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Are Things Looking Up? Here's a few sources that think so.

by Harry Salzman

November 21, 2011





The U.S. will not become a nation of renters; there are just too many benefits, both financial and otherwise, to own versus rent. That’s according to the combined findings of several recent studies presented during the "Buyer or Renter Nation?" session held during the 2011 Realtors Conference and Expo last week and also the NAR annual survey which was released last week.

One analysis of homeowners which spanned a 31-year period compared the ownership benefits in terms of appreciation and interest deductibility and costs homeowners incur with down payment, taxes, insurance and maintenance and, in the analysis, 84% of homeowners came out ahead.

According to the most recent data from the Federal Reserve Board, a homeowner’s net worth is 45.9 times that of a renter’s.

"We knew that homeowners, on average, accumulate more wealth than renters", said Ken Johnson, editor, Journal of Housing Research at Florida International University. "These findings indicate that homeownership is a self-imposed savings plan."

"Homeownership is more affordable today than at any time over the last 30 years", Johnson said.

The NAR survey shows that 78% of recent homebuyers say their home is a good investment and 45% believe it’s better than stocks.

Another analysis conducted by Johnson, Beracha, Hilla Skiba and Mark Hirschey determined that housing affordability is at record levels.

Twenty-three states are at 30-year record levels of affordability based on price-to-income ratios, and all 50 states are at record affordability levels based on mortgage- payment-to-income ratios.

Beyond the financial advantages of homeownership, Johnson also cited several studies that have demonstrated how homeownership enhances civic pride, improves voter turnout, increases personal happiness, reduces crime, and provides a better familial environment.

Some of the other data presented in the NAR survey were:


First-time buyers who financed their purchase used a variety of resources for their down-payment. 75% tapped into savings. 26% received a gift from a friend or relative, 7% received a loan from a friend or relative. 9% sold stocks or bonds. 8% tapped into a 401(k) fund.

94% of entry-level buyers chose a fixed-rate mortgage

54% of first-time buyers financed with a low-down-payment FHA mortgage and 6% used the VA loan program which requires no down-payment.

64% of all buyers are married couples

18% are single women

10% are single men

7% are unmarried couples

The biggest factors influencing neighborhood choice were (in descending order) quality of the neighborhood, convenience to jobs, affordability, convenience to family and friends, neighborhood design, convenience to shopping, quality of school district, convenience to schools, and convenience to entertainment or leisure activities.

The typical home seller was 53 years old and their income was $101,500.

The typical seller who purchased a home nine years ago realized a median equity gain of $26,000, a 16% increase, while sellers who were in their homes for 11 to 15 years saw a median gain of $57,900, or 39%. Over time, the survey findings consistently show that the longer you own, the larger your return.

From our standpoint, it was interesting to note that home buyers thought the most important services agents provide are helping find the right house and negotiating price and sales terms.

Some other interesting facts were that 91% of buyers who used the Internet to search for a home, purchased through a real estate agent, as did 70% of non-Internet users, who were more likely to purchase directly from a builder or from an owner they already knew.

Like sellers, buyers most commonly choose an agent based upon a referral from a friend, neighbor or relative, with trustworthiness and reputation being the most important factors. That explains why, after 39 years of serving the Pikes Peak Area, we rely almost completely on referrals from our friends and past clients for our business.

Give us a call to discuss your real estate needs. We will do a great job for you…just ask our past clients. Call us at 598-3200, or, 1 800 677-6683 (MOVE).



Realtor Magazine (November 18, 2011) says that the housing picture is expected to brighten in 2012. They cite a forecast by Fiserv, a financial information services firm which predicts that 95% of the 384 metro areas it tracks will see home prices rise in 2012…..and a survey by MacroMarkets of 100 economists and real estate professionals that predicts a rise in home values of .25% in the new year.

Bloomberg reports that economists at J.P.Morgan Chase & Co. now see gross domestic product rising 3% in the final quarter and Morgan Stanley & Co. is looking for a 3.5%. They also predict that the strengthening economy will help lift US stock prices. They also say the economic pick-up may also push up yields on Treasury securities.

Karen Hoguet, chief financial officer for Macy’s Inc. says, "We’ll have a spectacular Christmas".

