Real Estate Information Archive

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

MORTGAGE RATES GOING UP – HOME PRICES GOING UP – BETTER BUY NOW !!!

Markets react quickly to economic events. Several recent events have demonstrated just how quickly these reactions can take place.

The Health Care Reform Bill which was signed last week, combined with already bloated federal spending, has already triggered an adjustment in mortgage rates. On Thursday, 30 year mortgage money rates increased by ¼% and on Friday, the rate went up another 1/8%, as the mortgage market adjusted for “a higher cost of capital”.

Another factor that will influence mortgage rates is the elimination of Mortgage Backed Securities (MBS). These securities will no longer be available after March 31, 2010. This will eliminate a major source of funding for home mortgages. Obviously, this will raise interest rates even further.

This upward trend in rates will be accelerated by the inflation that is kicking in daily. Experts predict that we will really begin to feel the price rise by the third quarter of this year.

The bottom line is that, if you buy a home today, either as a personal residence, or as an investment property, you should see a rise in the value of you investment before the end of the year. Your mortgage rate today will be lower than you will be able to obtain later this year. Your equity and the value of your investment will both go up by the end of 2010. Call us today, to explore these factors and to see how we might help you enhance your financial situation.  

NEWS FLASH – TECHNOLOGY AND THE real estate INDUSTRY JUST GOT MARRIED

The latest example of how technology is changing every aspect of our personal and professional lives is the announcement from the National Association of Realtors that they will soon introduce Realtors Property Resource, a web-based property data project which will give Realtors detailed information on more than 140 million properties across the country. This program cost NAR over $25 million to develop and will revolutionize the way real estate is sold in the future. We were excited to meet with one of the creators of this innovative, aggressive program at the recent Leading Real Estate Companies of the World national conference in Las Vegas.

RPR will enable Realtors to share with their clients such things as expandable map views, neighborhood walk-through views, value comparisons (for both listed and non-listed homes), a property’s sales, listing, tax and value history and will even adjust projected values based on improvements or planned improvements, and the improvement costs involved are based upon local, not national cost estimates.

Finally, RPR creates a multi-page, comprehensive, professional report on a property, which can be sent to the prospective Buyer and/or Seller as a PDF, or, as an email.

So, what does this wonderful new tool mean to Realtors? First of all, it will enable every agent in the US to offer their clients more information than has ever been available in the past. But, more importantly, because all agents will now be able to offer the same information to their clients, RPR will highlight the fact that the difference between mediocre agents and outstanding agents will be measured by their ability to negotiate the best deal for their clients. The bottom line for Buyers and Sellers: Look for the best negotiator you can find.

Realtors Property Report is presently being beta tested in selected areas, but it is not too late for Realtor input. Jeff Young, Senior Vice President of operations states that there are still tremendous opportunities for input from NAR stakeholders, including members. Nationwide release of the program is scheduled for  this Fall. To see a 28 minute demo video of this exciting property data project, visit http://blog.narrpr.com.

QUESTION:    WHAT DO HUNDAI, FORD, GM, JET BLUE, CARNIVAL CRUISE LINE AND SEARS HAVE IN COMMON WITH SALZMAN real estate SERVICES, LTD ?

ANSWER:   They all offer Job Loss Protection programs. The reason they offer these powerful programs is because many potential Buyers find this added level of comfort motivating. And it’s no wonder. As Pete Flint of Trulia.com points out, “Today, the number one cause of foreclosure is unemployment and there are now fifteen million Americans out of work”. The result of this unfortunate fact is that, as CNBC reports, “53% of potential Buyers are skittish, thus not currently willing to enter the marketplace”.

As we have explained in the past, our Job Loss Protection Program is a part of the HELP Program, which operates as a non-profit organization helping Americans avoid foreclosure should they fall victim to the current shifting job market. When foreclosure happens, the Buyers lose not only their homes, but their hard-earned equity, as well. Helping Buyers purchase with an added level of protection helps not only the Buyer, but also helps their surrounding community. We have chosen to become certified in this program and to offer it to our Buyers to demonstrate our commitment to looking out for our clients’ and our communities’ best interests.

