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October 21, 2013

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.

HOMES FOR SALE---EXTRAS INCLUDED

As I’m negotiating to purchase a home on your behalf, I always look for financial “carrots” to help offset some of the buying costs.  And, on the other hand, for many years my listing presentations have had some choice incentives that a Seller might offer to help attract a Buyer.

When working as a Buyer’s Broker, I believe it is my duty to see that the Buyer is aware that they have received a good to a possibly “great” deal. 

An article in last Monday’s Wall Street Journal addressed this practice in talking about the “Freebies” that are now being offered to help boost home sales.  They indicated that “home builders have boosted cash incentives and upgrades to lure Buyers…due to rising prices and higher mortgage rates.”

In a booming market, these incentives practically go away, but the “increasing use of incentives underscores the fickle nature of the housing market, which has been gaining steam over the past two years but remains well below the pre-crash peak and often is buffeted by economic shift.”

I am of the opinion that incentives almost always help make everyone feel good about either buying or selling.  Obviously, the types of incentives vary based on the current market.  However, some type of bonus is definitely worth considering, whether you are looking to either buy a new or resale home or looking to sell your present home.

These motivations can include incentives for extras such as wooden floors rather than standard carpeting or an offer to split or pay closing costs.  These “extras” are what I look for when working with my clients.  In today’s market I’m finding those same “extras” are what it might take to get to a closing table.

So if you are looking to sell and trade up, or buy for the first time or for investment purposes, now is a great time to be in the Residential Market here in Colorado Springs.  Along with low interest rates at the present time, you might see some of these “freebies” come your way, too.  Call me at 598.3200 or email me at Harry@HarrySalzman.com so we can discuss your personal situation and see if any of this can work for you.

HOMEOWNERSHIP STILL THE AMERICAN DREAM

keepingcurrentmatters.com, 10.18.13

The big question facing the real estate community over the last few years has been how the housing crisis might impact the American public’s belief that homeownership is part of  “The American Dream”.

A recent study at Harvard University’s Joint Center for Housing Studies addressed this in a paper titled “Reexamining the Social Benefits of Homeownership after the Housing Crisis.”  Some of the findings revealed:

• Homeownership Still Preferred Over Renting   “Even after the dramatic loss of equity and the high foreclosure rates, the early evidence suggests that people seem to believe that, over the long run, owning is still preferable to renting.  The long term cultural preference for owning seems to have weathered the recent housing crisis.”

• Americans Still Expect to be Homeowners   “The research on home-buying expectations supports the conclusion that very large percentages of Americans still expect to buy a home at some time in the future.”

• Younger Americans More Desirous of Homeownership   “Moreover, the finding that younger renters and owners are more likely than their older counterparts to expect to own bodes well for the future of the housing market.”

So, “even after one of the most difficult decades in this country’s real estate history, the belief that homeownership is a part of the American Dream still lives on.” 

This has been my philosophy forever—I have always believed that there is “never” a bad time to buy real estate as long as it’s considered a personal investment.  In the long run, it will appreciate and as I’ve shown you many times in past eNewsletters, you’ll most often get a better run for your money in real estate than in the stock market or mutual funds over time. 
 

NOTE TO BUYERS:  YOUR WINDOW OF OPPORTUNITY IS STILL OPEN

I have been forecasting the potential 5% mortgage rate for 2014 since this past summer and we heard these same forecasts at the Southern Colorado Economic Forum on September 26, 2013. 

While The Fed recently announced that they would continue their current bond purchasing pace until the economy gets stronger, mortgage rates actually went back down.  This was great news for any Buyer who is in the process of purchasing a home.  However, this window of opportunity is expected to close in the very near future, as Ben Bernanke, Chairman of the Fed suggested that the Fed could still scale back the stimulus this year.

The Mortgage Bankers Association, Fannie Mae and Freddie Mac and the NAR have all projected what I’ve been saying—the 30 year fixed rate mortgage will be in excess of 5% by this time next year.  The average of their projections is 5.3%. 

“The payment difference in a $250,000 mortgage today and next year figuring 4.37% today and 5.3% next year would be $140.78 a month.  And today’s rates are often lower than that and next year could be even higher than projected AND home prices will more than likely be higher next year than now, so…the savings by buying today are definitely worth it to you.”

ANOTHER BIG REASON TO BUY NOW…

Inman.com, 10.17.13

Effective January 1, 2014, a new provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act goes into effect and the “qualified residential mortgage” (QRM) will possibly have far reaching effects that might ultimately lower the number of people who can obtain mortgage loans.

An article on inman.com explained briefly that “QRM was designed to set the bar for residential mortgages and to minimize the risk that borrowers may default.  It requires that debt ratios be limited to 43 percent and loan fees limited to 3 percent, and interest-only loans and negative amortization are not allowed in most cases.

