TREND Economic and Market Watch Report. Index

TREND Economic and Watch Report TREND is the Multiple Listing Service (MLS) for more than 32,000 real estate professionals in and around the Philadelphia metropolitan region. TREND s 13-county primary service area includes Kent and New Castle counties in Delaware; Burlington, Camden, Gloucester, Mercer and Salem counties in New Jersey; and Berks, Bucks, Chester, Delaware, Montgomery and Philadelphia counties in Pennsylvania. For more than 10 years, TREND has been committed to providing real estate professionals with superior real estate marketing information services. That commitment continues today and well into the future with our Internet-based MLS and Public Records systems and additional TREND products. The market information services and technology that TREND offers along with education, communication and support of these, give real estate professionals the tools and the advantage they need to succeed in today's industry. TREND provides the Economic and Watch Report to help real estate professionals identify current and future economic trends that affect the real estate industry. Index Local Report Delaware Kent County... New Castle County... New Jersey Burlington County... Camden County... Gloucester County... Mercer County... Salem County... Pennsylvania Berks County... Bucks County... Chester County... Delaware County... Montgomery County... Philadelphia County... 3 5 7 9 11 13 15 16 18 21 23 25 28 Trends... Chief Economist's Commentary*... Local Forecast... Economic Monitor*... 30 31 32 33 *Reprinted from Real Estate Outlook: Trends and Insights. 2008 TREND MLS and NATIONAL ASSOCIATION OF REALTORS. Used with permission. Reproduction, reprinting, or retransmission of this article in any form (electronic media included) is prohibited without expressed written consent. For subscription information please call 1-800-874-6500.

Buyer's Kent County, DE 1 2 3 4 5 Seller's Labor : In the first two months of the second quarter, 156 jobs were added to the payrolls of Kent County. As a result of these new jobs, the average monthly unemployment rate fell from 3.9% during the first quarter to 3.7% for April and May. The strong employment climate may help to create demand for home purchases. Favorable mortgage rates should augment this trend. Housing : Q1' 08 Q2' 08 Q3' 08 (Forecast) # Homes on the * # ** # New Homes Built *** Avg # of Days $217,900 $215,800 1,802 987 296 389 218 150 82 88 * Available as of Jun. 30, 2008. ** May not add to total of zip codes *** During the first two months of 2nd quarter. Zip Code (Quarter) 19901 $223,500-6.52% 80-6.98% 89 97.8% 19904 $210,800-4.92% 89-22.61% 80 97.5% 19934 $223,100-9.79% 33-38.89% 76 96.3% 19936 $150,000 0.00% 1-50.00% 131 94.3% 19938 $238,000-11.95% 13-56.67% 70 98.2% 19943 $198,500-18.45% 38-24.00% 80 97.1% 19946 $217,600 2.16% 8-42.86% 138 97.8% 19950 $265,900 7.39% 4 100.00% 138 99.9% 19952 $178,200 1.37% 34 36.00% 107 95.8% 19953 $258,900 27.29% 6-40.00% 71 94.2% 19954 $67,000-55.92% 1-66.67% 16 100.0% 3

Kent County, DE Zip Code (Quarter) 19955 $184,000-27.27% 1-50.00% 24 99.5% 19958 $168,500 N/A 5 N/A 24 98.6% 19962 $268,500-1.29% 36-16.28% 80 96.9% 19963 $200,600-16.07% 11-31.25% 76 19964 $199,300 N/A 7 N/A 113 99.6% 19977 $229,500 4.37% 57-22.97% 101 96.8% 19979 $324,900 68.34% 1 0.00% 39 101.6% 19980 $155,000 88.56% 1-50.00% 72 95.2% OTHER $289,500 N/A 1 N/A 29 100.0% 4

Buyer's New Castle County, DE 1 2 3 4 5 Seller's Labor : In the first two months of the second quarter, 941 jobs were added to the payrolls of New Castle County. As a result of these new jobs, the average monthly unemployment rate fell from 4% during the first quarter to 3.7% for April and May. The strong employment climate may help to create demand for home purchases. Favorable mortgage rates should augment this trend. Housing : Q1' 08 Q2' 08 Q3' 08 (Forecast) # Homes on the * # ** # New Homes Built *** Avg # of Days $261,000 $269,600 3,448 2,674 1,080 1,461 168 128 72 68 * Available as of Jun. 30, 2008. ** May not add to total of zip codes *** During the first two months of 2nd quarter. Zip Code (Quarter) 19701 $286,900 2.98% 117-23.03% 73 97.9% 19702 $237,800-4.96% 154-30.94% 67 98.3% 19703 $216,100 2.66% 33-8.33% 57 98.8% 19706 $224,000-3.82% 1-80.00% 13 96.3% 19707 $444,800 5.83% 41-10.87% 103 96.7% 19708 $300,000 N/A 1 N/A 13 103.4% 19709 $328,200 1.27% 110-22.54% 90 19711 $309,900-2.73% 115-15.44% 71 96.9% 19713 $210,800-5.34% 79-35.77% 64 98.8% 19720 $186,400-10.30% 142-29.35% 68 97.9% 19730 $277,500-10.48% 2 100.00% 113 81.6% 5

New Castle County, DE Zip Code (Quarter) 19731 $315,000 N/A 1 N/A 149 95.5% 19734 $318,100 3.41% 13-56.67% 65 100.5% 19801 $205,000 54.60% 62 40.91% 43 97.0% 19802 $177,200 17.66% 61-46.49% 84 97.9% 19803 $385,700 3.54% 67-12.99% 44 96.3% 19804 $188,700-10.53% 55-25.68% 65 97.6% 19805 $162,400 3.90% 117-40.91% 60 96.5% 19806 $324,400 5.84% 56-22.22% 75 95.9% 19807 $1,111,700 17.70% 21-25.00% 103 92.1% 19808 $267,800-0.74% 133-14.74% 54 97.4% 19809 $219,800 4.22% 64 4.92% 50 96.0% 19810 $332,100-0.27% 67-26.37% 76 96.8% 19938 $285,000 N/A 1 N/A 1 100.0% 19977 $209,000-51.87% 2-50.00% 104 95.0% 6

