Real Estate Information Archive

November 29, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

real estate INVESTMENTS LOOK GOOD, BUT OUR AREA STILL NEEDS JOBS TO STABILIZE THE ECONOMY

The National Association of Business Economics' latest report voices concern about federal debt, unemployment, and business regulation, causing experts to forecast only moderate growth in 2011.

The NABE also reports that "consumer spending is expected to remain modest throughout the forecast horizon due to weak job gains, persistently high unemployment, and negligible growth in household net worth."

On the bright side -- the chances of the economy slipping back into recession are considered low.

The housing market, however, continues to struggle. The National Association of Realtors reports that existing home sales fell in October after two months of gains.

Lawrence Yun, NAR chief economist, said the recent sales pattern can be expected to continue, but may improve come Springtime. "The housing market is experiencing an uneven recovery, and a temporary foreclosure stoppage in some states is likely to have held back a number of completed sales. Still, sales activity is clearly off the bottom and is attempting to settle into normal sustainable levels."

The third quarter also saw an increase in the depreciation of home values, this according to Zillow.com. Their experts report that we have seen 51 consecutive months of declines, with values now 25% below their peak. This decline in home values is comparable to the decline seen between 1928 and the end of 1933, when values fell 25.9%, at the height of the Great Depression. In addition, foreclosure liquidations rose again, to a new peak for the third quarter. More than 1.17 out of every 1,000 homes was liquidated in September.

With a more positive view, however, Frank Nothaft, vice-president and chief economist at Freddie Mac, stated, “For the first time during the housing downturn, the overall delinquency rate is lower than it was a year earlier”.The Mortgage Bankers Association also reported that the mortgage delinquency rate in the U.S. declined last quarter "amid hints of improvement in the job market." Michael Fratantoni, the MBA's vice president of research and economics reported that "although the employment report for October was relatively positive, the job market had improved only marginally through the third quarter." Therefore, the delinquency rate may have declined, but it remains high.

The National Association of Realtors echoes this sentiment, releasing a statement earlier this month noting that the housing market recovery depends on jobs, as well as access to credit.

Locally, the unemployment rate for the Colorado Springs area is now over 8% and job uncertainty is a persistent problem. According to a recent article in the Gazette, “The 8.9 percent unemployment rate in Colorado Springs is the highest since June 2009 and the 27,336 area residents unsuccessfully looking for work represented the third highest total on record, according to the Colorado Department of Labor and Employment."

Emphasizing the dependence of the housing market on jobs, NAR Chief Economist Lawrence Yun stated, "Modest changes in mortgage rates are less important to a housing market recovery than the number of people who are able to obtain mortgages,”

Or, to put it simply, unemployed people don’t buy houses.

MORTGAGE RATES STARTING TO RISE FROM AN ALL-TIME LOW

As we have been warning, 30 year fixed mortgage rates are now settling at levels significantly higher than all time lows set just weeks ago. Conforming 30 year fixed mortgage rates today are at 4.4% for well-qualified borrowers who pay a standard origination fee (points) of .07 to 1%. Current 15 year fixed mortgage rates today are at 3.77%.

FHA mortgage rates, which are driven by the same mortgage-backed securities prices as conforming fixed mortgage rates, are also up about a quarter percent higher than they were two weeks ago and are nearly identical to conforming mortgage rates today. Jumbo mortgage rates have avoided the spike that has hit conforming and FHA interest rates. Current 30 year fixed jumbo mortgage rates remain at a record low 4.875%.

It doesn’t look like rates will go back down. Call us to find out the best available current rates.

STARTING TO GET CABIN-FEVER?  – NOW MIGHT BE A GOOD TIME TO BUY A VACATION RENTAL

Right now, the languishing housing market offers some lingering upsides for those who have a pot of investment dollars to burn. Home prices are low, financing is cheap, inventories are bulging and vacation rentals represent a great opportunity to grab a piece of the American Dream as a solid, long-term investment.

"Vacation homes are almost always a good investment," says vacation rental guru Christine Karpinski, director of Owner Community for HomeAway.com, the global leader in vacation rentals, hosting some 540,000 vacation rental listings.

"First, if you're looking for a good long-term investment, real estate tends to be a good bet. Second, vacation properties have the ability to pay for themselves, and owners often earn a profit in rental income. Third, the investment comes with the desirable perk of having a place at the beach or in the mountains to call your own," says Karpinski, a vacation rental owner herself.

Here's why you might want to move on that vacation rental now.

Prices are as low as they are going to go.

Property prices are as low as they've been in ten years. Procrastination won't keep them low. Analysts say the housing market is scraping bottom and poised to move up.

Interest rates are likewise as low as they are likely to go.

Rates on non-owner occupied properties are only about a half a percentage point higher than residential rates-- with a virtually mandated 20 to 30 percent down payment.

Markets are flush with inventory.

