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					                                Jacksonville Area
                     Local Market Report, Fourth Quarter 2011
         Today's Market…
                               Median Price (Red Line) and One-year Price Growth
             $250,000                                                                                      25%
                                                                                                           20%
             $200,000                                                                                      15%
                                                                                                           10%
             $150,000                                                                                      5%
                                                                                                           0%
             $100,000                                                                                      -5%
                                                                                                           -10%
               $50,000                                                                                     -15%
                                                                                                           -20%
                      $0                                                                                   -25%
                            2002 Q2 2003 Q2 2004 Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 Q2 2010 Q2 2011
                             Q4      Q4      Q4      Q4      Q4      Q4      Q4      Q4      Q4      Q4


                                                       Local Price Trends
Price Activity                                        Jacksonville       U.S.                  Local Trend
            Current Median Home Price (2011 Q4)         $121,600       $162,333
                                                                                       Prices are down compared to a year
         1-year (4-quarter) Appreciation (2011 Q4)        -9.4%          -4.4%            earlier and continue to weaken
        3-year (12-quarter) Appreciation (2011 Q4)       -24.3%         -10.2%
          3-year (12-quarter) Housing Equity Gain*      -$39,100       -$18,433       The relatively recent correction in local
         7-year (28 quarters) Housing Equity Gain*      -$32,100       -$36,567        home prices wiped out most of the
         9-year (36 quarters) Housing Equity Gain*                                      equity gained over the last 7 years
                                                          $600          -$6,067
*Note: Equity gain reflects price appreciation only



                                                      Jacksonville       U.S.
Conforming Loan Limit**                                 $417,000       $729,250
                                                                                      Most buyers in this market have access
                 FHA Loan Limit                         $417,000       $417,000
                                                                                         to government-backed financing
Local Median to Conforming Limit Ratio                    29%        not comparable
Note: does not reflect the new limits passed in November of 2011



Local NAR Leadership
The Jacksonville market is part of region 5 in the NAR governance system, which includes all of Georgia, Florida,
Alabama, Mississippi, Virgin Islands, and Puerto Rico. The NAR Regional Vice President representing region 5 is Cynthia
S. Joachim ABR, ABRM, GRI.
     Drivers of Local Supply and Demand…

Local Economic Outlook                                 Jacksonville            U.S.
                                                                            Not
                       12-month Job Change (Dec)            10,600
                                                                         Comparable        Employment has held up and is on an
                                                                            Not                      upward trend
                       12-month Job Change (Nov)             8,000
                                                                         Comparable
                                                                            Not            Jacksonville's unemployment rate lags
                       36-month Job Change (Dec)          -15,300
                                                                         Comparable        the national average, but has improved
                  Current Unemployment Rate (Dec)            9.2%              8.5%          relative to the same period last year
                     Year-ago Unemployment Rate             11.1%              9.4%          Local employment growth is strong
                1-year (12 month) Job Growth Rate            1.8%              1.1%             compared to other markets


                                Share of Total Employment by Industry
                      Jacksonville Area                                                          U.S.