The Job Loss Protection Program is available in all 50 states and will pay up to $2000 per month of the Buyer’s mortgage payment, for six months, should the owner lose his/her job. The cost of the program is only $500, paid by the Seller. And, considering the marketing advantage that the program offers to the Seller and the peace of mind it offers to the Buyer, that’s money-well-spent.

Some people have asked us if this program doesn’t introduce a negative in a market where we are trying to instill confidence. Our response is to ask whether that same concern should apply to offering Home Warranties, or Title Insurance. Imagine the Buyer who is faced with foreclosure because of a loss of employment, who discovers that, even though they qualified for the program, they were not even offered the opportunity to enroll. For us not to offer this program to prospective Buyers because we were worried that it might be perceived as a negative would be like refusing to talk about the elephant in the living room. Just because we don’t address it doesn’t mean that it is not on the minds of every Buyer in America who has access to newspapers, TV or the Internet.

And, we should point out that, in this competitive market, the Job Loss Protection Program offers Sellers a wonderful sales advantage over the other Sellers in their neighborhoods.

If you would like to learn more about the Job Loss Protection Program, please give us a call.

SELLERS ……HOW DO YOU COMPETE WITH FORECLOSURES??

If you’re selling your home in today’s market, you’re probably facing the toughest competition anywhere: FORECLOSED PROPERTIES.

How can you compete against a bank that’s desperate to sell their foreclosures? Here’s how (Thanks to relocation.com)

1. Know your enemy.  Because banks are so eager to sell off their foreclosures, they are creating a market price that is artificially low. Appraisers don’t care if the house next to yours was sold as a foreclosure…”a comp is a comp”. The result is that, when “comparables” are listed, the list includes these foreclosures and they drag down the projected price of your home. The best advice is, if possible, wait until your neighboring foreclosure homes are sold and off the market, or, resign yourself to lowering your price to a level that can compete against these turkeys. 
2. Keep it neat. Be sure your home is always presentable. Foreclosures are usually neglected and do not show very well.  
3. Prepare your home for showing. Consider hiring a staging company to prepare your home for showing. They will probably recommend such things as repainting rooms in neutral colors, removing family pictures, etc.  The bank foreclosures in your neighborhood will probably look like what somebody else’s family thought was “cool”.
4. Get real about pricing. Select a real estate agent who knows the market and who can advise you about realistic pricing and who can negotiate on your behalf. Be flexible and willing to consider all offers. Don’t take low offers personally. Yes, it’s “your home”, but, to a prospective Buyer, it’s just another house.

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

An angel appears at a Congressman’s weekly staff meeting and tells the Congressman that in return for his unselfish and exemplary behavior, God will reward him with his choice of infinite wealth, wisdom, or good looks. Without hesitation, the Congressman selects infinite wisdom. "Done!" says the angel, and disappears in a cloud of smoke and a bolt of lightning.

Now, the entire staff turns toward the congressman, who sits surrounded by a faint halo of light. One of his staff whispers, "Now that you have this great gift, what wise thing do you have to tell us?"

The Congressman sighs and says, "I should have taken the money."

QUOTE OF THE WEEK

W. C. Fields said this:

“You can fool some of the people, all of the time….and you can fool all of the people, some of the time…….But, if you play your cards right, that’s good enough”

FEATURED LISTING Clifton

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

THE WALL STREET JOURNAL REPORTS “GOOD NEWS” – HOUSING STARTS ARE DOWN

The Commerce Department reports that the pace of new-home construction fell roughly 5% in February to 563,000 units at a seasonally adjusted rate. Strangely enough, the Wall Street Journal reports this in an upbeat manner, since the fact that housing starts are down is good news for anyone concerned about the bloated housing market.

The pace of home building already has fallen sharply, to a low of 488,000 units last April from a peak of nearly 2.3 million in mid-2006. That has helped cut excess inventory of new homes, which has fallen to its lowest level since 1971.

Despite this reduction in new-starts, experts say more thinning is needed. While new homes for sale shrank to 234,000 in January, this is dwarfed by the 3.25 million existing homes also on the market. Added to this in an additional 5 million properties estimated to be in the late stages of delinquency or the early stages of foreclosure. Little wonder that, according to their own trade association, builders’ confidence sank to a level of 15, from a level of 17 the previous month. Their confidence has been below the 50 level since April 2006.

