Real Estate Information Archive

October 24, 2022

 

HARRY’S BI-WEEKLY UPDATE

A Current Look at the Colorado Springs Residential real estate Market

As part of my Special Brand of Customer 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.

 

 

SO MANY QUESTIONS AND NO STOCK ANSWERS…

With a recession literally knocking on the door and mortgage interest rates escalating daily, I get regularly questioned about the “state of Residential real estate”.

And, like most things, there is no “right” answer to any of these questions.  It’s not a matter of one-size-fits-all…but then, again, purchasing Residential real estate never falls into a one-size-fits-all category.

Each transaction must be considered against an individual family’s needs, wants and budget requirements and I have yet to find two families with the exact same situation.

Another thing that I tell my clients is that all Residential real estate must be looked at from a LOCAL point of view.  What’s happening in the Colorado Springs area is often quite different from other parts of the country.  

As an example, our city is experiencing fabulous growth as more and more companies and their employees relocate here.  In addition, now that “work from home” (WFH) has become the norm for some—it’s somewhat of a “no-brainer” to choose a city such as Colorado Springs, known for the fabulous “work-life balance” so many crave.

For several years now we have had fewer available homes for sale than ever before, and this is one reason our home values have skyrocketed and created a sellers’ market that essentially still exists today.  

Local homebuilders were not able to keep up with demand, in part due to the shortage of supplies such as lumber, cement and steel but there are still an historic number of local homes under construction due to having so many folks wanting to buy.

And with home appreciation across the U.S. now “normalizing”, we are still seeing better returns than most of the country.  Some cities are slowing down or staying even, but Colorado Springs is continuing to thrive.  

While our home values are continuing to increase, the fact that they are doing so slower than in the past several years is a important for several reasons.

To begin with, there was no way to sustain the type of increases we had been seeing.  It would not have been too long before many more folks, and most particularly first-time buyers, would not have been able to afford a home.  As it is, with the interest rates more than double what they were at the beginning of this year, monthly payments are not as affordable for many.

The lack of available homes for sale created a frenzy that favored sellers and forced buyers into bidding wars and paying above list price for many homes.  There were no concessions for buyers and even appraisals went by the wayside in many cases.  It was one of those “buy as is” type situations--if you even got the opportunity to buy.  

Buyers today in most cases have the time to deliberate and to make realistic offers with some contingencies that we did not see even six months ago.  When you consider that a home is often the most valuable asset in a family’s financial portfolio, this is a good thing.  

If you are a regular reader of my eNewsletter, you know that I have been telling you for some time now that low interest rates and fast appreciation were not going to be here forever.  However, even I did not foresee things moving as fast as they have. 

Those of you who rent or have family members or friends who are renters have seen that rental rates are rising faster than ever.  Some of that is due to investors realizing that there are many who need to rent for whatever reason and these investors are either purchasing homes to rent out or going in with larger investment groups who are building apartments at a faster pace than we have seen in years.  Whatever the case, it is almost always preferable to own rather than rent, if possible, because one way or another you are helping to pay down a mortgage—be it yours or your landlord’s.  

If you have wanted to sell and trade up or move to a new location and were waiting, what should you do?  Again, it depends on your specific situation, but as I say…there are always those who need to sell and those who need to buy.  It’s just likely to take longer in this current marketplace. 

I’ve seen homes that might have sold in one day had they been listed 6-8 months ago compared to now seeing only a few prospective buyers.  The reason?  Buyers can be pickier than they were earlier in the year and are taking more time in decision making.  And of course, the interest rates are holding some back. 

While interest rate increases have hurt some potential buyers, but I don’t think they can be blamed for everything.  If you are selling to trade up, the equity in your present home can be used for a larger down payment which can help keep the monthly payment more reasonable.  And, when the rates go down, and they will at some point, you can likely refinance and get the payments even lower.  

