Detailed National and North Central Ohio Market snapshot newsletter. National news brought to you by Keller Williams Realty and local news by Paul W. Drury

1. Commentary 2
Released:
The Numbers That Drive Real Estate 3
February 8, 2011
Recent Government Action 10
Topics for Home Buyers, Sellers, and Owners 13
Brought to you by:
KW Research

2. Commentary
Gradual improvement in the housing market continues at a steady pace without
government support. Six months after two consecutive years of tax incentives for
buyers; starting in July 2008 with a $7,500 repayable first-time buyer tax credit,
extending to a $8,000 nonrepayable first-time buyer tax credit in January 2009, and
ending in June 2010 with the expanded credit to repeat buyers; the market has shown
remarkable improvement from the initial drop this past July. With mortgage rates
remaining near historic lows and home prices having generally stabilized, economists are
expecting further strength in 2011.
Consumers are showing some signs that they’re feeling better: a significant boost in the
food and services industry implies they are eating out more, vacations are back on the
rise as spending on travel and tourism increased 8% in the third quarter, and household
net worth has risen notably thanks to a strong stock market even as they continue to
shrink their debt.
As the economy improves, current stimulus efforts by the government and the Federal
Reserve Board are expected to gradually wind down, which typically means rising
interest rates. Meanwhile, buyers continue to benefit from historically favorable buying
conditions and sellers enjoy increased stability in the market.
KW Research 2

3. Home Sales 4
The Numbers That Home Price 5
Drive Real Estate
Inventory 6
Mortgage Rates 8
Affordability 9
Brought to you by:
KW Research

4. Home Sales
In Millions
The uptrend in existing home sales activity continued through December, increasing by a substantial
12.3% from a month ago. This marks the fifth monthly increase in the past six months and indicates a
recovery that’s gaining a firmer footing. While home sales remained 2.9% below the level seen last
year, the market’s upward momentum, despite the absence of the tax credit, is a welcoming sign.
Extended and Expanded Home Buyer Tax Credit Second Gradual Recovery Without
Renewed November 7, 2009 Tax Tax Credit
Must have contract signed by April 30, 2010 Credit
Must close by June 30, 2010 Expired
December ’09-’10
December ’08-’09
Latest Data Release: January 20, 2011
Source: National Association of Realtors
KW Research 4

5. Home Price
In Thousands
Home prices softened in December: median home prices edged down slightly to $168,800, 1%
below the year-ago level. Contributing to this is a larger share of distressed homes sales which
accounted for 36% of sales in December. This is compared to 33% in November 2010 and 32% in
December 2009. Prices continue to hold steady and mortgage rates remain historically low,
offering favorable buying opportunities.
December ’08-’09
December ’09-’10
Latest Data Release: January 20, 2011
Source: National Association of Realtors
KW Research 5

6. Inventory - Number of homes available for sale
In Millions
The number of homes on the market continued to shrink. There are now 3.56 million homes on
the market, down 4.2% from 3.72 million in November. More and more buyers are taking
advantage of today’s exceptional affordability conditions. Expected improvements in lending
standards and job growth will present consumers with great opportunities to buy their first
home, move up, or invest.
December ’08-’09
December ’09-’10
Latest Data Release: January 20, 2011
Source: National Association of Realtors
KW Research 6

7. Supply of Inventory
In Months
The surge in home sales and a shrinking inventory pared down the month’s supply to 8.1 months.
This is down 1.4 months from November but remains 0.9 months above last year at this time.
While still at a relatively high level historically, months of inventory has declined steadily from its
peak of 12.5 months in July and is now back to pre-tax credit expiration levels.
December ’08-’09
December ’09-’10
Latest Data Release: January 20, 2011
Source: National Association of Realtors KW Research 7

8. Mortgage Rates
30-Year Fixed
Mortgage rates are inching up but remain historically low. This trend continues to support home
buying, as it translates to significant savings for buyers. As overall economic recovery remains on
track, rates are expected to rise to keep inflation in check.
Source: Freddie Mac KW Research 8

9. Affordability - The percentage of a median family’s income required
to make mortgage payments on a median-priced home
Percentage of Income
Housing affordability was near the record in December. The relationship between mortgage rates,
home prices, and family income is the most favorable on record for buying. The home price-to-income
ratio continues to remain well below the historical standard. Stabilizing home prices and rising interest
rates are expected to reverse the recent affordability trend.
Affordability as of December every year. Calculations assume a 20% down payment.
KW Research 9
Source: National Association of Realtors

