DSLD SALES. Villages at Bocage 35 $179,555 1,893 $ Woodlake Estates 47 $187,390 2,024 $ Totals 193 $132,061 1,409 $

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1 Northshore and Surrounding Areas Welcome to the first electronic edition of the Murphy Appraisal Newsletter, Northshore Edition. This newsletter contains select items of interest to keep our clients, contacts and friends abreast in the real estate marketplace. We hope you find it informative and useful. Please continue to keep us in mind for your appraisal and consultation needs. We hope you have a safe and Happy New Year! -Rick Murphy Northshore Real Estate January 2013 Volume 1, Issue 1 State Estimates Isaac Damaged 13,000 Louisiana Homes At least 13,000 homes in Louisiana were damaged by Hurricane Isaac, according to the preliminary figures from the Governor s Office of Homeland Security and Emergency Preparedness. Nearly 95,000 people signed up for individual aid from FEMA, for grants to help repair homes and property in the 10 hardest-hit parishes. The tally of damaged homes could end up being much higher, with not all of those who applied necessarily eligible for aid. The devastation will be nowhere near the back-to-back blows of hurricanes Katrina and Rita, which hammered Louisiana in Those storms reportedly damaged more than 200,000 homes across southern parishes. Source:CityBusiness Average Home Sales Prices Dropped In St. Tammany In November The average selling price of homes throughout the St. Tammany area dropped in November, according to statistics released by the Gulf South Real Estate Info Network. In East St. Tammany, the average home price was $131,769, down from $163,792 average in October and from $174,477 a year ago, a significant decrease. In West St. Tammany, the average home price was $235,435, down from the $241,705 average a month ago and from $248,882 a year ago. Yet the average selling price of homes in the Greater New Orleans area in November was up 2.3 percent compared with the same month last year, from $193,692 to $198,132. More homes were sold this year at 771 compared with 620 in Source: Christian Moises, CityBusiness

2 Foreclosures High, But Abate In St. Tammany St. Tammany Parish, with 122 filings in November, had the highest rate in the New Orleans metro area at one in every 782 housing units receiving a filing, according to figures recently released by Irvine-Calif.-based RealtyTrac. That marked a 58.5 percent drop compared with October of this year and a 50.2 percent decrease over a year ago. Filings include default notices, auction sale notices and bank repossessions. Louisiana s 1,230 filings in November produced a foreclosure rate of one in every 1,598 housing units receiving a notice, a 26.7 percent decrease over the month and a 22.4 percent drop over the year. That put Louisiana 34 out of 50 states. Source: Christian Moises, CityBusiness Bloomberg photo, The Times Picayune North Shore Commercial Real Estate Better, But Not Booming For commercial real estate professionals on the North Shore, 2012 has been better than last year and much better than Karl Landreneau, director of commercial sales and leasing with Latter & Blum, says the North Shore market has remained stable because of a limited supply of space. For more than two years running, everything was flat over here, said Robert Tufts, CEO of The Latitude Group in Mandeville. There was nothing new going on, especially in retail and office. But the 2012 numbers have inched upward. I would not by any means call it a boom, but certainly things are looking better, Tufts said, noting that Class A office space, when it s available, goes fast, but Class B and C space is just as strong. That the North Shore remains so popular may have a lot to do with its overall economic health. According to a St. Tammany Economic Development Foundation report released in early October, employment in the parish for the second quarter of 2012 grew 1.4 percent over the same period last year. Housing has jumped 17 percent, while new businesses have increased from 666 in the second quarter of 2011 to 678 during the spring of this year. Source: Gary Boulard, CityBusiness Home Building Makes Slow, Steady Climb In St. Tammany Housing markets have taken a beating lately despite record-low interest rates and a housing climate that is otherwise friendly to prospective buyers. But a gradual increase in new homes sales is apparent in area communities, including a noticeable bump in activity in St. Tammany Parish. The number of new housing permits in St. Tammany Parish peaked at 2,920 in It plummeted to near 500 in 2009 but is slowing making a comeback aided by lower building costs. New home construction is up about 30 percent from a year ago, he said, but the number of new permits is so few that it makes the overall volume insignificant. Building a new home is cheaper than in the past, with lower costs for materials and labor, but the rejuvenation of the market has seen a steady increase in the cost of supplies. There s been about a 40 percent increase in the cost of lumber over the past year, homebuilder Bobby Hurley says. The cost of plywood has risen and painters in the area are even telling me that the cost of paint has gone up as well. This has not been a very steep recovery, Hurley said, but things are getting better. I would just encourage folks who are interested in buying a new home to get off the sidelines and take advantage of these interest rates they won t be like this forever. Source: Mason Harrison, CityBusiness -steady-climb-in-st-tammany/

