Presentable Market Data Chuck Carr 2317 Briarleigh Way Dunwoody, GA 30338 Office: 770-698-8797 Cell: 678-591-6030 Email: [email protected]@aol.com.

Presentable Market DataChuck Carr

2317 Briarleigh WayDunwoody, GA 30338

Office: 770-698-8797Cell: 678-591-6030

Email: [email protected]

mailto:[email protected]

Understanding three views of the current market allows Buyers to maximize their ability to evaluate properties, receiving the highest value in their home search and Sellers to position their property to maximize money in their pocket while minimizing time on market:

• Macro View: National MarketNational Media Coverage

• Metro View: Atlanta MarketQuarterly FMLS Market Report

• Micro View: Your CommunityComparative Market Analysis

Current Market Overview

• Metro Areas Included

– 36 FMLS Areas

Forsyth

InsidePerimeter

Cherokee

E. Cobb

W. Cobb

Douglas

Paulding

N. Fulton

DeKalb

Gwinnett

1Q 2008 Quarterly Metro Market ProfileProvided By Keller Williams Realty

Condo/Townhome Residences – 36 FMLS Areas

• Keller Williams Realty continues to rank number 2 in total sales of Condos, Townhomes and single family detached homes

• Keller Williams is the only top five company to increase its Atlanta market share every year since 2003, in all types of markets



• Cumulative monthly 2008 sales of Condo/Townhome residences declined by 36.7% in 1Q 2008 compared to 1Q 2007

• Cumulative sales were lower in each month of 2008 than in either of the two previous years



• Sales began the year lower in January, 2008 after slowing which began in September, 2007

• March sales will increase as lagged closings are processed, but will not reach levels of previous years



• 1Q 2008 sales of Condo/Townhome residences were substantially (-36.7%) lower than in the previous two years

• After the first quarter of 2007, sales lagged those of 2006 in each of the following periods, declining in each successive period into 1Q 2008



• The downtrend in quarterly unit sales, vs. the previous year’s quarter, has been accelerating since 1Q 2007, with each successive quarterly sales total declining by more than in the previous quarter



• Sales by price range shows that the decline is spread across all price segments



<$200K$200-$499K

$500-749K

$750-$999K

$1.0-$1.9M $2.0M+ Total

NEW180

(-38%)197

(-50%)5 (-71%)

0 (-100%)

0 (-100%)

0 (N/A)

382 (-45%)

RESALE898

(-31%)260

(-42%)17

(-32%)3

(-40%)3

(0%)0

(N/A)1,181

(-34%)

TOTAL1,078 (-32%)

457 (-46%)

22 (-48%)

3 (-50%)

3 (-25%)

0 (N/A)

1,563 (-37%)

• Looking at sales by New/Resale and by sales price range shows that there are no market segments where 1Q 2008 sales were stronger than in 2007

Better Same Worse

Comparison to 1Q 2007:

1Q 2008 Sales



FMLS data for single family Condo/Townhome residence sales. Data is believed to be accurate but is not warranted. ChartMaster Services, LLC

• Median Sales prices have also fallen again in 1Q 2008, as they did in 4Q 2007

• The 1Q 2008 median sales price was -5.9% lower than 1Q 2007



• The mix of sales changed in 1Q 2008 compared to 1Q 2007 in that the portion of units sold in the <$200K price range was higher by 5%, contributing to the lower median price



• The median sales price as a percent of original list price declined to the lowest point in the last three years, indicating stronger Buyer price resistance

• In 1Q 2008, the median S/L ratio fell to 93.9%, indicating that Sellers are having to accept offers that represent increasingly lower percentages of their original listing price



• The median % S/L price ratio is lower in each price range segment, except for the $1.0M-$1.9M range

• S/L price ratios normally decline as prices go higher, possibly reflecting the difficulty in pricing these properties



• The declining Sale/Original List price ratio shows that Buyer price resistance is increasing, requiring Sellers to give up more of their listing price during contract negotiations

• The trend in lower S/L ratios has been downward since the middle of 2007, but has accelerated since October of 2007



• The overall median number of Days On Market was higher in 1Q 2008 than in any quarter of the previous 2 years

• The median DOM has risen above 90 days for the first time, as market slowing has progressed



• Changes in median DOM by price segment show a pattern of mostly small changes in the price ranges below $500K

