CHART 2 - N. Kona Residential Median Price vs Number Sold Since 1997

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1 GRIGGS REPORT #152 - DECEMBER 31, 13 A TWICE MONTHLY REAL ESTATE MARKET PERSPECTIVE FOR NORTH KONA AND THE BIG ISLAND PAGE 1 NORTH KONA RESIDENTIAL DATA ABOUT THE PENDING RATIO: The Pending Ratio is used throughout the report to serve as an indicator of Market Strength and Market Trend.. PENDING RATIO = NUMBER OF PENDING SALES DIVIDED BY ACTIVE LISTING TIMES / THE HIGHER RATIO = STRONGER MARKET DEMAND. Why it is a useful indicator: 1) It is a current leading indicator of market Demand vs. Supply Dynamics based on Listing and Pending Sale MLS Data. 2) It is a readily available useful indication or market strength when tract over time shows market trend. 3) It can be used as a "Litmus Test" of market strength for any market niche with sufficient MLS active listing and pending sales data. The following Color Codes describe what the ratio numbers mean in terms of the type of market. ( This calibration is less accurate when there is an abnormal supply of distressed properties entering the market on a regular basis such as currently is the case. ) PEAK MARKET - Signals the End of the Real Estate Cycle is eminent PENDING RATIO or GREATER PEAK SELLERS MARKET - PENDING RATIO FROM 51 TO 99 SELLER'S NEUTRAL OR STABLE MARKET - PENDING RATIO FROM 3 TO NEUTRAL BUYERS MARKET - PENDING RATIO BELOW 3 BUYER'S NORTH KONA RESIDENTIAL DATA TABLE TABLE 1 ACTIVE PENDING PENDING TYPE OF Number Sold Average VOLUME Median # SOLD to $4M LISTINGS SALES RATIO MARKET 12 Month Period Price MILLIONS Price Last 3 days 12/31/ BUYER'S 244 $ 281,4 $ 68.7 $ 235, 25 12/31/ PRICE LOW >>>>>>>>>> >>>>>>>> 324 $ 272,6 $ 88.3 $ 225, 34 12/31/ NEUTRAL 425 $ 36,8 $ 13.4 $ 241, /31/ NEUTRAL 437 $ 355,7 $ $ 28, 24 12/31/ NEUTRAL 9 $ 353,6 $ 18. $ 269, 51 12/31/ SELLER'S 541 $ 379, $ 5.3 $ 3, 45 12/31/ PEAK 637 $ 445,3 $ $ 394, /31/ DEMAND PEAK 689 $ 585,6 $ 43.5 $ 489, 51 12/31/ NEUTRAL 649 $ 732,4 $ $ 6, 49 12/31/ PRICE PEAK>>>>>>>>>>>> >>>>>>>> 485 $ 83,4 $ $ 635, 39 12/31/ BUYER'S 44 $ 87, $ $ 613, /31/ DEMAND LOW 245 $ 82, $ $ 542, 14 12/31/ BUYER'S 286 $ 81,3 $ $ 425, 29 12/31/ NEUTRAL 36 $ 469,7 $ $ 398, 3 12/31/ PRICE LOW >>>>>>>>>> >>>>>>>> 398 $ 456,3 $ $ 367, 3 12/31/ SELLER'S 413 $ 487, $ 1.3 $ 393, 47 12/31/ NEUTRAL 463 $ 558,7 $ $ 439, 32 12/13 %chg -9% -19% -11% 12% 15% 28% 12% -32% TABLE 1- Inventory has just reversed its increasing trend. We should expect to see the new decreasing pattern continue through the coming busy winter months. Median price continues to climb. Wow!... look at the increase in volume from a year ago. $ $368 $366 $368 $367 $383 $385 $393 $395 $46 $4 $425 $425 $433 $432 $435 $439 $4 $3 $ $ Chart 1 - Kona Residential Median Price (thous) & Pending Ratio - Past 2 Years Res-Median Price Res Pending Ratio CHART 2 - N. Kona Residential Median Price vs Number Sold Since 1997 Median Price Number Sold 12 Month Period 8 $6, $635, $613,3 $7, 7 $542, $6, $489, 6 $425, $394,9 $398, $367, $393, $439, $, 4 $235, $225, $241,7 $28, $269, $3, $4, $3, 3 $, $, CHART 2 - The number of home sales shows steady growth. The pace has increased over the past 12 months as has the median price.