3 North Shore Banks Tweak Offerings With Interest Rates At Record Lows Interest rates are set to stay at historic lows for the next two years, putting the squeeze on profit margins at banks. But North Shore lenders are optimistic that local demand for mortgages and accelerated commercial lending will bolster their business. The Federal Reserve announced in September it would lower near-zero interest rates through mid-2015 amid still-anemic economic growth, a part of its much-anticipated quantitative easing plan. The plan, known as QE3, is expected to keep mortgage rates down for the foreseeable future, a good sign for consumers. For local and regional banks, it has created an environment that is pushing them to add products to gain business. North Shore bankers expect new homebuyers move to secure on near-zero rates and new housing and commercial construction picks up in St. Tammany. The average interest rate on a 30-year, fixed-rate mortgage has decreased steadily in the wake of the 2008 financial crisis, hitting 3.47 in September, down from 3.6 percent in August and 4.11 percent a year earlier. In mortgage lending, a big unknown is how new standards intended to weed out the risky lending practices that led to the 2008 financial crisis will affect customer demand for loans. The Consumer Financial Protection Bureau plans to deliver those standards in January. Source: Jennifer Larino, CityBusiness Flood Insurance Premium Rises Slightly In St. Tammany Parish The average cost for a National Flood Insurance Program policy in the New Orleans area was up in every parish except Orleans when compared with a month earlier, according to policy statistics recently released. Louisiana had the third most premiums with policyholders having paid $343.4 million into the program. The total that would be paid out in a worst-case scenario would be $111.8 billion. Statewide, there were 483,811 policies at an average of $709.78, up from a $697 average a year earlier. St. Tammany (unincorporated areas only): had 35,238 policies at an average of $547.78, up from the $ July average but down from the $ in Source: Christian Moises, CityBusiness The Multi Family Market At A Glance According to data recently released from the Greater New Orleans Multi-Family Report, for the period ending in October, St. Tammany Parish has the newest inventory of garden apartment communities and the highest suburban rents in the area. An average monthly rent figure (spanning from 1 to 3 bedroom units) was $1,009 per month (rents ranging from $858 to $1,300 per month). Reported occupancy was 89%, due to recently introduced inventory to the sub-market. They expect occupancy to rise over the next four to six months. The Brewster Commons Apartments, a 240 unit complex off I-12 in the mixed use River Chase development in Covington, is in a lease up phase after construction was completed in It is developed by Favrot & Shane and is being managed by 1st Lake Properties.

4 St. Tammany Economic Development Foundation The St. Tammany Economic Development Foundation (STEDF), a non-profit corporation and politically unaffiliated, is recognized as the lead economic development organization for St. Tammany Parish. It as an organization is charged with retaining and attracting business and employment opportunities. The STEDF releases and publishes a variety of economic data and demographic data, including Quarterly Reports of Economic Trends. For complete information, visit the STEDF at their website below. The 2 nd Quarter Economic Trends Report noted trends in employment (the parish had a significant decline in first time unemployment filings), residential and commercial building permits, and apartment rents (2.3% higher on average than 2 nd Q rents). The report can be seen in its entirety by clicking the link below. Also, the STEDF has a composite Growth Index Report by quarter (it grew at an annual rate of 1.9% versus 1.5% for the first quarter). This can be viewed by the link below. NORTHSHORE NEW HOME CONSTRUCTION DSLD Homes dominated the Northshore new construction market in DSLD new home sales totaled 218 in St. Tammany Parish in sales were in the Slidell area. A total of 736 permits were issued in the Parish last year and DSLD accounted for approx. 30% of them. Overall in St Tammany the average living area of a DSLD home was 1,861 SF and the average sales price was $187,594 or /SF. 164 of these were listed in the MLS and will be summarized by subdivision in a table that follows. In addition to DSLD there were a total of 12 sales by various builders in Eagle Landing north of 190 on Also, 8 sales by Southern Homes in Del Sol off of Hwy sales in Coquille S/D and 15 sales by various builders in Autumn Creek. In addition there were 11 sales in Montgomery Terrace, 7 sales in Normandy Oaks, and 7 sales in Grande Maison. Southern Homes had a total of 8 sales in the Big Branch/Lacombe area in Autumn Haven Subdivision. In Tangipahoa Parish, DSLD sold 169 homes last year that were listed in the MLS. Overall in Tangipahoa the average living area for the homes sold was 1,728 SF and the average sales price was $162,363 or 94.34/SF, with an average of 71 days on the market.

