About Yellowstone County, MT

Thought it might be useful to show the effect on interest rates on the decision to rent versus purchase a home. The comparisons contain over 4000 rental housing units advertised in 2009 and over 1150 closed home transactions. Payment figure a financing of 100% of purchase price 5% interest rate for 30 years showing the principal and interest payment. Taxes and insurance are not included, yet if you factored in the tax savings versus the tax & insurance costs it's about a wash.

The following charts do not take into account the benefit of $8,000 tax credit given to you when you switch from renting to buying. yet if want to compute that affect, it tilts the advantage to buying by another $22.22 per month over thirty years so average sales price you have only $16 more a month to own the averages sales price in billings as opposed to renting the average asking price home for rent.

Now when you look at the median sales priced home in billings and think your better off renting your calculator is not working at all. it only costs $9 more a month to rent the median priced home as opposed to purchasing it. When you factor in the $8,000 credit over thirty years it cost $31 more a month to rent than it does to buy.

NAR Projects Home Sales to Rise 13.6% in 2010

Existing home sales will increase 13.6% in 2010, with 5.69m houses sold during the year, according to National Association of Realtors (NAR) projections.

NAR also projects as many as 2.4m first-time homebuyers took advantage of the $8,000 tax credit in 2008. First-time buyers accounted for 47% of home sales in 2009, up from 41% in 2008 and a low of 36% in 2006, NAR added.

NAR projects existing home sales will total 5.01m in 2009, up 2% from 2008, and will increase again to 5.69m in 2010.

"A steady draw down of inventory will help home values to turn positive in 2010, but risks such as unemployment remain in the economy," said NAR chief economist Lawrence Yun.

Other NAR projections include new-home sales at 397,000 this year, and increasing to 549,000 in 2010. NAR projects housing starts, including multifamily units, are expected to total 564,000 units in 2009 and grow to 752,000 in 2010.

NAR projects that 30-year fixed-rate mortgages will average 5.3% during Q409, but will increase to 5.8% by the Q410.

"We've seen a steady downtrend in housing inventory for well over a year and home prices appears to be in the early stages of stabilizing. With expansion of the tax credit to additional buyers through the middle of next year, and no major unforeseen events impacting the economy, home prices should rise between 3 and 5 percent in 2010, but with wide geographic differences," Yun said

MARKET UP DATE AT GLANCE COMMENTARY THRU NOVEMBER 14TH 2009

I'LL BEGIN WITH THE COMMENT "cash for clunkers EXTENDED AND EXPANDED" and a race to the MOVED finish line (NOW APRIL 30^TH 2010) THE BEST WAY TO DESCRIBE THE WAY THE REAL ESTATE MARKET IS BEHAVING this fall.

WHEN YOU LOOK AT THE NUMBERS THE THING that JUMPS OUT AT YOU IS A 67% INCREASE IN THE NUMBER OF PENDING SALES YEAR TO YEAR, YOU COULD SHOUT ABOUT THE INCREASE (SEE THE CAUSE IN THE FIRST LINE), YET WHEN YOU NOTE THAT LAST YEAR AT THIS TIME THE BUYERS WITHDREW FROM THE MARKET PLACE AND CAUSED A PLUNGE IN PENDING SALES, IT TEMPERS ENTHUSIASM. I BELIEVE we are in AN EXTENDED AND EXPANDED race with first time buyers ($8,000 CREDIT) WANTING TO PURCHASE WITH tax credit AND EXISTING HOMES that BUY A DIFFERENT PRINCIPAL RESIDENCE ($6,500 CREDIT).

THIS BRINGS UP A GOOD POINT IN THE OVERALL NUMBERS WE WILL EXPERIENCE THE REST OF THE YEAR. THE MARKET FELL FROM THIS POINT FORWARD FOR THE REMAINDER OF 2008. THIS YEAR APPEARS TO HAVE STABILIZED WITH INVENTORY AND PENDING SALES REMAINING IN A SOLID RELATIONSHIP TO EACH OTHER. THAT FACT BRINGS MEASURED OPTIMISM.

the most active SEGMENT of the market HAS REMAINED between 160k to 180k(PRIME FIRST TIME BUYER PRICE RANGE), that price range share of the market 13% by unit volume in 2008, INCREASED TO 17% by unit VOLUME AT THE END TO september 2009. THE UPPER RANGE SEGMENTS 300K TO 500K WILL SEE AN INCREASE IN MOVE UP TRAFFIC WITH THE EXPANSION OF THE TAX CREDIT TO EXISTING HOME BUYERS. i SUSPECT A lag in timing, UNTIL AFTER THE HOLIDAY SEASON WE WILL WATCH CLOSELY AS THE PENDING SALES AFTER JANUARY 1^ST 2010.

