Phoenix Housing MarketPhoenix Housing Market

4/16/2009Updated 4/16/2009

1

2

PHOENIXPHOENIX

► STRENGTHS• Population growth

I G th

► CONCERNS•Home Inventories

• Income Growth

• Highly Educated Population

•Foreclosures

•Credit Conditions

• Low Costs of Doing Business

• Affordable Housingg

• No hurricanes, earthquakes, tornadoes, “Santa Ana Fires” or snow

3

2009Forecast

4

Arizona’s Population Growth

6.70

6.57.0

Arizona s Population Growth

5.105.05.56.06.5

2 70

3.703.54.04.55.0

illio

ns

1.301.80

2.70

2.02.53.0M

i

0.75

0.51.01.5

1950 1960 1970 1980 1990 2000 2010

5

1950 1960 1970 1980 1990 2000 2010Source: U.S. Census Bureau

Phoenix’s Population Growth

3 98742174,500

3072

3,987

3,5004,000

2130

2 0002,5003,000

ousa

nds

664971

1509

1,0001,5002,000

Tho

332664

0500

,

1950 1960 1970 1980 1990 2000 2008 2010

6

1950 1960 1970 1980 1990 2000 2008 2010Source: Greater Phoenix Economic Council

Ph i M t E l tPhoenix Metro Employment

19002000

140015001600170018001900

10001100120013001400

Employment has increased over 100 % in Greater Phoenix over the past 20 years overall. Non-farm employment in Greater Phoenix has grown from 983,400 in 1990 to nearly 1.89 million in 2008. Regional employment decreased (1.4) percent between 2007 and

2008 marking the first significant decrease in the last 15 years

7Source: Eller College of Management, The University of Arizona

2008 marking the first significant decrease in the last 15 years.

Comparing MarketsComparing Markets

Percentage of new and existing homes that were sold during the 4th quarter of 2008 that were affordable to families earning the area’s median income.

Seattle 40 6%Seattle 40.6%

Portland 48.9%

Reno64.8%

San Francisco 20.6%

Las Vegas 71.1%

Salt Lake 58.0% Denver 70.3%

Albuquerque

Chicago 56.8%

Los Angeles 26.9%San Diego 44.6%

Phoenix 74.1%Tucson 64.1%

68.7%

San Antonio 62.3%

Dallas 67.5%

Houston 66.2%

8Source: National Association of Home Builders

Arizona In Migration Patterns for theArizona In-Migration Patterns for the Top 5 States Per Year

Colorado

Washing…

Texas

Illinois

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000 120,000

California

YTD M 09 2008 2007 2006 2005 2004 2003 2002 2001 2000YTD-Mar 09 2008 2007 2006 2005 2004 2003 2002 2001 2000

9Source: Arizona Department of Transportation, Motor Vehicle Division. Dec 2007

Income Growth for Greater PhoenixIncome Growth Percentages for Greater PhoenixIncome Growth Percentages for Greater Phoenix

-1.1%1Q 2009

Year

5.6%

8.7%

1.7%

2006

2007

2008

5 3%

6.6%9.0%

2003

2004

2005

4 0%

5.7%

4.3%

5.3%

1990 2000

2001

2002

2003

6.9%

4.0%

-2% 0% 2% 4% 6% 8% 10%

1980-1990

1990-2000

10Source: Eller Collage of Management, The University of Arizona, 2001 - 2008.

Historical Data: U.S. Census Bureau, 1980, 1990, 2000.

