1. COCHISE COLLEGE Center for Economic Research Economic Review & Outlook Sierra Vista, AZ

2. Cochise College Center for Economic Research United States Real GDP Growth Real GDP Growth 3.9% in 2004 3.9% in 2004 3.2% in 2005 3.2% in 2005 3.3% in 2006 3.3% in 2006 1 st Qtr: 5.6% 1 st Qtr: 5.6% 2 nd Qtr: 2.6% 2 nd Qtr: 2.6% 3 rd Qtr: 2.0% 3 rd Qtr: 2.0% 4 th Qtr: 2.2% 4 th Qtr: 2.2%

3. Cochise College Center for Economic Research United States Consumer Price Index Consumer Price Index 2004: Up 2.7% 2004: Up 2.7% 2005: Up 3.4% 2005: Up 3.4% 2006: Up 3.2% 2006: Up 3.2% Energy prices up 11.2% in 2006 Energy prices up 11.2% in 2006 Follows 17.1% increase in 2005 Follows 17.1% increase in 2005

4. Cochise College Center for Economic Research Interest Rates Federal Funds Rate Federal Funds Rate Increased 25 basis points each meeting from June 2004 to June 2006 Currently 5.25% Mortgage Rates Mortgage Rates 2003: 5.83% 2004: 5.84% 2005: 5.87% 2006: 6.58% Jan 2007: 6.36%

5. Cochise College Center for Economic Research Arizona’s Economy Real GDP by State Real GDP by State Up 9.1% in 2005 Up 5.2% (Avg. Annual) between 1997 and 2004 Fastest-growing state (economically) in the nation in 2005 Fastest-growing state (economically) in the nation between 1997 and 2004

6. Cochise College Center for Economic Research

7. The Local Economy

8. Cochise College Center for Economic Research Population Sierra Vista Sierra Vista 2005 Population: 43,690 Up 2.3% from 2004 Up 15.7% since 2000 Average 3.3% per year since 2000 Cochise County Cochise County 2005 Population: 131,790 Up 1.7% from 2004 Up 11.9% since 2000 Average 2.3% per year since 2000

9. Population Projections In 2010 Sierra Vista: 49,757 (Avg. 2.6% per year) Cochise County: 146,666 (Avg. 2.2% per year)

10. Employment

11. Cochise College Center for Economic Research Unemployment Rate 2005 U.S.: 5.1% U.S.: 5.1% Arizona: 4.7% Arizona: 4.7% Cochise County: 4.9% Cochise County: 4.9% Sierra Vista: 2.9% Sierra Vista: 2.9%2006 U.S.: 4.6% U.S.: 4.6% Arizona: 4.2% Arizona: 4.2% Cochise County: 4.7% Cochise County: 4.7% Sierra Vista: 2.8% Sierra Vista: 2.8%

12. Cochise College Center for Economic Research Sierra Vista Employment, 2006 Civilian Labor Force: 18,047 Civilian Labor Force: 18,047 New Jobs: 521 New Jobs: 521 Job Growth: 3.0% Job Growth: 3.0% Top Employers (FTE Employment) Top Employers (FTE Employment) Fort Huachuca (13,098) Fort Huachuca (13,098) Sierra Vista School District (1,065) Sierra Vista School District (1,065) Sierra Vista Regional Health Center (643) Sierra Vista Regional Health Center (643) Northrop Grumman Corp (565) Northrop Grumman Corp (565) Aegis (557) Aegis (557)

13. Cochise College Center for Economic Research Cochise County Non-Farm Employment 2005 2005 37,050 jobs 37,050 jobs 1,900 new jobs 1,900 new jobs Annual job growth: 5.4% Annual job growth: 5.4% Goods Producing: 7.5% Goods Producing: 7.5% Private Service- providing: 4.8% Private Service- providing: 4.8% Government: 5.9% Government: 5.9% 2006 2006 38,350 jobs 1,300 new jobs Annual job growth: 3.5% Goods Producing: 4.9% Private Service- providing: 4.2% Government: 1.8%

14. Cochise College Center for Economic Research Cochise County Job Creation/Growth, 2005-2006 No. of New Jobs No. of New Jobs Professional & business services: 375 Professional & business services: 375 Trade, transportation & utilities: 325 Trade, transportation & utilities: 325 Agriculture: 275 Agriculture: 275 Government: 225 Government: 225 Leisure & hospitality: 200 Leisure & hospitality: 200 Mining & construction: 150 Mining & construction: 150 Education and health services: 50 Education and health services: 50 Financial activities: 25 Financial activities: 25 Manufacturing: 25 Manufacturing: 25 Information: -50 Information: -50 Other services: -75 Other services: -75 Job Growth Rate Job Growth Rate Professional & business services: 8.6% Mining & construction: 5.5% Trade, transportation & utilities: 5.1% Leisure & hospitality: 4.9% Manufacturing: 2.9% Financial activities: 2.6% Government: 1.8% Agriculture: 1.7% Education and health services: 1.3% Information: -10.5% Other services: -7.3%