The slow economy and even slower housing market has left vacation markets brimming with buying opportunities, from sellers looking to move on or up, to foreclosures that warrant careful scrutiny. “And as market demand has surged, organizations like HomeAway.com have sprung up on the Internet to help connect potential renters with your vacation rental" Karpinski said.

Buy now, beat the 2011 peak season rush.

Buy now and you've got plenty of time to prepare yourself and your property for the peak rental season. Rental fees generated during the twelve weeks between Memorial Day and Labor Day can pay your mortgage for an entire year. Most inquiries come in between January and March.

However, before you let yourself fall in love with a property, make sure it is legal to rent it out as a vacation home. “Some areas and homeowners' associations do not allow short-term rentals," Karpinski warns.

SOME HOLIDAY SAFETY TIPS TO PROTECT YOUR HOME

The Holiday season is upon us, and for most it is a time full of joy, fellowship, and family. But the unexpected can and does happen. So, from stopping theft to preventing fires, here are a few tips from the experts that can help keep your family safe this time of year.

• Fire safety comes with the territory of the holidays. Trees and lighting can both be dangerous if not done correctly.
• When selecting a real tree, be sure to buy one that is fresh. This means you should look for a fragrant tree that is a rich, deep green color. Also, the trunk should still be sticky with sap. Old trees are dry and brittle, and thus can be very flammable.
• To keep your tree fresh throughout December, be sure to keep it immersed in water at all times. If needles start to fall off, give it more water!
• For those with artificial trees, don't use electrical lights on metallic trees! And be sure to always turn your lights off you go to bed or leave the house.
• Another fire hazard are those beautiful, twinkling lights. Every year's decorating should begin with checking light strands for cut or frayed wires.
• Also, be sure that lights are used as marked. Indoor lights are for use inside only. Outdoor lights are kept outside.
• Next, don't overload your outlets. Three sets of lights to an extension cord is plenty!
• Another looming threat during the holidays is home burglary. Thieves prey on those that travel during this season.
• To prevent thieves from targeting your home, you need to make your schedule unpredictable. That means keep your routine varied. Come home randomly for lunch one day a week. Leave for work at different times.
• And to give the appearance that someone is always home, leave on a TV or use lights that are on timers.
• Never post on social media that you'll be out of town or away from your house for extended periods of time.
• And as added measures of security, consider installing an alarm system, or having a house-sitter stay at your home or check on it periodically during your vacation.

Use these tips to have a safe and merry holiday season!

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

LATEST STATISTICS

Click here for the latest Sales and Listing statistics for the Pikes Peak area

 JOKE OF THE WEEK

November 22, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET 

SHOULD YOU BUY YOUR DREAM HOUSE NOW?  THE NEW YORK TIMES SAYS, “YES”

The New York Times recently published an article about our present real estate market and what it should be telling prospective Buyers. Some of the more persuasive arguments cited for buying a house now were:

• Your home provides you with a return on your investment in the form of “net imputed rent from owner-occupied housing”. i.e. You live in the house and so it provides you with a real flow of valuable services. This represents about a 6% return on your investment, after maintenance and repair and it is constant over time in real terms.
• Your home will provide you with capital gains when you sell it, if it appreciates during the time you own it (and, at today’s reduced prices, it’s an excellent bet it will appreciate in the years ahead).
• You can deduct the interest you pay on the mortgage
• There is a huge inventory of homes-for-sale on the market. This results in lower prices and more choices for Buyers.
• Home prices are down by 30% on average from the peak

In real numbers, this means that four years ago, a $300,000 home with a mortgage rate of 6.6% would have cost you $1,533 a month. Today, that same home would be available for $213.000, would have a mortgage interest rate of 4.2% and would cost you approximately $833 a month.

The Census Bureau and other demographers project that the number of American households will increase by 1 to 1.5 million each year. With new construction lagging, we should soon be experiencing a tightening market with low vacancy, as has occurred in every housing cycle since WWII.

It’s true that the performance of the housing market drives the economy and the performance of the economy drives the housing market…but housing has perhaps never been a better bargain. Sooner or later, Buyers will regain faith, inventories will shrink to reasonable levels, prices and interest rates will rise and we’ll even start building again, and the price of the home you buy today will rise accordingly.

The American dream is not dead – it’s just taking a well-deserved rest.   

9 TIPS FOR PROSPECTIVE BUYERS

Here are 9 steps that you can take to make your dream home a reality!

1. Know how much you can afford. You may already know how much monthly payment you can support (experts recommend no more than 1/3 your monthly income), but the buying process will also include upfront costs, such as a downpayment and closing costs.

2. Downpayment options. Do you qualify for downpayment assistance programs? Will you be able to get an FHA loan and pay 3.5 percent down? Do you have a relative that would like to make a downpayment gift? Many financial experts recommend a downpayment of 20 percent, so be sure to explore your options!

