Strategic Examiner 2 nd Quarter 2008

Transcription

1 Strategic Examiner 2 nd Quarter 2008 Puget Sound s Quarterly Comprehensive Overview of Home Supply and Demand Home Trends, Inc th Street SE Bothell, WA t f

2 US HWY 101 I 5 STATE HWY 9 Puget Sound Metro Market County Map I 5 Skagit I 5 Snohomish I 5 I 405 STATE HWY 202 Kitsap STATE HWY 99 I 5 I 405 US HWY 2 STATE HWY 16 I 5 STATE HWY 167 I 405 STATE HWY 169 King STATE HWY 8 Thurston STATE HWY 7 STATE HWY 164 I 705 Pierce STATE HWY 410 I 5 Miles (425)

3 Puget Sound Region At a Glance The following are key findings from the 2 nd quarter 2008 Supply and Demand report for the entire Puget Sound Region as of June 30, Note- levels and absorption rates are based on the previous 12 months of sales. Section A Detached Single Family Construction The Puget Sound saw a 3% increase in the number of recorded plats from 1,015 to 1,044. Unsold recorded lots and homes saw a 3% increase from 27,587 to 28,322 while months of inventory rose 16% from 41.4 months of supply to 48 months. The number of unrecorded plats saw a decline of 2% down from 1,763 to 1,723 communities while the total number of lots in the pipeline also decreased 4% from 74,399 lots to 71,712 lots. The total months of inventory in the pipeline increased from months to months. Section B Attached Multi-family Construction (No Conversions Included) The number of currently selling multi-family projects and projects under construction not yet selling combined, saw an increase of 5% from 376 projects to 393 projects region wide. The total number of units on the market and under construction decreased 2% from 10,233 to 10,053. Months of currently selling inventory saw a 22% increase from 34.9 months of supply to 42.5 months. Section C Total supply The total supply number combining attached and detached, proposed and currently selling in the Puget Sound, saw a 4% increase from 164,867 units to 172,017 units. Section D Demand Numbers Comparing 12 months of single family sales ending June 30, 2008 to 12 months of sales ending March 31, 2008, the region saw an 11% decline from 7,988 to 7,074. Comparing 12 months of single family sales ending June 30, 2008 to the same time period ending in 2007 the region saw a decline of 25%. Comparing multi-family sales ending June 30, 2008 to 12 months of sales ending March 31, 2008, the region saw a 19% decline from 3,515 to 2,840. Comparing 12 months of multi-family sales ending June 30, 2008 to the same time period ending in 2007, the regions sales were down 30%.

4 Section E Demand numbers based on projections/sales statistics Conway/Pedersen s projected household growth between 2008 and 2013 is 96,612 which is a 25% decline from previous estimates. The four-year average demand numbers declined 18% during the 2 nd quarter from 84,474 to 69,452. Section F Drivers of the Economy Quarterly Statistics Labor Force dropped 1% roughly 11,000. Employment dropped by 1% eliminating 18,000 jobs. Unemployment rose from 5.05% from 5.13%. Building permits rose 20% from the 1 st quarter to 5,669. Section G Apartment Market Quarterly Statistics The vacancy rate remained at 4.04%. Section H Projected Years of (, Spec and Lot ) Based on Four Scenarios. Four scenarios for future housing supply: o Based on Conway/Pedersen and ESRI projected household growth, the regions inventory level is at 8.9 years which is a 4% increase from the 1 st quarter. o Based on the previous 12 months of sales the region has 12.4 years of supply, up 27% from last quarter. o Based on sales with a 25% fallout of proposed communities, the region has a 7.2-year supply of inventory, a 4% increase from the 1 st quarter. o Based on projected sales, apartment unit inclusion (four-year average) (15% decline in sales and a 25% fallout of plats in the planning process) the region has an 11.7-year supply of housing which is up 27% (from 9.3 years) since the 1 st quarter.

5 The following are key findings from the 2 nd quarter 2008 Lot Supply Report, Total Puget Sound Region as of June 30, Section A and Currently Selling The average list price of available single family new construction declined from $480,626 to $ 448,826 from this time last year. The number of spec homes under construction has decreased 3% from 3,981 to 3,849 region wide. The total dollar amount of spec inventory dropped 3% from1.98 billion to 1.92 billion. Months of spec inventory rose slightly to 6.4 months while the months of recorded lots rose to 47 months of supply. Sections B through D in the Pipeline (Under Review to Preliminary ) in the pipeline declined 2% from 1,761 to 1,723 while lots decreased 4% from 74,399 to 71,712. The unrecorded months of supply rose 7% from 9.3 years of supply to 10 years based on the previous 12 months of sales. Puget Sound Region Commentary In order for there to be a positive side note to the downturn of the statistics, I have to look out two-plus years. The market is not going to get better any time soon. The southwest market is still looking at two years before it begins an upswing and as late as 2013 before the southwest market sees a newsworthy price appreciation story. In the meantime, here in the Puget Sound region we are in the beginning stages of creating a supply shortage. I understand it doesn t feel that way, but there are a number of factors leading us there. 1. Unlike the rest of the nation, our spec inventory is quite low at 6.4 months. 2. Builders are obviously finding it difficult to find the loans they need to build even if a proforma looks good. 3. Under current absorption rates, we have a 4-year supply of lots and homes on the market. When sales pick up that inventory will disappear quite rapidly. 4. subdivisions are not even being discussed by lenders today. 5. The entitlement process is going to lengthen due to the short staffing within all jurisdictions. The entitlement process currently takes over three years and it will extend out to four years. 6. The Puget Sound will consume over 50 its current lot inventory by 2010 with little to replace what is sold out.

