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TRENDGRAPHI X MONTHLY REAL ESTATE REPORTBROUGHT TO YOU BY

Lyon Real Est ate3640 American River Drive, Suite 100, Sacramento, CA 95864

F O R I M M E D I A T E R E L E A S E

February 23, 2012

CONTACT: Pat Shea, President(916) 690-0980

Where are they hiding t hat Shadow I nventory?Continued low inventory coupled with a substantial increase in sales, provides an intriguing

start to 2012 in the core counties that comprise the Greater Sacramento Area. 3,417 new

sales contracts in Placer, Sacramento, El Dorado and Yolo counties represent a 39%

increase over the same month in 2011 and a 44% increase compared to Decembers

figures. New contracts for short-sale transactions represented close to 48% of the total

sales in Sacramento, Placer & Yolo and over 40% in El Dorado County. Bank owned, or

REO sales, have dropped dramatically in the four county areas from 39.6% of sales in

January, 2011 to 23.6% in January, 2012. This begs the question: where is the alleged

shadow inventory hiding?

Months of inventory, which is calculated by the rate-of-sale compared to standing

inventory, compares as follows: Sacramento 2.4, Placer 2.8, Yolo 3.2 and El Dorado 4.7.Signs of a neutral real estate market typically include 4-6 months of inventory. Less than 4

months is typically deemed a Sellers Market. Uncertainty around the amount and release

of bank owned inventory however, combined with low equity for non-distressed

homeowners, makes 2012 supply forecasts very challenging to predict.

The erosion in average sales price appears to be slowing and finished in January 2012

accordingly: Sacramento $180,000; Placer $282,000; Yolo $232,000. El Dorado County

closed out at $317,000; 5% above January 2011.

Agents are experiencing multiple offers in all market areas and most price points when the

property is appropriately positioned. Our market will remain heavily dependent upon asteady stream of short-sale listings and equity sellers who are willing to take advantage of

low prices and interest rates on their next purchase, stated Pat Shea, President, Lyon Real

Estate. Lending seems to be opening up with slight improvement in loan to value

requirements and monthly earning multipliers that determine maximum loan amounts.

An old clich states: a bell does not ring when we hit rock bottom. Many experts do

believe, however, that we will experience a small but steady improvement in number of

units sold and price point this year.

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Core Count ies Combined - Sacrament o, Placer, El Dorado & Yolo

CountyCurrentMonth

PriorMont h Var %

Same MoPrior Year Var %

All Sales

Closed Sales 1,839 2,514 -27% 1,814 1%

New Contracts 3,417 2,371 44% 2,450 39%Inventory 4,928 5,310 -7% 8,315 -41%

Months of Inventory 2.7 2.1 27% 4.6 -42%

Avg Sales Price (in Thousands) $212 $221 -4% $224 -5%

Avg Sales Price Per Sq Ft $116 $119 -3% $121 -5%Shor t Sales Breakou t

Closed Sales 619 774 -20% 468 32%

New Contracts 1,638 1,027 59% 820 100%

Inventory 1,541 1,744 -12% 3,111 -50%

Months of Inventory 2.5 2.3 10% 6.6 -63%

Avg Sales Price (in Thousands) $213 $219 -2% $226 -6%

Avg Sales Price Per Sq Ft $110 $114 -3% $116 -5%REO Sales Breakout

Closed Sales 590 762 -23% 807 -27%

New Contracts 805 677 19% 969 -17%

Inventory 854 1,028 -17% 1,778 -52%

Months of Inventory 1.4 1.3 7% 2.2 -34%

Avg Sales Price (in Thousands) $163 $160 2% $188 -13%

Avg Sales Price Per Sq Ft $97 $96 1% $106 -8%$400K Sales & Over Breakout

Closed Sales 134 212 -37% 163 -18%

New Contracts 227 158 44% 237 -4%Inventory 1,004 1,029 -2% 1,280 -22%

Months of Inventory 7.5 4.9 54% 7.9 -5%

Avg Sales Price (in Thousands) $571 $581 -2% $577 -1%

Avg Sales Price Per Sq Ft $174 $176 -1% $170 2%

Shor t Sales & REO Sales as Percent age of Total Sales

Current Mont h Prior Mont h Same Mont h Last Year

Reg SS REO Reg SS REO Reg SS REO

Closed Sales 34.3% 33.7% 32.1% 38.9% 30.8% 30.3% 29.7% 25.8% 44.5%

New Contracts 28.5% 47.9% 23.6% 28.1% 43.3% 28.6% 27.0% 33.5% 39.6%About Trendgraphix, I nc.Trendgraphix, Inc. is a real estate reporting company based in Sacramento that uses local MLS data to provide highly-visual market statistical graphs to real estate brokers, agents, and MLS/Realtor associations across the USA.Trendgraphix's programs are currently used by tens of thousands of agents in more than 100 brokerages in 18 U.S.states. For more information visit www.TrendGraphix.com or email mcarter@trendgraphix.com