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HAPPY ANNIVERSARY TO ME !!!

by Harry Salzman

Date:  Mar 28, 2011

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

 HAPPY ANNIVERSARY TO ME !!!

On a personal note, this week marks my 39th anniversary of selling homes in Colorado Springs. I mention this to clarify the rumor that I sold General Palmer his first home here 39 years ago, in 1972, I sold a house in Security for $13,450. Since then our local real estate market has seen many ups and downs, such as:

  • The 1973 decision by the City Council to discontinue all gas taps. That unfortunate decision killed the city's progress dead in its tracks and it took a long time for the city to recover. It was a dramatic demonstration of the kinds of problems that can be caused by electing officials with no appreciation for jobs, capitalism and what "free-market' means.
  • The creation of the Economic Development Council in the late 70's and the real growth that it generated.
  • The good news in the late 70s-early 80s was the appreciation of home values of over 12%. The bad news was the growth of the interest rate to 18%. (Thank you, Jimmy Carter).
  • The Savings and Loan financing mess which drove the government to shut down the S&L industry and caused a flood of foreclosures, similar to what is happening today in real estate. The result was a dismal, local Real Estate market in 1988-90.
  • The local high-tech boom which brought in good, high-paying jobs and a wonderful real estate market, beginning around 1992-2005, when we reached our highest sales peak, with 13,124 local sales in a single year.
  • Along the way, PPAR introduced the Multiple-Listing Service which provides us with invaluable statistics for assisting our clients in their decision-making process. Based upon those statistics, we see that the value of local homes between 1985 and February, 2011 went from $84,414 to $235,684, for an average appreciation of 5.8% per year.  No matter how you slice it, that's a great investment.

We have enjoyed working with our friends and clients during these 39 years and we have also enjoyed helping the companies, both local and national, that have used our relocation services.

As we begin our next 39 years. we look forward to assisting you as you sell, buy or invest in real estate. We look forward to negotiating on your behalf as you build your financial future and invest in our great community.

And yes, General Palmer was a great guy to do business with.

Call us at 598-3200, or, toll free at 800 677-MOVE 

SPRINGS NAMED "ONE OF THE BEST RETIREMENT PLACES" BY FORBES THE GAZETTE March 25, 2011 2:59 PM

Forbes magazine names Colorado Springs one of its best places to retire in its April 11 issue. The magazine cited our affordable housing, safe streets and low cost of living as plusses to retiring here, but said the winter might be a drawback and said the area was "a bit light on doctors." The Springs shared the honor with 15 other cities, including Albuquerque, N.M., and Salt Lake City, Utah. Forbes said taxes and cost of living heavily influenced the list, although factors such as health care, climate and crime also played a role.

 

SOME THINGS TO LOOK FORWARD TO THIS YEAR IN COLORADO SPRINGS

To those in our community in search of the often hard-to-find "good news," a coalition of community organizations have committed to pull together some positive, relevant and, in some cases, inspiring news about things that are happening in our community on a quarterly basis.  This "News Worth Sharing" publication is provided to those in our community who want more information about all the great things going on and getting done right here in the Pikes Peak Region from a business or civic perspective.  

Some of the things we can look forward to and take pride in during 2011 are:

  1. Police and Fire recruiting academies
  2. Saturday bus services and additional paratransit services restored
  3. Residential streetlights turned back on
  4. Trash cans and park maintenance services returned to neighborhood parks and medians maintained
  5. Maintaining Park, Recreation and Cultural Services including the Therapeutic Recreation program, Center, Deerfield, Meadows Community Center, North Cheyenne Cañon Visitor Centers, Rock Ledge Ranch, and operating the Julie Penrose and Uncle Wilbur fountains next summer
  6. The Space Foundation's move to new headquarters & three new primary employers for the region. This also means that the annual National Space Symposium remains here, taking place this year from April 11 - 14 at The Broadmoor.
  7. The International University Sports Federation (FISU) chooses Colorado Springs as the host city for its 2012 World University Championships in Softball (August 2-11) and Boxing (August 2-10), with both sports held at UCCS. The events are part of a schedule of 33 winter and summer World University Championships to be conducted in 2012, the largest number in FISU history.
  8. UCCS will be the first university to deliver for-credit college courses via Telepresence. UCCS and computer giant Cisco held a worldwide press conference on January 19, 2011 to share this new way of delivering education.
  9. Colorado Springs' cost of living, utility bills lower than national average. Living in Colorado Springs costs 7.2 percent less than the national average, according to the 2010 ACCRA Cost of Living Index. Utility bills are 13 percent lower in Colorado Springs compared to the national average. 

Finally, coming in at #10, is an announcement from the city's budget office that 2010 revenues exceeded the budget by $9.5 million and the excess money will be spent fixing potholes.

That's one less bump in the road you will have to worry about !!!

So, smile !!! You live in a great community !!!

 

STUDY: COLORADO ADDED FEW JOBS IN LAST DECADE EVEN AS LABOR FORCE GREW

A study by CSU economists Martin Shields and Michael Marturana was released Tuesday by Colorado State University. The report highlighted jobs that posted the biggest gains and biggest losses in employment during the decade and since 2007.

The study painted a grim picture of the state economy from 2000 to 2010, as two recessions wiped away growth across much of the state. Colorado added few jobs during the decade, even as the labor force added more than 300,000 people and the working- age population soared by 575,000.

"The decade has been a really difficult one in Colorado. There was substantial growth in the labor force but not in jobs," the report said. "In many ways, Colorado has lost a decade."

  • The Western Slope and mountains saw the biggest gain in earnings per worker, but the region still trailed the Front Range by more than $10,000 per worker in 2010 and the Eastern Plains by almost $4,000.
  • The Front Range lost 5,000 jobs during the decade.
  • Educational services, including teachers and employees of private colleges, topped both lists of gainers, followed by ambulatory health care services.
  • Specialty trade contractors - the plumbers, electricians and other subcontractors who helped fuel Colorado's building boom - lost the most jobs.

"The construction trades have taken the biggest hit," Shields said. "We're not Arizona, Nevada, California or Florida, where the real-estate markets really melted down, but you can see that it had a significant impact on the state."

Other highlights from the study:

  •  Colorado's per-capita income ranking, which had climbed from 19th-highest nationally in 1990 to seventh in 2000, dropped to 16th by 2009.
  • Since the start of the recession in December 2007, the state lost more than 126,000 jobs.
  • The most jobs were lost - 134,000 - between the third quarter of 2007 and the second quarter of 2010.

