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Commentary 2

The Numbers That Drive Real Estate 3

Special Reports 9

Topics for Home Buyers, Sellers, and Owners 11

Released: September 7, 2010

KW Research 2

Commentary

Canada’s housing market is back in balance with home sales and prices, continuing to fall back in line with historical trends. The outlook for the Canadian economy, employment, and mortgage market remains positive, but tempered from earlier this year.

Canada will continue to be somewhat susceptible to global economic movements, and the Bank of Canada intends to monitor this closely as it makes further decisions about interest rate increases. Because the normalizing of the housing market has quelled fears of a housing bubble, some experts believe the Bank could be less likely to continue rate hikes.

The strong fundamentals of the financial system continue to bode well for the future. The Royal Bank of Canada was honored with a spot in the Top 10 safest banks in the world, while 6 Canadian banks made the Top 10 list for North America.

Overall, the outlook remains cautiously optimistic, but it is widely recognized that the Canadian economy remains strong, resilient, and stable compared to other major economies.

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Home Sales 4

Home Price 5

Inventory 7

Mortgage Rates 8

The Numbers That Drive Real Estate

KW Research 4

Home SalesIn Thousands

Existing home sales activity totaled 31,536 units in June, down 6.8% from the previous month, as sales trend back toward the 20-year average. Experts consider this departure from the seasonal norm to be due in large part to the effects of changes to mortgage regulations and rising interest rates, which caused buyers to act in April when they would have otherwise done so at a later date.

Data released on August 15, 2010Sources: The Conference Board, CREA, Royal Bank of Canada

Sales back at historical markers

July ’09-’10

July ’08-’09

20-Year Average: 31.3

KW Research 5

Home PriceIn Thousands

Data released on August 15, 2010Sources: The Conference Board, CREA, Royal Bank of Canada

The national average home price slid 3.6% to $330,351 in June from a month earlier, but still remains 1.1% above year-ago levels. Now that home prices have fallen back in line with 30-year historic appreciation, economists and industry experts expect prices to increase at a slower rate as the market balances.

Home Price - past 5 years

Historical Appreciation Rate

Home Price – previous year

enlarged above

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NT

$404K

YT

$284K

BC

$492KAB

$355KSK

$249K

MB

$219K ON

$329K

QC

$251K

NL $237K

NS $99K

NB $160K

PE $145K

Prices Increased

Prices Decreased

Home Price Direction (Year-Over-Year Change)

Home Prices by Province and Territory10 out of 12 provinces and territories experienced an increase in home prices

National Average: $330,351

No Data

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Inventory – Sales-to-New Listings Ratio

Number of homes available for sale

The new supply of homes continues to mirror the number of buyers in the market. This balance of supply and demand provides an environment suited for home price stability. The market is solidly back in balanced territory as seen by sales-to-new listings ratios close to 50% for the past four months. This is a good indicator for a sustainable housing market.

Buyer’s Market

Balanced Market

Seller’s Market

June

’09-

’10

June

’08-

’09

KW Research 8

Mortgage RatesAverage for 25-year amortization, 5-year term

Source: Bank of Canada

Mortgage rates fell to 5.39% for the month of August from 5.79% in July. Aside from February, which was the last time the interest rate hit 5.39%, this was the lowest since May 2009. Low rates provide an excellent opportunity for savings on monthly payments – every 1% change in interest has the same effect on monthly payments as a 10% change in price on a 30-year amortizing loan. As recovery gains a firmer footing, rates continue to be expected to increase in order to keep inflation in check.

August ’09-’10

August ’08-’09

35-year average: 9.94%

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Special Reports Canadians Purchase Most U.S. Property 10

KW Research 10

Canadians Purchase Most U.S. Property

Source: TheGlobeandMail.com

Last year, Canadians purchased more property in the United States than residents of any other country. Of all the property purchased by non-U.S. citizens, Canada weighed in at 23%, followed by Mexico at 10% and the United Kingdom at 9%. China and Germany followed closely behind.

Given the strong Canadian currency, the low interest rates, and the reduced home prices in some of the sunniest and warmest winter states it’s understandable why. Some of the warmest states; including Florida, Arizona, and California; also have higher levels of distressed properties, which could mean further savings for savvy buyers.

The following are a few things to keep in mind for those who decide to spend substantial time south of the border:1.Taxes. If you spend more than 4 months in the United States each year, you might be considered a citizen for tax purposes. Fill out an IRS Form 8840 to let the U.S. government know you are a Canadian citizen.2.Automatic Payments. Set up automatic payments for bills while you’re gone. Make sure your driver’s license and insurance will not expire while you’re away. 3.Health Insurance. Not having health insurance while in the United States could cost you serious money. Plan ahead and secure insurance before heading south.

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Topics for Home Buyers, Sellers, and Owners

Financial Fitness 12

KW Research 12

Is homeownership a key component to being financially sound?

Financial FitnessHow Homeowners Compare

Source: REM online.com, newswire.com

According to a survey sponsored by Genworth Financial Mortgage Insurance Company, homeowners are the most financially fit.

The following are some of the key findings:•65% paid off their credit card balances every month; that’s 12% more than non-homeowners •25% have made additional payments on their mortgages in the past year•44% of homeowners were able to save some money after paying their monthly bills•About half of homeowners surveyed made down payments of 20% or more•13% said they are in “great” financial shape•Compared to the same survey 3 years ago when the economy was booming, there was a 5% increase in those who say their financial fitness is good

KW Research 13

Although it is important to stay informed about what is going on in the national economy and housing market, many different factors impact the real estate market in your own area.

Talk to your KW associate for assistance interpreting the conditions in your local market.

KW associates are equipped with all the knowledge and information to help navigate you through the home-buying or selling process in any market.

Your Local Market

KW Research 14

About Keller Williams Realty

Founded in 1983, Keller Williams Realty, Inc., is an international real estate company with more than 77,000 associates and 677 offices located across the United States and Canada. The company began franchising in 1991, and following years of phenomenal growth and success, became the third-largest U.S. residential real estate firm in 2009. The company has succeeded by treating its associates as partners and shares its knowledge, policy control, and company profits on a system-wide basis. Focusing on helping associates realize their fullest potential, Keller Williams Realty is known as an industry leader in its family culture, unmatched education, profit sharing business model, phenomenal coaching program, and technology offerings.

www.kw.com

KW Research 15

The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources. You should not treat any opinion expressed on This Month in Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Keller Williams Realty, Inc., does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind. All information presented herein is intended and should be used for educational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. All investments involve some degree of risk. Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information contained in This Month in Real Estate.