8

Long-Term Interest Rates

5

6

7

3

4

5

0

1

2

Jan-0

6Fe

b-06

Mar-06

Apr-0

6May

-06Ju

n-06

Jul-0

6Au

g-06

Sep-0

6Oc

t-06

Nov-0

6De

c-06

Jan-0

7Fe

b-07

Mar-07

Apr-0

7May

-07Ju

n-07

Jul-0

7Au

g-07

Sep-0

7Oc

t-07

Nov-0

7De

c-07

Jan-0

8Fe

b-08

Mar-08

Apr-0

8May

-08Ju

n-08

Jul-0

8Au

g-08

Sep-0

8Oc

t-08

Nov-0

8De

c-08

Jan-0

9Fe

b-09

Mar-09

Federal Funds (Effective) 30 Year Fixed

11Source: Freddie Mac, Federal Reserve

Median Sales Price of Existing Single Family Homesg g y2008 4th Quarter

Los Angeles

San Francisco

Ri id / S B di

Seattle

BostonNew York

San Diego

Los Angeles

Greater Phoenix

Chicago

Portland

Las Vegas

Riverside/ San Bernardino

Tampa

U.S. Average

MinneapolisSalt Lake City

Denver

$-

$100

,000

$200

,000

$300

,000

$400

,000

$500

,000

$600

,000

Houston

Albuquerque

12 $ $ $ $ $ $

Source: National Association of Realtors, 2007.

Resale Home Median Price Per Month

300000

200000

250000

20022003

150000

20032004200520062007

50000

100000200720082009

0Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

13

*This representation is based in whole or in part on the data supplied by ARMLS. ARMLS does not guarantee nor is in any way responsible for its accuracy.Data maintained by ARMLS may not reflect all real estate activity in the market.

Source: ARMLS

DETACHED NEW HOME MEDIAN PRICE: $218 156DETACHED NEW HOME MEDIAN PRICE: $218,156 Maricopa County

March 2009 StatisticsPhoenix $218,156

275000

300000

325000

225000

250000

275000

175000

200000

125000

150000

1Q03

3Q03

1Q04

3Q04

1Q05

3Q05

1Q06

3Q06

1Q07

3Q07

1Q08

3Q08

1Q09

14Source: The Information Market

Quarterly

All A ti H Li tiAll Active Home Listings

60000

40000

50000

20000

30000

10000

20000

0

Jan-

02Ju

n-02

Jul-0

2Au

g-02

Oct-0

2Ja

n-03

Apr-0

3Ju

l-03

Oct-0

3No

v-03

Jan-

04Ma

r-04

May-0

4Ju

l-04

Oct-0

4De

c-04

Jan-

05Ma

r-05

May-0

5Ju

l-05

Oct-0

5De

c-05

Jan-

06Ma

r-06

May-0

6Ju

l-06

Sept

-06Oc

t-06

Nov-0

6De

c-06

Jan-

07Fe

b-07

Mar-0

7Ap

r-07

May-0

7Ju

n...

July-

07Au

g-07

Sep-

07Oc

t-07

Nov-0

7De

c-07

Jan-

08Fe

b-08

Mar-0

8Ap

r-08

May-0

8Ju

n-08

Jul-0

8Au

g-08

Sep-

08Oc

t-08

Nov-0

8De

c-08

Jan-

09Fe

b-09

Mar-0

9

15

Includes all single-family, townhomes, and manufactured homes

Source: ARMLS

------------------ Normal Market Conditions

Maricopa County Home Closings

18 000

Maricopa County Home Closings

12,00014,00016,00018,000

6,0008,000

10,000,000

02,0004,000

05 05 05 05 05 05 05 05 05 05 05 05 06 06 06 06 06 06 06 06 06 06 06 06 07 07 07 07 07 07 07 07 07 07 07 07 08 08 08 08 08 08 08 08 8 08 08 08 09 09 9

Jan 05

Feb 05

Mar 05

Apr 05

May 05

Jun 05

Jul 0

5Aug 0

5Sep

t 05

Oct 05

Nov 05

Dec 05

Jan 06

Feb 06

Mar 06

Apr 06

May 06

Jun 06

Jul 0

6Aug 0

6Sep

t 06

Oct 06

Nov 06

Dec 06

Jan 07

Feb 07

Mar 07

Apr 07

May 07

June 0

7Ju

ly 07

Aug 07

Sep 07

Oct 07

Nov 07

Dec 07

Jan 08

Feb 08

Mar 08

Apr-08

May-08

Jun-08Ju

l-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

New Home ClosingsHome Re-Sales

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Source: The Information Market (Includes: Single Family Detached, Townhomes,& Condos)

