Annual Real Estate Report 2012*

*Hint- It’s the best news in 5 years

Review In 2012 we saw the real estate recovery gaining momentum in the country and locally. Now that sales and prices are rising again, we can look back and see the bottom was in mid to late 2010. 2011 was inconsistent at best with a few months of increases followed by a few months of decreases. In 2012 we finally had 6 straight months of increasing prices for the first time since 2007. The recovery is encompassing more areas nationally which bodes well for price and sales recovery in the Carolinas as we continue to be in-migration states. Local recovery will continue to be stronger in the radius of 20-25 miles from Charlotte due to gas prices and the Charlotte job engine.

The Allen Tate Company continues to lead the way in the Charlotte Region and the Carolinas. In the Charlotte Region we have closed more than 1/3 of all home sales year to date and our closed sales increase is 10% higher than our competition average. The Balatow Team has experienced a 31% closed sales increase largely due to an 89% increase in our inventory of houses listed for sale. Our company and our team are out- performing the market and we want to especially thank everyone who trusted us with their home experience this year.

At present, interest rates are below 4% and opportunities for home buyers are still outstanding. With new construction expected to double in spring 2013, home sellers should be in top shape and ready to go on the market now or early in 2013 before new construction homes are completed.

We hope you enjoy the stats and analysis. We want all our clients and friends to be the best informed real estate owners and consumers in the market.

Market Trends• New Construction- Strong Increase early 2013 = Existing home

sellers should be on the market now• Interest Rates- Gradual rise as economy improves = future

higher cost of ownership per $1 purchased• Rental Rates- High rents begin push back to buying = rising

demand for new and existing houses• Home Inventories- Low levels of existing houses for sale = less

competition for good houses, shorter time on market• Price Stabilization- Has occurred = gradual, historical, “normal”

rise in prices returning• Foreclosure-delinquent inventories down = Less competition

from low price inventory

Please call us at 704-904-8769 or e-mail us at Bill.Balatow@allentate.com with any questions about the review, trends or any of the attached tables.

2012 National Statistics and Trends• Average sales price nationwide was $215,000.• 87% of buyers financed their purchase and average amount financed was

91% of purchase price, a strong sign of a more favorable lending environment.

• 40% of home buyers and 38% of home sellers chose their agent from a referral from a relative, neighbor or friend.

• 39 percent of recent home buyers were first-time buyers, a slight rise from 2011, but closer to the historical norm of 40 percent.

• 65 percent of recent home buyers were married couples—the highest share since 2001.

• For 52 percent of home buyers, the first step in the home-buying process was taken online. Over 90% used the internet in their search process.

• The typical home buyer searched for 12 weeks and viewed 10 homes—a decline from 12 homes in prior year, which speaks to the tightened inventory in many areas.

• 89 percent of buyers purchased their home through a real estate agent or broker, a share that steadily increased from 69 percent in 2001.

• 88 percent of sellers were assisted by a real estate agent when selling their home.

Source: National Association of Realtors

ALLEN TATE 13 COUNTY CHARLOTTE REGION

COMPARED TO CHARLOTTE MLS Closed Units Listings Taken

Allen Tate

Jan. – September 2012 6,920 5,899Percentage Change 26.7 3.6

Charlotte MLS

Jan. – September 2012 20,482 36,996 Percentage Change 17.3 -0.8

We closed one out of every 3 houses sold in the region!

WE’RE ON FIRE!COMPANYWIDE RESULTS- NC & SC

*As of 11/30/2012

Current* Last Year Change

LISTINGS Month to Date 877 797 10.0% Year to Date 12,369 11,521 7.4%

SALES Month to Date 1,382 1,078 28.2% Year to Date 18,089 13,947 29.7%

CLOSINGS Month to Date 1,346 900 49.6% Year to Date 14,629 11,379 28.6%

Tate Closed Transactions

‘06 24,446

‘07 22,451

‘08 15,364

‘09 12,610

‘10 12,264

‘11 12,405

‘12 15,211 Estimated

NATIONAL PICTUREHome Sales

Seasonally Adjusted

4.4 4.8 M

Distressed 22%

Home Prices $187,400 9% 6 Straight Months

Days on Market 8.2 Last August6.1 This August

Mortgage Rate Forecast(Average Rate of 5.5% in 2015 ?)