THE inventory levels have CONTINUED TO STAY IN A NARROW BAND ALL YEAR WITH A slight A DECREASE IN PROPERTIES FOR SALE OF 5% FROM a year ago, AS COMPARED TO 41% HIGHER IN JANUARY AND 9% HIGHER IN MARCH A YEAR AGO, THE decrease from a year ago is AFFECTED by the increase in pending SALES AND STABLE INVENTORY..

THE PENDING SALES LEVELS CONTINUE HIGHER, AN INCREASE OF 67% FROM a year ago, AS COMPARED TO 37% LOWER IN JANUARY AND 12% LOWER IN MARCH. THE CONTINUED INcrease from a YEAR ago is AFFECTED by the increase in FIRST TIME HOME BUYERS AND slight MOVE UP TRAFFIC (WHICH SHOULD INCREASE WITH THE EXPANDED TAX CREDIT). THIS MONTH AS IN COMING TIME PERIODS WE WILL SEE INCREASES FROM A YEAR AGO, BECAUSE A YEAR AGO PENDING SALES LEVELS WENT DOWN SUBSTANTIALLY.

CONSTRUCTION numbers in OCTOBER: single family permits, IN TOTAL still show A DECLINE FROM LAST year, 18% LOWER. to put it in PERSPECTIVE the first 10 months of the year are as follows 1. 2009 199 single family permits, 2. 2008 243 Single family permits, 3. 2007 392 Single family permits. WE CONTINUE A TREND IN new CONSTRUCTION market THAT PERMITS IN FOR THE MONTH ARE AT OR HIGHER THAN THE YEAR BEFORE AND OCTOBER DID ADMIRABLY WELL AGAIN 21 PERMITS 2009 AND 16 IN 2008. AS WE MOVE FORWARD THE TREND WILL MOST PROBABLY CONTINUE DUE THE STEEP DECLINE IN PERMITS LAST YEAR, AGAIN THIS SHOWS A MARKET THAT IS STABILIZING AND FOUND ITS FLOOR of activity. THE BONUS FOR HOME BUILDERS WILL BE 2010 IF THEY CAN GET AN ORDER BY APRIL 30^TH 2010 AND GET THEM BUILT TO CLOSE BEFORE JUNE 30^TH 2010 THE BUYERS CAN REAP A $6,500 TAX CREDIT. A LITTLE BIT OF A NARROW TIME FRAME YET I AM SURE IT WILL INCREASE ACTIVITY IN THE HOME BUILDING BUSINESS.

the home sales prices below SHOW a slight price decline year to year YELLOWSTONE county a 4% IN AVERAGE AND 3% IN MEDIAN SALES PRICE. I WOULD SAY WHEN THE SMALLER SIZE OF HOME SELLING IS FACTORED IN THE DECLINE YEAR TO YEAR WOULD BE ABOUT 3% WITH HOMES IN POOR CONDITION OR LOCATION EXPERIENCING GREATER THAN THAT.

THE POSITIVE forces in the MARKET REMAIN THE SAME, the STRENGTH of the below $200,000, no SIGNIFICANT FORECLOSURES of HOMES AND HISTORICALLY LOW INTEREST RATES 5% FOR A 30YEAR LOAN AND STRONG EMPLOYMENT NUMBERS. the importance of A LOW FORECLOSURE RATE CAN not be OVERSTATED. when you look at other market places AND THE case /shiller index declines, the driving force in downward price pressure is FORECLOSED properties sold by lenders.

unemployment in YELLOWSTONE COUNTY IN WAS 4.7%, NOT SEASONALLY ADJUSTED, COMPARED to the state average of 6.7% , GALLATIN VALLEY OF 5.5% MISSOULA OF 5.6%, THE FLAT HEAD OF 8.8 % and the NATIONAL of 10.2% giving people who want to own their home a job and A BELIEF that they will be employed, (A SIDE NOTE TO YELLOWSTONE COUNTY ACTUAL NUMBER OF WORKING PEOPLE IN OCTOBER WAS 80,400 PRELIMINARY) along WITH low INTEREST, approximately 5.% on a 30 year fixed rate, and you have a good case for buying a home if your intention is staying put three plus years.

IF YOU NEED AN ADDITIONAL INFORMATION PLEASE CALL OR E-MAIL

here is the actual language in the bill extending and expanding the home buying tax credit

SEC. 11. EXTENSION AND MODIFICATION OF FIRST-TIME HOMEBUYER TAX CREDIT.

