Ron Peltier, the chairman of Home Services (Warren Buffett's real estate company and my ultimate boss) came out with an interesting article on the current state of the real estate market that I wanted to share. To those of you on the fence about purchasing a home - there is no time like the present and you never realize you are at the "bottom" until after you are already heading back up...


FOR IMMEDIATE RELEASE Contact: Israel Kreps
Kreps DeMaria PR
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UPTURN IN DECEMBER HOME SALES A HOPEFUL SIGN THAT
U.S. RESIDENTIAL REAL ESTATE MARKET MAY BE BOTTOMING-OUT
IN TERMS OF TRANSACTION VOLUME,
SAYS CHAIRMAN OF HOMESERVICES OF AMERICA

MINNEAPOLIS, MN (February __, 2009) – Analysts predict that many challenges will continue to face the U.S. residential real estate market before a full recovery is achieved, but an unexpected upturn in December home sales could signal that one of those crucial benchmarks -- transaction volume -- is on the brink of bottoming out.
“There are many issues that have to be resolved before we can say that the real estate market is truly in recovery, but transaction volume is one of the lynchpins of the process,” says Ron Peltier, chairman and CEO, HomeServices of America, Inc., the second largest, full service independent residential real estate brokerage firm and the second largest brokerage-owned settlement services provider (mortgage, title, escrow and insurance) in the United States.
“To see residential sales activity increase despite the nation’s economic challenges suggests that we have hit a point where consumers are beginning to feel confident about the value of their purchase,” continues Peltier. “Recovery cannot reach fruition unless the consumer feels secure in the long-term value of owning a home, and it seems that we are entering the ‘tipping point’ of that process.”
Peltier notes that housing affordability has reached a 20-year-high. Also, the impact of distressed properties, which HomeServices companies now account for 35% of aggregate sales, has spurred activity.
While sales activity rose at year end, home prices fell about 16 percent in 2008 and are now down about 25 percent from the recent market peak.
“There has been tremendous erosion in values – largely because of the high number of distressed sales and foreclosures,” he said. “The foreclosures have created a bifurcated market, where unfortunately, the sheer volume of distressed properties is dragging down

the entire marketplace. We anticipate this phenomenon will begin to dissipate towards the end of 2009, as consumers absorb these properties, and ongoing government stimulus programs continue to push the economy -- and specifically the financial markets -- in a positive direction.”
Recently, the National Association of Realtors® reported that existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 6.5 percent in December, while housing inventory fell 11.7 percent at year-end.
For the entire year, the U.S. posted 4.9 million existing-home sales, a 13.1 percent drop from 5.6 million transactions in 2007. Peltier noted that overall volume in the five million existing-home sales is the sustainable level, a 25 percent decrease from the recent market peak of 7.2 million, a volume chiefly fueled by speculators.
“It’s no coincidence that the 25 percent decrease in volume mirrors the departure of speculators from the market,” continues Peltier. “We believe five million existing home sales is the appropriate floor to regain stability in the market.”
“Buyers who have been sitting on the sidelines now have a compelling reason to move forward with a purchase in the months ahead,” he said. “Housing is an extremely good value these days.”
Peltier added that if mortgage rates remain low, as expected, median sales prices are likely to stabilize by the end of 2009, despite the nation’s overall economic weakness.
“We do not expect a ‘U-shaped’ recovery curve it will be a slow and steady growth line that will start in 2010,” concludes Peltier, “values in some areas, particularly the hardest hit markets, may slide more, but we are hopeful that wholesale drop in values may be nearly over, and that is good news for the health of our overall housing market.”

About HomeServices of America
HomeServices of America, Inc. based in Minneapolis, Minn., is the second-largest homeownership service provider in the United States. Owned by MidAmerican Energy Holdings Company, an affiliate of Berkshire Hathaway Inc., HomeServices’ operating companies offer integrated real estate services, including brokerage services, mortgage originations, title and closing services, property and casualty insurance, home warranties and other homeownership services. HomeServices Relocation, LLC is the full-service relocation arm of HomeServices of America which provides every aspect of domestic and international relocation to corporations around the world. HomeServices operates in 19 states under the following residential real estate brand names: Carol Jones REALTORS; CBSHOME Real Estate; Champion Realty Inc.; Edina Realty; EWM REALTORS; Harry Norman, REALTORS; HOME Real Estate; Huff Realty; Iowa Realty; Jenny Pruitt and Associates, REALTORS; Long Companies; Prudential California Realty; Prudential Carolinas Realty; Prudential First Realty; Prudential York Simpson Underwood Realty; RealtySouth; Rector-Hayden REALTORS; Reece & Nichols; Roberts Brothers Inc.; Semonin REALTORS and Woods Bros. Realty. Information about HomeServices and the locations of its subsidiary companies is available at http://www.homeservices.com/.