Historical Foreclosure Trends-Trust Deed SalesHistorical Foreclosure Trends-Trust Deed Sales

800090001000011000120001300014000

2000300040005000600070008000

01000

17Source: The Information Market

Metro Phoenix Monthly Foreclosuresy

10 000

12,000

8,000

10,000

4 000

6,000

2,000

4,000

0Jan0 6

M ar0 6

M ay0 6

Jul0 6

Sep0 6

N ov0 6

Jan0 7

M ar0 7

M ay0 7

July0 7

Sep0 7

N ov0 7

Jan0 8

M ar0 8

May-0 8

Jul-0 8

Sep-0 8

Nov-0 8

Jan-0 9

Mar-0 9

18Source: The Information Market

Notice of trustee sale, precursor to foreclosure Trust Deed Sales

Median Listing Price vs. Median Sales Price

$350 000

$300,000

$350,000

$200,000

$250,000

$150,000

$200,000

$100,000

Jan

02

Apr

02

Jul 0

2

Oct

02

Jan

03

Apr

03

Jul 0

3

Oct

03

Jan

04

Apr

04

Jul 0

4

Oct

04

Jan

05

Apr

05

Jul 0

5

Oct

05

Jan

06

Apr

06

Jul 0

6

Oct

06

Jan

07

Apr

07

Jul 0

7

Oct

07

Jan

08

Apr-

08

Jul-0

8

Oct

-08

Jan-

09

Li ti P i S l P i

19

Listing Price Sales Price

Source: ARMLS

Metro Phoenix New Housing PermitsMetro Phoenix New Housing Permits

6000

7000

4000

5000

6000

2000

3000

4000

0

1000

2000

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

2005 2006 2007 2008 2009

20Source: The Arizona Republic,

Phoenix Business Journal

Phoenix Market:All Detached Product – Historical Finished Lot Inventory

70 000

80,000 72

66

50 000

60,000

70,00060

54

48

M

30 000

40,000

50,00042

36

30

MONTHS

10,000

20,000

30,000 24

18

12

6

0

10,000

Q04

Q05

Q05

Q05

Q05

Q06

Q06

Q06

Q06

Q07

Q07

Q07

Q07

Q08

Q08

Q08

Q08

Finished Lot Inv

Months of

6

4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Months of Supply

21Source: Metrostudy

Phoenix Market: 4th Qtr 2008Phoenix Market: 4 Qtr 2008Months Supply of Vacant Lots by Lot Width

264

192216240

96120144168

24487296

024

Att < 45 45 50 55 60 65 70/75 80/85 90+St d d L t WidthStandard Lot Width

22Source: Metrostudy

Phoenix Market: 4th Qtr 2008Vacant Lot Months of Supply by Submarket (1st of 2)

Near North PhxNorth Phoenix

Central PheonixPeoria

FlorenceTempe

North SurpriseSouth Surprise

East MesaHunt Hwy …

Central Pheonix

Near SW PhxWest ChandlerEast Chandler

North AvondaleNorth Surprise

West MesaSouth Scottsdale

South BuckeyeNear SW Phx

0 24 48 72 96 120 144 168 192 216 240 264 288 31223Source: Metrostudy

Phoenix Market: 4th QTR 2008Vacant Lot Months of Supply by Submarket (2nd of 2)

MaricopaNear West Phx

GlendaleGilbert

TollesonSouth Mountain

Maricopa

North ScottsdaleSun City AreaQueen Creek

GoodyearGlendale

CoolidgeNorth BuckeyeAJ-Gold Camp

Casa GrandeNorth Scottsdale

Fountain HillsCave Creek

Litchfield ParkCoolidge

0 24 48 72 96 120 144 168 192 216 240 264 288 31224Source: Metrostudy

25Source: Maricopa Association of Governments

26Source: Maricopa Association of Governments

27