Buyer's Burlington County, NJ 1 2 3 4 5 Seller's Labor : In the first two months of the second quarter, 914 jobs were added to the payrolls of Burlington County. As a result of these new jobs, the average monthly unemployment rate fell from 4.5% during the first quarter to 4.4% for April and May. The strong employment climate may help to create demand for home purchases. Favorable mortgage rates should augment this trend. Housing : Q1' 08 Q2' 08 Q3' 08 (Forecast) # Homes on the * # ** # New Homes Built *** Avg # of Days $255,200 $278,700 4,198 2,850 880 1,313 155 140 91 88 * Available as of Jun. 30, 2008. ** May not add to total of zip codes *** During the first two months of 2nd quarter. Zip Code (Quarter) 08010 $167,300-16.93% 27-18.18% 82 97.1% 08015 $180,500-5.79% 73-17.98% 101 97.7% 08016 $232,400-14.05% 98-1.01% 92 95.8% 08019 $343,500-3.92% 3 50.00% 100 93.3% 08022 $362,900 3.63% 32-21.95% 101 95.5% 08036 $364,400 12.57% 17-15.00% 109 95.6% 08041 $290,000-17.28% 1-75.00% 355 96.7% 08046 $166,400-14.84% 97 7.78% 91 96.3% 08048 $284,500 3.34% 36-14.29% 75 94.8% 08052 $193,100-5.90% 33-28.26% 101 95.2% 08053 $269,400-9.32% 188-16.81% 72 96.0% 7

Burlington County, NJ Zip Code (Quarter) 08054 $251,900-10.45% 180-26.83% 71 96.2% 08055 $411,800-1.48% 94 6.82% 98 95.6% 08057 $529,500-13.44% 67-5.63% 116 94.9% 08060 $241,300-3.63% 67-17.28% 119 95.2% 08065 $196,800-3.72% 17-41.38% 81 96.8% 08068 $196,600 8.74% 9-55.00% 97 94.6% 08075 $244,000-4.80% 89 15.58% 74 96.2% 08077 $281,100-7.35% 46-13.21% 83 95.6% 08087 $212,500 N/A 2 N/A 50 95.9% 08088 $350,300 11.42% 68-28.42% 94 95.6% 08505 $288,200-1.91% 66-16.46% 91 96.2% 08511 $380,000-13.06% 1-80.00% 133 95.0% 08515 $470,100 14.41% 13 30.00% 83 99.6% 08518 $177,200 15.36% 17-22.73% 116 95.7% 08554 $181,900-0.38% 21 90.91% 82 93.6% 08562 $426,400 17.53% 7-41.67% 173 93.7% 08610 $260,000 14.19% 1-50.00% 19 89.7% 08620 $304,000 26.77% 3-25.00% 134 91.2% 8

Buyer's Camden County, NJ 1 2 3 4 5 Seller's Labor : In the first two months of the second quarter, 997 jobs were added to the payrolls of Camden County. As a result of these new jobs, the average monthly unemployment rate fell from 5.5% during the first quarter to 5.4% for April and May. The strong employment climate may help to create demand for home purchases. Favorable mortgage rates should augment this trend. Housing : Q1' 08 Q2' 08 Q3' 08 (Forecast) # Homes on the * # ** # New Homes Built *** Avg # of Days $200,700 $218,800 4,270 2,975 938 1,261 98 80 82 80 * Available as of Jun. 30, 2008. ** May not add to total of zip codes *** During the first two months of 2nd quarter. Zip Code (Quarter) 08002 $248,200 7.96% 68-12.82% 82 97.1% 08003 $306,600-8.31% 83-43.15% 78 95.2% 08004 $207,700-2.94% 28-39.13% 90 96.3% 08007 $210,600-4.92% 10-41.18% 66 95.7% 08009 $238,600 2.67% 34-8.11% 95 95.7% 08012 $216,300-4.29% 60-26.83% 85 98.3% 08021 $152,800-5.15% 116-23.68% 76 97.3% 08026 $194,700-8.89% 5 150.00% 62 90.2% 08029 $168,600-13.80% 13-27.78% 61 94.9% 08030 $126,200-11.25% 31-54.41% 71 95.7% 08031 $177,000-0.39% 31-18.42% 69 96.9% 9

Camden County, NJ Zip Code (Quarter) 08033 $453,600-10.14% 53-7.02% 85 95.5% 08034 $242,000-6.92% 58-22.67% 83 96.9% 08035 $284,300-1.22% 24 26.32% 110 95.6% 08037 $229,100 4.47% 6-62.50% 31 96.0% 08043 $324,700-19.43% 90-6.25% 88 94.7% 08045 $197,900 6.63% 6-33.33% 96 96.3% 08049 $182,200 0.11% 15-21.05% 62 97.1% 08059 $183,100 6.95% 20 11.11% 48 97.3% 08078 $183,400-11.61% 22-18.52% 77 96.7% 08081 $209,300 1.11% 182-11.22% 92 95.4% 08083 $175,800-19.39% 23-20.69% 78 96.8% 08084 $167,200-16.32% 10-41.18% 64 93.9% 08089 $335,800 69.17% 3-72.73% 24 96.4% 08091 $196,500-11.13% 7-58.82% 79 96.6% 08095 $162,500 N/A 2 N/A 73 94.5% 08102 $196,200 135.25% 16 220.00% 73 101.8% 08103 $58,400-14.62% 12-57.14% 86 86.3% 08104 $63,200-13.54% 44-49.43% 79 93.4% 08105 $84,400-4.20% 36-23.40% 66 97.5% 08106 $203,000-11.28% 26-25.71% 61 96.2% 08107 $176,800-1.83% 28-40.43% 81 97.4% 08108 $234,400-8.08% 55-15.38% 74 94.9% 08109 $193,800-10.11% 61-11.59% 78 95.6% 08110 $147,700-9.05% 59 0.00% 76 97.3% 10

Buyer's Gloucester County, NJ 1 2 3 4 5 Seller's Labor : In the first two months of the second quarter, 577 jobs were added to the payrolls of Gloucester County. As a result of these new jobs, the average monthly unemployment rate fell from 5.2% during the first quarter to 5% for April and May. The strong employment climate may help to create demand for home purchases. Favorable mortgage rates should augment this trend. Housing : Q1' 08 Q2' 08 Q3' 08 (Forecast) # Homes on the * # ** # New Homes Built *** Avg # of Days $226,300 $234,300 2,504 1,639 529 744 198 148 96 85 * Available as of Jun. 30, 2008. ** May not add to total of zip codes *** During the first two months of 2nd quarter. Zip Code (Quarter) 08012 $228,300-5.19% 35-48.53% 49 97.0% 08014 $200,000-2.91% 1 0.00% 196 95.2% 08020 $255,400-7.76% 7-12.50% 110 95.6% 08027 $201,000 0.55% 15 15.38% 92 96.6% 08028 $215,900-0.14% 53-8.62% 103 95.2% 08032 $220,000 12.82% 1-50.00% 86 93.7% 08051 $198,500-8.02% 34-35.85% 65 97.6% 08056 $405,100-8.12% 16 45.45% 104 94.8% 08061 $350,900 17.36% 8-27.27% 92 96.9% 08062 $370,100-14.35% 41-4.65% 101 94.2% 08063 $159,000-2.39% 12 9.09% 74 96.4% 11

