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Erie Region by CharlieThhomas

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									                                               Erie Area
                                 Metro Market Report, First Quarter 2009

        Today's Market…
                           Median Price (Red Line) and One-year Price Growth                                                                   1,000s
                 20%                                                                                                                             $120
                 15%                                                                                                                                $100
                 10%
                                                                                                                                                    $80
                  5%
                                                                                                                                                    $60
                  0%
                                                                                                                                                    $40
                 -5%
                 -10%                                                                                                                               $20

                 -15%                                                                                                                               $0
                        2002 -   Q3    2003 -    Q3    2004 -    Q3    2005 -    Q3       2006     Q3        2007     Q3    2008 -   Q3    2009 -
                         Q1             Q1              Q1              Q1                - Q1               - Q1            Q1             Q1



                                                                       Erie                      U.S.                                Local Trend
Price Activity
          Current Median Home Price (2009 - Q1)                    $85,900                   $167,633
                                                                                                                           Prices are down compared to a year
                    1-year Appreciation (2009 - Q1)                -11.1%                      -8.8%                          earlier and continue to weaken
                    3-year Appreciation (2009 - Q1)                 10 4%
                                                                   -10.4%                      22 7%
                                                                                              -22.7%
          3-year (12-quarter) Housing Equity Gain                 -$10,000                   -$49,267
                                                                                                                       The decline has wiped out most of the
                  7-year (28 q) Housing Equity Gain               -$21,200                   -$31,367                  equity gained during the housing boom
                  9-year (36 q) Housing Equity Gain                -$6,900                      $633



                                      State Home Sales (Red Line) and Sales Growth                                                                  1,000s
                  20%                                                                                                                                   300
                  15%
                  10%                                                                                                                                    250
                   5%                                                                                                                                    200
                   0%
                  -5%                                                                                                                                    150
                 -10%
                 -15%                                                                                                                                    100
                 -20%                                                                                                                                    50
                 -25%
                 -30%                                                                                                                                    0
                        2002 -   Q3     2003 -    Q3    2004 -    Q3      2005       Q3     2006        Q3     2007        Q3   2008 -    Q3   2009 -
                         Q1              Q1              Q1               - Q1              - Q1               - Q1              Q1             Q1



Home Sales and Construction Growth                              Pennsylvania                     U.S.
          *State Existing Home Sales (2009 - Q1)                      -18.8%                     -8.2%                Weak compared to recent state average
*versus same quarter, year-ago



                                                                                 1
    Local Supply and Demand…
Local Economic Outlook                                   Erie            U.S.
               1-year Job Additions (2009 - Apr)        -3,900       Not Comparable     Weak for this market and could impact
               3-year Job Additions (2009 - Apr)        -4,100       Not Comparable                    demand
        State Economic Activity Index                Pennsylvania        U.S.
                  12-month change (2009 - Apr)          -10.4%           -3.2%          Contracting faster than the rest of the
                  36-month change (2009 - Apr)           -8.0%            0.9%                          nation



Local Fundamentals                                       Erie            U.S.
             1-year (12 month) Job Growth Rate           -2.9%           -1.6%          Weak compared to other markets
             3-year (36 month) Job Growth Rate           -3.1%            0.7%           Weaker than most metro areas
   1-year Job Gain to New Single-Family Homes            -15.7             -0.1       Weak compared to the national average
     3-year Job Gain to New Single-Family Homes           -3.5             4.7           Weak compared to the nation
   ** Single-Family Housing Permits (2009 - Apr)        -37.4%          -42.2%             Important to reduce supply
**Rolling 12-month sum vs. a year ago



                       Affordability - Local Mortgage Servicing Cost-to-Income
                                        (Historical Average Shown in Red Dashed Line)
              11%

              10%

              10%

               9%

               9%

               8%

               8%




Monthly Mortgage Payment to Income                       Erie            U.S.
                             Ratio for all of 2008      9.0%             20.7%                 Good local affordability
                             Ratio for 2009 - Q1        7.8%             17.7%             Improving and historically strong
                        Historical Local Average        9.7%             23.2%               Good relative to the nation




                                                                 2
                       Recent Trend ‐ Local Mortgage Servicing Cost to Income
                                     (Historical Average Shown in Red Dashed Line)
             12.0%

             10.0%

              8.0%

              6.0%

              4.0%

              2.0%

              0.0%
                         2007 - Q4       2008 - Q1   2008 - Q2     2008 - Q3     2008 - Q4      2009 - Q1




Median Home Price to Income                          Erie           U.S.
                                 Ratio for 2008      3.2              7.2                Good Relative to Local History
                        Historical Local Average     3.5              7.2              Good Compared to Nation Average


                          Ratio of Local Median Home Price to Local Average Income
                                       (Historical Average shown in Red Dashed Line)
                 3.8
                 3.7
                 3.6
                 3.5
                 3.4
                 3.3
                 3.2
                 3.1
                 3.0
                 2.9




                                                            3
  Looking Deeper….
                               State Total Foreclosure Rate vs. U.S Average
                                            (U.S. Average in Red Dashed Line)
                4.5%
                4.0%
                3.5%
                3.0%
                2.5%
                2.0%
                1.5%
                1.0%
                0.5%
                0.0%




              Source: Mortgage Bankers' Association



Monthly Market Data - February 2009                   Erie             U.S.
                           PRIME Market Share        85.8%             84.5%          Lower subprime exposure than average
            SUBPRIME and Alt-A Market Share          14.2%             15.5%             Strong Compared to the Nation

        TOTAL F    l
              Foreclosure + REO Rate
                                R t                  1.1%
                                                     1 1%               1.7%
                                                                        1 7%          Littl local i
                                                                                      Little l  l increase relative t year ago
                                                                                                             l ti to

TOTAL Foreclosure + REO Rate (same period, 1-                                         The current local rate is high compared
                                                     0.9%               0.8%
                year earlier )                                                            with the current U.S. average
                                                                                        There has been little change locally
      SUBPRIME Foreclosure + REO Rate                8.3%              14.6%
                                                                                               compare to year ago
  SUBPRIME Foreclosure + REO Rate (same                                                Locally, today's foreclosure rate is low
                                                     8.6%              11.6%
          period, 1- year earlier)                                                       relative to the nationional average
                                                                                       Relatively little local increase versus a
        ALT-A Foreclosure + REO Rate                 3.3%              12.1%
                                                                                                        year ago
ALT-A Foreclosure + REO Rate (same period, 1-                                         Today's local rate is low compared to the
                                                     3.0%               5.5%
                year earlier)                                                                     national average
Monthly Foreclosure data provided by First American CoreLogic, LoanPerformance data




                                                              4
The Mortgage Market

                 30-year Fixed Mortgage Rate and Treasury Bond
      8.0                                                                                          3.00
      7.0                                                                                          2.50
      6.0                                                                                          2.00
      5.0                                                                                          1.50
      4.0                                                                                          1.00
      3.0                                                                                          0.50
      2.0                                                                                          0.00
            Q4   Q2     Q4    Q2     Q4     Q2   Q4   Q2   Q4   Q2   Q4   Q2   Q4   Q2    Q4


                      Spread (right axis)             30-Year FRM          10-Year Treasury Bond




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