I have been in this business for 50+ years, so interest rates of 7% don’t seem so high to those of us who can remember 18%.  Yes, compared to the 3% or so of recent times, it is a bit confounding, but those rates were unrealistic as well. 

If you’re wanting a home now and cannot wait indefinitely for interest rates to go down, you might be finding your life plans aren’t lining up with economic conditions.  If that’s the case, sometimes you must deal with higher monthly payments than you’d like until you can refinance down the road.  

You might need to make some concessions to accommodate a more expensive loan, like reworking your monthly budget-- but over the long haul, there’s a good reason why homeownership is a big part of the “American Dream”.  The sooner you are a homeowner, the sooner you can start building equity for you and your family.  

What I’m saying is that while there is no stock answer, and never has or will be when it comes to the buying and selling of Residential real estate, there IS an answer for each individual situation. 

Having seen almost every cycle imaginable over my fifty years here, I’m in a good position to help you and your family find the best answers for YOU.

It all begins with a call to me at 719.593.1000 or an email to Harry@HarrySalzman.com and we can start finding solutions that can work for you.

 

WITH THE LATEST NEWS ABOUT INFLATION, SHOULD YOU STILL BUY A HOME?

KeepingCurrentMatters, 10.19.22

The prices of groceries and most goods and services are climbing daily, so it’s no surprise that folks are wondering whether now is still the time to buy a new home.  If you fit into that category, here’s what you need to know.

 

Homeownership Is Historically a Great Hedge Against Inflation. 

 

In an inflationary economy, prices rise across the board.  Because you can lock in what is likely your largest monthly payment (your mortgage) for the duration of your loan, historically homeownership is a great hedge against those rising costs.  

According to James Royal, Senior Wealth Management Report at Bankrate, “A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment.  Sure, property taxes will rise, and other expenses may creep up, but your monthly housing payment remains the same”.

And, as I mentioned above, with rents being as high as they are, the ability to stabilize your monthly payments and protect yourself from future rent hikes may be even more important.  

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains what happened to rents in the latest inflation report: “Inflation refuses to budge. In September, consumer prices rose by 8.2%.  Rents rose by 7.2%, the highest pace in 40 years”.

Rental contracts are typically renewed annually, at which time a landlord may be more likely to increase monthly payments to offset the impact of inflation.  This could be part of the reason why a survey from realtor.com shows that 72% of landlords said they plan to raise the rent on one or more of their properties in the next year.

 

Bottom Line?  The best hedge against inflation is a fixed housing cost.  If you are wanting to find a way, I’m here--- ready, willing, and able to help you explore the possibilities.  

 

REPAIRS THAT PAY OFF IN A COOLING housing market

The Wall Street Journal, 10.11.22

In this slower-than-recent-times housing market, sellers are finding that remodeling properties can be a way to avoid cutting their asking price.

The bidding wars and frenzy of the recent past are gone, and buyers are looking much closer at what they want in a new home.  For sellers, making repairs, or even small improvements that buyers care about could make the difference between getting your asking price or giving a discount.

Between mid-July and mid-August about 95% of home sellers made updates or repairs before listing their properties, up from 71% of sellers six to 12 months ago, according to realtor.com.  They spent an average of $14,163.  

However, data suggests that not all renovations are worth the cost for sellers.  According to a recent NAR report, the top three interior remodeling projects with the highest return on investment are a hardwood flooring refinish, new wood flooring and an insulation upgrade.

Other sellers might find that smaller fixes such as a fresh paint job can make a bigger impression on buyers than pricier changes such as a renovated third bathroom, some real estate agents said.

At times, a big remodeling project, such as a new kitchen or deck, might not be worth the investment and could delay a seller’s timeline given supply and labor shortages.  

Focus on more affordable projects that appeal to buyers and look beautiful in photos, such as the refinishing of hardwood floors, suggested Jessica Lautz, a vice president at NAR.

A hardwood flooring refinish has a 147% cost recovery, meaning homeowners are likely to recoup well more than the cost, she added.  In comparison, a kitchen upgrade has a 67% cost recovery.