5 DSLD SALES Subdivision # of Sales Sales Price Area(SF) Price/SF Days on Mkt St Tammany Ashton Parc 20 $174,675 1,658 $ Tanglewood 6 $218,524 2,103 $ Barkley Parc 33 $198,513 1,971 $ Lexington Place 28 $167,525 1,597 $ Raiford Oaks 9 $228,456 2,090 $ Savanahs 14 $161,828 1,565 $ Tallow Creek 28 $201,675 2,103 $ Villages at Bocage 33 $180,594 1,868 $ Totals 171 $186,985 1,853 $ Tangipahoa Arrington Place 6 $139,983 1,516 $ Bedico Meadows 37 $142,469 1,530 $ Blythewood 24 $173,321 1,895 $ Chateau Estates 16 $141,576 1,493 $ Cornerstone 5 $148,840 1,552 $ Holly Gardens 14 $144,086 1,482 $ Madison Trace 5 $124,760 1,297 $ The Parc 4 $146,475 1,532 $ Villages at Bocage 35 $179,555 1,893 $ Woodlake Estates 47 $187,390 2,024 $ Totals 193 $132,061 1,409 $

6 NORTHSHORE LOT SALES AND ABSORPTION On the Northshore, single-family lot sales have been at the highest pace since Hurricane Katrina. Most vacant lots are being purchased by two homebuilders: DSLD, LLC and DR Horton, Inc. While DSLD has been in the market for the past three years, DR Horton made a strong push in 2012 to increase lot inventory. The lots are being purchased for home prices in the $150,000 to just over $200,000 home price range. Almost all bulk lot sales have structured takedowns between lots per sale. Based on our research, a total of lots sold in St. Tammany Parish this year with lots in Tangipahoa Parish. This is just the lot sales and does not include pending transactions or home sales. Lot prices have remained the highest in Western St. Tammany Parish with recent bulk sales in Palm Court, Grand Oaks, and Raiford Oaks south of I-12 in Madisonville selling from $32,000 per lot to $40,000 per lot. Subdivisions closer to Covington include Savannahs Subdivision, Barkley Parc, Tuscany West, Oak Alley and several others with sales prices from $30,000 per lot to $44,000 per lot. The higher end sales are the most recent showing greater demand. The custom home market over $250,000 is still lagging except for the subdivisions located off the Highway 21 corridor. Lots sales in Terra Bella, Maison Du Lac, Natchez Trace, and home sales in Weston Glen have seen greater absorption in 2012 than they did in Probably the most telling about the direction of the market from the homebuilders and developers perspective is the number of new phases recently completed or will soon be available. This includes Grand Oaks off of Highway 22 in Madisonville, Savannahs in Covington, Bedico Creek off of Highway 1085 in Madisonville, Natchez Trace on Highway 21 south of I-12 and several others. Eastern St. Tammany Parish has not recovered to the point of the western side of the parish, but several sales provide support for a positive outlook. Tammany Holding Company, LLC sold 20 lots in Lakeshore Estates to Lakeshore Properties, LLC represented by MR. Samuel Markovich. The sale occurred in April 2012 with a price of $1,400,000 or $70,000 per lot. All of the lots have frontage along lakes/canal leading to Lake Pontchartain. This is one of the most recent bulk waterfront lot sales in Slidell. The lots had been retailing from 2006 to 2009 with an average of $164,000 representing a 57% discount. Individual lot absorption for waterfront lots in Oak Harbor and Lakeshore Estates has been relatively slow with approximately 30 lot sales over the past 12 months. As of late November, a total of 202 lots were listed on the local MLS ranging from $60,189 to $172,689 per lot. More lots are available, but are not currently listed. DSLD has also started purchasing lots in Slidell including Tanglewood Crossing off of Gause Boulevard and lots in Ashton Parc north of I-12. Bulk lot prices have ranged from $39,000 to $50,000 per lot. Tangipahoa Parish has a number of bulk lot sales, but at a lower price than in St. Tammany. Almost all subdivision lots were purchased by homebuilders (DSLD and DR Horton) in 2011 with fewer sales in new subdivision in Bulk lot prices have ranged from $15,000 per lot to a high of $30,000 per lot. The better located subdivisions have been absorbed, but there are still several less desirable subdivisions. One recent sale occurred in Hammond for a lot price of $12,500 for 20 lots. This is the lowest price seen in this market. As far as lot absorption, the custom home market is still all but nonexistent in Tangipahoa Parish. Most individual lot sales are being sold out of foreclosure for heavy discounts that are still depressing the overall market. Ponchatoula and the rural areas are still heavily overbuilt with absorptions well below other subdivisions closer to Hammond and I-12. In conclusion, the continued growth in the St. Tammany and Tangipahoa market has increased absorption of both lots and homes. Most lots are being purchased by homebuilders as a homebuilder recently indicated a lack of inventory is expected in the next year or two. With continued growth in this market and the high cost of mitigating wetlands for new subdivisions, prices will likely continue to rise for available lots.