P.S. This report emphasizes the urgency of electing a Mayor and City Council that will concentrate on bringing jobs to our area. Your vote is important to the future of our city.

 

INVESTORS DOMINATE DISTRESS SALES

Investor activity dominated a sluggish distress sale market in February as homebuyers are increasingly frustrated by difficulties getting financing, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

For many homebuyers, mortgage financing is becoming an increasing obstacle. This was highlighted in the latest HousingPulse tracking survey as cash transactions set a new record, accounting for a huge 33.7% of purchases in February. The increase in cash purchases paralleled a rise in investor activity. Investors accounted for 23.5 percent of home purchases in February, up from 19.9% percent in only two months. Investors were obviously driven by the availability of high-quality homes at low prices and the availability of low mortgage-interest rates.

Other factors that persuaded Investors to buy now were the large pool of high-quality renters (former Homeowners) and the upward trend in rents.  

In what could normally be viewed as a positive development, the HousingPulse Distressed Property Index or DPI, a key indicator of the health of the housing market, fell from 49.6 percent in January to 47.3 percent in February. This marked the first decline in the DPI seen since last fall.

The bright side of our present market is that Colorado Springs looks better than almost any other area of the country.

Call us at 598-3200, or, toll free at 800 677-MOVE

 

FEBRUARY EXISTING-HOME SALES DECLINE FOLLOWING SUSTAINED GAINS Washington, DC, March 21, 2011

Existing-home sales fell in February following three straight monthly increases, according to the National Association of REALTORS®. Existing-home sales are 2.8 percent below the 5.02 million pace in February 2010.

Newly constructed homes command higher prices than existing homes. Newer appliances, newer building materials and such, plus the new homes being generally larger-sized, account for most of the difference.

Historically the premium of new home price above existing home price has been about 15 percent. However, recent price data say that the premium has risen to 45 percent. That is, the median price of new homes in January was $230,600 versus the median price of existing homes of $157,900.

The much lower existing home price is partly due to distressed home properties on the market that are selling for much less than the replacement cost. Still, the exceptionally large price differential between new and existing homes may imply that either new home prices have to fall or that there is good growth potential for existing home prices.

The bright side, however, is that existing-home sales remain 26.4 percent above the cyclical low last July, according to Lawrence Yun, NAR chief economist.

 

SELLERS' MARKET A YEAR AWAY, SURVEY SAYS

Daily real estate News  |  March 25, 2011  

While buyer's mostly control the real estate market now, Americans say that will soon change. More than 61 percent of Americans agree that a seller's market is at least a year away, according to the latest Spending and Saving Tracker survey from American Express.

More than two in five Americans--or 41 percent--acknowledge that currently it's a buyer's market in real estate.

Forty-three percent of home owners said they are confident they would receive their asking price when selling their home, but 47 percent said they are not confident or "not at all" confident.

Yet, nearly 40 percent said they would not be willing to settle for less than their asking price.

To make a home more competitive in the marketplace, 44 percent of home owners surveyed said that to sell their home they would include appliances and 28 percent would consider offering to make requested repairs or allowing an allotment for repairs.

If you are considering selling your home, we can assist you in establishing a price and negotiating the deal. As the data shows, it is a very competitive Buyers' market and Sellers need the best, most professional assistance available.

Call us at 598-3200, or, toll free at 800 677-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 latest podcast. ..And, if you would like to learn more about our Job Loss Protection Program, please contact us. 

 

LATEST STATISTICS

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

 

JOKE OF THE WEEK

  

 

The Answer is Jobs, Jobs, Jobs

by Harry Salzman

March 21, 2011

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

 

THE ANSWER IS "JOBS, JOBS, JOBS"

.THE QUESTION IS WHICH CANDIDATES WILL HELP CREATE THEM

The March 15, 2011 issue of the Gazette reported that Colorado Springs ranked second-worst in the nation for its rising unemployment rate last year, according to the Brookings Institution's Quarterly MetroMonitor report. The only city with a worse job performance last year was Las Vegas.

The good news was that Colorado Springs economic output appears to be rebounding strongly from the recession. The bad news is that we are just not creating any jobs in the process.

How are new jobs created? Well, the process must start with a business-friendly environment and that's a function of the business philosophy of the governing body .in our case, the city council and the mayor.

That's why it's so important that we elect a business-friendly Mayor and Council in the upcoming elections.

For that reason, we felt compelled to advise our readers of the recommendations of the business leaders in our community relating to the upcoming elections. The Pikes Peak Association of Realtors, The Chamber of Commerce and the Homebuilders Association all agree that our community deserves visionary leadership for the future and they have recommended the following candidates for your consideration:

  • Steve Bach, Mayor
  • Lisa Czelatdko, City Council District 3
  • Jan Martin, City Council at Large
  • Tim Leigh, City Council At Large
  • Merv Bennett, City Council At Large

The Pikes Peak Association of Realtors is also recommending

  • Angela Dougan, City Council District 2
  • Brandy Williams, City Council At Large

We live in the greatest city in the U.S. Let's keep it that way by creating jobs for our young people, so they don't have to move away to make a living.

 

GOOD NEWS !!!  Big industrial deal in Springs

The Gazette, March, 2011 -- Midnight Sun Capital LLC, in a venture with two Native American Alaskan investment groups, paid $11.175 million for a T-Mobile call center in Colorado Springs, the largest industrial building transaction so far this year in the Pikes Peak region.

The 69,287-square-foot building at 556 Chapel Hills Drive was sold to 556 Chapel Hills LLC, the entity created by Colorado Springs-based Midnight Sun to buy it.

Midnight Sun is a  private equity company headed by Colorado Springs attorney and native Hawaiian, Louie V. Larimer. Larimer is the president and CEO.

The T- Mobile building purchase was a collaborative venture between Larimer and two Alaska Native American corporations -  Cal Corp. and the Aleut Corp. Brady O'Donnell of Johnson Capital brokered the financing, which was provided by Wells Fargo.

The group's acquisition strategy is focused on investing in core Class A income-producing properties.

Founded in 2009, during its first year, Midnight Sun Capital's portfolio accumulated $10 million in assets.  It plans call for an additional $15 million to $20 million in property acquisitions annually through 2012.

 

MORTGAGE RATES FALL AS INVESTORS REACT TO THE CRISIS IN JAPAN

Mortgage rates fell as investors wary of the crisis in Japan sought out U.S. bonds, which lowered yields, according to Freddie Mac's weekly survey of mortgage rates.

