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

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1 GRIGGS REPORT #123 - OCTOBER 15, 212 A BIMONTHLY 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. 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 /15/ no data no data no data 239 $ 275, $ 65.7 $ 23, 16 /15/ BUYER'S 297 $ 272,9 $ 81.1 $ 225, 33 /15/ no data no data 413 $ 32,9 $ $ 239, 4 /15/ NEUTRAL 466 $ 3,6 $ $ 275, 45 /15/ NEUTRAL 481 $ 346,3 $ $ 267, 41 /15/ SELLER'S 531 $ 365,9 $ $ 299,9 24 /15/ PEAK 595 $ 429,4 $ $ 384,9 75 /15/ DEMAND PEAK 716 $ 548,3 $ $ 465,2 72 /15/ SELLER'S 664 $ 73,9 $ $ 6, 44 /15/ PRICE PEAK >>>>>>>> 534 $ 754,2 $ 42.7 $ 635, 4 /15/ BUYER'S 48 $ 737,8 $ 31. $ 66,3 35 /15/ DEMAND LOW 261 $ 669,8 $ $ 5, 15 /15/ BUYER'S 239 $ 534,7 $ $ 435, 22 /15/ NEUTRAL 365 $ 474,3 $ $ 398, 36 /15/ NEUTRAL 395 $ 456,7 $ 18.4 $ 37, 37 /15/ SELLER'S 391 $ 474,4 $ $ 384, 29 2/211 %chg -18% 19% 45% -1% 4% 3% 4% -22% Year over year data shows big decline in residential inventory and strong increase in pending sales. This is indicative o f new phase in this current real estate cycle. This new phase is termed the recovery phase. This follows approximately 2 years of Contraction, 2 years of Recession and 2 years of Trough or Bottom. Thanks to strong influence from the Federal Reserve this current cycle seems to be following a textbook real estate cycle pattern. Stay tuned $4 $398 Chart 1 - Kona Residential Median Price (thous) & Pending Ratio - Past 2 Years Res-Median Price Res Pending Ratio $43 $382 $375 $37 $37 $369 $368 $366 $366 $366 $368 $385 $384 $4 $4 $39 $38 $37 $36 $3 $34 CHART 2 - N. Kona Residential Median Price vs Number Sold Since Median Price Number Sold 12 Month Period $7, $6, $, $4, $3, $2, $, CHART 2 - The number of home sales has stalled over the past month and is actually showing a modest year of year decline. With the strong number of recent

2 PAGE 2 NORTH KONA RESIDENTIAL PRICE RANGE TABLE AND BIG ISLAND RESIDENTIAL LISTINGS, PENDING SALES AND SALES Year To Date TABLE 2 NORTH NORTH KONA KONA RESIDENTIAL PRICE PRICE RANGE RANGE DATA DATA KONA Residential NUMBER AVERAGE NUMBER AVERAGE PENDING VOL KONA RES NUMBER SOLD PENDING PRICE RANGE ACTIVE PRICE PENDING PRICE MILLIONS RATIO TO $ 4, 44 $ 325,8 69 $ 294,2 $ $ 41, $, 31 $ 465,9 26 $ 442,4 $ $ 1, $ 7, 51 $ 69,2 19 $ 597,6 $ $71, $ 9, 22 $ 84,7 6 $ 849, $ $ 91, $1,, 41 $ 1,158,2 1 $1,395, $ $1.5M $ 4.M 24 $ 2,316,7 2 $ 1,599, $ $4.1 M or GREATER 38 $ 7,986,499 $ - $ TABLE 2 - The under $4, inventory is still resisting decline. This is primarily due to the persistant supply of distressed properties entering the market. CHART 3 - NORTH KONA RESIDENTIAL NUMBER SOLD PAST 12 MONTHS BY PRICE RANGE TO $4, $41, $, $1, $7, $71, $9, $91, $1,, $1.5M $ 4.M $4.1 M or GREATER 68 BIG ISLAND LISTING, PENDING SALES AND SALES YEAR TO DATE TABLE 3 RES NUMBER LOW HIGH AVERAGE MEDIAN MODE VOLUME (M) PENDING 3-1 TO 3-4 ACTIVE 577 $25, $5,9, $375,399 $2, N/A $ RATIO ALL EAST HI PENDING 195 $42, $1,295, $241,771 $199, N/A $ 47.1 RESIDENTIAL SOLD YTD 583 $7,2 $2,495, $215,747 $175, $22, $ TO 3-9 ACTIVE 629 $19,999 $32,995, $1,333,298 $524,895 $399, $ ALL WEST HI PENDING 242 $4, $11,9, $428,416 $349, $399, $ 3.7 RESIDENTIAL SOLD YTD 655 $2, $13,8, $59,612 $346, $275, $ ALL BIG ISLE ACTIVE 126 $19,999 $32,995, $874,382 $3, $299, $1,55 ALL BIG ISLE PENDING 437 $4, $11,9, $345,58 $269, $399, $ ALL BIG ISLE SOLD YTD 1238 $7,2 $13,8, $414,693 $2, N/A $ CHART 4 - West HI, East HI and Hawaii Island - Residential Pending Ratio over the Past Two Years West Hawaii Ratio East Hawaii Ratio Big Isle Res Ratio. 5.. CHART 4 - The West HI Pending Ratio shows a weakening over the past month while the East HI residential market strengthened