Gloucester County, NJ Zip Code (Quarter) 08066 $121,400-15.52% 26-13.33% 66 95.2% 08071 $169,500-21.60% 18-37.93% 58 95.5% 08080 $264,100-2.08% 125-18.83% 97 96.7% 08081 $229,000-12.02% 2-33.33% 108 95.9% 08085 $323,400-8.59% 49-14.04% 81 95.0% 08086 $226,500-10.65% 21-19.23% 93 95.7% 08090 $213,100-10.57% 25-21.88% 99 96.7% 08093 $175,700 3.47% 21-22.22% 62 97.8% 08094 $216,400-10.50% 86-9.47% 80 96.6% 08096 $201,000-9.78% 104-20.00% 93 96.2% 08097 $174,900-24.45% 5-54.55% 19 92.2% 08312 $205,500-0.15% 24-7.69% 59 98.3% 08322 $224,600-14.67% 27-6.90% 104 93.1% 08328 $158,600-35.27% 5-16.67% 86 92.7% 08343 $276,900 45.13% 7 16.67% 134 93.6% 08344 $210,200-4.06% 3-72.73% 79 98.4% 08360 $155,000-34.01% 1 0.00% 42 91.7% OTHER $222,000 N/A 1 N/A 154 96.6% 12

Buyer's Mercer County, NJ 1 2 3 4 5 Seller's Labor : A decline in employment of 171 jobs was offset by a decrease in the number of persons looking for work during the first two months of the second quarter. The net effect was no change in the 4.6% average monthly unemployment rate from the first quarter. Despite the job losses, mortgage rates remain at historically favorable levels. These low rates are helping to keep home buyers interested. Housing : Q1' 08 Q2' 08 Q3' 08 (Forecast) # Homes on the * # ** # New Homes Built *** Avg # of Days $342,900 $379,800 2,715 1,917 584 884 66 76 100 80 * Available as of Jun. 30, 2008. ** May not add to total of zip codes *** During the first two months of 2nd quarter. Zip Code (Quarter) 08512 $213,300-2.74% 10-28.57% 68 96.3% 08520 $264,800-9.50% 93-23.14% 99 96.6% 08525 $377,900-32.52% 9 0.00% 71 96.3% 08534 $515,800 4.31% 58 13.73% 81 95.6% 08540 $966,700 11.09% 122-3.94% 90 94.9% 08542 $407,100-42.77% 5-37.50% 95 96.9% 08550 $582,200-2.74% 52-30.67% 69 96.1% 08558 $2,300,000 N/A 1 N/A 14 96.0% 08560 $373,500-34.52% 8 14.29% 190 96.6% 08561 $537,000 N/A 1 N/A 53 95.9% 08609 $98,100-20.95% 20 33.33% 95 96.0% 13

Mercer County, NJ Zip Code (Quarter) 08610 $212,600-3.54% 68-40.87% 82 97.0% 08611 $84,400-32.53% 55-33.73% 75 94.8% 08618 $172,300-13.59% 52-16.13% 72 97.1% 08619 $275,400 2.99% 65-2.99% 70 96.2% 08620 $310,400 10.38% 24-11.11% 58 97.9% 08628 $276,300-12.78% 21-4.55% 74 96.4% 08629 $137,900-20.47% 24-51.02% 116 95.0% 08638 $191,900-3.37% 46-17.86% 91 94.8% 08648 $332,200-2.67% 89-19.82% 68 96.9% 08690 $307,900-5.12% 60-17.81% 85 97.3% 08691 $374,800-1.39% 57-9.52% 64 97.4% 14

Buyer's Salem County, NJ 1 2 3 4 5 Seller's Labor : A total of 120 jobs were created during April and May. The new jobs in Salem County were offset by a proportional increase in the number of job seekers. The net result was no change in the average monthly unemployment rate for the first two months of the second quarter from the 5.8% rate of the first quarter. The new jobs should help demand. Mortgage rates remain historically favorable which should augment the new jobs to keep the market moving. # Homes on the * # ** # New Homes Built *** Avg # of Days Housing : Q1' 08 Q2' 08 Q3' 08 $199,000 $194,200 601 350 88 123 20 15 83 100 (Forecast) * Available as of Jun. 30, 2008. ** May not add to total of zip codes *** During the first two months of 2nd quarter. Zip Code (Quarter) 08001 $462,000 55.45% 1-66.67% 51 94.3% 08069 $147,600 9.09% 27-37.21% 95 95.1% 08070 $201,800 13.63% 30 0.00% 127 98.1% 08072 $350,000 118.75% 1 0.00% 202 92.3% 08079 $130,300-4.68% 19-34.48% 70 94.2% 08085 $95,000 N/A 1 N/A 293 95.1% 08098 $232,800-22.94% 23-17.86% 69 95.8% 08302 $112,300-50.96% 3 200.00% 54 95.0% 08318 $237,800 3.48% 21-36.36% 122 94.5% 08343 $255,200-56.38% 4 300.00% 137 90.2% 08344 $44,000 N/A 1 N/A 26 97.8% 15

Buyer's Berks County, PA 1 2 3 4 5 Seller's Labor : In the first two months of the second quarter, 1,833 jobs were added to the payrolls of Berks County. As a result of these new jobs, the average monthly unemployment rate fell from 5.3% during the first quarter to 4.9% for April and May. The strong employment climate may help to create demand for home purchases. Favorable mortgage rates should augment this trend. Housing : Q1' 08 Q2' 08 Q3' 08 (Forecast) # Homes on the * # ** # New Homes Built *** Avg # of Days $168,900 $183,500 3,985 2,079 881 1,158 76 76 83 85 * Available as of Jun. 30, 2008. ** May not add to total of zip codes *** During the first two months of 2nd quarter. Zip Code (Quarter) 17026 $130,400-37.88% 1 0.00% 6 100.4% 17067 $187,000 24.67% 2 100.00% 27 98.7% 17087 $197,300 N/A 2 N/A 22 98.0% 17569 $252,200 0.92% 2 100.00% 117 99.6% 18011 $289,900 6.04% 3-62.50% 136 18062 $355,000 12.70% 1 0.00% 291 86.6% 18092 $680,000 N/A 1 N/A 71 19503 $175,700-7.38% 3-25.00% 64 95.4% 19504 $330,100 11.37% 4-42.86% 112 94.9% 19505 $250,800 27.18% 4-20.00% 58 98.9% 19506 $252,700-3.37% 20-20.00% 159 95.8% 16