• Larger changes occurred in the $500K-$749K and in the $1.0M-$1.9M price ranges, where DOM were lower than in 2007



<$200K$200-$499K

$500-749K

$750-$999K

$1.0-$1.9M $2.0M+ Total

NEW134 Days

+34%127 Days

+20%201 Days

+39%N/A Days

N/AN/A Days N/A

N/A Days N/A

132 Days +26%

RESALE80 Days

-5%95 Days

+10%57 Days

-60%69 Days

-7%63 Days -85%

N/A Days N/A

83 Days -2%

TOTAL85 Days

-1%111 Days

+19%72 Days -50%

69 Days -6%

63 Days -

79%

N/A Days +N/A

94 Days +6%

• Although the median Days on Market were mostly higher in 1Q 2008, several segments were improved

• New construction units were all higher, while resale units were lower in all except the $200K-$499K price range

Better Same Worse

Comparison to one year ago:

1Q 2008 Days on Market




• The trend towards Sellers paying some, or all, of their Buyer’s closing costs stabilized in 1Q 2008 at a very high (79%) percentage of transactions

• Seller’s should be aware of this Buyer requirement during contract negotiations and consider its affect on Seller net proceeds of sale



• The percentage of transactions including Seller-paid closing costs usually declines for higher-priced residences

• This trend is illustrated by the fact that the percentage was less than half, of the percentage of transactions with Seller-paid closing costs, at price levels above $500K during 2008, while lower price segments included more than 84% with some, or all, closing costs paid by the Seller



• Sellers agreeing to pay some or all of their Buyer’s closing costs reduce their net percentage of original list price by another 1.7% of their original list price



• The percentage of transactions where the Seller was required to reduce the listing price in order to attract a Buyer, has increased to another new high in 2008

• The 46% rate for 1Q 2008 is higher than the previous high in 4Q 2007 and is well above the range observed during the last 3 years

• A percentage of 35% is the high end of the normal range for price reductions, further indicating a higher level of Buyer price resistance in the current market



• The percentage of transactions following a price reduction has been at a high level across nearly all of the price range market segments

• Only one price grouping ($500-$749K) experienced a significant reduction in the percentage of transactions following a price reduction



• When a price reduction is required, the Seller negotiates to a lesser portion of the original listing price than a Seller not required to reduce their price

• This difference across the metro area typically ranges between 4-6 percentage points less, of the original list price, than for a Seller with no price reduction

• In 1Q 2008, the 7.7 percentage point difference would amount to a reduction of $13,300 at the median sales price, compared to a Seller without a price reduction



• Sellers of higher priced residences who were required to reduce their list price, were penalized to a lesser degree than those at lower price ranges, with those in the lowest price range giving up 9% of their original listing price

• However, regardless of price range, Sellers who price in line with the current market (no price reduction required) are able to sell at a high (nearly 97%) S/L ratio



• Even after taking a price reduction, Sellers usually realize a nearly equal, or lesser, portion of their new list price than those Sellers not required to reduce their price



• When a price reduction is required, more time is needed to attract a buyer

• Typically, the Seller with a price reduction needs 2-3 times longer to sell than the Seller not required to reduce their listing price

• The likely results are higher carrying costs, greater inconvenience due to keeping the house in showing condition and delays in finding and moving to a new home



• A days on market difference existed at nearly all price levels for Sellers requiring a price reduction compared to those not requiring a reduction

• The only price range where price reduced properties sold in less time was in the $750-$999K range where the number of sales was quite small

• The overall difference in 1Q 2008 was 2.1 times longer to sell after a price reduction



• Failed listings are viewed here as a percentage of total finalized listings

• Failed listings as a percent of Finalized listings (Exp.+ WD + Closed) began to rise during the 2nd half of 2006 and have continued a general upward trend after a temporary 1Q 2007 downtrend

• The consistently high failure rate is further evidence of Buyer price resistance, since listings usually fail due to overpricing



• We now know that in 4Q 2007, out of every 100 finalized listings, 70 failed to sell and 30 sold

• Of the 30 sold listings, 12 (41%) had a price reduction before a contract agreement was reached

• Therefore, if 70 failed due to overpricing and another 12 required a price reduction in order to sell, there were 82 out of every 100 listings that were overpriced in 4Q 2007



• The supply of listings grew nearly 39% from January of 2007, through March of 2008