2 PAGE 2 NORTH KONA RESIDENTIAL PRICE RANGE TABLE AND BIG ISLAND RESIDENTIAL LISTINGS, PENDING SALES AND SALES Year To DateP TABLE 2 NORTH NORTH KONA KONA RESIDENTIAL PRICE PRICE RANGE RANGE DATA DATA KONA Residential NUMBER AVERAGE NUMBER AVERAGE PENDING VOL PENDING KONA RES # SOLD Percent PRICE RANGE ACTIVE PRICE PENDING PRICE MILLIONS RATIO Change TO $ 4, 21 $ 348, 23 $296, $ % $ 41, $, 23 $ 454,6 3 $ 451,9 $ % $ 1, $ 7, 39 $ 626,8 26 $ 67,7 $ % $71, $ 9, 32 $ 83,9 6 $ 83,7 $ % $ 91, $ 1,, 38 $ 1,196,3 2 $ 972, $ % $1.5M $ 4.M 34 $ 2,533,8 4 $ 3,56, $ % $4.1 M or GREATER 32 $ 7,127, 3 $ 5,798, $ % The comparison Charts below shows the significant shift of sales into the higher price ranges up to $9,. The under $4, price range is at a new low representing only 34% of home sales compared to 49% last year. Look at the over $4.M market with 21 sales in the past 12 months compared with only 14 during Percentage Sold by Price Range 13 Percentage Sold by Price Range 12% 8% 6% 3% 3% 49% TO $4, $41, $, $1, $7, $71, $9, $91, $1,, % 7% 3% 4% 34% TO $4, $41, $, $1, $7, $71, $9, $1.5M $ 4.M $4.1 M or GREATER 17% $91, $1,, $1.5M $ 4.M 19% 25% $4.1 M or GREATER BIG ISLAND LISTING, PENDING SALES AND SALES YEAR TO DATE TABLE 3 HI ISLE RES NUMBER LOW NORTH KONA RESIDENTIAL HIGH PRICE AVERAGE RANGE DATA MEDIAN MODE VOLUME (M) PENDING 3-1 TO 3-4 ACTIVE 556 $27, $26,, $43,59 $274, N/A $ RATIO ALL EAST HI PENDING 137 $36, $799, $241,36 $, $299, $ 33. RESIDENTIAL SOLD YTD 913 $12,8 $1,925, $239,291 $, $1, $ TO 3-9 ACTIVE 599 $16,9 $13,9, $1,329,739 $625, $699, $ ALL WEST HI PENDING 187 $39, $7,, $6,696 $44, N/A $ RESIDENTIAL SOLD YTD 959 $26, $21,, $671,715 $4, $3, $ ALL HI ISLE ACTIVE 1155 $16,9 $26,, $896,646 $397, N/A $ 1,35.63 ALL HI ISLE PENDING 324 $36, $7,, $448,618 $317, $299, $ ALL HI ISLE SOLD YTD 1872 $12,8 $21,, $46,556 $295, $3, $ CHART 4 - West HI, East HI and Hawaii Island - Residential Pending Ratio over the Past Two Years 4 3 West Hawaii Ratio East Hawaii Ratio Big Isle Res Ratio CHART 4 - The Pending ratio is trending downward island wide. You can see it is following a seasonal trend by looking back to the same time in 12. It is actually slightly lower than it was a year ago. Traditionally January will bring the turnaround.

