Real Estate Information Archive

February 20, 2020

 

HARRY’S BI-WEEKLY UPDATE

                          A Current Look at the Colorado Springs Residential real estate Market

As part of my Unique Brand of Personal Service, it is my desire to share current real estate issues that will help to make you a more successful and profitable buyer or seller.  

AHEAD OF THE CURVE…YUP…THAT’S ALWAYS MY GOAL…

As most of you know, several years ago I decided to add another designation under my name--“The real estate Therapist”.  I even went so far as to trademark it in the State of Colorado.  My reasoning was the realization that the service I provide my clients is 90% seasoned real estate professional and 10% “therapist”.  

The time I spend with clients prior to even beginning the home search gives me great insight into the family dynamics and helps me assist them in determining how best to make their wants and needs fit their budget and other requirements.  I often find that family members might have different wants and needs, yet obviously they need to come to a consensus prior to the housing search.  I take it all into consideration, help them reach a common goal, and do my best to manage the stress involved in the entire home buying and selling process. Thus, my role as “The real estate Therapist”.

Therefore, I was not entirely surprised when just this month there was an article on HousingWire titled “Some Homebuyers Value their real estate Agent as much as their Therapist” which went on to say that some homebuyers become best friends with their agents!  I’ve known this for as long as I can remember.  

The article went on to say that according to a new survey from Century 21, a majority of homebuyers and sellers say they value and confide in their real estate agents more than a therapist and know them better than their own neighbors.

After all, finding and having the “right” real estate professional by your side is so important in navigating through what for most is the biggest emotional and financial decision of their life.  It is my honor and privilege to have earned the trust and friendship of so many of my clients and their families, and it is not something I take for granted.

So…a big thanks to all of you for giving me that trust and for your friendship.  I look forward to working with you and your family members for many years to come.

 

Now on to some continued great news about Colorado Springs real estate…

 

COLORADO SPRINGS IS NUMBER ONE FOR HOME BUYERS IN RECENT NATIONAL SURVEY

National Association of Realtors, 2.19.20

The National Association of Realtors (NAR) has created the profile of homebuyers for each metropolitan statistical area (MSA) and I wanted to share this information with you—especially since Colorado Springs is right at the top once again.

Each year, the American Community Survey releases the Public Use Microdata Sample (PUMS) which include population and housing unit records with individual response information.  Focusing on homeowners who moved into their home within the last year, NAR was able to identify characteristics of the homebuyers and their homes at a local level.

In answer to the question of “Where are People Buying Homes?”— Colorado Springs was a resounding number one choice, followed by Las Vegas-Henderson-Paradise, NV, Cape Coral -Fort Myers, FL, and Phoenix-Mesa-Scottsdale, AZ.  

Based on the NAR’s Home Buyers and Sellers Survey, nationally a typical homebuyer was 46 years old and earned nearly $92,000 in 2017.  Our local typical homebuyer that same year was 38 years old with an average income of $82,489.

 

THAT BEING SAID…

Our biggest hurdle at the moment is a shortage of available homes for sale.  Just like the rest of the USA, the supply shortage is creating problems for those looking to buy, most especially for the entry-level buyers.  

Low mortgage rates and a strong job market and economy isn’t enough to help the Millennial and Gen X buyers coming into the very competitive housing market this homebuying season, due in part to rising prices and fast-selling homes.

Compounding the problem locally is actually the fact that we are the number one place in the nation where people want to buy.  As most of you may know, Amazon just completed the purchase of over 69 acres near the Colorado Springs Airport where they are building a 4 million square foot distribution center.  They are looking to employ 1,000 people, many of whom will be looking for a place to call home.  With only 1171 homes (1039 single family, 26 condos, 76 townhomes and 30 patio homes) listed for sale today in all price ranges on the Pikes Peak area MLS, you do the math!  

You might be interested to know that one year after Amazon announced its HQ2 move to Northern Virginia, home prices there were up 33% year-over-year!  With that came an even greater housing shortage, so once again, if you or a family member are wanting to sell and trade up…don’t delay. I cannot emphasize that enough. 

If you have even thought of selling your home to move to another neighborhood or to trade up, NOW is the time.  Not only will you get more than you might think for your present home, you might find with the low interest rates that your monthly payment won’t be much more than what you are presently paying since the low mortgage rates are offsetting home affordability issues at present. 