10. Recent ‘Anti-Flipping’ Waiver Extended 11
Government Action
Brought to you by:
KW Research

11. ‘Anti-Flipping’ Waiver Extension
In 2003 the Federal Housing Administration (FHA) feared that flipping homes was the cause of the skyrocketing home
prices throughout individual neighborhoods. Because of this, the FHA no longer approved property loans that were
resold within 90 days of the original purchase, with the exception of foreclosures owned by government sponsored
enterprises (GSEs) such as FHA, Fannie Mae, and Freddie Mac. The anti-flipping rule is designed to help protect the
FHA’s mortgage insurance program and federally chartered financial institutions from losses.
In February 2010, the FHA initiated a one-year suspension on the regulation that prevented “flippers” from purchasing
single-family homes and releasing them into the market within 90 days. Since then, the FHA says it has insured 21,000
loans that had exchanged hands within the previous 90 days. The loans are worth more than $3.6 billion and would
not have qualified for financing before suspension. An analysis of these loans suggest they do not present a greater
credit risk than other loans, which lent support to the suspension’s extension.
The government sent a notice to banks in mid-January of 2011 in which it announced the extension of the waiver
through the end of the year. According to FHA Commissioner David Stevens, the purpose of the extension was to
accelerate the resale of REO properties in neighborhoods where there is a high rate of foreclosure. This will facilitate
the purchase of homes that have recently been “flipped.” As a result, foreclosed properties will be moved off the
market faster, reducing the amount of vacant homes in neighborhoods throughout the United States.
Sources: Inman News, realtytimes.com KW Research 11

12. ‘Anti-Flipping’ Waiver Extension
Limitations considered by the FHA consist of the following:
1. 20% Rule
If resale is higher than 20% of the original price, one must show proof of justified price. For example, if a
$200,000 house is purchased and the resell price is $245,000, the house must undergo additional underwriting
guidelines, which is considered a double appraisal.
2. Title Hold
No simultaneous closings are allowed when the seller holds a property. In other words, back-to-back, same-
day closings to an FHA end-buyer is prohibited.
3. Short-term Funding
Investors must come up with short-term funding of the 30-to-60-day variety if their desire is to buy/fund and
in order to sell to an FHA end-buyer.
4. Previous Flips
A property cannot show signs of prior flipping activity. If so, the FHA has the right to object.
5. Transactions at Arm’s Length
Transactions must show no identity of interest between the buyer and the seller or other parties that
participate in the sale of a property.
Overall, this will help lower holding costs for investors/flippers allowing them to continue flipping more properties.
In return, this will help bring more desirable homes to the market for first-time home buyers.
KW Research 12

13. Topics for Home Buyers, Distressed Properties 14
Sellers, and Owners
Brought to you by:
KW Research

14. Distressed Properties
Bank-owned foreclosures (REOs) and short sales both present great value for buyers. Prices can be as
much as 30%below market in some areas—and in other areas distressed properties are the market. Either
way, experts agree there’s value for a buyer who wants to own 5 years or more. Rental rates are
advancing too—great news for investors who want to buy and rent. REO transactions move quickly, but
short sales are still slow.
Profile of Who’s Buying Distressed Properties
First Time Buyers Flippers Rentals
Foreclosures 32% 4% 13%
Short Sales 41% 2% 10%
Motivations for Buying Distressed Properties
Tax Deduction 60%
Closer to Family/Friends/Desired Location 40%
Equity 29%
Space 24%
Location 19%
Source: KW Market Navigator: Vision and Opportunities 2011 KW Research 14

15. Understanding Buyers
Buying distressed properties can open up great opportunities, but in order for an investment to be
successful, understanding the buyers’ needs is essential. KW Research reveals the following facts
among buyers of distressed properties.
Purchase Location Types of Homes Purchased
• Suburban (69%) • Single-Family Detached (82%)
• Within Same City (50%) • Condominium (9%)
• Urban (18%) • Town House (7%)
• Rural (13%) • Duplex (1%)
Importance of House Condition
What Buyers Want • 69% short sales & 55% foreclosures are in
• Attractive Price (43%) good/excellent condition
• Low Mortgage Rates (36%) • 50% of first-time buyers buy in good condition
• Able to Afford (28%) • 78% of investors intending to flip the property
• Tired of Paying Rent (21%) typically buy homes in fair, poor, or very poor
condition
• 50% of move-up buyers buy in excellent
condition
KW Research 15

16. 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 own area.
Talk to Paul W. Drury for assistance interpreting the conditions in your local
market. The following graphs are general and covers most of the broad
market area he serves. For detailed information about your own
neighborhood, call him or send him an email today.
KW associates are equipped with the knowledge and information to help you
navigate the home-buying or selling process in this challenging market.
KW Research 16

17. Local Market Absorption Rate
KW Research 17

18. Number of Homes “in play”
KW Research 18

19. Avg Price per sq ft
KW Research 19

20. Sold to List Price Comparison
KW Research 20

21. Avg Price For Sale VS Sold
KW Research 21

22. About Keller Williams Realty
Founded in 1983, Keller Williams Realty, Inc., is an international real estate
company with more than 80,000 associates and 686 offices across the United
States and Canada. The company began franchising in 1991 and, after 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 sharing
its knowledge, policy control, and company profits on a systemwide basis.
By focusing on helping associates realize their fullest potential, Keller Williams
Realty is known as an industry leader for its family culture, unmatched
education, profit-sharing business model, phenomenal coaching programs,
and technology offerings.
www.kw.com
KW Research 22

