Real Estate Information Archive

October 18, 2017

 

HARRY’S BI-WEEKLY UPDATE

                        A Current Look at the Colorado Springs Residential real estate Market

As part of my Unique Brand of 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.

 

THIS IS A BIT LATE BECAUSE…

I was hoping to include the comprehensive neighborhood reports are usually in the 2^nd eNewletter of the month, but they have not been produced by PPAR as of this morning and I did not want to delay sending this.

Any one of you who would like a copy of the detailed report, or simply the page covering your individual neighborhood, please send me an email and I will have it sent to you directly.

Business is still going at a record pace and there doesn’t seem to be any rhyme or reason as to a particular “buying season” anymore.  Starter homes are continuing to receive multiple offers, some over listing price and they are on the market for a very short time—sometimes just hours. 

This can be discouraging to first time buyers and others who want to sell and trade up but there are lots of ways to help improve your chances and working with me is number one on that list. 

I have seen it all in my 45+ years in the local residential real estate arena and know the ins and outs of the business.  I can help from beginning to end—from finding properties that meet your individual needs, wants and budget to recommending lenders to obtain pre-approvals and then writing an offer that will most certainly get noticed, if not accepted the first time.  

If you, a family member or co-worker need help in making your residential real estate dreams come true, my special brand of customer service is simply a phone call or email away.  I can be reached at 593.100 or at Harry@HarrySalzman.com .

 

MILLENNIALS’ NEW WEAPON IN BIDDING WARS:  A PARENT’S HOME EQUITY

The Wall Street Journal, 10.10.17

Parents are refinancing their own homes to help their children compete as all-cash buyers in hot housing markets. When the purchase closes, the children pay the parents back.

This has been referred to as the mortgage merry-go-round:  Parents refinance their own home to fund the full cost of their son or daughter’s home.  This allows the child to compete as a “desirable all-cash buyer” in areas such as Colorado Springs where bidding wars are common and we find that many sellers today often prefer cash transactions because they can close quickly without making a deal contingent on financing.  Then, when the purchase closes, the new home is refinanced by the child and the parents are paid back.

This strategy is also indicative of how hard it is for most millennials to get into their “starter home”, where competition is the fiercest.  Even those with high paying jobs and large down payments are losing out, most especially in hot real estate markets such as ours.

Certainly, this will not work for everyone.  Parents must have enough equity in their homes to make it worthwhile, and the same goes for the child’s new home.  And both parties must be willing to take on the added hassle and cost of two loans.  Additionally, mixing family and money can be tricky—especially when large sums and people’s homes are involved.

Here are a couple more things to keep in mind:

1. Loan Options.  Parents have several options for using the equity in their homes, including a cash-out refinance, which allows the borrowers to refinance an exiting mortgage plus an additional amount and take the difference out in cash; a home-equity loan, which is a loan against the value of a home, including a second mortgage; or a HELOC, which works like a credit card, allowing homeowners to qualify ahead of time and withdraw funds when the child is ready to close.

 

2. Finance Fail.  The biggest risk, however, is that the children will not qualify for a loan—or one as big as expected—especially if they pay above the asking price or the market cools before obtaining the loan.  To avoid this, let the lender know your plans ahead of time and if possible, use one loan officer for both transactions.  Also, some lenders want buyers to live in a home for at least 3 to 6 months prior to refinancing.  An alternative here would be a “delayed-financing mortgage”, which allows a buyer to purchase the home in cash and refinance the day after closing for up to 80% of the value of the home.

 

3. Think Like a Lender.  Parents should do the same kind of due diligence as a lender, including vetting children’s finances.  It might be best to work with a lawyer to draw up a family loan agreement setting out repayment terms and other stipulations.  For example, parents may want to ask for 5% of the eventual sale price.  Buyers may also want to get a home inspection.

 

4. Consider the Costs.  A purchase mortgage or a refinance would typically cost about 2% of the loan value.  Most closing costs would apply to two loans instead of one.  And while repayment penalties are rare on primary-residence homes, they may apply to investment properties.

