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					                      Miami-Fort Lauderdale-Miami Beach Area
                      Local Market Report, Third Quarter 2011
         Today's Market…
                               Median Price (Red Line) and One-year Price Growth
             $450,000                                                                                         40%
             $400,000                                                                                         30%
             $350,000                                                                                         20%
             $300,000
                                                                                                              10%
             $250,000
                                                                                                              0%
             $200,000
                                                                                                              -10%
             $150,000
             $100,000                                                                                         -20%
              $50,000                                                                                         -30%
                   $0                                                                                         -40%
                            2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011
                             Q3      Q3      Q3      Q3      Q3      Q3      Q3      Q3      Q3      Q3


                                                        Miami               U.S.                  Local Trend
Price Activity
            Current Median Home Price (2011 Q3)       $187,600           $169,267
                                                                                          Prices are still down from a year ago,
         1-year (4-quarter) Appreciation (2011 Q3)     -12.7%              -4.3%                but the trend is improving
        3-year (12-quarter) Appreciation (2011 Q3)     -34.8%             -16.0%
          3-year (12-quarter) Housing Equity Gain*    -$100,200           -$32,233         The local housing price correction
         7-year (28 quarters) Housing Equity Gain*    -$112,300           -$29,733         eliminated all of the equity gained
         9-year (36 quarters) Housing Equity Gain*                                             during the housing boom
                                                       -$11,800            $2,267
*Note: Equity gain reflects price appreciation only
Conforming Loan Limit**                               $423,750           $729,250
                                                                                         Most buyers in this market have access
                 FHA Loan Limit                       $423,750           $417,000           to government-backed financing
Local Median to Conforming Limit Ratio                  44%             not comparable
**Note: the 2009 loan limits for FHA and the GSEs were extended through 2010.

                                 State Home Sales (Red Line) and Sales Growth
                      1,000s
               700                                                                                           80%
               600                                                                                           60%
               500
                                                                                                             40%
               400
                                                                                                             20%
               300
                                                                                                             0%
               200
               100                                                                                           -20%

                  0                                                                                          -40%
                       2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011
                        Q3      Q3      Q3      Q3      Q3      Q3      Q3      Q3      Q3      Q3




Home Sales                                             Florida              U.S.
            State Existing Home Sales                                                     The sales level is much higher than a
                                                        10.6%              17.0%
              (2011 Q3 vs 2010 Q3)                                                               year ago and growing.
       Drivers of Local Supply and Demand…
Local Economic Outlook                                      Miami               U.S.
                                                                             Not
                       12-month Job Change (Sep)            24,200
                                                                          Comparable        Employment has held up and is on an
                                                                             Not                      upward trend
                       12-month Job Change (Aug)            22,900
                                                                          Comparable
                                                                             Not
                       36-month Job Change (Sep)        -117,600                             Miami's unemployment rate lags the
                                                                          Comparable
                                                                                             national average, but has improved
                Current Unemployment Rate (Sep)             10.6%               9.1%         relative to the same period last year

                   Year-ago Unemployment Rate               11.7%               9.6%
                                                                                              Local employment growth is strong
                                                                                                 compared to other markets
               1-year (12 month) Job Growth Rate             1.1%               0.8%