6 7. Conway Pedersen projects 1.6% growth through 2008, 0.6% in 2009 and 1.6% in migration is estimated to be 84,000 by 2011 creating demand for 50,400 permits, using conservative numbers. The Puget Sound won t have 50,000 sales. The region will experience more along the line of 24,000 total sales in the next three years. What we will have is a lot of pent-up demand that will need to be met when the mortgage crisis is resolved. Demand will reach critical levels near the end of Then, providing all the lending stars are in alignment, in the 1 st quarter 2011 our market should begin to recover. Hold on, create a new business plan, look for opportunities and get ready to execute.

7 Supply Versus Demand Report Total Puget Sound Region as of June 30th 2008 Puget Sound Totals King Snohomish Pierce Thurston Kitsap Skagit 1Q Q 2008 Supply Numbers 3/31/2008 3/31/2008 Change Sec. A Detached Single-Family Construction Sec. A 1 Total Selling ,015 1,044 3% 1 2 Total Vacant / 7,153 6,476 8,061 3,966 1,250 1,416 27,587 28,322 3% 2 3 * Months of Vacant /Unsold Spec. Based on Single-Family % 3 4 Total # in the Pipeline w/ Preliminary & Under Review ,763 1,723-2% 4 5 Total in the Pipeline w/ Preliminary & Under Review 16,441 15,483 14,434 15,893 7,521 1,940 74,399 71,712-4% 5 6 * Months of Unrecorded Based on Single-Family % 6 Sec. B Attached Multi-Family Construction (no conversions included) Sec. B 1 Total Attached Developments on the Market % 1 2 Total Units on the Market (Selling and Taking Reservations) 5,981 1,521 1, ,233 10,053-2% 2 3 * Months of Attached Based on Multi-Family % 3 4 Total Attached Developments in the Pipeline (Apartment + Condominium) % 4 5 **Total Units in the Pipeline (Apartment + Condominium) 42,683 3,166 10,671 3,187 1, ,648 61,930 18% 5 6 * Months of Attached in the Pipeline Based on Multi-Family & Apartments Permitted % 6 Sec. C Total Supply Sec. C 1 Total / and Units in Pipeline & On Market 72,258 26,646 34,880 23,431 10,983 3, , ,017 4% 1 Sec. D Demand Numbers Sec. D 1 * Single-Family (*1st Quarter 2008 uses 4/2007-3/2008, uses 7/2007-3/2008 ) 2,050 1,857 1,528 1, ,988 7,074-11% 1 2*** * Single-Family Versus One Year Ago ,247-2, *** 2.1*** * Single-Family Versus One Year Ago (%) -31% -29% -24% -10% 0% -25% -22% -25% -3% 2.1*** 3 * Multi-Family (*1st Quarter 2008 uses 4/2007-3/2008, uses 7/2007-3/2008 ) 1, ,515 2, *** * Multi-Family Versus One Year Ago -1, , *** 4.1*** * Multi-Family Versus One Year Ago (%) -37% -6% -32% 16% -35% -37% -15% -30% -16% 4.1*** 5 Apartment Units Brought to Market/Reduced From Rental (Four Year Average) 2, ,468 4,203-23% 5 6 *Total Single-Family and Multi-Family + Apartment Unit Inclusion (Four Year Average) 6,681 2,579 2,451 1, ,895 13,890-18% 6 7*** * Single-Family and Multi-Family + Apartment Unit Inclusion (Four Year Average) % % % % 2.00% % % % -9% 7*** Sec. E Demand Numbers Based on Projections / Statistics Sec. E 1 Conway/Pedersen ( ) or ESRI Projected Household Growth ( ) (Calculated From 5 Year Population Growth Numbers) 36,146 21,134 19,136 9,695 6,223 4,277 96,612 96,612 0% 1 2 Total Projected Residential Consumption from Based on Single-Family and Multi-Family + Apartment Unit Inclusion (Using 4 Year Average) 33,404 12,895 12,254 7,314 1,947 1,639 84,474 69,452-18% 2 Sec. F Drivers of the Economy Quarterly Statistics Sec. F 1 Labor Force 1,082, , , , ,610 59,210 2,170,410 2,158,830-1% 1 2 Employment 1,040, , , , ,240 55,520 2,074,680 2,056,380-1% 2 3 Unemployment Rate 3.90% 4.50% 4.50% 5.70% 6.00% 6.20% 5.05% 5.13% 0% 3*** 4 Building Permit Issuance Quarterly (Yearly Totals:2001=24, =24, =25, =28, =31, =30, :30,165) 3, ,727 5,669 20% 4 Sec. G Apartment Market Quarterly Statistics Sec. G 1*** Vacancy Rate 4.10% 4.80% 3.90% 3.20% 4.20% % 4.04% 0.0% 1*** Sec. H Projected Years of (recorded lots, spec homes, & proposed lot inventory) Based on Four Senarios Sec. H 1 Conway/Pedersen ( ) or ESRI Projected Household Growth ( ) (Calculated From 5 Year Population Growth Numbers) % 1 2 *Based on (previous 12 months) % 2 3 Based on and Developments -25% Fallout % 3 4 Based on Projected + Apartment Unit Inclusion (Four Year Average) (-15% for Slowdown in & -25% Fallout) % 4 *1st Quarter 2008 uses 4/2007-3/2008, uses 7/2007-3/2008 * * Pipeline refers to all lots/homes/units in the platting or permitting process *** Change (425)

