1. Regional Housing Market Perspective HANLEY WOOD MARKET INTELLIGENCE Formerly Meyers Group Stephen Smiley (925) 737-1110 x224 ssmiley@hanleywood.com ssmiley@hanleywood.com

2. WHO IS HANLEY WOOD MARKET INTELLIGENCE?  Information: Nation’s leading provider of residential real estate information –Covering 30 major metropolitan areas nationwide –Addressing active subdivisions and the entitlement pipeline  Consulting: Customized analysis for residential and master planned communities –848 studies in 22 states in 2004 –Pricing strategies, absorption studies, product analysis and strategic planning

4. EXPANSION MOTIVATIONS  Increase Revenue  Expand Scale to Enhance Valuation  Geographic Diversification to Lower Risk  Product Expansion and Land Inventories  “The Closer In Markets Are Taken”

5. San Joaquin Map

6. Stanislaus Map

7. Merced Map

8. Fresno Map

9. NEW HOME AFFORDABILITY RATIO Major California Markets Note: Data is for 30-Year Fixed Rate Mortgage and 2005* figures are based on 1Q05 data. Source: Meyers Market Monitor, Hanley Wood Market Intelligence Note: Data is for 30-Year Fixed Rate Mortgage and 2005* figures are based on 1Q05 data. Source: Meyers Market Monitor, Hanley Wood Market Intelligence 1 st Quarter 2005 Statistics Orange County3.8% San Diego6.4% LA/Ventura14.3% Inland Empire15.3% Bay Area14.5% Sacramento16.7% Central California16.9% 1 st Quarter 2005 Statistics Orange County3.8% San Diego6.4% LA/Ventura14.3% Inland Empire15.3% Bay Area14.5% Sacramento16.7% Central California16.9%

10. DETACHED MEDIAN PRICE Central Valley $408k (+44%) 221% increase from 1 st Qtr 1995 Note: 2005* figures are based on 1Q05 data Source: Meyers Market Monitor, Hanley Wood Market Intelligence Note: 2005* figures are based on 1Q05 data Source: Meyers Market Monitor, Hanley Wood Market Intelligence

11. NEW DET. HOME TRENDS IN PRICE & VALUE/SF Central Valley Median Price=$407,859 (+44%) Price/SF=$182 (+5.2%) Merced = $181k (+10.3%) San Joaquin= $200k (+7%) Stanislaus = $171k (+5.6%) Note: 2005* figures are based on 1Q05 data Source: Meyers Market Monitor, Hanley Wood Market Intelligence Note: 2005* figures are based on 1Q05 data Source: Meyers Market Monitor, Hanley Wood Market Intelligence

12. AVERAGE DETACHED NEW HOME PRICES Commuter Corridor/Hwy 5 & 99 January 2005  Tri-Valley Dublin$1,084, 975 Livermore$1,207,301 San Ramon$916,837  Central California Tracy$581,622 Patterson$490,159 Lathrop$461,191 Los Banos$401,046 Manteca$394,134 Stockton$388,076 Modesto$354,209 Fresno$309,518 Merced$288,604

13. SAN JOAQUIN MOST ACTIVE SUBMARKET Central Valley Source: Meyers Market Monitor, Hanley Wood Market Intelligence. San Joaquin Captures 47% of Sales San Joaquin 53.1% in 1997

14. NEW HOME EXECUTIVE SUMMARY REPORT 1 st QUARTER 2005 PricePrice/sq/ftLast 4 Quarters % CaptureCurrent Quarter % Capture Merced$336,190$1812,16411.4%60212.3% San Joaquin$464,990$2004,80425.4%1,08522.2% Stanislaus$407,656$1713,99721.1%96719.8% Central Valley $407,859$18210,96558.0%2,65454.3% Median Detached BaseTotal Sales (Detached & Attached) Counties Source: New Home Executive Summary Report, Hanley Wood Market Intelligence.