15. Cochise College Center for Economic Research Average Annual Wage Comparisons, 2005

16. Cochise College Center for Economic Research Average Hourly Wage Comparisons, 2005

17. Cochise College Center for Economic Research Sierra Vista Employment Forecast Labor Force Labor Force 18,352 in 2007 18,352 in 2007 18,680 in 2008 18,680 in 2008 19,009 in 2009 19,009 in 2009 Unemployment rate Unemployment rate 2.8% in 2007 2.8% in 2007 2.8% in 2008 2.8% in 2008 2.7% in 2009 2.7% in 2009

18. Local Sales Retail Sales Restaurant and Bar Lodging Wholesale Trade Manufacturing Construction

19. Cochise College Center for Economic Research Sierra Vista Taxable Sales by Category

20. Cochise College Center for Economic Research Sierra Vista Retail Sales 2005 2005 $476.3 million Up 7.5% Real, inflation-adjusted growth of 4.1% 65.1% of county retail sales 2006 2006 $501 million Up 5.2% Real, inflation-adjusted growth of 2% 64.3% of county retail sales

21. Cochise College Center for Economic Research Sierra Vista Restaurant & Bar 2005 2005 $54.7 million $54.7 million Up 8.9% Up 8.9% Real, inflation-adjusted growth of 5.5% Real, inflation-adjusted growth of 5.5% 56.1% of county restaurant & bar sales 56.1% of county restaurant & bar sales 2006 2006 $61.4 million $61.4 million Up 12.3% Up 12.3% Real, inflation-adjusted growth of 9.1% Real, inflation-adjusted growth of 9.1% 57.1% of county restaurant & bar sales 57.1% of county restaurant & bar sales

22. Cochise College Center for Economic Research Sierra Vista Accommodation Sales 2005 2005 $15 million $15 million Up 18.6% Up 18.6% Real, inflation-adjusted growth of 15.2% Real, inflation-adjusted growth of 15.2% 54.2% of county accommodation sales 54.2% of county accommodation sales 2006 2006 $15.1 million $15.1 million Up 0.4% Up 0.4% Real, inflation-adjusted growth of -2.8% Real, inflation-adjusted growth of -2.8% 55.9% of county accommodation sales 55.9% of county accommodation sales

23. Cochise College Center for Economic Research Sierra Vista Sales Forecast, 2007-2009 Average Annual Growth Average Annual Growth Retail Sales: 5.2% Retail Sales: 5.2% Restaurant and Bar Sales: 3.1% Restaurant and Bar Sales: 3.1% Accommodation Sales: 3.9% Accommodation Sales: 3.9%

24. Housing & Real Estate

25. Cochise College Center for Economic Research New SFR Construction

26. Cochise College Center for Economic Research New Home Closings New Home Median Price New Home Average Price Resale Home Closings Resale Home Median Price Resale Home Average Price New Home Permits 2002330$148,460$149,9371,884$104,438$89,900653 2003407$162,157$169,6471,979$102,000$116,673926 2004656$169,421$179,5992,464$115,000$128,8571,047 2005611$210,000$215,0202,850$140,050$159,6401,108 2006514$241,907$250,8962,254$151,267$169,544900 Cochise County Housing Market 2002-2006

27. Cochise College Center for Economic Research Countywide Housing Market, 2006 New home closings down 15.9% New home closings down 15.9% New home median price up 15.2% New home median price up 15.2% New home average price up 16.7% New home average price up 16.7% Resale home closings down 20.9% Resale home closings down 20.9% Resale home median price up 8% Resale home median price up 8% Resale home average price up 6.2% Resale home average price up 6.2%

28. Cochise College Center for Economic Research Sierra Vista Area MLS Home Sales Year Number of Homes Sold Change in Volume Average Price Average Price Change Median Price Median Price Change 20021,10912.5%$129,1958.4%$116,9009.8% 20031,086-2.1%$144,05911.5%$134,00014.6% 20041,34023.4%$166,59815.6%$153,90214.9% 20051,63221.8%$197,13318.3%$185,87520.8% 20061,237-23.8%$214,2197.6%$205,50010.6%

29. Cochise College Center for Economic Research Sierra Vista Area MLS Stats, 2006 Average selling price as percent of asking price: 97.8% (down from 98.8%) Average selling price as percent of asking price: 97.8% (down from 98.8%) Homes sold above asking price: 9.5% (down from 16.6%) Homes sold above asking price: 9.5% (down from 16.6%) Homes sold at asking price: 31% (down from 42.7%) Homes sold at asking price: 31% (down from 42.7%) Homes sold below asking price: 59.4% (up from 40.7%) Homes sold below asking price: 59.4% (up from 40.7%) Average days on market: 110 (down from 128) Average days on market: 110 (down from 128) Average price per square foot: $125.01 (up 6%) Average price per square foot: $125.01 (up 6%)

30. Cochise College Center for Economic Research Sierra Vista Area Housing Affordability Index

31. Cochise College Center for Economic Research Outlook Continued slowing of home sales (both new and resale) Continued slowing of home sales (both new and resale) Stabilization of prices Stabilization of prices Continued shift from seller’s to buyer’s market Continued shift from seller’s to buyer’s market Potential interest rate cuts in second half of the year may help Potential interest rate cuts in second half of the year may help

32. Cochise College Center for Economic Research That’s All Folks!

33. Cochise College Center for Economic Research