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HARRY'S BI-WEEKLY UPDATE 1.23.17

by Harry Salzman

January 23, 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.

 

HAPPY MONDAY TO ALL…

It’s a beautiful day here in Colorado Springs and I’m getting ready to present my annual forecast to the City Council this afternoon.  I do this on behalf of the Pikes Peak Area Realtors each year and this year I thought you also might  be interested in the “State of the real estate Market”.  As I’ve been telling you in recent issues, the local real estate market is HOT..HOT..HOT.

Below is the outline of my presentation and a list of the attachments.  You can select any of the attachments to download for perusal at your convenience.  If you have any questions about my presentation, or any other real estate concerns, please call me at 598.3200 or email me at Harry@HarrySalzman.com .

 

 

Presentation to Colorado Springs City Council

January 23, 2017

 

by

Harry A. Salzman,

The real estate Therapist

REALTOR® Emeritus/CRS, CRP, E-Pro, CNE

 

ERA Shields/Salzman real estate Services

 

 

Overview and Update of Colorado Springs Residential real estate and a Forecast for 2017

 

 

This presentation is on behalf of the membership of:

 

 

Overview and Update of Colorado Springs Residential real estate and a Forecast for 2017

We all know Colorado Springs is a great place to live. And if you have been in the real estate market or known someone who has bought or sold in the past year, you are aware that the 2016 market was HOT. This tells us that other people think Colorado Springs is special as well.

It’s natural to wonder, “Is this just the beginning of a positive trend?” “Will this growth last?” “What is around the corner?” This afternoon we will discuss the relative strength of Colorado Springs to the U.S. and I will provide a real estate forecast on behalf of PPAR for the Colorado Springs region.

 

  • Homeownership continues to be a reliable and stable method for building wealth. (Exhibit A)

 

  • Wealth-building through real estate, primarily home-ownership, out-performed wealth-building through stock ownership.

 

  • While many Americans remain frustrated by the slow movement of the economy, rising home values present a positive direction.

 

  • Nationally the homeownership rate is at 63.5% (Exhibit B)

 

 

  • Home prices are projected to continue to rise (Exhibit C)

 

  • Nationally, home prices are projected to rise by 5.2%

 

  • As of September 2016, Colorado had the 3rd largest year-over-year home price appreciation at a rate of 8.6%

 

 

  • Rising home prices is great news if you own a home, but what if you don’t? (Exhibit D)

 

  • Increasing home prices is a sign of the on-going housing recovery

 

  • Affordability becomes a concern as prices continue to rise

 

  • Some American families will become priced out of homeownership

 

  • Renter households will also rise

 

  • Rental rates increase as demand outpaces rental supply

 

  • Student debt stands in the way of homeownership for young adults. (Exhibit D-1)

 

 

  • The role of the shortage in housing inventory (Exhibit E)

 

  • The country is short by 8.3 million housing units

 

  • The shortage of housing inventory is the principle reason home prices have been outpacing people’s income growth for the past 5 years

 

  • From 2011 to 2016, the median home price will have risen 42% while the median household income gain will have risen only 17%

 

  • An increase in supply is needed to slow the rate of home price growth

 

  • In order to bring the inventory of homes for sale to a more balanced market, more housing starts are needed

 

  • Economists project a national housing shortage for at least 4 more years

 

 

 

  • Post-election market gains and increases in interest rates indicate rising confidence across investors, consumers, businesses, economists, and homebuilders

 

  • Pro-growth policies take time to benefit the economy

 

  • Short-term, rising interest rates and home prices present challenges for home buyers

 

  • Long-term, stronger economic growth results in increased incomes, affordability, and ongoing housing recovery

 

 

  • Not surprisingly, politics plays a role in consumer confidence. (Exhibit G)

 

  • Republicans tend to feel positive toward the market while Democrats feel less positive

 

  • Colorado Springs ranks 6th in the nation for top housing markets based on political leaning (and therefore market confidence), affordability, and employment opportunity

 

 

  • Top Housing Trends for 2017 – Realtor.com (Exhibit HDespite a more moderate housing market nationally in 2017, strong local economies and population growth will continue to fuel the nation’s top markets

 

  • Home prices are anticipated to increase 3.9%

 

  • Interest rates are expected to reach 4.5%

 

  • Colorado Springs ranks #12 of the 100 top metros in forecasted gains in price (4.8%) and sales (6.7%)

 

  • Nationally, western cities continue to lead the nation in prices and sales

 

  • Millennials and boomers dominate the market

 

  • Midwestern cities will continue to be hotbeds for millennials

 

  • Nationally there will be a slowing in price appreciation

 

  • Limited inventory continues to fuel fast-moving markets

 

 

 

  • Fannie Mae anticipates interest rates to increase to 4.2% by year-end.