Berks County, PA Zip Code (Quarter) 19507 $243,000 8.34% 3-25.00% 46 96.3% 19508 $214,900 9.59% 32-45.76% 115 96.5% 19510 $234,300-0.42% 27-20.59% 161 98.5% 19512 $223,200 3.05% 32-27.27% 39 99.6% 19518 $270,100 8.47% 45-16.67% 120 97.9% 19520 $397,600 16.05% 2-66.67% 0 110.3% 19522 $209,500-18.64% 31-42.59% 64 96.9% 19526 $168,600 16.52% 27-6.90% 67 100.4% 19529 $330,000-4.35% 2 0.00% 87 95.0% 19530 $229,700 8.71% 15-11.76% 101 95.8% 19533 $260,000 21.72% 19-20.83% 116 100.2% 19534 $244,300 10.05% 3 0.00% 101 99.9% 19539 $287,800-13.50% 7 16.67% 137 95.5% 19540 $264,600 19.30% 30-31.82% 66 97.7% 19541 $269,200 16.74% 9-30.77% 107 94.5% 19543 $281,300 0.43% 16-38.46% 101 99.1% 19544 $118,800 N/A 1 N/A 183 95.0% 19547 $265,400-3.10% 13 30.00% 60 87.8% 19551 $186,300-11.50% 19 5.56% 69 97.4% 19555 $172,300 8.64% 10 100.00% 91 97.7% 19560 $157,800-4.65% 35-30.00% 147 98.5% 19562 $143,000-12.48% 4-55.56% 116 96.0% 19565 $215,800 3.15% 23-43.90% 80 99.1% 19567 $171,800-0.06% 14-22.22% 110 97.8% 19601 $69,000-7.13% 56-28.21% 71 96.0% 19602 $52,000 2.77% 43-14.00% 71 93.8% 19604 $56,100-16.39% 74-33.93% 68 94.7% 19605 $169,900-12.29% 83-7.78% 90 98.6% 19606 $185,300 6.01% 145-7.64% 82 99.2% 19607 $165,800-3.38% 87-1.14% 67 98.8% 19608 $224,900-8.91% 94 0.00% 57 98.7% 19609 $171,900 4.24% 47-2.08% 80 98.8% 19610 $276,200 11.96% 58-1.69% 90 96.6% 19611 $125,600 10.27% 53 60.61% 102 98.6% 17

Buyer's Bucks County, PA 1 2 3 4 5 Seller's Labor : In the first two months of the second quarter, 3,556 jobs were added to the payrolls of Bucks County. As a result of these new jobs, the average monthly unemployment rate fell from 4.8% during the first quarter to 4.4% for April and May. The strong employment climate may help to create demand for home purchases. Favorable mortgage rates should augment this trend. Housing : Q1' 08 Q2' 08 Q3' 08 (Forecast) # Homes on the * # ** # New Homes Built *** Avg # of Days $346,100 $339,100 4,199 3,233 1,106 1,593 222 134 78 71 * Available as of Jun. 30, 2008. ** May not add to total of zip codes *** During the first two months of 2nd quarter. Zip Code (Quarter) 18036 $298,300-36.27% 3-57.14% 132 96.5% 18041 $200,000 N/A 1 N/A 194 88.9% 18055 $225,000-59.82% 1 0.00% 3 100.0% 18077 $394,400 37.85% 5-28.57% 104 94.4% 18081 $290,000 27.75% 1-50.00% 332 89.0% 18901 $458,600 10.40% 105-24.46% 76 94.2% 18910 $575,000 N/A 1 N/A 201 95.8% 18914 $349,500-7.20% 49-20.97% 74 95.9% 18917 $194,700-39.44% 4-33.33% 77 98.9% 18920 $475,000 51.76% 1-50.00% 11 97.1% 18923 $390,700 14.41% 3 50.00% 39 99.8% 18

Bucks County, PA Zip Code (Quarter) 18925 $490,000-10.81% 23-25.81% 71 95.9% 18929 $469,100-2.51% 25-51.92% 114 95.5% 18930 $315,500-9.42% 2-33.33% 60 99.5% 18934 $500,000-69.09% 1-50.00% 276 100.0% 18938 $773,200 9.74% 35-52.05% 114 94.7% 18940 $473,700 1.43% 122-3.17% 70 95.0% 18942 $655,000 75.84% 3-57.14% 162 86.0% 18944 $296,700-17.24% 63-5.97% 75 18946 $450,000 24.14% 1 0.00% 99 96.8% 18947 $460,900-22.50% 7-53.33% 51 94.6% 18949 $372,000 N/A 1 N/A 66 87.6% 18950 $295,000 N/A 1 N/A 27 100.0% 18951 $259,000-5.30% 126-6.67% 75 97.4% 18954 $480,100 5.01% 22 29.41% 87 96.1% 18955 $186,900 3.15% 4-60.00% 44 92.9% 18960 $273,200-7.07% 46-25.81% 105 96.4% 18962 $246,000 N/A 2 N/A 39 99.4% 18964 $360,000-21.05% 2 0.00% 9 94.8% 18966 $336,900-7.16% 111-22.38% 50 96.3% 18969 $213,700-4.17% 18 20.00% 81 96.9% 18970 $190,000-73.61% 1 0.00% 47 100.1% 18972 $360,100 4.08% 9 12.50% 90 96.4% 18974 $277,600-15.90% 95-23.39% 67 96.4% 18976 $340,500-10.23% 55 0.00% 77 96.7% 18977 $514,500-13.50% 13-18.75% 80 95.2% 19006 $367,800 N/A 4 N/A 49 95.3% 19007 $183,600-7.46% 50-12.28% 80 96.5% 19020 $282,100 2.84% 104-2.80% 57 96.6% 19021 $191,100-10.78% 26-16.13% 53 96.0% 19030 $262,100 0.61% 23-45.24% 63 97.4% 19047 $323,700-7.51% 74-17.78% 59 96.8% 19053 $301,700-6.65% 61-14.08% 59 96.5% 19054 $240,700 2.78% 32-27.27% 64 99.7% 19055 $201,600-3.54% 52 30.00% 74 97.7% 19056 $245,200-6.84% 31-18.42% 60 97.1% 19057 $190,500-11.97% 44-20.00% 58 97.8% 19067 $374,200-5.93% 143-15.88% 77 96.7% 19

Bucks County, PA Zip Code (Quarter) 19440 $442,500-14.38% 4-50.00% 149 92.0% OTHER $493,500 0.02% 44-32.31% 68 97.0% 20