Mortgage rates generally track yields, which move inversely to Treasury prices. Rates had climbed early this year, hitting the highest level since April last month after slumping most of last year as Treasurys declined amid economic uncertainty.

"With the crisis in Japan, investors rushed to buy the security of U.S. Treasury bonds, which lowered its yields and other interest rates as well," said Freddie Chief Economist Frank Nothaft.

The 30-year fixed-rate mortgage averaged 4.76% in the week ended Thursday, down from the prior week's 4.88% average and from 4.96% a year earlier. Rates on 15-year fixed-rate mortgages fell to 3.97% from 4.15% in the previous week and 4.33% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.57%, down from the prior week's 3.73% and 4.09% a year earlier. One-year Treasury-indexed ARMs fell to 3.17% from 3.21% and 4.12%, respectively.

To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point and the others required an average 0.6 point.

Call us to get the latest rate information available.

 

COLORADO SPRINGS FORECLOSURE FILINGS FALL BY 23.4%

.AND FORECLOSURE SALES FALL BY 37.4%

Colorado statewide foreclosures in February fell by 18 percent from a year earlier, according to the most recent RealtyTrac report.

Even better, our local new filings (288) fell 23.4% from a year earlier and sales of foreclosed properties in February (142) dropped 37.4% from February, 2010. These declines in both foreclosure filings and foreclosure sales are good indicators that our local market is stabilizing.

In fact, the Mortgage Bankers Association shows Colorado faring much better than the overall nation, in terms of delinquent loans, an early indicator of foreclosures. The MBA's National Delinquency Survey shows only 5.9 percent of mortgage loans in Colorado were past due in the fourth quarter of 2010, compared with an 8.9 percent rate nationally. The MBA report showed that Colorado had the eighth-lowest rate of loan delinquency in the fourth quarter and ranked 10th for the lowest rate of serious delinquency, which the MBA defines as loans 90 days or more past due and loans in foreclosure.

The bottom line is that foreclosures are quickly becoming less of a factor in our local market.

 

HOUSING STARTS AND PERMITS STALL IN FEBRUARY

RISMEDIA, March 19, 2011-Nationwide housing starts and issuance of permits for new housing construction both posted disappointing declines in February 2011 as concerns about a growing number of factors caused builders to pull back on production of new homes, according to newly released figures from the U.S. Commerce Department. Total housing starts declined 22.5% from January to a seasonally adjusted annual rate of 479,000 units, the second-slowest pace on record. Equally disconcerting, total permit issuance for new homes fell 8.2% to a record low pace of 517,000 units in February.

National declines in permit issuance were also widespread in February. The single-family sector posted a 9.3% drop to 382,000 units while the multifamily sector posted a 4.9% drop to 135,000 units, and regional declines amounted to 27.8% in the Northeast, 5.4% in the Midwest, 1.4% in the South and 13.6% in the West.

Locally, Single-family homebuilding permits totaled 65 in February, a 60.8% drop from the 166 permits issued during February of 2010. This was the lowest number of permits issued for any month since February 2009, when 53 were issued.

In spite of these discouraging statistics, however, NAHB Chairman Bob Nielsen, is quoted as saying, "Builders are cautiously looking forward to the spring home buying season in hopes that improving economic conditions will help bring more buyers to the table, even though the same factors that have been weighing down the market are still very much in play.

 

FIRST-TIME HOMEBUYERS PREPARE FOR BEST BUYER'S MARKET IN RECENT HISTORY

RISMEDIA, March 18, 2011-While affordable housing prices, ample inventories, and historically low interest rates signal 'buyer's market' for investors or move-up buyers in many U.S. markets, inexperienced first-time buyers may wonder if the time is right to make a move into real estate.

To help first-time buyers know if they're ready to look for the home of their dreams as we head into this year's home-buying season, here's a 'reality checklist' designed to help them decide if the time is right.

Get your financial house in order
Make sure your credit is in good shape and repair any damage previously done. Know your credit score: thirty-five percent (35%) of successful buyers recently reported they didn't know their credit score when they went house shopping, according to a national survey fielded for MortgageMatch.com. Having enough money set aside for a down payment is a key component to making sure you are ready to purchase a home. Also, it's important to not put all of your money in the down payment as other fees or unexpected expenses often arise after closing.

Don't fall in love with a house you can't buy
Find out how much you can afford: establishing your purchase power upfront, including how much money will be required for a down payment and closing costs, is a must for first-time buyers.

Learn the lingo
Since first-time buyers are new to the market and will finance a significant portion of their purchase, it's important to get familiar with the processes and terminology associated with home-buying. Here are a few key terms from MortgageMatch.com to add to your vocabulary:

  • Bait rate: Misleading mortgages with low rate promises and no contingencies generally for those with extraordinary credit. Rates are based on: credit, debt-to-income and loan-to-value ratios, the size and type of loan, property location and the day you lock your rate, etc. The loan isn't locked until the application is accepted. By then, it may be too late to find a better rate from another lender.
  • Basis point: A term used in the mortgage industry which simply means 1/100th of 1%.
  • Closing costs: The fees required to process and close your loan. They're a cash obligation running from 3-5% of the purchase price. Motivated sellers might pay a portion of these costs.
  • GFE: The Good Faith Estimate (GFE) is a document explaining all costs involved in getting a loan.

While national rates on 30-year-fixed-rates mortgages have risen slightly this year, they are still at historic lows not seen since 1980, according to Freddie Mac. If you want to land the best mortgage that fits your needs, start early and give us a call. We can make the process smoother and easier to understand.

If now isn't the right time, prepare for your future purchase
If now isn't the right time to buy a home, make a plan with a target date for when you expect to be ready. Improving your credit, paying down debt, stabilizing your work history and calculating exactly how much you can afford, are the best ways to prepare for your future home purchase. It's also important to refrain from making any new large purchases or applying for new credit.

Call us, if you would like to discuss any of the details regarding your home purchase.

HOWEVER, THERE SOME NEW RULES FOR FIRST-TIME HOMEBUYERS

Wall Street Journal  Mar, 20, 2011

Without a house to sell, first-time home buyers have had a field day in the depressed housing market. That is, until recently. New rules, regulations and policies have changed the landscape, making buying that new home harder and more expensive.

Not long ago, first-time buyers accounted for 40% of home sales. Now they're down to 29% and falling, experts say, as first-time buyers confront a steady accumulation of rising fees, costs, and rates. This month, fees on most new mortgages will rise by up to 0.50%. In April, fees on small-down-payment mortgages, a first-time buyer favorite, will spike. Meanwhile, more lenders are requiring larger down payments, and new proposals from the Obama administration call for mortgages to become more expensive and limited in size.