    #N/A             #N/ANatural                                        #N/A     #N/ANatural
                        Resources           Constructio                             Resources Constructio
Natural Resour     0.1% and Mining
                                 0.4                                   Natural 0.6% and Mining    n
                                                 n                     Governme                           Manufacturi
                          0.1%                                                        0.6%      0.6%
                                               4.7%                       nt                                 ng
Construction Governmen
                   4.7%        28.1       Manufacturi                  Constru 0.6%                         9.0%
                 t                                                      16.8%
      Other 12.8%                            ng
Manufacturing      4.5%        27.1         4.5%                        Manufac9.0%
                                                                            Other
    Services                                                              Services
      3.9%
Trade/Transpo    21.7%        129.9                                     Trade/T 19.2%
                                                                            4.1%
                                             Trade/Tran                                                                 Trade/Tran
Information &        1.6%           9.8      sportation/U            Leisure &
                                                                        Informa2.0%
     Leisure                                                                                                            sportation/
                                                tilities             Hospitality
    Hospitality                                                                                                           Utilities
Financial Act        8.9%          53.3        21.7%                   9.8%
                                                                        Financi 5.9%
     11.4%                                                                                                                19.2%
Prof. & Busin       15.5%          92.9                                 Profess13.3%
                                               Information
Educ. & Heal     14.7%        88.1                1.6%                  Educat 15.3%
         Educ. &
Leisure &Health 11.4%
          Ho                  68.3        Financial                      Educational
                                                                        Leisure9.8%                                     Information
Other Service                             Activities                       & Health
                                                                        Other S4.1%
        Services 3.9%         23.1
                        Prof. &                                                                                  Financial 2.0%
                                            8.9%                          Services                  Profession
         14.7%                                                                                                   Activities
Government       12.8% Business
                              76.7          95.2%                          15.3%
                                                                        Govern16.8%              #N/A al &
                       Services                                                                     Business      5.9%
#N/A              #N/A  15.5%                                            #N/A #N/A                  Services
#N/A              #N/A                                                   #N/A #N/A                   13.3%
                            12-month Employment Change by Industry in the Jacksonville Area (Dec - 2011)
Goods Producing                                         NA              Information                                 -200
  Natural Resources/Mining/Construction                       NA          Financial Activities                     -2,300
        Natural Resources and Mining                           0          Prof. & Business Services                5,200
        Construction                                          800         Educ. & Health Services                  1,200
  Manufacturing                                                0          Leisure & Hospitality                    3,700

Service Providing Excluding Government                        NA          Other Services                            -300

  Trade/Transportation/Utilities                             3,200        Government                                -700



        State Economic Activity Index                     Florida              U.S.
                                                             2.1%              2.9%         The economy of Florida is growing
           12-month change (2011 - Dec)
                                                                                           more slowly than the rest of the nation,
           36-month change (2011 - Dec)                     -3.8%              0.3%          but improved modestly from last
                                       New Housing Construction
             Local Fundamentals                   Jacksonville           U.S.
12-month Sum of 1-unit Building Permits through                                       The current level of construction is
                                                      3,216         not comparable
                  Dec 2011                                                            64.0% below the long-term average
                                                                                       Reduced construction will limit new
   8-year average for 12-month Sum of 1-Unit
                                                      8,937         not comparable supply to the market, allowing demand
                Building Permits
                                                                                       to catch up with the inventory more
   Single-Family Housing Permits (Dec 2011)                                           Construction is down from last year,
                                                      -5.0%              -7.4%
          12-month sum vs. a year ago                                                   but appears to have bottomed.


                          Construction: 12-month Sum of Local Housing Permits
                                       (Historical Average Shown in Red Dashed Line)
         20,000
         18,000
         16,000
         14,000
         12,000
         10,000
          8,000
          6,000
          4,000
          2,000
              0




While new construction is the traditional driver of supply in real estate, foreclosures now have a strong impact on
inventories, particularly at the local level. Rising inventories, through construction or foreclosure, place downward
pressure on the median home prices.

                              State Total Foreclosure Rate vs. U.S Average
                                          (U.S. Average in Blue Dashed Line)
           16.0%
           14.0%
           12.0%
           10.0%
            8.0%
            6.0%
            4.0%
            2.0%
            0.0%




           Source: Mortgage Bankers' Association
         Composition of Mortgaged Homes in Local Area
    Monthly Market Data - December 2011            Jacksonville                 U.S.
                                                                                              There are nearly 5.9 prime loans for
    Prime Mortgages Outstanding (estimate)              379,743             49,444,933           every subprime mortgage in the
                                                                                             Jacksonville market, which is less than
                                                                                            the national average of 14.4 suggesting
                                                                                               that subprimes make up a greater
  Subprime Mortgages Outstanding (estimate)             64,043              3,430,162           share of the local market than on
                                                                                                            average.
Source: First American CoreLogic, LoanPerformance data