The Dodd-Frank bill also requires the lender to retain 5 percent of any mortgages they make.  In other words, if they make a $100,000 loan they must retain $5,000 to secure the loan.”

For the first time in history, lending decisions after January 1, 2014 will be based on compliance issues rather than Buyer credit issues. 

Imagine that a mistake was made on a purchase agreement.  The Buyer and Seller want to change the agreement to correct the mistake, except the law prohibits you from doing so.

“If a lender makes a mistake with any part of the compliance, here’s what will happen:

1. The lender now has to pay all of the borrower’s closing costs.
2. Even if the mortgage agent made the mistake, the mortgage agent must be paid.
3. The lender cannot deduct any costs or losses resulting from the mistake.
4. The lender still has to close the loan.

What this means for agents, brokers and you, my clients:

1. There will be fewer loan choices as community banks and credit unions are squeezed out of the market, making it even harder for many borrowers to qualify.
2. The loan process will also probably take longer due to the increased compliance.
3. It will probably be much more difficult and costly to obtain a loan in the future.”

This is already having an effect on mortgage lenders all over the country.  Wells Fargo just this week announced a significant layoff of mortgage lending employees due to lower volume and fewer qualified buyers forecast in the months to come.

So, BOTTOM LINE…if you are sitting on the fence about either Buying or Selling, it’s time to make a move before the end of the year.   No one knows, not even me, what will happen after January 1, 2014 but it doesn’t appear to be in anyone’s best interest to keep sitting on the fence.

AND NOW A WORD FOR THE SELLERS…

My last eNewsletter showed how in the past 12 months our local Colorado Springs market has had a 9.8% gain in Median Sales Price as of September 30, 2013.  Hopefully you now have an additional amount of equity available in your home—maybe even more than you think. 

Here are some excellent reasons why you might consider selling your home now:

1. Demand Is High—There are a lot of buyers out there and they are serious about purchasing right now.
2. Supply is Beginning to Increase—Selling now while demand is high and before supply increases may get you your best price.
3. New Construction is Coming Back—Homebuilders are jumping back into the market, often giving you competition in the Seller’s market.
4. Interest Rates Will Again Rise—Whether you are moving up or down, your housing expense still be more a year from now if a mortgage is necessary to purchase your next home.
5. It’s Time To Move On with Your Live—Sometimes letting the possibility of a few extra dollars can get in the way of the importance of being with family, health, or having the freedom to live your life as you really want.  You can remedy this by putting your home on the market today and get on with your life.

Let’s get together soon to discuss some or all of these things so I can assist you in making the decisions that make the most sense for you financially and personally.  As you have been reading here, it isn’t going to pay to wait, and it probably will end up costing you to do so. 

PHILOSOPHY OF THE DAY

---Karl Eller, April 1999, Eller College of Business, The University of Arizona

 “When you are looking at the characteristics on how to build your personal life, first comes integrity; second, motivation; third, capacity; fourth, understanding; fifth, knowledge; and last and least, experience.

Without integrity, motivation is dangerous; without motivation, capacity is impotent; without capacity, understanding is limited; without understanding, knowledge is meaningless; without knowledge, experience is blind.  Experience is easy to provide and quickly put to good use by people with all other qualities.

Make absolute integrity the compass that guides you in everything you do.  And surround yourself only with people of flawless integrity.”

FEATURED LISTING       

Harry A. Salzman. CRS, CRP, CNE
e-Pro Internet Certified
Broker/Owner

email: Harry@HarrySalzman.com

Serving: Colorado Springs, Monument. Air Force Academy, Fountain,
Security, Woodland Park, Black Forest, Manitou Springs 

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October 7, 2013

   HARRY’S BI-WEEKLY UPDATE

               A Current Look at the Colorado Springs Residential real estate Market

I HOPE YOU DON’T MIND A LITTLE SELF PROMOTION…

In August I was awarded “REALTOR Emeritus” status from the National Association of Realtors.  This unique honor was given to me “in recognition of forty cumulative years of membership in the NAR and in recognition of his valuable and lasting contribution to the real estate profession in the Community.”  This was a major accomplishment for me and one that was publicized locally in the Colorado Springs Business Journal  “Kudos” and The Gazette’s “Movers and Shakers” sections this past week, among others. 

Looking back at the 40 plus years, I feel that my greatest satisfaction has not been measured by the number of homes I’ve sold, but by the relationships I’ve formed with many families and the number of repeat transactions, now often including grandchildren of some original clients.