But taken in total, all this reform means the window of opportunity for first-time buyers may be closing. Still, home prices have bottomed out, mortgages are still cheap and interest rates are still low.

So, if you are considering buying your first home, here are some new rules for first-time home buyers.

New rule: Put more money down.

Not because you'll have to -- it's still possible to make a down payment of less than 5% -- but because you want to. Insurance fees on the government-insured mortgages that require just 3.5% down have doubled in seven months, to up to 1.15% (as of April). On a 30-year, $300,000 mortgage, a buyer would pay $30,000 more in fees than if he had signed up for the mortgage in September. Also, between new lender requirements and cash-flush buyers, down payments have been rising since the last half of 2010 and now average 34% of the purchase price, according to the latest data by mortgage-data firm CoreLogic.

New rule: Brace for competition.

Following the housing downturn, desperate Sellers were often eager to accept an offer - any offer. But now, first-time Buyers looking for discounted prices may be disappointed. Over the past few months, investors, international buyers, and downsizing retirees have made a noticeable impact on the market, because they're paying with cash. In January, about 32% of purchases were made with all cash, up from 26% a year ago, according to the NAR. Sellers are often more inclined to accept these offers since they don't need to wait for a lender to approve financing.

and ..Don't limit your home search

Many prospective home buyers believe if they want to get the deal of a lifetime in this market they need to focus on distressed properties, such as foreclosures or short sales, in which the lender accepts less than the mortgage amount. But, eliminating market-rate homes from your search - those sold by willing Sellers to willing buyers - isn't the wisest move.

If you are considering a short sale, the bank will probably respond very slowly. In some cases, it may not respond at all. With short sales, if you are in a hurry, you are probably going to be disappointed.

Also, there is a common misperception that distressed properties are always screaming deals. But, sometimes they are not. Frequently, a Buyer can get a better deal on a market-rate home. Distressed properties account for roughly a third of the inventory right now. Therefore, if you decide you only want to look at distressed properties, you are limiting yourself to a third of the market. And that's crazy.  That means you are ignoring two thirds of the market.

What you should be saying is that I want a house that fits my budget, fulfills my lifestyle needs and is a good value.  That way it doesn't matter whether it is a so-called "distressed" home or a home sold by an individual owner.

 

VACANT DWELLINGS REQUIRE A DIFFERENT KIND OF INSURANCE POLICY

RISMEDIA, March 19, 2011

More and more houses sit unoccupied these days, left behind by their owners in this still-tough economic climate. In 2010's fourth quarter, the Census Bureau reports 12.1% of all U.S. residences, or 18,394,000 homes, were vacant.

But even properties that aren't distressed may take a long time to sell after the owners move on. All of which makes a difference in the kind of insurance coverage such unattended houses require-coverage that isn't offered in the standard homeowners' policy.

Vacant Home Insurance Now, which offers policies in several states, says up to 80% of homeowners do not know that "the provisions of their existing homeowners' insurance policy would essentially end coverage, exposing them to catastrophic loss."

Insurers discontinue coverage on a home if it becomes unoccupied for over 30 days and no new residents have moved in. Some insurers will grant a policyholder a vacancy permit, providing it is requested before the 30 days expire. This permit continues to provide coverage against some of the standard homeowners' perils, such as fire and wind, but does not protect the house against perils such as theft, glass breakage, or water damage.

Coverage provided by a vacancy permit varies from insurance company to insurance company and from city to city, so policyholders should check with their agent or the firm's representative. Some Insurers view a vacant property as a higher liability because often no one is regularly checking it.

A vacant condo is another story, Since the master insurance policy covers such a large part of the condo, including the wall, exterior and roof, a vacant condo is probably going to put a homeowner at significantly less risk.

A homeowner needs to have a specific plan in place to have the dwelling checked periodically by someone..a neighbor or relative, as well as the agent.

We have been advising our clients about the need for 'vacancy insurance' for many years, so, call us to discuss this issue, if you have any concerns about your vacant home.

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 please contact us. 

 

LATEST STATISTICS

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

 

JOKES OF THE WEEK

Because these are very short jokes, we decided to give you two, for the price of one, this week.

Unemployment Line

Manny and Fred lived in Brooklyn and worked together. Both were laid off, so they went to the unemployment office. When asked his occupation, Manny answered, "Panty Stitcher. I sew elastic onto ladies' cotton panties."

The clerk looked up Panty Stitcher. Finding it classified as "unskilled labor," she gave him $300 a week unemployment pay.

Fred was asked his occupation. "Diesel Fitter," he replied. Since diesel fitter was a skilled job, the clerk gave Fred $600 a week.

When Manny found out he was furious. He stormed back into the office to find out why his friend and coworker was collecting double his pay.

The clerk explained, "Panty stitchers are unskilled and diesel fitters are skilled labor"

"What skill?!" yelled Manny. "I sew the elastic on the panties, Fred puts them over his head and says: 'Yeah, diesel fitter.'"

 

Birthday Lake Crossing

Turning 21, a boy from Duluth Minnesota named Lars had heard stories of an amazing family tradition. It seems that his father, grandfather and great grand- father, on their 21st Birthday, had all been able to walk to the boat club across the lake for their first legal drink.

So when Lars' 21st Birthday came around, he and his pal Sven took a boat out to the middle of the lake. Lars stepped out of the boat and nearly drowned. Sven managed to pull him to safety. Furious and confused, Lars went to see his grandmother.

"Grandma," he asked, "it's my 21st birthday, so why can't I walk across the lake like my father, his father, and his father before him?"

Granny looked into Lars' eyes and said, "Because your father, grandfather and great-grandfather were born in January; you were born in July!"

MORTGAGE DEDUCTION UNDER RENEWED SCRUTINY

by Harry Salzman

March 14, 2011

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKETPodcast: March 8, 2011

 

MORTGAGE DEDUCTION UNDER RENEWED SCRUTINY

If you own a home, you get a tax deduction on your mortgage interest. But some people now argue that the policy should be changed because:

  • It doesn’t really encourage homeownership.
  • The government shouldn’t be encouraging homeownership anyway.
  • The government can’t keep giving out such a big tax break when it’s facing huge deficits.
  • The policy isn’t giving enough of a tax break to lower-income families.