              Subprime Foreclosure and Delinquency Rates
Monthly Market Data -
  December 2011                Jacksonville                          U.S.
                             50.4%        52.1% 53.4%          30.7% 31.5% 31.9%
                             53.4                            31.8                              The 90-day delinquency rate for
Subprime: 90-day              %        52.1     50.4         5%          31.4
                                        %                                5%        30.7     subprime mortgage in Jacksonville fell
   Delinquent                                    %                                 4%       over the 6-month period ending in 5.9
                           Dec-10    Jun-11    Dec-11       Dec-10   Jun-11       Dec-11


                             34.1%        34.7% 33.4%          14.0% 13.6% 13.0%
    Subprime:                                                                                  The recent decline of the 90-day
                                      34.67                                         13.9
                            33.35               34.13        13.0        13.6                delinquency rates suggests that local
                                       %                                            5%
   Foreclosure +             %                   %           0%          2%
                                                                                               foreclosure rates will continue to
     REO Rate                                                                                      decline in the near future.
                           Dec-10    Jun-11    Dec-11       Dec-10    Jun-11      Dec-11


The "foreclosure + REO rate" is the number of mortgages, by metro area, that are either in the foreclosure process or have completed
               the foreclosure process and are owned by banks divided by the total number of mortgages for that area.
Source: First American CoreLogic, LoanPerformance data



                Prime Foreclosure and Delinquency Rates
Monthly Market Data -
  December 2011                Jacksonville                          U.S.
                             21.0%        21.9% 22.7%             5.9%     5.8%      6.2%
                            22.67                            6.17                               The 90-day delinquency rate in
   Prime: 90-day             %        21.88     20.95         %
                                       %                                 5.83      5.90        Jacksonville fell over the 6-month
    Delinquent                                   %                        %         %             period ending in December
                           Dec-10    Jun-11    Dec-11       Dec-10   Jun-11       Dec-11


                             14.7%        16.2% 16.0%            2.7%      2.8%      2.9%
      Prime:                          16.21                  2.93                              The recent decline of the 90-day
                            16.03                                        2.84
                             %         %        14.70         %                     2.70     delinquency rates suggests that local
   Foreclosure +                                 %                        %          %         foreclosure rates will continue to
     REO Rate                                                                                      decline in the near future.
                           Dec-10    Jun-11    Dec-11       Dec-10    Jun-11      Dec-11


The "foreclosure + REO rate" is the number of mortgages, by metro area, that are either in the foreclosure process or have completed
               the foreclosure process and are owned by banks divided by the total number of mortgages for that area.
Source: First American CoreLogic, LoanPerformance data
                                            Affordability
             Long-Term Trend: Ratio of Local Mortgage Servicing Cost to Income
                           (Local Historical Average Shown in Red, U.S. Average in Green)

            30%

            25%

            20%

            15%

            10%

             5%

             0%
                  1993      1995     1997     1999     2001     2003      2005     2007     2009     2011




Monthly Mortgage Payment to Income              Jacksonville           U.S.
               Ratio for 2010                        8.2%              14.2%     Historically strong and an improvement
             Ratio for 2011 Q4                       6.5%              13.0%          over the third quarter of 2011

             Historical Average                      11.5%             21.4%       More affordable than most markets



                         Recent Trend - Local Mortgage Servicing Cost to Income
                                      (Historical Average Shown in Red Dashed Line)
            14%
            12%
            10%
             8%
             6%
             4%
             2%
             0%
                    2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011 Q4




