HARRY'S BI-WEEKLY UPDATE 10.24.16
October 24, 2016
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.
COLORADO SPRINGS COMPREHENSIVE PLAN BEING FORMULATED
Several months ago I shared with you that I was selected by Mayor John Suthers to serve on the Steering Committee of Plan COS—a 2-year commitment that will provide the City of Colorado Springs with an updated Comprehensive Plan that will serve as a guide for the development of the City and help establish priorities.
I indicated that I would keep you abreast of what we are doing and I want to share some of what’s happened to date. We are actively seeking citizen feedback—finding out what you love about Colorado Springs. You can take the survey and discover more about Plan COS by going to the website at: https://coloradosprings.gov/plancos . I would encourage you all to take time to give your input so that this will be a plan “of the people, for the people”. Please share this website with your neighbors, family and co-workers who live in Colorado Springs so that they can also provide feedback for the Steering Committee. This is OUR City—it’s up to us all to see that future growth happens in the way we would like.
At our last meeting we were shown 12 trends that are affecting Colorado Springs and other cities throughout the world. I thought you would find this interesting and might consider these prior to taking the survey. They will help you better understand some of the areas that are being looked at in developing a new Comprehensive Plan.
- Changing American Demographics. The influence of youth is rising with the emergence of Generation Z, the generation now coming of age behind Millenials. As the younger generations of Americans begin to assume more responsibility at home and in the workplace—where they are more likely to start their own businesses—the impacts of differing lifestyle preferences are becoming more apparent in downtowns. Non-white races and ethnic groups are becoming the majority, more diverse cultural and religious backgrounds are becoming ubiquitous, and gender roles and norms are being redefined. To this end, a notable preference for living and working environments that prioritize diversity, collaboration, inclusivity, and the free exchange of ideas is emerging.
- Education, Talent + Jobs. The premium on a young, skilled workforce continues to drive development and investment in American cities. While college-educated workers make up about one-third of the American workforce, they produce more than half of the nation’s economic output. Where young skilled workers choose to live is increasingly the key decision factor for business growth and relocation.
- Rise of the Mid-Tier City. The dense, large “superstar” cities that were synonymous with economic growth and opportunity during the past decades are slowly being overtaken in popularity by smaller-- less flashy but more affordable—urban areas. These mid-tier cities are beating out superstar cities like New York and San Francisco in attracting 25 to 34-year olds with a college education because they are more affordable and livable.
- Changing Consumer Behaviors. Advances in technology continue to impact the nature of the retail industry and the shape of brick-and-mortar stores that are critical to downtowns. The convenience and ease of e-commerce is stimulating increases in online sales; however, the majority of retail transactions still occur in traditional stores. Many consumers prefer to support the regional economy and locally produced items that offer the added value of an emotional connection through the product with the local neighborhood. Downtown retail formats that prioritize a personalized consumer experience will stay competitive.
- Shifts in Transportation + Mobility. There is a national shift away from auto-dependence and toward cities that provide transportation choices that include walking, biking and transit. This trend has continued and is made even stronger by the lower-than-ever numbers of teens and young adults who are getting their driver’s licenses and owning cars. Capitalizing on the growing sharing economy, carshare programs are on the rise, expanding from universities and cities into other areas as well. Another significant and growing impact on transportation in cities is the on-demand ride services of Uber and Lyft. Apart from the automobile, local bike share initiatives—founded in Europe and China—can now be found in more than 100 cities in North America. Public transit options are increasing in many downtowns, with cities across the U.S. (re)investing in streetcars and light rail, and attempting to make the transit experience more enticing.
- Downtown + Livability. There is an increasing demand for authenticity and vibrant spaces. The reinvestment in downtown and downtown living is no longer an option, but an essential requirement for a thriving city. The demand for sterile housing developments has been slowed by the creation of more vibrant and amenitized walkable neighborhoods for younger generations and more mature adults looking to age in place. Redevelopment and infill has provided new housing options with more transportation options. The high demand for multi-family units in city centers is expected to continue. Though renting has increased among all age groups, household types and income groups, the primary reason for the high demand for multi-family units in downtown has been attributed to the Millenial and Baby Boomer generations. A rent premium exists for housing and commercial uses in walkable urban places.