                               Share of Total Employment by Industry
        Miami-Fort Lauderdale-Miami Beach Area                                                    U.S.
    #N/A           #N/A    Natural Constructio                           #N/A     #N/ANatural       Constructio
                          Resources       n                                         Resources           n
Natural Resour       0.0% and Mining
                                   0.5  3.8%                             Natural 0.6% Mining
                                                                                    and               0.6%      Manufacturi
                            0.0%       Manufacturi                                    0.6%                         ng
Construction         3.8%        83.9                                     Governmen
                                                                         Constru 0.6%
             Governmen                      ng                                 t                                  8.9%
Manufacturing      t 3.3%        72.1     3.3%                           Manufac8.9%
                                                                            16.9%
                                                                           Other
      Other     14.3%
Trade/Transpo     22.8%         501.6                                      Services
                                                                         Trade/T 18.9%
     Services                                Trade/Tran
                                                                             4.1%
       4.3%                                  sportation/U                                                                Trade/Tran
Information          1.9%        40.8           tilities
                                                                         Informa2.0%
                                                                      Leisure &                                          sportation/
    Leisure &                                  22.8%                  Hospitality                                          Utilities
Financial Act
    Hospitality
                     6.8%      150.3                                     Financi 5.7%
                                                                       10.0%                                               18.9%
Prof. 11.6%
      & Busin 15.3%             336.1                                    Profess13.2%
Educ. & Heal      15.9%             349       Information                Educat 15.3%
                                                 1.9%
Leisure & Ho    11.6%              254.6                                 Leisure10.0%
                                                                          Educational
         Educ. &                                                                                                          Information
                                                Financial                  & Health
          Health 4.3%
Other Service                    93.5
                               Prof. &          Activities               Other S4.1%                               Financial 2.0%
         Services                                                           Services                 Profession
                              Business            6.8%                      15.3%                                  Activities
Government15.9%14.3%            314.8      96.2%                         Govern16.9%              #N/A  al &
                              Services                                                                              5.7%
                                                                                                     Business
#N/A               #N/A        15.3%                                      #N/A #N/A                   Services
#N/A               #N/A                                                   #N/A #N/A                    13.2%
              12-month Employment Change by Industry in the Miami-Fort Lauderdale-Miami Beach Area (Sep - 2011)
Goods Producing                                               NA           Information                              -2,200
  Natural Resources/Mining/Construction                       NA           Financial Activities                      -700
        Natural Resources and Mining                          0            Prof. & Business Services                 5,800
        Construction                                        -3,900         Educ. & Health Services                  13,100
  Manufacturing                                             -1,900         Leisure & Hospitality                    11,100
Service Providing Excluding Government                        NA           Other Services                            400
  Trade/Transportation/Utilities                             3,400         Government                                -900


        State Economic Activity Index                       Florida             U.S.
                                                                                             The economy of Florida is growing
                                                             1.3%               2.8%
           12-month change (2011 - Sep)                                                     more slowly than the rest of the nation,
                                                                                              but improved modestly from last
                                                            -6.8%               -2.6%
           36-month change (2011 - Sep)                                                            month's 1.07% change
                                       New Housing Construction
             Local Fundamentals                       Miami              U.S.

12-month Sum of 1-unit Building Permits through                                       The current level of construction is
                                                      3,562         not comparable
                  Sep 2011                                                            66.7% below the long-term average

                                                                                     Reduced construction will limit new
   8-year average for 12-month Sum of 1-Unit                                       supply to the market, allowing demand
                                                      10,711        not comparable
                Building Permits                                                     to catch up with the inventory more
                                                                                                   quickly
                                                                                      Construction is on the rise relative to
   Single-Family Housing Permits (Sep 2011)
                                                      11.0%             -10.3%         last year, suggesting that the local
          12-month sum vs. a year ago
                                                                                             inventory has stabilized


                           Construction: 12-month Sum of Local Housing Permits
                                        (Historical Average Shown in Red Dashed Line)
          30,000

          25,000

          20,000

          15,000

          10,000

           5,000

               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
                                          Foreclosures by Type
Monthly Market Data -
   August 2011                         Miami                                 U.S.
                        6.4%                        6.6%     4.9                               4.1
  Market Share:                                               %                                 %        The Miami market has been able to
  Prime (blue), Alt-A        87.1%          6.4%         6.6%        90.9%         4.9%         4.1%      contain both subprime and prime
(green), and Subprime                    87.1                                    90.9                              lending issues
         (red)                            %                                       %

                                                                                                       The local prime rate fell modestly from
                                                         9.7%                      3.2%
       PRIME:                  9.99              9.67                 3.43
                                                                                        3.15
                                                                                                                 March of last year
  Foreclosure + REO             %                 %                    %
                                                                                         %
         Rate                                                                                            The current local prime rate is high
                             Mar-11            Aug-11 10.0%         Mar-11         3.4%
                                                                                      Aug-11           compared with the current U.S. average

                                                                                                         There was modest increase locally
                                                         33.1%                    18.9%
    SUBPRIME:                                   33.12                                   18.8               compared to 6 months earlier
                               31.39             %                   18.1               8%
  Foreclosure + REO             %                                    5%
         Rate                                                                                          The current local rate is high given the
                                                         31.4%      Mar-11
                                                                                  18.2%
                                                                                      Aug-11
                             Mar-11             Aug-11                                                              U.S. average

                                                                                                        The alt-A foreclosure rate rose slightly
       ALT-A:                                   31.20    31.2%       15.2         15.2%
                               30.89                                                    15.1
                                                                                                           over the most recent 6 months
  Foreclosure + REO                              %                   1%
                                %                                                       8%
         Rate                                                                                             The current rate for Miami is high
                             Mar-11             Aug-11 30.9%        Mar-11        15.2%
                                                                                      Aug-11
                                                                                                          compared with the U.S. average
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 Foreclosures and Delinquencies in Process
Monthly Market Data -
   August 2011                         Miami                                 U.S.
                             41.1%         41.4% 40.4%               26.6% 27.8% 27.5%                  The local 60-day delinquency rate fell
                                       41.36                                     27.8                    over the 6-month period ending in
    Prime: 60-day          40.44        %
                                                    41.09          27.5
                                                                                 0%
                            %                        %             2%                       26.6           August suggesting that 90-day
    Delinquent                                                                              0%          delinquencies will decline in the near
                          Aug-10       Mar-11      Aug-11        Aug-10      Mar-11       Aug-11                       future

