Billings, MT

Below are the numbers for Yellowstone County for the first ten months of the year. If anyone had any doubt giving people an $8,000 tax break would affect people's behavior the numbers below should put that thought to rest. Things of note as we have progressed through the year we have steadily gained on our short fall of closed transaction compared to last year. The 79% above last year for pending sales of you can thank the $8,000 tax credit for that huge increase. When you look at sales price decline with size factored in my comment is about a 3% decline in pricing to put that into perspective the market has been flat since 2007. Not bad if you compare a 50% statewide drop in home values in California in the same time period, heck Las Vegas dropped 33% just from 2008 September to 2009 September. Another item to note is by definition first time buyers are rents and you can see the impact of them buying homes in the rental softness in pricing and increase availability.

Since it seems that Washington dc will pass an extension and expansion of the tax $8,000 for first time buyers $6,500 for person moving from a home they have owned for five years get ready for the after burns to kick in till reach altitude than flame out and head back for a crash landing.

Market update at glance	10/31/2009	Year	Percentage Increase
Yellowstone County		2008	2009	or -Decrease
Residential Closed Sales Units		1738	1632		-6%
Residential Pending Sales Units	167	299		79%
Residential Active Property Units For Sale	876	844		-4%
Average sales price Single family Home	$209,697	$201,222		-4%
Average Square feet Single family Home	2326	2272		-2%
Median sales price Single family Home	$186,070	$181,200		-3%
Median Square feet Single family Home	2214	2160		-2%
Average Days on Market Till Offer Received
Single Family Home			60	65		8%
Absorption rate -	TIME IN DAYS
Time it would take for all existing		171
properties to sell with no new inventory coming
into the market place - residential
SINGLE FAMILY PERMIT ISSUED MONTH	16	21		31%
SINGLE FAMILY PERMIT ISSUED YEAR	243	199		-18%
Average Number of Rentals Advertised Sundays	301	393		31%
Average Asking Price for a Rental Home	$1,114	$1,035		-7%
Average Asking Price for a Rental Apartment	$678	$673		-1%

Foreclosures Growing in Suburbs and Secondary, says RealtyTrac

By JON PRIOR
October 30, 2009 11:53 AM CST

Foreclosures are beginning to flare up in suburban and secondary metro markets for Q309, according to a report from RealtyTrac.

Dramatic increases in foreclosures from a year ago came in suburban areas previously believed to be more stable, such as Boise, Idaho, up nearly 22% from Q209. Another area, Provo, Utah, is located a distance of 45 miles outside Salt Lake City and rose nearly 11% in the same period. RealtyTrac provides an online marketplace for foreclosure properties with more than 1.5m default, auction and REO listings.

In several states, foreclosure activities drifted toward new focal points, such as smaller towns with previously self-sustaining industries. Chico, California in Sacramento Valley, and agricultural hub, had a 98% increase in foreclosures from Q308, according to the report.

The Las Vegas metro area had the highest percentage of foreclosures among its housing units with 5.13% in Q309. Merced, Calif. - west of San Jose - had a 3.72% foreclosure rate, and Cape Coral - Fort Meyers, Fla. came in third with 3.67% of homes sliding into foreclosures, according to the report.

"You're moving from Phoenix to Prescott, you're moving from Las Vegas to Reno," Rick Sharga, the vice president of marketing at RealtyTrac, told HousingWire. "You are seeing that migration into secondary markets. You're also seeing a migration into formerly stable areas and areas that have been wracked by unemployment."

Cities in California, Florida and Nevada accounted for the 10 highest foreclosure rates in Q309 among metro areas with more than 200,000 people. However, five of those cities reported decreasing foreclosure activity from Q308, offset by many other markets reporting spikes in foreclosures, according to the report.

Sharga sees the foreclosure crisis coming in three waves, and with this new data, the market is showing signs of the second one.

"That first wave of foreclosures cratered the economy, which created job losses, which created the second wave. Now, we're seeing prime rate loans affected by unemployment. And the third wave will be really a repeat of wave one, except this time we're going to see a switch of Option ARM and Alt-A loans out for the subprime loans. It will probably be as big but somewhat shorter lived," Sharga said.

Sharga said that he expects a peak in foreclosures in 2010, only a marginal improvement in 2011 and a return to normal monthly foreclosure activity sometime in 2012.

