Ours Are Among the Best Housing Markets in the Country! Housing Predictor, an independent real estate research firm, just released their ranking of 234 real estate markets in the country. The ranking was based on projected appreciation in local home values for 2011. And our markets top the list: Best 25 Housing Markets 2011 Forecasted Rank City Appreciation for 2011 1 Portland, ME 3.6% 7 Iowa City, IA 3.2% 22 Cedar Rapids, IA 2.6% 23 Des Moines, IA 2.6% 24 Davenport, IA 2.5% This forecast is consistent with the Federal Housing Finance Agency (FHFA) report. This ranking by appreciation also consistently ranks our markets among the best in the country. And why is that? We never saw the huge, unsustainable increase in pricing, so we aren't experiencing the painful plunge in values either. So residential real estate continues to be a great investment in our markets. Seize the opportunity to buy now before prices and interest rates move up later this year! Trending Up in 2011 So what trends are we projecting for 2011? Slowly but surely, 2011 will get better. Many economic indicators for the housing market are trending up in 2011 - some good for the market, and some challenging for the market: 1. Jobs and Buyer Confidence Improving - Once consumers and families become more certain about their jobs and incomes, they will be able to move back into the housing market and take advantage of our great inventory and low interest rates. 2. Gas Prices Going Up - Since gas prices began rising last fall, we have noted sales slowing in outlying areas. Buyers become concerned about longer commutes as gas prices rise. 3. Inventory of Properties for Sale Increasing - Our regional real estate activity chart (attached) shows the percent change in number of properties for sale in each of our markets. The following shows a sampling of our markets' months of inventory, also referred to as absorption rates: Market Months of Inventory Cedar Rapids 7.3 months Clinton/Camanche/Fulton 9.9 months Dubuque 9.6 months Iowa City 10 months Iowa Quad Cities 6 months Illinois Quad Cities 7.6 months Muscatine/Wilton 6 months Most of our markets are buyers' markets, which is defined as a market in which there is more than 6 months of inventory. Prices tend to fall if there is too much inventory. 4-6 months of inventory is considered a balanced market and prices are stable. 0-3 months of inventory is a seller's market and homes appreciate. To sell in this market requires compelling prices. Sellers are advised to determine the months of inventory in their price range and neighborhood and to price it right from day #1 - which is 10% - 15% below asking prices on competing properties, and reflects comparable sold properties. 4. Interest Rates Going Up - In the words of CNN Money - "kiss 4% mortgage rates goodbye." At the time of this writing (January 25, 2011), Ruhl&Ruhl's mortgage company, 1862 Mortgage, is offering the following: r 30-year fixed rate mortgage

• 4.875% (No points)

r 30-year FHA mortgage u

• 4.75% (No points)

r 15-year fixed rate mortgage

• 4.25% (No points)

Freddie Mac's chief economist Frank Nothaft predicts interest rates will be in the 5.75% range by the end of 2011. CNNMoney.com noted on January 25, 2011: "Rates haven't been this high since May, and forecasters now predict them to remain between 5% and 6% for all of 2011… The increase will push mortgage payments higher for homebuyers. When rates rise from 4.25% to 5% it takes away about 9% of buying power," according to Greg McBride, chief economist for Bankrate.com. Lawrence Yun, chief economist for the National Association of Realtors notes: "The real challenge is too many potential homebuyers are still finding it difficult to qualify for loans. The current mortgage market…is less about rates than it is about underwriting standards which are, in my opinion, too stringent. If lenders return to more normal, safe underwriting standards for creditworthy buyers, there would be a big boost to the housing market and spillover benefits for the broader economy." 5. Foreclosures and Distressed Sales Up - A wave of discounted real estate is coming into our markets in the form of "short sales" and foreclosures. We are seeing foreclosure properties in the range of 5% - 10% of inventory. This doesn't compare to California, Arizona and Nevada where over 60% of properties sold are "distressed" properties. Research shows that "short sales" sell at a 20% discount and foreclosures sell at a 40% discount from market value. Depending on when and how much discounted real estate enters our markets, it will have a major impact on the prices of surrounding properties. Again, our markets are less impacted than others but this does have the potential of reducing property values on neighboring homes. This is why every effort must be made by sellers, lenders and Realtors to get properties sold before they get to this stage and potentially start a downward price trend that our area has avoided thus far. 6. Buyers Increasingly Finding their New Homes on the Internet - Ruhl&Ruhl and the National Association of Realtors track homebuyers asking the question - "how did you find the property you purchased?" Increasingly buyers are finding their properties on the internet - 35% in 2010. 39% find their property through their real estate agent. The number of properties found in the newspaper has declined steadily - to only 2% in 2010. This is why New York real estate guru Barbara Corcoran advises home sellers to "wage war online and be sure to have lots of great pictures." RuhlHomes.com receives over 2,600 visitors each day and there is a wealth of information to help buyers and sellers. 7. Relocation Activity Increasing - As employers have begun hiring again, we are seeing an increase in relocation activity in the region. Relocating employees are once again considering adjustable rate mortgages if they are likely to be transferred again in the next 3-5 years. 8. New Housing Starts to Pick Up - While we expect significant variance from market to market, we do expect more new housing starts and sales in 2011. Builders' access to credit remains the fragile component, as small builders have experienced extreme difficulty in obtaining financing, despite a demand for new inventory in several markets. According to the National Association of Homebuilders (NAHB) the American home of the future will be smaller, more energy efficient, and opt to have a combined great room/kitchen area. 9. More Properties will Sell in 2011 - We expect steady, slow growth in demand for homes and investment properties in 2011. The early part of the year will appear to be slower than 2010, but that's because the 2010 tax credit required offers to be written by April 30th and closed by June 30th. This accelerated an unusual number of sales into the first half of the year, and the second half of 2010 was slower than usual. Momentum will build during the spring and accelerate as buyer confidence grows and interest rates rise - as buyers will want to purchase before rates and prices turn up again. A family-owned company since 1862, Ruhl&Ruhl REALTORS annually sells nearly 3,800 homes in eastern Iowa, western Illinois and southwestern Wisconsin. Caroline Ruhl is the President and owner of Ruhl&Ruhl REALTORS, and is the fourth generation of the Ruhl family to lead the residential brokerage and home services company. Headquartered in Davenport, Iowa, the company has 254 sales associates and 50 employees based in sales offices located in Bellevue, Bettendorf, Cedar Rapids, Clinton, Coralville, Davenport, DeWitt, Dubuque, Maquoketa, and Muscatine, in Iowa, and in Moline, Illinois. In addition to residential sales, Ruhl&Ruhl offers services in relocation, new home sales, farm sales, senior services, real estate investment, property management and mortgage services through 1862 Mortgage. For more information on Ruhl&Ruhl, visit their website at www.RuhlHomes.com.