Despite these objections, it will be difficult to revamp a tax deduction that’s been in place for nearly a century. Housing experts are strongly against reducing or eliminating the deduction because they believe it would discourage home-buying, particularly given the weakness of the housing market. Both Congress and the White House would have to approve any change to the tax code, but they could be reluctant to take on such a controversial issue before the 2012 presidential election.

The mortgage-interest deduction works like this: Say a home buyer makes $50,000 a year, and paid $5,000 last year in interest on his mortgage. If he claimed his mortgage-interest deduction, the IRS would tax only $45,000 of his income (or less if he claimed other deductions).

The IRS also lets people claim deductions on interest they pay on a second home or a home equity loan. The home mortgages must be $1 million or less, and the home equity loans must be $100,000 or less.

The mortgage-interest deduction is probably most helpful for people who bought their homes recently. That’s because when you first buy a home, a large portion of each monthly payment goes toward paying down the interest. As you live in your home longer, the portion of your monthly payment that goes toward interest will shrink, and the portion that goes toward principal will increase, at least in most traditional home loans.

The Obama administration’s proposed 2012 budget would leave the deduction in place, but places some limits on the deductions claimed by families making more than $250,000 a year.

The Office of Management and Budget (OMB), which helps the White House develop its budget, estimates that the mortgage-interest deduction cost the government $79 billion in forgone taxes in 2010. That could rise to as much as $144 billion in 2016, the OMB estimates. While some observers argue that the government should get rid of the deduction to help plug its budget gap, others say homeowners should be allowed to keep their money.

The president’s deficit commission advocates changing the tax deduction to a tax credit. It would also cap eligible mortgages at $500,000 instead of $1 million, and eliminate any tax benefits for second homes and home equity loans.

After the deficit commission’s report was released in December, the real estate industry fired back. NAR cited a recent survey of almost 3,000 homeowners and renters.

Nearly three-fourths of the homeowners and two-thirds of the renters said the mortgage-interest deduction was “extremely” or “very” important.

The purpose of the mortgage-interest deduction is to encourage people to buy homes, with the idea that homeowners take better care of their property, contribute more to their neighborhoods and can build wealth.

But some argue that the government shouldn’t subsidize homeownership. The government pushed homeownership hard in the 1990s and early 2000s, and some of the borrowers who got homes couldn’t really afford them. Most experts agree that this was one of the causes of the financial meltdown.

On the other end of the spectrum, some people support changing the deduction because they say it doesn’t actually fulfill its stated purpose, to increase home buying. Australia, Canada and England don’t give out tax deductions on mortgage interest, and they have higher homeownership rates than the U.S.

In fact, some say that the mortgage-interest deduction may actually discourage homeownership. In tightly regulated, land-scarce metro areas, the tax deduction can raise demand for homes but not supply, making it more expensive for people to buy houses.

Furthermore, although the mortgage-interest deduction tends to disproportionately benefit families making $100,000 or more each year, largely because they tend to have the biggest houses and the biggest house payments, middle- and lower-income homeowners tend to actually get a better deal by claiming the standard deduction instead of itemizing their deductions to claim the mortgage-interest deduction.

Some say they doubt that the mortgage-interest deduction is ever a deciding factor when a family chooses to buy a home, though it may encourage some families to buy bigger homes.

The basic question some experts ask is, “Should the government be subsidizing homeownership?”

 

NAR “HOME OWNERSHIP MATTERS BUS TOUR” BEGINS IN CHICAGO

The day before the National Association of REALTORS® started its Home Ownership Matters Bus Tour at the Chicago Flower & Garden Show, REALTORS® from the Chicago area gathered at NAR headquarters for a town hall-style meeting. The topic: the state of home ownership in America today.

2011 NAR President-Elect Moe Veissi, in Chicago for the kick-off of the tour, encouraged REALTORS® to start talking with peers and clients about how much the U.S. economy is affected by home ownership.  ”We need to spread the word,” he said. Key messages he asked members to share:

  • The housing market makes up $4 trillion, or about 15 percent, of the total U.S. gross domestic product.
  • The housing industry has led the way out of six of the last eight U.S. recessions.
  • For every two homes sold in the United States, one job is created.

One of NAR’s key priorities is preventing any chipping away of the mortgage interest deduction as a means of helping to reduce the federal deficit. The push comes at a time when editorial boards of major newspapers such as The New York Times and The Washington Post have come out in favor of eliminating or reducing this tax benefit, which has been in place for almost 100 years.”Home owners already pay a majority of the taxes in this country,” Veissi said.

“The deduction didn’t cause the deficit problem,” Veissi said. “Rather than taking away the deduction, the government needs to look internally at how it can streamline its operations. Small businesses have been making these type of cuts for years.”

Also top of mind for members was the need to fix the financial system and free up capital for qualified buyers. Veissi said. “If we had more financing options, we would sell more real estate today,”

Veissi said NAR strongly favors reforming — rather than eliminating — the government-sponsored enterprises (GSE) that enable the secondary mortgage market to operate. “The GSEs are broken but they’re fixable,” Veissi said. “Without GSEs, we’ll lose the system that helped many of our parents and grandparents become homeowners. If you privatize the secondary mortgage market, you eliminate the concept of the 30-year mortgage,” he said.

The Home Ownership Matters bus tour is an opportunity for NAR to engage with American consumers on these issues.  The bus travels from Chicago to Denver to Portland during the month of March, with a few intermediate stops along the way. The tour’s message is simple but powerful: Home ownership matters to individuals, to communities, and to the country. We hope to see a lot of you as we travel from city to city!

 

FORECLOSURES POST BIGGEST DROP ON RECORD  
 

The number of foreclosure notices filed nationally in February declined 14 percent compared with January, and foreclosure notices dropped 27 percent compared to last year at this time. The number of all U.S. homes in some stage of foreclosure fell drastically last month, reaching a 36-month low. Initial default notices, scheduled foreclosure auctions, and homes repossessed by lenders all dropped in February, RealtyTrac, a foreclosure tracking site, says. This marks the largest year-over-year decline that RealtyTrac has ever recorded.

In El Paso County, foreclosure forecasts dropped to 4200 in 2011, the lowest level in 5 years. Again, the Pikes Peak area outperformed most of the rest of the country.

Nationally, Lenders repossessed 64,643 homes in February, a 17 percent drop from January.

On the national level, initial default notices dropped 16 percent from January — and 41 percent from a year ago. What’s more, foreclosure auctions dropped 10 percent from last month and 21 percent from February of last year, RealtyTrac said.

Rick Sharga, a senior vice president at RealtyTrac, says the real estate market isn’t out of the clear quite yet. He expects foreclosure activity to likely spike again as banks resolve foreclosure paperwork issues.