       Median Home Price to Income              Jacksonville           U.S.
               Ratio for 2010                         1.3               2.4      The price-to-income ratio has fallen and
             Ratio for 2011 Q4                        1.1               2.3          is below the historical average
             Historical Average                       1.5               2.7      Affordable compared to most markets
                            Ratio of Local Median Home Price to Local Average Income
                             (Local Historical Average Shown in Red, U.S. Average in Green)
                  4.0
                  3.5
                  3.0
                  2.5
                  2.0
                  1.5
                  1.0
                  0.5
                  0.0
                         1993        1995         1997        1999       2001      2003     2005       2007        2009        2011




                                               The Mortgage Market
                             30-year Fixed Mortgage Rate and Treasury Bond Yield
                  280                                                                                                         7.0%
                  240                                                                                                         6.0%
                  200                                                                                                         5.0%
                  160                                                                                                         4.0%
                  120                                                                                                         3.0%
                   80                                                                                                         2.0%
                   40                                                                                                         1.0%
                     0                                                                                                        0.0%
                         2006 Q4     Q2      2007 Q4     Q2    2008 Q4    Q2     2009 Q4   Q2    2010 Q4     Q2     2011 Q4



                                   Spread (left axis)          30-Year FRM (Right axis)         10-Year Treasury Bond (Right Axis)




Mortgage rates eased ever lower through the end of the 4th quarter of 2011. Weak economic news, lingering concerns
about the impact of the European debt crisis, and scant core inflation pressure combined with the Federal Reserve’s
“operation twist”, which is intended to flatten the yield curve putting downward pressure on long-term rates, helped to
move mortgage rates lower. The average 30-year fixed rate mortgage slipped below 4.0% for the first time in history
during the first week of October according to Freddie Mac’s Primary Mortgage Market Survey. The average weekly rate
stayed under 4.0% for all of December reaching a then record of 3.91% in the week of the 22nd. Rates are likely to
remain low as core inflation is in check and the recent increase in fuel prices are unlinked to mortgage rates unless they
reflect growing demand for oil due to a rapid economic expansion, which is not in the forecast. Rates are likely to rise
through the spring, but remain well below 5%.
A Closer Look…Local Mortgage
Modifications
            Share of Mortgage Modifications Implemented During the 3rd Quarter of
            45%
                              2011, by Change in Loan Payment            42.7%
            40%
            35%
            30%
                                                                      25.0%
            25%
            20%                                                                       17.2%
            15%                         12.5%
            10%
              5%        0.9%                           1.7%
              0%
                    Not Reported      Increased     Unchanged      Decreased by Decreased by Decreased by
                                                                  Less Than 10% 10% to Less  20% or More
          Source: Office of the Comptroller of the Currency                      Than 20%



               Modified Loans                         Florida             U.S.
                   Q3 2011                              232             233,853
                                                                                         Modifications have fallen in Florida
                   Q3 2010                            23,766            137,539           since last year, breaking with the
                                                                                                    national trend.
        Percent Change over 12 months                 -99.0%              70.0%



Short-sales and loan modifications are important for the national housing recovery. Foreclosures weigh on home prices
and consumer confidence and stymie bank activity. By increasing the number of short-sales and successful loan
modifications, fewer loans end up in foreclosure. Modifications performed by the Federal government's Home Affordable
Modifications Program accounted for 27% of all modifications in Florida during the third quarter of 2011. The remaining
73% were private modifications. The largest share of modifications in Florida, 42.7%, had their monthly principle and
interest payment decreased by 20% or more. Roughly 12.1% of loans modified in this way during the 1st quarter of 2011
were back in delinquency by the third quarter of this year.




                        Geographic Coverage for this Report
  The Jacksonville area referred to in this report covers the geographic area of the Jacksonville metro area as officially
   defined by the Office of Management and Budget of the U.S. Government. The official coverage area includes the
                                                     following counties:


                    Baker County, Clay County, Duval County, Nassau County, and St. Johns County


     More information on the OMB's geographic definitions can be found at http://www.whitehouse.gov/omb/inforeg_statpolicy/

				
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