 

5. Tax Tips.  Gifts of more than $14,000 per person per year are subject to federal gift taxes for the giver, which could apply to both parents and children.  Both parties should consult a tax professional to determine how this type of transaction could affect them.

 

DOWN PAYMENT MYTHS DEBUNKED:  An Infographic:

 

THE COST OF WAITING TO BUY

Keeping current matters, 9.29.17

I get asked this question a lot:  “Should I buy now or wait?” and my answer is always the same.  It all depends on your individual circumstances.  That said, in general, and most especially in today’s escalating market prices with the good possibility of mortgage interest rates rising in the near future, there’s no better time to buy than NOW.

Here is an illustrations explaining why:

 

Some Highlights:

• The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices and interest rates were to increase over a period of time.
• Freddie Mac predicts interest rates to rise to 4.4% by next year.
• CoreLogic predicts home prices to appreciate by 5.0% over the next 12 months.
• If you are ready and willing to buy your dream home, find out if you are able to.

So, if you are ready, willing and even thinking about buying a new home—whether to sell and trade up or buy for the first time or for investment purposes, please give me a call sooner than later and let’s see how we can make this a reality for you and your family.  I can be reached at 593.1000 or by email at Harry@HarrySalzman.com.

 

AND FINALLY, A LITTLE BIT OF BRAGGING…

As most of you know, I was in Chicago for an International relocation Conference the last week of September.  The Pikes Peak Association of Realtors (PPAR) held a formal dinner on September 29^th, which I was unable to attend.  To my great surprise and with much gratitude, I found out that I was awarded the “Extra Mile Award” at that dinner.

According to PPAR, this award was presented for:

“Excellence and service to the real estate industry.  Harry Salzman has served as a member of the Government Affairs Committee (of PPAR) for over 20 years.  As part of the association’s advocacy efforts he has represented PPAR in city and county with his famous statistical and economic outlook, making him and PPAR the go to source for housing statistics in the region.  In addition to his advocacy efforts, Harry has been a valuable member of PPAR’s investment task force.”

I have been doing what I do for more than 45 years in the local real estate arena and know that my clients enjoy getting my special brand of customer service.  Knowing that people trust me enough to allow me to play a big part in their family’s biggest financial investment and that I can help them make their residential real estate dreams come true is a reward in itself.  To be able to do the work I love is also a reward in itself.  This special award from PPAR and being recognized by my local peers is the “icing on the cake” and is special to me and I wanted to share it with you—because, let’s face it, without all of you, an award like this would not have been possible.

 

October 3, 2017

HARRY’S BI-WEEKLY UPDATE

                        A Current Look at the Colorado Springs Residential real estate Market

As part of my Unique Brand of 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.

 

AS I BEGIN TO WRITE OF ALL GOOD THINGS, TROUBLING THOUGHTS DISTURB ME

There’s lots of good news to share about the residential real estate market, but it’s difficult to get the events of the past few weeks out of my head.  I recently returned from an international relocation conference in Chicago and learned of so many positive things about corporate staff building, which of course translates into new workers being relocated to all areas of the country. It was a very positive meeting and left me feeling recharged and full of new possibilities for the Colorado Springs market.

Last week was the beginning of the Jewish New Year, a time of reflection and rededication to helping achieve peace, equality in all areas and to spread goodwill to mankind.  It’s an uplifting experience and leaves you feeling that all things are possible if we all work to make that happen.

Then came the Las Vegas massacre on top of the devastating hurricane damage in Houston, Florida and now Puerto Rico.  The world as we know it is changing in so many ways and it can be very disturbing.  I’m so grateful to all the first responders everywhere who continue to risk their lives everyday to save those unable to help themselves.  Their sacrifices are many and a great debt is owed to one and all.

My heart goes out to all the families affected in this very troubling time.  There really are no words for this.  If you or anyone of your family or friends is suffering a loss, please know that you are in my thoughts and prayers.