- Regionalism. In response to dwindling resources and political gridlock at the state and federal levels, city and county governments in metropolitan regions across the county are turning to collaboration with private companies, universities, hospitals, non-profits, and each other in order to accomplish tasks once reserved for, or funded by, state and federal governments. Partnerships are necessary to also encourage development within urban limits where services exist, and curb rural developments that lack equal access to utilities and other city services.
- Shifts in Global Wealth. Over 80% of the world’s population lives in emerging markets, and these regions are expected to be responsible for nearly all future global population growth and expanding consumer spending. Emerging economies are expected to account for 60%-70% of global GPD growth for the foreseeable future as they expand at more than twice the rate of developed economies. Foreign investment in apartment housing, mixed-use development, and office and industrial space is driving the transformation of American cities.
- Advances in Technology. To maintain and improve high service levels on tighter budgets, downtowns are increasingly looking toward technological solutions. Mobile devices are continuing to diminish the importance of static office locations, allowing for connections anywhere, anytime. Office space configurations are changing, with reduced space needed to conduct business and greater utilization of space beyond traditional eight hour workdays. To attract young skilled employees, office design is increasingly combining business and social functions—a growth of mixed-use principles within buildings as well as outside of them. The growing popularity of co-working spaces are reflective of these trends. In response to high-profile infrastructure failures throughout the country, cities are seeking strategies to manage the high costs of infrastructure maintenance. Sensors are being increasingly use by cities to measure the status of infrastructure and to cue maintenance. In terms of mobility, autonomous cars have the potential to dramatically change the arrangement of cities in the coming decades, and limited introduction to the market is possible within the next few years.
- Social Equity + Pride. There is a rising tide of civic activism and opportunity oriented at neighborhood, community and city building. This activism stems from a renewed sense of pride and love in one’s city as people continue to chose more urban lifestyles and invest in their neighborhoods. As this trend has grown, issue relating to inclusiveness, reinvestment, access to services, variety of housing types and prices, gathering areas, civic centers, safety, walkability, access to parks and other topics have become primary conversations in cities across the country.
- Health, Environment, Tourism + Sports. Healthy environments are becoming an increasingly important factor in where companies and families choose to locate. As medical, sports and recreation technology (rec-tech) have become viable industries, outdoor-oriented cities are competing to attract these companies and the lifestyles they bring with them. Whether this is sports training, museums, or companies, a healthy and vibrant natural setting can determine their location. As outdoor recreation and tourism continue to increase in popularity, locally and nationally, outdoor cities must harness their potential to provide a setting that remains competitive. In many cases, cities have not just focused on the surrounding natural setting, but also have looked inward, bringing parks, trails and nature into their neighborhoods.
- Military + Defense. Military bases, institutions, and personnel affect city economies across the country, but as the population grows, other sectors will begin to have a larger influence. Private sector spin-off industries based on the local talent pool will be part of these new industries. The ability to capitalize on related technology industries presents an opportunity as the built and human capital for these activities already exists within these cities.
A lot to read and take in, but these factors are important considerations in helping determine where and how we want to work and live. I encounter this daily in my “relocation” of folks from other communities as well as those who simply are looking for new “features” in a local new neighborhood. This information is most definitely something for us all to consider in making future plans. I urge you to add your voice to those of others in the community by taking the survey.
SEPTEMBER LOCAL MARKET UPDATE AND MONTHLY INDICATORS PROVIDE RESULTS IN GREATER DETAIL
Pikes Peak REALTORS® Services Corp.,
In the recently published September 2016 Monthly Indicators and Local Market Update for El Paso and Teller Counties, new listings year-over-year were slightly down for the single-family/patio homes and up 14.0% for condo/townhomes. With that came a pending sales increase year-over-year of 14.4% for single-family/patio homes and 10.0% for condo/townhomes.
The median sales price increase year-over-year in all properties was up 9.1%, which is a good sign that the housing market is continuing to stabilize. If there were more listings, more people would be moving—either selling to trade up or buying for the first time.
I’m still finding there are those who wish to move but are afraid to list their homes because if they sell quickly, which has been the case in recent months, they might not be able to find the home they are wanting to buy as quickly as they’d like.