3 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.% 2.% N. Kona 3-7 Waikoloa Waimea 36-4,5,6 S Hilo 3-2 Puna 3-2.%.% CHART 3: THIS CHART IS PROBABLY THE BEST INDICATOR OF THE ISLAND WIDE DESTRESSED PROPERTY TREND. N. Kona is the only market area showing decline over the past month. The other market areas have shown increase in the percentage of distressed listing in the MLS. The following is the list of current percentage distressed (REO or Short Sale) in 9 day sales: N. Kona 28.9%, Waikoloa 61.9%, Waimea 43.8%, S. Hilo 22% and Puna 29%. Chart 6 - Number By District of REOs, Owned by: Fed. National Mortgage Assn. (FANNIE MAE), Deutsche Bank, Wells Fargo & Bank of America 8 7 Puna 6 S Hilo 4 S Kohala 3 N Kona 2 S Kona, Kau /15/11 11/15/11 12/15/11 1/15/12 2/15/12 3/15/12 4/15/12 5/15/12 6/15/12 7/15/12 8/15/12 9/15/12 /15/12 CHART 4: THIS CHART LOOKS AT THE FORECLOSURE TREND AS REFLECTED IN THE NUMBER OF Fannie Mae, Deutsche Bank, Wells Fargo and Bank of America OWNED PROPERTIES. MUCH OF THE DECLINE IS DUE THE PASSAGE OF ACT 48. REO numbers are either unchanged or showing slight increase.