                             13.7%         13.6% 12.6%                    5.8%     6.2%        6.3%        Miami's 90-day delinquency rate
                                       13.60       13.66           6.25          6.24                  climbed faster than the national average
    Prime: 90-day           12.56       %           %               %             %        5.82          over the most recent 6-month period
    Delinquent               %                                                              %            suggesting a bulge of foreclosures in
                           Aug-10      Mar-11      Aug-11        Aug-10      Mar-11       Aug-11                       the future
                                                                                                       The increase in the 90-day delinquency
                               9.7%        10.0%         8.7%             3.2%     3.4%        3.2%      rate over the most recent 6-month
        Prime:                          9.99        9.67
                                                                                 3.43                  period suggests a near term increase in
                             8.71        %                         3.17           %         3.15
  Foreclosure +               %                      %              %                        %         the foreclosure rate, which should then
    REO Rate                                                                                                shrink as the decline in 60-day
                           Aug-10      Mar-11      Aug-11        Aug-10      Mar-11       Aug-11        delinquencies moves its way through
                                                                                                                      the system
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%
                  1992      1994     1996     1998     2000     2002      2004     2006     2008     2010




Monthly Mortgage Payment to Income                   Miami             U.S.
               Ratio for 2010                        11.0%             15.1%     Historically strong and an improvement
             Ratio for 2011 Q3                        9.6%             13.9%        over the second quarter of 2011
             Historical Average                      16.4%             22.0%       More affordable than most markets



                         Recent Trend - Local Mortgage Servicing Cost to Income
                                      (Historical Average Shown in Red Dashed Line)
            20%
            18%
            16%
            14%
            12%
            10%
             8%
             6%
             4%
             2%
             0%
                    2009 Q4 2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3




       Median Home Price to Income                   Miami             U.S.
                                                      1.8               2.4
               Ratio for 2010                                                    The price-to-income ratio has fallen and
                                                                                     is below the historical average
                                                      1.6               2.3
             Ratio for 2011 Q3
             Historical Average                       2.1               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
                        1992        1994         1996        1998       2000      2002     2004        2006       2008        2010




                                              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 Q3     Q1      2007 Q3     Q1    2008 Q3    Q1     2009 Q3   Q1    2010 Q3     Q1     2011 Q3



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



After a soft second quarter, the economy was shocked by three events that came together nearly within the same weak; a
deadlock in Congress and near miss on the budget extension, renewed concerns about the Greek debt crisis impacting
the US, and a sharp, downward revision to 1st and 2nd quarter GDP estimates. The result was a 15% or more correction
in the equity indexes, which sent investors into US Treasuries seeking a risk free asset. The yield on the 10-year
Treasury reached near record lows and the 30-year FRM followed suit, slipping under 4% multiple times. However, the
gap between the 10-year Treasury and the 30-year fixed opened up as the risk to MBS investors of increased refinancing
rose, creating resistance for falling mortgage rates. Fuel prices eased in the 3rd quarter and are likely to do so through
the fall. At the same time there is little core inflation pressure, which combined with the Federal Reserve’s “operation
twist” that is intended to flatten the yield curve putting downward pressure on long-term rates, should sustain a near-
record low mortgage rate environment through the fall.
A Closer Look…Local Rental
Vacancy Rates
                                U.S. (blue) and Local (red) Rental Vacancy Rates
            14.0%

            12.0%

            10.0%

              8.0%

              6.0%

              4.0%

              2.0%

              0.0%
                         1988      1990   1992   1994   1996     1998   2000   2002    2004    2006    2008   2010



              Rental Vacancy Rate                       Florida             U.S.
                  Ratio for 2010                         10.1%              10.2%
                Ratio for 2011 Q3                        13.6%              9.8%              Data for Florida Not Available
                Historical Average                       10.1%              8.6%




#N/A




                          Geographic Coverage for this Report
 The Miami area referred to in this report covers the geographic area of the Miami-Fort Lauderdale-Miami Beach 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:


                                   Broward County, Miami-Dade County, and Palm Beach County


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

				
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