7 ITEMS OF INTEREST Covington A commercially zoned cottage at 714 E. Rutland St. in the Division of St. John in downtown Covington, that was the former retirement home of the late Archbishop Philip Hannan, has sold. It is a raised, two story, wood frame Acadian style cottage containing 2,161 SF., and sold for $300,000, or an equivalent of $138.82/SF. The building is approximately 90 years old and was in fair condition at time of sale as it was in need of updating and deferred maintenance. According to agent Jennifer Rice, the property was purchased for professional office use. 714 East Rutland St, Covington A vacant, wooded parcel situated on the south side of Boston St. as it leads unto Highway 190, containing approximately 1.5 usable acres, or 65,340 SF, sold in the spring for $265,000, or an equivalent of $4.05/SF. North of the Chimes Restaurant, the western boundary of it fronts the Bogue Falaya River, which runs underneath a bridge on Boston St. The site was originally planned for an office park but those plans declined when the market weakened. The purchaser was an out of town entity, and reportedly has obtained approvals to construct a retail center on higher elevations, the first phase of which would be +/- 3,000 S.F. of space. Work is moving right along on construction of the new Racetrac gas station and convenience store located on Highway 190 and Harrison Avenue (a/k/a Dog Pound Rd.). The 2.02 acre site was purchased in the fall of 2011 for $1,850,000, an equivalent of $20.98/ SF. A 4 suite retail strip center at Highway 21 (just north of I-12), known as Creek Stone Village, sold at private auction for $1,846,333, an equivalent of $154.94/SF for 11,916 SF of building area. The center was anchored by Jose Balli, a jeweler/art retailer, has since added a few tenants, and is expected to be fully occupied by Christwood purchased acres adjunct to it s assisted living facility as part of a potential long term master plan expansion. They paid $2,417,536 for it, or an equivalent of $41,381 per acre for the site, which is situated SE of the interchange for I-12 and Highway 21, abutting the Tchfuncte Estates single family residential subdivision.