There are a variety of government programs that have been introduced to keep all of the foreclosed properties from hitting the market all at once. Government loan-modification and foreclosure-prevention programs as well as bank-approved short sales should help clear the market gradually.

It is far too early to say that housing is ready to rebound and, until that happens, it looks like it would be better for everyone if builders aren’t feeding the glut. Sorry, fellas ! 

INTEREST RATES VS. INFLATION …IT’S A BALANCING ACT

The Federal Reserve, must strike a balance between stimulating the economy and encouraging inflation. If the Fed raises rates too soon or too aggressively, it could undermine the recovery. If it waits too long, it could fuel inflation.

Last Tuesday, the Federal Reserve announced that it would not raise interest rates in the near future, which probably means several more months. They will also end, as planned, one of its main supports for the US economy – purchases of $1.25 trillion of mortgage-backed securities – allowing a nascent economic recovery to stand with less government support. These purchases helped drive up the value of these securities and maintained existing mortgage interest rates at the lowest level in over 40 years.

Mortgage rates are not expected to rise immediately as a result of the Feds decision to stop buying mortgage-backed securities, according to Scott Simon, a managing director at Pacific Investment Management Company, a big mortgage securities investor. He stated, “Private investors, who stepped aside when the Fed jumped into the market, are ready to return. It is not as though credit is all of a sudden going to become much more difficult to get. The big problem for the housing market is unemployment”.

Keep in mind, however, that, until we know what entities are going to step forward and start buying the mortgage-backed securities that the government has been purchasing, interest rates could start creeping up.

John Lonski, chief economist at Moody’s Investor Service says he isn’t expecting the Fed to move until private-sector job-growth is tracking above 100,000 a month for three months. Even if such job growth resumes, the Fed is clearly focused on getting the economy somewhat closer to “maximum employment”,- which before the Great Recession meant a jobless rate of roughly 5% - before it feels comfortable raising rates. The risk is that the Fed loses control of stable prices as a result of postponing an increase in rates.

The bottom line to all of this is – Right now, while inventories are high, and prices and rates are low, you will never find all of these competing influences working this hard in your favor, again. Better buy that house right now !!!!

 LAST CALL FOR FEDERAL TAX CREDIT

 Attention, all prospective homeowners !!! If you plan to buy a home anytime in the near future, keep in mind that, in order to obtain the Federal Tax Credit for homebuyers, you must be under contract by the end of April and must close by June 30, 2010. You will really kick yourself, if you let these deadlines pass.

FOR real estate AGENTS, THE FUTURE IS CLEAR – OFFER MORE INFORMATION TO CLIENTS, WORK HARDER FOR SMALLER COMMISSIONS, AND LEARN TO NEGOTIATE

The Inman News, a website dedicated to helping Realtors prepare for the future, featured an article titled, “real estate Darwinism”, March, 2010. The article lists some of the realities that will shape the future of the Real Estate market and predicts that the agents who survive and lead us out of this current mess are going to be those most willing to change. They will share three key attributes: they will be the most competent in their craft, utilize all available technology and be the most dedicated to customer service. Externally, technology will continue to drive industry change. Internally, change will come in the form of   technology and reduced commissions. Some of the predictions in the article were:

•  Online sources for information will enable customers to learn everything about specific properties before they even talk to an agent. We are almost there now.
• In order to justify a fair commission, agents will have to be transaction and negotiation experts to add value to the transaction
• There will be a shift back to the local and regional broker
• The brokerage office of the future will have far fewer agents, each handling many more transactions (Already, board memberships are falling in most areas. NAR membership is almost back down to 2004 levels).
• Independent contractor status will begin to evolve into employee status, with transaction bonuses

The article points out that these changes are market-driven and Realtors are facing the Darwinian reality that they can change, or be left behind. In 1975, a $1 million producer won awards and could feed a family. Today, they still get the award, but are barely making a living. These agents will cease to exist: the part-time agent will generally not fit in. You can see this evolution at work today in the growing number of “teams” working within brokers.