Giving the home a deep cleaning before showing it to potential buyers can also go a long way to presenting the home in its best light.

Enhancing curb appeal is another way to help a home stand out to buyers and reduce seller concessions. 

Anything that isn’t broken and isn’t overtly visible, such as a new air conditioning system, won’t impress buyers as much as improvements they can see, such as new doors for the kitchen cabinets or customizable closet shelves.  Aim to fix anything that an inspection would turn up.

These are just some possible ways to show your home in the best light without having to possibly lower the asking price or give unnecessary concessions.  

As with everything to do with Residential real estate, it must be “localized”.  Different neighborhoods attract different type of buyers, and the expectations can different so it’s important to know those differences when fixing up a home for sale.

When you are ready to sell, I’ll be happy to make suggestions based on years of experience working within most all local neighborhoods that can enhance the selling power of your home and get you the most return for your investment.

 

HARRY’S THOUGHT OF THE DAY: 

 

 

October 18, 2022

 

HARRY’S 50^th ANNIVERSARY

 

 

FIFTY YEARS IN LOCAL RESIDENTIAL real estate SURE WENT BY FAST…AND I’M STILL LOVING EVERY MINUTE OF IT

 

Yes, you read that right!  In a blink of an eye…I recently celebrated 50 years selling Colorado Springs Residential real estate.  

For someone who thought he would spend his life working for a Wall Street type company in Denver dealing in Investment Banking, it still seems surreal that I changed course by moving to Colorado Springs and looked to purchase a home.  I kept driving here from Denver to look for employment, but finally had to tell the homebuilder that I couldn’t buy the home I had wanted because I wasn’t able to find a job.

Since the builder knew my background in finance, he asked me if I might possibly want to go to work for him since buyers were looking for mortgages and he figured I knew a lot about that.  I told him I knew nothing about selling houses but that I was great at selling women’s shoes while in college.

 

And the rest is history…still in the making as you know.  (No, this is NOT a retirement announcement!)

 

Looking back, this was certainly not my life plan, but it turned out that sometimes plans change and, in my case, I was always able to use my background in finance to the advantage of my clients while building a new career in a city that I have been privileged to call home for 50 years.

As most of you are aware, I am a big believer in giving back to the community that has provided me with so much.  Through my volunteer association and participation in various City of Colorado Springs’ government committees, as well as local real estate associations, non-profits, and the UCCS School of Business and Southern Colorado Economic Forum, I have had the great pleasure of working with and befriending so many exceptional people.  There are far too many to name here, but most of you know who you are, and I will be forever indebted to you for your friendship and guidance over the years.

Becoming a nationally known relocation Expert also gave me the opportunity to help move so many folks to (and from) Colorado Springs over the years.  I’ve worked with the Chamber, EDC and many companies to help make the relocation process as stressless as possible for numerous employees who have come to make Colorado Springs their home.  Those folks are many of the ones who have helped our city grow and prosper and I like to think I had a small, but significant, role in helping that happen.

In recent years I have had the pleasure of working to find homes for children and even grandchildren of some of my original clients and that “full circle” thing has made my heart happy.

Several months ago Colorado Springs Mayor John Suthers presented me with the “Proclamation” below:

 

 

 

This was an unexpected surprise and one I shall treasure forever.  I wanted to share it with you, my friends, clients, and readers because I know that my success is due in no small part to your loyalty and friendship, and I never take that for granted.

Enough about me.  

One of the reasons I share this is because I realize how important it is, and most especially now when the country is about to enter a recession, to have a seasoned, knowledgeable professional in your corner when it comes to making one of the most important financial decisions of your life.

A home is often your greatest asset and finding the one that’s right for your individual wants, needs and budget requirements is harder today than ever.  With interest rates rising ever so fast and home prices still escalating, it’s so important to know where and how to begin the search.  And when it comes to selling your present home, it’s equally important to know how to price it right to attract buyers.

