April 7, 2017
HARRY’S BI-WEEKLY UPDATE
A Current Look at the Colorado Springs Residential real estate Market
As part of my Personal Service, it is my desire to share current real estate issues that will help to make you a more successful and profitable buyer or seller.
***You’re receiving this four days later than usual because I wanted to include the very latest local statistics and they were not available until late yesterday due to inclement weather and quarterly reporting***
LIFE IS STILL A BIT CRAZY IN THE real estate ARENA
The “new normal” I was telling you about in the last eNewsletter has become simply “normal” by this point. Things are happening and changing so quickly that it’s difficult to know what each new day will bring.
Colorado Springs is experiencing an improved economy and job market while being recognized nationally in many of the “best” lists when it comes to livability. This is fantastic news for us locals, but it is putting a bit of a strain on residential real estate when more people desire to locate here or are being relocated for a job position. That translates into more home sales and with a current shortage of listings, it creates the buying frenzy we are now experiencing.
I’ve been in residential real estate for 45 years this month and I’ve never seen things like this. I can barely get a home in the $300,000 and under range listed and it already has multiple offers, most at list price or over and with very few contingencies and short turnaround times in many cases.
Yes, folks, it’s most definitely continuing to be a Sellers Market and there are many reasons for that. To begin with, there are fewer listings than ever before, which cuts down on the possibilities for those looking. All cash deals are also a culprit as they make it easier on the seller.
New construction, an answer for some, is also experiencing quicker than normal sales, which is making lot selection and turnaround times a bit more difficult. In recent days I’ve had buyers call me to go with them to select a lot and home from a builder only to find that in the few hours since they had been there the lot was no longer available.
You can also add the still historically low interest rates to the mix, along with first-time buyers and investors who are finally realizing that owning real estate has been providing better returns than stocks and bonds. Top all that with the spring buying season that normally starts about now and there you go.
And this isn’t just a Colorado Springs thing. Home prices all across the country are rising fast— U.S. home prices in January rose at their fastest rate since mid-2014—again pointing to a Sellers Market.
“There are a far larger number of buyers chasing after fewer inventories,” said NAR chief economist Lawrence Yun. “Prices are easily outpacing people’s income growth” which is causing “consternation for renters who are trying to get into the homeownership market.”
Home prices in the U.S. hit a record in September 2016 and the pace of growth has been slowly picking up since then. However, home-price growth remains less than half of what it was during the housing bubble in the mid-2000’s when homes grew by more then 14% for much of 2005, for example, and this is good news in general. If we can get more inventory we should see steady but probably slower growth, which will make it easier for many to qualify—especially first time buyers.
The number of homes for sale in the U.S. is at the lowest level on record according to the NAR, who began tracking inventory 18 years ago. Nationally, new home starts are partially to blame as the new starts are “grossly inadequate” says Yun and that is “why there is a housing shortage across the country.”
But also adding to the problem are investors who are picking up homes in record numbers and holding on to them due to the large supply of renters, rather than reselling. According to Yun, “Investors came in to get that cash flow, and the cash flow remains very positive. The price appreciation is just extra gravy that they’re witnessing, and they’re saying they’re going to ride out this price increase.”
If you’re looking to sell and trade up—NOW is a great time—but be prepared for all of the above.
That’s why it is more important than ever to have an experienced real estate professional on your side. One who knows how to negotiate a deal and the ins and outs of writing contracts that have a good chance of being accepted the first time. And one who can help find a lender that provides quality care along with competitive rates.
This is particularly important in today’s market as I’ve seen a number of complications on the “other” side from lenders, title companies, appraisers and most especially inexperienced agents who are not providing their clients with the special brand of customer service that my clients have come to expect and deserve.
As I’ve told you time and again—I can get it done “one way or another”. While there are obstacles in the current residential market, there are still homes available in most price ranges and in many neighborhoods that can fit your individual wants, needs and budget.
If you, a family member, neighbor or co-worker is even considering a move, please have them call me at 598.3200 or email me at Harry@HarrySalzman.com and let’s see how we can make things happen. You’ll be glad you did.
LOCAL HOME SALE PRICES CONTINUE THEIR UPWARD CLIMB…
Local homeowners can continue the celebration. In comparing March 2017 real estate average and median sales prices to March 2016—they are once again up—up—up. That should keep a big smile on your faces.