Knowing that with my Investment Banking background and years of experience in selling real estate I am able to help clients realize their personal home ownership dreams—that’s the key to what keeps me motivated on a daily basis, year in and year out.

As many of you know, I have specialized in relocation for a good part of my career.  My extensive knowledge of the Pikes Peak Region as well as my “Network” of relocation specialists across the country has provided thousands of clients with the ability to make a move with as little personal stress as possible.

I understand that there are many things at work when a person is facing relocation.  Most times there are family concerns as well as the stress of a new position in an unfamiliar location.  I believe it is my responsibility to help make my client’s move as seamless as possible…whether they are relocating to my area or to another part of the country.  A happy client means a happy employee, as well as happy family members.  That’s my ultimate goal when working within the relocation industry.

So, bragging time done, but in all seriousness, I want to take this time to thank all of you, my readers, for helping me achieve this wonderful pinnacle in my real estate career.  Without your confidence in me as your partner in Real Estate transactions, none of this would have been possible. 

Please know that I will continue to do everything possible to help you, your family, co-workers and friends whether they are looking to move across town or across the county.  Just give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let me work my “magic” for you.

Here’s to another “40” years of working together to make your home ownership dreams come true!

SOUTHERN COLORADO ECONOMIC FORUM FORECASTS “MORE STEADY IMPROVEMENT”

Listening to the experts speak on September 26, 2013 at the 17^th Annual Southern Colorado Economic Forum gave me even more reason to continue with my “positive” outlook for the Pikes Peak Region.

This Forum is presented annually, with presentations by the UCCS College of Business and other national and local economic experts.  Salzman real estate Services, LTD is proud to be the only direct Residential Real Estate Company listed among the leading Business Companies and Forum Sponsors. 

Jim Paulsen, chief investment strategist for Wells Capital Management predicted that the recovery will pick up speed during the coming year.  According to Paulsen, “a slow-to-develop recovery should hit its stride in 2014 with growth reaching 3 percent for the first time since the recession and remaining at or near that pace for the next several years.”

Fred Crowley, the forum’s senior economist said he expects “more steady improvement” as the local economy continues to recover from the Great Recession.  Rebuilding from the Waldo Canyon and Black Forest fires will general about 1400 local jobs over the next four years.  He said that “new home construction and vehicle sales continue to drive local economy, although housing construction is growing at a slower rate in recent months than it had earlier this year and late last year.”

Crowley went on to say that “there are also clear signs of strength in consumer sentiment.  People are feeling better about the local economy because there is job growth and incomes are going up.”

Some of the Forum’s projected highlights include:

• Residential construction will jump by 23 percent next year to around 3,700 units
• Commercial construction will increase by 20 percent
• Payrolls will expand by about 2 percent, or 5,000 jobs
• Incomes will grow by 4.5 percent
• Overall economic growth is anticipated to grow to 2.8 percent next year from 2.2 percent this year, despite the threat of budget reductions at local military installations under automatic federal spending cuts known as sequestration

The annual published report of “The Southern Colorado Economic Forum” is 36 pages long.  If you would like to purchase a complete copy of the publication, please contact Town Zwerlein, Faculty Director at 255.3241 or by email @ tzwirlei@uccs.edu or Fred Crowley, Associate Director at 255.3531 or email @ fcrowley@uccs.edu.

SEPTEMBER ANOTHER GOOD MONTH FOR real estate SALES

Statistics provided by the Pikes Peak REALTORS Service Corp, or its PPMLS

Area home sales rose again in September, showing a 7.2 percent increase over the same month a year ago.  This is the 15^th straight year-over-year increase in monthly sales. According to the just released report from PPAR, year-to-date sales have totaled 8,469, a 22.6 percent gain over the same period in 2012.

Some highlights of the latest report, comparing September 2013 to September 2012 in PPAR include:

                        Single Family/Patio Homes:

• New Listings are 1,157, Up 6.6%
• Number of Sales are 829, Up 7.2%
• Average Sales Price is $245,177 Up 9.7%
• Median Sales Price is $213,000, Up 9.8%
• Total Active Listings are 4,070, Up 9.3%

                        Condo/Townhomes:

• New Listings are 144, Up 14.3%
• Number of Sales are 101, Up 16.1%
• Average Sales Price is $173,954, Down 3.0%
• Median Sales Price is $139,000, Down 4.8%
• Total Active Listings are 456, Up 4.6%

It is worth noting that new listings, while up from a year ago, are down 20.9% from a month ago in single family/patio homes and down 21.3% in condo/townhomes.  When that is coupled with the fact that area foreclosure filings are dropping and look to be the lowest in a decade, this means there are fewer homes available to prospective buyers.  The good news is that homes are selling much quicker than in the past few years, some with multiple offers and even offers over the listing price.  This report is showing that all sales in El Paso County are selling at an average of 98.2% of the listing price—great news for Sellers.

