The Residential Real Estate Market Charlotte Regional Realtor ® Association Carolina Multiple Listing Services, Inc. C

1. The ResidentialReal Estate Market Charlotte Regional Realtor® Association Carolina Multiple Listing Services, Inc. CEO Anne Marie Howard, Esq. CRRA Speaker Series January 16, 2009

2. CHARLOTTE REGIONAL REALTOR® ASSOCIATION (CRRA) • 501(c)(6) professional trade association • Owned by and governed by Realtors® • CRRA leads, educates and equips members to be productive • 8,500 members

3. Realtors® versus real estate agents • As a member, you are a Realtor®and adhere to and operate under the National Association of Realtor® (NAR) Code of Ethics • Licensees who are not members of a local association are not Realtors® and are not bound by a Code of Ethics

4. CAROLINA MULTIPLE • LISTING SERVICES, INC. (CMLS) • Largest regional MLS between Northern Virginia and Atlanta • 9,000 CMLS Subscribers serving 10 counties in the surrounding area • CMLS is owned by and governed by Realtors® • CMLS is not a public utility and all the data/information in the MLS cannot be accessed directly by the public • Alexander • Anson • Cabarrus • Gaston • Iredell • Lincoln • Mecklenburg • Montgomery • Stanley • Union • City of Kannapolis

5. CMLS is a cooperative where members agree to cooperate and compensate one another in an effort to find a perfect fit (buyers and sellers) for their clients • Listing information from the MLS provided by Realtors® is sent at the brokerage’s request to: • Contracted with Threewide’s for its ListHub product, • which now gives the broker the ability to select from the following: • Integrity of the CMLS data and information is key • Firm Web sites • Charlotte.com • Distinctive Homes of Charlotte • Realtor.com • Prospect Plus • The Real Estate Book AOL Real Estate CLRSearch.com CyberHomes Google Base Homes and Land Homescape Hotpads MyRealty.com Oodle PropSmart Trulia VastYahoo! Real Estate Zillow.com

6. CRRA • Budget • Budgeted for a 20 percent drop in membership • CRRA is showing a balanced budget for 2009 • Realtor® dues account for 11 percent of revenue, down from 15 percent in 2008 • Non-dues revenue include Realtor® Reflections, rental income and the Realtor® Store, and advertising on the member-only Web site • Cost-Saving Initiatives • Hiring freeze • No salary increases for staff • Further staff reductions will be considered during the first quarter of 2009 • The Realtor® Expo has been postponed to 2010 • CRRA Orientation will go paperless • CMLS • Budget • Budgeted for a 20 percent drop in membership • 2009 budget shows an 18 percent decrease in revenue over 2008 • Expenses budgeted to drop 9 percent • CMLS quarterly fee and annual Supra service fee remain unchanged • Cost-Saving Initiatives • Provide tax services from only one vendor (CRS expired in Dec. 2008) • Went paperless in CMLS Orientation classes • Continue to pursue NCDS/Statewide IDX • Delay obtaining a new MLS system until 2010 • Budget Highlights and Cost-Savings Initiatives

7. CRRA Housing Opportunity Foundation’s (HOF) concentration is on affordable workforce housing • Charitable arm of the association 501(c)(3) nonprofit • The mission of HOF is to: • Position and educate Realtors® as leaders • Promote homeownership • Provide funding to create housing opportunities • Four areas of work: • Funding • Education • Leadership • Advocacy

8. Distribution of funding given on behalf of Realtors®: • Habitat Support Program • $20,000 to eight area Habitat organizations (Mecklenburg, North Meck, Iredell, Union, Stanly, Gaston, Cabarrus and Lincoln).  Dollars will fund specific house “builds,” offer expanded credit counseling and permit expansion of a Habitat Re-Store to allow for increased revenue • Community Grants Program • Will launch in 2009 and will specifically address unmet housing needs in Mecklenburg and Iredell counties • 2008 Humanitarian Award • Given at the Gala to the HAMMERS project, a program of the Davidson Housing Coalition ($1,925 to contribute to a nonprofit of its choosing)

9. Workforce Housing Certificate Program (WHCP) • 263 Realtors® currently enrolled in program • 109 current Realtor® Alumni • Mark your calendars for Realtors® Care Day, April 24 • 288 Realtor® volunteers have already indicated their interest; e-blasts will be generated throughout the project to keep volunteers up-to-date on progress of project • Sites to be confirmed in February and will be throughout Mecklenburg and Iredell; anticipate approximately 30 sites total • To volunteer, register at www.CarolinaRealtors.com

10. What is Mingle School of Real Estate? • In 1992, CRRA purchased the Mingle School of Real Estate • The official school of real estate in the region • Provides professional-development opportunities for the public and Realtors® by offering a variety of education classes • Broker Pre-Licensing Classes • Broker Post-Licensing Classes • 24-Hour Broker Transition Course • Continuing-Education Classes (classroom and online) • Appraisal Classes (Pre-Licensing and Continuing Education) • NAR-approved designations • “Let our experience be your best teacher.”