With so few existing homes available, yours will get more attention than in the past, and you might be surprised to find it in a bidding war—resulting in more money for you.  That’s just today’s reality.  

New construction starts are up locally and that’s been a great option for some of my clients.  I have a good working relationship with a number of local builders and can help navigate you through the new home buying market as well.  There’s no extra cost to you and with so many more options and decisions to make in that arena, my knowledge can be invaluable and save you both time and money.

This is a lot to consider if changing homes is in your near future.  However, with me by your side we can make it happen.  Just give me a call at 593.1000 or email me at Harry@HarrySalzman.com and let’s work together to make all your residential real estate dreams come true.

 

NAR JUST RELEASED Q4 2019 RESULTS FOR MEDIAN SALES PRICES OF TOP 175 CITIES 

National Association of Realtors, 2.12.20

Colorado Springs is ranked number 26 of 175 cities in the NAR quarterly comparison of the top metropolitan statistical areas for median sales price of existing single-family homes, with a median price of $322,200 at the time of the survey.  The national average is $274,900. To see the complete list of 175 cities, in statistical order, please click here.  To see the alphabetical order, please click here.

NAR also included a survey of the qualifying income based on sales price for existing single-family homes in these same areas.  It was broken down by percentage of down payment.  This information only considers conventional mortgage loans.  A number of homebuyers in Colorado Springs choose to finance their homes through FHA or VA, which would be based on different income requirements.

Based on conventional mortgage loans, the qualifying income necessary at the end of the last quarter of 2019 in Colorado Springs was:

 5% Down:   $68,756

10% Down:  $65,137

20% Down:  $57,900

To see the report of all 175 cities, please click here.

 

WE CAN’T RELY ON LOW MORTGAGE RATES FOREVER

Realtor Mag, 2.7.20

Mortgage loan rates keep falling and sub 4% rates are improving buyers’ purchasing power, but higher borrowing costs will come at some point, according to Lawrence Yun, NAR’s chief economist.

He added that “at some point, mortgage rates are going to revert back to normal”, noting that the interest rate for a 30-year mortgage was 8.1% in 2000.

Affordability is still lower than historical norms even with today’s low rates and Yun says that the lack of available inventory is continuing to push prices higher.  He said that home ownership has remained flat since 2007 and the wealth gap between renters and homeowners is growing.  

A word to the wise----if you are thinking the low interest rates are here to stay---you might want to reconsider.  What goes down will eventually go up, and sometimes with little warning.

 

NOW A FEW 2020 real estate TIPS AND TRENDS

Rismedia, American Home Shield, 2.14.20

The new year and new decade will undoubtedly bring new trends to the residential real estate market and will see a continuation of some trends that currently affect both real estate investors and homeowners across the USA.  Low mortgage rates, a changing rental landscape, low inventory and other factors will shape 2020 and could influence the decisions to buy and/or sell real estate this year.

 

• Mortgage Rates Will Stay Low at Present.  The Fed has announced plans to keep short-term rates low for the time being, so homebuyers can expect mortgage interest rates to remain low through 2020. Sellers in 2020 can expect buyers to ask them to contribute towards closing costs.  Average closing costs will remain at about 2-5% of the price of the home.

 

• Landlords Will Face New Challenges.  Residential landlords in some areas will need to prepare for rent-control ordinances that could come into effect due to the rapidly escalating rental rates.  Also, with the high cost of homes along with inventory shortage, breaking into the investment market can be difficult in some areas.  Areas with especially high rental rates may find renters looking to move to more affordable areas or to purchase rather than rent if possible.

 

• Inventory Will Remain Low.  Millennials are starting to look at buying their first homes, so the number of homes on the market in desirable areas will remain low, and bidding wars may continue.  A number of baby boomers are either remaining in their homes longer or are looking to downsize into condos, townhomes or smaller homes, which will exacerbate the shortage of available properties on the market.

 

• Starter Homes Will Grow in Popularity.  Starter home construction is speeding up to meet the needs of younger homebuyers who want to purchase their first homes and older home buyers who want to downsize.  With unemployment and interest rates at record lows, and many millennials getting married and starting families, it’ll be no surprise to see newly built starter homes appearing on the market.

 

• Home Prices Will Slow, but Demand Concentration Will Increase.  With new jobs becoming increasingly concentrated around major city centers and in increasingly popular places like Colorado Springs, a growing portion of workers in the service industry will relocate to those areas to seek employment.  That means prices in those areas will continue to grow, but they can’t grow forever. Demand for housing in big markets like ours will continue to stay strong, so once more, if you’re thinking of making a move—now is the time.

