Summer’s here and for many Americans that meansfilling up the gas tank, checking the tires and venturingdown the highway. Whether driving to the mountainsor shore, or setting off on a cross country adventure,we’re eager to get to our destination. Perhaps youremember the road trips you took as a child, or thoseyou’ve taken with your own children. Either way, ourjourneys are often accompanied by the refrain “Are wethere yet?”

“Are we there yet?” Lately I hear this question fromconsumers wondering if our real estate market hasreached a turning point. My answer is: Yes — weare there!

We’ve been waiting…waiting for the economy and realestate market to turn around. Meanwhile, we’ve put ourhomeownership dreams on hold. There are two reasonsfor this. First, we worry about the employment outlookand our ability to continue meeting our financialobligations. Second, before we start to look for a home,

we want to make sure we get the “best possible” deal.I understand these reasons for waiting, but eventually,the desire to own the home we want overpowers ourhesitancy. It is then that we make the decision to moveforward with our lives. I believe we’ve reached thatpoint — we’ve made our journey and are now pullingup to the curb!

IS BUYING A HOME STILL AGOOD INVESTMENT?

When Case Shiller released its latest Home Price Index,the news media was flooded with talk of a double dip inhome prices. Case Shiller obtains its information fromtransfer tax data and compares the consecutive sellingprices of the same properties. While it is a useful indexfor understanding some aspects of real estate trends, itcan also be misleading if not used in context of localmarket trends. The press highlighted areas like Detroit,MI and Las Vegas, NV where 2010 home values wereless than or equal to what they were in 2000.

A Message from Lawrence F. Flick, IV, Chairman and Chief Executive OfficerPrudential Fox & Roach, REALTORS®and The Trident Group

1

The Chairman’s Report

SUMMER 2011 REGIONAL EDITION: SOUTHEASTERN PENNSYLVANIA

“Are We There Yet?”

2

Case-Shiller® Home Price Index: Single-Family Aggregate Index, (Index,2000Q1=100), SASource: Fiserv, FHFA, Moody's Analytics 5/09/11Philadelphia, PA Metro Division Counties: Bucks PA, Chester PA, Delaware PA, Montgomery PA, Philadelphia PA

Southeastern Pennsylvania Since 2000: up 71% Since Peak: down 7.15%

But, in the Philadelphia region, this simply is not true!Yes, prices have declined since their 2007 peak, but theyremain well above 2000 values, as illustrated above.

In the past ten years, the average sales price in our areahas also increased significantly. In 2000, average salesprice was $154,000. So far in 2011, it’s $241,251.

ARE REAL ESTATE PRICES AT THE BOTTOM?

No one really knows that a market has hit “the” bottomuntil after it has begun to rise. Prices in our region havebeen bumping along a bottom since 2009.

What’s more, if we remove foreclosures from thepicture, prices have been steady across the country.According to Core Logic, another source of data, overallhome prices fell 7.5% in April versus the same period a

year ago. But when distressed sales are taken out of theequation, prices fell just 0.5% in that time. In our area,it is important to note that less than 1/2 of 1% of allhouseholds are in the foreclosure process, yet becausethe media doesn’t highlight regional differences, manyperceive that our market is also distressed. The reality isthat we are faring better than much of the country:Our market is not suffering from a foreclosure/shadowinventory hangover.

Even if prices were to fall a bit more to what we imaginemust be rock bottom, consumers need to considercurrent interest rates. Earlier this year, mortgage rates,while still low, rose to 5.25%. At publication of thisreport, interest rates unexpectedly decreased once againto 4.5%. For a $250,000 mortgage, the lower rates willproduce a savings of $41,000 over 30 years.

IS THERE GOING TO BE A DOUBLE DIPRECESSION?

As far as the recession is concerned, it’s been a longroad — bumpier and more uneven than we anticipated.But all signs point to a sustainable recovery and mosteconomists do not believe that there will be a doubledip recession. Employment is a key factor. So far thisyear, the economy has added almost a million jobs.Manufacturing is also strong. Events in the Middle Eastand North Africa have caused gas prices to spike, butthey are beginning to come down again.

Our area is strong because our local economy isdiverse with significant concentration in “eds, meds,and pharma.” Overall, there’s been positive growth sinceJuly 2009 and I expect this to continue. The Moody’sAnalytics report of the five county southeasternPennsylvania region states that “Philadelphia’s recoveryhas been strengthened with house prices at a bottomand private employment at a two year high.”

ISN’T IT HARD TO GET A MORTGAGE NOW?

The pendulum has changed direction away from loanswithout income or asset verification. The fact remainsthat those who are employed and have average credit

can get a mortgage. With proof of income and assets,applicants today can secure a mortgage at a good rate.FHA loans are still available with 3.5% down, and 5%conventional loans are commonplace. Your Trident loanconsultant can help determine what program works bestfor you.

WHY NOW IS THE TIME

Every buyer has an individual situation and motivationfor making a purchase. If your personal circumstancesdictate a move, here are four excellent reasons why thetime to buy is now:

• Affordability — Homes are more affordable now thansince the industry started keeping records in 1970.

• Selection — There’s a great selection of homes fortoday’s buyers.

• Low prices and interest rates — Once the majority ofconsumers begin to feel confident again and enter themarket, both prices and interest rates will rise.

• Pent up demand — Households waiting to form willbegin to unleash many new buyers into the market.Also, a recent survey noted that 65% of renters saidthey were planning to buy a home soon.

3

Our area is strongbecause our local economy is diverse with

significant concentration in “eds, meds, and pharma.”

Homes are more affordable nowthan since the industry started keeping records

in 1970.

An Independently Owned and Operated Member of the Prudential Real Estate Affiliates, Inc.

4

WHAT IF I NEED TO SELL?

We are in a buyer’s market, but homes are selling. Lastyear, 48,000 homes were sold in our market area. Whydid these properties sell when others sat on the market?The two main reasons were price and condition.

• Price — When selling your present home to buyanother that better meets your needs, it’s importantto price your home correctly. Keep in mind thatalthough it may sell for less than it did in 2006, thehome you buy now will not cost as much either.

• Condition — There are a lot of houses on themarket, so it is important to make sure that yoursstands out. Your Prudential Fox & Roach salesassociate will advise you on how to make it the mostappealing to potential buyers.

AREWE THERE YET? YES!

Don’t wait until the road is jammed with traffic.Be among the first to arrive and do take yourtrusted guides with you: your Prudential Fox &Roach sales associate and Trident loan consultant.They are dedicated professionals who can help younavigate along the way. The long journey is overand we’re pulling up to the curb. We can answerthe question “Are we there yet?” with confidence.Yes — we are there!

Lawrence F. Flick, IVChairman and Chief Executive OfficerPrudential Fox & Roach, Realtors® and The Trident Group

We can answer the question“Are we there yet?” with confidence.

Yes – we are there!