Real Estate Information Archive

January 25, 2021

 

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.

 

LOTS TO THINK ABOUT IN TODAY’S HOUSING ARENA

I’ve been a fixture in the local residential real estate community for going on 48 years now and have gone through a lot of different cycles, and this past year has certainly reconfirmed to me that change is not only inevitable…it’s a constant in the business of buying and selling homes.

The housing industry in general has been seeing new trends, most related to the current pandemic, and it appears that as we rethink the ways in which we work, live, educate and entertain, home needs and wants are also rethought.

As you might imagine, working from home (), home schooling and eating “in” more than in the past has created the need for more home office space, larger kitchens, more “privacy”, and greater outdoor entertainment areas.  Some folks have been busy with home renovations while others have been looking for properties to better suit their current needs and wants.

With record lows in existing homes listed for sale, home price appreciation is continuing its upward trend.  When coupled with the unimaginably low interest rates we are currently witnessing and rental prices also trending upward, it’s no surprise that homes are selling as soon as they hit the market—and creating bidding wars and selling prices considerably over listing price as well.  

What to do in this kind of market becomes the question if you are considering a move.  The answer is simple.  Call me!  For each individual situation—wants, needs, and budget—there is an personalized solution—and I am here to get you through the current residential real estate “maze”.  

Since it’s obviously still a seller’s market, one option is selling your present home and buying one that fits your needs today and for the foreseeable future.  As you might imagine, it’s imperative to know where you want to move because your present home will undoubtedly sell much quicker than you could even imagine.  Sometimes it’s possible to lease it back from the buyer until you are able to make your move, but that is not always an option.  Timing is everything when it comes to moving in today’s market.

New home construction was strong in 2020, looks to continue that way into the foreseeable future with new home prices continuing to rise as well.  This has been a viable option for a number of my clients and my good working relationship with a number of local homebuilders helps a lot. I can assist with site and home selection, as well as making certain that you can get the best financing to fit your individual needs.  

And speaking of new construction, this has also become an option for some of my “investor” clients who have faced the same lack of available homes for purchase as rental properties.  Let me give you a recent example of a home that in the past might not have been considered for a rental property.

My clients purchased a newly constructed home at a price of $507,000 with a down payment of 25%.  They were able to get an amazing 30-year fixed-rate mortgage (and non-owner occupied at that) for 2.75%.  They were also able to include landscaping front and back yards, rear fencing and window coverings in the loan amount.  That gave them a total monthly payment (PITI) of less than $2000.

Their property manager has indicated that the home should be able to rent for $2500-$2600 a month, thus giving them an immediate positive cash flow.  Of course, being a new home, they also have the reassurance of little or no maintenance for some years to come.

At this rental price point my clients should be able to find a great tenant who will not only take good care of the home but might choose to live there for a longer time period.  A win-win for all.

With many new companies moving to Colorado Springs, there are going to be lots of folks relocating and wanting a place to call home.  Most will be in the rental market until there are more homes for sale since new construction can’t happen overnight, and apartment living is not practical for some.  

Where is this narrative going?  

If you are looking to purchase a home for investment purposes, I’m your guy.  Not only do I put my own money where my mouth is and have owned investment properties for many, many years, I am able to help you figure out the best way for your situation.  However, since I do have an investment banking background, I am NOT a tax advisor.  So please know that you should always talk to your tax advisor prior to investing in residential real estate—or making any investment that could affect your individual tax situation.

For those of you with children or friends looking to buy for the first time, here’s an example of what happened to me just yesterday. A client was referred to me by her father.  She has always been a renter and wanted to buy but needed a starter home.  She was pre-approved for a loan up to $240,000, and as you might guess, that put her (and I) in an especially tough situation considering how few homes there are in general, let alone in that price range.  We looked at four homes and waited in line to even get in to see the homes.  After making an offer on a townhome listed at $185,000, I found out that we were offer number 43.  The accepted offer was $240,000, and although our offer was considerably over list price, we weren’t even in the ballpark.  