Buyer's Chester County, PA 1 2 3 4 5 Seller's Labor : In the first two months of the second quarter, 2,722 jobs were added to the payrolls of Chester County. As a result of these new jobs, the average monthly unemployment rate fell from 3.8% during the first quarter to 3.6% for April and May. The strong employment climate may help to create demand for home purchases. Favorable mortgage rates should augment this trend. Housing : Q1' 08 Q2' 08 Q3' 08 (Forecast) # Homes on the * # ** # New Homes Built *** Avg # of Days $359,400 $380,600 4,162 2,878 930 1,484 324 285 90 73 * Available as of Jun. 30, 2008. ** May not add to total of zip codes *** During the first two months of 2nd quarter. Zip Code (Quarter) 10465 $477,300 N/A 1 N/A 55 119.6% 17527 $250,000 N/A 1 N/A 44 90.9% 19073 $484,700-5.99% 8-20.00% 69 96.6% 19087 $425,100-3.17% 83-6.74% 42 96.9% 19301 $396,900-5.05% 36 16.13% 59 96.7% 19310 $222,700 5.75% 7 75.00% 56 97.8% 19311 $379,300-8.23% 18-10.00% 115 94.6% 19312 $696,700 4.69% 46-13.21% 63 97.4% 19317 $585,900-19.88% 18-30.77% 102 95.1% 19320 $206,600-8.50% 145-20.77% 92 19330 $961,800 296.13% 11-21.43% 66 94.3% 21

Chester County, PA Zip Code (Quarter) 19333 $727,000 12.50% 22-33.33% 61 97.0% 19335 $328,300-3.75% 197-7.08% 70 98.3% 19341 $376,600 2.28% 57 18.75% 71 96.8% 19342 $800,000 N/A 1 N/A 201 100.1% 19343 $461,000 11.25% 27 28.57% 108 95.8% 19344 $281,800 8.22% 13-38.10% 68 96.7% 19347 $580,000 N/A 1 N/A 49 96.7% 19348 $394,700-11.00% 59-28.05% 105 95.4% 19350 $389,400-12.20% 31-6.06% 84 95.1% 19352 $368,500-4.06% 20-37.50% 93 96.4% 19355 $607,400-1.25% 83-4.60% 67 94.6% 19362 $195,800-52.34% 6 100.00% 118 95.7% 19363 $300,800-4.81% 29-44.23% 63 98.5% 19365 $210,500-11.89% 12-55.56% 103 97.1% 19372 $234,900-14.36% 6 20.00% 124 94.7% 19375 $1,983,500 N/A 2 N/A 41 95.0% 19380 $362,200-5.70% 130-21.21% 62 19382 $387,300-4.89% 156-17.46% 75 19390 $268,700-9.62% 31-38.00% 127 95.3% 19421 $880,000 58.56% 1 0.00% 410 97.8% 19425 $527,400-0.92% 51-19.05% 76 95.1% 19457 $250,000-13.10% 1-66.67% 334 98.1% 19460 $320,300-1.54% 143 12.60% 69 97.4% 19465 $287,400-20.52% 46-25.81% 103 95.2% 19475 $297,900 16.73% 28 7.69% 49 101.5% 19481 $335,000 N/A 1 N/A 100 95.7% 19520 $237,600-22.68% 8 0.00% 58 94.9% 19543 $379,500 N/A 2 N/A 87 97.6% 22

Buyer's Delaware County, PA 1 2 3 4 5 Seller's Labor : In the first two months of the second quarter, 2,890 jobs were added to the payrolls of Delaware County. As a result of these new jobs, the average monthly unemployment rate fell from 4.8% during the first quarter to 4.7% for April and May. The strong employment climate may help to create demand for home purchases. Favorable mortgage rates should augment this trend. Housing : Q1' 08 Q2' 08 Q3' 08 (Forecast) # Homes on the * # ** # New Homes Built *** Avg # of Days $247,600 $266,600 3,533 2,675 1,119 1,564 60 76 74 69 * Available as of Jun. 30, 2008. ** May not add to total of zip codes *** During the first two months of 2nd quarter. Zip Code (Quarter) 19003 $314,600 2.44% 24-40.00% 44 97.0% 19008 $351,900-3.16% 39-41.79% 65 96.9% 19010 $437,000-35.79% 40-13.04% 86 96.8% 19013 $76,300-8.51% 55-12.70% 113 95.0% 19014 $253,900-1.32% 72-15.29% 51 19015 $156,200-4.87% 64-20.99% 59 19018 $160,900-3.59% 65-26.97% 63 96.5% 19022 $110,100-16.08% 10-9.09% 36 92.9% 19023 $91,600-3.07% 84-1.18% 71 95.4% 19026 $208,300-5.66% 102-18.40% 59 97.0% 19029 $169,800 18.66% 11 22.22% 84 102.3% 23

Delaware County, PA Zip Code (Quarter) 19032 $119,500-8.22% 33-26.67% 59 94.6% 19033 $208,600 4.40% 19-9.52% 42 97.1% 19036 $158,500 1.67% 36-28.00% 57 95.9% 19041 $1,490,000 45.74% 5-28.57% 103 94.1% 19043 $198,700 6.77% 4-63.64% 83 97.0% 19050 $152,000-4.22% 77-27.36% 69 96.4% 19061 $241,400-12.31% 107-9.32% 85 97.9% 19063 $408,800-7.34% 96-4.00% 59 19064 $274,800-9.52% 74-22.92% 64 96.6% 19065 $405,000 N/A 1 N/A 35 88.1% 19070 $214,800-6.73% 23 35.29% 67 96.4% 19073 $704,800 30.21% 55-25.68% 83 100.1% 19074 $190,400 4.33% 10-50.00% 54 98.5% 19076 $156,000-20.41% 20 25.00% 54 95.1% 19078 $193,700-1.97% 34-8.11% 58 96.1% 19079 $113,000-11.58% 33-10.81% 65 95.0% 19081 $279,300-24.00% 23-8.00% 74 95.9% 19082 $119,900-3.93% 101-24.63% 81 95.4% 19083 $289,100-2.59% 136-18.07% 56 97.4% 19085 $896,100-17.44% 9-18.18% 116 96.1% 19086 $269,100-6.01% 49-36.36% 81 96.2% 19087 $901,000 27.10% 38-37.70% 65 96.4% 19094 $155,300-24.13% 9-50.00% 67 96.5% 19096 $351,700 0.09% 3-25.00% 31 97.8% 19317 $461,200 16.32% 23-14.81% 172 93.4% 19333 $1,410,000 N/A 1 N/A 67 94.3% 19342 $371,800-0.48% 49-16.95% 68 96.0% 19373 $699,300-9.11% 8-20.00% 151 96.5% 19382 $567,500-25.52% 2-71.43% 23 98.7% 24

