Houston's River Oaks and Avalon neighborhoods continue to be in a Buyer's market
primarily due to the average price of homes in these areas. Just as the higher priced
homes were the last to feel the effects of the downturn, they will be near the last to
have a significant upturn.

The inventory of homes measures supply compared to demand and is expressed in
months of inventory. In simple terms Inventory Level is the number of months it would
take to exhaust the inventory, if homes continued to sell at the current rate and no
additional homes entered the market. While a simple calculation, over years it has
provided a quick way to understand the balance of supply and demand. Most people
believe a level of 7 to 8 months is a stable market. Six months or less is considered a
Seller's market and 9 months or more is a Buyer's market. The rate of sale used is
normally the previous 12 months of sales.

The period from October to January was affected especially hard from both the effects
of Hurricane Ike and the economic recession. I thought it would be interesting to
measure the Inventory based upon the rate of the last six months, with the especially
slow October to January months not included. The result is a lower inventory than the
Standard Method in all price ranges.

Shown below is a table showing inventory levels in River Oaks/Avalon by price range
using both the Standard Method and the Six Month Method. While the six month
method show there has been improvement only the $1 million to $2 million segment
has trended toward stability. Half of the inventory is in the over $2 million segment
and will take some time to work out.

If you want more detailed information about this neighborhood or others, call me at
713.942.6895 or email tom@tomdplant.com.

                                                         MONTHS OF INVENTORY
                                                                River Oaks/Avalon
                                                                  October 1, 2009