The shortage of available homes is continuing to affect the number of sales in communities all over the U.S. However Colorado Springs, while experiencing the same type of listing shortage, is still experiencing a significant number of sales. This bodes well for our community and is indicative of the increased job market and improved local economy.
You can click here to read the 16-page Monthly Indicators or click here to get specific information on the neighborhood of your choice from the 33-page Local Market Update. These reports provide greater detail than the monthly “PPAR Monthly Statistics” that I share in the first eNewletter of each month.
The “Activity Snapshot” shows the one-year change:
- Sold Listings for All Properties was up 15.7%
- Median Sales Price for All Properties was up 9.1%
- Active Listings on All Properties was down 29.7%.
As you will see, the time to buy is continuing to be NOW. With a few more choices, continued low, but gradually increasing, interest rates and increased home equity, the opportunity to sell and trade up couldn’t be better.
To discuss whether this can be a reality for you or someone in your family, simply give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let’s see how together we can make this work.
COLORADO SPRINGS IS A TOP CITY FOR BUSINESS AND CAREERS
The Gazette, 10.20.16
On the heels of top rankings in national lists from Money and U.S. News and World Report magazines, Forbes magazine has now named Colorado Springs as a top city nationally for business and careers. In its 18th annual ranking of metro areas notable for their work environments, Colorado Springs ranked 12th out of the nation’s 200 largest cities, according to Forbes.
Rankings were based on 14 different factors related to job growth, business and living costs, income growth, quality of life and the educations of its workforce. In making its selection, Forbes noted that the city was known for its culture and economy being influenced by military installations and defense contactors and for being a popular tourist destination because of Pikes Peak, Garden of the Gods and Cave of the Winds, among others.
It appears that people around the country are taking note of the good job being done by our City Council and Mayor’s office along with the Regional Business Alliance and others. With all those folks working together, there’s just no end to the accolades we can expect to get in the coming years.
5 real estate TRENDS YOU SHOULD KNOW
realtor.org 10.18.16
The National Association of Realtors® (NAR) has been publishing the Profile of Home Buyers and Sellers since 1981—the longest running series of national housing data evaluating the demographics, preferences and experiences of recent home buyers and sellers.
If you could go back in time to 1981 you would see that the housing buyer and seller landscape was much different than that of today. Mortgage rates were four times higher than they are today, the typical home averaged 1,700 square feet and cost $70,000 ($201,376 in inflation-adjusted dollars) and there was a much larger share of first-time buyers.
Here are five important trends that have shaped the real estate industry:
- There’s a big drop in first-time buyers. Due to various factors, last year’s survey saw first-time buyers drop to the lowest share (32 percent) since 1987 (30 percent). Echoing this, the U.S. Census Bureau reports the home ownership rate for 18-35 year olds is currently at 34.1 percent, the lowest in records dating back to 1994.
- The internet isn’t replacing real estate professionals. While 90 percent of potential buyers have gone online during their home search, they continue to see the value of using a real estate professional when actually buying or selling their home. Indeed, for-sale-by-owner transactions were at their lowest share ever last year, and haven’t been above 9 percent since 2011.
- Home size hasn’t increased that much. While tiny homes and McMansions are causing a lot of buzz, NARs profile of Home Buyers and Sellers shows that buyer preferences, when it comes to home size, hasn’t changed all that much. In 1981, for example, the typical home was just 300 square feet smaller (1,700) than it was in year’s survey.
- Down payments are down. NAR first collected data on down payments in 1989 when the average monthly mortgage rate was 10.62 percent. At that time, buyers financed their home with a 10 percent down payment. In the last two surveys, first-time buyers put down around 6 percent.
- The home search is longer. Even though buyers now have technology and the world at their fingertips, it’s not making the home search process faster. In fact, the average length of a home search was around seven or eight weeks from 1987 until 2007 and it climbed to around 10 weeks in the last two years.
Here is a look back over the past 35 years of home buying and selling
FIRST TIME BUYERS BEHIND LATEST HOUSING GAINS
Realtormag 10.20.16
First time buyers are responsible for most of the sales momentum in September according to NAR. An illustration of Existing Home Sales nationally for September 2016 is below. As you’ve seen from recent statistics, Colorado Springs is seeing higher median home prices than the U.S.