In cases such as these, sometimes it helps if a parent or other co-applicant can step up so that the buyer is able to qualify for homes in a higher price range.  Oftentimes the current rental payment of the potential buyer would allow them to buy more home for the money and not increase their monthly output, but on their own they might not qualify for the higher loan amount.

An important reminder:  No matter if you’re buying for you and your family or for investment purposes, don’t let the price point of a home get in the way of your decision.  The current low interest rates mean your monthly payment will likely be far less than you might imagine.

There you have it.  

While the market is tight and homes are not so easy to come by, I’m the guy who can steer you in the right direction to achieve your personal residential real estate needs and wants.  And it starts with a simple phone call.

I can be reached at 593.1000 or by email at Harry@HarrySalzman.com and I look forward to speaking with you. Remember—the sooner you contact me, the sooner you will be on your way to a new future in residential real estate. As the sign above my desk says, I’ll get it done:

And as my clients can attest…if it’s at all possible…I WILL get it done!

 

DECEMBER 2020 LOCAL MARKET UPDATE

Colorado Association of REALTORS^{® ,} Pikes Peak REALTORS Service Corp, or it’s PPMLS

Here is the December 2020 Local Market Update for both El Paso and Teller counties that wasn’t available when the last eNewsletter was published.  

You can click here to get specific information on the geographical area of your choice from the 18-page Local Market Update. I recommend that you check out your own area or one that you are considering, to get a good idea of the local pulse. As an example, here is a detailed report on the Colorado Springs area:

NOW MAY BE THE RIGHT TIME TO SELL YOUR HOUSE

Keeping current matters, 1.19.21

The housing market made an amazing recovery last year and is now positioned for an even stronger 2021.  Record low interest rates are definitely a driving factor and buyer demand across the USA is incredibly strong, and even more so in Colorado Springs.

I mentioned earlier, this is NOT the case on the supply side.  Here is a breakdown by states and you can see just how strong the demand is right here in Colorado:

 

 

As the maps show, buyer traffic is high, but seller traffic is low.  With so few homes for sale right now, record-low inventory is creating a mismatch between supply and demand.

What does all this mean for buyers and sellers?  

Buyers need to remain patient in the search process and be ready to act immediately once they find the right home since bidding wars and offers over list price are becoming the norm in this type of market.

Sellers may not want to wait until spring to put their houses on the market this year.  With such high buyer demand and such a low supply, now is the perfect time to sell a house on optimal terms.

Bottom Line?  If you’ve even considered a move, NOW is a great time to begin the process.  Call me today and let’s see how we can make your residential real estate dreams come true.

 

SOME REASONS WHY THE housing market IS SO TIGHT AT PRESENT

The Wall Street Journal, 1.22.21

The current shortage of available listings began more than a year ago and while it was not helped by the pandemic, there are a number reasons that have contributed to this.

Americans are staying in their homes longer than in the past, with the typical homeowner in 2020 having remained in place for 13 years.  This is in contrast to the 8.7 years that was typical in 2010.  About one in four U.S. homeowners have lived in the same home for more than 20 years according to a new study by Redfin Corporation.  

Homes sales across the country soared last year, reaching their highest level in 14 years, as Americans were looking for a larger home where they could work remotely more easily.  

But Covid-19 concerns had the opposite effect among potential sellers as a fear of strangers entering homes prompted some to cancel or delay plans to list their homes.

Others were concerned about finding a new home in a competitive market or refinanced at the considerably lower interest rates available.

Many baby boomers are staying in their homes and older folks are finding that they can “age in place” rather than move to “senior living” communities.  

All in all, this is creating not only the housing shortage, but contributing to the faster increase in home appreciation and resulting higher sales prices.

Once again…with feeling…if you are even simply dreaming of a new home—NOW is the time.  Waiting will cost you more in the long run and interest rates are not likely to remain this low forever.

 

2021’S SEVEN BIGGEST HOUSING ISSUES ACCORDING TO real estate PROS

Realtor Mag, 1.20.21

1. Inventory shortages.  Throughout the U.S. and most especially here in Colorado Springs.

 

2. Widely distributed vaccines to boost consumer confidence.  This should encourage more sellers to list their homes and help offset the inventory challenges.  It could also help businesses reopen fully and give more Americans added job security and the confidence to enter the housing market.