8 Lot Supply Report Total Puget Sound Region as of June 2008 Change Change Puget Sound Totals King Snohomish Pierce Thurston Kitsap Skagit *2Q 2007 Total *3Q 2007 Total *4Q 2007 Total *1Q 2008 Total *2Q 2008 Total (1Q 08-2Q 08) (2Q 07-2Q 08) Sec. A Currently Selling 6/30/2007 9/30/ /31/2007 3/31/2008 6/30/2008 Sec. A 1 Total Selling % 17% 1 2 Average per Plat Selling % -4% 2 3 Total Vacant / 7,153 6,476 8,061 3,966 1,250 1,416 23,401 25,211 27,780 27,587 28,322 3% 21% 3 4 *Months of Vacant /. Based on Single-Family % 74% 4 5 Total / Under Construction 979 1, ,597 5,016 4,410 3,981 3,849-3% -16% 5 6 Total Average List of $657,074 $433,053 $426,159 $373,657 $442,106 $360,910 $480,626 $475,589 $474,253 $459,605 $448,826-2% -7% 6 7 Total $ Amount of Spec $661,632,664 $561,417,136 $421,255,846 $154,976,269 $71,797,039 $50,940,633 $1,911,563,148 $2,132,988,477 $2,137,723,442 $1,981,199,931 $1,922,019,587-3% 1% 7 8 *Months of Unsold Spec Based on Single-Family % 20% 8 9 Single-Family by Quarter ,407 1,677 1,387 2,203 1,807-18% -25% 9 Sec. B ** in the Pipeline w/ Preliminary Sec. B 1** Total in the Pipeline w/ Preliminary ,039 1,074 3% 43% 1** 2** Total in the Pipeline w/ Preliminary 10,662 10,960 8,411 6,865 5, ,540 33,977 35,124 42,444 43,054 1% 37% 2** 3 Average per Plat w/ Preliminary % 5% 3 4 *Months of Lot in the Pipeline w/ Preliminary Based on Single-Family % 96% 4 Sec. C ** in the Pipeline Under Review Sec. C 1** Total in the Pipeline Under Review ,091 1, % -41% 1** 2** Total in the Pipeline Under Review 5,779 4,523 6,023 9,028 2, ,473 43,336 40,969 31,955 28,658-10% -38% 2** 3 Average per Plat Under Review % 30% 3 4 *Months of in the Pipeline Under Review Based on Single-Family % -11% 4 Sec. D **Total Pipeline w/ Preliminary & Under Review Sec. D 1** Total in the Pipeline w/ Preliminary & Under Review ,844 1,851 1,801 1,761 1,723-2% -7% 1** 2** Total in the Pipeline w/ Preliminary & Under Review 16,441 15,483 14,434 15,893 7,521 1,940 78,013 77,313 76,093 74,399 71,712-4% -8% 2** 3 Average per Plat w/ Preliminary & Under Review % 3% 3 4 *Months of Unrecorded Based on Single-Family % 32% 4 5 Average Preliminary % 2% 5 6 Average Preliminary Start of % 11% 6 * 4th Quarter 2006 report uses 1/ /2006, 1st Quarter 2007 report uses 4/2006-3/2007, 2nd Quarter 2007 report uses 7/2006-6/2007, 3rd Quarter 2007 report uses 10/2006-9/2007, 4th Quarter 2007 report uses 1/ /2007, 1st Quarter 2008 report uses 4/2007-3/2008 ** Pipeline refers to all lots/homes/units in the platting or permitting process N/A - Home Trends has only been collecting data in this County for 21 months. We cannot duplicate the data using the NWMLS numbers. in the review process have no preliminary or plat approval ww.newhometrends.com (425) ext 4713

9 US HWY 101 I 705 STATE HWY 9 King County, Washington I 5 Skagit I 5 Snohomish I 5 I 5 I 405 STATE HWY 202 Kitsap STATE HWY 99 I 5 I 405 US HWY 2 STATE HWY 16 I 5 STATE HWY 167 I 405 STATE HWY 169 King STATE HWY 8 Thurston STATE HWY 7 STATE HWY 164 Pierce STATE HWY 410 I 5 Miles (425)

10 King County At a Glance The following are key findings within the Supply and Demand report for King County ending June 30, Section A Detached Single Family Construction Note- levels and absorption rates are based on the previous 12 months of sales. The number of recorded plats increased by 2% from 333 to 339 while the number of available lots and homes decreased slightly from 7,178 to 7,143. Months of recorded vacant lots and homes increased 14% from 36.8 months to 41.9 months. plats in the pipeline decreased by only 4 from 567 to 563 while the number of proposed lots increased 1% from 16,308 lots to 16,441. Months of proposed inventory climbed from 83.7 months to 96.2 months of supply based on the previous 12 months of sales. Section B Attached Multi-Family Under Construction and/or Selling (No Conversions Included) The number of attached projects rose 4% from 252 to 262 since the end of the 1 st quarter The total number of units declined 1% from 6,042 to 5,981. Months of inventory rose 29% from 31.5 months to 40.6 months. Section C Total Supply The total supply of housing increased 12% from 64,446 to 72,258 units since the end of the 1 st quarter. Section D Demand Numbers 12 months of single family sales ending June 30, 2008 saw a decrease of 12%, 2,339 to 2,050 sales, from 12 months of sales ending March 31, Single family sales compared to the same 12-month period a year ago saw a decline of 31%. 12 months of multi-family sales ending June 30, 2008 saw a decline of 23% from 12 months of sales ending March 31, Multi-family sales, compared to the same 12-month period a year ago, are down 37%.

11 Section E Demand Numbers Based on Projections/ Statistics Projected household demand from ESRI and Conway/Pedersen stayed flat at 36,146. The total demand numbers from 2008 to 2013 are down 19% from 41,165 to 33,404. (Demand numbers are based on the last 12 months of sales.) Section F Drivers of the Economy Quarterly Statistics Labor Force stayed flat at 1,082,250. Employment stayed flat at 1,040,140 jobs. The unemployment rate rose slightly to 3.9%. Permit activity surprisingly rose 22% compared to the 1 st quarter from 2,786 to 3,399 permits. Section G Apartment Market Quarterly Statistics The vacancy rate remained at 4.1%. Section H Projected Years of (, Spec and Lot ) Based on Four Scenarios. Four scenarios for future housing supply: o Conway/Pedersen s numbers increased from 8.9 years of supply to 10 years. o Based on the previous 12 months of sales, King County is up 39% from 7.8 years to 10.8 years of supply. o Based on 12 months of sales and a 25% fallout of proposed plats, King County s inventory rose from 7.1 years of supply to 8 years. o Based on sales, apartment inclusion (four-year average) a 15% slowing in sales and 25% plat fallout, King County increased from a 7.4-year supply to a 10.1-year of supply of housing.

12 The following are key findings within the Lot Supply Report for King County ending June 30, Section A and Currently Selling The total number of recorded plats selling in the past 12 months has increased from 300 to 339. The average list price of a new home has dropped to $657,074 from $713,921 from the same time period last year. The total number of homes under construction or complete is down from this time last year to 979 from 1,160. Months of spec inventory, based on the previous 12 months of sales, have risen to 5.7 months. The total dollar amount of inventory on the King County market saw a 4% decrease to $661 million. King County Commentary Spec inventory levels are at reasonable levels being under 6 months. The recorded lot count declined slightly this quarter compared to last quarter but is still high at 36.2 months of inventory. There are currently 1,807 developer-held lots in King County and combining that with the 3-year supply of vacant lots, the price points are set to fall by 30%+ on land values. Simple supply and demand!! The attached market has taken an exceptional hit this quarter and this will be reflected in the numbers during the next few months. High rise projects are seeing a tremendous amount of earnest monies pulled back and lost. I anticipate this trend to continue through the year and into Consumers are too afraid they will be upside down as soon as they move in or they will have lost the ability to secure a mortgage. On the positive side, due to high fuel prices, the homes that will sell in the coming years will be in areas close to employment. Buyers would rather spend their money on a mortgage than on fuel and a commute, preferring to use the extra time for a better quality of life. This trend will continue for the next 2.5 years when buyers will begin moving further out again. Make sure any communities you are a part of have a great location, great product with a fair price and a top of the line sales and marketing team. Community transportation will be key as well.

13 Supply Versus Demand Report King County as of June 30th 2008 King County 1Q Q 2008 Supply Numbers 3/31/2008 3/31/2008 Change Sec. A Detached Single-Family Construction Sec. A 1 Total Selling % 1 2 Total Vacant / 7,178 7,153 0% 2 3 * Months of Vacant /Unsold Spec. Based on Single-Family % 3 4 Total # in the Pipeline w/ Preliminary & Under Review % 4 5 Total in the Pipeline w/ Preliminary & Under Review 16,308 16,441 1% 5 6 * Months of Unrecorded Based on Single-Family % 6 Sec. B Attached Multi-Family Construction (no conversions included) Sec. B 1 Total Attached Developments on the Market % 1 2 Total Units on the Market (Selling and Taking Reservations) 6,042 5,981-1% 2 3 * Months of Attached Based on Multi-Family % 3 4 Total Attached Developments in the Pipeline (Apartment + Condominium) % 4 5 **Total Units in the Pipeline (Apartment + Condominium) 34,918 42,683 22% 5 6 * Months of Attached in the Pipeline Based on Multi-Family & Apartments Permitted % 6 Sec. C Total Supply Sec. C 1 Total / and Units in Pipeline & On Market 64,446 72,258 12% 1 Sec. D Demand Numbers Sec. D 1 * Single-Family (*1st Quarter 2008 uses 4/2007-3/2008, uses 7/2007-3/2008 ) 2,339 2,050-12% 1 2*** * Single-Family Versus One Year Ago *** 2.1*** * Single-Family Versus One Year Ago (%) -24.7% -31% -7% 2.1*** 3 * Multi-Family (*1st Quarter 2008 uses 4/2007-3/2008, uses 7/2007-3/2008 ) 2,299 1,769-23% 3 4*** * Multi-Family Versus One Year Ago , *** 4.1*** * Multi-Family Versus One Year Ago (%) -16% -37% 131% 4.1*** 5 Apartment Units Brought to Market/Reduced From Rental (Four Year Average) 3,615 2,862-21% 5 6 *Total Single-Family and Multi-Family + Apartment Unit Inclusion (Four Year Average) 8,253 6,681-19% 6 7*** * Single-Family and Multi-Family + Apartment Unit Inclusion (Four Year Average) % % -10% 7*** Sec. E Demand Numbers Based on Projections / Statistics Sec. E 1 Conway/Pedersen Projected Household Growth from (Calculated From 5 Year Population Growth Numbers) 36,146 36,146 0% 1 2 Total Projected Residential Consumption from Based on Single-Family and Multi-Family + Apartment Unit Inclusion (Using 4 Year Average) 41,265 33,404-19% 2 Sec. F Drivers of the Economy Quarterly Statistics Sec. F 1 Labor Force 1,081,560 1,082,250 0% 1 2 Employment 1,042,330 1,040,140 0% 2 3 Unemployment Rate 3.60% 3.90% 0% 3 4 Building Permit Issuance Quarterly (Yearly Totals:2001=9, =10, =9, =11, =12, =14, =15,418) 2,786 3,399 22% 4 Sec. G Apartment Market Quarterly Statistics Sec. G 1*** Vacancy Rate 4.10% 4.10% 0.0% 1*** Sec. H Projected Years of (recorded lots, spec homes, & proposed lot inventory) Based on Four Senarios Sec. H 1 Based on Conway/Pedersen Projected Household Growth from (Calculated From 5 Year Population Growth Numbers) % 1 2 *Based on (previous 12 months) % 2 3 Based on and Developments -25% Fallout % 3 4 Based on Projected + Apartment Unit Inclusion (Four Year Average) (-15% for Slowdown in & -25% Fallout) % 4 *1st Quarter 2008 uses 4/2007-3/2008, uses 7/2007-3/2008 * * Pipeline refers to all lots/homes/units in the platting or permitting process *** Change (425)

14 Lot Supply Report King County as of June 2008 *2Q 2007 Total *3Q 2007 Total *4Q 2007 Total *1Q 2008 Total *2Q 2008 Total Changf Changf King County 06/30/ /30/ /31/ /31/ /30/2008 (1Q 08-2Q 08) (2Q 07-2Q 08) Sec. A Currently Selling Sec. A 1 Total Selling % 13% 1 2 Average per Plat Selling % 0% 2 3 Total Vacant / 5,042 5,680 7,203 7,178 7,153 0% 42% 3 4 *Months of Vacant /. Based on Single-Family % 121% 4 5 Total / Under Construction 1,160 1,321 1,009 1, % -16% 5 6 Total Average List of $713,921 $694,958 $699,445 $671,577 $657,074-2% -8% 6 7 Total $ Amount of Spec $627,314,346 $717,938,662 $682,877,487 $689,571,656 $661,632,664-4% 5% 7 8 *Months of Unsold Spec Based on Single-Family % 32% 8 9 Single-Family by Quarter % -32% 9 Sec. B ** in the Pipeline w/ Preliminary Sec. B 1** Total in the Pipeline w/ Preliminary % 72% 1** 2** Total in the Pipeline w/ Preliminary 7,644 7,482 6,732 10,167 10,662 5% 39% 2** 3 Average per Plat w/ Preliminary % -19% 3 4 *Months of Lot in the Pipeline w/ Preliminary Based on Single-Family % 118% 4 Sec. C ** in the Pipeline Under Review Sec. C 1** Total in the Pipeline Under Review % -39% 1** 2** Total in the Pipeline Under Review 10,966 10,980 9,870 6,141 5,779-6% -47% 2** 3 Average per Plat Under Review % -13% 3 4 *Months of in the Pipeline Under Review Based on Single-Family % -18% 4 Sec. D **Total Pipeline w/ Preliminary & Under Review Sec. D 1** Total in the Pipeline w/ Preliminary & Under Review % -4% 1** 2** Total in the Pipeline w/ Preliminary & Under Review 18,610 18,462 16,602 16,308 16,441 1% -12% 2** 3 Average per Plat w/ Preliminary & Under Review % -8% 3 4 *Months of Unrecorded Based on Single-Family % 38% 4 5 Average Preliminary % -5% 5 6 Average Preliminary Start of % -5% 6 2nd Quarter 2007 report uses 7/2006-6/2007, 3rd Quarter 2007 report uses 10/2006-9/2007, 4th Quarter 2007 report uses 1/ /2007, 1st Quarter 2008 report uses 4/2007-3/2008, report uses 7/2007-6/2008 S ** Pipeline refers to all lots/homes/units in the platting or permitting process N/A - Home Trends has only been collecting data in this County for 21 months. We cannot duplicate the data using the NWMLS numbers. in the review process have no preliminary or plat approval ww.newhometrends.com (425) ext 4713

15 King County Historical Single-Family Lot Date Not ( lots) Not on Jun. 30th 2001 through Jun. 30th 2008 Vacant & Change Change Home List Average Change Home (Jul. To Jun.) Average Closed Lot Change Jun , , $465,350-2, Jun ,356 10% ,038-7% 3.8 $441,145-5% 3, Jun ,026-6% ,028-1% 2.7 $469,016 6% 4,559 $111,864 - Jun ,823-4% % 1.9 $524,464 12% 5,480 $124,216 11% Jun ,549-6% % 1.4 $683,404 30% 4,823 $132,561 7% Jun ,035 11% % 3.2 $688,685 1% 3,504 $154,809 17% Jun ,042 0% ,160 26% 4.7 $713,921 4% 2,989 $162,581 5% Jun ,153 42% % 5.7 $657,074-8% 2,050 $187,437 15% Date Formal on June 30th 2008 Avg Avg with Preliminary in Review Total Home (Jul. to Jun.) Change ( ) Change ( ) Change ( ) Start of Jun , , , ,838 Jun ,184-8% ,488 3% ,672-3% ,262 Jun ,935 9% ,591-22% ,526-7% ,559 Jun ,973-33% ,336 72% ,309 11% ,480 Jun ,872 49% ,493 1% ,365 18% ,823 Jun ,515-27% ,713 2% ,228-10% ,504 Jun ,644 17% ,966-6% ,610 2% ,989 Jun ,662 39% ,779-47% ,441-12% ,050 * Remaining Mos. of is based on sales: Jul to Jun 2008

16 King County Single-Family Lot by June 2008 Avg List Not ( lots) Not on June 30th 2008 Vacant & Jun Avg. Avg. Under 3,999 $488, ,660 23% % $454, $417,560 4,000-4,999 $504, ,407 20% % $515, $516,072 5,000-5,999 $559, ,016 28% % $541, $537,561 6,000-6,999 $656, % % $672, $652,040 7,000-7,999 $658, % % $610, $625,864 8,000-8,999 $958, % % $959, $935,350 9,000-9,999 $892, % % $872, $693,947 10,000-14,999 $1,381, % % $1,308, $1,568,565 15,000-19,999 $1,056, % % $1,128, $1,491,386 20,000-45,999 $1,467, % % $844,227 5 $1,350,960 46,000 + $1,231, % % $1,804,906 7 $1,920,739 N/A % % $536,960 1 $520,000 $657, , ,989 2,050 Formal on June 30th 2008 with Preliminary ( ) in Review ( ) Under 3, ,182 11% % ,111 13% ,000-4, ,183 30% ,010 17% ,193 26% ,000-5, ,664 34% ,132 20% ,796 29% ,000-6, ,348 13% % ,918 12% ,000-7, % % % ,000-8, % % % ,000-9, % % % ,000-14, % % % ,000-19, % % % ,000-45, % % % , % % % N/A % , % , % , , , , ,050 Total ( ) Avg Avg Start of Home ( ) * Remaining Mos. of is based on sales: Jul to

17 King County Single -Family Lot by Market Area June 2008 Market Area Avg List Not ( lots) Not on June 30th, 2008 Vacant & Total $ Amount of Spec. () Total $ Amount of Spec. () Avg. Bear Creek $752, % % 1.7 $11,812,934 $15,597, $624, $651,688 East King County % - 0 0% - $0 $ East Sammamish $938, % % 7.1 $127,038,100 $103,077, $910, $980,129 Eastside $929, % % 11.1 $58,700,230 $117,779, $851, $846,609 Enumclaw $403, % % 7.1 $5,074,585 $5,844, $366, $398,915 Federal Way $500, % % 6.0 $16,987,125 $18,381, $446, $483,164 Green River Valley $332, % % 5.2 $17,767,710 $19,679, $397, $358,542 Highline $722, % % 5.8 $19,678,790 $17,053, $491, $512,202 castle $840, % % 7.2 $116,091,515 $133,268, $715, $716,188 Northshore $646, % % 5.7 $44,480,249 $51,391, $620, $615,848 Seattle - Central % % 0.0 $0 $795,000 5 $392,200 1 $455,000 Seattle - North $834, % % 8.0 $0 $1,669, $469,671 3 $836,300 Seattle - South $547, % % 12.0 $4,458,750 $6,442, $532, $495,848 Seattle - West $476, % % 4.5 $2,164,750 $1,429, $474,113 8 $538,100 Shoreline % % 0.0 $574,950 $0 4 $649,625 1 $574,950 Snoqualmie $706, % % 2.4 $40,868,650 $29,057, $515, $474,209 Soos Creek $449, ,536 21% % 6.2 $82,456,668 $75,598, $469, $415,834 Tahoma / Raven Heights $502, % % 5.5 $79,159,340 $64,565, $461, $415,099 Vashon % - 0 0% - $0 $ $657, , $627,314,346 $661,632,664 2,989 2,050 Avg. Formal on June 30th 2008 Market Area with Preliminary ( ) in Review ( ) Total ( ) Avg Avg Start of Home ( ) Bear Creek 5 1,229 12% % ,229 7% East King County 0 0 0% % % East Sammamish % % ,248 8% Eastside % % % Enumclaw % % % Federal Way % % ,656 10% Green River Valley % % ,036 6% Highline % % % castle % % ,271 8% Northshore % % ,217 7% Seattle - Central % % % Seattle - North 4 6 0% % % Seattle - South 3 7 0% % % Seattle - West % % % Shoreline 2 0 0% % % Snoqualmie 21 1,868 18% % ,401 15% Soos Creek 183 1,887 18% ,557 27% ,444 21% Tahoma / Raven Heights % % ,095 7% Vashon % % % , , , ,050 * Remaining Mos. of based on

18 I 705 King County, Washington Market Area Map Shoreline STATE HWY 99 I 5 STATE HWY 522 Seattle - North Bothell Northshore Kirkland Bear Creek Redmond Snohomish County STATE HWY 520 I 405 Seattle West Seattle Seattle Central Seattle South Eastside Mercer Island I 405 Bellevue Sammamish East Sammamish Snoqualmie STATE HWY 167 I 405 STATE HWY 202 Renton castle Burien Highline I 5 SeaTac Vashon I 5 Federal Way Des Moines Kent Soos Creek Federal Way STATE HWY 167 STATE HWY 18 Green River Valley STATE HWY 18 Tahoma/Raven Heights STATE HWY 169 East King County STATE HWY 167 STATE HWY 164 Enumclaw STATE HWY 7 Pierce County STATE HWY 410 Miles (425)

19 King County Single-Family Lot by Bear Creek Market Area Avg List Not ( lots) Not on June 30th 2008 Vacant & Avg. Avg. 4,000-4,999 $669, % % $758, $688,060 5,000-5,999 $717, % % $619, $662,146 7,000-7,999 $758, % % $561, $624,758 10,000-14, % % $2,074, ,000 + $1,898, % % $1,850,000 1 $2,081,572 $752, Formal on June 30th 2008 with Preliminary ( ) in Review ( ) 4,000-4, % % % ,000-5, % % % ,000-7, % % % ,000-14, % % % , % % % , , Total ( ) Avg Avg Start of Home Jun * Remaining Mos. of based on

20 King County Single-Family Lot by East Sammamish Market Area Avg List Not ( lots) Not on June 30th 2008 Vacant & Avg. Avg. Under 3,999 $634, % % $622, $593,298 4,000-4,999 $812, % % $813, $884,674 5,000-5,999 $863, % % $772, $822,134 6,000-6,999 $883, % % $952, $963,712 7,000-7,999 $975, % % $851, $876,703 8,000-8,999 $888, % % $1,120, $979,885 9,000-9, % % $1,139,750 2 $1,279,975 10,000-14,999 $1,450, % % $1,274,778 4 $1,446,250 15,000-19,999 $1,035, % % $1,399, $1,684,282 20,000-45,999 $1,996, % % $2,398,950 46,000 + $1,100, % % $3,533,333 1 $5,400,000 N/A % % $938, Formal on June 30th 2008 with Preliminary ( ) in Review ( ) Under 3, % % % ,000-4, % % % ,000-5, % % % ,000-6, % % % ,000-7, % % % ,000-8, % % % ,000-9, % % % ,000-14, % % % ,000-19, % % % ,000-45, % % % , % % % N/A 1 0 0% % % , Total ( ) Avg Avg Start of Home Jun * Remaining Mos. of based on

21 King County Single-Family Lot by Eastside Market Area Avg List Not ( lots) Not on June 30th 2008 Vacant & Avg. Avg. Under 3,999 $939, % % $674, $645,554 4,000-4,999 $755, % % $730, $781,542 5,000-5,999 $874, % % $836, $872,381 6,000-6,999 $906, % % $836, $918,831 7,000-7,999 $829, % % $929, $803,286 8,000-8,999 $1,031, % % $1,017, $1,007,674 9,000-9,999 $2,270, % % $1,017,395 1 $875,000 10,000-14,999 $1,232, % % $1,008,153 8 $1,272,488 20,000-45, % % N/A % % $929, Formal on June 30th 2008 with Preliminary ( ) in Review ( ) Under 3, % % % ,000-4, % % % ,000-5, % % % ,000-6, % % % ,000-7, % % % ,000-8, % % % ,000-9, % % % ,000-14, % % % ,000-45, % % % N/A % % % Total ( ) Avg Avg Start of Home Jun * Remaining Mos. of based on

22 King County Single-Family Lot by Enumclaw Market Area Avg List Not ( lots) Not on June 30th 2008 Vacant & Avg. Avg. Under 3, % % $288,975 4,000-4,999 $465, % % $467,043 5,000-5,999 $326, % % $366,171 8 $366,788 9,000-9, % % ,000-14,999 $461, % % , % % $403, Formal on June 30th 2008 with Preliminary ( ) in Review ( ) Under 3, % % % ,000-4, % % % ,000-5, % % % ,000-9, % % % ,000-14, % % % , % % % Total ( ) Avg Avg Start of Home Jun * Remaining Mos. of based on

23 King County Single-Family Lot by Federal Way Market Area Avg List Not ( lots) Not on June 30th 2008 Vacant & Avg. Avg. Under 3, % % $348, ,000-4,999 $444, % % $426,944 2 $423,475 5,000-5,999 $472, % % $395, $476,163 6,000-6,999 $429, % % $513, $476,018 7,000-7,999 $551, % % $467, $502,255 8,000-8,999 $384, % % $430,000 4 $416,820 9,000-9,999 $477, % % $547, $494,959 10,000-14, % % $805, N/A % % $500, Formal on June 30th 2008 with Preliminary ( ) in Review ( ) Under 3, % % % ,000-4, % , % , % , ,000-5, % % % ,000-6, % % % ,000-7, % % % ,000-8, % % % ,000-9, % % % ,000-14, % % % N/A 2 0 0% % % , Total ( ) Avg Avg Start of Home Jun * Remaining Mos. of based on

24 King County Single-Family Lot by Green River Valley Market Area Avg List Not ( lots) Not on June 30th 2008 Vacant & Avg. Avg. Under 3,999 $326, % % $363, $346,540 4,000-4,999 $332, % % $466, $365,616 5,000-5,999 $321, % % $335, $324,965 6,000-6,999 $311, % % $385, $367,467 7,000-7,999 $375, % % $327, $370,883 8,000-8, % % ,000-14, % % ,000-45, % % , % % $332, Formal on June 30th 2008 with Preliminary ( ) in Review ( ) Under 3, % % % ,000-4, % % % ,000-5, % % % ,000-6, % % % ,000-7, % % % ,000-8, % % % ,000-14, % % % ,000-45, % % % , % % % , Total ( ) Avg Avg Start of Home Jun * Remaining Mos. of based on

25 King County Single-Family Lot by Highline Market Area Avg List Not ( lots) Not on June 30th 2008 Vacant & Avg. Avg. Under 3,999 $403, % % $401, $402,654 4,000-4, % % $725,000 1 $640,000 5,000-5,999 $370, % % $511,425 8 $422,663 6,000-6,999 $503, % % $504,950 7,000-7,999 $489, % % $536, $525,065 8,000-8,999 $751, % % $824,425 10,000-14,999 $1,530, % % $1,600,000 N/A % % $722, Formal on June 30th 2008 with Preliminary ( ) in Review ( ) Under 3, % % % ,000-4, % , % % , ,000-5, % % % ,000-6, % % % ,000-7, % % % ,000-8, % % % ,000-14, % % % N/A % % % Total ( ) Avg Avg Start of Home Jun * Remaining Mos. of based on

26 King County Single-Family Lot by castle Market Area Avg List Not ( lots) Not on June 30th 2008 Vacant & Avg. Avg. Under 3,999 $549, % % $461, $472,040 4,000-4,999 $745, % % $659, $572,850 5,000-5,999 $621, % % $651, $605,700 6,000-6,999 $734, % % $629, $690,364 7,000-7,999 $842, % % $728, $783,923 8,000-8,999 $1,088, % % $974, $992,730 9,000-9, % % ,000-14,999 $1,648, % % $1,497, $1,803,231 15,000-19, % % $1,395, ,000-45,999 $1,995, % % N/A % % $840, Formal on June 30th 2008 with Preliminary ( ) * Remaining Mos. of based on in Review ( ) Under 3, % % % ,000-4, % % % ,000-5, % % % ,000-6, % % % ,000-7, % % % ,000-8, % % % ,000-9, % % % ,000-14, % % % ,000-19, % % % ,000-45, % % % N/A 1 0 0% % % , Total ( ) Avg Avg Start of Home Jun. 2008

27 King County Single-Family Lot by Northshore Market Area Avg List Not ( lots) Not on June 30th 2008 Vacant & Avg. Avg. Under 3,999 $525, % % $574, $528,412 4,000-4,999 $585, % % $583, $591,622 5,000-5,999 $705, % % $747,459 5 $558,370 6,000-6,999 $598, % % $671,619 7 $670,315 7,000-7, % % ,000-8,999 $952, % % $864,589 7 $963,114 9,000-9,999 $939, % % $907, $728,296 10,000-14, % % $795, ,000-45,999 $939, % % $2,195,000 2 $1,567,475 N/A % % $646, Formal on June 30th 2008 with Preliminary ( ) in Review ( ) Under 3, % % % ,000-4, % % % ,000-5, % % % ,000-6, % % % ,000-7, % % % ,000-8, % % % ,000-9, % % % ,000-14, % % % ,000-45, % % % N/A % % % , Total ( ) Avg Avg Start of Home Jun * Remaining Mos. of based on

28 King County Single-Family Lot by Seattle - Central Market Area Avg List Not ( lots) Not on June 30th 2008 Vacant & Avg. Avg. Under 3, % % $392,200 1 $455,000 5,000-5, % % N/A % % Formal on June 30th 2008 with Preliminary ( ) in Review ( ) Under 3, % % % ,000-5, % % % N/A % % % Total ( ) Avg Avg Start of Home Jun * Remaining Mos. of based on

29 King County Single-Family Lot by Seattle - North Market Area Avg List Not ( lots) Not on June 30th 2008 Vacant & Avg. Avg. Under 3,999 $834, % % $469,671 3 $836,300 5,000-5, % % ,000-8, % % N/A % % $834, Formal on June 30th 2008 with Preliminary ( ) in Review ( ) Under 3, % % % ,000-5, % % % ,000-8, % % % N/A % % % Total ( ) Avg Avg Start of Home Jun * Remaining Mos. of based on

30 King County Single-Family Lot by Seattle - South Market Area Avg List Not ( lots) Not on June 30th 2008 Vacant & Avg. Avg. Under 3,999 $480, % % $531,509 9 $465,213 5,000-5,999 $444, % % $465,000 6,000-6, % % ,000-7,999 $819, % % $839,950 N/A % % $536,960 1 $520,000 $547, Formal on June 30th 2008 with Preliminary ( ) in Review ( ) Under 3, % % % ,000-5, % % % ,000-6, % % % ,000-7, % % % N/A 1 0 0% % % Total ( ) Avg Avg Start of Home Jun * Remaining Mos. of based on