The Luxury Distressed Market:

Tough Times Ahead

The Luxury Distressed Market:

Tough Times Ahead

Beth Jo Zeitzer

President/Broker

R.O.I. Properties

SLHT Distressed Property Symposium

April 16th, 2009Page 1

Foreclosures – Buyers Respond To Low Prices

The monthly median sales price (across all areas and types) is at the lowest level of the millennium.At $118,900, it is lower than the previous low point of $125,900 reached on January 16, 2001.It has now fallen 56% from the peak level of $267,000 reached on June 16, 2006.

As a Result …

Buyers are back in the market for smokin’ deals. Investors and first time buyers account for the increase.Purchases are focused where pricing is lowest – including the west valley and the outer suburbsMedium-priced areas like Mesa, Gilbert, Chandler and Peoria are also seeing an increaseThe move up and top end of the market is not yet participating in the increased buying activity

Source: The Cromford Report Page 2

General Market Snapshot

Source: The Cromford Report February 26th, 2009Page 3

REO Market Snapshot

Source: The Cromford Report Page 4

$1M-$1.5M Market Snapshot

Source: The Cromford Report Page 5

Lender Owned Sales

Source: The Cromford Report Page 6

Days Inventory By Price Range

Source: The Cromford Report Page 7

Sales Per Month

Source: The Cromford Report

March, 2002: 5,727March, 2003: 6,471

March, 2004: 8,677March, 2005: 9,957

March, 2006: 7,495March, 2007: 5,900

March, 2008: 4,257March, 2009: 7,594

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Investors Are Back

Source: The Cromford ReportData based on the “intended use” filed with the county recorder Page 9

Spotlight on: Paradise Valley

Sources: The Cromford Report, ARMLS

Active Listings: 581Pending Listings: 21

Properties Sold Last Month: 9REOs & Short Sales Sold Last Month: 0Days On Market – Monthly Sales: 355

Active Listings $/SF: $508.20Monthly Sales $/SF: $314.85

Median Price – Monthly Sales $1,025,000Appreciation – Monthly Median: -41.4%

Current NOTS: 42Active REOS: 9

Active Pre-Foreclosures: 34

Current Pending Distressed Properties (Lender Owned, Short Sale, Pre-Foreclosure): 11

Closed Distressed Sales, Last 6 Months(Lender Owned, Short Sale, Pre-Foreclosure): 19

Of These, Sales Over $1M: 3 of 19

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Plenty of PV homes for sale, but sales are sluggish.Prognosis – more For Sale signs ahead.

Active Listings - PV

Source: The Cromford ReportPage 11

Monthly Sales Trends - PV

Source: The Cromford ReportPage 12

The Distressed Luxury Market

While the low end of the distressed market is trading at high volume, the luxury market remains stagnantPricing in the luxury market remains unrealistic especially when compared to banks’ pricingNOTS are steadily increasing in all luxury marketsContinued economic uncertainty makes it difficult for luxury buyers to commitLending standards remain tight, and only those with the best credit may qualify

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Thank You!

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