3. Check Credit Report. Your credit report says a lot about you. Lenders use it to evaluate your risk potential and to inform themselves on how responsible of a borrower you are. They use this report and subsequent score to figure your interest rate. The more stellar your report, the better your score and thus lower your rate. Be sure to check your report for accuracy, and report any errors to the credit reporting agencies.

4. Get Prequalified. It's time to talk to a lender! Pre-qualification will give you a ballpark figure of how much the bank would be willing to lend you. Are you looking for a $100,000 house or a $300,000?

5. Get Preapproved. This is the official letter from the lender that says they will be willing to lend you money. Many sellers look for buyers who are preapproved.

6. Affordability. The bank may tell you that you can afford a home worth $300,000. This does not mean you want to borrow to your max. A more modest home may fit better in your financial plans.

7. Housing Criteria. You have a budget, now develop a list of what you need and want. This can include anything from "must have 3 bedrooms" to "hardwoods" or "granite".

8. Neighborhood choice. Location strongly affects prices. A 3,000 square foot home in Briargate costs a fraction of one in the Broadmoor area. Decide what neighborhoods and areas are the best fit for you. This will help narrow your home search. See the latest neighborhood statistics, below.

9. Call us !!!  We can help you navigate the entire process from searching, putting in offers, to where to hire an inspector or general contractors.

real estate PRICES SEEM TO HAVE BOTTOMED – BUYERS AND SELLERS TAKE NOTE

For the fourth consecutive month, price reductions increased for homes currently listed in the United States, according to Trulia.com. These reductions amount to more than $30.7 billion nationwide and are now at an all-time high of 27 percent. In a press release, Trulia.com. concludes that “Beginning in June 2010, there has been a continual and dramatic increase in price reductions in many cities. Comparatively speaking, we've found that seasonal considerations combined with a lack of urgency on the part of would-be buyers and continued job market doldrums nationwide have led to more significant reductions during this time period than during the same time frame in 2009," said Tara-Nicholle Nelson, consumer educator.

As a result of the latest reductions, Sellers have gotten much more aggressive in their pricing. "We would normally expect to see a seasonal uptick in price reductions between June and November, as motivated sellers whose homes are still on the market after the summer selling-season aggressively cut prices in an effort to get their homes sold before the holidays. This is like Christmas coming early for buyers who are hoping to capitalize on a bargain-buy before the year's end.” said Tara-Nicholle.

But many experts predict that prices and mortgage interest rates will now begin to rise. So, before the window closes, it's important to remember that if you're an ill-prepared buyer, you could lose the deal of a lifetime and the home you really want.

Here are a few tips to keep that “perfect new home” from slipping away:

• Even if you're just browsing, get your pre-qualification for your loan. You might think, you're not really ready to buy but let's go shopping any way. Know your price point. Understand how much home you can afford and browse in that market range.
• Since the mortgage crisis, getting loans and buying a home has gotten more complex and can take even longer than before. That shouldn't discourage you but rather encourage you to get everything in order to make the close of escrow simpler.
• Act now. Timing the market and waiting to see if you can get the absolute rock bottom interest rate might cause you to lose the home you love. Certainly negotiating is always part of a real estate transaction, but just keep in mind that if you're not careful you could time yourself out of the home you really want. Work with your Realtor on this.
• If you're in a situation where the purchase of your new home is dependent upon the sale of your current home, then you must stay on top of your home sale. Sometimes buyers get so busy shopping for their next home that they end up leaving their current listed home a mess. This turns off potential buyers; it happens all the time. So, keep a close eye on how appealing your present home is to a buyer, as you shop for your new dream home.

Bottom line: Unless you’re an experienced juggler, you will need the services of an experienced Realtor to guide you through the maze of selling your present home, obtaining financing, and locating and purchasing your new home. Call us !!!

UNDERWATER? MAYBE WALKING AWAY ISN’T THE BEST SOLUTION

Mortgages are "underwater" or "upside down" when the property experiences “negative equity” i.e. the mortgage is larger than the current value of the property. Negative equity is caused by a decline in property value, an increase in mortgage debt or, most likely, both. However, homeowners who are "underwater" with their home loan and are considering walking away from the debt, could still be gasping for relief years down the road.

There are occasions when walking away from your home -- and down the road to foreclosure -- is your only option, but seldom is it the best alternative. The consensus among experts is to consider the alternatives before abandoning your home, talk with your lender and seek counseling from a U.S. Department of Housing and Urban Affairs (HUD) certified counselor.

Before walking away, some of the other options that should be considered are:

• Refinancing, turning in your existing mortgage for a new one, is perhaps the toughest option to accomplish. A refinance requires meeting stiff underwriting requirements -- an excellent credit report, a high credit score of 720 or more, documented career level income and little debt, for starters. Federal programs, including the Federal Housing Administration's refinance effort, can be a good bet for those who haven't yet faced hardship and can qualify for a new loan.

