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2010 to 2011

Real Estate Market Trends

The Great Recession is Over

But We Don’t Feel Better

Source: University of Michigan

2000200120022003200420052006200720082009201020110

20406080

100120

Consumer Sentiment

Inde

x: 1

966Q

1 =

100

Why Don’t we Feel Better?

14 million Unemployed

2000 2002 2004 2006 2008 20100.0%2.0%4.0%6.0%8.0%

10.0%12.0%

Unemployment RateU.S. Richmond

Less than 5 weeks;

20.4%

5 to 14 weeks; 21.2%

15 to 26 weeks; 14.1%

27 or more weeks; 44.3%

Length of Unem-ployment (U.S.)

Source: Bureau of Labor Statistics

Distressed Property Sales Still High

Nov

Jan 2

009

Mar May Jul Sep

Nov

Jan

2009 Mar May Jul Se

pNov

Jan

2010 Mar May Jul

0%10%20%30%40%50%60%

Foreclosed Short-sale

perc

ent

of e

xist

ing

hom

e sa

les

Source: NATIONAL ASSOCIATION OF REALTORS®

Price Declines Typical Across the State

Source: Virginia Association of REALTORS®

Year Units Sold Avg List Price Avg Sold Price2004: 18,944 $208,186 $206,7202005: 20,043 $241,420 $240,0412006: 18,543 $268,591 $265,8092007: 15,794 $280,034 $274,7762008: 11,005 $277,171 $268,0082009: 11,316 $268,806 $232,8302010: 10,750 $245,388 $228,056

2011 (YTD – September 30, 2011): 8,371 $244,638

$218,119

Central Virginia Regional MLSSingle Family Residential Market

A Metro Richmond ComparisonSingle Family Residential Market - 2011

Area Units Sold Avg LP Avg SP (%Chng)Chesterfield 2,518 $244,619 $227,404 (-5.31%)Hanover: 665 $291,098 $256,129 (-4.50%)Henrico: 1,978 $245,735 $231,412 (-8.63%)Richmond: 1,396 $203,144 $202,066 (-0.83%)

2011 Year-to-Date: September 30, 2011(%Chng) compared to same period 2010

Data Collected October 20, 2011

What’s Selling…

…in 2011?

Area (% Sold under): $200,000 $300,000$400,000Chesterfield 52.78% 78.16%

90.59%Hanover: 36.98% 71.11%

91.32%Henrico: 55.46% 77.40%

87.56%Richmond: 62.89% 80.23%

88.19%

CVR MLS Region: 57.45% 79.69%89.91%

Cumulative 2011 Year-to-Date: September 30, 2011Data Collected October 20, 2011

Residential Condominium Market Changes:2010-2011 - YTD

CVR MLS Region:Sold Units YTD: +4.36% Avg Sold Price YTD:

+4.00%

Chesterfield:Sold Units YTD: +8.37% Avg Sold Price YTD: -

13.74%Henrico:

Sold Units YTD: +5.47% Avg Sold Price YTD: -0.50%Richmond City:

Sold Units YTD: -12.75% Avg Sold Price YTD: -3.86%Hanover: (Limited # units)

Sold Units YTD: +80% (30 units to 54 units)Avg Sold Price YTD: +0.71%

2011 Year-to-Date: September 30, 2011(%Chng) compared to same period 2010

Data Collected October 21, 2011

County of Chesterfield – City of Richmond

October 2010 through September 2011

R E Stats Inc. - *Active Inventory as of October 25, 2011Inventory and

AbsorptionSingle-Family Residential

Data Collected October 25, 2011

County of Henrico – County of Hanover

October 2010 through September 2011

R E Stats Inc. - *Active Inventory as of October 25, 2011Inventory and

AbsorptionSingle-Family Residential

Data Collected October 25, 2011

2010-2011: YTD

The Direction We’re Heading

1st Quarter 2nd Quarter 3rd QuarterPending Units -5.122% +0.971% +2.30%

Sold Units +11.789% -4.358% +3.40%

Average Sold Price -8.33% -5.13% -4.80%

CVR MLS Region – Single Family

2011 Year-to-Date: September 30, 2011(%Chng) compared to same period 2010

Thru Thru

Economic OutlookTomorrow will Look A lot Like

TodayPaying down debt takes time

No quick fix Recoveries after financial crises take much longer

Consumers are saving more, but that’s not good in the short-run

Firms reluctant to hire No need for more workers Can’t find workers with the right skills

In the next 12-24 months, expect Moderate growth and a stubbornly high unemployment rates Volatile financial markets Little threat of inflation or rising interest rates

The Forecast2009 2010 2011 2012

U.S. EconomyGDP (% chg) -3.5 3.0 1.6 2.3Payrolls (% chg) -4.4 -0.7 1.0 1.3Unemployment Rate (%) 9.3 9.6 9.0 8.7Inflation (%) -0.3 1.6 3.4 3.610-year Treasury (%) 3.3 3.2 2.7 2.830-year FRM (%) 5.1 4.7 4.5 4.8

Housing MarketHousing Starts 554,000 585,000 560,000 632,000Existing Home Sales 5,156,000 4,907,000 4,941,000 5,153,000Existing Home Prices (% chg) -12.9 0.2 -3.9 2.9New Home Sales 376,000 322,000 303,000 380,000New Home Prices (% chg) -6.6 2.0 2.1 3.5

Source: NATIONAL ASSOCIATION OF REALTORS® October 2011 Forecast

The Future…Continued Uncertainty

Shadow Inventory… How Much is Still Out There?

When Will Prices Hit Bottom and Bounce? What’s Up in Washington?

Too tight financing requirements, especially for Condo Market, Investors.

GSE Reform. MID… Eliminated or Revised come 2013. QRM… The End for 30 Year Mortgages?

Jobs, Jobs, Jobs… and Consumer Confidence. Recovery… It Needs to FEEL Like Recovery.