 

3. Some homes will be lost to foreclosure.  While there is likely to be an increase in foreclosures due to an end of forbearance and stimulus plans, growing home equity may help homeowners sell in a strong market if they are facing foreclosure.

 

4. Low mortgage rates will continue to drive demand.  The low interest rates are causing renters to speed up their plans to purchase a home, current homeowners are opting to trade up faster and older adults are downsizing sooner—all due to the low interest rates.  Mortgage rates will likely increase as soon as more people get the vaccine and the economy improves, so folks are wanting to take advantage of the low rates available now.

 

5. A permanent shift to remote work could encourage more moves.  Larger home offices and more private space will be a concern as many employers are considering at least a partial WFH situation for employees.  

 

6. Virus surges won’t lead to further market panic.  The surprise element of the pandemic has passed, and the real estate market is better prepared for virtual showings and are able to transact business while being socially distanced.  

 

7. Affordability challenges persist and tax credits may help.  As affordability issues mount, lawmakers are working to come up with solutions, most especially for first-time buyers.  The proposed $15,000 down payment tax credit for first-time buyers, which, as proposed, will be able to be used at the time of purchase, has been proposed as an extension of the Recovery Act’s temporary tax credit.

 

 

January 8, 2021

 

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 TO SAY GOODBYE 2020…

As we bid adieu to a very unprecedented year, here’s wishing you all a very happy 2021 along with hopes of a return to normalcy.  A new kind of normalcy, for sure, but any kind would be welcome at this point.

A year ago, I wrote about my “2020 Vision” and predicted that local home appreciation would remain high, new construction would become a viable choice for many, and interest rates appeared likely to remain low for the foreseeable future. 

All of this was true…and for many of the reasons I mentioned.  Those included the historically low inventory of existing homes for sale, the influx of new businesses and their relocated employees, and the high rental rates which would drive more folks to home ownership. 

I certainly didn’t have any clue that a world-wide pandemic was on the horizon and that it would have such an effect on the housing market.   For several months in 2020, Realtors were unable to show homes and even photograph ones that were going on the market.  A good number of homeowners were also hesitant to let strangers into their home during this time.  Therefore, my prediction that more homes would become available for sale did not come to fruition in 2020.

As a result of the pandemic, working from home (WFH) and home schooling have both changed what folks are looking for in their living situations and has driven a lot of home renovation and ideas of what is not only needed, but wanted, in a new home.  As you might imagine, larger kitchens, home offices, private spaces and outdoor entertainment areas are popular requests now.

And with WFH becoming so prevalent, there has been somewhat of an exodus from the bigger cities toward places with access to “the great outdoors”.  As most of you know, Colorado Springs most certainly has that…and so much more. 

This has put even more pressure on buyers and there have been times where I’ve made an offer for a client only to find out that there were 14 others in line!  Even though “Mr. Negotiator” is one of my aliases, there is a limit to even what I can do in a situation such as that.  So “going, going, gone” also applies to just how fast home sales are in today’s market.

To give you an example, as I write this there are currently only 322 existing single-family homes available for sale in the city of Colorado Springs. New listings are disappearing as quickly as they come on the market and this covers all price ranges. 

Homes across the U.S. appreciated in 2020 at the fastest rate since 2014 and until there are more existing homes for sale it’s likely that trend will continue throughout 2021.  Interest rates remain historically low, another driver of potential sales. 

New home construction was strong in 2020, looks to continue that way into the foreseeable future and new home prices are continuing to rise as well.  This was an option for many of my clients last year and continues to remain so at the start of 2021.  I’ve got a good working relationship with a number of local homebuilders, and that can help a lot. I can assist with site and home selection, as well as making certain that you can get the best financing to fit your individual needs.  And, of course, this comes at no additional cost to you.  It’s an excellent option for this coming year, especially with the list of new wants and needs. Your present home will no doubt sell quickly, and you could possibly lease it back from the buyer while your new home is being built.  Lots of things to consider for sure.