4 PAGE 4 NORTH KONA CONDO DATA TABLE 4 ACTIVE PENDING PENDING TYPE OF Number Sold AVERAGE VOLUME MEDIAN # SOLD to $1.5M LISTINGS SALES RATIO MARKET 12 Month Period Price MILLIONS Price Last 3 day /15/1997 no data no data no data no data 296 $ 129, $ 38 $ 7, 32 /15/1998 no data no data no data no data 376 $ 133,2 $ $ 115, 33 /15/ BUYER'S 427 $ 14, $ 6 $ 126, 35 /15/ SELLER'S 495 $ 166,7 $ 83 $ 135, 4 /15/ no data NEUTRAL 437 $ 185,6 $ 81 $ 1, 49 /15/ SELLER'S 399 $ 2,6 $ 8 $ 173, 41 /15/ PEAK 616 $ 219,4 $ 135 $ 193, 53 /15/ DEMAND PEAK 587 $ 289,8 $ 17 $ 265, 59 /15/ PEAK 692 $ 41,2 $ 278 $ 369, 64 /15/ PRICE PEAK >>>>>>>>>> >>>>>>>>> 477 $ 459, $ 219 $ 415, 33 /15/ BUYER'S 283 $ 41,8 $ 114 $ 365, 21 /15/ DEMAND LOW 191 $ 379,4 $ 72 $ 3, 11 /15/ BUYER'S 148 $ 285, $ 42 $ 261,3 15 /15/ BUYER'S 272 $ 238,7 $ 65 $ 2, 18 /15/ BUYER'S 3 $ 21,6 $ 6 $ 167,7 15 /15/ NEUTRAL 327 $ 219,8 $ 72 $ 175, 2/211 %c -23% -4% 26% 9% 9% 19% 4% -% Chart 7 - Kona Condo Median Price( thous) & Pending Ratio - Past 2 Years 6 Median Price Condo Pending Ratio $2 4 $29 $199 $18 $175 $172 $17 $169 $164 $165 $16 $172 $174 $173 $175 $2 $1 3 2 $ $ CHART 7 - Like Residential the N. Kona condo inventory shows sharp Year over Year decline. Median Price is showing the same +4% year over year appreciation as Residential. Unlike residential the number pending sales is below last years level. 8 7 CHART 8 NORTH KONA CONDO MEDIAN PRICE vs NUMBER SOLD $4, $4, $3, $3, $2, $2, $1, $, $, Number Sold 12 Month Period MEDIAN Price CHART 8 - Condo price appears to be on increasing trend due to strong sales numbers and declining inventory.

5 PAGE 5 NORTH KONA LAND DATA TABLE 5 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 /15/1997 no data no data no data no data 12 $ 193, $ 23.2 $ 127, 24 /15/1998 no data no data no data no data 136 $ 167,2 $ 22.7 $ 1, 15 /15/ BUYER'S 192 $ 134,7 $ 25.9 $ 115, 18 /15/ BUYER'S 298 $ 2, $ 59.6 $ 149,8 27 /15/ no data 237 $ 26, $ 48.9 $ 167, 17 /15/ NEUTRAL 248 $ 19,6 $ 47.3 $ 152,8 21 /15/ SELLER'S 28 $ 253,9 $ 71.1 $ 2, 21 /15/ SELLER'S 292 $ 336,2 $ 98.2 $ 295, /15/ SELLER'S 183 $ 467,7 $ 85.6 $ 399, 13 /15/ PRICE PEAK >>>>>>>>>>>>>>>>>>>>>>>>> 99 $ 5,4 $ 54.5 $, 6 /15/ BUYER'S 67 $ 442,7 $ 29.7 $ 42, 5 /15/ BUYER'S 51 $ 439,2 $ 22.4 $ 325, 3 /15/ BUYER'S 42 $ 315,6 $ 13.3 $ 277, 8 /15/ DEMAND LOW 54 $ 265, $ 14.3 $ 212, 2 /15/ BUYER'S 72 $ 249,4 $ 18. $ 19, 5 /15/ BUYER'S 71 $ 255,4 $ 18.1 $ 187, 9 2/211 %chg -23% 133% 123% -1% 2% 1% -1% 8% Chart 9 - Kona Land Median Price (thous) & Pending Ratio Past 2 Years $27 $2 $197 $184 LAND-Median Price $189 $178 $178 LAND Ratio $18 $175 $199 $225 $213 $189 $188 $2. $2. 12 $ $. 4 $. 2 3 CHART - NORTH KONA LAND MEDIAN PRICE vs NUMBER SOLD $6, 3 2 $, $4, 2 1 $3, $2, $, Median Price Number Sold 12 Month Period

