Real Estate Information Archive

November 24, 2020 

 

November 19, 2020

 

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.

 

 

CONGRATULATIONS TO ALL HOMEOWNERS IN THE COLORADO SPRINGS AREA…BUT REMEMBER…EVERYTHING COMES WITH A PRICE

A recent report from the National Association of Realtors (NAR) concerning Home Buyers by Metropolitan Statistical Area (MSA) shows that Colorado Springs is the number one city with the highest concentration of buyers.

Good News?  Well, in some ways, yes.  And in others, maybe not so much.

It’s certainly great for all current homeowners because obviously, greater demand is creating higher home appreciation.  However, a little slower appreciation would be more realistic, as I’ve been saying for quite some time now.  

For first-time homebuyers and those looking to relocate here for professional or personal reasons, it’s not quite as welcome news.

Like the rest of the country, the Colorado Springs area has been faced with a shortage of available homes for sale, and in our case, we have the lowest number of existing homes for sale ever.  This shortage is one of the factors in the unrealistically high home appreciation which will likely continue until there are more homes for sale.

Our once comparatively “quiet” city is growing by leaps and bounds and there’s no end in sight.  Companies are realizing the “work-life balance” is importance for today’s employees and their families, and this pandemic has driven that fact home even harder.

If you are able to work from home (WFH), wouldn’t you rather be in Colorado Springs than in some crowded city?  A rhetorical question to be sure, however, one that obviously many folks across the nation are asking themselves. 

The current pandemic has also forced folks into rethinking home “need and want “priorities and many are looking to add larger kitchens, quiet office space, home schooling and outdoor recreational and dining areas. 

Our downtown is thriving with the opening of the U S. Olympic and Paralympic Museum, numerous new apartment complexes, the new sports complex currently under construction, and more.  Hopefully it won’t be too long before we can put some of the restrictions due to COVID-19 behind us and restaurants and stores will be thriving again as well.  

Southwest Airlines has just added Colorado Springs as one of their destination cities and that promises to bring even more vacation travelers to our locale, as well as increasing traffic to and from COS.

Mayor John Suthers, along with the City Council and Chamber/EDC and others have worked so hard to see these dreams become realities and a big shout out goes to all concerned.  There was a time in the not-so-distant past when none of these things seemed possible, and certainly not in the time frame in which they have.   

If you’ve even thought about selling to trade up or move to a new neighborhood, NOW is the time.  It will likely take a bit longer to find what you want, and you may want to consider new construction as a viable option as well.  This is something a number of my clients have looked at in recent times and I’ve helped them find just the right solution for their individual situation.  

This is all part of my special brand of customer service and help with new home construction options comes at no additional cost to you.  In fact, it could save you money in the long run since I can not only help in site and home selection, but also in finding the right lender for you.  

Homes are not likely to get any cheaper, interest rates are still historically low and the equity in your present home is likely more than you might imagine—so don’t delay.  Give me a call at 593.1000 or email me at Harry@HarrySalzman.com and together we can make all your residential real estate dreams come true.

 

METRO HOME PRICES INCREASE IN ALL AREAS IN THIRD QUARTER 2020

Realtor Mag, 11.12.20

Just like we are seeing in the local statistics, home prices all across the country are seeing greater gains due to the limited number of homes for sale, record low interest rates and high buyer demand.  The majority of major metro markets posted double-digit price gains in the third quarter and single-family existing home prices increased in all 181 metro areas tracked in NAR’s latest quarterly report.

According to Lawrence Yun, NAR’s chief economist, “Favorable mortgage rates continue to bring fresh buyers to the market.  However, the affordability situation will not improve even with low interest rates because housing prices are increasing much too fast.”

He added that, “In light of the pandemic, prices jumped in a number of metros that contain larger properties and open space—where families could find extra rooms, including areas for an at-home office”.

Colorado Springs ranked 28^th with a 13.6% increase, in comparison with the U.S. as a whole at 12.%.  