The article concludes by pointing out that all “free” markets move to an equilibrium of efficiency based on supply and demand, but the real estate industry has not yet made that adjustment. However, it appears that agents will eventually evolve into account managers with standard work schedules and quotas.

FEBRUARY SALES TAX REVENUES WERE UP

On March 16, 2010, The Gazette reported that in February, Colorado Springs sales tax collections rose 4.74% compared with those of February 2009. Sales tax collections fund more than half the city’s annual budget for general services such as police and fire protection, parks and roads.

Categories of goods that produced the greatest increase in sales taxes were furniture, appliances and electronics, up 17.76%; utilities, up 8.4%; department and discount stores, up 7.09%.

Decreases were posted by auto repairs and leases, down 11.02% and building materials, down 7.93% from the year before. This ties in with our other story about the decrease in home-building.

COUNTY PROJECTIONS SHOW THAT OUR AREA CONTINUES TO GROW

Prospective home owners and investors will be interested in the following chart from our County Government Planning Dept. As you can see, it shows that our area is one of the few parts of the country that is looking at continued growth through the foreseeable future.

THANK YOU, AGAIN, TO OUR GREAT CLIENTS

At the recent conference in Las Vegas, we were very pleased to be awarded the Platinum Producer Award for 2009 by the sponsoring organization, Leading real estate Companies of the World. It goes without saying that we are well aware the award was the result, not of our efforts, but of our clients’ loyalty and support, and we want to take this opportunity to thank all of you for your friendship and for your business. Stop by the office to see your award and we’ll buy you a cup of coffee.

Thanks, folks. 

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

Someone asked us what was meant by the expression, “Welfare Mentality”. We thought the following joke explains it perfectly:

Two old friends meet passing on the street one day. But one looked forlorn, and almost on the verge of tears. His friend asked, "What had the world done to you, my old friend?"

The sad fellow said, "Let me tell you. Three weeks ago, an uncle died and left me forty thousand dollars."

Friend: "That's not bad."

"But you see, two weeks ago, a cousin I never even knew kicked the bucket, and left me eighty-five thousand free and clear."

Friend: "Sounds like you should be grateful..."

"You don't understand!" he interrupted. "Last week my great-aunt passed away. I inherited almost a quarter of a million."

Now his friend was really confused. "Then, how come you look so glum?"

"This week... nothing!"

Margaret Thatcher said it best …”The problem with Socialism is that, eventually, you run out of other peoples’ money”

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

HOLD ON TO YOUR HATS - FHA IS TIGHTENING UP

We just returned from the annual week-long convention of the Leading real estate Companies of the World. There were over 780 Real Estate companies represented at the conference (23 from outside the U.S.). As always, the meeting featured a lot of fascinating seminars and trade show booths and we enjoyed having the opportunity to meet and greet Realtors from all over the country and the world. We were also very pleased to hear from many of the attendees that they are receiving and enjoying our eNewsletter. We’ll try to keep it interesting for you.

This year, most Realtors at the Leading RE conference were asking, “How long will it be before we see sales going up?”. In many parts of the country, the market is extremely soft. In Detroit, for example, the Realtor’s commission sometimes turns out to be higher than the actual selling price of the property. Fortunately for us, Colorado Springs is a real “Magnet Market”, and we received a lot of inquiries and interest in our local market from other conference attendees. However, although we have not suffered the steep declines that many of our fellow Realtors have seen, we still have a long way to go.

For us, the highlight of the conference this year was the presentation by Dave Stevens, the newly-appointed head of the Federal Housing Administration. Prior to his appointment, Dave had been with Long and Foster Realtors, the largest real estate company in the world. (They have over 10,000 Realtors working with them, primarily along the East coast.) So, Dave knows and understands the problems that the industry now faces.

In his capacity as head of the FHA, he meets regularly with Congressmen, Senators, Cabinet Members and the members of the Press and they all ask the same question, “Who created the present mess?”. Dave’s regular response is, “My neighbor. ….The one who bought the house he couldn’t afford”.