3 12/31/11 1/15/12 1/31/12 2/15/12 2/29/12 3/15/12 3/31/12 4/15/12 4/3/12 5/15/12 5/31/12 6/15/12 6/3/12 7/15/12 7/31/12 8/15/12 8/31/12 9/15/12 9/3/12 /15/12 /31/12 11/15/12 11/3/12 12/15/12 12/31/12 1/15/13 1/31/13 2/15/13 2/29/13 3/15/13 3/31/13 4/15/13 4/3/13 5/15/13 5/31/13 6/15/13 6/3/13 7/15/13 7/31/13 8/15/13 8/31/13 9/15/13 9/3/13 /15/13 /31/13 11/15/12 11/3/12 12/15/12 12/31/12 PAGE 3 BIG ISLAND DISTRESSED RESIDENTIAL PROPERTIES TREND CHART 5 - Percentage of Total MLS Active, Pending or 9 sales Listings that are Short Sales or REO 6% % 4% 3% % N. KONA 3-7 WAIKOLOA WAIMEA 3-6-4,5,6 S HILO 3-2 PUNA 3-1 % % TABLE 4 COMPARES THE PERCENTATE OF DISTRESSED MLS LISTING YEAR OVER YEAR AVERAGE N. KONA WAIKOLOA WAIMEA S. HILO PUNA HI ISLE 12 27% 44% 24% % 27% 29% 13 14% 12% 18% 18% % 16% % CHANGE -49% -74% -28% -12% -28% -38% CHART 5: The general trend is toward a decline in the percentage of listings in that MLS that are either REO or Short Sale. down (-49%). Island wide and N. Kona are Chart 6 - REO Properties By District, Total Number Held by: FANNIE MAE -- Deutsche Bank -- Wells Fargo -- Bank of America # of REO Properties 6 Puna 4 3 S Hilo S Kohala N Kona S Kona, Kau TABLE 5 COMPARES THE NUMBER OF REO PROPERTIES YEAR OVER YEAR AVERAGE PUNA S. HILO N. HILO,HAMAKUAN. KOHALA S. KOHALA N. KONA S. KONA,KAU TOTAL INCREASE ISLAND WIDE % CHANGE 21% 133% % -% % % -% 19% CHART 6: Puna and S. Hilo show the largest increase in REO's owned by the four lenders in the study group.

4 PAGE 4 NORTH KONA CONDO DATA TABLE 6 ACTIVE PENDING PENDING TYPE OF Number Sold AVERAGE VOLUME MEDIAN # SOLD to $1.5M RATIO MARKET 12 Month Period Price MILLIONS Price Last 3 days 12/31/1997 no data no data no data no data 313 $ 127,6 $ 4 $ 7, 26 12/31/ PRICE LOW >>>>>>>>>> >>>>>>>>> 369 $ 131,9 $ 49 $ 114, /31/ SELLER'S 448 $ 146, $ 65 $ 131, 4 12/31/ SELLER'S $ 169,4 $ 85 $ 135, 34 12/31/ BUYER'S 396 $ 184,7 $ 73 $ 1, 26 12/31/ no data no data 452 $ 8,9 $ 94 $ 182, /31/ DEMAND PEAK 625 $ 23,9 $ 144 $, 63 12/31/ PEAK 615 $ 317,9 $ 196 $ 289, /31/ NEUTRAL 665 $ 432,7 $ 288 $ 395, 48 12/31/ PRICE PEAK >>>>>>>>>> >>>>>>>>> 47 $ 452,6 $ 184 $ 45, /31/ BUYER'S 264 $ 4, $ 111 $ 359, 15 12/31/ DEMAND LOW 183 $ 355, $ 65 $ 335, 12 12/31/ BUYER'S 165 $ 391, $ 65 $ 2, 12/31/ BUYER'S 291 $ 229, $ 67 $ 3, 32 12/31/ PRICE