15. Current Median Price and New Home Sales over Past Four Quarters  San Joaquin $464,9904,804 sales  Stanislaus$407,6563,997 sales  Merced$336,1902,164 sales  Fresno region$307,5005,625 sales  Kern County$295,7502,320 sales

16. DET. SALES: MAJORITY NOW OVER $350K Central Valley Source: Meyers Market Monitor, Hanley Wood Market Intelligence YTD Net Sales 2004 4% Over $500K 7% Over $450K 13% Over $400K 18% Over $350K 25% Over $300K 17% Over $250K 8% Over $200K 2% Over $150K.001% Over $100K.001% under $100K

17. INVENTORY REMAINS LOW Central Valley Source: Meyers Market Monitor, Hanley Wood Market Intelligence 1Q05 Stdg. Inv.10 1Q05 Speculative Inv.13 Mo. Spec. Inv.0.0

18. Central Valley Future Supply  CountyActiveMappedTotal  San Joaquin3,35719,24222,599  Stanislaus3,8087,58311,391  Merced2,9938,43511,428  Projected Supply (Based on 2004 Sales)  San Joaquin4.17 years (5,414 sales/yr)  Stanislaus2.81 years (4,084 sales/yr)  Merced5.43 years (2,103 sales/yr)

19. RESALES HIT NEW RECORD IN 2004 Central CA 2004 - 56,026 Sales Source: Meyers Market Monitor, Hanley Wood Market Intelligence

20. 2004 TOP BUILDERS CENTRAL VALLEY BuilderSalesMarket Share# of Projects KB Home7416.4%15 California Homes7266.3%20 Ranchwood Homes6505.6%12 Meritage Homes5915.1%10 Woodside Homes5825.0%10 Forecast Homes5074.4%13 Kimball Hill Homes4193.6%7 Morrison Homes4013.5%9 Dunmore Homes3713.2%8 Ryland Homes3362.9%7 Source: Hanley Wood Market Intelligence

21. 1Q05 TOP BUILDERS CENTRAL VALLEY BuilderSalesMarket Share# of Projects KB Home2107.9%8 Ranchwood Homes2007.5%13 Kimball Hill Homes1505.7%6 California Homes1475.5%8 Woodside Homes1194.5%7 Meritage Homes1164.4%7 Forecast Homes873.3%4 Morrison Homes873.3%8 Ryland Homes803.0%4 JKB Homes782.9%4 Source: Hanley Wood Market Intelligence

22. 2004 TOP BUILDERS FRESNO MSA BuilderSalesMarket Share# of Projects Centex Homes53811.0%22 Cambridge-Lennar4769.7%17 Wathen/Castanos4559.3%6 Wilson Homes3918.0%5 Granville Homes3236.6%10 McMillin Homes3036.2%8 Ennis Homes2986.1%14 Bonadelle Dev2344.8%5 Smee Builders1863.8%4 McCaffrey Group1753.6%6 Source: Hanley Wood Market Intelligence

23. 1Q05 TOP BUILDERS FRESNO MSA BuilderSalesMarket Share# of Projects Centex Homes23514.1%12 Cambridge-Lennar19011.4%8 Ennis Homes1006.0%8 Wathen/Castanos996.0%3 Granville Homes915.5%6 McMillin Companies784.7%5 McCaffrey Group623.7%2 McMillin Homes553.3%3 Smee Builders, Inc.553.3%3 Wilson Homes533.2%4 Source: Hanley Wood Market Intelligence

24. News and Notes from Central Valley:  In the entire Central California region, builders had detached net sales of 18,508 homes through 2004, representing an increase of 3.5% over 2003.  The detached average prices in Central California rose 32% from 2003 to $369,845. The highest increases were found in Central Valley were new homes commanded an average price of $409,488. By comparison, the Kern County submarket base prices increased to $298,452, followed by the Fresno market which increased to $305,661.  Central Valley with 163 projects had 93% of its sales occurring in homes priced at over $300,000.

25. GOING FORWARD  Look for additional product in Mountain House, Lathrop, etc. Growth control in Tracy, etc.  Merced/Madera will continue to expand.  Lot prices continue to increase has more builders look towards the area to expand.  The Bay Area will always impact the market, however, local valley move-up buyers now a major market. Due to increased equity and low interest rates.  Price points increasing. Tracy/Lathrop towards the high $500,000’s, other areas into the mid $400,000’s.  Look for more slow growth measures to come to a vote over the next few years  Markets expanding south of Fresno, communities such as Selma, Sanger, Reedley, etc  Bay Area/Sacramento builders need to keep pipeline filled.

26. WHERE CAN WE FIND CHEAP LAND?