The State of the Market -- First Quarter 2009

Where is the market headed and when will it turn are the million-dollar questions everyone wants the answers for. In this newsletter, we'll analyze how southeastern Wisconsin faired in the first quarter and the contributing economic factors. We'll also give our forecast of where the market may be headed as well as new technology and services Shorewest is offering. We hope you find it informative and useful.

Since the start of the year, many factors would suggest that the market is about to change. Mortgage rates are at historic lows hovering around 5% for a 30-year fixed mortgage. President Obama signed the Economic Stimulus Bill (The American Recovery and Reinvestment Act of 2009, H.R.1). The bill is designed to stimulate the economy and spending with new jobs and an $8,000 housing credit for first-time homebuyers. These, plus soft housing prices, make homeownership more affordable than ever.

According to the Multiple Listing Service March Report, the Housing Affordability Index for the four-county Milwaukee Metropolitan area was 161. This means that the area's median family income is 161% of what is necessary to qualify for the median priced home. That's an increase of 19.2% from a year ago.

Despite all this, home sales remain slow.

Closed sales in our market area during the first quarter were down from 2008. The median sales price was also down anywhere from one to 21 percent in our market area from 2008. While total active listings available are down from 2008 (which is a good thing), month's supply of inventory is up in all markets due to slow sales. To bring months of inventory down, prices will need to decline further to balance out the supply and demand.

-- Joseph A. Horning, President, Shorewest, REALTORS®

What's Inside

	1st Quarter Results New listings in all of our southeastern Wisconsin markets are down. This is good news considering the large supply of homes currently for sale. Total inventory is also down in most markets from this time last year, but the Month's Supply of Inventory is still relatively high in most markets, hovering around 12 months or more. This indicates that the market sits firmly in the buyer's favor. The median sales price of homes has also decreased from last year across our markets. It's definitely a tougher market for sellers. However, decreased home prices, great low mortgage rates and the new $8,000 First-Time Home Buyer Credit are creating an enticing environment for buyers and for renters converting to homeownership. Back to Top
	Price Your Home to Sell Today! If your home is on the market -- or soon will be -- you want to make sure the house is priced to sell. That doesn't mean looking at comps of houses that sold six months to a year ago, thinking you'll get what you paid for it a few years back when the housing market was booming. Today, you need to compare your home with what is on the market. And, if you want it to sell, price it lower than what you see. According to a Case Shiller report, housing prices will continue to fall throughout this year and 2010. And one of the biggest reasons is that all the Adjusted Rate Mortgages (ARMs) are coming due earlier than predicted. People who bought their homes with little down using an ARM when the market was overpriced will now be looking at refinancing their homes for more than they are worth today. President Obama's bailout plan for foreclosures may have a significant impact on this trend. And we hope it does. Right now, though, we're looking at over 12 months of inventory in most southeastern Wisconsin markets. With this large inventory, housing values will only depreciate more to balance out the supply and demand. Since March of 2008, the median sales price has dropped in our market areas anywhere from one to 21 percent.While some of the areas show significant decreases, prices need to decline further to bring what buyers are willing to pay closer to what sellers have their homes listed for. This graph shows Existing Home Sales and Inventory. Back to Top
	Foreclosures Continue to Rise The number of foreclosures is expected to continue to rise throughout the year. According to FHFA report dated 3/19/09, over 33% of subprime ARMs are seriously delinquent and 23.1% of all subprime loans are seriously delinquent. According to a 3/12/09 Bloomberg report, some of the top U.S. lenders own as many of 700,000 foreclosed homes they have yet to offer for sale, says Rick Sharga, executive vice president for marketing at RealtyTrac. RealtyTrac publishes the largest, most comprehensive and accurate database of foreclosure and bank-owned properties in the nation. Wisconsin's foreclosure rate is less severe than many other states but likely to worsen as the year continues. According to The PEW Center on the States, one in 60 Wisconsin homeowners will be in foreclosure by the end of 2010 (better than the US projected average of one in 33 homeowners). While fewer than other states, foreclosures are expected to negatively affect more than one third of the state's homeowners and their property values. Back to Top
	First-Time Home Buyer Tax Credit If you're a first-time home Buyer or haven't owned a home in three years, you may be able to qualify for the $8,000 First-Time Homebuyer Tax Credit. It's free credit you don't have to pay back. Hurry, the credit expires Dec. 1, 2009. If you're a homeowner thinking about selling, the tax credit can benefit you, too. With more first-time buyers looking to take advantage this tax credit, your home may sell faster. Click here to learn more about the benefits of this tax credit.
	Market Watch No one knows for sure when the housing market will turn. What we can do, though, is provide you with insight based on past market trends. Of course, how well the stimulus package and other housing programs work, how long mortgage rates will be at record lows and how the economy will bounce back from unemployment and low consumer confidence will all effect the future housing climate. Source: Multiple Listing Service, Inc. Back to Top
	Mission Statement We Are a Team... Proudly Independent Dedicated to Serving the Housing Needs of Wisconsin Committed to Unsurpassed Customer Service Pledged to Sharing Our Talents for Mutual Growth and Prosperity -- Adopted the 21st day of October, 1986. Our Family of Companies Shorewest, REALTORS® shorewest.com Heritage Title Services htstitle.com Wisconsin Mortgage Corporation wimort.com Shorewest Insurance Associates Shorewest Real Estate Institute Business Development and Relocation Home Services Center Shorewest Title Associates Back to Top

©2009 Shorewest, REALTORS® EHO

Shorewest Launches New Technology that Enhances Consumers' Home Selling and Buying Capabilities

In today's busy, consumer-centric society, waiting for something is often uncommon. People need to have everything at their fingertips. And to that end, technology is evolving faster and better than ever. Companies who embrace technology are often light years ahead while others struggle to compete.