 

 

 

  • As mortgage rates increase, demand decreases

 

 

  • More Good News for Colorado Springs

 

  • Colorado Springs has been ranked #5 in Best Places to Live as ranked by U.S. News & World Report (Exhibit K)

 

  • Ranking based on Job Market, Value, Quality of Life, Desirability, and Net Migration

 

 

  • Colorado Springs ranked #14 in Hottest Housing Markets by Realtor.com (Exhibit L)

 

 

 

 

  • Median Sales Price of Existing Single-Family Homes (Exhibit N)

 

  • National Growth: 5.2% appreciation

 

  • Colorado Springs Growth: 8.9% appreciation

 

 

  • 2016 SFR uses: 200403 in El Paso County, 132763 in the City

 

 

 

 

 

 

 

 

 

  • As of the 3rd Quarter, there was an increase of 22% in building permits for single family, detached homes

 

  • As of the 3rd Quarter, there was a 13.7% increase in year-to-date home sales

 

 

  • Harry’s Forecast…

 

  • 2016 was the best year ever with 15,319 closings

 

  • I predict 2017 is going to be just as incredible

 

  • Strong job growth, interest rates, and a shortage of inventory will continue to fuel home appreciation and sales activity

 

  • Job growth is the #1 indicator in a strong housing market.  It is being predicted that job growth will drop slightly but will still be “very strong” over the next two years

 

  • Amazing interest rates are still part of the equation.  While an increase in rates has been predicted, they will still be in the historically low range.

 

  • Median Sales Price expected to appreciate 5 ¾ - 6 %

 

  • Unknown changes from the Federal Government regarding Dodd-Frank

 

  • How long will this hot market last?  With strong job growth in the local economy and continued historically low interest rates, expect to see positive price appreciation, albeit at a more reasonable level, starting in late 2017 going forward.

 

  • Now is the time, more than the past, for home ownership.

​​

 

City Council 2017

Index of Exhibits

 

  • Exhibit A – Article from the Wall Street Journal, 12.9.16, “Household Wealth Rises to a Record”

 

  • Exhibit B -- U.S. Department of Commerce, U.S. Census Bureau, 10.27.16, “Quarterly Residential Vacancies and Homeownership, Third Quarter 2016.”

 

  • Exhibit C – CoreLogic U.S. Home Price Insights Report 9.16

 

  • Exhibit D – RISMedia, 1.1.17, “Housing Value at Record-High: Will Buyers Be Able to Keep Up?”

 

  • Exhibit D-1 – Article from the Wall Street Journal, 1.19.17, “Student-Debt Picture Darkens”

 

  • Exhibit E – Forbes 12.13.16, “Four More Years? No Quick End In Sight For The U.S. Housing Shortage.”

 

  • Exhibit F – Fannie Mae 12.20.16, “Confidence Improves at the Prospect of Pro-Growth Policies.”

 

  • Exhibit G – RISMedia, Housecall Blog, 12.12.16 “Surveying the American Dream: Housing Optimism Swings Post-Election”

 

  • Exhibit H – Realtor.com, 11.30.16, “Realtor.com® Forecasts Post-Election Economy to Result in Higher Mortgage Rates While Housing Delivers Slower Gains in 2017.”

 

  • Exhibit I – Fannie Mae 12.16, Housing Forecast December 2016

 

  • Exhibit J – Wall Street Journal, 1.12.17, “Demand for Mortgages Takes a Hit.”

 

  • Exhibit K – U.S. News & World Report 1.2017, “Best Places to Live” and “Best Places to Live Methodology”

 

  • Exhibit L – REALTORMag, Realtor.com 12.22.16, “Hottest Housing Markets in December”

 

  • Exhibit M – National Association of Realtors, 12.7.16, “The 2016 Profile of Home Buyers and Sellers.”

 

  • Exhibit N – National Association of Realtors 12.16, Median Sales Price of Existing Single-Family Homes for Metropolitan Areas

 

  • Exhibit O – Pikes Peak Association of Realtors 12.16, Listing and Sales Summary

 

  • Exhibit P -- PPMLS Monthly Indicators for El Paso & Teller Counties, Nov. 2016

 

  • Exhibit Q – PPMLS Local Market Update, Nov. 2016

 

  • Exhibit R – UCCS Quarterly Economic Update, Nov. 2016

 

 

HARRY'S BI-WEEKLY UPDATE 1.9.17

by Harry Salzman

January 9, 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.