LOW >>>>>>>>>> >>>>>>>>> 38 $ 3, $ 63 $ 165, 39 12/31/ NEUTRAL 317 $ 222, $ 71 $ 18, 3 12/31/ NEUTRAL 345 $ 242, $ 84 $ 224, 29 12/13 %c 3% 2% -1% 9% 9% 18% 24% -3% TABLE 6 - Chart 7 - Kona Condo Median Price( thous) & Pending Ratio - Past 2 Years Median Price Condo Pending Ratio 9 $213 $213 $217 $2 $225 $224 $2 8 $187 $192 7 $173 $177 $175 $ $165 $16 $164 $165 6 $1 4 $ 3 $ CHART 8 - Condo prices have now risen 4% from the low of $16, in late 11. CHART 8 NORTH KONA CONDO MEDIAN PRICE vs NUMBER SOLD Number Sold 12 Month Period MEDIAN Price 7 $395, $45,6 6 $359, $335, $289,9 4 $182,7 $, 3 $7, $114,9 $131, $1, $135, $2, $3, $165, $18, $4, $4, $3, $3, $2, $, $1, $, $,

5 PAGE 5 NORTH KONA LAND DATA TABLE 7 PENDING PENDING TYPE OF Number Sold Average VOLUME Median # SOLD to $1.5M ACTIVE SALES RATIO MARKET 12 Month Period Price MILLIONS Price Last 3 days 12/31/1997 no data no data no data no data 127 $ 196,3 $ 24.9 $ 123, 9 12/31/ no data PRICE BOTTOM >>>>>>>>>>>>>>>>>>>>> 14 $ 161,9 $ 22.7 $ 4, 14 12/31/ BUYER'S 222 $ 149,3 $ 33.1 $ 115, 26 12/31/ no data no data 287 $ 223,3 $ 64.1 $ 16, 23 12/31/ BUYER'S 2 $ 213,3 $ 44.8 $ 173, 11 12/31/ no data no data 291 $ 5,7 $ 59.9 $ 151, 25 12/31/ DEMAND PEAK 263 $ 265, $ 69.7 $ 225, 21 12/31/ DEMAND PEAK 299 $ 499,4 $ $ 3, 25 12/31/ BUYER'S 166 $ 679, $ $ 429, 6 12/31/ PRICE PEAK >>>>>>>>>>>>>>>>>>>>> 17 $ 1,71,7 $ $ 534, 8 12/31/ BUYER'S 78 $ 1,421, $ 1.8 $ 48, 11 12/31/ DEMAND LOW 53 $ 864, $ 45.8 $ 3, 2 12/31/ BUYER'S 54 $ 919, $ 49.7 $ 3, 6 12/31/ BUYER'S 58 $ 2,7 $ 14.5 $, 5 12/31/ BUYER'S 67 $ 27,3 $ 18.1 $ 19, 4 12/31/ BUYER'S 91 $ 226,4 $.6 $ 189, 12 12/31/ PRICE BOTTOM >>>>>>>>>>>>>>>>>>>>> 145 $ 247,7 $ $ 175, 12/13 %chg. -21% -33% -15% 59% 9% 74% -7% -17% CHART 9 - Land sales are double the number they were this time last year. The Median Price is still not finding traction. 25 Chart 9 - Kona Land Median Price (thous) & Pending Ratio Past 2 Years LAND-Median Price LAND Ratio $2 $175 $18 $ $3 $188 $188 $19 $189 $183 $177 $175 $179 $ $175 $ $1 $ 5 $ CHART - NORTH KONA LAND MEDIAN PRICE vs NUMBER SOLD $16, $173, $151, $123, $4, $115, Median Price Number Sold 12 Month Period $6, $534, $48, $, $429, $4, $3, $3, $3, $3, $225, $, $19, $189, $175, $, $, If the increased sales trend continues prices will eventually follow that upward trend.

