1. RESEARCH
This M h i R l E
Thi Month in Real Estate
Released: April 9, 2009
9
Commentary……………………………. 2
The Numbers that Drive Real Estate… 3
Recent Government Action……………. 9
Research for Buyers and Sellers………. 14
- Courtesy of Mike Walker
1
www.ShowMeTheKeys.com

2. Commentary
Affordability, low rates, desire to buy provide hope for the U.S. housing market
Housing affordability now stands at its best level since 1971. This greater affordability helped boost home sales
in February. Especially strong was the activity attributed to first time home buyers, who represented half of new
February first-time
home purchasers this month. The $8,000 tax credit helped move many of these first-time buyers out of their
rentals and into their own homes.
In light of weakening global economic indicators and a poorly functional financial system, the U.S. government
and Federal Reserve remain proactive, with the Federal Reserve alone purchasing and holding up to an
additional $750 billion of agency mortgage-backed securities and $100 billion more in housing agency debt.
The Fed moves are designed to provide greater support to mortgage lending and housing markets.
While
Whil economists expect continued softness i the overall housing market, encouraging buyer signs abound
i idf in h ll h i k ib i b d
given the historically low mortgage rates and the availability of distressed properties. There are localized
opportunities for savvy investors and for those buyers who are qualified, willing, and ready to buy on the cheap.
And with rates at historic lows, the question for many borrowers becomes, how long will the good times last?
The Fed's actions and mounting federal deficits could weaken the dollar and spur the aforementioned
Fed s
inflationary trend, which could send interest rates back up. In addition, the first-time home buyer tax credit
expires at the end of November. Prominent economists maintain that low rates should be available for quot;at least
the next several months.quot; But if fears of inflation cause investors to shun Treasurys, the Fed's impact on long-
term interest rates could be short-lived.
2

3. The Numbers That Drive Real Estate
- Courtesy of Mike Walker
3
www.ShowMeTheKeys.com

4. Home Sales - In Millions
The annual rate for a particular month represents what the total number of actual sales for a year
would be if the relative pace for that month were maintained for 12 consecutive months.
f p f f
Existing home sales rose 5.1% in February, reversing losses in January. Favorable market
conditions and government-granting incentives are gaining traction in attracting a larger
wave of first-time home buyers, who accounted for half of all home sales last month.
More robust activity is expected in the next few months. A recent House Hunt survey
revealed that the U.S housing market appears to be showing early signs of emerging from
the worst real estate market in three years.
5.10
4.99
4.95 4.90 4.94
4.93
4.92 4.85
4.54
4.95
4 95
4.74 4.72
4.49
Annual Rate of Sales
Feb Mar Apr May Jun
p y Jul Aug Sept Oct
g p Nov Dec Jan Feb
Data released on March 23, 2009
4
Source: National Association of Realtors

5. Median Home Price
In Thousands
The national median home price continues to overcorrect. Home prices stood at 2003
levels in February at $165,400, which translates to a 16% decline from a year ago.
“Given the downward distortion in price comparisons due to distressed sales, it’s
important for owners to keep in mind that this doesn’t equate to a similar loss of value
for traditional homes in good condition,” said Lawrence Yun, NAR chief economist.
Regionally, the West is showing signs of recovery with stronger-than-expected sales
gains.
gains California is in the lead with median listing prices starting to rise for the first
time in three years.
$137 $143 $156 $166 $181 $198 $218 $214 $196 $165
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Median home price as of February every year (Data released on March 23, 2009)
5
Source: National Association of Realtors

6. Inventory - Months Supply
Number of months it would take to sell all the homes on the market at the current rate of sales
Continuingly improved affordability conditions and lower interest rates are expected to
attract more potential home buyers and help reduce inventory. According to Move Inc.,
approximately 1 in 4 (23%) Americans expect to buy a home in the next five years.
The months supply of homes has fallen to less than 10 months this year in comparison
to double-digit levels for most of last year. In February, 3.8 million existing homes were
available for sale, representing 9.7 months of supply at the current pace of sales.
sale 97 sales
11.3 10 9 11 11 11
10.9 10.6 10
10
10
9.7 9.7
9.4 9.7
Monthly Inventory
Feb Mar Apr May Jun
p y Jul Aug Sept Oct
g p Nov Dec Jan Feb
Latest data release: March 23, 2009
6
Source: National Association of Realtors