Some of the pertinent facts about the market that Dave brought out in his presentation were:

90% of all residential loans originated in the first quarter of 2009 were sold to either Freddy Mac or Fannie Mae

• 80% of insured loans in 2009 were to first-time Buyers (So it looks like the tax credits to these Buyers did work)
• FHA did a “terrible job” of monitoring lenders. Within the past 6 months, FHA has suspended the licenses of 359 lenders …That’s more than all of the suspensions since the year 2000.
• The cost of FHA insurance to Borrowers has been increased by 35%. This represents an increase in closing costs and monthly charges. The increase was to make up for the costs of foreclosures and short sales and to bring FHA’s charges into proper balance as a federal agency.
• When Seller concessions of up-to 6% were allowed, over 50% of the loans became delinquent. For that reason, FHA reduced the maximum allowable concessions to 3%.
• As of January 1, 2010, every loan officer must be licensed.

In conclusion, Dave Stevens said he sees himself as a “Professional Temporary” employee of the FHA. He emphasized his Faith and Trust in the real estate industry and pointed out that a market as large as the Real Estate market moves very slowly, but it is turning around.

THE WALL STREET JOURNAL SAYS, “IT’S TIME TO BUY YOUR NEW HOME”

In the Saturday, March 13, 2010 issue of the Wall Street Journal, two separate articles emphasized the need for speed in making your decision about buying your new home.  The first article emphasized that mortgage interest rates will soon rise. Predictions about the size of the increase vary, depending upon which expert your read, but all of the experts say a rate increase is coming. What will the increase mean to a typical Buyer. Well, for example, if a couple has a combined pretax income of $100,000 a year and debt obligations (excluding mortgage) of $500 a month, they would qualify for a $590,000 house, at the present interest rate of 5%. However, if rates go up to 6% (as some experts predict, that same couple would only qualify for a $540,000 mortgage.

In a separate article, the Journal writer explains that, in order to qualify for the soon-to-end Buyers-federal-tax-credit, you must be under contract by April 30 and must close by June 30. As we have mentioned before, it does not look like this tax credit will be renewed.

The WSJ writer also points out that appraisals are now a challenge for prospective Buyers. With home prices still falling in some areas of the country, you might find that the property appraises below the purchase price. That means the Buyer must come up with more down-payment, or, the Seller must lower the purchase price to keep the deal alive.

To get the best advertised rates, you must have a credit score of at-least 720, out of a possible 850. According to Fannie Mae, the big mortgage buyer, every 20 point drop in your credit score below 720 results in a steeper origination fee.

All of these factors point to the fact that these costs and rates are rising and, when inflation hits, will rise even more quickly.

There are many more factors that will affect the cost of your home purchase, but the two conclusions that are obvious are: 1. The home you look at today will cost you more tomorrow and, you will need some expert advice about all of these factors, so, give us a call right now.   

IN LAS VEGAS, I WAS DEFINITELY A ‘LICENSED’ REALTOR

As a means of publicizing and promoting our local community, and as a conversation starter at the Leading RE conference in Las Vegas, I decided to break the ice with the attendees by wearing my Colorado auto license on my chest, in addition to the traditional name tag. My Colorado license plate reads, RELOC8 and it really helped to start-up conversations with a lot of people. It seems that everyone is interested in Colorado and the Realtors were also intrigued by the idea of advertising their services on their license plates. If fact, the license plate even got us a couple of leads. We got inquiries from two employees of the Wynne Hotel, the host hotel for the conference, who wanted to talk with us about relocating to our area and a from a Realtor from Italy who loves skiing and is thinking about moving over here. Hey, this “Thinking Outside of the Box” stuff really works !!.    

LET’S MAKE A DEAL !

One other pleasant surprise for us at the Leading RE conference was the high level of interest from other Realtors in the “Certified Negotiation Expert” program that we recently completed. They were fascinated in the details about how negotiating skills can be learned and used to benefit both the Buyer and the Seller in a typical transaction. It goes without saying that, in every transaction, the Buyer and Seller both have the same goal, namely, the completion of the sale. However, that sale cannot be consummated until both parties are satisfied about such details as completion dates, down payment, terms, seller-provided furnishings, etc. Unfortunately, failure to resolve conflicts about such details often causes the deal to fall apart. That’s where negotiating skills on the part of the Realtor are so important. Identifying the goals of both parties, explaining options, suggesting solutions should all be part of the Realtor’s duties. That’s why we are so pleased to have recently completed the CNE certification process. It enables us to help both Buyer and Seller achieve their respective goals.        