11. CRRA Government Affairs works closelywith REBIC to address regionalpublic-policy issues • Transfer taxes and impact fees • Tax on services • Land development issues • Rights of property owners

12. Let’s Talk About The national market

13. National Economic Overview A Weakening Economy – Problems • Economic forecasters tell us – in a recession • Tighter credit: reducing growth of personal consumption • Consumer confidence, weak consumer spending • Stock market – roller coasting • Rising unemployment/job losses, housing slowdown • Lower retail sales • Weaker corporate profits, slowing business investment • Recession: announced in fourth quarter 2008 Source:   NAR

14. National Economic Outlook: HIGHLY UNCERTAIN! Source:   NAR

15. National Outlook existing-Home Sales • Short run: somewhat unstable – at rate of 10 years ago • Housing and Economic Recovery Act (July 2008), higher Government Sponsored Enterprises (GSE) loan limits, homebuyer tax credit, lower inventories of new homes, slowing foreclosures • Financial-industry problems – Bailout ($700 billion) • Pending Homes Sales Index dropped to all-time low of 82.3 in November 2008 (NAR uses this index to predict new home contracts – the index measures housing contract activity and is based on signed real estate contracts of single family existing homes and condos – this weak number reported in November accurately predicted weak sales for December and indicates that sales will remain weak in January) • Existing-Home Sales (November) – 4.49 million units* - down 8.6 percent • Existing-Home Median Price (November) – $181,300 • Housing Starts (November) – 625,000 units* • New-Home Sales (November) – 407,000 units* - down 5.3 percent * Seasonally adjusted Source:   NAR

16. National Outlook RISKS TO OUTLOOK • Financial market troubles and other industry failures (i.e., auto industry) • Rising unemployment • Rising energy and food costs

17. Let’s Talk About THE local real estate market

18. Economic Indicators UNEMPLOYMENT RATE

19. Economic Indicators UNEMPLOYMENT RATE

20. POPULATION CHANGES Source:   Charlotte Chamber of Commerce, December 2008

21. Economic Indicators CHARLOTTE REGION POPULTATION INCREASING Although the region will continue to grow, 2009 growth will be slower Population Source:   Charlotte Chamber of Commerce, December 2008

22. Positive Economic Indicators Fastest Growing Areas with Population Over 1 Million

23. Positive Economic Indicators MECKLENBURG COUNTY -A YOUNG DEMOGRAPHIC Source: US Census

24. Positive Economic Indicators A CLOSER LOOK AT MECKLENBURG COUNTY – BUYING POWER Source:   US Census and Charlotte Chamber of Commerce, December 2008

25. CHARLOTTE’S ECONOMY CONTINUES TO DIVERSIFY • 1998 • Financial services • Transportation and distribution services • High-growth manufacturing • 2008 • Health care • Plastics and rubber manufacturing • Automotive and motor sports • Finance, insurance and professional services • Logistics • Wholesale trade • Tourism • Emerging industries • Aviation and defense • Biotechnology and pharmaceutical • Medical devices • Optics Source:   Charlotte Chamber of Commerce, December 2008

26. Positive Economic Indicators DEVELOPMENT TO WATCH

27. Positive Economic Indicators DEVELOPMENT TO WATCH N.C. Research Campus Kannapolis At completion, N.C. Research Campus will add 37,000 research-related jobs to the region. Source: Rowan-Cabarrus Comm. College

28. Positive Economic Indicators CHARLOTTE’S RANKINGS & ACCOLADES #1 Economic Strength Ranking –July, 2008 Policom Corp. #1 Best Place to Live –May 2008 Relocate-America.com #1 Top Large County for Recruitment and Attraction – July 2007 Expansion Management Magazine #1 Most Educated Workforce: Cities – July 2007 Business Facilities #1 Best Cities for Black Families – February 2007 BET.com #2 Best City for Entrepreneurs – September 2006 Entrepreneur Magazine #5 America’s Best Housing Market - May 2007 Forbes Magazine #5 N. American Cities of the Future – April 2007 fDiMagazine #8 Top Real Estate Market for Expanding Companies – October, 2007 Expansion Management Magazine #9 Top Ten Hottest Cities for Job Growth – May 2006 Business 2.0

29. Positive Economic Indicators SUMMARY OF NEW & EXPANDED FIRMS Source: Charlotte Chamber –

30. Positive Economic Indicators Summary of New & Expanded Firms by Industry3rd Qtr. 2008

31. THE CORRECTION…A return to levels of 2003 Source: CMLS data

32. 2005, 2006 and 2007 data show exceptional market activity in number of closings Source:  Carolina Multiple Listing Services, Inc.