• A mortgage modification reworks the terms of existing loans to get the payment down to a more affordable level. To add greater affordability, lenders lower the interest rate, lengthen the term of the loan or reduce the principal -- or do some combination of all three. Modifications can be used by qualified home owners who aren't yet struggling as well as those who are in a pinch.

• Short sales. Modifications and short sales can impact your credit, but not necessarily with the force of a foreclosure.

Bottom line, exploring all the options is a better first step than walking away. Call us.

TOP 5 STAGING TIPS FOR SELLERS

Staging is a way for your home to stand out from the competition. It's a way for a buyer to see the true potential of your home. Many real estate agents work with professional stagers. But if you don't have the money to spend for professional help, then consider these five tips to stage your own home.

1. Curb Appeal: A first impression happens only once! Prune overgrown plants and remove unnecessary clutter from your yard. For a finishing touch, consider painting your front door an attention grabbing color, like dark blue, red, or green.
2. Remove Clutter: Knickknacks, doodads, and bric-a-brac must go. When you put your home on the market, a showing could be scheduled at any point. So, for now, take a box and go from room to room collecting the extra "stuff." These baubles distract homeowners from seeing the actual room and space.
3. Edit: It's not just clutter that needs removed from counters and shelves. Editing is a way of making your rooms look bigger. In staging you need only have the bare essentials of furniture. Remove heavy pieces that make rooms look smaller. If you can, put these items into storage. As a very last resort, you can put them in the garage and cover them with a tarp.
4. Main Functions: This means that a dining room should be staged as a dining room, not a sewing room or office. A patio is a place to relax with nature, not a catch-all for outdoor items, toys, and grills.
5. Ambiance: You want to create an atmosphere that is welcoming and makes the buyer feel at home, something of paramount importance in staging. This means the home should be smell clean, be light and airy, and be a comfortable temperature. To accomplish these tasks, you can bake cookies just prior to a showing to fill the air with yummy goodness. If you are a smoker or have pets you may need to take more drastic measures, such as repainting walls or cleaning carpets and furniture. To liven-up your home, replace old and burnt out light bulbs, and have heavy curtains open or removed. If you are showing during the winter months, be sure to leave the heater set to a comfortable temperature. The same goes for the A/C during the heat of summer.

Use these simple tips to get your home ship shape for your sale!

ALSO ....SUCCESSFUL SELLERS AVOID THE FOLLOWING DEAL-KILLERS

At last count, nationwide, new home sales were down more than 12 percent and resale home sales down even more -- 27 percent. Yet many Sellers are still making some classic mistakes as they try to market their homes. To help you avoid these “deal-killers”, here are some mistakes that Sellers make:

• Pricing too high. A high listing price will cause some buyers to lose interest sight-unseen. It may also lead other buyers to expect more than what you have to offer. Overpriced homes tend to take an unusually long time to sell, ultimately selling at a lower price. Your Realtor can help you set a realistic listing price.

• Mistaking refinance appraisals for the market value. Lenders often estimate the value of homes at a higher level than it's actually worth to encourage refinancing. Ask your real estate agent for the most recent information regarding property sales (similar to yours) in your community.

• Forgetting to "showcase your home." When selling your home, make it look as pleasant and move-in-ready as possible. Make necessary repairs. Clean. De-clutter. (See the staging tips, above)

• Using the "hard sell" while showing. Don't try haggling or forcefully selling with prospects. Allow your Realtor to do the selling.

• Trying to sell to "looky-loos." A prospective buyer who shows up because they saw a for sale sign likely isn't interested in your property. Buyers who don't come through a real estate agent are, typically, six to nine months away from buying. They just want to see what's available. Chances are, they still have to sell their house, haven't been to a lender and may not be able to afford a home yet. Your real estate agent can distinguish real potential buyers from lookers because they will take the time to determine a prospective buyer's savings, credit rating, and purchasing power.

• Being ignorant of your rights and responsibilities. Understand the details of the sales contract. They are legally binding documents that can be complex and confusing. Know your responsibilities before signing the contract. Can the property be sold "as is"? How will deed restrictions and local zoning laws affect your transaction? There's much more to know. This is an area where your Realtor can really help explain the complexities of real estate Law to you.

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

LATEST STATISTICS

Click here for the latest Sales and Listing statistics for the Pikes Peak area.

November 15, 2010 

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

DOES HOME OWNERSHIP STILL MAKE SENSE ?

On November 9, 2010, Realty Times, a respected national source for information about the current real estate market, published an article titled, “Value in Homeownership”, based on  the recently released 2010 National Association of REALTORS® Profile of Home Buyers and Sellers survey. The article made several good points which are pertinent to our local market. Here are some comments that our readers might find interesting.

Is there value in owning a home? The NAR survey shows us that today’s homeowners are living in their homes longer, and after several years of price declines, are now seeing a rise in home equity gains.