And, please remember, I would be honored to serve as your Broker and negotiate on your behalf 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

In honor of St. Patrick’s Day, we offer the following classic:

An Irishman walks into a bar and orders three glasses of Guiness, drinking them one at a time. Noticing this odd ritual, the bartender explains that beer goes flat when poured and informs the man his beer would be much fresher if he ordered one glass at a time.

The Irishman explains he began this custom with his two brothers, who have moved to America and Australia, respectively. This is their way of remembering all the time they spent drinking together.

The man becomes a regular at the pub, well-known for always ordering three beers at once. One day he walks in and orders only two beers. Assuming the worst, a hush falls among other patrons.

When the Irishman returns to the bar to order his second round, the bartender quietly offers his condolences. The man looks confused for a moment, and then explains, "No, my brothers are both just fine, but I have given up beer for Lent."

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

DO YOU HAVE MONEY TO BURN ?

If you are not under contract by April 30, 2010 to buy your new home, you will be throwing away your chance to cash in on the federal tax credit of between $8000 and $6500. That’s when this program expires (and it doesn’t look like it will be renewed). Also, consider this: New FHA rules go into effect on April 5, 2010 and they will make it even more expensive for you to buy your home after that date.

Finally, just one more piece of evidence that inflation will begin to hit the housing market within the next two quarters (and thus, will increase the price you will have to pay for your new home) ….Builders use lots of copper in the construction process (wiring, piping, etc.) and earthquake-stricken Chile is the 3rd largest producer of copper in the world. In our last issue, we pointed out that a lumber shortage is beginning to affect building prices. Now it appears that a shortage of copper will also begin to be a factor for builders. Don’t be a Mugwump. Call us.

IT’S HARD TO CLIMB INTO THE LIFEBOAT WHILE YOU’RE STILL UNDER WATER

The Wall Street Journal (March 3, 2010) featured an interesting article explaining why the federal programs designed to help troubled homeowners stay in their homes have had such limited success. In theory, homeowners should be lined up to take advantage of these programs. Around 37% of all borrowers with 30-year conforming fixed-rate mortgages have mortgage rates of 6% or higher. Many of these homeowners could refinance at today’s rates and reduce their rates by a full percentage point, thus saving, on-average, $2,600 every year. Yet, through December, only 188,000 borrowers who owe between 80% and 105% of the value of their homes had refinanced.

Some mortgage bankers say that higher fees by lenders have undermined the effort to encourage refinancing. For example, a borrower with 20% down and a 695 credit score seeking to refinance must pay fees equal to 1% of the loan amount. These fees rise for borrowers with weaker credit scores, higher loan-to-value ratios or other risk factors. These fees “have defeated the Fed’s purchase program”, according to Alan Boyce, a mortgage-securities-market veteran. These loan fees are “partly responsible for why there’s been no refinancing boom.”

Furthermore, many homeowners are so far underwater that refinancing is out of the question. For example, John Albright, a retired Navy officer in Manassas, VA,, hasn’t been  able to refinance because the value of his home has plunged. He figures the market-value of his home is now around $275,000, but he and his wife owe more than $500,000 on their mortgage. When he tried to refinance, his lender told him he would have to come up with about $200,000 to pay down his mortgage before refinancing would be possible. Falling home values are one of the biggest factors raising borrowers refinancing costs. Furthermore, borrowers with less than 20% equity may have to pay for mortgage insurance.

As a result of all of these factors, borrowers who are now refinancing tend to be those who need it least. They are people who have very good credit “and the savings really aren’t going very far down the credit spectrum”, according to Michael Fratantoni, the head of research and economics for the MBA.

The Obama administration is planning to extend for a year a program launched last April to help homeowners with little or no equity to refinance. Last September, it was even expanded to include borrowers who owe up to 125% of their home value, but fewer than 2,000 borrowers have used the program through December. The program, which had been set to expire this June, was called “a failure” last week by analysts at Barclays Capital.