33. Closings and Average Sales Price - 2008 Good News - Steady Source: CMLS data

34. Source: Carolina Multiple Listing Services, Inc.

35. Number of closings January-December 2008 was: • Slightly above 2003 by 2 percent • Below 2004 by 18.4 percent • Below 2005 by 30.7 percent • Below 2006 by 38 percent • Below 2007 by 30.3 percent • 2005, 2006 and 2007 showed abnormally high market activity that skews current market data. • The number of active listings flattened out over the summer of 2007 and remained flat into the fourth quarter of 2007. 2008 saw a gradual increase of active listings with the peak in May; however, since May, active listings have gradually declined. • There has been some drastic slowing in the sales activity in the third quarter of 2008. This trend will probably continue through the second quarter of 2009 when the Charlotte market is expected to start showing signs of recovery. SUMMARY OF MARKET ACTIVITY DATA

36. The Elephant in the Room …

37. 2008 Foreclosure Filings and Home Price Index The National Picture Source: Realtytrac.com • Currently – 1,755,015 foreclosure filings across the country (as of Jan. 2009) • National average foreclosure sales price – $194,748

38. Foreclosure Filing Activity The National Picture – Last half of 2008 Source: Realtytrac.com

39. Foreclosure Filings MECKLENBURG COUNTY2008 ACTIVITY Total foreclosure filings for Mecklenburg Co. – As of Nov. 2008 - 8,938

40. MECKLENBURG COUNTY - FORECLOSURE FILINGS • Foreclosure Filings in Mecklenburg County • YTD 2008- 8,938* foreclosure filings • 2007-9,227 foreclosure filings • 2006-6,096 foreclosure filings • 2005-3,012 foreclosure filings • The number of foreclosure filings in Mecklenburg County rose 51 percent in 2007 compared to 2006. • As of November 2008, one in every 380 housing units in Mecklenburg County received a foreclosure filing – that is less than 1 percent of homes will receive a filing notice. • As of November 2008, YTD filings have decreased 3.3 percent over 2007 filings • The average sales price of foreclosure homes in NC is estimated at $112, 741. Note: Foreclosure filings include default notices, auction sale notices and bank repossessions. A filing is not a foreclosure. Source:    RealtyTrac, Inc. and Charlotte Business Journal * Foreclosure filings through November 2008

41. Subprime Mortgages -

42. Source: Carolina Multiple Listing Services, Inc.

43. LOCAL MORTGAGE INDUSTRY • Banks have gone back to basics, carefully screening applications when securing loans • Credit worthiness – Credit score no lower than 660 on average; The better the credit, the better the rate • Down payment – Buyer needs 3-5 percent depending on loan; in 2009, FHA requires 3.5 percent • Documentation of income and the approved debt-to-income ratio • Mortgages for investment property – lenders are looking for 20 percent down payment • $7,500 tax credit for first-time homebuyers who purchase before June 2009

44. National Association of Realtors®Proposed Housing Stimulus Plan • $7,500 first-time homebuyer tax credit – permanent and not a loan • Made the 2008 FHA, Fannie Mae and Freddie Mac loan limits permanent; new rules for 2009 will reduce them • Get the Treasury Relief Program back on track and target more funds to mortgage relief • Create a federal mortgage interest buy-down program to make below-market rates available and stabilize home prices • Permanently bar banks from engaging in real estate brokerage and management

45. IN SUMMARY • Charlotte Region • Unemployment concerns • Potential job growth – but slowed • Positive population gain projections • Diversification of job sectors • New economic development initiatives impacting the region • Mecklenburg County • Foreclosure filings monitored • Nationally • National Association of Realtors® proposed housing stimulus plan

46. WRAP-UP • CRRA and CMLS • Closings are down but sales prices are holding • Membership • CRRA – 8,839 (as of Dec. 31, 2008) • CMLS – 9,996 (as of Dec. 31, 2008) • Projected loss of CRRA/CMLS membership – 20 percent • Residential Sales Trends • Coming soon – Housing Affordability Index • Quarterly reporting after NAR releases sales trends • Data reported by county (data reported by area will continue) • Median sales figures for single-family detached homes, condos/townhomes