Lawrence Yun, chief economist for the national Association of Realtors is quoted in Realtor Magazine as saying, "Housing affordability is about the best it’s ever been. Investors can anticipate strong rent returns and solid home appreciation. Nor is there any reason to believe this rent growth will cool. If annual rent gains stay near 3.5%, rents will double in 20 years. If they reach 5%, rent doubling will occur in 14 years. That means home prices could also double in 14 to 20 years."

The Gazette (November 17, 2011) reports that US manufacturing is recovering from a slump, and inflation may be peaking. Strong consumer spending helped the economy grow at an annual rate of 2.5% in the July-September quarter. Retail sales rose in October, leading economists to predict similar growth in the final three months of the year.

Finally, a report issued by the Mortgage Bankers Association shows that the share of households delinquent on their mortgage payments has fallen to the lowest level since the end of 2008, offering signs that modest job gains are stemming further damage in the US housing sector.

And you thought we were the only optimists on the planet ……SMILE !!! 2012 is going to be a great year.



The National Association of Realtors notified us last Friday that Congress had restored the loan limits for the Federal Housing Administration (FHA) for two years. This reversal by Congress represents a victory for all prospective home Buyers, for the real estate market nationally, and for the national economy.

The National Association of Realtors (NAR) had lobbied intensely for this reversal, to help make mortgages more affordable and accessible for hard-working, middle-class families in 669 counties and 42 states and territories, where the average loan limit reduction after the reset last month was more than $68,000.

The new regulation reinstates the FHA loan limits through 2013 at 125% of local area median homes, up to a maximum of $729,750 in

the highest cost markets, the floor will remain at $271,050. However, Congress chose not to apply the loan limits restoration to Fannie Mae and Fredddie Mac. Fannie-and-Freddie-backed mortgages will remain at 115% of local area median home prices up to $625,500.

The bill also provides for a short-tern extension of the National Flood Insurance Program through December 16, 2011. NAR promised to continue to press Congress to authorize a five-year extension of the program, which ensures access to affordable flood insurance for millions of home and business owners across the country.

As the Wall Street Journal points out (Nov. 17, 2011) "Five years ago, it was too easy to get a mortgage. Today, it’s probably too hard". This reversal by Congress will help address that problem.

Good Work, NAR. We’re proud to be a member.



Every quarter, the College of Business and Administration of the University of Colorado at Colorado Springs publishes the Quarterly Updates and Estimates for El Paso County. This in-depth analysis of every aspect of our local economy is a valuable tool for personal and business planning. It is full of helpful charts and graphs about the real estate market, auto sales, tax revenues, employment trends, wages and even features a measurement of the local "Misery Index".

If you would like a copy of this very informative analysis of our local economy in the third quarter of 2011, produced by Fred Crowley, chief economist for the Southern Colorado Economic Forum, CLICK HERE.



Our annual prediction is that, because 2012 is an election year, Washington will pull out all the stops and do whatever is necessary to boost our economy, so that voters will not go to the voting booths mad. In the time-honored tradition of "Bread and Circuses", we will see steps taken to help the housing market, increase employment and put "a chicken in every pot and a car in every garage".

So, relax. 2012 should be a great year for all of 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 39 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 podcast for this month …



CLICK HERE to see the latest statistics about real estate sales and listings in the Pikes Peak area.



Ducking into confession with a turkey in his arms, Brian said, "Forgive me, Father, for I have sinned. I stole this turkey to feed my family. Would you take it and settle my guilt?"

"Certainly not," said the Priest. "As penance, you must return it to the one from whom you stole it."

"I tried," Brian sobbed, "but he refused. Oh, Father, what should I do?"

"If what you say is true, then it is all right for you to keep it for your family."

Thanking the Priest, Brian hurried off.

When confessions were over, the Priest returned to his residence. When he walked into the kitchen, he found that someone had stolen his turkey.

Tips for selling a home in the winter

by Harry Salzman

November 14, 2011




Realtor Magazine (November 8, 2011) cites a survey of the healthiest housing markets in the U.S., conducted by Builder Magazine. Builder teamed with Hanley Wood Market Intelligence to compile its annual list, factoring in housing projections from Moody’s The list is based on projected price appreciation, population growth, income growth and improving employment picture.