Buyer's Montgomery County, PA 1 2 3 4 5 Seller's Labor : In the first two months of the second quarter, 4,400 jobs were added to the payrolls of Montgomery County. As a result of these new jobs, the average monthly unemployment rate fell from 4.2% during the first quarter to 4% for April and May. The strong employment climate may help to create demand for home purchases. Favorable mortgage rates should augment this trend. Housing : Q1' 08 Q2' 08 Q3' 08 (Forecast) # Homes on the * # ** # New Homes Built *** Avg # of Days $311,900 $327,700 5,826 4,255 1,620 2,410 290 235 82 69 * Available as of Jun. 30, 2008. ** May not add to total of zip codes *** During the first two months of 2nd quarter. Zip Code (Quarter) 18041 $188,600 0.27% 13-51.85% 75 98.1% 18054 $276,600 23.21% 9-35.71% 92 95.1% 18070 $182,500-8.75% 1 0.00% 34 91.3% 18073 $258,400-12.94% 19-34.48% 82 98.8% 18074 $276,000 3.53% 19-24.00% 67 94.4% 18076 $175,300-22.91% 3-70.00% 90 96.3% 18915 $352,000-5.71% 1-50.00% 160 98.1% 18936 $222,700-6.03% 2 0.00% 86 96.5% 18964 $252,600-15.35% 39-29.09% 68 97.9% 18969 $336,700 16.59% 24-35.14% 86 96.0% 19001 $251,700-4.80% 62 12.73% 41 25

Montgomery County, PA Zip Code (Quarter) 19002 $522,100-1.58% 88-16.98% 67 98.9% 19003 $420,100 4.35% 20-13.04% 59 95.8% 19004 $502,300-9.48% 43-4.44% 68 96.0% 19006 $494,800 16.42% 56 12.00% 67 94.0% 19010 $1,015,400 3.46% 22-24.14% 42 94.5% 19012 $255,300-12.84% 24 9.09% 78 96.6% 19025 $344,400-28.35% 16 23.08% 32 96.4% 19027 $271,000-7.76% 58-20.55% 105 95.2% 19031 $313,100-27.74% 18 5.88% 41 95.8% 19034 $419,100-34.75% 13-38.10% 105 92.3% 19035 $1,081,900-22.82% 9-25.00% 19 94.5% 19038 $285,700-19.18% 102-25.55% 50 97.4% 19040 $276,900 5.93% 47-37.33% 62 19041 $1,044,500 31.65% 11 22.22% 117 94.4% 19044 $292,600 4.50% 47-35.62% 51 97.1% 19046 $369,400-10.12% 54 1.89% 70 95.3% 19066 $489,100-15.44% 8-72.41% 71 96.3% 19072 $508,500-11.19% 34-20.93% 52 95.5% 19075 $291,800 1.25% 33 57.14% 52 19083 $279,900-32.72% 1 0.00% 3 100.0% 19085 $818,800-32.93% 8-63.64% 59 95.5% 19087 $441,200-29.72% 17 30.77% 60 96.6% 19090 $249,800 1.50% 44-27.87% 51 96.4% 19095 $234,700-33.94% 16 33.33% 73 92.6% 19096 $550,000 23.76% 47-9.62% 37 19401 $164,500-6.69% 129-17.31% 87 95.6% 19403 $244,200-16.51% 147 6.52% 79 96.6% 19405 $197,600-5.23% 21 23.53% 83 96.0% 19406 $288,900 0.77% 67 15.52% 85 96.5% 19422 $525,900 16.58% 72-19.10% 111 97.1% 19426 $330,900-0.72% 124-14.48% 74 97.3% 19428 $312,700 6.91% 76 0.00% 57 94.1% 19438 $347,000 9.74% 69-1.43% 71 97.6% 19440 $292,800 6.90% 35-2.78% 69 97.6% 19444 $359,900-12.65% 28-26.32% 80 96.8% 19446 $306,500 2.51% 176-13.73% 72 97.8% 19453 $206,500 31.36% 10 0.00% 64 95.0% 26

Montgomery County, PA Zip Code (Quarter) 19454 $315,800-7.39% 89-30.47% 57 95.8% 19456 $418,300 N/A 3 N/A 26 89.8% 19460 $456,900 24.70% 9-47.06% 40 96.0% 19462 $369,600 21.82% 60 30.43% 58 97.8% 19464 $178,900 4.31% 148-26.73% 84 97.7% 19468 $233,700-12.37% 91-28.91% 84 97.9% 19473 $394,500 30.20% 43-17.31% 73 100.5% 19474 $326,100-22.28% 8 166.67% 69 98.9% 19477 $775,000 N/A 2 N/A 129 82.9% 19478 $242,000 22.22% 1-50.00% 68 96.8% 19490 $340,600 N/A 1 N/A 14 100.2% 19492 $275,000 N/A 2 N/A 4 99.2% 19504 $231,300-33.34% 2 0.00% 13 96.9% 19512 $223,900 27.94% 3 50.00% 206 98.0% 19525 $286,800 1.06% 46 15.00% 76 27

Buyer's Philadelphia County, PA 1 2 3 4 5 Seller's Labor : In the first two months of the second quarter, 6,177 jobs were added to the payrolls of Philadelphia County. As a result of these new jobs, the average monthly unemployment rate fell from 6.9% during the first quarter to 6.6% for April and May. The strong employment climate may help to create demand for home purchases. Favorable mortgage rates should augment this trend. Housing : Q1' 08 Q2' 08 Q3' 08 (Forecast) # Homes on the * # ** # New Homes Built *** Avg # of Days $188,000 $194,600 10,194 6,771 2,791 3,581 173 108 74 72 * Available as of Jun. 30, 2008. ** May not add to total of zip codes *** During the first two months of 2nd quarter. Zip Code (Quarter) 19102 $447,900-7.67% 32 77.78% 138 94.1% 19103 $520,600 2.78% 90-3.23% 139 96.6% 19104 $180,900-25.25% 28-31.71% 94 92.3% 19106 $490,400 0.76% 68-11.69% 79 93.6% 19107 $491,300 44.46% 49-30.99% 92 19111 $170,500-3.73% 171-1.72% 67 96.3% 19114 $242,000-0.37% 71-31.07% 77 99.3% 19115 $235,400-4.11% 85-3.41% 61 96.0% 19116 $228,100-3.27% 65-2.99% 53 96.3% 19118 $502,000-15.77% 32-31.91% 56 94.2% 19119 $280,700 7.47% 85-15.84% 60 96.6% 28

