Market Area Update

MARKET AREA UPDATE Report as of: 1Q 2Q 3Q 4Q

Year: 2015 Market Area (City, State): MSA: Sebastian-Vero Beach, Florida

Provided by (Company / Companies): Prudential Sterling Properties

What are the most significant trends in your current real estate market? (Attach addenda, charts, graphs, etc. as appropriate) * REAL ESTATE MARKET DATA

Define Market Area: Urban (city limit area only) Metro Area (as defined by MSA) Other: Please explain: * Single Family Condominiums / Townhomes (detached) (attached) **Sales Price (current) Choose one: Average Median $ 337,856 $ 195,958 **Sales Price (same time prior year) Choose one: Average Median $ 289,868 $ 231,745 Average Days on Market – list to contract (current) # 63 (Median DOM) # 75 Increase Decreasing Stable Increase Decreasing Stable Absorption – Months of Inventory (last 3 months) Number of active listings divided by the average # of sales per month # 4.5 # 3.7 (for the last 3 months) = # of months needed to sell existing inventory Absorption – Months of Inventory (same time prior year) # 6.3 # 6.4 Active Listings # 1,412 # 327 Closed ( total last 3 months) # 1,137 # 357 Expired Listings ( total last 3 months if available) # Not Available # Not Available

Change in Home Values % 13 % -15.4

Increase in past 3 months Increase in past 3 months Stable Stable Decreasing in past 3 months Decreasing in past 3 months Sold LP/SP Ratio (last 3 months) % 92.3 % 91.6

**Average = the result by adding all sales prices and dividing by the number of units sold Median = denoting the middle of the range of values

GENERAL ECONOMY

How would you rate the overall economic conditions in area as defined above: Mixed Stable Healthy Shrinking Depressed

Supply of Listings: (Single family) Shortage Oversupply Balanced ~ (Condo/Town home) Shortage Oversupply Balanced

Overall Market Conditions: Active Stable Sluggish Flat Depressed

Unemployment Rate: % % 7.1 Average – Please check trend: Increasing Decreasing Same

Please describe local economic conditions/climate: (draw upon newspaper articles concerning the coming and going of corporations, layoffs, etc.)

Indian River County is a small and quiet county located on the east coast of Florida, with Sebastian and Vero Beach being its largest cities. This community is largely compromised of retirees and 2nd home owners. There have been concerns lately that the unemployment rate is the 7th highest in the state of Florida, but those numbers also need to account for the representative demographic. Piper Aircraft (a small plane manufacturer) announced that they would conduct mass layoffs this quarter, with the potential to impact 150 employees. In Piper's press release about the layoffs, the company said it was preparing a staff reduction schedule and would inform laid off employees of their status as soon as possible. The company also indicated that it would be working with the Florida state unemployment office and local job placement organizations to ensure that its displaced workers receive assistance. On a more positive note, the county’s Economic Development Council continues to expand their Local Jobs Grant program, as a recent study showed that it was directly responsible for the creation of 171 new jobs last year. The Local Jobs Grant funds are paid out after the new jobs are created and filled for a year. Companies must create a minimum of five new full time permanent jobs paying at least 75 percent of the county’s average annual wage, excluding benefits. The funds are paid through phases over a 5 year period. For each job that the Local Jobs Grant creates, 1.076additional spinoff jobs are created by other companies (for example, the 171 jobs created by companies receiving a Local Jobs Grant, created approximately 184 spinoff jobs, for a combined 355 total jobs.

The MSA/County is petitioning the Federal Railroad Administration to be added as a consulting party for the proposal to the All Aboard Florida project, which is a rail line extending from Orlando to West Palm Beach. They want to petition to be a stop on the rail line, which is currently slated to bypass the county on its way to West Palm Beach, depriving potential tourists the opportunity to add to Indian River's tourism economy.

The latest Cost of Living figures released this quarter by The Council for Community and Economic Research (C2ER), the Vero Beach-Sebastian metro area cost of living index was 100.4 for the first three quarters of 2014, slightly higher than the 2013 figure of 98.8 but still well below the cost of living in communities to the south (Miami-Dade and Fort Lauderdale). Indian River County is one of 13 communities statewide that participates in this study and the only community in Florida’s Research Coast region to do so. The Index reflects the cost of more than 90,000 prices covering 60 different items in six component categories: housing, utilities, grocery items, health care, transportation, plus miscellaneous goods and services.

As a way of creating more of a draw for businesses to come to Indian River County, the local EDC has hired Consultant Janet Ady of the firm Ady Advantage of Madison, Wisc., to prepare a report on an $80,000 study intended to tell the County how to target businesses for economic development. They are working on the next two phases of the report currently. They hope it will be completed by spring of 2016.

RENTAL INFORMATION

Is There a Charge for Rental Assistance: Yes No Outsourced Is Home/Condo Rental Information Available in Your MLS: Yes No Single Family Housing Availability: (3+Bedrooms) Shortage Oversupply Balanced Average Rent $1,600/Month Condo/Townhome Availability: (2+Bedrooms) Shortage Oversupply Balanced Average Rent $1,225/Month__ ___ Apartment Availability: (2+Bedrooms) Shortage Oversupply Balanced Average Rent Not Available on MLS