My job is to assist you in making the right personal decision, based on your needs, wants and budgetary restrictions.  Just give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let me put my 40 plus years of local real estate professionalism to work for you.

The time is still right for anyone looking to sell and trade up, buy a starter home or to look for investment property.  Just don’t expect to take your time in decision making because as statistics reveal…things are moving faster than they have in a number of years. 

Once again I suggest being prepared—know what you are looking for and be open-minded when it comes to location.  An area you might not have considered before might turn out to be exactly what you are looking for now.  You might also be open to looking at new construction as existing homes with your needs and/or wants become more and more scare.

Please note that these statistics include “all homes” within PPAR—therefore both El Paso and Teller counties are included.  To view the 12-page report in its entirety and to see how your individual area is performing in comparison to the rest of the county, click here. 

MORTAGE RATES TUMBLE AGAIN…BUT THERE’S NO GUARANTEE THEY WILL STAY THERE

In the past few weeks all indications were that Mortgage Interest Rates were slowly on the rise and aiming to stay that way.  For example, the rate slowed the construction of new homes, rental costs escalated sharply with increasing home costs and buyers have been in a hurry to lock in rates. 

And then—the Federal Fiscal New Year on October 1, 2013.  We’ve all been hearing and reading about every new, unique government situation on the radar and lo and behold—due to a big local and national real estate market starting to slip, so has Mortgage demand decreased. 

Therefore, here’s a great example of what I was able to do for a client just last Friday, October 4^th.  We were able to lock in a 30-year-fixed rate of 3.75% for a new VA loan.  Yes, you read that right.  It was a big WIN for one of my clients.  And the 30-year fixed conventional rate is about 4.0%. 

USAToday reported that “this latest drop came amid declining consumer confidence and on the onset of the government shutdown which occurred last week.  According to Frank Nothaft, Freddie Mac chief economist, rates are not likely to move ‘sharply lower’ unless the shutdown continues to a point where it would take a measurable toll on government spending, which would weigh on the economy,, Nothaft says.”

So---there you go.  If you thought you were starting to get priced out of the mortgage market even though it was still historically at a low point, you now have a second chance to catch it at an all time low.  But there’s no guarantee how long these rates will last, so if you are in the market, don’t hesitate too long.  It’s time again now to consider selling and trading up, looking at a first time home or finding the right investment property.  Just give me a call and we can help determine if this makes sense for you personally.

ECONOMY AND HOME FORECAST IS SUNNY

The Gazette, 9.25.13

REALTORMag, 9.24.13

Two economists from the Federal Reserve Bank of Kansas City have indicated that economic growth is expected to gain additional strength in Colorado and across the rest of the nation next year as automatic federal budget cuts loosen their grip on both economies.

“Economic growth in Colorado Springs has lagged the rest of the state because federal government budget cuts have a bigger influence on the local economy where nearly half of economic activity is tied to the military and other federal agencies,” said Alison Felix, the bank’s Denver branch executive and assistant vice president.

She added that the Colorado Springs economy should “gain strength next year despite continuing federal cuts because of continued strong housing construction.  Permits for new single-family homes are the strongest in El Paso County among the state’s largest counties.”

REALTORMag reported that “fifty-five percent of Americans say they expect home values to rise over the next 12 months, further showing that consumers are becoming less fearful about jumping back into the real estate game, according to Bankrate’s latest monthly Financial Security Index.” 

“It appears that Americans’ love affair with real estate is back.” Says Greg McBride, senior analyst for Bankrate.com.  “Even though the housing bust shows that housing prices don’t just go straight up, people just don’t have the same risk aversion to Real Estate and home ownership that they do to stock ownership.”

So, there you go again—more economists telling us that the time is NOW.  It’s not just overly optimistic me—the experts are telling us, too.  Things are getting better and if you’ve been sitting on the fence it’s definitely time to at least decide which way you want to go.  A stronger economy will translate into higher prices and eventually higher mortgage rates, so let’s get together soon to see how you might benefit from all that’s happening in the market at the present time. 

PHILOSOPHY OF THE DAY

“…I firmly believe that any man’s finest hour—his greatest fulfillment of all that he holds dear—is that moment when he has worked his heart out in good cause and lies exhausted on the field of battle—victorious.”

--Vince Lombardi

FEATURED LISTING       

Harry A. Salzman. CRS, CRP, CNE
e-Pro Internet Certified
Broker/Owner

email: Harry@HarrySalzman.com

Serving: Colorado Springs, Monument. Air Force Academy, Fountain,
Security, Woodland Park, Black Forest, Manitou Springs