Philadelphia County, PA Zip Code (Quarter) 19120 $87,000-9.19% 174-17.54% 66 95.7% 19121 $92,200-17.09% 43-2.27% 63 90.4% 19122 $140,400-24.68% 30 57.89% 75 94.5% 19123 $381,400 4.04% 41-24.07% 79 96.5% 19124 $89,500-8.95% 187-21.10% 66 95.5% 19125 $155,800-4.71% 117 34.48% 69 94.5% 19126 $146,900 12.05% 31-16.22% 63 94.0% 19127 $265,300 6.33% 39 0.00% 58 97.0% 19128 $247,600-4.03% 135-27.42% 48 97.5% 19129 $243,200 1.80% 53 26.19% 51 95.3% 19130 $360,000 4.38% 117-19.86% 80 96.3% 19131 $119,000 5.78% 61-15.28% 77 93.0% 19132 $49,800-3.11% 44 25.71% 60 91.4% 19133 $49,400 0.20% 8-61.90% 81 86.6% 19134 $80,100 18.49% 135-34.15% 62 94.5% 19135 $106,500-9.21% 121-6.20% 57 96.3% 19136 $139,300 0.14% 118 7.27% 74 97.3% 19137 $124,800-8.91% 27-37.21% 69 95.1% 19138 $82,400-8.65% 62-23.46% 63 95.2% 19139 $106,400 31.85% 61-15.28% 72 95.6% 19140 $54,600 4.00% 64-31.18% 72 92.5% 19141 $80,600-5.73% 46-32.35% 68 96.5% 19142 $68,000-4.23% 69-32.35% 67 93.9% 19143 $126,200 17.40% 110-15.38% 86 93.6% 19144 $112,800 0.98% 68-28.42% 70 95.4% 19145 $139,500-0.43% 118-25.79% 96 92.4% 19146 $293,200 3.79% 212-11.30% 96 96.0% 19147 $349,600-4.35% 156-38.34% 101 95.0% 19148 $155,400-0.45% 176-10.66% 77 94.1% 19149 $122,800-4.73% 156-27.10% 61 95.8% 19150 $149,700 1.42% 38-26.92% 73 98.9% 19151 $128,900-2.13% 96 6.67% 77 95.6% 19152 $200,600 2.82% 79-16.84% 55 96.8% 19153 $119,800-1.07% 33-35.29% 90 19154 $199,300 3.75% 74-21.28% 50 97.7% 29

Trends Improvement or Flash-in-the-Pan? By Ken Fears Manager, Regional Economics Now that we can review the second quarter of 2008, sales rose with the seasonal upswing in demand and prices. But many factors such as moderating prices and historically low mortgage rates suggest that affordability is better today than it s been in years. With strong current conditions and the potential for rising mortgage rates, many periodicals and news figure-heads, even CNBC s once pessimist Jim Kramer has advised that now is the time to be looking to purchase. But are potential buyers following suit? Home sales rose 2.0% nationally between April and May. This increase came even as mortgage rates rose from their January lows around 5.5% to nearly 6.4% in late June. Historically, sales and prices have tended to rise every spring and summer and decline during the fall and winter. This pattern is driven by the school year: families tend to move when the children are out of school. Since this extra demand is added to core demand during the warm months, sales volume increases. Also, as families require larger homes, the median price tends to rise as well. Give this seasonal pattern, can it be asserted that the recent increase in sales is due to seasonal buying patterns or an actually improvement in buyer sentiments? Here in the market covered by TREND MLS, sales fell 17.3% compared to the same period in 2007, while the average price has decreased 2.0% over this same period. But simply looking at sales and prices on a year over year basis may not be enough. Since the national market slowdown has been in motion for nearly 2 years, there could be a year-over-year difference that does not account for an improvement in buyers sentiments during the intervening three quarters. In short, this market may be slower than a year ago, but it could have picked up in last three to six months. Changes to days on market and the concessions that sellers make might shed some light on this issue. 135 130 125 120 115 110 105 100 2007 Q2 2007 Q3 2007 Q4 2008 Q1 2008 Q2 97% 96% 95% 94% 93% 92% 91% 90% 89% Days Concession (right) As can be seen from the graph above, average days on market rose over the 15-month period ending in June. Over this same period, the average concession rose. These patterns suggest that there has not been an improvement in consumers perception of the market and willingness to participate actively. This housing market is one of the most difficult in memory. The buyers that enter the market are finding their way to working out deals with sellers. But getting buyers to enter the market is the big problem. As the market moves away stalemate and to another, lower equilibrium, buyers are likely to come back to the market seeking deals. Potential buyers need to realize that deals won t seek them out, though. Good deals must be sought and bargained for. 30

Real Estate - A Nice "Commodity" Play! by Lawrence Yun, NAR Chief Economist Commentary We are all well aware of high commodity prices in today's market. Most tangible raw materials are commanding sky high prices. Oil, diesel, copper, steel, cement, and other construction related costs (except lumber) are all up substantially. Some have even brought back the Malthusian theory of too many people on earth outstripping available resources. We can see the effect in inflation figures. In the past five years the consumer price index has risen 18 percent; the producer price index for construction has increased 39 percent during the same period. In light of the resource price boom, one interesting angle that has not been delved into deeply is that real estate could be a nice commodity play. Real estate -- with all its tangible and concrete solid qualities (unlike paper financial assets) - has historically been a good hedge against inflation. High commodity prices -- and high inflation rates in the late 1970s and early 1980s -- led to double-digit gains in home prices. So why hasn't that happened this time? One reason goes back to supply and demand. Right now there are too many home sellers (some of whom are trying to sell one of several properties they own) in relation to home buyers. The short-term dynamics of high home inventory (of both new and existing homes) will require some time to work off. However, once inventory reaches a manageable level, does it then mean that real estate prices will "catch-up" to reflect high commodity costs and the high costs of construction? Think about two different households (one owner, one buyer) interested in homes situated where land is cheap and plentiful. How much are those homes worth? If a household desires to build a (new) home there, then the real price of that home will be the cost of construction. But let's assume that the home owner wanted to charge a much higher price (i.e., more than the cost of construction) to sell that home to a buyer. The buyer would do well by simply building a new home at the cost of construction rather than paying the higher asking price. So the long-term home price equilibrium can be viewed simply as the cost of production. If the cost rises, then so will the home price. In areas of the country where developable land is relatively widely available, the rising cost of construction will surely then lead to proportionately higher home prices. Of course, where land is not cheap and/or plentiful, then real estate prices will not only reflect the cost of construction, but also the shortage (in supply) and the premium value of the land. New York, San Francisco, and the Washington D.C. areas, for example, will always command high home prices because of the very limited land supply that is close to downtown job centers. Inflation has been - and always will be -- a big headache for the country, our economy and consumers. One way for consumers to assuage the pain of inflation, however, is to own commodities. A simple, good way is to own real estate. If commodity prices further accelerate for some reason, you will automatically be in the game. 31