Early in this decade many buyers jumped on the investment bandwagon. They bought and sold quickly, walking away with inflated profits. But as the real estate bubble burst, many speculators found they had bought at the top of the market and so, as prices fell, foreclosure rates skyrocketed. Historically, however, homeownership is a good, long-term investment, and one that brings many rewards.

NAR President Vicki Cox Golder explains, "Sellers who purchased at the top of the market and had to sell in a short time frame were hurt by the price correction, but the vast majority who were able to stay for a normal period of home ownership generally built enough equity to make a trade-up purchase. Despite swings in the housing market in recent years, the fact is most long-term owners have seen healthy gains in the value of their property. This underscores two simple facts – home ownership encourages stability, and the longer you own, the better your investment. Many of the house ‘flippings’ and quick gains which occurred during the boom period were abnormal, driven by risky, easy-money financing that should never have been allowed in the market."

"The primary exception to the disappointing ‘house-flipping’ trend was in the case of experienced investors, many of whom paid cash and who are making renovations or improvements after a careful study of properties, neighborhoods and market demand," Golder said. These savvy buyers are still making money.

However, even in its current slow state, the real estate market is far from dead. Surveys show that Americans are still buying homes, primarily because of the desire to own a home, the desire for a larger home, a change in family situation, to take advantage of the home buyer tax credit, to make a job-related move, or to take advantage of the current over-supply of affordable homes.

And today, homeowners are staying put longer. A typical seller has been in their home for 8 years, and the survey shows that first-time buyers are planning to stay for 10 years, and repeat buyers for 15 years.

Even with the recent decline in home prices, the typical homeowner who purchased a home eight years ago has experienced a median equity gain of $33,000, a 24 percent increase, while Homeowners who have been in their homes for 11 to 15 years have seen a median gain of 40 percent. So, considering these facts, it’s easy to see why the decision to buy a home for the long-term is once-again coming into favor with the public.

The bottom line is that the decision to buy or sell a home should be, as always, based upon a knowledgeable study of the local market, specific neighborhoods, current inventory, available mortgage rates, and pertinent market trends. If you are considering buying or selling your home, we stand ready to provide you with this kind of expertise. Call us.

SELLERS ….IT’S TIME TO DECK THE HALLS …BUT NOT TOO MUCH

Traditionally, the last several months of the year are pretty slow for real estate sales. However, there still are prospective Buyers out there so, Sellers, if your house is on the market, you should try to make it as attractive to them as possible. Give yourself a competitive edge. While your competition is busy going over the meadow and through the woods to Grandmother’s house, you can spend your time gift-wrapping your house in a big Christmas bow and getting it ready to sell.

November and December might discourage some prospective Buyers, but don’t give up. Many real estate experts note that if you have buyers dropping by your open house or making an appointment to view your home during the holiday season, there’s a good chance they’re serious buyers.

So, while this time of year often brings out all the holiday decorations, there is such a thing as too much holiday cheer. Remember that not all buyers celebrate the same holidays.

A good rule of thumb is to keep decor simple and subtle. If you celebrate Christmas, go ahead and put up a tree, but don’t put one up in every room. …and maybe leave Santa off the roof, this year. Make it easy for Buyers to imagine their own holiday celebrations and their own lives in your home.

Outside, settle for a nice holiday wreath and some subtle seasonal decor. Keep in mind that curb appeal is what gets buyers in the door.

Stash the gifts and just bring them out on the day you celebrate. Presents under the tree take up precious floor space and they are a distraction. Keep them out of sight, together with the family pictures, to stage your house properly.

Another nice touch is to spruce up the mantle. However, keep family and/or pets’ names off the stockings. Again, you’re trying to encourage the Buyer to imagine what the home will look like when it is “their” home.

So, with these tips in mind, have yourself a merry little Christmas.

THINGS ARE LOOKING UP

We just received a nice note from Robert August, President of S. ROBERT AUGUST & COMPANY, INC., in Centennial, Colorado. Bob is a long-time friend and an expert in housing trends. Below, we are including some encouraging information from him about our national and local and national real estate market (together with some of our own comments).

As we know, the housing recovery is dependent upon job creation and while the 317,800 jobs created in the 12 months ending September may not sound exciting, it sounds pretty impressive when you compare it with September of 2009 with 5,604,400 jobs lost over the previous year. 

Nationally, 30 states showed positive growth for over the past year.  Texas added 166,600 jobs, just shy of the next 6 top job growth states combined.  The state of California continues to lead the country in job losses (62,100) but has certainly shown improvement over the past year.

The District of Columbia added 22,500 jobs which would make it the number 10 state in job growth (if it were a state) and when added to Maryland and Virginia the job growth total for the region balloons to a healthy 76,500 jobs in the past year.  Furthermore, the Washington, DC metro area easily leads the nation in job creation with 56,100.

Hmmm …Washington seems to be doing quite well.