2005

2006

2007

2008

2009

2010

2011

2012

2013

fore

cast

2014

fore

cast

2015

fore

cast

0

2

4

6

30-year Mortgage

Modestly higher rates could help home sales as banks re-staff mortgage work for home purchase applications and less refinance applications.

Monthly Pending Home Sales Index(Seasonally Adjusted)

707580859095

100105110115

Homebuyer Tax Credit

Source: NAR

20 11/20/12 11/20/12

Annual Existing Home Sales:U-Shaped Recovery

2005

2006

2007

2008

2009

2010

2011

2012

est

.

2013

2014

2015

0

2

4

6

87.08

6.52

5.024.12 4.34 4.18 4.26 4.65 5.05 5.3 5.6

In million units

Visible Housing Inventory For Sale(Existing home inventory at 8-year low)

2000 - Jan2002 - Apr 2004 - Jul 2006 - Oct2009 - Jan2011 - Apr0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

Visible Housing Inventory For Sale(Newly Constructed Homes Inventory at 50-year low)

1964 - Jan 1971 - Jul 1979 - Jan 1986 - Jul 1994 - Jan 2001 - Jul 2009 - Jan0

100

200

300

400

500

600

700

Shadow Inventory … Falling(Seriously delinquent mortgage + homes in foreclosure process)

million units

2000

- Q

1

2001

- Q

1

2002

- Q

1

2003

- Q

1

2004

- Q

1

2005

- Q

1

2006

- Q

1

2007

- Q

1

2008

- Q

1

2009

- Q

1

2010

- Q

1

2011

- Q

1

2012

- Q

10.00.51.01.52.02.53.03.54.04.55.0

Distressed Sales Market Share

2010 … 33%

2011 … 33%

2012 … 25%

2013 … 15%

2014 … 8%

2015 … 5%

2000

- Q

1

2000

- Q

4

2001

- Q

3

2002

- Q

2

2003

- Q

1

2003

- Q

4

2004

- Q

3

2005

- Q

2

2006

- Q

1

2006

- Q

4

2007

- Q

3

2008

- Q

2

2009

- Q

1

2009

- Q

4

2010

- Q

3

2011

- Q

2

2012

- Q

10

2000

4000

6000

8000

10000

12000

14000

16000In $ billion

If 4% annual gain

Bubble growth

Net Equity in Real Estate

Renter Households

1980 - Q1 1984 - Q4 1989 - Q3 1994 - Q2 1999 - Q1 2003 - Q4 2008 - Q325,000

27,000

29,000

31,000

33,000

35,000

37,000

39,000

41,000

In thousands

Homeowner Households

1980 - Q1 1984 - Q4 1989 - Q3 1994 - Q2 1999 - Q1 2003 - Q4 2008 - Q350,000

55,000

60,000

65,000

70,000

75,000

80,000

In thousands

Homeownership Rate at 65.5%(Lowest in 15 years)

1965 - Q11971 - Q31978 - Q11984 - Q31991 - Q11997 - Q32004 - Q12010 - Q358

60

62

64

66

68

70 %

2011History

2012Forecast

2013Forecast

2014Forecast

GDP Growth +1.8% +2.1% +2.5% 3.1%

Existing Home Sales

4.26 million 4.64 million 5.05 million 5.3 million

New Home Sales

301,000 368,000 575,000 650,000

Housing Starts 612,000 776,000 1,128,000 1,300,000

Existing Home Price

$166,100 $176,100 $185,200 $195,000

Fed Funds Rate

0.1% 0.1% 0.1% 0.1%

30-yr Mortgage 4.7% 3.7% 4.0% 4.6%

Thanks for the opportunity to present our report and please call or e-mail

with any questions.