RESIDENTIAL INVESTOR IQ LAS VEGAS, NEVADA

Q1 2011 UPDATE

MARKET IQ
Real estate investors demand up-to-date market intelligence to make informed decisions. Resources available to you and your investor clients include: - Monthly Market Synopses - Regional Economic and Housing Summary (Quarterly) - Consumer demand reports - Detailed rental analysis With the tools assembled by Market IQ, Coldwell Banker Premier Realty can assist clients in understanding the macro and micro economic and housing details in assisting investors in the timely disposition of their properties, even in challenging markets.
Residential Activity Synopsis - Monthly Residential Rental Report Southern Nevada Economy

Housing Stock Vacancy Rate

Vacancy Rates by Housing Type
14.00% 12.00% 11.38% 11.53%

10.00%

Vacancy %

8.00% 7.22% 6.50% 6.00% 6.16% 6.16% 5.64% 5.18% 4.00% 2.58% 2.00% 2.04% 2.58% 2.62% 4.28% 3.64% 2.77% 3.78% 6.38% 6.87% 6.93% 6.84% 6.38% 5.75%

0.00%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Single Family
Source: Clark County.

Multi-Family

Rental Property Vacancy Rate

Rental Vacancy Rate (%) - Las Vegas
18
16.7

16
15.2 15.2

16.0 15.0 15.1 13.6 11.9 11.8 10.8 10.3 9.5 9.0 8.3 7.8 8.4 8.3 12.9 12.1 12.9 12.8 13.0 13.5

14 12

Vacancy %

10 8 6 4 2 0

9.9

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2005 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010

Source: U.S. Census Bureau

Rental Property Days on Market

Rental Property Average Days on Market
100 95 90 80 70 66 60 50 40 30 20 10 0
Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Condominium
Source: Mlxchange. Note: Averages can be greatly skewed by outliers. Extreme observations have been removed by analyst.

68 64 61

68

70 65 57 50 57 55

Days on Market

58 54 50 49 47 46 55 50 47 40 55 51 50

60

50 42

46

44 40 36

42

29

Single Family

Average Rental Rates

Average All Types
$0.76

High-Rise

$1.54

Condo

$0.75

SFR

$0.71

$0.00

$0.25

$0.50

$0.75

$1.00 $/Sq.Ft

$1.25

$1.50

$1.75

$2.00

$2.25

Source: Mlxchange, Coldwell Banker Premier Realty.

Relationship between Cap Rates, Sale Prices and Rents

Capitalization Rates, Sale & Rent Prices (Indexed)
12% 2.5

10% 2.0

8% 1.5

6%

1.0 4%

0.5 2%

0%

0.0

Oct-01

Oct-02

Oct-03

Oct-04

Oct-05

Oct-06

Oct-07

Oct-08

Oct-09

Apr-02

Apr-03

Apr-04

Apr-05

Apr-06

Apr-07

Apr-08

Apr-09

Apr-10

Oct-10

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Cap Rate

Rent Index

Sale Index

Source: Mlxchange, Clark County

With rents being fairly flat, cap rates are largely a function of sale price declines.

Jan-11

Jul-02

Jul-03

Jul-04

Jul-05

Jul-06

Jul-07

Jul-08

Jul-09

Jul-10

Rent & Sale Price Index

Cap Rate

Age Distribution of Valley Homes

Source: Mlxchange

Older than 1960

1960 to 1975

1975 to 1989

1989 to 2000

2000 to 2010

Rental Price Per Square Foot Single Family - Q1

Source: Mlxchange

Less than $.70

$.70 to $.85

$.85 to $1.30

$1.30+

Rental Returns Monthly Q1

Source: Mlxchange

Source: Mlxchange. Calculated using 75% LTV at 5.0%, insurance, taxes, special improvement and management fees.

-$420

-$400 to $0

$0 to $300

$300+

Cap Rates on Sold Homes with Tenants in Place Q1

Note: Based on natural breaks in the data. Source: Mlxchange.

4% or less

4 to 7.5%

7.5% to 11%

11% to 16%

16%+

Cap Rate Sales Price Relationship

Rental Properties Closed Q1 2011

Single Family Rental Cap Rates vs. Sale Price

25%

20%

15%

Cap Rate

10%

5%

0%
$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000

-5%

Sale Price

Source: Mlxchange

Bank Owned Properties

Nearly 14,200 homes are currently held by lenders 6,295 are on the multiple listing service as listed, under contract or a pending sale

Source: Clark County

Source: Clark County

Short Sale Properties

There are 7,034 short sale homes on the market that are not under contract. This represents 47% of the active for-sale inventory. 8,244 short sales are under contract. A majority of these are contingent on being approved by the lender. 12% of the short sales that go under contract actually close.
Source: Ticor Title Active Under Contract

Notices of Default
Nearly 16,000 Notices of Default were counted in Q1, 2011

Source: Ticor Title

Short Sale and REO Active Listings

10,000 9,000 8,000 7,000

Number of Homes

6,000 5,000 4,000 3,000 2,000 1,000 -

Short Sale

REO

Source: Mlxchange

GLOSSARY OF TERMS
There are numerous investment terms to be familiar with:
Adjusted cost basis: The investors cost of the property for tax purposes. Depreciation: An expense deducted from income for tax purposes which allows the owner to recapture the investment in an asset over its economic life by a periodic deduction from the income generated by the asset on a beforetax basis. Feasibility study: An analysis based upon estimates to determine if the investment makes sense and whether or not to proceed with it. Net operating income: Gross scheduled income less vacancy allowance and annual operating expenses. Capitalization rate: An indicator of value and the rate at which investors are willing to invest their capital. Divide net operating income by the desired rate equals the purchase price the investor is willing to pay. Rate of return on equity: The rate which equates the present value of the net cash flow inflows to the initial equity investment.

A glossary of terms is available. Please see your CBPR professional.

INVESTMENT SERVICES
Facilitate the acquisition and disposition of distressed real estate assets including residential, commercial and land. Engaged with numerous asset sources in a direct or intermediary role. Investment opportunities desired include residential and commercial assets, performing and non-performing notes and failed real estate or entitled land developments. United Auction/Exchange: Strategic partnership to purchase at the trustee auction, bulk investment portfolio opportunities and more.

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