Millennials are finally looking at homeownership and unfortunately are also faced with the same limited options.  They are finding Colorado Springs a great place to call home and to begin raising families and interest rates are very favorable, but they too are being held back due to the listing shortage.

Home sales across the U.S. actually declined in November for the first time in six months due to an abundance of buyers and not enough sellers. 

See a theme here?  If you’ve even considered selling your present home, NOW is the perfect time.  You’ve probably got more equity than you might imagine and when coupled with the low interest rates—it might just make sense for you to make a move now--and most likely you can ‘trade up”.  As I tell my clients, it’s the monthly payments that you need to consider, not the price of the new home.  At today’s interest rates it’s possible that you can get “more” or a different home for not much more than you currently pay.

I’m guessing that when more people are vaccinated and feel better about venturing a bit further than home, more of them will be listing their present home in search of new environs.  This will help stabilize the escalating sales prices and help us return to more realistic home appreciation rates.  As you will see below, our average sales price for single-family homes in December 2020 was $437,365—a 20% increase over the price in December 2019!

Yes, times are a bit challenging for Residential real estate, but if you know me at all—you know I relish a good challenge.  I’ve been in the local real estate arena for almost 48 years and have been around for all the cycles.  I know that ins and outs of doing whatever it takes for find solutions for most any of these challenges and my investment banking background gives me a heads up on the competition. 

I work with each client to determine their individual needs, wants and budget and work to make things happen.  If something is not in your best interest, I’ll tell you so.  I’m in this business for long term relationships with my clients, not a quick sale. It’s been my pleasure to recently have worked with children and grandchildren of my past clients and I hope to continue that legacy.

A new year brings with it a lot of new hopes and dreams, and this year even more so than most.   If Residential real estate is among your hopes and dreams for 2021, please give me a call at 593.1000 or email me at Harry@HarrySalzman.com and let me help make them all come true.

And now for statistics…

 

DECEMBER 2020

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

Here are some highlights from the December 2020 PPAR report.  Remember that the new format of this report no longer provides monthly statistics for each individual neighborhood.  However, if you are interested in what’s happening in your neighborhood, I can provide you with this information through other means.

In El Paso County, the average days on the market for single family/patio homes was a very low 16.  For condo/townhomes it was 10. 

Also in El Paso County, the sales price/list price for single family/patio homes was 101.3% and for condo/townhomes it was 98.4%. 

Since this is also year-end statistics, I am providing you with both the regularly posted year-over-year monthly stats as well as the cumulative year-to-date comparison of 2020 to 2019. 

Please click here to view the detailed 10-page report, including charts.  If you have any questions about the report or to find out how it relates to your individual situation, just give me a call.

 

In comparing December 2020 to December 2019 for All Homes in PPAR:                      

                        Single Family/Patio Homes:

·       New Listings were 939, Up 14.2%

·       Number of Sales were 1,376, Up 10.3%

·       Average Sales Price was $437,365, Up 20%

·       Median Sales Price was $379,999, Up 15.2%

·       Total Active Listings are 532, Down 59.1%

·       Months Supply is 0.4, Down 5.7%

 

Condo/Townhomes:

·       New Listings were 161, Up 33.1%

·       Number of Sales were 222, Up 29.1%

·       Average Sales Price was $295,153, Up 18.3%

·       Median Sales Price was $290,000, Up 21.4%

·       Total Active Listings are 70, Down 46.6%

·       Months Supply is 0.3, Down 1.6%

 

The Cumulative YTD Summary: (comparing Jan-Dec 2020 to Jan-Dec 2019)

                        Single Family/Patio Homes:

• New Listings were 18,747, Down 1.0%
• Sales were 17,337, Up 8.0%
• Average Sales Price was $415,329, Up 13.4%
• Volume was $7,200,558,873, Up 22.4%

 

Condo/Townhomes:

• New Listings were 2,720, Up 10.8%
• Sales were 2,517, Up 12.8%
• Average Sales Price was $273,427, Up 10.3%
• Volume was $688,215,759, Up 24.4%

 

Now a look at more statistics…

 

DECEMBER 2020 MONTHLY INDICATORS  ILLUSTRATE OUR LOCAL TRENDS IN DETAIL

Colorado Association of REALTORS^{® ,} Pikes Peak REALTORS Service Corp, or it’s PPMLS

Providing greater detail than the above report, this contains information on both El Paso and Teller counties for Residential real estate.  I normally include the Local Market Update as well, but it was not available at press time. 