As the Realtor article points out, the U.S. housing markets projected to have the biggest gains into 2012 tend to be home to major universities, strong private sector employment, or have nearby military bases. Those criteria describe Colorado Springs exactly.

Builder Magazine lists Colorado Springs as number “8” on its list, and points out that troops returning from Afghanistan will boom our economy. Local home prices are predicted to rise 2.6%. Employment is predicted to grow by 1.4% and households to increase by 1.8% in 2012.

Ain’t you glad you live here??



Last week the National Association of Realtors released their current analysis of the previous four quarters of median home prices in the largest 150 communities in the U.S. As expected, in the four quarters ending September 30, 2011, prices declined an average of 4.7% nationally. But the good news is that Colorado Springs median home prices dropped only 3.8%. In other words, we are 19% better off than the rest of the country…..

How might this data affect your decision to buy a home now? Well, let’s look at a specific example. Let’s say you have been considering buying your $250,000 home in Colorado Springs. With a 3.5% down-payment of $8,750, that would bring the amount financed to $241,250. To that number, we must add the FHA mortgage insurance (a one-time 1.5% payment) of $3,618.75. So, the entire amount financed by the lender would be $244,868.75. In today’s market, the numbers would work out like this:

     Monthly Principal and Interest payment (3.75%)             $1,134                         

     Monthly mortgage premium (.5% MIP)                              $102

     Estimated monthly real estate taxes                                $125

     Estimated monthly home insurance premium                      $80

     Total monthly payment                                                  $1441 

But that doesn’t tell the whole story. Don’t forget that, as a homeowner, you get to deduct several expenses from your taxable income. Using the example we cited, above, your annual deductions would amount to:

  • Home Interest payments                                               $9,106
  • Property taxes (estimated)                                            $1,500
  • Total                                                                           $10,606

Assuming that your tax bracket is 28%, those two credits would mean an annual tax credit to you of $2,970, or $248 a month. When you deduct that tax credit, it brings down your actual cost of ownership to a monthly expense of $1,193. ($1,441 - $248)

The bottom line is that, if you are paying anything like $1,193 a month in rent, you are missing out on the opportunity to build your total worth (equity) and your estate, the ability to put a lid on your housing expense for the next thirty years (thus avoiding the constant problem of ever-increasing rents) and the satisfaction of owning your own home….And, by the way, the Gazette (Friday, Nov. 11, 2011) notes that rents in Colorado Springs soared to a record-high in the third quarter and are expected to keep climbing as demand remains strong ….In fact, if you are now living as a renter in that same home we used in our example, you are probably paying approximately $1,450 a month….That means it is costing you $257 more per month to rent that house than it would cost you to own it. …Strange, but true !!!

And, keep in mind that these numbers won’t look this good forever. The fact is that, with every passing day, as foreclosures and short-sales are absorbed back into the market, there will be fewer homes in the inventory, thus increasing prices,….also, there will absolutely be increases in interest rates (We are currently at an historically low rate) ….and, inflation is also scheduled to drive up home prices dramatically.

Bottom line:  It is less expensive to own a home in Colorado Springs than it is to rent.

Call us at 598-3200, or 1-800-677-6683 to discuss this once-in-a-lifetime opportunity. Act now, and you will be sending me ‘Thank-You’ notes for the next 30 years.



The Colorado Springs Business Journal reports that third quarter foreclosure filings and sales at auction were down statewide and in El Paso County. Foreclosure filings dropped nearly 25% in the third quarter of this year, according to a Colorado Division of Housing report.

The number of foreclosure home sales dropped more than a third from 746 in the third quarter of 2010 to 497 in the third quarter of 2011.

While new filings are on the rise for the year, 2011 is still shaping up to have the lowest number of foreclosure filings and sales at auction since 2009, according to the state division of housing.

Although it’s probably too soon to start singing, “Happy Days Are Here Again”, it looks like the band should begin to tune up.



According to Realtor Magazine (Nov.9,2011), a recent survey by Move, Inc. shows that 27% of Americans say they plan to buy a home in the future (with most saying in two or more years), and only 2% say they plan to purchase a home in the next 12 months. So, why are so many buyers continuing to wait when home affordability is so high and interest rates are so low?

About 23% of those surveyed say they are delaying buying a home because they are concerned about the real estate market in their local area, particularly with concerns about the future of home values, the economy and jobs, as well as difficulty in saving for a down-payment.