Shorewest, REALTORS® is pleased to embrace some of this latest revolutionary technology and use it in the real estate industry. It is this new technology that is helping consumers search for homes in ways never dreamed possible.

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New Mobile Website -- goswr.com

Shorewest's new mobile website -- goswr.com -- lets consumers look for homes on the go. With almost every listing available in Southeastern Wisconsin, goswr.com provides an easy-to-use navigation designed specifically for web-enabled mobile phone users.

"It is so easy to use," says Joseph A. Horning, President of Shorewest, REALTORS®. "When you drive by a home for sale and you want more information on it, you can simply go to goswr.com and enter the street name. All the homes listed on that street will appear. You can then click through the homes listed. You'll be able to see interior photos, pricing, descriptions and contact information. It works on virtually every broker listing -- not just Shorewest listings. You can even search by MLS number or do a regular home search entering parameters such as price range, bedrooms, baths and community desired. It's a home search at your fingertips."

Shorewest launched goswr.com in early December. The site is already getting a significant amount of traffic, says Horning. And, as more and more people upgrade to the web-enabled phones, it will only increase.

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Hotline Texts Link to Photos Instantly

Another new enhanced technology is Shorewest's exclusive bilingual hotline (262.814.1400 or 800.589.7300). A five-digit Personal Identification Number (PIN) identifies every Shorewest listing. The PIN is on the yard sign as well as all marketing and ads for a listing. Callers can call the hotline and enter the PIN and hear a complete description of the home in English or Spanish. They are also given other options such as search similar homes in the price range, mortgage calculator, agent contact and more.

Texting is the latest addition to the hotline. It allows users to select an option that will text them interior photos of the listings right to their mobile, web-enabled phones. If the user doesn't have a web-enabled phone, it will text a short description and agent contact information.

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New shorewest.com

Just launched mid-December, the new shorewest.com is your only source for real estate. The enhanced site offers faster and more detailed property searches along with a multitude of updated features, providing more information at consumers' fingertips. A new quick home search is available right on the home page.

With a redesigned look and streamlined navigation, shorewest.com offers consumers what they're looking for. Advanced search options makes it easy to find a property that meets specific needs in specific locations. Plus, its advanced mapping tool helps consumers target certain areas while providing unique satellite imaging.

"It's a new way to search for homes," says Horning. "Our goal is to make the home buying and selling process as easy and efficient as possible. Our new website enhances the consumers experience, saving them time in the process."

According to the National Association of REALTORS®, 89% of homebuyers use the internet when searching for a new home. Shorewest's mission is to provide the information needed most in an easy-to-use and easy-to-read fashion.

Other enhanced features on shorewest.com include
• Larger, higher quality photos
• Exclusive Guided Home Tour -- which is an audio visual presentation and a new enhanced slide show
• The ability to search for agents by language(s) they speak
• Easier to use mortgage calculator that allows you to put the dollars down rather than a percent
• myShorewest which e-mails you about listings that meet your criteria
• Buying and selling information
• And so much more.

"We continue to invest in our agents and company to offer more services and benefits than any other real estate company in the area," says Horning. "It is this commitment to customer satisfaction that helps us sell more than three times our closest competitor."

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Wisconsin Mortgage Corporation Launches New Rate Buy Down Program

For home sellers looking to differentiate themselves in the market, Wisconsin Mortgage Corporation and Shorewest, REALTORS® might have to tool to do it. Wisconsin Mortgage has a new rate buy down program called Rate Relief. The Rate Relief program is a unique marketing program centered on seller-funded preferred financing. While the program is primarily offered to sellers listed with Shorewest, REALTORS®, anyone financing with Wisconsin Mortgage can take advantage of it.

Here's how the program works. The seller commits to pay 3% of the purchase price towards a financing package from Wisconsin Mortgage. The 3% will be used to buy down the mortgage rate and reduce closing costs.

For buyers, Rate Relief provides a permanent interest rate buy down. Preferred financing significantly reduces the monthly mortgage payment as a result of obtaining a below-market interest rate. Qualifying for a larger home is another advantage of the preferred financing.

For the seller, preferred mortgage rate financing sets your home apart from other homes on the market. Home showings increase due to a higher level of interest from homebuyers. Plus, the target market expands as a result of more people qualifying due to lower interest rates. With the Rate Relief program, sellers also see less negotiating on price and contract terms -- especially when the preferred financing is contingent upon receiving a full-price offer.

Here's an example of the savings available to a buyer with the Rate Relief program.

How Much Will This Really Save Me?

In the above example Rate Relief can help by:

1. Saving with a Lower Mortgage Rate
(Savings below is based on the example above.)
Each Month: $213.66
1 Year: $2,563.92
5 Years: $12,819.60
10 Years: $25,639.20
30 Years: $76,917.60

2. Allowing the buyer to purchase more house with a lower interest rate.

To find out more information on the Rate Relief program or to contact a loan officer call 262.786.5250 or visit wimort.com.

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