23. 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 23

24. What we have to offer sellers
• Sellers now have access to tools unimaginable just a few
years earlier. Keller Williams Realty doesn’t spend valuable
resources promoting its own name. Instead it puts
resources into the best tools and resources for education
and training, providing the highest quality real estate
professionals into local communities.
• Properties put up for sale by Paul are also listed in KWLS, a
national MLS, implemented by Keller Williams, now the
2nd largest company in the US; local MLS; NEOHREX
(Northern Ohio Real Estate Exchange); and on national
sites such as Trulia, Zillow, CyberHomes, and others.
• Free Real Estate Informational Webinars available by
logging onto this link… http://budurl.com/druryvideos
KW Research 24

25. What we have to offer sellers ( Cont’d)
• Other tools brought to bear by Paul include branding using
unique web addresses with a virtual tour that can be
emailed or the link can posted anywhere, to include Craig’s
List and Back Page. Recent listed homes sold.
– 37101 Hunter’s Trail in Avon – http://37101hunterstrail.com
– 2815 West River Road South in Elyria – http://2815WRiverRdS.com
• Not Planning to sell in the near future?
– Would you still like to monitor what is happening in your
neighborhood or area?
– Contact Paul now for a free periodic market update. No cost. No
obligation.
KW Research 25

26. Properties currently for sale
• Properties currently for sale:
– 3307 Sandy Lane in Avon – http://3307SandyLn.com
– 19593 Whitehead Road in Wellington - http://19593whiteheadrd.com/
– 13951 Diagonal Road in Lagrange – http://13951DiagonalRd.com
– 1 Grover Court in Grafton – http://1groverct.com
– 416 Winckles Street in Elyria – http://416wincklesst.com
– 149 Woodview Drive in Elyria – http://149woodviewdr.com
• Would you like to see one of these homes? Click on the link
for a visual tour.
• Check out Paul’s YouTube Channel at
http://www.youtube.com/user/Mrpdrury
• Would you like your home or property promoted like
these?
– Contact Paul for a free, no obligation, consultation today
at 440-385-5650.
KW Research 26

27. 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.
• Free Real Estate Informational Webinars available by
logging onto this link… http://budurl.com/druryvideos
• If you wish to conduct your own Multiple Listing Home
Searches, you may do so using this link….
http://bit.ly/aDE5XP
KW Research 27

28. What we have to offer buyers (Cont’d)
• Buyers can access Paul’s website at www.druryrealty.com
and conduct their own searches as well as 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.
Greater Cleveland West now sells more properties than any
other office in the entire regional MLS.
• 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. http://bit.ly/aDE5XP
KW Research 28

29. Investors & Shoppers – Foreclosure Watch
• Are you shopping for the deal of a century for your
new home?
• Are you in the market to buy a home at a steep
discount and try and fix it up and “flip it”?
• Are you looking for a home for someone else?
• Want to know what is happening in your marketplace?
• Send Paul an email today and request free market
updates at paul@druryrealty.com
• Call Paul directly at 440-385-5650.
• No cost. No commitments. No obligations. No fuss. No
kidding.
KW Research 29

30. Follow Paul’s Real Estate updates online…
Home Web Page On Twitter
• www.druryrealty.com • - www.twitter.com/PaulWDrury
On Zillow On FaceBook
• www.zillow.com/profile/PaulWDrury • - www.facebook.com/paul.w.drury
On Trulia On LinkedIn
• www.trulia.com/profile/paulwdrury • www.linkedin.com/in/paulwdrury
On the Real Estate Global Free Real Estate
Network Webinars
• www.realestateglobalnetwork.com/profile/PaulWDru
ry • http://budurl.com/druryvideos
On YouTube Special Deal Links
• www.youtube.com/user/MrPDrury • http://bit.ly/ffvZOr
KW Research 30

31. Paul’s special vendor deals of the month…
Now advertising his properties on
• http://www.communityohio.com
• Featuring outstanding deals from the following vendors
• GoDaddy Domain Sale • Franklin Covey Supplies
• ESET Internet Security • Intuit Quickbooks
Software • Executive Book
• NewEgg Electronics Summaries
Superstore • RubberMaid Products
• E-fax Electronic Fax • Build my Move Moving
Service Services
• TomTom GPS Poducts • eBatts discount battery
• DocuSign Electronic services
Document Service • Bulb America Light Bulb
Supplier
• Magazine Mall
KW Research 31

32. The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and
national media, local real estate agents, and other expert sources. You should not treat any opinion expressed in This Month in
Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of
opinion. Keller Williams Realty, Inc., does not guarantee and is not responsible for the accuracy or completeness of information,
and provides said information without warranties of any kind. All information presented herein is intended and should be used for
educational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own
research and due diligence and obtain professional advice before making any investment decision. All investments involve some
degree of risk. Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information
contained in This Month in Real Estate.
KW Research 32