6 PAGE 6 SUMMARY TABLE OF PENDING RATIO TRENDS FOR NORTH KONA RESIDENTIAL, CONDO AND LAND, BIG ISLAND RESIDENTIAL AND 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 6 Average TO $4K $41K-$K $1K-$7K$71K-$9K $91-$1.5M 1.1M-$4.M KONA RES KONA CND KONA LND All Three Big Is RES /15/ /15/ /15/ /15/ /15/ /15/ /15/ /15/ /15/ /15/ /15/ /15/ /15/ /15/ /15/ /15/ /15/ /15/ /15/ ' vs 12' 41.72% 25.59% % 49.81% 35.17% 8.15% 48.% 96.36% 31.8% -67% % TABLE # 6 - Higher Ratio = Stronger Market. BIG ISLAND PENDING RATIO CONTINUES TO STRENGTHEN AND IS AT NEW HIGH. Year over Year improvement in the Res, Cnd, Lnd and Big Island are encouraging. under $4, range and $4, to $,. Most impressive in the price range group is the 6 CHART 6 - Kona Residential and Condo Pending Ratios for the past 12 Months KONA RES KONA CND Chart 7 - North Kona Residential Pending Ratio by Price Range TO $4K $41K-$K $1K-$7K $71K-$9K $91-$1.5M $1.1M-$4.M Chart 7 - Price range to $4, Pending Ratio weakened slightly due to an increase in listing and drop in pending sales.

7 Kona Home Price San Diego & L.A. Home Prices Index TABLE 1 - KONA & WEST COAST CITIES RESIDENTIAL INVENTORY - OCTOBER 15, 212 COUNTY KONA LA VEGAS SAN DIEGO SAN FRAN PORTLAND,O SANTA FE, NM POPULATION 2 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 12 months ago to date CURRENT INVENTORY % Change 12 months % -28.8% % -37.8% % % % % CHANGE FROM PEAK TO CURRENT % % % % % % % TABLE & CHART 1 COMMENTS: Coinsidence or similarity in market fundementals? Amazing to see Little Kailua Kona having the almost identical decline in inventory from Peak as Megaopolis LA (-54.74%) vs. (-54.84%). Data is residential listing inventory from REALTOR.COM CHART 1 - Single Family Residential Inventory - KONA, SAN FRANCISCO, SAN DIEGO & L A KONA SAN FRAN SAN DIEGO L A PRICE TREND COMMENTS: All metros and N. Kona residential data are now showing upward price trend. This trend is being b rought about by the reduced inventory of bargain priced distressed properties and to a lesser degree increased activity for properties in higher price ranges. * Kona home price data from Hawaii Information Service and is Median Price. San Diego, LA and San Francisco is a h ome price index from Case Shiller Home Price index. CHART 2 - Three Year Price Trend for Kona, San Diego and Los Angeles $4, $4, $39, $38, $37, $36, $3, $34, KONA San Diego L A San Francisco CURRENT DQNEWS.COM HEADLINES RELATED TO CALIFORNIA MARKETS: SEE FULL STORY ON WEBSITE - DQNews.com 1) An estimated 34,453 new and resale houses and condos sold statewide last month, down 16.5 percent from 41,28 in August, and down 2.7 percent from 35,44 sales in September ) The median price paid for a Bay Area home rose to its highest level in more than four years in September, the result of a slowly improving economy, low mortgage interest rates and shifts in market mix, a real estate information service reported. The median price paid for new and resale homes in the ninecounty Bay Area rose to $429, last month. That was up 4.6 percent from $4, in August and up 17.5 percent from $365, in September a year ago. It was the highest since August 28 when it was $447,. 3) The median price paid for a Southern California home rose again in September to a more-than-four-year high, the result of affordability-driven demand meeting a modest supply of homes for sale, and a big change in market mix. For the first time in nine months sales declined compared with a year earlier as low-end deals fell and foreclosure resales hit a nearly five-year low. 4) The number of California homes entering the formal foreclosure process dropped in the second quarter to its lowest level sinc e early 27. The decline stems from a combination of factors, including an improving housing market, the gradual burning off of the most egregious mortgages originated from 25 through 27, and the growing use of short sales.

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 COLLECTED IS LIMITED TO $4M AND UNDER PRICE RANGE IN ORDER TO SCREEN OUT RECENT 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) PAGE 1-TABLES 1, 2 and 3 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 OR FOR DIFFERENT MARKET AREAS ON THE ISLAND. MICHAEL B. GRIGGS, RB AND CLARK REALTY CORPORATION ASSUMES NO RESPONSIBILITY FOR IT'S USE BY OTHERS. YOUR ARE WELCOME TO SHARE THE REPORT WITH OTHERS. MAHALO!