 

NOW FOR SOME STATISTIC AND GOOD NEWS FOR LOCAL RESIDENTIAL real estate

Homes are selling at 99.6% of listing price and a VERY LOW average of 24 days on the market. It’s still unbelievable and continues to put a lot of pressure on both buyers and sellers in terms of decision-making.  It doesn’t appear that this pressure is going to subside in the near future.

In September 2017 Colorado Springs was once more listed in America’s Top 20 Performing Markets at number 18 in the Realtor.com rankings. 

With homes selling within days of being listed, if you are planning to sell your home, you need to know where you are planning to go next because the short turnaround times don’t give you a lot of leeway to decide after the sale.  It’s best to find your next home prior to listing your present one at this time.

Let me remind you again that the hard reality today is:  If you are buying, you need to know in advance exactly what you want because most often you don’t get the luxury of “thinking about it” for even a few hours.  If you don’t make an offer—one that’s going to get noticed—someone else will. 

As much as I hate for my clients to face disappointment per a possibility of multiple offers, it’s becoming a regular thing.  That’s why you need to keep an open mind to look at properties in areas where you might have not considered in order to find what you want, need and can afford.  Even when it comes to purchasing a newly constructed home, I’m finding that lots are going quickly so making an informed decision is essential no matter what you are seeking.

That being said, there are still homes available in most neighborhoods and in most price ranges.  If you are in the market—either as a first-time buyer, as a trade-up buyer or for investment purposes, please give me a call sooner than later.  I can be reached at 593.1000 or by email at Harry@HarrySalzman.com .

For more details on the local September 2017 PPAR reports, please see the next article.

 

SALES AND PRICES KEEP ESCALATING DESPITE LOW INVENTORY

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

You will see in the Cumulative Year to Date Summary that total sales numbers year-over-year in Single Family/Patio Homes are up 9.3% and up 20.4% for Condo/Townhomes.

Year-over-year, new listings are up 3.4% for Single Family/Patio Homes and down 11.5% for Condo/Townhomes. If you’ve been thinking of listing your home, it’s certainly going to get a lot more attention in this type of sales environment.  Just remember that it’s likely to sell fast, so once again…you need to be prepared for that inevitability.

Here are some highlights from the September 2017 PPAR report. Please click here to view the detailed 15-page report, including charts

In comparing September 2017 to September 2016 in PPAR:

                       

                        Single Family/Patio Homes:

• New Listings are 1,442, Up 3.4%
• Number of Sales are 1,509, Up 9.3%
• Average Sales Price is $309,698, Up 6.3%
• Median Sales Price is $275,000, Up 4.2%
• Total Active Listings are 2,145, Down 12.2%
• Months Supply is 1.4

 

                        Condo/Townhomes:

• New Listings are 177, Down 11.5%
• Number of Sales are 254, Up 20.4%
• Average Sales Price is $217,732, Up 9,5%
• Median Sales Price is $197,000, Up 12.6%
• Total Active Listings are 112, Down 49.3%
• Months Supply is 0.4

 

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

                                                Median Sales Price             Median Sales Price

                                                  September 2017                    September 2016

Black Forest                            $495,000                              $475,000                     

Briargate                                  $337,500                              $345,750           

Central                                      $220,000                              $204,500

East                                           $245,000                              $218,500

Fountain Valley:                       $252,500                              $229,700

Manitou Springs:                     $392,000                              $385,000

Marksheffel:                             $288,750                             $267,888

Northeast:                                $369,950                              $250,000

Northgate:                                $460,381                              $430,525         

Northwest:                               $380,000                              $369,000           

Old Colorado City:                  $231,000                              $191,500

Powers:                                    $275,000                              $250,500

Southwest:                              $287,000                              $292,500

Tri-Lakes:                                $437,125                              $411,000

West:                                        $273,500                              $270,000

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

If you have any questions about these reports and how they might relate to you and your future housing plans, please give me a call at 593.1000.

 

FIVE REASONS TO SELL THIS FALL

Keeping current matters, 9.18.17

As I mentioned earlier, NOW is a great time to list your home if selling to trade up is in your present plans.  There are lots of buyers out there and with the low number of listings, your home is sure to get noticed.