The Forecast By Lawrence Yun, Vice President, NAR Research Forecast Modest near-term movement is expected in existing-home sales, with a recovery in sales seen during the second half of the year. The Pending Home Sales Index,* NAR s forward-looking indicator based on contracts signed in May, fell 4.7 percent to 84.7 from an upwardly revised reading of 88.9 in April, and remains 14.0 percent below May 2007 when it stood at 98.5. Some pullback after a sharp increase in the previous month was expected. The overall decline in contract signings suggests we are not out of the woods by any means. The housing stimulus bill has become a law and this will begin to make a measurable impact in raising home sales later in the year. But location has never mattered more than in the current market. Look at the pending home sales index for the West. While it s true the index slipped 1.3 percent to 97.5 in May in that region, it was 2.0 percent higher than it was in May of 2007. Indeed, some markets have seen a doubling in home sales from a year ago, while others are seeing contract signings cut in half. For instance, double-digit pending sales gains in May from a year ago were noted in Colorado Springs CO, Sacramento CA and Spartanburg SC. In addition, price conditions vary tremendously, even within a locality, depending upon a neighborhood s exposure to subprime loans. Although inflationary expectations appear to be under control for the time being, sharper consumer price gains could lead to notably higher mortgage interest rates in 2009. Based on current indicators, the 30-year fixed-rate mortgage is forecast to rise gradually to 6.8 percent by the end of this year, and then hold at that level for most of 2009. The speed at which home prices has declined in a few select markets is unprecedented, but the large price declines in those areas have enticed bargain hunters back into the market. Interestingly, there have been reports of multiple bidding after the large price cuts, so it is possible that most of the price declines have already occurred in those markets. The aggregate median existing-home price (on a national basis) is projected to fall 6.2 percent this year to $205,300, and then rise by 4.3 percent in 2009 to $214,100. New-home sales are a different story. They are likely to fall 32.3 percent to 525,000 in 2008 and decline another 3.4 percent next year to 507,000. In light of high inventory conditions, rising commodity prices and construction costs will curtail new home construction deep into next year. Housing starts, including multifamily units, will probably fall 28.7 percent to 966,000 this year, and then drop another 9.0 percent in 2009 to 879,000. The precipitous drop in starts is due in part to some overbuilding during the boom years, as well as the rising costs of construction. Officially, the U.S. economy has still not drifted into recession. In fact, GDP growth in the second quarter of this year was close to 2 percent. Growth in GDP is forecast at 1.6 percent for all of 2008 and 1.4 percent next year not spectacular, but still positive. Inflation, as measured by the Consumer Price Index, is forecast at 3.7 percent this year and 2.4 percent in 2009. Inflation-adjusted disposable personal income is projected to grow 1.5 percent in both 2008 and 2009. So, what does all this mean for housing consumers? It will continue to be a buyer s market for a while. Obviously, we will need to watch development with credit markets and the GSEs, but if a potential buyer can qualify for a mortgage, there is plenty of choice out there for homes. 32

This table reflects data available through July 2008. Economic Monitor Monthly Indicator Existing Home Sales posted 4.99 million seasonally adjusted annualized units in May a 2.0% increase from April s level. Resales rose in all regions but the South, and even there they were only down 0.5%. The national median home price for an existing home was $208,600, down 6.3% compared to a year ago. The inventory of existing homes was at a 10.8 months supply at the current sales pace. New Home Sales declined 2.5% in May to a seasonally adjusted annualized rate of 512,000 units. April s figure was revised downward to 525,000 units. Sales of new homes are off 40.3% compared to the pace in May 2007. The supply of new homes available for sale rose slightly to a 10.9 months supply. Housing Starts slipped 3.3% in May, posting a seasonally adjusted annualized rate of 975,000 units. Both single-family and multi-family units fell, but multifamily units are up compared to their year-ago level. Housing permits, generally a reliable indicator of future starts, fell for single-family units while posting a mild increase for multifamily units. Housing Affordability slipped in May. NAR s Housing Affordability Index stood at 125.4 for the month, down from the 130.6 reading in April. The decline was due in large part to increases in most of the components of the index, including a month-to-month rise in the median home price, as well as increases in mortgage rates and qualifying income. Even so, May s index is still well above the 110.4 posted in May 2007. Mortgage Rates The 30-year fixed mortgage rate jumped 28 basis points in June to 6.32%. Rates are at their highest level since since October 2007. But relatively low mortgage rates and weak home prices have been fueling local home sales in some markets such as those in California and Florida. Mortgage rates are expected to rise in the second half of the year, although at a steady level. Employment The U.S. economy shed 62,000 payroll jobs in June the sixth straight month of job losses. April and May job figures were revised and showed more job losses than previously registered. Construction jobs have borne the brunt of job cuts, losing more jobs than any other sector over the past 12 months. Bright employment spots included health care, education, government, mining (from the commodity boom), and leisure/ hospitality sectors all of which posted job gains. Economic Growth Despite ongoing job cuts, the U.S. economy did grow in the first quarter of 2008, posting a GDP growth rate of 1.0% for the quarter. The figure is an upward revision from a previous estimate of 0.9%. This is the third and final revision of GDP growth based on more complete data. For comparison, real GDP increased 0.6% in the fourth quarter of 2007. The increase reflects increased spending for services, exports of goods and services, and federal government spending. Recent Statistics May 08 4,990 Apr 08 4,890 May 07 5,930 May 08 512 Apr 08 525 May 07 857 May 08 975 Apr 08 1,008 May 07 1,436 May 08 125.4 Apr 08 130.6 May 07 110.4 June 08 6.32% May 08 6.04% June 07 6.61% June 08-62 May 08-62 12-month total -42 thousand 2008:I 1.0% 2007:IV 0.6% 2007:I 1.2% Likely Direction Over the Next Six Months Forecast Sales activity is getting turbo charged in areas with notable price declines as buyers pick up bargains. Very few new homes being built High commodity prices will cut profit margins and negatively impact construction Sizable gains in California, Florida, Nevada, and Arizona Inching higher because mortgage lenders want to be protected from inflation GDP expands and lifts labor demand GDP expands but not robustly as consumers are tapped out Notes: All rate are seasonally adjusted. New home sales, existing home sales, and housing starts are shown in thousands. Employment growth is shown as month-to-month change in thousands. Inflation is shown as the month-to-month change in the Consumer Price Index. Sources: NAR, Bureau of the Census, Bureau of Labor Statistics, Freddie Mac, and the Mortgage Bankers Association 33