8 Mandeville A tract containing 1,422 acres on Highway 190 in Fountainebleau State Park, surrounding the Southeast Louisiana Hospital (which is scheduled to close) sold for $6,450,000.00, or an equivalent of $4,535 per acre. It was purchased by St. Tammany Parish, for planned drainage infrastructure improvements for the area. 1,422 Acres, Fountainebleau State Park (outlined in red) The Mandeville Self Storage facility at 2425 Florida St. (Highway 190) in Mandeville sold over the summer for $1,700,000. It is located near the Tammany Trace on Florida St. and has 430 self storage units, approximately half of which are drive up climate controlled units, an amenity for these types of facilities. The new owners have conducted deferred maintenance and improved the property. The former Schwan s office warehouse and cold storage build-to-suit facility in Alamosa Park, off Highway 59, on Tammany Trace, recently sold for $864,000, or an equivalent of $94.88/SF, for 9,106 SF of building area, including a truck dock on a 3.33 acre site. Schwan s, a Minnesota Corp. sold the property is consolidating its frozen food operations on its core business in the Northeast. The property may become occupied in part by Pamlab (or an entity thereof), a Covington based specialty biomedical company that specializes in naturalized medicine. Former Schwan s Building, Tammany Trace

9 Slidell The St. Tammany Federal Credit Union relocated a branch, selling and buying an office building in the process. It sold a 1,464 SF office building at 862 Brownswitch Rd. for an effective price of $220,000 (or an equivalent of $150.27/SF of GBA), to move into a larger building containing 2,200 SF at 720 Robert Blvd., bought for $320,000 (or an equivalent of $145.45/SF of GBA). A acre vacant commercial site adjunct to the Southern Surgical Hospital on Lindberg Drive sold for $3,000,000, or an equivalent of $5.47/SF, a portion of which will be improved with a new, 60 unit assisted living facility. The balance of the site is expected to be developed with a medical office and ancillary hospital services. The CubeSmart Self Storage facility on 775 Brownswitch Road at Robert Road, above I-12, recently sold for $4,780,000. It is a large facility, having 507 self storage units, approximately 40% of which are climate controlled units. The facility was formerly a U- Store-It, and was purchased by a subsidiary of CubeSmart, and no management changes were expected. Tangipahoa Near the NW corner of Highway 190 and Highway 445 in Robert, north of I-12, a vacant parcel containing 16 acres was purchased for $500,000, or an equivalent of $31,250 per acre. The site is suitable for commercial development on highway and residential development off highway, however the purchaser had no immediate plans to develop the site and purchased it as a long term investment. The purchaser also has an option to purchase, for 3 years, a +/- 16 acre piece adjacent to it, the western portion. 32 Total Acres, Robert Dollar General is bullish on Hammond. Three new retail stores are being developed in various locations, including South Airport Road (west of I-55), and the block of Wardline Road (near Durbin Road), as well as in the block of Happywoods Road. Site sizes average up to approximately ½ of an acre, and site land has sold in the $3 to $5 per SF range. The new stores will average approximately 9,000 SF of building area.

10 Murphy Appraisal Services, LLC, is a comprehensive and full-service real estate appraisal and consulting firm with extensive experience throughout Louisiana and Mississippi. While based and focused in the Greater New Orleans Metropolitan Area, we historically have covered the length of the Interstate 10 and Interstate 12 corridors from Lafayette to Baton Rouge through New Orleans and the Florida Parishes and into the Mississippi Gulf Coast from Waveland to Pascagoula. Since 1991, we have provided high quality commercial and residential real estate appraisal services for a wide ranging client base including both national and locally based institutional lenders, private individuals, estate planning professionals, attorneys, and real estate development companies. We perform literally thousands of appraisals annually. In fact, we are the largest appraisal firm in the state of Louisiana. Rick Murphy Founder Rick Murphy, who has 26 years of experience in real estate appraisal, brokerage, and development in South Louisiana, leads a staff of 24 individuals which includes three state certified general appraisers, eight state certified residential appraisers, and four appraisal trainees. This includes general and residential appraiser licenses in both Louisiana and Mississippi. In addition, this staff includes professionals in real estate For information and assistance, please call us at any of our office locations, toll free at , or visit us at our website: Commercial Services 757 St. Charles Ave Suite 202 Murphy Appraisal Services Covington Office Helenberg Road Suite 204 Covington, LA Hammond Office 1250 S.W. Railroad Avenue Suite 200A Residential Services 2305 Veterans Memorial Blvd. Suite 1 Metairie, LA Hammond, LA New Orleans, LA Many of the news items here can be viewed in their entirety by clicking on the links following the stories, and using their respective search engines. Any information herein not that of Murphy Appraisal Services, LLC has been reproduced in whole or in part with permission where applicable.