TMiRe November15 Us

1
Keller Williams Research
This Month in Real Estate
Released: November 5, 2009
Updated: November 9, 2009
14Topics for Buyers and Sellers………………….
Recent Government Action…………………….
The Numbers That Drive Real Estate…………
Commentary…………………………………….
9
3
2

KW Research 2
Budding Signs of Recovery
Budding signs of recovery continued last month. The encouraging news arrived in a number
of closely followed economic indicators. On Thursday, October 29, the U.S. Commerce
Department stated the country's recession has officially ended, at least as leading data
indicates.
U.S. GDP expanded 3.5 percent in the third quarter, the first period of quarterly growth in more
than a year. A strong bounce in housing sales activity in September, mainly due to first-time
buyers' efforts to claim the tax credit before it expires for November 30, pointed to
stabilization in the housing sector. And more good news this week as an extension to the
Home Buyer Tax Credit is working its way through a congressional vote. Many believe this bill
will emerge later in the month, possibly with provisions to include some existing homeowners
and higher income earners.
The recovery will continue to develop in small steps. The Recent Nobel Prize winner in
economics, Paul Krugman, praised the progress, stating the most severe part of the crisis has
now subsided and “the end of the world has been postponed.” Moving forward, trade
imbalances and mounting levels of government debt, as well as high levels of unemployment, will
need to be addressed. For now, governments including the United States will continue to provide
stimulus support until the major economies are firmly on solid ground.

KW Research 3
The Numbers That Drive Real Estate

KW Research 4
Home Sales
In Millions
4.94
5.57
5.09
5.24
4.66
4.55
4.71
4.49
4.74
4.54
5.10
4.89
4.72
Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept
Seasonally Adjusted Home Sales
Latest data release: October 23, 2009
Source: National Association of Realtors
Existing home sales bounced back strongly in September with much of the
increase being attributed to the rush of first-time buyers trying to claim the tax
credit before the end of this month. Sales jumped 9.4 percent to 5.57 million
units over August sales of 5.09 million, marking five gains in the past six months
and is 9.2 percent above levels seen last year. Sales activity is at the highest
level since July 2007 when sales hit 5.73 million.

KW Research 5
Median Home Price
In Thousands
$191 $186 $180 $176 $165 $168 $170 $167 $182 $177 $175$182$175
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Existing-home price was $174,900 in September, 6 percent higher from its low
in January but still 8.5 percent below September 2008. Distressed properties,
which accounted for 29 percent of all transactions in September, continue to
hold down the median price, as they typically sell for 15-20 percent less than
traditional homes.

KW Research 6
Inventory - Number of homes available for sale
In Millions
The current housing supply is the lowest seen in two and a half years. Total
housing inventory at the end of September fell 7.5 percent to 3.63 million
existing homes available for sale, representing an 7.8-month supply at the
current sales pace, down 16.1 percent from August’s 9.3-month
supply. Compared to a year ago, there are now 15 percent fewer homes on the
market. According to Lawrence Yun, NAR chief economist, “If we could continue
to absorb inventory at this pace, home prices would return to normal, modest
appreciation patterns next year.”
4.2
3.6
3.94.13.9
3.6
3.8
3.6
3.7
4.2
4.3
3.8
3.9
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Number of Homes Available for Sale

KW Research 7
Mortgage Rates
30-Year Fixed
Source: Freddie Mac
Rates for 30-year fixed loans continue to hover around 5 percent. While having
risen above the ultra-low 4.78 percent reached in the spring, rates remain at
attractive levels for people looking to buy a home or refinance. As an economic
recovery is underway and concerns over inflation come back, experts expect
mortgage rates will likely go up.
5.59%
5.29%
4.92%
4.87%
5.00%
5.03%
4.94%
5.07%
5.04%5.12%
5.14%
5.08%
5.22%
4.80%
4.78%
4.82%
4.87%
5.15%
5.03%
5.01%
5.12%
5.10%
5.25%
5.16%
5.04%
5.07%
4.98%
4.85%
4.78%
4.96%
4.84%
4.86%
4.82%
4.91%
5.29%
5.38%
5.42%
5.32%
5.20%
5.25%
5.14%
5.20%
1/8
1/22
2/5
2/19
3/5
3/19
4/2
4/16
4/30
5/14
5/28
6/11
6/25
7/9
7/23
8/6
8/20
9/3
9/17
10/1
10/15
10/29
Average Weekly Mortgage Rates