6 PAGE 6 SUMMARY TABLE OF PENDING RATIO TRENDS FOR NORTH KONA RESIDENTIAL, CONDO AND LAND, BIG ISLAND RESIDENTIAL AND NORTH KONA RESIDENTIAL PRICE RANGES COLOR GUIDE FOR MARKET TYPE: PEAK SELLERS NEUTRAL BUYERS KONA RES, CONDO, LND & BIG IS PENDING RATIO TRENDS KONA RESIDENTIAL PRICE RANGE PENDING RATIO'S TABLE 8 Average TO $4K $41K-$K $1K-$7K $71K-$9K $91-$1.5M 1.1M-$4.M KONA RES KONA CND KONA LND All Three HI Isle RES 12/31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /28/ /31/ /3/ /31/ /3/ /31/ /31/ /3/ /31/ /31/ /31/ ' vs 13' -.72% 15.72% -15.4% -2.7% % % 122.% 1.25% -3.% % 76.31% TABLE # 6 - Higher Ratio = Stronger Market. Pending Ratio numbers in the $4, to $7, price ranges tells the story on the the Kona residential market. As the under $4, market shrinks from lack of inventory the higher price levels have taken center stage.. CHART 6 - Kona Residential and Condo Pending Ratios for the past 12 Months KONA RES KONA CND... 12/31/12 1/31/13 2/28/13 3/31/13 4/3/13 5/31/13 6/3/13 7/31/13 8/31/13 9/3/13 /31/13 11/31/13 12/31/13 3. Chart 7 - North Kona Residential Pending Ratio by Price Range 12 Month Trend TO $4K $41K-$K $1K-$7K $71K-$9K $91-$1.5M $1.1M-$4.M. 12/31/12 1/31/13 2/28/13 3/31/13 4/3/13 5/31/13 6/3/13 7/31/13 8/31/13 9/3/13 /31/13 11/31/13 Chart 7 -

7 12/1/ 3/1/1 6/1/1 9/1/1 12/1/1 3/1/2 6/1/2 9/1/2 12/1/2 3/1/3 6/1/3 9/1/3 12/1/3 3/1/4 6/1/4 9/1/4 12/1/4 3/1/5 6/1/5 9/1/5 12/1/5 3/1/6 6/1/6 9/1/6 12/1/6 3/1/7 6/1/7 9/1/7 12/1/7 3/1/8 6/1/8 9/1/8 12/1/8 3/1/9 6/1/9 9/1/9 12/1/9 3/1/ 6/1/ 9/1/ 12/1/ 3/1/11 6/1/11 9/1/11 12/1/11 3/1/12 6/1/12 9/1/12 12/1/12 3/1/13 6/1/13 9/1/13 12/1//13 PAGE 7 TABLE 1 - KONA & WEST COAST CITIES RESIDENTIAL INVENTORY - DECEMBER 31, 13 COUNTY KONA LA VEGAS SAN DIEGO SAN FRAN PORTLAND,O SANTA FE, NM POPULATION 33, M 1.95M 3.95M 85, 2.26M 144,17 Realtor.com - Market Area KONA LA VEGAS SAN DIEGO SAN FRAN PORTLAND SANTA FE, NM Peak Inventory Date Mar-9 Aug-7 Oct-7 Sep-7 Oct-8 Aug-8 Aug-8 Inventory PEAK Inventory 2 YEARS ago to date CURRENT INVENTORY % Change 2 YEARS (See Chart 1) % % % % -.59% -33.5% 1.75% % CHANGE FROM PEAK TO CURRENT -6.42% -7.6% -4.% -71.% % % % TABLE & CHART 1 COMMENTS: West Coast metro's are showing the distinct seasonal shrinkage in inventory. While the West Coast cities are shedding inventory in the fall the Kona market starts to build inventory in anticipation of the brisk winter season. In this report we see the Kona inventory beginning to show decline as the winter buying begins. CHART 1 - Single Family Residential Inventory - KONA, SAN FRANCISCO, SAN DIEGO & L A KONA SAN FRAN SAN DIEGO L A CHART 2 - This chart is a new approach in tracking price trend measured by change in price at current date compared with price t wo years earlier. Kona's price pattern is very similar to San Diego. The timing differs with San Diego changes preceding Kona by approximately one year. San Diego 2 year price appreciation peaked at +54% in 7/4. Kona hit peak appreciation of 63% for a two year period in 8/5. San Diego turned the corner and started positive appreciation again in 3/9, while Kona reversed from its depreciation trend a year later in 4/. San Diego maybe a good leading indicator for major changes in the real estate cycle in Kona. It will likely be several years before the next down turn. Kona home price data from Hawaii Information Service and is actual Median Price over 12 month periond. 8.% 6.% CHART 2 - Kona vs San Diego Moving % Price Change The price change is measured over 2 year periods * San Diego is the monthly index price from Case Shiller Home Price Index. KONA San Diego 4.%.%.% -.% -4.% -6.% CURRENT DQNEWS.COM HEADLINES RELATED TO CALIFORNIA MARKETS: SEE FULL STORY ON WEBSITE - DQNews.com 1) An estimated 33,429 new and resale houses and condos sold statewide last month. That was down 8.3 percent from 36,468 in Octo ber, and down.8 percent from 37,481 sales in November 12 2) Bay Area home sales dipped again in November, constrained by supply and market uncertainty amid mixed economic news. Prices c ontinued their year-and-a-half-long upward march. Purchase and mortgage patterns are moving slowly but steadily toward long-term norms 3) Southern California s housing market downshifted last month, with sales falling well below a year earlier as investor activit y waned again and buyers continued to struggle with higher prices and a thin supply of homes for sale. The median sale price held nearly steady for the sixth consecutive month, though it was still almost percent higher than a year ago. 4) The number of California homes purchased with cash reached an all-time high last year, the result of high investor interest, a difficult mortgage environment, and perceived higher returns on investment. 5) The number of California homeowners entering the foreclosure process fell last quarter to the second -lowest level in seven and a half years. The drop-off is the result of a stronger job market, home price appreciation, and a variety of government foreclosure avoidance efforts.