About 2 million households are in foreclosure proceedings. In addition, about 5 million borrowers are at least two months behind on their mortgage payments.


POLL FINDS 'HALF-FULL' HOUSING OUTLOOK

 The Wall Street Journal (03/10/11)

A new survey of potential home buyers and sellers reveals that 68 percent of respondents believe the housing market and property values will pick up in the next year or two.

Just released, the poll also shows that 86 percent of Americans agree real estate is a good investment despite volatility in recent years; the finding suggests that some buyers may be more optimistic while sellers are wary.

Nonetheless, the survey reports that 78 percent of those who sold homes in the last year were satisfied.

  

 

30-YEAR MORTGAGE RATES HOLD STEADY THIS WEEK
Daily real estate News  |  March 11, 2011  

National Mortgage rates continued to hold steady below 5 percent this week, according to Freddie Mac’s weekly mortgage market survey. Interest rates for 30-year fixed-rate mortgages have averaged at or below 5 percent in every week but one this year, contributing to record home affordability.

Here are how our local rates fared for the week:

- 30-year fixed-rate mortgages: averaged 4.78 percent.


- 15-year fixed-rate mortgages: averaged 4.75 percent.


- 5-year adjustable-rate mortgages: averaged 3.75 percent   


It’s a great time to buy !! Don’t let this opportunity get away !!!

 

THERE HAVE BEEN SOME KEY CHANGES IN AMERICANS’ ATTITUDES TOWARD HOUSING AND THE ECONOMY

RISMEDIA, March 1, 2011—Fannie Mae’s latest national housing survey finds that Americans are more confident about the stability of home prices than they were at the beginning of 2010, even though they lack confidence in the strength of the economy:

The Fannie Mae Fourth Quarter National Housing Survey, conducted between October 2010 and December 2010, polled homeowners and renters to assess their confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system and overall confidence in the economy.

Seventy-eight percent of respondents believe housing prices will hold steady or increase over the next twelve months, up from 73% in January 2010; but almost two-thirds still believe the economy is on the wrong track, virtually unchanged (61%) from the beginning of last year.

Additional survey highlights include:

Fifty-nine percent of Generation Y (ages 18-34) believes buying a home has a lot of potential as an investment, even though this age group suffered the steepest decline in homeownership during the housing crisis—from nearly forty-four percent when home prices peaked, to under forty percent in 2009.

During 2010, survey respondents increasingly expressed a strong belief that it will be harder for future generations to obtain a mortgage. Three-quarters of those surveyed (74%) believe it will be harder to get a mortgage in the future, up from just over two-thirds at the beginning of 2010.

  

BEFORE YOU LIST YOUR HOME FOR SALE

Today's market presents some very unique opportunities for buyers. With affordability near record highs and interest rates near record lows, many homeowners are making the decision to move up or on. Here a few simple tips to take into consideration when listing your home for sale.

1. Curb Appeal: Buyers make snap judgments about each home they view. These judgments are drawn largely from first impressions. Be sure your home has impressive curb appeal. Fresh flowers and mulched beds, along with trimmed hedges and grass are a must. If your home needs a fresh coat of paint, now is the time. And even if your paint or siding is in good repair, consider painting your front door an eye-catching color, such as red or blue. Remember, most Buyers make up their minds about your house within the first 15 seconds.

2. Inspection: An inspection can make or break a deal. Even after they've fallen in love with your house, a buyer may decide foundation issues or faulty electrical are too much of a headache. The benefits of having an inspection done prior to listing can be two-fold. First, your buyers will be aware of what repairs are needed before they make an offer. Second, you can choose to address these repairs and therefore have them removed from the scenario altogether.

3. Repairs: Buyers are turned off by long lists of needed repairs. This goes double for time-consuming and costly repairs, such as roof work or foundation issues. By identifying and addressing the issues, you may be able to yourself save time and money in the long run.

4. Organize Paperwork: There may be contracts or warranties you have on your home that will transfer to a new buyer. These can include appliances, builder warranties, and even contracts with lawn and pool companies there were paid up-front.

5. Talk to your lender: How much new home can you afford? Are you able to sell your home for enough to cover the remaining balance of the loan? These are important questions to get answered prior to listing!

6. Prepare for showings: Staging a home for sale has multiple different layers. First, you should clean and organize. Have carpets cleaned and repaint dirty or loudly colored walls. Next, remove large and bulky furniture, as these make rooms appear smaller. And finally, take down personal pictures, trophies, and memorabilia that could distract the buyer from what they are actually interested in ... your house!

But, before you do anything else, be sure to contact us as your local expert. We will take care of all of these tasks, and more.

Call us at 1-800 677-MOVE, or 598-3200

 

PRICING A HOME TO SELL

The most popular real estate slogan has always been "location, location, location." Well, folks, there's a new slogan in town, and his name is "price, price, price." You can have the most fabulous Colorado Springs house, but if you are overpriced, you won't sell in today's market.

Here are a few tips to steer you in the right direction.

Comparables: What are homes like yours selling for? Comparables can be found by analyzing homes in your neighborhood, or in nearby neighborhoods, that have similar square footage, upgrades, and amenities. If a comparable home sold for $150,000, there's little chance you'll find a buyer willing to pay $180,000 for your overpriced home. You always want to be the least expensive home in the neighborhood, when it comes to selling, not the most! Everybody loves a deal. We can help you find comparable info in your neighborhood (and remember, with comparables, neighborhoods make a big difference in price).

Be Competitive: Underpricing a home is a strategy that some agents employ to garner interest and to create a bidding war through multiple offers. A well-priced home is sure to get more showings than a home that costs more than the competition. More showings mean more exposure, which ups the chances of you receiving an offer.

Lender Communication: Lenders will only allow a buyer to borrow up to the amount a home appraises for. That means if you are overpriced, even an eager buyer may hit a lending road block.

How Bad You Need to Sell: This is the real kicker. Some homeowners want to sell, but they don't need to. That means they can wait out a down market, or even wait for the "perfect" buyer. If, however, you find yourself needing to move across town, or across the state, then you will have to be more willing in today's market to compromise. And compromise is all about price when it comes to real estate.

Buyers are savvy. Technology allows them to search the local MLS, research the latest trends, and even see how your neighborhood's prices have changed over the last 30 days. They will know if your home is overpriced. It is best to error on the side of too little than too much in this numbers game. If you price your home right, however, you're sure to find a ready and willing buyer.