Click here to see the entire list of 181 MSAs in numerical order or to view them in alphabetical order, click here.  If you have any questions, please give me a call.

 

FOUR REASONS WHY THE ELECTION WON’T DAMPEN THE housing market

Keeping Current Matters, 11.2.20

Interestingly enough, I read this article the day before the election and here we are two weeks out and we still don’t have the final results.  However, the thoughts concerning the housing market aren’t likely to change—the housing market has been and will continue to be—the driving force in the U.S. economy.

Here are four reasons why:

1. Demand is Strong Among Millennials.  The national’s largest generation began entering the housing market last year as they reached the age to marry and have children—two key drivers of homeownership.  According to an article in The Wall Street Journal, “Millennials, long viewed as perennial home renters who were reluctant or unable to buy, are now emerging as a driving force in the U.S. housing market’s recent recovery.”

 

2. Mortgage Rates Are Historically Low.  Rates are driving demand across all generations.  Strong demand created by this low rate has countered other economic disruptions (i.e. the pandemic, recession, record unemployment.)  Freddie Mac has forecasted mortgage rates to remain low through next year: “One of the main drivers of the strong housing recovery is historically low mortgage rates…Given weakness in the broader economy, the Federal Reserve’s signal that its policy rate will remain low until inflation picks up, and no signs of inflation, we forecast mortgage rates to remain flat over the next year.  From the third quarter of 2020 through the end of 2021, we forecast mortgage rates to remain unchanged at 3%.”

 

3. Prices Continue to Appreciate.  The continued lack of supply of existing homes for sale, along with buyer demand has experts forecasting strong price appreciation over the next twelve months.

 

4. History Says So.  Normally the market slows slightly in November when it’s a Presidential election year, and the pace quickly returns.  Here’s an explanation as to why from the Homebuilding Industry Report: “This may indicate that potential homebuyers may become more cautious in the face of national elections uncertainty.  This caution is temporary and ultimately results in deferred sales, as the economy, jobs, interest rates and consumer confidence all have far more meaningful roles in the home purchase decision than a Presidential election result in the months that follow.”  

 

Ali Wolf, chief economist for Meyers Research, also notes: “History suggests that the slowdown is largely concentrated in the month of November.  In fact, the year after a presidential election is the best of the four-year cycle.  This suggests that demand for new housing is not lost because of election uncertainty, rather it gets pushed out to the following year as long as the economy stays on track.”

 

Bottom Line:  There’s no question that this has been one of the most contentious presidential elections in our nation’s history and will have a major impact on many sectors of the economy.  However, as Matthew Speakman, an economist at Zillow explained several weeks ago:

“While the path of the overall economy is likely to be most directly dictated by coronavirus-related and political developments in the coming months, recent trends suggest that the housing market—which has basically withstood every pandemic-related challenge to this point—will continue its strong momentum in the months to come.”

 

So…once more with feeling…if you’re in the market…give me a call sooner than later.

 

METRO AREA WEALTH GAINS FROM HOMEOWNERSHIP AS OF 2020 Q2

National Association of Realtors, 10.30.20

Homeownership is the key to building wealth.  Among all families, the ownership of a primary residence typically accounts for 90% of total wealth, based on the 2019 Survey of Consumer Finance data.  Among those in the bottom 20% of the income percentile, the median value of holdings for a primary residence accounts for 99% of total family assets, but only 42% for families in the top 10% of the income bracket.

 

 

Housing wealth accumulation takes take and is built up by paying off mortgage debt and by home price appreciation.  And while home prices can fall, they tend to recover and go up over the longer term.  As of September 2020, the median sales price of existing home sales in the U.S. was $311,800, a 35% gain since July 2006, when prices peaked at $230,000.

Nationally, a person who bought a typical home 30 years ago would have typically gained about $283,000 as of the second quarter of 2020.  Of the total wealth gain, 67% is from the price appreciation of 3.7% annually.  Over a 10-year period, the wealth accumulation is $144,490, of which $114,233 or 80% are from the price appreciation.