7. Mortgage Rates
30-Year Fixed
After the Fed announced that it would expand purchases of mortgage-backed securities and
Treasury securities, applications for both purchase and refinance loans jumped 32%.
Last month, mortgage rates averaged around 5%, down from 5.1% in February and 6 % a
year ago. Buyers continue to enjoy lower mortgage rates as weekly rates fell to 4.78 percent
i jl kl f ll 4 8
in the first week of April.
With rates at historic lows, uncertainty remains as to how long these low rates will last.
Increasing federal deficits due to massive government spending could weaken the dollar and
prod inflation, which could send interest rates back up.
5.25%
5.16% 5.15%
5.12% 5.10%
5.07% 5.03%
5.01%
5.04%
4.96% 4.98%
4.85%
4.78%
Average W kl Mortgage Rates
A Weekly M t Rt
1/8/2
1/15/
1/22/
1/29/
2/5/2
2/12/
2/19/
2/26/
3/5/2
3/12/
3/19/
3/26/
4/2/2
2009
2009
2009
2009
/2009
/2009
/2009
/2009
/2009
/2009
/2009
/2009
/2009
7
Source: Freddie Mac

8. Affordability - % of Income
The percentage of a median family’s income required to make mortgage payments on a median priced home
Quality buyers are continuing to take advantage of stimulus incentives and favorable
affordability conditions as evidenced by increasing sales last month. Exceptionally low
home prices and mortgage rates continue to give them more buying power. According
to NAR President Charles McMillan, “With the drop in interest rates, a median-income
family can afford a home costing $20,000 more than a year ago for the same monthly
mortgage payment.”
14%
20% 19% 19% 18% 19% 20% 23% 22% 18%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Affordability as of February every year. Calculations assume a 20% down payment.
8
Source: National Association of Realtors

9. Recent Government Action
- Courtesy of Mike Walker
9
www.ShowMeTheKeys.com

10. Government Teams Up with Investors to Purchase Toxic
Assets
The Treasury Department recently released the Public-Private Investment
Program to ensure that lending continues to flow to households and businesses.
This program is intended to mend the balance sheets of banks which are filled
with toxic assets due to losses incurred during the housing market implosion.
The government will come together with private investors to purchase
the loans from the banks at discounted prices. The government and investors will
only have to put up a fraction of what the assets sell for and the FDIC will insure
lh t t f ti f h t th t ll f d th ill i
the remainder. Investors and the government will own the assets as an investment
in hopes of making money because they believe fear has driven prices below their
actually worth.
y
If this initiative works, banks will have a greater ability to extend more
new loans. Banks could have more flexibility in originating loans that the
government typically does not guarantee, including loans greater than $729,000,
also referred to as jumbo loans. Banks creating more new loans in the higher
l f dt j bl Bk ti l i th hi h
price points could ultimately translate into upper price home sales regaining
momentum and the eventual return of a healthy housing market.
10
Source: Washington Post, ustreasury.gov

11. The Federal Reserve Pulls Out the Stops to Get the
Housing Market Back on Track
The Fed illustrated that, even with the federal funds rate nearly at zero, it
still has more tricks to pull out of its hat by taking unprecedented steps toward
supporting mortgage lending and the housing market. Along with purchasing $300
pp g gg g g g p g
billion in Treasury securities, the Fed promised an additional $750 billion on top of
the $500 billion it has already committed to purchasing mortgage-backed securities.
When the Fed first announced that they would purchase these securities a
few months ago, interest rates fell by 1%. After the most recent announcement, rates
fell b
f ll by nearly a quarter of a percent from 5.03% on March 12 to 4.78% on April 2.
l t f tf 5 03% Mh t 4 78% A il 2
Some banks are extending loans at around 4.5%.
Estimated Payment on a $200,000 Mortgage
Interest Monthly
Rate Payment
8.5% $,
$1,538
6.5% $1,264
4.5% $1,013
Monthly Payment = Principal and Interest Portion Only
11

12. Banks Permanently Banned from Practicing Real Estate
In 2001, the Federal Reserve Board and the U.S. Treasury Department
issued a proposed regulation to allow national bank holding companies and
financial subsidiaries to engage in real estate brokerage and management. Since
this presented a clear conflict of interest, annual bills were passed to prevent banks
from doing so On March 11, President Obama signed into law the Omnibus
so. 11
Appropriations Act that permanently bars banks from entering the real estate
brokerage business.
This act is notable because banks in the real estate business could create
an uncompetitive environment that is ultimately against consumer interests, since
bank employees would not have the same fiduciary relationship with consumers
that independent real estate professionals have.
p p
12
Source: Realtor Magazine