Having been through most every financial cycle imaginable, and coupled with my financial expertise, affords my clients a heads up on what most other Realtors can provide.  

I want to thank you all for the past 50 years and I look forward to working with you, your family members, and co-workers in helping with any and all Residential real estate transactions in the years to come.

 

As always, you can reach me at 719.593.1000 or by email at Harry@HarrySalzman.com .

 

 

October 7, 2022

 

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.

 

 

 

Six months ago, when I started advising my clients that the sellers’ market and low interest rates weren’t going to be around forever, even I didn’t know how quickly the cards would turn.

In my 50+ years in the local Residential real estate arena, I’ve never seen interest rates rise this quickly (they are now the highest they have been since 2007) and, while we most definitely needed a more “normal” type of market, I doubt anyone would have projected it to normalize this fast.

What does that mean to you as a potential seller or buyer today?  To begin with, as a seller, it means that at present you can no longer dictate all the terms of the sale.  And as a buyer, you do get more options than you might have had even 4-5 months ago.  Also, oftentimes what you must “give up” as a seller you can make up when you make an offer as a buyer!

An important thing to remember, and something I always remind my clients, is that all Residential real estate facts need to be localized.  What is happening around the country is not often what is happening in our neck of the woods.

Colorado Springs has had a much more stable market than we’ve seen elsewhere.  The reason?  Lots of folks have been moving and are continuing to move here and our economy is doing far better than many other places.  Our inventory is still low compared to more “normal” times and that continues to give the seller somewhat of an advantage.

That doesn’t mean that homes are still selling at a record pace and over list price.  What it does mean is our home prices are continuing to rise, although at a much more reasonable rate, and while homes are not selling as fast as in the most recent past, they will sell when they find the right buyer.  

Things are just getting back to a more manageable pace. 

First-time buyers are being hit the hardest as they do not have equity to use for a down payment and the interest rates today are preventing some from qualifying.  As rates begin to fall, and they will hopefully do so within the next year, those folks will have more available homes and options from which to choose.

As you will see from the statistics below, home sales here in September are down 25% from a year ago.  We can blame some of that on “sticker shock”—a combination of prices and higher interest rates.  And there are a lot of “wait and see” folks who want to see where rates and prices are going.  Also, as you will read, available homes for sale are up 127.2% over a year ago, which means there are a LOT more homes from which buyers can choose.

Waiting for prices to fall in our area isn’t the best idea since that’s not likely to happen.  While homes will not appreciate as fast as they have, I don’t see where the values will decline.  And most economists agree.

And waiting for interest rates to fall probably isn’t the best idea either.  There are several ways to work around the fixed rates of today, such as getting a 5 or 7 year Adjustable-Rate Mortgage (ARM) and refinancing when rates fall, and several other strategies.  The best advice for today’s market is to shop around.  You will find that rates vary from lender to lender, and I can help direct you to several that often have very competitive rates and terms.

It’s good to remember that while the price you pay for your home today is permanent, your mortgage rate is not if you choose to refinance later.  A wise man once said, “Date the rate, but marry the home”!

As I’ve said, time and again, there are always those who need to buy and those who need to sell.  And with an experienced professional like me on your team, where’s there’s a will there will be a way.

Yes, it’s likely going to take considerably longer to sell, but for those who need time to figure out their next move, that’s a good thing.  For those who know where they are going, it’s going to take patience to wait for the right buyer.  But the good news is…. there is always a “right” buyer.  

Another important thing to remember is that this time of year is not the “traditional” buying and selling season.  We have tended to forget that since the frenzy of the last several years had created a “year-round” selling season.  

I’m not certain which is best, but I do know that having the ability to take time to make what is often your most important financial purchase is a good thing.  It’s just not what we have seen in recent times and will take some getting used to for both buyers and sellers.  In the long run it will make for happier and certainly more stress-free decisions and that’s as it should be.