Here are Five Good Reasons:

 

1. Demand Is Strong.  The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country.  These buyers are ready, willing and able to purchase…and are in the market right now.  More often than not, multiple buyers are competing with each other to buy a home.

Taking advantage of this buyer activity is to your advantage.

 

2. There is Less Competition Now.  Housing inventory is still under the 6-month supply that is needed for a normal housing market nationally and it’s considerably less than that here locally. This means that, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market.  This is great news for homeowners who have  gained equity as their values have increased.  However, additional inventory could be coming to the market soon.

Historically, the average number of years a homeowner stayed in their home was six, but that number has jumped to an average of almost nine years since 2008.  There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation.  As home values continue to appreciate, more and more homeowners will have the freedom to move.

Since the choices buyers have will continue to increase, NOW is a great time to sell.  Don’t wait until this other inventory comes to the market before you decide to sell if that’s something you are thinking about now.

 

3. The Process Will be Quicker.  Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for a mortgage and writing an offer that gets noticed the first time.  This makes the entire selling process much faster and much simpler as buyers know exactly what they can afford before home shopping and sellers know they have qualified buyers.  According to Ellie Mae’s Origination Insights Report, the time to close a loan has dropped to 43 days, after seeing a 12-month high of 48 days in January,

 

4. There Will Never Be a Better Time to Move Up.  If your next move will be to a premium or luxury home, now is the time to move-up!  The inventory of homes for sale at these higher price ranges has forced these markets into a buyer’s market.  This means that if you are planning on selling a starter or trade-up home, your home will sell quickly AND you’ll be able to find a premium home to call your own

Prices are projected to appreciate by 5.0% over the next year according to CoreLogic.  If you are moving to a higher-priced home, it will wind up costing you more in raw dollars—both in down payment and mortgage payment—if you wait.

 

5. It’s Time to Move on With Your Life.  Look at the reason you decided to sell in the first place and determine whether it is worth waiting.  Is money more important than being with family?  Is money more important than your health?  Is money more important than having the freedom to go on with your life the way you think you should?

Only you can answer those questions.  You have the power to take control of the situation by putting your home on the market.  Perhaps the time has come for you and your family to move on and start living the life you’ve always dreamed of.

 

A COUPLE OF PICTURES FROM CHICAGO

 

Me in front of the National Association of Realtors Building in Chicago

 

There was a contest for Chicago businesses to decorate “Police Dogs” for PAWS Chicago This one was designed by The National Association of Realtors and was outside their building.  I loved their slogan:

“Supporting all who serve—whether two legged or four—to find a safe home.”

 

REMODELING THAT CAN OFFER BIG PAYBACKS AT RESALE

Realtormag.org  9.28.17

Kitchen renovations and upgrades are among the top remodeling projects likely to add value to a home and most likely to appeal to home shoppers according to the 2017 Remodeling Impact Report conducted by the NAR.

Fifty-four percent of Realtors surveyed reported suggesting to sellers that they complete a kitchen upgrade before attempting to sell.  Twenty-three percent of real estate pros also said that a kitchen upgrade helped close a sale.

The report estimates that homeowners stand to recover 57%--or %20,000—of the $35,000 or so of the cost to take on a kitchen upgrade. 

Not only do kitchen upgrades just offer the potential for some bang for your buck at resale, but it has also been found to make homeowners more happy.  81% of remodeling consumers surveyed said they had a greater desire to be at home since completing their kitchen upgrade project and 81% also felt a major sense of accomplishment after the renovation.

The following chart shows you other ways in which to get greater joy from your home while recouping much of the cost at the time of sale.

 

HARRY’S JOKE OF THE DAY:

A doctor vacationing on the Riviera met an old lawyer friend and asked him what he was doing there.

The lawyer replied, “Remember that lousy real estate I bought? Well, it caught fire, so here I am with the fire insurance proceeds. What are you doing here?”

The doctor replied, “Remember that lousy real estate I had in Mississippi? Well, the river overflowed, and here I am with the flood insurance proceeds.” 

The lawyer looked puzzled. “Gee,” he asked, “how did you start the flood?”