Nearly 35% of those surveyed say their inability to get credit or find affordable credit are the main reasons why they are putting off purchasing a home.

The survey also found that younger adults tend to spend more on housing than older adults. For example, the survey revealed that two out of five – or, about 40% of millennials, say they should spend 30% to 60% of their gross monthly income on housing. More than half of older Americans, on the other hand, say they plan to spend less than 30% of their gross wages on housing.

The survey also discovered that seven out of ten Americans say that candidates’ positions on housing will be very important to them in the 2012 presidential and congressional elections.

Survey respondents identified the following top housing priorities for the next president’s first 100 days in office:

  1. Helping homeowners avoid foreclosure
  2. Keeping interest rates low
  3. Making more affordable mortgage credit available

Errol Samuelson, chief revenue officer of Move, Inc., said in a statement, “Our survey found that 27.3% of Americans still plan on buying a home. The survey illustrates candidates who share the concerns of the American people and make housing a top priority will win their confidence.”



Experts offer some of the following tips for selling a home in the winter.

  • Stage it:

Arrange furniture so the selling-points in the home are not overlooked

Paint rooms inviting colors

Display pictures of the home in warmer, summer months

Turn up the heat to a comfortable level. Cold homes don’t sell

Price it right

Keep sidewalks and driveways clear of snow, ice and leaves – giving potential buyers a clear path to your front door.

Light it up:

Keep all the light on, even when you’re not there

Open the blinds and drapes

Hire me as your agent (I just stuck that in there, to remind you that a good agent can help you get your house sold. Give us a call at 598-3200, or, 800-677-6683 (MOVE).

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 39 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 podcast for this month …



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




An application was for employment
A program was a TV show
A cursor used profanity
A keyboard was a piano!

Memory was something that you lost with age
A CD was a bank account!
And if you had a broken disk,
It would hurt when you found out!

Compress was something you did to garbage
Not something you did to a file
And if you unzipped anything in public
You'd be in jail for awhile!

Log on was adding wood to a fire
Hard drive was a long trip on the road
A mouse pad was where a mouse lived
And a backup happened to your commode!

Cut--you did with a pocket knife
Paste you did with glue
A web was a spider's home
And a virus was the flu!

I guess I'll stick to my pad and paper
And the memory in my head
I hear nobody's been killed in a computer crash
But when it happens they wish they were dead!

Rental Yields Look Better Than Ever

by Harry Salzman

November 7, 2011




The Gazette (November 5, 2011) notes that local home sales totaled 758 in October, a 20.1% jump over the same month last year. This increase in home sales was the fourth consecutive month of year-over-year increases in home sales.

Through the first 10 months of 2011, single family home sales totaled 7,164 in the Pikes Peak region, a 2.3% increase over the same period last year.

Another good sign that our local market is stabilizing and starting to grow was the fact that the inventory of available homes fell to 3,959. That’s its lowest point in nearly two years and represents a 22.7% decline from the same month last year, and the fewest number of listings in any month since December of 2009, when 3,951 homes were listed.

Some of the other indicators that point to a recovering local housing market and a great opportunity for homebuyers are:

? Low mortgage rates are still available ….Buyers can still get an FHA 3.75%, 30 year, fixed-rate, residential mortgage, with a minimum down-payment of 3.5%.

? The local unemployment rate in September fell to 9.3%, the lowest level in nearly two years, as nearly 1,800 residents returned to the job market, and even more than that found work, according to the U.S. Bureau of Labor Statistics.

? According to the Gazette (Friday, Nov. 4, 2011), U.S. merchants are reporting solid gains for October, a sign that consumers are starting to spend, again…..a sure sign that the economy is still on track to recover…And, as a result of the influx of troops returning to Fort Carson, our local retail sales will even outdistance the national figures.

? Experts are predicting that the housing market will show some very encouraging signs of recovery in the second quarter of 2012, as the inventory of foreclosures shrinks and as the federal government introduces some housing programs designed to stimulate the housing market (just in time for the upcoming elections).

The bottom line for Buyers is that, as mortgage rates and home prices start to rise (as they definitely will) and as the inventory of available homes continues to shrink, the people who buy their new home today will look back in two years and see that they made one of the best investments of their lifetime.