(a) Extension of Application Period-

(1) IN GENERAL- Subsection (h) of section 36 of the Internal Revenue Code of 1986 is amended--

(A) by striking `December 1, 2009' and inserting `May 1, 2010',

(B) by striking `Section- This section' and inserting `Section-

`(1) IN GENERAL- This section', and

(C) by adding at the end the following new paragraph:

`(2) EXCEPTION IN CASE OF BINDING CONTRACT- In the case of any taxpayer who enters into a written binding contract before May 1, 2010, to close on the purchase of a principal residence before July 1, 2010, paragraph (1) shall be applied by substituting `July 1, 2010' for `May 1, 2010'.'.

(2) WAIVER OF RECAPTURE-

(A) IN GENERAL- Subparagraph (D) of section 36(f)(4) of such Code is amended by striking `, and before December 1, 2009'.

(B) CONFORMING AMENDMENT- The heading of such subparagraph (D) is amended by inserting `AND 2010' after `2009'.

(3) ELECTION TO TREAT PURCHASE IN PRIOR YEAR- Subsection (g) of section 36 of such Code is amended to read as follows:

`(g) Election To Treat Purchase in Prior Year- In the case of a purchase of a principal residence after December 31, 2008, a taxpayer may elect to treat such purchase as made on December 31 of the calendar year preceding such purchase for purposes of this section (other than subsections (c), (f)(4)(D), and (h)).'.

(b) Special Rule for Long-time Residents of Same Principal Residence- Subsection (c) of section 36 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

`(6) EXCEPTION FOR LONG-TIME RESIDENTS OF SAME PRINCIPAL RESIDENCE- In the case of an individual (and, if married, such individual's spouse) who has owned and used the same residence as such individual's principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence.'.

(c) Modification of Dollar and Income Limitations-

(1) DOLLAR LIMITATION- Subsection (b)(1) of section 36 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

`(D) SPECIAL RULE FOR LONG-TIME RESIDENTS OF SAME PRINCIPAL RESIDENCE- In the case of a taxpayer to whom a credit under subsection (a) is allowed by reason of subsection (c)(6), subparagraphs (A), (B), and (C) shall be applied by substituting `$6,500' for `$8,000' and `$3,250' for `$4,000'.'.

(2) INCOME LIMITATION- Subsection (b)(2)(A)(i)(II) of section 36 of such Code is amended by striking `$75,000 ($150,000' and inserting `$125,000 ($225,000'.

(d) Limitation on Purchase Price of Residence- Subsection (b) of section 36 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

`(3) LIMITATION BASED ON PURCHASE PRICE- No credit shall be allowed under subsection (a) for the purchase of any residence if the purchase price of such residence exceeds $800,000.'.

(e) Waiver of Recapture of First-time Homebuyer Credit for Individuals on Qualified Official Extended Duty- Paragraph (4) of section 36(f) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

`(E) SPECIAL RULE FOR MEMBERS OF THE ARMED FORCES, ETC-

`(i) IN GENERAL- In the case of the disposition of a principal residence by an individual (or a cessation referred to in paragraph (2)) after December 31, 2008, in connection with Government orders received by such individual, or such individual's spouse, for qualified official extended duty service--

`(I) paragraph (2) and subsection (d)(2) shall not apply to such disposition (or cessation), and

`(II) if such residence was acquired before January 1, 2009, paragraph (1) shall not apply to the taxable year in which such disposition (or cessation) occurs or any subsequent taxable year.

`(ii) QUALIFIED OFFICIAL EXTENDED DUTY SERVICE- For purposes of this section, the term `qualified official extended duty service' means service on qualified official extended duty as--

`(I) a member of the uniformed services,

`(II) a member of the Foreign Service of the United States, or

`(III) an employee of the intelligence community.

`(iii) DEFINITIONS- Any term used in this subparagraph which is also used in paragraph (9) of section 121(d) shall have the same meaning as when used in such paragraph.'.

(f) Extension of First-time Homebuyer Credit for Individuals on Qualified Official Extended Duty Outside the United States-

(1) IN GENERAL- Subsection (h) of section 36 of the Internal Revenue Code of 1986, as amended by subsection (a), is amended by adding at the end the following:

`(3) SPECIAL RULE FOR INDIVIDUALS ON QUALIFIED OFFICIAL EXTENDED DUTY OUTSIDE THE UNITED STATES- In the case of any individual who serves on qualified official extended duty service (as defined in section 121(d)(9)(C)(i)) outside the United States for at least 90 days during the period beginning after December 31, 2008, and ending before May 1, 2010, and, if married, such individual's spouse--

`(A) paragraphs (1) and (2) shall each be applied by substituting `May 1, 2011' for `May 1, 2010', and

`(B) paragraph (2) shall be applied by substituting `July 1, 2011' for `July 1, 2010'.'.