Once again…homeowners accrue housing wealth or equity over time from the principal payments to reduce the mortgage debt and from the appreciation of home prices:

Housing Wealth Gains = Principal Payments + Price Appreciation Gains

 

Here is a look at Wealth Gains from Homeownership in Colorado Springs:

 

Note:  The calculations show the housing wealth gains accumulated for a typical home purchased 5, 10 and 15 years ago and sold at the median sales price as of 2020 Q2.  The calculations assume a 30-year fixed mortgage plus points and fees and 10% down payment.

These calculations are illustrative of the wealth gains from homeownership in Colorado Springs.  The actual home equity gains accrued over time will vary by property and will depend on home improvements undertaken over time.  These home improvement costs are not taken into account in the calculations.

 

 

                      

 

 

As you can see, these charts illustrate what I’ve been telling you time and again for many, many years.  Homeownership over time far outshines gains from traditional stocks and bonds while providing you shelter and comfort along the way.

If you have any questions, please give me a holler.  

 

November 5, 2020

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.

 

THE ONE CONSTANT IN THIS NOT-SO-NORMAL ECONOMY AND WORLD?  HOMEOWNERSHIP.

I was waiting to write this AFTER the Presidential election but since the results aren’t final at this time I didn’t want to prolong giving you great news regarding the state of residential real estate. 

With “home” taking on so many new meanings and functions, the housing market is playing a leading role in the present economic turnaround.  Many folks are buying or selling much sooner than they anticipated as they search for more functionality and personal comfort in their homes.  

High buyer demand and low inventory are causing homes to appreciate at a faster-than-normal pace.  According to the National Association of Realtors (NAR), the real estate industry provided $3.7 billion dollars of economic impact to the country last year.  This is significant in terms of the national economy as well as to the bottom line of current homeowners.

U.S. home prices between July and August 2020 showed a largest increase since the Federal Housing Finance Agency (FHFA) started the House Price Index in 1991.

As most of you know, homeownership is something I advocate for anyone who is in a position to do so.  And this is not just because I work in the industry.  I have invested in real estate since I purchased my first home in 1972 (even at an 8.5% mortgage loan rate!) and it has proven time and again to be a great investment.  The personal economic gains over the long haul have consistently outperformed stocks and bonds and the equity gains have allowed me to purchase other homes while keeping my bottom line in check.  

COVID-19 has contributed greatly to the lack of inventory in the Colorado Springs area for a number of reasons.  As mentioned earlier, folks who are working from home (WFH) and homeschooling their kids are finding new wants and needs for their housing situations.  And, WFH is also affording a number of those who live in crowded cities the opportunity to move to a more favorable environment such as ours.

According to a new survey from online freelance company Upwork, as many as 23 million Americans plan to relocate to a new city due to WFH.  

I’ve had more relocation calls in the last few months than I had all last year from those wanting to move here, and let’s face it…why not move to “America the Beautiful City” if that’s an option?  We get it.  However, that is another factor contributing the 25-year low availability of existing homes for sale here. 

As you will see, our median home prices are still on the rise, and I’m afraid that will continue until we have more listings.  Yes, rising median home prices are great, but this kind of rate is not sustainable, nor is it practical.  It is particularly hard on first time homebuyers who do not have equity to use and have trouble qualifying for the higher loan amounts.

Something for present homeowners to remember is that the equity in your present home is potentially greater than you might think, and with interest rates so low, it’s possible you can get into another home for not much more in monthly payment costs.

Also worth considering when you sell your present home is the possibility of leasing it back from the buyer so that you have time to complete the process of finding a new home or getting ready for a move. That’s not always an option, but it’s certainly one we can request when listing your home.

New home construction is a more viable option than in past years and I’ve helped a number of clients in their new home purchases recently.  My good relationships with a number of local builders has given my clients an advantage.  I can help with site and home selection and even direct folks to the best lender for their individual situation.  And did I mention this comes at no additional cost to the client?  Just one of the many things I provide as part of my special brand of customer service.