KW Research 8
21% 19% 19% 20% 20% 23% 24% 22% 18% 15%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Affordability as of September every year. Calculations assume a 20% down payment.
Affordability -
% of Income
Historically high affordability conditions coupled with the first-time buyer tax
credit are boosting home sales. Home buyers continue to benefit from low
home prices as well as unprecedented mortgage rates. “Potential first-time
buyers can take heart in that affordability conditions this year are the highest on
record dating back to 1970,” according to NAR President Charles McMillan. So
far this year, the home price-to-income ratio has fallen well below the historical
average of 25 percent. The ratio now stands at 15 percent.
Percent of Income Required for Mortgage Payments on a Median-Priced Home
Well below the
historical
standard of
25 %
The percentage of a median family’s income required
to make mortgage payments on a median-priced home

KW Research 9
Recent Government Action

KW Research 10
First-Time Home Buyer Tax Credit Update
October 2009
As the deadline for the First-Time Homebuyer Tax Credit crept closer, it became
a clear priority on the Hill. An extended and expanded home buyer tax credit is a
part of a larger bill that also extends unemployment benefits. This bill was
signed by President Obama on Friday, November 6.
The bill essentially remains intact but has a handful of important changes:
Sources: Bloomberg News, The Washington Post, U.S. Government Printing Office
1. Existing homeowners who lived in their previous home for 5 out
of the last 8 years will be eligible for up to a $6,500 credit.
2. The income limits have been bumped up $50,000 to $125,000
for individuals and up $75,000 to $225,000 for couples.
3. Those who qualify will have until the end of April, 2010 to find
their new home and have a signed contract on it. They will
have until the end of June to close.
4. Military, foreign services and intelligence employees with
extended active service may qualify for a few special
provisions, including an extra year to take advantage and they
may not need to repay the credit if they move during the first
three years.

KW Research 11
October 2009
First-Timers: Unchanged
Prior Owners: $6,500 if lived in
prior home for at least 5 years of
past 8 years
First-Timers: maximum of
$8,000 or 10% of sales price
Prior Owners: $0
Amount
November 7, 2009January 1, 2009Effective Date
Individual: $125,000
Couple: $225,000
Individual: $75,000
Couple: $150,000
Income Limit
Contract signed before
May 1, 2010, must close
before July 1, 2010
Members of the uniformed
services, foreign services, and
intelligence employees who
served an extended service of 90
days will have until April 30, 2011
and June 30, 2011.
Must Close before
December 1
Deadline
NewPrevious

KW Research 12
October 2009
If purchased in 2010, by
amending 2010 tax return or
claiming on 2011 tax return
If purchased in 2009, by
amending 2009 tax return or
claiming on 2010 tax return
How to claim
Buyer must be at least 18 years
old and not classified as a
dependent for tax purposes
Home must cost less than
$800,000
Home must be primary
residence for at least 3 years. If
home is sold or buyer moves,
before 3 years, must re-pay full
amount of credit. Exception for
military, foreign services, or
intelligence with extended 90 days
service overseas.
Home must be primary
residence for at least 3 years
Other
Restrictions
NewPrevious

KW Research 13
The Consumer Financial Protection Agency has been in the works in Congress for
several months. This agency will look out for consumers, protecting them from unfair
financial practices, overseeing credit cards and loans. Soon after its creation, the
Consumer Financial Protection Agency would bring the Home Valuation Code of Conduct
(HVCC) to an end.
The HVCC slipped in under the radar earlier this year. It was the result of a settlement
between the New York attorney general and Fannie Mae and Freddie Mac to conduct fair
and appropriate appraisals. HVCC actually created a lot of confusion, many improper
appraisals, and much frustration from contracts falling through from inaccurate
appraisals.
The current code would be replaced by one with a similar goal that allows for public
comment and is consistently applied across all federal agencies.
This will give the public the opportunity to weigh in on what has and has not worked from
experience. This will hopefully get closer to a code that truly protects consumers, ensures
fair values, and prevents future bubbles.
Source: The Washington Post
Could HVCC be on its way out?
October 2009