Again, we, as your local expert, will be able to guide you through these steps and, in fact, will do these things, and many more, to help you get your home sold.

Call us at 1-800 677-MOVE, or 598-3200

 

WHAT ARE TODAY’S BUYERS LOOKING FOR?

According to the 2010 NAR survey of the profiles of Buyers and Sellers, the following list shows the level of importance that prospective Buyers assign to the houses they are considering:

  • Price                                             18%
  • Size                                               18%
  • Condition of home                      17%
  • Distance from job                       14%
  • Size of lot                                     13% 
  • Distance from home/family          7%
  • Quality of neighborhood               7%
  • Quality of schools                         3%
  • Distance from schools                 3%

 Total                                                100%

The surprise for us ‘old-timers’ is that quality of neighborhood and schools were so far down the list. Looks like the ‘Dinks’ have taken over the market (Double-Income, No kids).

 

ARE YOU AN INVESTOR?    MAYBE YOU SHOULD BE !!

One thing that surprised us at the recent convention of Leading real estate Companies of the World, in Las Vegas was that Realtors from all over the country reported a significant rise in the number of sales to Investors.

That probably shouldn’t come as a surprise, since our present market contains all of the factors that would look good to prospective Investors …Low prices, good interest rates and a huge pool of prospective renters.

If you’re interested in exploring the possibility of acquiring an investment property, give us a call. This could be the time for starting your empire.

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

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

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

 

LATEST STATISTICS

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

 

JOKE OF THE WEEK

You have to be old enough to remember Abbott and Costello, and too old to REALLY understand computers, to fully appreciate this. For those of us who sometimes get flustered by our computers, please read on...
 
 If Bud Abbott and Lou Costello were alive today, their infamous sketch, 'Who's on First?' might have turned out something like this:

 COSTELLO CALLS TO BUY A COMPUTER FROM ABBOTT
ABBOTT:
Super Duper computer store. Can I help you?

 COSTELLO: Thanks I'm setting up an office in my den and I'm thinking about buying a computer.

 ABBOTT: Mac?

 COSTELLO: No, the name's Lou.

 ABBOTT: Your computer?

 COSTELLO: I don't own a computer. I want to buy one.

 ABBOTT: Mac?

 COSTELLO: I told you, my name's Lou.

 ABBOTT: What about Windows?

 COSTELLO: Why? Will it get stuffy in here?

 ABBOTT: Do you want a computer with Windows?

 COSTELLO: I don't know. What will I see when I look at the windows?

 ABBOTT: Wallpaper.

 COSTELLO: Never mind the windows. I need a computer and software.

 
 ABBOTT:
Software for Windows?

 COSTELLO: No. On the computer! I need something I can use to write proposals, track expenses and run my business. What do you have?

 ABBOTT: Office.

 COSTELLO: Yeah, for my office. Can you recommend anything?

 
 ABBOTT:
I just did.

 COSTELLO: You just did what?

 ABBOTT: Recommend something.

 COSTELLO: You recommended something?

 ABBOTT: Yes.

 COSTELLO: For my office?

 ABBOTT: Yes.

 COSTELLO: OK, what did you recommend for my office?

 ABBOTT: Office.

 COSTELLO: Yes, for my office!

 ABBOTT: I recommend Office with Windows.

 COSTELLO: I already have an office with windows! OK, let's just say I'm sitting at my computer and I want to type a proposal. What do I need?

 ABBOTT: Word.

 COSTELLO: What word?

 ABBOTT: Word in Office.

 COSTELLO: The only word in office is office.

 ABBOTT: The Word in Office for Windows.

 COSTELLO: Which word in office for windows?

 
 ABBOTT:
The Word you get when you click the blue 'W'.

 COSTELLO: I'm going to click your blue 'w' if you don't start with some straight answers. What about financial bookkeeping? You have anything I can track my money with?

 
 ABBOTT:
Money.

 COSTELLO: That's right. What do you have?

 ABBOTT: Money.

 COSTELLO: I need money to track my money?

 ABBOTT: It comes bundled with your computer.

 COSTELLO: What's bundled with my computer?

 
 ABBOTT:
Money.

 COSTELLO: Money comes with my computer?

 ABBOTT: Yes. No extra charge.

 COSTELLO: I get a bundle of money with my computer? How much?

 ABBOTT: One copy.

 COSTELLO: Isn't it illegal to copy money?

 
 ABBOTT:
Microsoft gave us a license to copy Money.

 COSTELLO: They can give you a license to copy money?

 ABBOTT: Why not? THEY OWN IT!

 (A few days later)
 
 ABBOTT:
Super Duper computer store. Can I help you?

 
 COSTELLO:
How do I turn my computer off?

 ABBOTT: Click on 'START'..... ........

 

March 7, 2011

HARRY'S WEEKLY UPDATE 

 

NATIONALLY, PENDING HOME SALES DECLINED IN JANUARY

Pending home sales eased moderately for the second straight month in January, but remained 20.6 percent above the cyclical low last June, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator, declined 2.8 percent to 88.9. The index is 1.5 percent below the 90.3 level in January 2010 when the tax credit stimulus was in place. If contract activity stays on its present course, there should be an 8 percent increase in total existing-home sales this year.

Lawrence Yun, NAR chief economist, points to the broader trend. “The housing market is healing with sales fluctuating at times, depending on the flow of distressed properties coming on the market,” he said. “We should not expect the recovery to be in a straight upward path — it will zig-zag at times.”

“The broad fundamentals for a housing recovery are developing,” Yun said. “Job growth, high housing affordability and rising apartment rent are conducive to bringing more buyers into the market. Some buyers may be looking to real estate as a hedge against potential future inflation.”

 

THE LOCAL PICTURE

To get a clearer picture of how our local market is doing, Click here for the latest sales and listing statistics for the Pikes Peak area.

As you might notice as you examine the statistics, our local sales figures are pretty sad. The good news is that our sales numbers are still better than most other parts of the country. The bad news, however, is that the number of local residential real estate sales in February 2011 was the lowest in many years.

The number of home sales in El Paso County in February 2011 (404 sales) was down 21.7% from February of last year. However, the statistics also show a very encouraging trend. The average and median prices of those sales were up. (Average price in Feb.2011= $235,684, for an increase of +13.6% over Feb. 2010. Median price in Feb. 2011 = $190,457, for an increase of +4.6% over Feb. 2010). In fact, our annual 2010 rise in local values (5.2%) is outstanding, when compared with other parts of the country. (The national rise in value averaged only .2%.)

