) Shadow inventory Upside Down Sellers Interest Rate Potential Increase (again?): (1% Changes Buying Power 10%) Tougher Mortgage Guidelines Appraisal Challenges Weak national and global economies create uncertainty in the marketplace

20. What is Helping Colo Spgs? Inventory is Down Foreclosures are down Short Sales are down Interest rates are down Unemployment is down Troops levels increasing Is Confidence Returning? New Normal?

21. 2012 Outlook: Best Case: Prices up 5% Sales up 10% Worst Case: Prices dn 5% Sales flat Most Likely: Prices flat Sales up 5% Under $250K strong demand, prices up 5%, sales up 10%. $250K-$500K marginal demand, tough competition, flat prices, flat sales. Over $500K soft demand, prices down 5-10%, flat sales. Going forward: As market shows signs of improvement inventory will rise to meet demand, delaying recovery. 2013 similar, 2014 stronger. Faster recovery in the 90’s was not hampered by dismal national RE Stats and gloomy national and global economy. Best Advice: A) Move Up B) Buy Residential Rental C) Refinance