 

February 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.

2020 IS OFF TO A VERY BRIGHT START…

I last wrote as I finished my annual “State of Residential real estate” presentation before the Colorado Springs City Council.  I hope you enjoyed looking at the slides I presented as much as City Council did.  There is so much to be thankful for as citizens of “Olympic City USA” but along with that comes challenges.  The most obvious is the shortage of available existing home listings.  Our local MLS listings are at an all-time low and that creates problems not only for those who want to sell and trade up or buy for investment purposes, but also for folks who are relocating to the Springs for employment or retirement reasons.

There’s a reason Colorado Springs shows up on so many “Top 10” lists, as those of us who live here know.  You just can’t beat the views, outdoor activities, relative low cost of living, sense of community and small business opportunities. Here are four recent rankings:

 

• The National Association of Realtors (NAR) ranked Colorado Springs among the top 10 metropolitan areas predicted to outperform the nation for at least the next 3-5 years.

 

• The Federal Housing Finance Agency (FHFA) ranked Colorado Springs 9^th in the U.S. for home price appreciation.

 

• NAR ranked Colorado Springs 5^th in the 20 Hottest Midwest Housing Markets in October 2019.

 

• Realtor.com ranked Colorado Springs 7^th in the Top 10 Housing Markets Positioned for Growth.

 

And just last month, Colorado Springs was ranked #13 on the prestigious New York Times’ “52 Places to Visit in 2020” list.  The Springs is the third highest ranked U.S. place among seven stateside locations included on this global list.  We earned this accolade thanks in part to being “the gateway to alpine vacationlands, the impending opening of the U.S. Olympic & Paralympic Museum, the soon to come zero-energy Pikes Peak Summit Complex and the flourishing culinary scene”. 

Our home appreciation is among the best in the nation and this is in part due to the lack of available homes for sale.  We are not alone in this trend, as there is also a national shortage of available homes.  The reasons are many and include the still historically low interest rates, the increasing rental rates, millennials finally deciding it’s time for home ownership, and folks staying in their present homes for considerably longer than in the past.  

New home starts are up locally, as you might imagine.  This has become a viable choice for a number of my buyers due to the lack of existing homes for sale.  Fortunately, I have a good relationship with a number of local builders and that has been a blessing for my clients.  I help them with site and home selection, as well as assist in finding the best lender for their individual needs.  And, this is provided at no additional cost to them. It’s obviously an invaluable service I can provide by helping navigate clients through the new home purchase waters.  I might mention that due to the rising cost of lumber and other materials, new homes are going to keep increasing in price, so if that’s on your horizon, NOW would be a great time to start the conversation.

Did I mention that I’m not called “Mr. Negotiator” for nothing?  This comes in handy for my clients not only when they are buying or selling an existing home, but also when looking to purchase new construction.

Speaking of negotiations, it’s so much more important these days to have a seasoned, knowledgeable real estate professional on your team.  My 47 plus years in the local arena, along with my investment banking background, has afforded me the opportunity to work in every type of cycle and to find the way to make all your residential real estate dreams come true.  I invest the time to find out your realistic wants, needs and budget requirements long before the search begins.  That way, when you find what’s right for you, we can make an offer quickly based on actual facts.  These days of multiple and over list price offers does not give you much time to make a decision. 

In fact, some of my clients, after losing a home or two of their choice, have made an offer on a home based on the listing and without ever having set foot in the home.  Unfortunately, that’s the reality today when we have only 1,190 homes available in all price ranges.  In the not so distant past, we would have almost 5,000.  You do the math.  It’s tough out there, but fortunately you’ve got a secret weapon—me.  And with me in your corner, you’ve got a far better than average chance of achieving your residential real estate goals.

If you’ve even considered the possibility of selling in order to trade up, now is a great time.  With so few homes for sale, yours would certainly get more than a few viewings and would likely sell quickly.  It might be necessary to lease your home back from the buyers if possible, in order to make your move, but you are likely to get top dollar for your present home.  You might even have more home equity than you’d expect in order to compensate for paying more for your next home.  With today’s low interest rates, that move could possibly translate to a monthly payment that’s less than you might anticipate.