• Inventory is expressed as the number of months required to sell currently active listings, at the average monthly sales rate during the last 12 months

• After a fairly flat supply of listings during the last 2 quarters of 2007, supply began to increase again in January, 2008



<$200K$200-$499K

$500-749K

$750-$999K

$1.0-$1.9M $2.0M+ Total

NEW9.4

Months +32%

17.3 Months +18%

39.9 Months +68%

38.9 Months

-17%

45.8 Months

-45%

156.0 Months

N/A

15.1 Months +39%

RESALE9.2

Months +14%

15.1 Months +14%

20.0 Months

+1%

35.4 Months +112%

19.8 Months

-42%

48.0 Months

-60%

11.0 Months +18%

TOTAL8.6

Months +9%

14.6 Months

+5%

25.0 Months

+16%

32.9 Months +42%

30.9 Months

-40%

96.0 Months

-75%

11.1 Months +14%

• Although still very high, the listings inventory has improved for new units priced above $750K and for resale units priced above $1.0M

• There were no sales of new units in the $2.0M+ price range in 2007, but there were listings at that price (no % change calculated)

• Months of inventory are generally higher for properties in higher price ranges and for new-build units

Better Same Worse

Comparison to 1Q 2007:

1Q 2008 Months Supply of Listings






• The number of active listings grew dramatically from Jan., 2007 through Oct., 2007, while sales were relatively flat

• The number of listings declined slightly in December, but sales dropped more substantially during those months

• The months supply of listings is usually determined by dividing the current number of listings by the average Annual sales, resulting in an 12.1 months supply – by dividing current active listings by the last 3 months average sales, results in a 17.2 months supply, which may be a warning that supply will continue to increase relative to sales, for some time further into 2008

• 1Q 2008 continued a disappointing period for Condo/Townhome Sellers. Not only were sales down by 37%, prices also declined by nearly 6% and the downtrend in sales was accelerating.

• Also, evidence of a more difficult market for Sellers was shown by the declining S/L price ratio, slightly increased DOM, larger percentage of transactions occurring after a price reduction, higher percentage of failed listings and a continuing high level of listings inventory.

• A shift in the mix of sales toward the lower end of the price range, may signal a resurgence of first-time buyers, which could start an improvement in sales at higher price levels as move-up buyers are more able to sell their homes.

• Buyer price resistance has increased requiring Sellers to reduce prices and accept lower percentages of their original asking prices. Still, those Sellers pricing correctly for current market conditions, were able to sell at a median of 98.6% of their asking price, in a median of 60 days on market.

Conclusion:The Atlanta Condo/Townhome market entered a period of slower sales in the 4 th quarter of 2006.

Slowing has increased each quarter since then and caused greater difficulty for Sellers in this market. Sellers are under increased pressure to price in line with competing properties, rather than based upon selling prices of properties that sold months ago, in very different market conditions. The reward for Sellers who do this are successful sales at very near asking price, in much-reduced time on the market.



SUMMARY

Relevance to Sellers:• Current market softness requires that Sellers set realistic prices in line with the new reality of

conditions. Homes must be priced in line with competing properties now on the market and in as good, or better condition, in order to get optimum sales results.

• Buyers will likely ask Sellers to pay some, or all, of their closing costs.• The slower market will continue until listing inventories return to more normal rates – until

then, pricing in line with the current market and higher-level property condition are essential optimal results for Sellers. More attention should be paid to pricing below comparable properties currently on the market, as opposed to selling prices for those which sold several months ago during different market conditions.

Relevance to Buyers:• Builders may offer Buyer incentives to work down high new home inventory.• Although prices are lower across both areas, new homes fell less (-1.6%) than resales (-6.3%),

which may create better value in resales in 2008.• Properties that have been price-reduced may set up a more favorable negotiating environment

for Buyers. Market slowing may create more anxiety for Sellers, causing them to negotiate more favorably for Buyers.

• Buyers should ask the Seller to pay some, or all, of Buyer’s closing costs.



Presentable Market Data Chuck Carr 2317 Briarleigh Way Dunwoody, GA 30338 Office: 770-698-8797 Cell: 678-591-6030 Email: [email protected]@aol.com.

Documents

quarterly metro market

metro areas

quarterly unit sales

fmls areas forsyth

cumulative sales

total sales of condos

previous years quarter

previous quarter