Housing Market Recovery Experiencing Choppy Waters

November 18, 2010

Source: Frank Mortl, III
Job Title: Chief Executive Officer
Phone: (269) 382-1597
Email: FrankM@gkar.com

The Greater Kalamazoo Association of REALTORS®
(GKAR) announced their response today to the Monthly Cumulative Sales Report for October. The data
displays somewhat encouraging housing news for Kalamazoo area home buyers and home sellers alike.

Residential units sold (closed), 252, fell in October compared to September, 254, and the 2,944 units sold
throughout all of 2010 represent 108 less sales (closings) of residential units than comparable numbers,
3,052, through October of last year. Additionally, this October's numbers indicate a 31% reduction in homes
sold compared to October of 2009. October's average residential selling price went down since September as
well, with average prices of local homes declining 6.7% from last month down to $132,502. Total dollar
volume of residential sales in October also decreased, falling 7.5% to $33.4 million in value compared to this
time last month.

"It's clear the greater Kalamazoo housing market remains in the early stages of recovery," said Frank Mortl, III,
Chief Executive Officer of GKAR. "Though local REALTORS® are sensing that a housing market recovery is taking place in our area, the statistical evidence represents choppy waters at times depending on the duration and impact of a foreclosure moratoruim."

"Though housing affordability conditions today are 60 percentage points higher than during the housing boom,
vacant homes and homes where mortgages have not been paid for an extended number of months need to be cleared from the books as quickly as possible before we see an upward housing market resulting in a new set of buyers helping the recovery along a healthy path. From what we've seen recently, inventory remains elevated and continues to favor buyers over sellers. However, a normal seasonal decline in inventory is expected through the upcoming months which should have limited impact on an already strong set of housing affordability conditions. For example, the median monthly mortgage payment for a recently purchased home is several hundred dollars less than it was five years ago. In fact, the median monthly mortgage payment in many of our local areas is less
than people are paying for rent. The bottom line is that the savings today's buyers are receiving are not a one-time benefit. Buyers with fixed rate mortgages will save money every year they are living in their home, truly an example of how homeownership builds wealth over the long term."

Average interest rates on 30-year fixed mortgages have fallen to their lowest levels since the early 1970's,
dipping to 4.17%, according to Freddie Mac. Rates for 15-year fixed loans dropped to 3.57%, hitting their
lowest number in dacades. The impact of the favorable borrowing costs is bing somewhat muted, however,
by the large amount of foreclosures, high unemployment rates, and tight credit restrictions.

GKAR encourages anyone interested in the purchase of a home to contact a local greater Kalamazoo
REALTOR® for more information on homebuying opportunities and the advantages available to both
new and trade-up buyers. For more information on the many reasons to consider the purchase of a home
in the greater Kalamazoo area, visit gkar.com or contact the GKAR office at 269-382-1597.

Contact:
Frank Mortl, III
Chief Executive Officer
Greater Kalamazoo Association of REALTORS®
5830 Venture Park Drive
Kalamazoo, MI 49009
269-382-1597
frankm@gkar.com

gkar.com

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