HARRY A. SALZMAN, THE real estate THERAPIST

 

SO, YOU’RE PROBABLY WONDERING….

I have so many titles and designations in the real estate arena that I figured adding one more that really suits me best might be in order.  Thus, THE real estate THERAPIST it is! 

After all, when I think about the integral function of my special brand of customer service, serving as a sounding board and helping figure out what an individual or family needs in terms of housing is probably the most essential part of my work. 

I need to know what makes my clients tick.  Do they want to live near schools…in a home or townhome… near downtown or out in the forest?  Are they gourmet chefs and need a super kitchen…do they entertain and want an extra large “great room”…or need a large recreational area in the yard?  What about an oversized garage for multiple cars or RV’s?  Do they work from home and need a quiet home office located away from the hustle and bustle of everyday life? 

And what about finding the best financing and taking care of listing their present home if that’s a consideration?  Those stresses are ones I handle for my clients so they can better enjoy the process and excitement of moving into a new home.

All of this and so much more goes into play before I begin the search for the best fit for my clients’ needs, wants and budget considerations. 

That’s not even taking into consideration what I do for those who relocate, either to or from the Pikes Peak area.  As most of you know, that’s a big part of my business and where “therapy” really comes into play.   Is there a trailing spouse who may not be so thrilled about the move?  Or children that have to be uprooted from their friends and schools?  Educating those folks about the many advantages of living in Colorado Springs is especially important and I always take time to fully understand the issues and pressures that go into relocation—be it for an individual or a family.

So while I may not have an accredited degree in Psychology, I think most of you would agree that I play the role of The real estate Therapist with every transaction.  Thus, this new addition to my many other titles.

 

* * * And…once again…Happy New Year to you and yours.* * *

 

THE LOCAL housing market CONTINUES IT’S UPWARD TREND

December PPAR statistics show the Pikes Peak housing market continuing to perform extraordinarily well and we now have 29 consequent months of year-over-year increased local Residential real estate sales. 

Homes are selling at 99.4% of listing price with the average days on the market at 38.  This continues to be great news for both buyers and sellers, despite the fact that interest rates have started to rise.

As you will see in the Cumulative Year to Date Summary, total sales numbers in Single Family/Patio Homes and Condo/Townhomes are up 15.6% and 14.7% respectively for year-over-year.  And, it’s the second consecutive year setting an annual record in sales.  This is fabulous news for local homeowners.

The Monthly Summary shows that compared to a year ago, total active listings are down 28.0% for Single Family/Patio Homes and 25.1% for Condo/Townhomes, continuing a downward trend that tends to favor sellers.  New listings are down 1.2% for Single Family/Patio Homes and up 8.3% for Condo/Townhomes.  This is reflective of the holiday season and I anticipate new listings to increase along with the rising interest rates.  Those who have waited are beginning to realize that they can wait no longer if they want to take advantage of still historically low, but increased interest rates.

Even with new listings down for the month in Single Family/Patio Homes, I’m finding that there are homes available in most neighborhoods and price ranges.  The biggest issue is knowing what you need, want and can afford prior to beginning the process of selling to trade up or move to a new location.  Most homes do sell quickly so having those decisions made in advance can make a lot of difference if your home sells fast.  Pre-approval from your lender is also a requisite in this fast paced market.

If you have been thinking of listing your home, I cannot emphasize strongly enough that NOW is the time.

With interest rates increasing and home equity building at a steady pace, it’s time to make your move either to sell and trade up or buy for the first time or for investment purposes.  To get the ball rolling, simply call me at 598.3200 or email me at Harry@HarrySalzman.com and let’s see how I can put my special brand of customer service to work for you, your family members or co-workers.

 

DECEMBER 2016 WAS THE 29TH STRAIGHT MONTH OF INCREASED LOCAL RESIDENTIAL real estate SALES

Statistics provided by the Pikes Peak REALTORS Service Corp, or it’s PPMLS

Here are some highlights from the December 2016 PPAR report.  Please click here to view the detailed 15-page report, including charts. If you have any questions, just give me a call.