13. New Website to Help Struggling Homeowners
The U.S. government recently unveiled a consumer website to inform struggling
homeowners of the types of government resources available to them. On this site,
them site
homeowners can find the answers to their questions about loan modification and
refinancing programs such as:
• Where do I go to get help?
• Do I qualify?
• What lenders are participating?
• When can I apply?
• Why does my loan servicer have to ask if they can modify my loan?
• How do I know if refinancing will improve my ability to stay in my home?
g p y y y y
Find all this information and more at www.MakingHomeAffordable.gov
13
Source: MakingHomeAffordable.gov

14. Research for Buyers and Sellers
- Courtesy of Mike Walker
14
www.ShowMeTheKeys.com

15. Low Down Payment Loans from FHA
Buyers:
First-time home buyers can take advantage of FHA loans that require
down payments as low as 3.5%. These loans can be a great way for first-time
3 5% first time
buyers with good, steady jobs but not a lot of cash on hand to take advantage of
the numerous advantages of this buyer’s market including record-breaking
affordability and an $8,000 tax credit.
$8 000 credit
FHA loans can be a good option for buyers purchasing their first home,
especially for those who have a small down payment or that have less-than-perfect
credit.
credit Lenders usually offer these loans at reasonably low interest rates because
the U.S. government insures them against default. Most FHA borrowers opt for
30-year fixed rate mortgages although adjustable rate can also be a possibility.
FHA also offers 203(k) loans that can include the costs of repairs for “fixer-
() p
uppers” with the mortgage.
For more information, check out www.hud.gov/fha/loans.cfm
15
Source: HUD.gov

16. Claim Tax Credit on 2008 Tax Return
Buyers:
Buyers who qualify f the fi
B h lif for h first-time home buyer tax credit that have
ih b di h h
already filed their tax returns can still claim their tax credit this year. They will
need to file a 1040x form to amend their 2008 tax return and form 5405 to claim
the credit
credit.
For more information on your other filing options, visit
http://www.irs.gov/newsroom/article/0,,id=205416,00.html
htt // i / / ti l /0 id 205416 00 ht l
16
Source: IRS

17. 5 Common First-Time Home Buyer Mistakes
Buyers:
1. They don’t ask enough questions of their lender and end up missing out
on the best deal.
2. They don’t act quickly enough to make a decision and someone else buys
the house.
3.
3 They don’t find the right agent who’s willing to help them through the
don t who s
home-buying process.
4. They don’t do enough to make their offer look appealing to a seller.
5. They don’t think b t
5 Th d ’t thi k about resale b fl before th b
they buy. Th average first-time
The fi t ti
buyer only stays in a home for four years.
Reprinted from REALTOR® Magazine Online (http://www.realtor.org/realtormag) with permission
17
of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2009. All rights reserved.

18. Buying Your First Home
Buyers:
Your First Home: The Proven Path to Home Ownership is a great resource for
first-time home buyers. This educational resource is a must-read for anyone aspiring
to buy a home
home.
Drawn from the real-life experiences of hundreds of thousands of first-time home
buyers, Your First Home provides proven, practical guidance on how to hire a great
real estate agent, determine what you can afford to buy, secure the best financing,
agent buy financing
recognize the right home for you, craft a winning offer and negotiate with sellers,
spot serious issues at inspection, and close on your new home and maintain it.
This easy-to-read book is available for purchase on Amazon.
18

19. Does Moving Up Make Sense?
Sellers:
These questions will help you decide whether you’re ready for a home that’s larger or in a more desirable
location. If you answer yes to most of the questions, it’s a sign that you may be ready to move.
1. Has your income or financial situation improved? If you’re making more money,
you re money
you may be able to afford higher mortgage payments and cover the costs of moving.
2. Are interest rates attractive? A low rate not only helps you buy a larger home, but
also makes it easier to find a buyer.
3. Are there reasons why you can’t remodel or add on? S
3 A th h ’t dl dd ? Sometimes you can create a
i
bigger home by adding a new room or building up. But if your property isn’t large
enough, your municipality doesn’t allow it, or you’re simply not interested in
remodeling, then moving to a bigger home may be your best option.
4. Have you outgrown your neighborhood? The neighborhood you pick for your first
home might not be the same neighborhood you want to settle down in for good. For
example, you may have realized that you’d like to be closer to your job or live in a
better school district.
5. Have you built substantial equity in your current home? Look at your annual
mortgage statement or call your lender to find out. Usually, you don’t build up much
equity in the first few years of your mortgage, as monthly payments are mostly
interest,
interest but if you ve owned your home for five or more years, you may have
you’ve years
significant, unrealized gains.
Reprinted from REALTOR® Magazine Online (http://www.realtor.org/realtormag) with permission
19
of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2009. All rights reserved.