The bottom line is that, unless something changes, it looks like troubled homeowners will just have to keep paddling as fast as they can for a while.  

HOMEBUYERS EXPECT THEIR AGENTS TO BE GOOD NEGOTIATORS

In 2009, the National Association of Realtors published the results of their survey of home Buyers and Sellers.  The comments from the survey respondents reinforced our long-held opinion that that the negotiating skills of agents are a huge factor in bringing real estate transactions to successful and satisfying conclusions. Some of the survey responses indicated that:

• 99% of Buyers believe negotiation skills are “Very Important”. or, “Somewhat Important” in their real estate agent
• Only 42% of all Buyers felt that their agent negotiated “better contract terms” on their behalf
• Only 36% of all Buyers felt that their agents “negotiated a better price”
• Buyers gave “Negotiating Skills” the lowest satisfaction rating of all agent skills and qualities.

Just a few of the areas of a typical real estate transaction in which negotiating skills become a factor are:

v  Establishing current market value/price

v  Listing details – What stays and what goes, allowances, etc.

v  Amount of earnest money required

v  Choices in financing

v  Establishing and coordinating performance dates

v  Inspection, replacement, repairs of problems

v  Special add-ons such as Warranties, Job-Loss-Protection, etc.

With these facts as background, we were excited to hear that the real estate Negotiation Institute had scheduled their Certification Program for Real Estate Professionals this month in Colorado. This would mark the first time this program has been available in our state. Because we have always been convinced that negotiating on behalf of our clients is one of our major responsibilities, we immediately enrolled in this important CNE program and are pleased to announce that we have successfully completed the training and have been awarded the coveted “Certified Negotiation Expert” designation by the CNE. We are especially proud of this achievement, since only 5000 of the 1.1 million Realtors nationwide have been awarded this certification.  

And, please remember, I would be honored to use my negotiating skills 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. 

COLORADO SPRINGS IS WIRED

Forbes.com has ranked Colorado Springs as the nation’s sixth-most-wired city in its annual ranking, ahead of technology hotbeds such as Boston and San Jose, California. Our first appearance on the list was triggered as a result of higher broadband usage than in previous years – 69%. Or, just 2% less than top-ranked Raleigh, NC., and eighth among all cities. We rank 11^th in the number of companies providing broadband access with 15, and also 11^th in Wi-Fi hot spots. How about that !!!

LATEST STATISTICS LOOKING GOOD !!

On Friday, March 5, 2010, The Gazette reported that “home sales and prices rose again last month in the Pikes Peak region, continuing a string of better showings for the local resale market”. Single family/patio home sales in February were 504, compared with 464 in February of 2009. New listings were 1,389, compared with 1,312 in 2009. It was the eighth straight month that year-over-year sales have improved, after nearly three years of declines. For the first two months of the year, sales totaled 1,035, a 12.9% increase over the same period in 2009. It looks like we are well into a rebound from the recession.

LAS VEGAS, HERE WE COME !!

This week, we will be attending the annual meeting of “Leading real estate Companies of the World”, in Las Vegas, NV. This is a great opportunity for us to keep current on the latest information about Real Estate and relocation and it helps us serve our clients more effectively. Many of our readers will also be there, so we look forward to seeing you all there. 

JOKE OF THE WEEK

With Springtime just around the corner, we thought it might be time for a couple of jokes about robins from Aesop’s fables. The first one warns us about complacency and the second one urges us to control our appetites.

1      Two robins were sitting in a tree. "I'm really hungry", said the first one. "Me, too," said the second. "Let's fly down and find some lunch." They flew to the ground and found a nice plot of plowed ground full of worms. They ate and ate and ate and ate until they could eat no more. "I'm so full I don't think I can fly back up to the tree", said the first robin. "Me, either. Let's just lay here and bask in the warm sun", said the second. They plopped down, basking in the sun. No sooner had they fallen asleep than a big fat tomcat sneaked up and gobbled them up. As he sat washing his face after his meal, he thought, "I just love baskin' robins."