Call us at 598-3200 or, 800 677-6683 (MOVE) to discuss this present market and where it is headed. Don’t miss the boat !!!



After falling to a 13-year low during the second quarter, the homeownership rate posted a highly unexpected rise in the third quarter, according to a Census Bureau report released Wednesday.

With foreclosures forcing homeowners out of their homes and buyers waiting on the sidelines as home values declined, the homeownership rate has been on the decline for quite some time. In fact, according to Bloomberg, the rise in the third quarter of 2011 is the first in two years, according to the most recent Census figures.

However, the 0.4% increase, which brought the homeownership rate from 65.9% to 66.3% for the third quarter of 2011, was not large enough to result in an annual increase.

The declining homeownership rate is a reflection of the increase in foreclosures and of the economic uncertainty which has plagued all segments of our economy.

One result of this decline in homeownership is that investors are now looking at an increase in the number of families which have now become prospective renters, rather than homeowners. These investors are seeing a unique opportunity and they are putting their investment money into rental property. For more details, see the following article……



As homeownership has been declining, rentals have become a more significant factor within the real estate industry. In fact, rental property now presents a great opportunity for investors. Capital Economics predicts that, "Rental yields will soon rise above 5.5%, comfortably beating the yields available on Treasuries and equities."

As evidence that the local "Smart Money" is betting on the value of investment property, note that 3 upscale apartment projects were recently announced for the Springs.

The Gazette (November 5, 2011) reported that over $100 million will be spent on "an explosion of apartment development taking place in the Pikes Peak region".

Norwood Development Group and Western National Group will partner to develop the projects on Nor’wood sites on the city’s east, northeast and northwest sides. The complexes will add about 835 units at a time when apartment vacancy rates have plunged to single digits and rents are soaring.

The complexes will feature one-, two-, and three bedroom units, with rents ranging from about $850 to $1,400.

Call us at 598-3200 or, 800 677-6683 (MOVE) to explore the investment opportunities currently available for smart investors. You may not want to buy a new residence, but you should consider buying some investment property. It’s a great opportunity and a chance to build your retirement plan.



The Gazette reports (Wednesday, November 2, 2011) that Colorado Springs –area builders saw a big jump last month in the pace of home construction.

Single-family building permits in the Springs and El Paso County totaled 139 in October, a 36.3% increase over the same month a year ago, according to a report released Tuesday by the Pikes Peak Regional Building department.

Kyle Campbell, board president of the Housing and Building Association of Colorado Springs said single-family permits were issued across a wide range of prices. Campbell said he couldn’t pinpoint a single factor for the uptick in construction activity, but pent-up demand on the part of recession-weary consumers and mortgage rates that remained at the lowest level in decades are possible reasons.

It’s a good sign that things are picking up !!!



Those buyers who have enough money to put 20% - or more- down on the purchase of a home may want to consider another approach –preserving some of their cash for savings, investing or other purposes.

With today’s interest rates and the competitive pricing of private mortgage insurance, borrowers can retain some of their money by putting less money down on a home- say only 10% - and still get a low monthly payment.

In the past, the adage was’ "The more you borrow, the more you leverage". In today’s financial times, the scenario is much different. Today, borrowers can leverage private mortgage insurance to put as little as 5% down on home and still have a competitive payment. By utilizing this strategy, home buyers are able to leverage their current assets, while still keeping sufficient cash reserves.

Give us a call at 598-3200 or, 800 677-6683 (MOVE) to discuss this strategy and we will be pleased to explore your various options with 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 39 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 podcast for this month …



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



We just had a great idea for balancing the federal budget.

The present plan calls for a panel of really smart guys to balance the budget by a certain date and, if they can’t, then the Defense budget gets cut.

Our idea is that, if these geniuses fail to balance the budget by deadline time, the salaries of all Congressmen and Senators would get cut.

Wanna bet on how fast the budget would get balanced?

Displaying blog entries 1-3 of 3




Contact Information

Photo of Harry A Salzman Real Estate
Harry A Salzman
ERA Shields / Salzman Real Estate Services
5475 Tech Center Drive, Suite 300
Colorado Springs CO 80919
719-593-1000 or Toll Free: 800-677-MOVE(6683)
Cell: 719-231-1285
Fax: 719-548-9357

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