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Melissa Spraul, MWW Group (for BIA/LAV)
213 486 6560, Ext. 313

Patrick S. Duffy, Principal
MetroIntelligence Real Estate Advisors
818 584 1848

Greg Doyle, Regional Director
Hanley Wood Market Intelligence
626 831 8923

             Latest New Home Report from Building Industry Association
             and Hanley Wood Market Intelligence Shows A Market in Flux
                  But Continued Decreases in Speculative Inventory

  Credit issues continue to impact local market, but both Santa Clarita Valley and West
                               Los Angeles sales improve

October 21, 2008 (SANTA CLARITA, California) – As sales of new homes throughout California in August
fell by nearly 39% from a year ago, increases in both Santa Clarita Valley and West Los Angeles
underscore the fact that real estate markets are inherently local, and that regional or statewide numbers
may differ significantly from specific metropolitan submarkets.

As reported in the latest monthly report from the Building Industry Association – Los Angeles/Ventura
Chapter (BIA/LAV), although new home sales throughout metropolitan Los Angeles County fell by 19%
from August of 2007 to 170 units, each submarket of the county performed far differently, ranging from a
far steeper decline of 90% in the condo-heavy San Fernando Valley to a doubling of sales activity in the
resilient West Los Angeles area. In Ventura County, although countywide sales declined by 8% from
August of 2007, recent trends point to almost zero activity in the pricier, eastern portion of the county.

Similarly, between April and August of 2008, new home sales fell in the same valley areas but rose in
both West Los Angeles and in the South Bay.

“I think what we’re seeing is a definite reversal of the geographic trends which characterized the housing
boom,” said Patrick Duffy, a Principal with MetroIntelligence Real Estate Advisors, who analyzed the data
for the BIA. “That means that previous hot spots for infill condominium development – such as the San
Fernando or San Gabriel valleys – are going to see steeper sales declines as the national condo market
weakens more than the market for single-family homes.”

BIA/LAV’s Monthly New Home Report is compiled by Hanley Wood Market Intelligence (HWMI), the
housing industry’s leading provider of rich data and residential real estate development and new home
construction. The ongoing findings are part of a partnership between the two organizations and the real
estate advisory firm MetroIntelligence.

Median prices during August showed a similar trend, falling by up to 23% from a year ago in the San
Gabriel Valley, rising by 12% in West Los Angeles but remaining stagnant for the entire metropolitan
region at $575,000. “These types of variances make it really difficult to forecast the future,” noted Holly
Schroeder, CEO of BIA/LAV, “so when economists peek into their crystal balls for Southern California,
particular areas may be performing quite differently. Consequently, our report takes a much more
detailed view than you’ll see from other sources.” For example, although median prices in Ventura
County fell by nearly 14% from last August to $499,990, they remained flat in the western part of the
county, where more sales also occurred.

One key metric favored by homebuilders is the asking price per square foot for a new home, which fell by
nearly 7% from last August to $360 in Los Angeles County and by nearly 10% in Ventura County to $239.
And yet steeper declines for this metric were located in the Santa Clarita Valley (-24%), the South Bay (-
22%) and in western Ventura County (-15%).

“It’s pretty clear to me that the increasing sales activity in these submarkets is directly related to the better
values being offered by local homebuilders,” said Greg Doyle, Regional Director for Hanley Wood.
“Because builders now have to compete with the rising tide of foreclosures, the only way they can
compete is by offering a better value proposition for their products.”

Moreover, because builders have either been unable or unwilling to release new product into the
marketplace, speculative inventory – defined as homes in various stages of construction released for sale
but yet unsold – has steadily declined throughout 2008. Between April and August of 2008, such
inventory levels fell by 20% in metro Los Angeles County and by 68% in Ventura County. Concludes
Schroeder, “Most of our builders were in business during the last downturn of the early 1990s, so they’re
doing what’s necessary to bring the market back into balance, whether that means reducing inventory,
cutting prices when necessary to compete against existing homes, and doing what it takes to convince
buyers that new homes are often a better choice than an older foreclosure down the street.”


The Building Industry Association / Los Angeles Ventura Chapter (BIA/LAV) is comprised of
approximately 650 companies involved in every aspect of building homes and creating thriving
communities for a growing and diverse population. BIA/LAV exists to provide leadership on public policy
issues that promote building quality communities for the region’s growing population, to increase the
public appreciation of the importance of housing and those who provide it, and to facilitate improved
business opportunities for its members. More information is available on the Association's Web site,

About MetroIntelligence Real Estate Advisors
MetroIntelligence Real Estate Advisors is a boutique consulting firm which, through its variety of alliance
partners, helps builders, developers, lenders, investors, and public agencies identify, analyze and
manage development projects that best target customers and maximize investments. With expertise in
virtually all land use and product types, founder Patrick Duffy has overseen consulting engagements
throughout the U.S. and Mexico on over $40 billion of new development.

About Hanley Wood Market Intelligence
Hanley Wood Market Intelligence (HWMI) is the housing industry’s leading provider of rich data and
consulting services on residential real estate development and new-home construction and is a division of
Hanley Wood, LLC, the premier media company serving housing and construction. More information is
available on the company’s Web site, or by calling (626) 831-8923.

Hanley Wood Market Intelligence (HWMI) collects data from new for-sale production subdivisions of 10
units or more on a monthly basis. HWMI Net Sales represent sales contracts signed during the period
indicated minus any reported cancellations. Median and Average Prices are based upon the minimum
asking price of the plans sold during the period and do not include the cost of any lot/view premiums or
upgrades. Because this data is collected monthly and based upon sales contracts that represent future
closings, HWMI data is the most forward-looking data source available for new home information in the
state of California.

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