Bottom line: The economy, including job growth and housing, continues to improve; the problem is the improvement has been so gradual that it doesn’t feel like it.  We are moving, however, toward equilibrium in the marketplace, and as the foreclosure mess is wound down the housing industry should benefit from years of pent-up demand.

To see the complete charts on permits, click here

To see the complete chart on jobs, click here

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

LATEST STATISTICS

 Click here for the latest Sales and Listing statistics for the Pikes Peak area  

JOKE OF THE WEEK

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET 

GOOD NEWS !!! U.S. EMPLOYMENT REPORT SHOWS JOB CREATION IMPROVING - THAT'S GREAT FOR real estate

From IHS Global Insight

October's employment report was the best for months, as payrolls rose 151,000 and prior months were revised up. But the unemployment rate remained stuck at 9.6%.

The October payroll report was much better than expected, with 151,000 jobs added, a longer workweek, and positive revisions (totaling 110,000) to previous months. Private payrolls rose 159,000, and we now have four months in a row of private employment gains of more than 100,000—for the first time in this recovery. The new jobs were overwhelmingly in the private service sector, the economy's primary jobs engine. The jobs weren't enough to lower the unemployment rate, though, which remained stuck at 9.6%.

Government jobs did not move the headline number much this month. There were 8,000 federal government jobs lost in total, of which 5,000 were temporary Census workers (that leaves only 1,000 temporary Census workers still in place). State and local governments lost another 7,000 jobs (the smallest decline since April).

Manufacturing did not contribute to the jobs improvement. Manufacturing payrolls fell 7,000, their third consecutive monthly decline.

Construction helped a little, with 5,000 jobs added in October and only 8,000 lost in September (originally a 21,000 loss). There were 6,000 jobs lost in residential construction, but 6,000 gained in nonresidential construction and 4,000 added in heavy and civil engineering.

The key improvement was in private services, where 154,000 jobs were added this month, the best gain since April, and up from 111,000 in September. The sectors that did much better this month were retail trade (up 28,000, instead of up 12,000 in September), business services (up 46,000, instead of up 19,000), and education (up 19,000, instead of down 12,000). Health services added 24,000, the same as in September. Food services and drinking places added 24,000 jobs, their third straight strong month, suggesting that there has been some loosening in consumer wallets for eating out.

Within business services, the majority of the jobs added were temporary (35,000). But it is worth noting that the vast majority of jobs added this month were permanent hires.

The unemployment rate was steady at 9.6%. Household employment actually fell by 330,000, while the labor force fell by 254,000. It is pointless to try to interpret month-to-month movements in household employment (it is far more volatile than the payroll employment measure). But it is worth noting that the labor-force participation rate fell from 64.7% to 64.5%, its lowest level in this cycle, and implying that the improvement in jobs has been insufficient to attract potential workers back into the labor force.

The most comprehensive measure of underemployment (U-6)—which includes workers who would like a job but are not currently looking, plus those working part time who would rather work full time—edged down from 17.1% to 17.0%.

The payrolls report suggests that the economy has entered the fourth quarter with more momentum, so that GDP growth will beat the 1.5–2.0% pace seen in the second and third quarters. Rising employment, hours, and wages all give a welcome boost to consumer spending power as the holiday season approaches.

One upbeat employment report does not change the picture that this will be a slow, drawn-out recovery. And there were strong private employment gains back in March and April that did not continue. But today's news does further reduce the likelihood of the dreaded "double-dip" downturn, and as that risk is seen to recede, businesses and households may become more confident to hire and spend.

The report comes just two days after the Federal Reserve launched its new program of quantitative easing (QE2). If the Fed had seen this report before its decision, it probably would have moved ahead anyway, since the labor market remains too weak and the rate of inflation too low to meet the Fed's dual mandate of high employment and price stability. But it would have allayed some of the Fed's fears of the downside risks.

AND ..AS ICING ON THE CAKE….OUR NEW GOVERNOR IS ALSO FOCUSING ON JOB GROWTH

A good sign that our new Governor, John Hickenlooper, understands and agrees with the need for new jobs in our state, was the tone of his first speech as Governor. He spoke for 30 minutes to 300 civic leaders in Colorado Springs at the 13^th annual Mayor’s Breakfast at the Fine Arts Center. First of all, he emphasized the need for setting aside the traditional barriers between Denver and Colorado Springs and between our two political parties and promised that he will work to heal the political rift that has developed between our two cities. The very fact that he scheduled his first speech in Colorado Springs is a hopeful sign that he is serious about this commitment. Secondly, he spoke about the fact that our state must be managed as a business, rather than as a governmental entity.

Governor Hickenlooper emphasized that, “There is no hidden money” in the state budget and said improving Colorado’s business climate is the only way the state will overcome continued budget shortfalls that have hamstrung programs. He said he wants to launch a “bottom-up” economic development plan for the state by having all 64 counties create their own plans which would then form the backbone of the state’s plan. This is a dramatic improvement over the traditional process in which the state develops an economic development plan and then sends it down to the counties.