However—you won’t know any of that until you give me a call.  We can sit down and take all of your personal information into consideration and see if a trade up home can become a reality for you.  Just give me a call at 593.1000 or email me at Harry@HarrySalzman.com and let’s get the ball rolling.  

And now for statistics…

 

JANUARY 2020 

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

Here are some highlights from the January 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 28.  For condo/townhomes is was 22.  

The sales price/list price for single family/patio homes was 99.9% and for condo/townhomes  was 100.2%. 

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 January 2020 to January 2019 for All Homes in PPAR:                       

                        Single Family/Patio Homes:

·       New Listings were 1,333, Up 6.6%

·       Number of Sales were 916, Up 1.6%

·       Average Sales Price was $375,516, Up 9.2%

·       Median Sales Price was $336,795, Up 11.0%

·       Total Active Listings are 1,190, Down 26.4%

·       Months Supply is 1.3, Down 17.0%

 

Condo/Townhomes:

·       New Listings were 200, Up 17.0% 

·       Number of Sales were 136, Down 4.2%

·       Average Sales Price was $268,866, Up 20.0%

·       Median Sales Price was $242,500, Up 18.6%

·       Total Active Listings are 126, Down 11.9%

·       Months Supply is 0.9, Up 2.8%

 

JANUARY 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 0.2%
• Median Sales Price for All Properties were Up 10.5%
• Active Listings on All Properties were Down 30.8%

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:

 

 

A 2020 ECONOMIC OUTLOOK ON real estate FROM THE NATIONAL ASSOCIATION OF REALTORS (NAR) 

RealtorMag, 1.16.20

 

Lawrence Yun, chief economist for NAR is predicting that a recession is unlikely this year.  According to him, “We expect 2020 will be a year of slower growth but not a recession year.  However, an all-out trade war would lead to an economic downturn in nearly every country, including the U.S.”

Here is the rationale behind his prediction…

1. Unemployment Stays Low … Phase 1 of the Trade Agreement with China takes pressure off industries that were feeling the effects of threatened tariffs.

 

2. MORTGAGE RATES TO SUSTAIN HOUSING DEMAND … Fed unlikely to raise rates in 2020 and given the existing conditions, home sales—existing and new homes combined—are expected to increase by a little over 4%, from 6 million in 2019 to 6.3 million in 2020.

 

 

3. MODEST IMPROVEMENT IN HOUSING SUPPLY …  Housing supply expected to improve this year, but the new supply still will not meet the demand that will be created in 2020 by new household formation, estimated at 1.2 million, and demolished or obsolete housing, estimated at about 450,000.

 

4. COMMERICAL … Bright Outlook for Multifamily and Industrial Properties.  Investors are expected to pay a premium for multifamily, industrial and warehouse properties because of low rental vacancy rates and the sustained demand for ecommerce sales. Low rental vacancy rates mean higher demand for apartments, especially more affordable ones to help the high rental rate burden for many.

 

 

UCCS ECONOMIC FORUM DASHBOARD

UCCS Economic Forum, College of Business, Updated 1.24.20

Here’s a look at the economic picture from a different perspective.  As always, I like to share with you the updated Dashboard from the UCCS Economic Forum.  You can click here to see both the National and Local economic “big picture”.

 

housing market’S “CHOKEPOINT” SHOULD BE FEATURED IN PRESIDENTIAL DEBATES

Housing Wire, 1.13.20

The lack of new supply has become the housing market’s “chokepoint”, driving costs of living higher, and should be at the forefront of the 2020 election debates, according to Lawrence Yun, Chief Economist for NAR.

Instead, there has barely been a mention, other than when former Democratic candidate Julian Castro made an issue about housing NOT being an issue. 

Yun said that the number of single-family homes for sale dipped to 1.45 million in November 2019, the lowest level for that month in a data series that goes back to 1982.  In the intervening years, the U.S. has added 96.5 million people.

“We have an acute housing shortage,” Yun said.  “Consequently, people’s rents and home prices are rising faster than income growth and have been for years.  This issue should be at the forefront of election debates.”

While some candidates have proposed plans to make public colleges and universities free, Yun suggested candidates look into ways to boost employment in construction.  

“No one has discussed ideas for making training in the construction industries free,” Yun said.  “There’s an acute shortage of workers, and the cost would be much less than college tuition.”

The housing shortage and subsequent rise in prices is an issue for us all one way or another and one we might consider addressing with our Congresspeople and Senators.