KW Research 14
With the onset of the financial crisis, credit markets that were not backed or insured by the
government froze. Mortgages that are backed by the government and purchased by
Fannie Mae, Freddie Mac, and Ginnie Mae are called “conforming loans”. One type of non-
conforming loan is the “jumbo loan”. Traditionally, jumbo loans are mortgages that are
greater than $417,000.
Since the crisis began, tightened lending practices have made this
type of loan harder to secure. Jumbo loans currently come with
substantially higher costs from larger down payments and higher
interest rates. This has led to a 70% decrease in jumbo loan
origination since 2007 and a greater inventory of
homes in jumbo territory.
As part of the stimulus bill earlier this year, the conforming loan limits were raised to 125%
of median home prices to a limit of $729,750 for 2009 and were set to expire at the end of
the year. On October 29, the increased loan limits were extended through 2010. This
means it will be easier for sellers whose homes fall in this category and cheaper for buyers
to secure financing next year, compared to if the government let the limits expire.
Higher Loan Limits Extended
October 2009
Sources: Inman News, National Association of Realtors

KW Research 15
Topics for Buyers and Sellers

KW Research 16
Unemployment Worries Addressed
The average duration that unemployed workers are out of a job is currently more
than six months, near the highest level since the bureau started tracking the
figure in 1948. The total number of unemployed people stands at 15.1 million.
5.4 million of those have been looking for work for more than 27 weeks.
With incentives in the housing market, including very low interest rates, a large
selection of homes for sale in many markets, and highly affordable home prices,
concerns about the job market and possible unemployment have held back
many potential buyers.
Here are a few suggestions for potential buyers and current homeowners:
Sources: Bureau of Labor Statistics, CNNMoney.com, etc.
1. Buy well within your means. Although home buyers often want to buy a home
they can see themselves growing into, stay within a conservative percentage of
what you currently make. If you had to take a part-time instead of a full-time job,
if your salary or hours were cut, or if you become a one-income household
instead of two, make sure your monthly payment would still be attainable.
Peace of Mind Home Buyers Worried about High Unemployment

KW Research 17
Unemployment Worries Addressed (cont)
Peace of Mind Home Buyers Worried about High Unemployment
Source: Bureau of Labor Statistics, CNNMoney.com, and other sources
2. Put down a large down payment. Not only will your monthly payments be less, but
the equity from the down payment creates a buffer zone. If you put 20% down when
you purchase your home and home prices in the area drop 5%, you still have at least
15% equity in your home. For sellers, this built-up equity provides flexibility-should you
need to sell in a hurry.
3. Have an emergency fund. Experts advise everyone, not just homeowners, to have an
emergency fund of at least six months’ worth of expenses. This fund should be saved
in a liquid account, like a money market or savings account, for easy access if needed
quickly. With the average time to find a new job currently above six months, seven or
more months of savings is a good goal.
4. Pay down other debts. Lowering or eliminating debt service is always a good move
and is particularly wise in the current job climate. If you were without a job and income,
lower fixed monthly expenses help ease your financial burden and stretch the money
in your emergency fund.

KW Research 18
Your Local Market
Although it is important to stay informed about what is going on in the
national economy and housing market, many different factors impact
the real estate market in your area.
Talk to your Keller Williams agent for assistance
interpreting the conditions in your local market.
Keller Williams associates are equipped with all the knowledge and
information to help navigate you through the process of buying or
selling a home in this challenging market.

