Market Update Mid 2008 The Federal Reserve, taking a break from its aggressive rate-cutting policy, chose not to alter key interest rates on Wednesday, June 25 2008, leaving the Fed Funds rate at 2.00% Now everyone is wondering where interest rates are headed next. I think they will hold steady for a few months and then slowly go back up somewhat. Especially after the election in November. Once we get a new president in office the entire complexion of the economy and the "general feeling on the streets" among Americans will change. But in the meantime, since last September the Fed has cut rates seven times for a total of 3.25%. However, many experts believe that the Fed's decision this Wednesday, along with comments from the meeting itself, indicate an increased concern over inflation. This means the Fed could start increasing rates as early as its next meeting, which takes place in August. The Fed is in a quandary. The economy has slowed down a great deal, led by a decline in home sales and rising inflation, stemming primarily from increasing energy and gas prices. The Fed's primary role in relation to the economy is to combat inflation and preserve economic growth. To combat inflation, the Fed will ultimately have to increase interest rates in coming months, which will make it even more expensive for Americans to live. This is the LAST thing Americans want to hear, but the fact is that if we don’t curb inflation this recession will last even longer. What Does This Mean to You? If you're looking to buy or rent a house, consider these key points: Home prices in some areas are at five-year lows, while personal incomes in that same period have increased. Homes are more affordable for many right now, particularly first-time home buyers. But it is harder than ever to get a bank to loan you money because the banks have lost so much money on forclosures. Sellers are extremely motivated and many buyers in our area have benefited from the unbelievable deals that exist today. And experts foresee a strong rebound in home prices when the economy begins to recover, according to a new report from the Joint Center for Housing Studies. That means buyers today will be sitting on valuable properties tomorrow. Remember, annualized appreciation for homes exceeded 6.35% from 1940 to 2000. Ultimately, population growth and demographics point to a stronger housing market in coming years. So the market WILL rebound eventually. In the meantime renting might be the best option for some people. Renting will allow you to save money you would have put into a down payment on buying a house, and not worry about upkeep on your house. Another good reason to rent, is there is no long term commitment to the property. When your lease is up you can just pack up and move. Renters don’t need to worry about market conditions or stressed about the value of the property. But in recent years, more and more people have wanted to use the RENT2OWN program. This allows you to get into the property that you want to own, without having to deal with the burden of borrowing from a bank. You simply live in the property and at some point, refinance with a bank to become the true owner of the house. It's very simple! And remember, right now is a great time to buy. The people who "can" afford to buy now (and that is a very small amount of people) are buying. Using RENT2OWN programs like ours will allow YOU to buy now while the market is flooded with great deals for buyers! And you will be dealing with us, and not a bank, until you are ready to refinance and get a mortgage with a bank. We offer many other programs for buyers, renters or investors as well. In these trying real estate times we will continue to offer our clients the best options and the most innovative new programs. Call us anytime at 502-777-5246 or email us for more information! Best Regards, Mike Howard (president)

Early 2008 market update - Poor Real Estate Market Continues   The real estate bubble continues to deflate after "popping" in the last 24 months. The market conditions are pretty scary. A total of 635,159 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 446,726 properties nationwide during the third quarter of 2007, a 40 percent increase from the previous quarter and an increase of nearly 150 percent from the third quarter of 2006. The report also shows a foreclosure rate of one foreclosure filing for every 146 properties in the U.S.A. (that is SCARY) These were the two highest monthly foreclosure filing totals we’ve seen since the Mortgage industry began keeping records. Countrywide Home Loans USA. Which is the largest home lender in the USA, is in financial trouble now because so many homeowners are in foreclosure. Although not all areas are being hit as hard as others, the rise in foreclosures is quite widespread, with 47 out of the 50 states documenting year-over-year increases in foreclosures. Given the number of loans due to reset through the middle of 2008, and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets. Nevada posted the nation’s highest foreclosure rate for the quarter, one foreclosure filing for every 60 households. A total of 16,817 foreclosure filings on 12,982 properties were reported in the state during the third quarter, up 23 percent from the previous quarter and more than triple the number reported in the third quarter of 2006.California’s third-quarter foreclosure rate of one foreclosure filing for every 88 households ranked second highest among the states. A total of 148,147 foreclosure filings on 94,772 properties were reported in the state during the third quarter, up 36 percent from the previous quarter and nearly quadruple the number reported in the third quarter of 2006.Florida documented a third-quarter foreclosure rate of one foreclosure filing for every 95 households, the nation’s third highest state foreclosure rate. A total of 86,465 foreclosure filings on 60,992 properties were reported in the state during the third quarter, up more than 50 percent from the previous quarter and more than double the number reported in the third quarter of 2006. Other states with foreclosure rates among the top 10 included Michigan, Ohio, Colorado, Arizona, Georgia, Indiana and Texas. Mortgage applications are up while home sales are down because many borrowers are refinancing. Instead of moving. This solution would make sense except that it faces three hurdles: First, many recent loans cannot be refinanced because loan balances are greater than the property values because property values are not as high as they were during the boom years after 9-11. Second, many lenders have cut back or no longer deal in subprime or Alt-A financing. Third, many borrowers claimed income in the original loan application which cannot now be proven when full documentation is required. And in today's market almost all lenders are requiring FULL documentation of income from a job. This has made investing in real estate and buying property much more difficult. There is also a huge amount of people trying to refinance their home loans to stop foreclosure. Many homes could be saved if only borrowers could get loans with lower rates and payments. But many distressed homeowners are plainly unable to get new financing, one reason behind soaring foreclosure trends — trends which no one disputes. Luckily here in Kentucky, we have had a relatively stable real estate market. Although we have still had a huge number of houses in foreclosure here, the property values are still going up in here. I think this is because we are centrally located in the East central USA and we have some of the good and bad from many housing markets. As the old saying goes "nothing will hurt you, in moderation." We never had the huge appreciations of property values that the coastal and resort locations in the USA had in 2002 through 2005, but now we are not doing too bad here in Kentucky. Many people are losing their homes and it is harder and harder to get a mortgage. Rent2ownlouisville has done numerous LAND CONTRACTS in 2007 for people with poor credit, who have either been through foreclosure, bankruptcy, divorce, etc. Our program is a very attractive way to get back on your feet and survive these tough times in the real estate and credit world. We will continue to assist people in 2008 with short term suburban rental properties, lease options and Land Contracts. We are dedicated to assist people who have good jobs and make good money, yet have some credit issues and cannot get the property they want with conventional banks. Our goal is "to get everyone into the property they want and deserve." Contact us anytime regarding our programs or to inquire about properties we have listed. Best Regards, Mike Howard (President)