20. 12 Tips for Hiring a Remodeling Contractor
Sellers:
1. Get at least three written estimates.
2. Check references. If possible, view earlier jobs the contractor completed.
3. Check with the local chamber of commerce or Better Business Bureau for complaints.
p
4. Be sure the contract states exactly what is to be done and how change orders will be handled.
5. Make as small of a down payment as possible so you won’t lose a lot if the contractor fails to
complete the job.
6.
6 Be
B sure th t the contractor has the necessary permits, li
that th t t h th it licenses, and i
d insurance.
7. Check that the contract states when the work will be completed and what recourse you have
if it isn’t. Also, remember that in many instances you can cancel a contract within three
business days of signing it.
8. Ask if the contractor’s workers will do the entire job or whether subcontractors will be
involved too.
9. Get the contractor to indemnify you if work does not meet any local building codes or
regulations.
g
10. Be sure that the contract specifies the contractor will clean up after the job and be responsible
for any damage.
11. Guarantee that the materials that will be used meet your specifications.
12. Don’t make the final payment until you’re satisfied with the work.
kh il ih h k
Reprinted from REALTOR® Magazine Online (http://www.realtor.org/realtormag) with permission
20
of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2009. All rights reserved.

21. Five Cost-Effective Ways to Attract Buyers
Sellers:
1. Think Green. Better insulation, replacing old windows, and caulking can
increase the energy efficiency of the home and can be attractive to buyers.
buyers
2. Add Molding. Crown molding, wider baseboards, and framing doors and
widows can be delightful in any home.
3. Paint Finishes. Faux finishes and accented walls can help y p your home stand
out. Don’t get carried away; pick the color and texture wisely, keeping in mind
that you are trying to make your home universally appealing.
4. Upgrade Floors. Dirty or old flooring can turn buyers away. Consider new
carpet, tile, or wood. Refinishing existing flooring or professionally
il d fi i hi i i fl i f i ll
shampooing carpets can bring them back to life.
5. Outdoor Upgrades. A deck, or even a summer kitchen at certain price points,
can add value to your home The worth of different outdoor amenities varies
home.
from place to place, so be sure to get a professional opinion from your local
agent before taking on a big project.
21
Source: Realty Times

22. Tips to Prevent Common Seller Mistakes
Sellers:
1. Price Your Home Right. If you either need to sell or would like to sell your home,
pricing at current market value is key. Researching prices that comparable homes
recently sold for is a crucial component to determining a p
y p g price that will make the home
sell. If you don’t need to move, consider waiting for the market to improve.
2. Consider a Presale Inspection. This will accomplish two goals. First of all, it will let
you know the potential problems that need to be fixed, and secondly, buyers can make
offers that takes those items into consideration up front rather than renegotiating
concessions later.
3. Ensure Qualifications. Before entering into a contract, ask the buyer to disclose the
name of the lender with the prequalification letter. Make sure underwriting approval
happens shortly after accepting the offer by writing this into the contract.
h h tl ft ti th ff b iti thi i t th tt
4. Consider All Offers. Refusing to entertain an offer from a qualified buyer can be a big
mistake for sellers in this market. Wait until the offer has been negotiated to refuse it.
5. Accept Backup Offers. Consider a backup offer in case the primary one falls through.
p p p p y g
Also take into consideration that a lower offer with a larger down payment can be a
more solid deal than a higher price with less money down.
6. Choose the Right Agent. Solid negotiation and communication skills combined with
local area expertise can help sellers to get the most out of their experience.
experience
22
Source: Inman News

23. 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 y
p g your local market.
Keller Williams agents are equipped with all the knowledge and information to
g q pp g
help navigate you though the process of buying or selling a home in this
challenging market.
23

24. 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 St t
U it d States and C d Th company began franchising in 1991, and
d Canada. The b f hi i i 1991 d
following years of phenomenal growth and success, became the third-largest U.S.
residential real estate firm in 2009.
The
Th company has succeeded by treating its associates as partners and shares its
h d d b t ti it it t dh it
knowledge, policy control, and company profits on a system wide basis.
Focusing on helping associates realize their fullest potential, Keller Williams
Realty kno n
Realt is known as an industry leader in its famil c lt re unmatched education,
ind str family culture, nmatched ed cation
profit sharing business model, phenomenal coaching program, and technology
offerings. Keller Williams Realty provides associates with all the tools needed to
grow and thrive in today s market
today’s market.
- Courtesy of Mike Walker
y
-www.ShowMeTheKeys.com
330-571-2020
24