KW Research 19
About Keller Williams Realty
Founded in 1983, Keller Williams Realty, Inc., is an international real estate
company with more than 74,175 associates and 693 offices located across the
United States and Canada. The company began franchising in 1991, and following
years of phenomenal growth and success, became the third-largest U.S.
residential real estate firm in 2009.
The company has succeeded by treating its associates as partners and shares its
knowledge, policy control, and company profits on a system-wide basis.
Focusing on helping associates realize their fullest potential, Keller Williams
Realty is known as an industry leader in its family culture, unmatched education,
profit sharing business model, phenomenal coaching program, and technology
offerings. The company provides associates with all the tools needed to grow and
thrive in today’s market.
www.kw.com

KW Research 20
About Paul W. Drury
Originally licensed as an agent in Ohio in 1986, Paul began with Lehman
Johnson Real Estate in Elyria. He acquired his Real Estate Brokerage License in
1992 and became an Associate broker with West Shore Realty. In 1995 he
moved his brokerage license to Continental Realty Investment where he began
to focus on additional work with commercial and investment real estate. During
these years he also performed professional appraisals with The Appraisal House.
In 2001 he began Drury Realty Consulting and worked as an independent Real
Estate Consultant and worked on his own until 2009 when he joined Keller
Williams Realty, Greater Cleveland West. “Being a part of the Keller family
provides me with tools and serves unachievable strictly on my own, provides me
with the tools and networking of a huge national network, while still enabling
me to work, act, and function as the manager of my own business. It’s the best
of both worlds.” – Paul
Paul's Home Page

KW Research 21
What we have to offer sellers
Sellers of Real Estate now have access to tools unimaginable just a few years
before. Keller Williams doesn’t spend its money promoting its own name. It
doesn’t have to. It puts its resources into providing the best tools and resources
to its systems, education, and training, thus providing the most professional real
estate team members back into the communities.
Properties put up for sale by Paul are also; listed on KWLS, a national MLS,
implemented by the third largest company in the US; local MLS, the
NEOHREX, Northern Ohio Real Estate Exchange; and on many other national
sites such as Trulia, Zillow, CyberHomes, and others.
Other tools brought to bear by Paul include branding using the properties own
web address with a virtual tour that can be emailed by link or have the link
posted anywhere it can be, to even include Craig’s List and Back Page.
Examples of properties sold using this method include:
- 947 Gulf Road in Elyria (sold in 28 days)
- 359 Gayle Drive in Sheffield Lake (sold in 57 days)
- 327 Gayle Drive in Sheffield Lake (sold in 18 days)

KW Research 22
What we have to offer buyers
Buyers of Real Estate also have access to tools unimaginable just a few years before.
Since Keller Williams doesn’t spend its money promoting its own name, it puts its
resources into providing the best tools and resources to its systems, education, and
training, thus providing the most professional real estate team members back into the
communities.
Paul is available directly most hours of the day without having to battle assistants and
voice mails (most of the time) and he checks his email constantly.
Buyers can access Paul’s website at www.druryrealty.com and conduct their own
searches through wolfnet IDX and create their own search profiles for searching for
properties anywhere in Ohio. If relocating out of Ohio, Keller Williams offers one of
the finest relocation referral networks in the nation. While we may not be the biggest
firm in Northern Ohio yet, we are in many areas of the national already.
Paul’s website is easy to manage and he can set up search profiles for you so you get
notified at about 8:30 am of any new properties that come available. He also has
profiles set up on national websites such as Trulia providing for greater access to
search tools.

KW Research 23
Properties currently for sale
Properties currently for sale:
- 37101 Hunters Trail in Avon
- 4435 Porter Road in North Olmsted
- 810 Sandalwood Drive in Elyria
Want your home or property promoted like these?
- Contact Paul for a free, no obligation consultation today at 440-385-5650.

KW Research 24
Follow Paul on line…
Home Web Page
www.druryrealty.com
On Zillow
www.zillow.com/profile/PaulWDrury
On Trulia
www.trulia.com/profile/paulwdrury
On Twitter
- www.twitter.com/PaulWDrury
On FaceBook
- www.facebook.com/paul.w.drury
On LinkedIn
www.linkedin.com/in/paulwdrury

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