(g) Dependents Ineligible for Credit- Subsection (d) of section 36 of the Internal Revenue Code of 1986 is amended by striking `or' at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting `, or', and by adding at the end the following new paragraph:

`(3) a deduction under section 151 with respect to such taxpayer is allowable to another taxpayer for such taxable year.'.

(h) IRS Mathematical Error Authority- Paragraph (2) of section 6213(g) of the Internal Revenue Code of 1986 is amended--

(1) by striking `and' at the end of subparagraph (M),

(2) by striking the period at the end of subparagraph (N) and inserting `, and', and

(3) by inserting after subparagraph (N) the following new subparagraph:

`(O) an omission of any increase required under section 36(f) with respect to the recapture of a credit allowed under section 36.'.

(i) Coordination With First-time Homebuyer Credit for District of Columbia- Paragraph (4) of section 1400C(e) of the Internal Revenue Code of 1986 is amended by striking `and before December 1, 2009,'.

(j) Effective Dates-

(1) IN GENERAL- The amendments made by subsections (b), (c), (d), and (g) shall apply to residences purchased after the date of the enactment of this Act.

(2) EXTENSIONS- The amendments made by subsections (a), (f), and (i) shall apply to residences purchased after November 30, 2009.

(3) WAIVER OF RECAPTURE- The amendment made by subsection (e) shall apply to dispositions and cessations after December 31, 2008.

(4) MATHEMATICAL ERROR AUTHORITY- The amendments made by subsection (h) shall apply to returns for taxable years ending on or after April 9, 2008.

SEC. 12. PROVISIONS TO ENHANCE THE ADMINISTRATION OF THE FIRST-TIME HOMEBUYER TAX CREDIT.

(a) Age Limitation-

(1) IN GENERAL- Subsection (b) of section 36 of the Internal Revenue Code of 1986, as amended by this Act, is amended by adding at the end the following new paragraph:

`(4) AGE LIMITATION- No credit shall be allowed under subsection (a) with respect to the purchase of any residence unless the taxpayer has attained age 18 as of the date of such purchase. In the case of any taxpayer who is married (within the meaning of section 7703), the taxpayer shall be treated as meeting the age requirement of the preceding sentence if the taxpayer or the taxpayer's spouse meets such age requirement.'.

(2) CONFORMING AMENDMENT- Subsection (g) of section 36 of such Code, as amended by this Act, is amended by inserting `(b)(4),' before `(c)'.

(b) Documentation Requirement- Subsection (d) of section 36 of the Internal Revenue Code of 1986, as amended by this Act, is amended by striking `or' at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting `, or', and by adding at the end the following new paragraph:

`(4) the taxpayer fails to attach to the return of tax for such taxable year a properly executed copy of the settlement statement used to complete such purchase.'.

(c) Restriction on Married Individual Acquiring Residence From Family of Spouse- Clause (i) of section 36(c)(3)(A) of the Internal Revenue Code of 1986 is amended by inserting `(or, if married, such individual's spouse)' after `person acquiring such property'.

(d) Certain Errors With Respect to the First-time Homebuyer Tax Credit Treated as Mathematical or Clerical Errors- Paragraph (2) of section 6213(g) the Internal Revenue Code of 1986, as amended by this Act, is amended by striking `and' at the end of subparagraph (N), by striking the period at the end of subparagraph (O) and inserting `, and', and by inserting after subparagraph (O) the following new subparagraph:

`(P) an entry on a return claiming the credit under section 36 if--

`(i) the Secretary obtains information from the person issuing the TIN of the taxpayer that indicates that the taxpayer does not meet the age requirement of section 36(b)(4),

`(ii) information provided to the Secretary by the taxpayer on an income tax return for at least one of the 2 preceding taxable years is inconsistent with eligibility for such credit, or

`(iii) the taxpayer fails to attach to the return the form described in section 36(d)(4).'.

(e) Effective Date-

(1) IN GENERAL- Except as otherwise provided in this subsection, the amendments made by this section shall apply to purchases after the date of the enactment of this Act.

(2) DOCUMENTATION REQUIREMENT- The amendments made by subsection (b) shall apply to returns for taxable years ending after the date of the enactment of this Act.

(3) TREATMENT AS MATHEMATICAL AND CLERICAL ERRORS- The amendments made by subsection (d) shall apply to returns for taxable years ending on or after April 9, 2008.