OUTLINE OF SPEECH DELIVERED                                                         CHICAGO REAL ESTATE INVESTORS CLUB                                                                         February 26, 2006                                                               Holiday Inn, Higgins Road, Chicago                                                   REAL ESTATE TRENDS IN THE US, IN ILLINOIS, AND IN CHICAGO                                         1.. US POPULATION TRENDS (GROWTH) ARE VERY POSITIVE                                                   OFFSET: MORE JOBS, BUT AT LOWER SALARIES                                        2. DEMOGRAPHIC TREND (YOUTH) IS ALSO VERY POSITIVE                                                     OFFSET: HOUSEHOLD FORMATION RATE IS DOWN                                      3. PRODUCTION TREND IS VERY POSTIVE (FOR OWNERSHIP)                                 OFFSET: RENTS DON’T MATCH INCOMES; LAND IN MANY MAJOR MARKETS IS                                               SCARE;  GOOD JOBS IN MANY OTHER AREAS ARE VERY SCARCE                                    Recent mega-trend: IT’S JOB RICH, WELL-EDUCATED AREAS VERSUS MOST OF                                     THE REST OF THE COUNTRY WITH CHEAP LAND AND FEW HIGH-PAYING JOBS                                  4. ILLINOIS TREND IS VERY POSITIVE (GROWTH & YOUTH)                                  OFFSET: MAJOR SPRAWL CONTINUES: SOME SUBURBS ARE GETTING POORER;                                           THE OUTER TIER IS  NOW MUCH RICHER THAN THE CITY                                 5. CHICAGO TREND IS MIXED (CERTAIN POPULATION LOSSES)                                    THREE CONDO MARKETS?: OLDER NORTH LAKE FRONT IS THIRD TO THE                                     EXPANDING DOWNTOWN,  AND TO THE MUCH YOUNGER GENTRIFYING                                     NEIGHBORHOODS                                           TOO MANY RENTALS LACKING TENANTS                                           SCARCITY OF SINGLE-FAMILY HOMES                          CITY HAS MINIMAL ROLE IN NEW PRODUCTION FOR MIDDLE INCOME                                  PETER FUGIEL…………. IS A REAL ESTATE AGENT WITH PROPERTY CONSULTANTS                              IN THEIR LAKE VIEW  OFFICE. HE LIVES IN ROGERS PARK.  HE HAS BEEN                              IN REAL ESTATE SINCE 1977.