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Residential Real Estate Market Update

June 2012

Jeff Detwiler, President/COO, The Long & Foster Companies

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Momentum

Mortgage rates are below 3.75% Affordability is 200 plus Significant percentage of all transactions are cash (~20%) Investors are buying at a record rate (~27%) Housing market activity is elevated in 2012 vs. 2011 Multi year low in inventory

Market Overview“A Mixed Bag”

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Challenges

Unemployment rate is 8.2% Many home owners are underwater on their mortgage (~25% at

YE 2011)

Consumer debt levels remain very high, but have started declining

New & existing home sales remain at or near decade lows Distressed properties remain a significant part of the market High fallout of ratified contracts (~20%)

Market Overview“A Mixed Bag”

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2012 existing home sales equal to or better than 2011

2012 stabilized to slightly improving home prices

2013 and 2014 gradual improvement in existing and new home sales

2013 and 2014 home prices start appreciating

2015 return to a more normalized housing market

Likely mplementation of a broad-based refinance program over the next 12 months

Generally up-trending rates that start slowly but pick up pace over the course of the next 2 years

Housing Market Projections

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Jeffrey S. Detwiler, President/COO,

The Long & Foster Companies

Contact: media@longandfoster.com

Jeffrey S. Detwiler is president and chief operating officer of The Long & Foster Companies, the parent company of the largest independent residential real estate company in the United States, Long & Foster® Real Estate, Inc. The group of companies is the Mid-Atlantic region’s leading provider of homeownership services. In addition to its real estate arm, The Long & Foster® Companies consist of Prosperity Mortgage® Company; Long & Foster® Insurance; and Long & Foster® Settlement Services. The total 2011 sales volume and sales equivalents for all The Long & Foster Companies was in excess of $42.7 billion. Visit longandfoster.com for more information and complimentary industry-leading market data.