Governor Hickenlooper pledged to back military growth in El Paso County, to cut red tape and streamline state government. He said, “I think state government has to be smaller with fewer employees”.

He also emphasized that the key to business growth will be marketing the state.

The Governor’s speech was interrupted by 3 standing ovations, and was followed by very positive comments by attendees. “He sounded more like a successful businessman, rather than an elected bureaucrat” said one attendee.

As a matter of fact, our Governor Hickenlooper now sounds a lot like Rick Perry, the Governor of Texas, who managed to attract 90% of all new non-governmental jobs created in the U.S. in 2009, to Texas. How he accomplished this, while managing to keep existing businesses in his state, is outlined in his new book, “Fed Up”, the blueprint of how a state can succeed, in spite of Washington.

We are very encouraged by our new governor’s words and we hope he can deliver on this dramatic new approach to running our state.

SOME OTHER POSITIVE INDICATORS

On November 6, 2010, the Wall Street Journal noted the new 151,000 October jobs cited above. This represents the largest number of new private-sector jobs since April, which produced 159,000 jobs. WSJ also reported that the price of Treasuries fell. In addition, on Friday, Nov. 5, the stock market closed at a 2-year high. WSJ noted that these three indicators point to an improvement in the economy. 

Traditionally, the stock market leads the business cycle by 2 quarters, so, we should look for positive signs of business and job growth by the end of this coming June. Combine all of these factors with the recent rise in interest rates and it’s obvious that, if you are considering the purchase of a residence or an investment property, now is the time to buy. Call us.

LATEST LOCAL STATISTICS ALSO SHOW ENCOURAGING TRENDS

Click here for the latest Sales and Listing statistics for the Pikes Peak area. As you can see in the monthly PPAR statistics, in October, 2010, there were 631 sales in the Pikes Peak area, a decline of 18.4% from Oct. 2009. Total annual year-to-date sales for 2010 were 7005 as compared with 7328 in 2009. These declines can be attributed to the expiration of the Income Tax Credit for home purchasers, which expired in June.

What is very interesting about this month’s statistics is that, in spite of the declining number of sales, prices actually increased in 2010. (Average price in 2010 was $240,326 vs $213,352 in 2009, for an increase of 12.6%. Median price for sold homes in 2010 was $200,000 vs $187,995 in 2009 for an increase of 6.4%). These increases represent the twelfth straight month of sales price increases, a very good sign for the local real estate market (and a very unusual increase, compared to most other communities in the country).

The decline in the number of listings can probably be attributed to Homeowners who have removed their homes from the market until activity increases.

Note that the ratio of average selling price to listing price was 97.4%, a reflection of the fact that successful Sellers are being very realistic in establishing their asking prices. Those Sellers who are overpricing their homes are not selling in today’s tight market. You will note that the data breaks down the local area into separate neighborhoods, so you can see exactly how your home fits into the big picture.

One sad note in the data shows 3966 foreclosures so far in 2010. While this number is lower than 2009 (4540), it is still the third highest number of foreclosures since 1981. We all hope this number declines in 2011.

Bottom line: Home prices, large inventory, low mortgage rates, looming inflation and common sense all lead to one conclusion ….The time to buy your new home or investment property is now !!! Call us

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK

November 1, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

NEWS FROM THE relocation WORLD

Last week, in Seattle, we attended the Annual relocation Symposium of Worldwide ERC and the Relocation Directors’ Council. This informative meeting was attended by over 1600 people in the relocation industry and service providers from 47 countries. It was a great opportunity to hear how the recession is affecting employee relocation and to get a clear view of how employers are planning their relocations in the near-future. We were proud to be the only representative from Southern Colorado at the Symposium.

A major concern voiced by all of the employers at the meeting was that the cost of employee relocation was rising faster than they could budget for. Their major concern was to keep the employee ‘whole’, while keeping their costs within control. As we discussed in a previous eNewsletter, if a company transfers a current employee who owns a home, the average cost to the employer is $90,017. A new-hire homeowner transfer will cost the company $66,610. A current-employee renter transfer will cost the company $20,750 and a new-hire renter transfer will cost the company $17,877.

As employers are forced to cut relocation costs, some of the cost-cutting solutions they have been forced to implement range from: cancelling some of the more traditional relocation benefits such as paying closing costs on the new home and/or paying some points toward the interest rate, or, in some cases even paying nothing for relocation.

One message that relocating employers are now sending to Realtors is that they will be better utilizing the services of local Realtors in the “target” market for more accurate advice.

It’s important to realize that relocations are one of the most influential segments of the real estate industry and they represent a fairly accurate indicator of where the Real Estate market is going.

