Jerry Johnson Principal Johnson Reid, LLC

1. RECENT ECONOMIC ANDRESIDENTIAL MARKETTRENDS AND FORECASTPORTLAND METROPOLITAN AREATICOR TITLEJanuary 2010 Jerry Johnson Principal Johnson Reid, LLC

3. NATIONAL GDP GROWTH

6. CONSUMER CONFIDENCE SERIES

7. NEGATIVE EQUITY MORTGAGES SOURCE: First American CoreLogic, August 2009

8. RESIDENTIAL LOAN BALANCES THAT WILL EXPERIENCE PAYSHOCK

9. HOME PRICING TRENDS SOURCE: Case-Schiller

10. National-Standard & PoorsCase-Shiller Home Price Indices

11. National-Standard & PoorsCase-Shiller Home Price Indices

12. Area 147 …LO/WL Average Sales Price

13. Area 151 …Wilsonville Average Sales Price

14. COMMERCIAL PRICING TRENDS SOURCE: MIT

15. NATIONAL HOME SALES TRENDS SOURCE: NAR

16. FINANCING FOR HOMEBUYERSOCTOBER 2009 SOURCE: Campbell Communications

17. YEAR OVER YEAREMPLOYMENT CHANGEPortland Metro Area SOURCE: OLMIS

18. EMPLOYMENT CHANGEBY SECTOR – Portland Metro AreaSep-08-Sep-09 SOURCE: OLMIS

19. EXPANDING AND DECLINING INDUSTRY SECTORS - OREGON SOURCE: OLMIS

20. UNEMPLOYMENT RATEBaseline and with Discouraged SOURCE: BLS

21. NET CHANGE IN POPULATIONPORTLAND METRO AREA SOURCE: Portland State Pop Center and Washington Office of Financial Management

22. POPULATION BY COUNTYLast Ten Years SOURCE: Portland State Pop Center and Washington Office of Financial Management

23. RESIDENTIAL PERMIT TRENDS

24. HOMEOWNER VACANCY RATES – NATIONAL AVERAGE SOURCE: Census Bureau

25. CMA – Vacancy

26. RENTAL VACANCY RATES – NATIONAL AVERAGE SOURCE: Census Bureau

27. ECONOMIC/DEMOGRAPHIC TRENDS SUMMARY • CONFIDENCE LOW • High Unemployment • Significant Percentage of Negative Equity • BANKS WILL REMAIN ON DEFENSIVE • Residential Bust Followed by Commercial Bust • Foreclosures Likely to Continue • LOCAL EMPLOYMENT TRENDS NEGATIVE • Loss of 60,000 Jobs • Employment Back at 2005 Levels • PRICING APPEARS TO HAVE FOUND A BOTTOM • Lots of Residential Overhang Remains

28. OWNERSHIP RESIDENTIAL MARKET

29. CASE-SHILLER INDEX SOURCE: S&P/Case Shiller, Seasonally Adjusted

30. PORTLAND METRO AREA MEDIAN HOME PRICE TRENDS

31. HOUSING TRENDS

32. PORTLAND METRO AREA MEDIAN HOME PRICE TRENDS

33. PORTLAND METRO AREA MEDIAN HOME PRICE FORECAST

34. STANDING RESIDENTIAL INVENTORY IN MONTHSPORTLAND METRO AREA SOURCE: Realtors Multiple Listing Service

35. STANDING RESIDENTIAL INVENTORY IN MONTHSPORTLAND METRO AREA

36. RESIDENTIAL INVENTORYPORTLAND METRO AREA SOURCE: Realtors Multiple Listing Service

37. RESIDENTIAL INVENTORYPORTLAND METRO AREA SOURCE: Realtors Multiple Listing Service

38. NEW LISTINGSAND CLOSED SALESPORTLAND METRO AREA SOURCE: Realtors Multiple Listing Service

39. UNIT INVENTORYBY GEOGRAPHY AND TYPE

40. RESIDENTIAL INVENTORY TRENDS

41. STANDING INVENTORY IN MONTHS

42. STANDING INVENTORYBY PRICE RANGE – SEPT-09

43. STANDING INVENTORYBY PRICE AND COUNTY – SEPT-08

44. RESIDENTIAL LOT INVENTORYPORTLAND METRO AREA

45. ESTIMATED INVENTORY OF LOTS IN MONTHS SOURCE: Realtors Multiple Listing Service

46. PENDING LOT INVENTORYPORTLAND METRO AREA

47. MARKET CONCLUSIONS • FUNDAMENTALS IMPROVING • Standing Inventory at 6.5 Months • Very Low New Home Inventory • THREATS REMAIN ON HORIZON • Pricing Stabilizing, but Foreclosures Coming • Unemployment Too High – Will Peak in 2010 • PRICING POWER LIMITED • Shadow Inventory • Limited Confidence • CONDO MARKET DEAD UNTIL FURTHER NOTICE

48. MARKET CONCLUSIONS • FIRST TIME TAX CREDIT • Less Effective over Time • May be Setting Up FHA for Crash • CHANGE IN PRODUCT TYPE • First Time Homebuyer Target • Loss in Equity Will Impact Move-Up Markets • METRO – URBAN GROWTH REPORT • Not Even Trying Anymore • Expect No New Residential Land

49. PRELIMINARY UGRRESIDENTIAL CAPACITY