In comparing December 2016 to December 2015 in PPAR:                       

                        Single Family/Patio Homes:

  • New Listings are 763, Down 1.2%
  • Number of Sales are 1,236 Up 46.7%
  • Average Sales Price is $287,294, Up 7.8%
  • Median Sales Price is $255,000 Up 6.3%
  • Total Active Listings are 1,536, Down 28.0%

                        Condo/Townhomes:

  • New Listings are 104, Up 8.3%
  • Number of Sales are 159, Up 0.6%
  • Average Sales Price is $190,543, Up 15.8%
  • Median Sales Price is $177,000, Up 11.0%
  • Total Active Listings are 140, Down 25.1%

COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*

                                                Median Sales Price             Median Sales Price

                                                  December 2016                      December 2015

Black Forest                            $455,000                              $417,000                      

Briargate                                  $350,000                              $285,000          

Central                                     $208,950                              $172,000

East                                           $225,000                              $207,450

Fountain Valley:                       $224,300                              $215,000

Manitou Springs:                     $370,500                              $307,000

Marksheffel:                              $311,000                             $252,500

Northeast:                                 $250,000                              $235,500

Northgate:                                 $422,927                              $275,003         

Northwest:                                $335,000                              $310,250           

Old Colorado City:                   $236,500                              $223,000

Powers:                                     $249,900                              $229,000

Southwest:                               $262,500                              $249,000

Tri-Lakes:                                 $445,000                              $394,000

West:                                        $250,000                              $239,950

*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.

 

RENOVATION…WILL YOU GET A RETURN ON YOUR INVESTMENT?

Rismedia, 11.16

One question I get asked over and over is:  “How much will a renovation of (fill in the blank) add to the value of my home?”

If you’re looking for a return on investment when upgrading certain items in your home, it’s good to know what to prioritize first.  This is especially relevant when selling your home or investment property.  

The chart below will give you an idea of the ROI’s for various renovation projects:

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SOME ADDITIONAL STATISTICS FOR COLORADO SPRINGS…

#16 in “America’s Hottest Markets for real estate in December”—realtor.com©

#6 in “10 Hottest real estate Markets to Watch in 2017”—Forbes Magazine

 

HOUSING VALUE IS AT A RECORD HIGH.  WILL BUYERS BE ABLE TO KEEP UP?

Rismedia.com, 1.1.17

With housing’s collective value growing to $29.6 trillion last year—a record high reflecting 5.7% appreciation--and marking a full recovery since the crash—there is potential to push more prospective homebuyers to the sidelines. 

“Housing is incredibly important to us personally and to the economy as a whole,” said Zillow Chief Economist Dr. Svenja Gudell.  “The U.S. housing stock is worth more than ever, which is a sign of the ongoing housing recovery.  As buying a home gets more expensive, affordability remains a concern for many, and these numbers highlight just how much people are spending on housing.  The total value of the housing stock grew nearly 6 percent this year (2016), a pace that will likely mean some American families are priced out of homeownership.”

Despite the year’s appreciation, approximately 60 percent of housing markets remain below values reached during the bubble years according to a recently released analysis by Zillow. 

Since Colorado Springs was not hit as hard during the housing crash as many other areas, our recovery, along with a 15-year low in foreclosures, has been good; however, if home prices keep accelerating and mortgage interest rates keep rising, this could be a concern for us too.

This is just another reason to call me sooner than later if you’ve been thinking of getting into a new home or looking for investment property.  I can help you determine whether this is the right time for you to act on whatever housing thoughts you might have. 

 

COLORADO SPRINGS HOME CONSTRUCTION IS HIGHEST IN 10 YEARS

The Gazette, 1.4.17

Another sign of improvement in the local housing market is marked by the number of permits issued to builders for the construction of single-family homes in the Pikes Peak Region.  This past year the pace of new construction was at it’s highest since 2006.

The demand for housing, a stronger economy and the low unemployment rate has builders predicting that the upward trend will continue in 2017 in the Colorado Springs area. 

This is one more indicator that our City is thriving.  If you are considering new construction, there are options in all price ranges and locations.  Simply give me a call and let’s see if there might be something just right for you.

 

HOUSEHOLD WEALTH RISE TO A RECORD HIGH—FUELED BY real estate AND STOCKS

The Wall Street Journal, 12.16

While incomes for many have stagnated, the wealth of U.S. households climbed to a record $90.2 trillion in the third quarter 2016, driven by a strong buildup in real estate and stocks.

Stocks—directly and through retirement savings accounts such as 401(k)s--climbed by $494 billion in the third quarter while real estate, which is primarily people’s homes, rose in value by $554 billion, according to the Federal Reserve.

I’ve been publishing articles over the past several years that have shown real estate to be a better investment than stocks for many folks.  I don’t want to say, “I told you so”, but I told you so.

 

 

 

 

HARRY'S BI-WEEKLY UPDATE 1.3.17

by Harry Salzman

January 3, 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.

 

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Harry A Salzman
ERA Shields / Salzman Real Estate Services
5475 Tech Center Drive, Suite 300
Colorado Springs CO 80919
719-593-1000 or Toll Free: 800-677-MOVE(6683)
Cell: 719-231-1285
Fax: 719-548-9357

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