Some of the more significant issues covered at the symposium were:

•  Unless you are a Senior V.P, or the CEO of the company, based upon current equity, your “upside-down” home will probably not be subsidized by the relocating company
• Because of the increasing need for “Specialized Talent” individuals, there will probably be a rise in relocations for people in these growing fields
• Today’s Transferees feel they should be compensated for what they think their house is worth, but appraisers are using short-sale and foreclosure prices as comparables, thus reducing the market value of their homes. Educating these employees about the realities of the current market will be a challenge for employers and will require input from Realtors in the “target” location.
• Because of the frustrations and delays involved with short-sale home purchases, and the resulting reduction in employee productivity during this stressful process, one large, public utility on the West Coast will not assist transferees with short-sale purchases.
• Companies are now offering more information about the differences in local economies to their prospective Transferees, so as to reduce “surprises”. They also offer counseling regarding the effects that foreclosure and/or short-sale will have on the employee’s financial status.
• Some employers are encouraging Transferees to rent, rather than purchase, when they arrive at their new location…even offering bonuses and/or subsidies, or even ‘lump-sum’ benefits to Transferees who agree to hold on to their old house and rent, rather than buy in their new location. These employers feel this will allow the market to recover, thus allowing the Transferee to realize a better selling price for the home he/she is leaving behind. Many of these employers are offering to pay the Transferees’ property-management costs during this recovery period. The commonly quoted time-limit for these inducements seemed to be three years, indicating that industries appear to be predicting a recovery within the next three years.

As a result of these changes in companies’ relocation reimbursement policies, the percentage of Transferees who rent, rather than buy has increased from 30%, just a few years ago, to almost 70%, today.

All of these factors reinforce the arguments for buying investment properties now. These new arrivals are high-quality renters who are receiving rental assistance money from their employers for the next two to three years. Add to them the unfortunate families who have recently lost their homes to foreclosure or short-sale and we see that the pool of prospective renters is larger than ever before. When you consider the low-interest rates now available (but, scheduled to go up soon), and the current low prices for available houses, investment property looks as good as gold for the next several years.

As far as we were concerned, one of the most encouraging things to come out of the symposium was that attendees from all over the world felt that 2011 was going to be a better year.

WHAT IS TEXAS DOING RIGHT ??

A startling fact that was discussed at the relocation Symposium was that, in 2009, 90% of the non-governmental jobs created in the US were created in Texas. The attendees from Texas stated that this amazing economic boom was created by a cooperative venture by the Governor of Texas and the cities of Dallas, Austin and San Antonio working together to make Texas a “business-friendly” place to relocate. That, plus a low tax rate and no income taxes created a magnet for anyone who wanted to start or relocate a business.

Hmmm. Perhaps it’s true that a rising tide does raise all boats. Perhaps the whole economy of Colorado would benefit if we became more competitive in attracting new businesses. By offering more tax incentives and more aggressive incentives for businesses to relocate to Colorado, perhaps we could become known as a “business-friendly’ state. …Why not?

THE BAD NEWS IS – RATES ARE STARTING TO GO UP  - BUT NOT VERY FAST

How low can mortgage rates go?  Many of the ‘heavy-hitters’ in the mortgage industry were at the recent relocation Symposium and their shared opinion was that mortgage rates have hit bottom. The average 30-year, fixed-rate home-mortgage rate is expected to rise in our current quarter. By the end of 2010, the Mortgage Bankers Association predicts an average of 4.4% on a 30-year loan, increasing to 4.7% in the first quarter of 2011. In about a year from now, they expect the rate to rise to 5.1%. Now, while that is higher than our current rate of 4 1/8%, it’s still a very good deal.  

THE GOOD NEWS IS FORECLOSURES ARE DOWN

On October 31, The Gazette published the September economic indicators for Colorado Springs. The initial claims for unemployment were down 21.5%. Taxable retail sale were up 8.4%.Hotel occupancy was up to 72.6% and foreclosure filings were down 16.8%. On the down side, the unemployment rate was up to 8.7%. Single-family home permits were down 16.5% and auto registrations were down 11.9%.

All of our down-side numbers were the result of a lack of jobs and that’s a problem that doesn’t seem to have a ‘magic bullet’ solution. It’s going to be a couple of years before we see a turnaround in that segment of our economy.

Another troubling economic factor is the high inventory of unsold homes. With some lenders halting the disposal of foreclosed and short-sale properties and with many Realtors not even showing them anymore because of the unreasonable delays in obtaining acceptance for offers, the inventory of available homes grows and prices keep going down accordingly. That makes for good deals for Buyers, but a bad deal for Sellers. Furthermore, it aggravates the ‘upside-down’ home-value problem that triggers even more foreclosures.

If you have any questions about the value of your present home, call us. We keep close watch on property values in all neighborhoods in this area.

LATEST STATISTICS

Click here to see all of the latest Sales and Listing statistics for the Pikes Peak area. 

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ..And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK