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I hope you enjoy the latest edition of Brian Buffini's Real Estate Report. The goal of this piece is to help you stay educated on today's market and position yourself as a true professional and your clients' trusted advisor. We hope you'll put this comprehensive report to use in your business.

n Learn where the market is headed and how it affects your clients

n Find out more about today's buyers and how to nudge them off the fence

n Give sellers a little perspective and get them to take action

n Further communicate why you work by referral in this industry

It's a good life!

Contents

Industry Facts Mortgage Stats Buyer Facts, Trends & Demographics First-Time Home Buyer Facts Seller Stats, Trends & Demographics Distressed Properties Today's Real Estate Professional Why Working by Referral Works

Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9

? 2012 Buffini & Company

Brian Buffini's Real Estate Report Page 2

industry facts

THE TYPICAL HOUSE PURCHASED:

is

1,900 sq. feet

costs

$190,000

has

3 bedrooms & 2 baths

was on the market for

9 weeks

70% of Americans

view owning a home as part of the American dream

74% of homeowners

feel that owning a home is the best long-term investment

Affordability is the top priority for consumers who are considering a home purchase in the next 12 months

2011 EXISTING HOME SALES BY REGION (COMPARED TO Q3 2010):

West

up 16%

Midwest

up 25.1%

Northeast

up 11.6%

Home prices are projected to increase:

South

up 15.5%

2-3% 3% 4%

in 2012 in 2013 in 2014

Sacrifices for homeownership:

25%

of buyers cut spending on entertainment

34%

cut spending on luxury items or other nonessentials to purchase a home

20%

cut spending

12% on clothes

cancelled their vacation plans

Rent is projected to increase

3%

In 2012, existing home sales are projected to increase

4% - 5%

Five states with the highest price appreciation:

Alaska

2.1%

West Virginia

4.8%

New York

3%

South Dakota District of Columbia

3.1%

24%

The median home price to median family income has fallen to

2.6%--below the historical

ratio of 2.9%

There is currently

8.5 months

of inventory

Nearly 1 out of 3 home sales in

December 2011 went to buyers who paid cash

22.8% Homes purchased by

investors in December 2011

17% Of the nation's GDP, housing

accounts for

SOURCES: NAR Profile of Home buyers and sellers 2011, NAR, Orange Count y Register, Wall Street Journal, CNN Money, Bank of America: Mortgage Index Study, RISMedia

mortgage Stats

GROUPS WHO FINANCED THEIR HOME PURCHASE:

FIRST-TIME HOME BUYER MORTGAGE TYPES:

Brian Buffini's Real Estate Report Page 3

18% of refinances

in 2011 were cash-out refinances, a drop from 88% at the peak in 2006

87%

of buyers

82%

of repeat buyers

95%

of first-time buyers

BUYERS WHO USED A CONVENTIONAL LOAN:

50% 64% 30%

of all buyers of repeat buyers of first-time buyers

Average amount of downpayment:

5% first-time buyers 15% repeat buyers

35% of buyers put down

20% or more

Typical first-time buyer's monthly mortgage principal and interest payment is

$794

Typical repeat buyer's payment is

$1,006

89%

Average amount of purchase financed

8% of borrowers were at

least one month behind on their mortgage payments as of Q3 2011, down from 9.1% in the previous year

37% of refinances

were cash-in refinances

CONSUMERS' MOST IMPORTANT FACTOR WHEN CHOOSING A LOAN:

39%

lowest possible interest rate

23%

lowest possible monthly payment

76% of consumers preferred a higher, fixed-rate mortgage to a lower, variable-rate one

72% of borrowers plan to remain in their home for more than 7 years

900

800

700

600

500

The median credit score in the US has remained constant over the last decade at around 700

Sources: NAR Profile of Home buyers and sellers 2011, NAR, Buffini & Company Magazine, Wall Street Journal, RISMedia

Brian Buffini's Real Estate Report Page 4

Buyer Facts, Trends & Demographics

19% of home buyers

own more than one home

HOME BUYERS BY HOUSEHOLD TYPE:

64%

married couples

AVERAGE DISTANCE BETWEEN PREVIOUS HOME & NEW HOME PURCHASED:

Northeast

10 miles

18%

single women

10%

single men

7%

unmarried couples

1% other

FACTORS INFLUENCING NEIGHBORHOOD CHOICE:

67% Quality of neighborhood 49% Convenience to work 45% Overall affordability of homes 39% Convenience to family

and friends 32% Neighborhood design 28% Convenience to shopping 27% Quality of school district 21% Convenience to entertainment

or leisure activities

51%

of buyers said that finding the right property was the most difficult part of the buying process

Sources: NAR Profile of Home buyers and sellers 2011, NAR

West

11 miles

Midwest

10 miles

45% of recent

home buyers believe their home is a better investment than stocks

84% of buyers

purchased a previously owned home for a median

price of $180,000

South

15 miles

16% purchased a new

home for a median price of

$230,000

The average buyer searched for

12 weeks and 12 visited homes

The typical repeat buyer purchased a

2,100 square foot

home for $219,500

HOME BUYERS WITH CHILDREN UNDER Age 18:

None One Two Three +

64% 16% 14% 6%

Age of Home Purchased:

Year built 2011 2008 - 2010 2005 - 2007 2000 - 2004 1985 - 1999 1960 -1984 1911 - 1959 Before 1910

% 4% 13% 10% 11% 21% 22% 16% 3%

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