The “Activity Snapshot” for all residential properties in El Paso and Teller counties shows the Year to Date one-year change:

• Sold Listings for All Properties were Up 10.7%
• Median Sales Price for All Properties was Up 15.6%
• Active Listings on All Properties were Down 56.7%

You can click here to read the 16-page Monthly Indicators.

 

housing market FORECAST FOR 2021

Keeping current matters, 12.18.20

As you read earlier, the housing market, while facing its fair share of ups and downs in 2020, not only met expert predictions, it surpassed them and broke records along the way.

Here’s what leading real estate experts around the country are predicting for 2021: 

 

• Interest rates are projected to stay low.  This was one of the biggest drivers for 2020 and should continue in 2021.  Because of this, affordability reached one of the highest levels it has in the last 30 years.  And while home prices continue to rise, in part from lack of inventory, the counter of low interest rates have made purchasing a home increasingly affordable, especially for first-time buyers.  This infographic illustrates home affordability:

 

 

• Home sales are projected to grow by 7%.  This indicates that experts believe we will likely see an increase in inventory for 2021.  Whether it’s homeowners who waited out the pandemic or newly constructed homes, more inventory will be a welcome change.

 

• Home prices are projected to appreciate by 3.4%.  That’s a simple case of supply and demand.  But while 2020 saw homes appreciate on average nationwide at around 7 percent, this continued but lower appreciation is reflective of a more balanced market. With the end of the pandemic in sight, experts expect inventory levels to rise and home prices to appreciate at a steadier pace.

 

• Foreclosures should not lead to price declines.  Due to the massive wave of unemployment, a number of homeowners across the country were led to enter mortgage forbearance.  And while unemployment is slowly but surely declining (and ahead of expectations) it will be a while before we reach the pre-COVID levels.   Hence, foreclosures are expected to rise.  Experts do not anticipate this leading to a crisis like we saw in 2008 and they don’t expect it to lead to the major home value depreciation that followed.  According to Lawrence Yun, NAR chief economist:

 

And one more infographic on the 2021 Housing Forecast: (just a reminder that all of these are NATIONAL forecasts, and I expect our local numbers will be considerably better.  Please contact me for a more localized forecast)

 

 

NOTES FROM A ZOOM CONFERENCE

Like most people these days, I’ve been attending scheduled conferences via Zoom rather than in person. I thought I’d share some highlights of these meetings that you might find helpful.

The keynote speaker at the first conference on December 10^th was Lawrence Yun, chief economist for NAR.  Here are some of his “crystal ball” comments:

• After the widespread availability of the vaccine, we should see a fabulous increase in the economy which will lead to housing “wealth”
• Home sales are surging—both new and existing homes, but the record low supply is a challenge to affordability
• Home prices will be up 8% in 2021, in part due to the cost of lumber and new construction costs
• Mortgage rates will continue to be affordable
• The rate of return will remain positive for those who purchase for investment (rentals)
• Working from home will become the norm for many, with some going to the office no more than 1-2 days a week

 

And then from an economic panel of experts:

• A lot of “what if’s” will all turn positive
• Housing will be the best investment and rate of return for many
• Prices will be a detriment to first time buyers
• GDP growth should be around 3.5% in 2021
• Earnings growth in 2021 should also be good
• Inflation should be less then 2%.
• Much mobility will be on hold
• Optimistic that the economy will go up very strong
• housing market will see more inventory when people feel better about the pandemic (more vaccinations)

 

And some other thoughts:

• Developers are buying as much raw land as they can now
• The Housing Economy is at an all-time high and should continue
• Builders are selling more than they can build and are raising prices month after month
• For first-time buyers, the cost is getting in the door vs. the monthly payment

 

I’ll share some more conference material in the next e-Newsletter.

Until then…I hope to see or hear from you soon.