8 PAGE 8 USEFUL WEBSITES: A www. dqnews.com/ - Western metros sales data and trends. B. - Listing inventory and average list prices for 52 large cities. C. www. nahb.org - National Association of Home Builders. D. - Mortgage Bankers Association - loan activity and loan forecasts. E. - Federal Housing Finance Agency - GOVERNMENT DATA ON HOUSING MARKET F. Google search - "Case-Shiller Home Price Indices" G. - Real Estate Agents perspective of local markets. H. - NAR - Select "News Media" and look for "Economic Housing Indicators". I. - Dept. of Business and Economic Development J. K. - Energy Information Agency - Oil and Gas prices and forecasts. L. - Hawaii County statistics. Updates monthly. DATA TABULATED BY: MICHAEL B. GRIGGS, R, CRA, GRI, Clark Realty Corporation THANK YOU FOR YOUR WORDS OF ENCOURAGEMENT, SUGGESTIONS AND COMMENTS THAT CONTINUE TO IMPROVE THE REPORT- Mike Griggs - mikegriggs@hawaiiantel.net cell ph ALL HAWAII DATA HAS BEEN COLLECTED FROM MLS HAWAII, HAWAII INFORMATION SERVICE, REALTORS.COM AND OTHER SOURCES NAMED IN THE REPORT. NOTES: 1) PAGE 1- TABLE 1 - RESIDENTIAL DATA IS LIMITED TO $4M AND UNDER PRICE RANGE IN ORDER TO SCREEN OUT HIGH END ACTIVITY AT KUKIO AND HUALALAI RESORT AREA'S. SIMILARLY THE CONDO AND LAND DATA HAS AN UPPER LIMIT OF $1.5M. 2) NUMBER SOLD, AVERAGE PRICE AND MEDIAN PRICE IS DATA IS FROM A MOVING 12 MONTH PERIOD. UPDATED EVERY TWO WEEKS THIS I S A VERY ACCURATE METHOD OF TRACKING THE SALES PRICE TRENDS. 3) THE PENDING RATIO MAYBE A GOOD LEADING INDICATOR OF MARKET STRENGTH AND PRICE DIRECTION. THE MARKET TYPE DESIGNATION, EG. SELLER, BUYER MARKET, NEUTRAL AND PEAK IS BASED ON CALIBRATION IS USING PENDING RATIO DATA IN THE PAST MARKET CYCLE. 3) DATA REPRESENTS THE ENTIRE NORTH KONA MARKET. IT SHOULD NOT BE CONSTRUED TO BE AN INDICATOR OF THE MARKET CONDITION IN ALL SUBMARKETS WITHIN THE MARKET AREA. EXAMPLE: MARKET CONDITIONS IN SUPPLY AND DEMAND MIGHT BE VERY TIGHT IN LOWER PRICE RANGES WHILE UPPER PRICE RANGE ARE STILL RELATIVELY SOFT MARKETS. MICHAEL B. GRIGGS, RB AND CLARK REALTY CORPORATION ASSUMES NO RESPONSIBILITY FOR IT'S USE BY OTHERS. REPORT WITH OTHERS. MAHALO! YOUR ARE WELCOME TO SHARE THE