2      Two robins were sitting in a tree. "I'm really hungry", said the first one. "Me, too," said the second.    "Let's fly down and find some lunch." They flew to the ground and, in the middle of the road, they found some road apples (Our urban readers will have to find a horseowner to translate that expression for them). They ate and ate and ate and ate until they could eat no more. Then, they flew into the front yard of the adjacent lot and perched on the handle of the homeowner’s lawnmower to rest. Unfortunately, they had gorged themselves so much that, when they tried to fly off, they both had heart attacks and fell to the ground, dead. The moral to the story is, “ Don’t fly off the handle, if you are full of road apples”.

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

INFLATION IS COMING !! ......... INFLATION IS COMING !!

Last week, we pointed out how the costs of building materials and rising credit card fees were indicators of oncoming inflation. So, it’s no surprise that, this week, the U.S. Commerce Department reported that the U.S. economy grew at the rate of 5.9% in the fourth quarter of 2009. This “good” news was reported in the Wall Street Journal on February 27, 2010. Now, growth is good, but, the rule of thumb that is generally accepted is that quarterly growth over 2-2 ½% in any quarter means that inflation will increase within the following two quarters. That’s the ‘down” side of the good news. The NAR data on the 2009 fourth quarter median prices for homes referenced below, shows that Colorado Springs home prices are going up, which will only add to the inflationary pressure. Better buy now !!!

JOB LOSS PROTECTION PROGRAM JUST GOT BETTER

Last Summer, Salzman real estate Services, Ltd. became the only Colorado Springs source for the Job-Loss-Protection Program for Buyers. We are still the only local Realtor to offer this revolutionary program which has been so well-received by local HomeBuyers. The way the program works is that, within two years after closing, if a covered Homebuyer gets laid off from his or her job and is receiving unemployment benefits from their state, the JLP program will make their mortgage payments for them, for up-to six months.

When we introduced this program in 2009, the maximum monthly payment covered by this program was $1800. However, this past week, we were notified by the program sponsor that they had raised the maximum monthly payment to $2000. This increase should make the program even more appealing to prospective HomeBuyers. We are also pleased to announce that, through our network of relocation specialists, we are able to offer this plan to our out-of-state clients, as well.

The Job-Loss-Protection Program is funded by the Rainy Day Foundation, a non-profit organization, based in Washington, DC, and is marketed by Creative Alliances.

CAN MORTGAGE MONEY GET ANY CHEAPER ? 

Last week, the great home mortgage rates that are now available were dramatically demonstrated to one of our clients who is moving into the area from Kansas. To their delight, we were able to find them a 30 year mortgage, with a rate of only 4 7/8%. However, after shopping around, we were also able to find them a 15 year mortgage, without any origination fees or discount points, with a rate of 4 3/8%. Just that small difference in rates will enable them to pay off their home in half the time they had planned for. The moral of the story …These rates can’t last forever …Don’t be a “Mugwump”…. Buy now.

LOOKING FOR WORK? CHECK THIS OUT

Every year, we attend the Annual real estate Cyberspace Convention. Since 2002, this event has regularly featured exciting ideas and tips about technology and marketing for Real Estate professionals. This year, they also featured a website designed to assist our clients and prospective clients who might be seeking employment. If any of our readers fit into that category, here’s a site that might be of help. www.currentlocaljobs.com. This site claims to have found 4064 jobs in the Colorado Springs area. Good Hunting !! 

NAR QUARTERLY REPORT

Call us to receive the Quarterly report of housing prices from the National Association of Realtors.

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

It's the first day of school and the teacher thought she'd get to know the kids by asking them their name and what their father does for a living.

The first little girl says: "My name is Mary and my daddy is a postman."

The next little boy says: "I'm Andy and my Dad is a mechanic."

Then one little boy says: "My name is Jimmy and my father is a loser who prefers to lay on the couch all day and watch TV, while Mom goes off to work to support us."

The teacher gasps and quickly changes the subject, but later in the schoolyard the teacher approaches Jimmy privately and asks if it was really true what he had said about his father.

He blushed and said, "I'm sorry but my dad plays hockey for Team USA, and I was just too embarrassed to say so."