"Rising unemployment and a new variety of mortgage resets continued to gradually shift the nation's foreclosure epicenters in the third quarter away from the hot spots of the last two years and toward some metro areas that had avoided the brunt of the first foreclosure wave," said James J. Saccacio, chief executive officer of RealtyTrac. "While toxic subprime mortgages drove much of that first wave of foreclosures, high unemployment and exotic Alt-A Option ARMs are spreading the foreclosure flood to more metro areas in 2009."

NEW RESIDENTIAL SALES IN SEPTEMBER 2009

Sales of new one-family houses in September 2009 were at a seasonally adjusted annual rate of 402,000, according to

estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

This is 3.6 percent (±10.2%)* below the revised August rate of 417,000 and is 7.8 percent (±12.0%)* below the

September 2008 estimate of 436,000.

The median sales price of new houses sold in September 2009 was $204,800; the average sales price was $282,600. The

seasonally adjusted estimate of new houses for sale at the end of September was 251,000. This represents a supply of 7.5

months at the current sales rate.

Highlights from the Federal Housing Finance Agency information to ponder

Fannie Mae and Freddie Mac Implement HAMP During Second

Quarter; Trial Loan Mods Ramp Up

as

Completed Loan Mods Decline

October 2, 2009

The report shows that of the Enterprises' 30 million residential mortgages:

• Trial loan modifications under HAMP more than tripled from June to August, from

66,200 to 202,200.

• Completed actions to prevent foreclosure declined by 25 percent to approximately

58,200 during the second quarter as HAMP trial loan modifications replaced traditional

loan modifications and repayment plans in process. Completed loan modifications

decreased by 13 percent over the prior quarter to 32,300.

• Fifty-four percent of loan modifications completed in the second quarter resulted in

borrowers' payments decreasing by 20 percent or more, compared with only 8 percent

one year earlier.

• Short sales increased by 45 percent during the second quarter to 11,700 as the pipeline

of serious delinquent loans increased and Freddie Mac increased the delegated

authority of servicers to implement short sales.

• As short sales increased and loan modifications declined, completed home retention

actions - actions that result in a borrower keeping his or her home -accounted for 82

percent of all foreclosure prevention actions completed during the second quarter, down

from 90 percent in the first quarter.

• Mortgage delinquencies continued to increase during the quarter as higher levels of

unemployment contributed to new delinquencies. Foreclosure moratoria associated

with HAMP have also contributed to the increase in delinquencies as fewer seriously

delinquent loans are transitioning to foreclosure.

• Although the Enterprises' mortgage delinquencies continued to increase during the

second quarter of 2009, the rate of delinquency is consistently lower than the industry

average. As of June 30, 2009, the percentage of Enterprises' mortgage loans that were

at least two payments past due (60 plus days delinquent) was 3.5 percent, compared

with 4.7 percent for VA loans, 7.8 percent for FHA loans and 8.0 percent for the

industry average.

Top Five Reasons for Delinquency 1^st qt2009 2^nd qt 2009

Curtailment of Income 35% 40%

Excessive obligations 19% 18%

Unemployment 8% 9%

Illness of principal mortgagor or family member 6% 6%

Marital Difficulties 3% 3%

Mortgage Performance

 Loans that are only one month delinquent increased by 11 percent during the second

quarter to 682,000.

 Loans 60-plus-days delinquent increased by 21 percent during the second quarter to 1.3

million. Approximately 227,200 more loans became 60 days or more delinquent in the

second quarter of 2009.

Foreclosures

 Foreclosure starts increased in the second quarter by 23 percent over the prior quarter to

299,200, reflecting increases in the foreclosure pipeline as the number of 90-plus-days

delinquent loans increased. Although HAMP requires foreclosure activities to be

temporarily suspended during the trial period or while a borrower is considered for

alternative foreclosure prevention options, the foreclosure process is initiated for vacant

and non-owner occupied properties, and properties determined to be ineligible for HAMP.

 Completed foreclosure and third-party sales during the quarter increased by 38 percent to

57,800 generally driven by sales on non-occupied properties and owner-occupied properties already determined to be ineligible for HAMP.

If you wish to read the whole report here is the link

http://www.fhfa.gov/webfiles/15055/2Q09ForeclosurePrevention100209F.pdf