So, if you are thinking of making a move…don’t delay.  It won’t be as easy as in the past to find what you want, need and can afford, but having me on your side will significantly help.  I have been in the local residential real estate arena for more than 47 years, and with my investment banking background to boot, can help you make all your residential real estate dreams come true.  

It all starts with a call to me at 593.1000 or an email to Harry@HarrySalzman.com and we can get the ball rolling.  The sooner you begin, the sooner you’ll be living in the home that can provide you with the comfort and security you want, need and deserve.

 

And now for statistics…still “off the chart” but lack of listings is troubling…

You will see that home prices are continuing their upward trend due in part to low interest rates, low inventory and a pent-up demand created by the pandemic. 

 

OCTOBER 2020 

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

Here are some highlights from the October 2020 PPAR report.  Remember that the new format of this report no longer provides monthly statistics for each individual neighborhood.  However, if you are interested in what’s happening in your neighborhood, I can provide you with this information through other means.

In El Paso County, the average days on the market for single family/patio homes was 21.  For condo/townhomes it was 11.  

The sales price/list price for single family/patio homes was 100.8% and for condo/townhomes was 100.6%.  

Please click here to view the detailed 9-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 October 2020 to October 2019 for All Homes in PPAR:                       

                        Single Family/Patio Homes:

·       New Listings were 1,559, Down 6.3%

·       Number of Sales were 1,732, Up 19.6%

·       Average Sales Price was $432,477, Up 16.2%

·       Median Sales Price was $383,447, Up 14.5%

·       Total Active Listings are 881, Down 54.6%

·       Months Supply is .05, Down 62.0%

 

Condo/Townhomes:

·       New Listings were 230, Up 19.8% 

·       Number of Sales were 260, Up 24.4%

·       Average Sales Price was $276,160 Up 7.5%

·       Median Sales Price was $262,000, Up 13.9%

·       Total Active Listings are 101, Down 46.3%

·       Months Supply is 0.4, Down 56.8%

And a look at more statistics…

 

October 2020  LOCAL MARKET UPDATE  AND  MONTHLY INDICATORS  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. 

It is broken down by geographical areas and you can look to see how your neighborhood is doing in terms of sales, prices, and more.  

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 Up 19.5%
• Median Sales Price for All Properties was Up 14.1%
• Active Listings on All Properties were Down 54.1%

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

HOT housing market NOT LIKELY TO COOL IN WINTER

Realtor.com , 11.3.20

Winter is normally a slow season in real estate, but economists predict it isn’t likely to be that way this year.  Lawrence Yun, economist for NAR, says “It will be one of the best winter sales years ever”.

As previously mentioned, low inventories, combined with high demand due to record-low interest rates is sending buyers to the market quickly.  

“We currently see buyers sticking around in the housing market much later than we usually do this fall,” says Danielle Hale, realtor.com’s chief economist.  “If that trend continues, we will see more buyers in the market this winter, too. So this winter is likely to be a good time to sell.”

Here is a snapshot of the national picture of existing home sales in September 2020.  As you can see, prices continue to rise, and inventory continues to drop.  Sales are higher and inventory is lower locally, but you get the idea.  It’s a busy, busy housing market most everywhere.

 

I can’t emphasize enough that if you are even thinking of making a move, NOW is the time for us to start the process.  There are options available for most all situations and with my experience and expertise, I’m the one that can help you navigate through the home buying and selling wars. 

Give me a holler sooner than later and together we will find the right situation for all of your family’s wants, needs and budget requirements.

  

UCCS ECONOMIC FORUM DASHBOARD

UCCS Economic Forum, College of Business, updated 10.29.20

As always, I like to share the info I receive from the UCCS Economic Forum as soon as it’s available.  You can click here to see the U.S. “Big Picture” as well as the local economic news.

If you have any questions, please give me a call.