In the Single Family/Patio Home category, average sales price in March was $295,828 and median sales price was $268,000. This is an increase of 10.4% and 11.9% respectively year-over-year. In the Condo/Townhome category the average sales price was $181,546 and the median sales price was $173,000, up 13.3% and 7.2% respectively year-over-year.
Homes are selling at 100% of listing price and a low average of 32 days on the market. Let me add an FYI here for you. As I mentioned earlier, homes in the $300,000 and under category are selling practically as soon as they go on the market, most with multiple offers. Those in the higher end categories, while selling quicker than in the past few years, are still taking longer. I tell you this because I don’t want a client who wishes to list a higher price home to think it’s going to have multiple offers on the same day it goes on the market! More expensive homes take longer to sell for a number of reasons, including affordability of the buyers and the time it might take to get financing, among other factors.
As you will see in the Cumulative Year to Date Summary, total sales numbers in Single Family/Patio Homes and Condo/Townhomes are up 6.4% and 37.4% respectively for year-over-year. This number would have been even higher if we had more listings.
The Monthly Summary shows that compared to a year ago, total active listings are down 25.1% for Single Family/Patio Homes and 2.1% for Condo/Townhomes, continuing a downward trend that tends to favor sellers. New listings are down 1.7% for Single Family/Patio Homes and up 9.8% for Condo/Townhomes. This demonstrates once again that if you’ve considered putting your home on the market to trade up or move to a new neighborhood, NOW is a great time.
For more details on the local March report, please see the next article.
LOCAL real estate SALES ARE UP AND ONLY HAMPERED BY LOW INVENTORY
Statistics provided by the Pikes Peak REALTORS Service Corp, or it’s PPMLS
Here are some highlights from the March 2017 PPAR report. Please click here to view the detailed 14-page report, including charts. If you have any questions, just give me a call.
In comparing March 2017 to March 2016 in PPAR:
Single Family/Patio Homes:
- New Listings are 1,759, Down 1.7%
- Number of Sales are 1,247, Up 6.4%
- Average Sales Price is $295,828, Up 10.4%
- Median Sales Price is $268,000, Up 11.9%
- Total Active Listings are 1,454, Down 25.1%
- New Listings are 224, Up 9.8%
- Number of Sales are 213, Up 37.4%
- Average Sales Price is $181,546, Up 13.3%
- Median Sales Price is $173,000 Up 7.2%
- Total Active Listings are 139 Down 2.1%
COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*
Median Sales Price Median Sales Price
March 2017 March 2016
Black Forest $465,000 $480,000
Briargate $380,000 $310,000
Central $225,000 $200,000
East $242,500 $203,000
Fountain Valley: $230,000 $218,500
Manitou Springs: $341,225 $362,000
Marksheffel: $295,000 $252,000
Northeast: $267,750 $231,050
Northgate: $430,000 $411,059
Northwest: $397,500 $365,000
Old Colorado City: $250,500 $236,200
Powers: $260,000 $245,000
Southwest: $282,450 $249,085
Tri-Lakes: $425,000 $461,725
West: $290,000 $234,900
*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.
CENSUS SHOWS EL PASO COUNTY WITH LARGEST INCREASE IN STATE
The Gazette, 3.29.17
From 2015 to 2016, El Paso County’s population increased by an estimated 13,994 people, the largest increase seen that year by any of the states 64 counties, according to data released by the U.S. Census Bureau last week. The growth was about a 2.1 percent increase from the previous year, making it the highest increase the county has seen in at least six years.
As mentioned earlier, the relatively high quality of life, coupled with relatively low housing prices as compared to the Denver metro area, is continuing to attract new residents. “When we have jobs available on top of that, people can justify living here,” said local economist, Tom Binnings.
According to Steve Schleiker, El Paso County Assessor, the local housing market is reaping the benefits, with new construction of single-family homes up across the county. His office is just about finished completing reappraisals of El Paso County’s more than 270,000 properties and notices of tax value will be mailed in May. As of last week, the local market for single-family homes was valued at $56.8 billion, up from $49.9 billion in 2016, he said.