If you are wanting to find out how the present market is going to affect any buying or selling thoughts of yours, please give me a call at 719.593.1000 or email to Harry@HarrySalzman.com . 

I look forward to speaking with you soon.

 

And now for September statistics….

 

SEPTEMBER 2022

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

Here are some highlights from the September 2022 PPAR report.

In El Paso County, the average days on the market for single family/patio homes was 24.  For condo/townhomes it was 17.  

Also in El Paso County, the sales price/list price for single family/patio homes was 98.5% and for condo/townhomes it was 99.8%. 

In Teller County, the average days on the market for single family/patio homes was 36 and the sales/list price was 98.5%. 

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 September 2022 to September 2021 for All Homes in PPAR:

                        

                        Single Family/Patio Homes:

·       New Listings were 1498, Down 18.1%

·       Number of Sales were 1,294, Down 26.4%

·       Average Sales Price was $523,117, Up 5.0%

·       Median Sales Price was $460,000, Up 4.5%

·       Total Active Listings are 2,690 Up 127.2%

·       Months Supply is 2.1, Down 4.8%

 

 

Condo/Townhomes:

·       New Listings were 205, Down 28.8% 

·       Number of Sales were 248, Down 17.9%

·       Average Sales Price was $363,252, Up 8.1%

·       Median Sales Price was $345,000, Up 8.3%

·       Total Active Listings are 235, Up 65.5%

·       Months Supply is 0.9, Down 3.7%

 

Now a look at more statistics…

 

SEPTEMBER 2022 MONTHLY INDICATORS AND LOCAL MARKET UPDATE 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. 

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 Down 26.8%

 

• Median Sales Price for All Properties was Up 4.0%

 

• Active Listings on All Properties were Up 91.9%

 

You can click here to read the 16-page Monthly Indicators or click here to get specific information on the geographical are of your choice from the 18-page Local Market Update.  It’s a good idea to check out your own area or one that you might be considering to get a good idea of the local pulse.  As an example, here is a detailed report on the Colorado Springs area:

 

 

UCCS ECONOMIC FORUM DASHBOARD

UCCS Economic Forum, College of Business, 9.27.22

Here is the most recent economic update from the UCCS Economic Forum.  It provides data concerning all aspects of the economy, on both the national and Colorado Springs area levels.

I’ve reproduced the first page of the graphs and you can click here to see the report in its entirety.  If you have any questions, please give me a call.

 

 

 

SELLING YOUR HOME?  YOUR ASKING PRICE MATTERS MORE NOW THAN EVER

Keeping Current Matters, 8.9.22

As I mentioned earlier,  homes are continuing to appreciate and even with more available homes for sale the numbers are still at all-time lows, thus keeping the market competitive despite the rising interest rates.

However, your asking price is more important than ever.  During the pandemic sellers could price their homes higher due to high demand and low supply.  This year, things have started to shift and that means your approach to pricing your home needs to shift as well.  Here is what’s at stake if you don’t.

 

Why Pricing Your House at Market Value Matters

The price you set for your house sends a message to potential buyers.  If you price it too high, you could run the risk of deterring buyers.

When that happens, it is often necessary to lower the price to reignite or stir up interest in your home when it sits on the market for a while.  Sometimes lowering the price sends a red flag to buyers who wonder what that means, and they might wonder if the home is still overpriced.

Some sellers are not adjusting their expectations to today’s market, and realtor.com explains the impact that’s having:

 

“…the share of listings with a price cut was nearly double its year ago level even as it remains well below pre-pandemic levels.”

 

To avoid the headache of having to lower your price, you’ll want to price it as right as possible from the onset.  It isn’t always easy to do with interest rates and other factors changing so fast these days, but we can start by looking at comparables and work from there.  

If you are thinking of selling and wondering what your present home might be worth in today’s market, please give me a call so we can discuss it in greater detail.

 

HARRY’S THOUGHT OF THE DAY:

 

And this is why all the pet psychologists in Colorado are so busy….