A LITTLE BRAGGING AND A WHOLE LOT OF THANKS…
This lovely surprise appeared in my office on Tuesday morning as I found out I was inducted into the ERA Leaders’ Circle for 2016!
According to the accompanying letter, this is awarded to “members of the ERA community who have married their desire to succeed with the ERA brand’s smarter network, smarter support and smarter solutions to deliver true value to the communities they serve.”
This is all because of you, my friends and clients, and I owe you all a BIG THANKS for helping me achieve this honor.
I may be starting my 46th year in residential real estate this month but I want you to know that my commitment to each and every one of you is the same as it was 45 years ago when I first began.
My special brand of customer service will never waver, nor will my appreciation to all of you for choosing me as your Realtor over and again for so many years.
Thank you, one and all.
UPDATED STATS FROM UCCS ECONOMIC FORUM
UCCS Economic Forum, College of Business, updated as of 3.17.17, realtor.com
For a current update from the UCCS Economic Forum on both local and national statistics, please click here.
The charts are mostly self-explanatory but if you have any questions, just give me a holler.
WHAT ABOUT DOWNSIZING?
Daveramsey.com, 3.28.17, keeping current matters, 3.21.17
A recent study by Edlman Berland revealed that 33% of homeowners who are contemplating selling their homes in the near future are looking to scale down. As a majority of the country is experiencing a Sellers Market, there are a few reasons why this might make sense for many homeowners.
A blog by Dave Ramsey, the financial guru, highlighted the advantages of selling your current house and downsizing to a smaller home that better serves your current needs. He explains three potential financial advantages to downsizing:
- A smaller home means less space, but it also means less time, stress and money spent on upkeep.
- Let’s assume you save $500 a month on your mortgage payment. In 30 years, you could have an additional $1-1.6 million in the bank to get you through your golden years.
- Use the proceeds from selling your current home to pay cash for a smaller one. Just imagine what you could do with no mortgage holding you down! If you can’t pay cash, aim for a 15-year fixed rate mortgage and put at least 10-20% down on your new home. Apply the $500 you saved from downsizing to your new monthly payment. At 3% interest, you could pay off a $200,000 mortgage in less than 10.5 years, saving almost $16,000 in the process.
Realtor.com also addressed downsizing in an article and suggested you ask yourself some questions before deciding if downsizing is right for you and your family. Here are two of these questions followed by answers and some other information that might help:
Q: What kind of lifestyle do I want after I downsize?
A: “For some folks, it’s a matter of living a simpler life focused on family. Some might want to cross off travel destinations on their bucket lists. Some might want a low-maintenance community with high-end upgrades and social events. Decide what you want to achieve from your move first, and you’ll be able to better determine your housing options.”
Comments: Many homeowners are taking the profits from the sales of their current homes and splitting it in order to put down payments on smaller homes in their current locations, as well as on vacation/retirement homes where they plan to live when they retire.
This allows them to lock in the home price and mortgage interest rate at today’s values which makes sense financially as both home prices and interest rates are projected to rise.
Q: Have I built up enough equity in my current home to make a profit?
A: “For most homeowners, the answer is yes. This is if they’ve held on to their properties long enough to have positive equity that will be sizable enough to put a large down payment on their next home.”
Comments: A study by Fannie Mae revealed that only 37% of Americans believe that they have significant equity (>20%) in their current home. In actuality, CoreLogic’s latest Equity Report revealed that 78.9% have greater than 20% equity. That equity could enable you to build the life you’ve always dreamed of.
Bottom Line: If you’ve debated downsizing and want to consider all the options available for your personal wants, needs and budget considerations, please give me a call and let’s see how we can make your downsizing goals a reality.
SKY SOX TICKETS NOW AVAILABLE
It’s baseball season and time to get your complementary tickets for my first row, right behind home dugout seats!
Yes, I’ve got four of those available for each and every game and as always; they are on a first-come, first-served basis.
It’s a fun time for you and your family and it’s my pleasure to provide this to you as I have for the past 30 years. The Friday night fireworks and Sunday 50-cent hot dog days are the most popular, so get your requests in sooner than later.
Simply give me a call at 598.3200 or email me at Harry@HarrySalzman.com and I’ll make certain to save tickets for any available date for you.