The breakdown of current sales also shows a significant preference for lower-priced homes. Of the 404 homes sold in El Paso County last month, 209 were sold for under $200,000 (52%). Houses between $200,000 and $300,000 accounted for 110 sales (27%). Only 85 sales were for homes over $300,000 (21%).

This is another example of how Fort Carson’s returning soldiers help our entire local economy. (They tend to buy low-cost houses when they return from overseas). It also points out that, if you are selling in the median-to-upper price range, you had better be prepared to price very aggressively and have your house in a “ready-to-move-in” condition.

One happy side-effect of these low sales figures is that, when sales are down, interest rates also go down (Because lenders have more mortgage money available). As a result, we can currently get 4.78% mortgages, but that won’t last long. Better act now!!!

Call us.

 

MORE AMERICANS CONFIDENT ABOUT HOME OWNERSHIP

Americans are more confident about the stability of home prices than they were at the beginning of 2010, according to Fannie Mae's latest national housing survey, conducted between October 2010 and December 2010. And when it comes to home ownership, younger Americans are particularly optimistic, the survey finds.

Nearly 80 percent of all respondents, including home owners and renters surveyed, said they thought housing prices would hold steady or increase over the next 12 months--which is up from 73 percent in January 2010. In fact, survey respondents expressed more confidence over the stability of home prices than they did about the overall strength of the economy. (Sixty-one percent said the economy is heading on the wrong track.)

Young Americans, Hispanics, and African-Americans were the most positive about their views on home ownership among the general population, according to the survey. Nearly 60 percent of respondents between 18-34 years old say that buying a home offers a lot of potential as an investment. Also, more than one-third of Hispanics and African Americans say they plan to buy a home within the next three years, compared to one in four of the general population.

Most respondents to the survey continue to lack confidence in the strength of the economic recovery, and they are less optimistic about their ability to buy a home in the years ahead. This sense of uncertainty is weighing on the housing recovery today and reshaping expectations for housing for the future.”

FATE OF FORECLOSURE PROGRAMS HEADS TO A VOTE

Republicans on the House Financial Services Committee said they will push for a vote next Thursday on bills that would end four government programs that are aimed at helping prevent foreclosures.

Among the programs on the chopping block include the Home Affordable Modification Program, which was created to help struggling home owners reduce mortgage payments by offering lower interest rates and longer repayment times. The Treasury Department recently acknowledged that HAMP will fall short of meeting its original goal. Instead of preventing 3 to 4 million foreclosures as planned, it’s expected to complete only 700,000 to 800,000 loan modifications.

Other smaller programs at risk are aimed at refinancing loans, helping unemployed home owners, and aiding state and local governments in buying foreclosed properties in order to sell or rent them.

Committee chairman Rep. Spencer Bachus, R-Ala., says the foreclosure prevention programs haven’t had much impact and, in some cases, actually are doing more harm than good in helping struggling home owners.

The Obama administration argues that killing the programs will hurt some home owners.

WITHOUT FANNIE AND FREDDIE, THE 30-YEAR MORTGAGE MAY FADE AWAY

How might home buying change if the federal government shuts down the housing finance giants Fannie Mae and Freddie Mac?

If Freddie Mac and Fannie Mae were closed, homeownership in America could change greatly.

  • The 30-year fixed-rate mortgage loan, the steady favorite of American borrowers since the 1950s, could become a luxury product, housing experts on both sides of the political aisle say.
  • Interest rates would rise for most borrowers, but urban and rural residents could see sharper increases than customers in the suburbs.
  • Lenders could charge fees for popular features now taken for granted, like the ability to “lock in” an interest rate weeks or months before taking out a loan.

Life without Fannie and Freddie is the rare goal shared by both the Obama administration and House Republicans, although it will not happen soon. Congress must agree on a plan, which could take years, and then the market must be weaned slowly from dependence on the companies and the financial backing they provide.

The reasons by now are well understood. Fannie and Freddie, created to increase the availability of mortgage loans, misused the government’s support to enrich shareholders and executives by backing millions of shoddy loans. Taxpayers so far have spent more than $135 billion on the cleanup. The collapse of Fannie and Freddie took with it the pretense that the government could do so at no risk to taxpayers. Some Republicans and Democrats say the price is too high. They want the government to pull back, letting the market dictate price, terms and availability.

Hanging in the balance are the basic features of a mortgage loan: the interest rate and repayment period.

Fannie and Freddie allow people to borrow at lower rates. The key to that success is the guarantee that investors will be repaid even if borrowers default — a promise ultimately backed by taxpayers. Fannie, Freddie and other federal programs now support roughly 90 percent of new mortgage loans because lenders cannot raise money for mortgages that do not carry government guarantees.

Fannie and Freddie also allow borrowers to repay loans with fixed-interest rates over an unusually long period. A person who borrows $100,000 at 6 percent interest will pay $600 each month for 30 years, compared to $716 each month for 20 years.

Some experts say that one of the reasons that American housing finance is in such bad shape right now is the 30-year mortgage. Such loans are not available in most countries.

Fannie and Freddie also allow a wide swath of the American public to borrow money at the same interest rates and on the same terms. Borrowers who did not meet their standards were forced to pay higher interest rates to subprime lenders, but the companies essentially persuaded investors to treat a vast number of American families as if they were interchangeable.

They took messy bunches of loans, with risks as variable as snowflakes, and created securities of uniform quality, easy to buy and sell. The result was one of the most popular investment products ever created. And in its absence, experts on housing finance say that fewer borrowers would qualify for the best interest rates.

Fannie and Freddie slashed the requirements for down payments in recent years. Two-thirds of the borrowers whose loans were guaranteed by the companies from 1997 to 2005 made a down payment of less than 10 percent. But borrowers who invest less default more often. The Obama administration has said that it wants the companies to demand a minimum down payment of 10 percent.

A quirkier example is the ability to “lock in” an interest rate. Fannie and Freddie permitted lenders to make such promises at no risk because the companies had already obtained commitments from investors. In the companies’ absence, borrowers seeking rate locks may need to pay for them.

 

WINTER MONTHS CAN OFFER GREAT TIME TO SELL

Winter’s harsh weather certainly can bring a curve ball to selling, but some savvy Buyers and Sellers are finding it a good time to do business. That’s because the real estate market tends to be smaller in the winter, and buyers and sellers tend to be more serious and motivated about making a deal.

Winter can be a buyer’s market. They can usually get a better price, because there are not as many buyers in the market. Plus, buyers may be able to get quicker action on their mortgages since lenders aren’t dealing with as many applications.

If a house is on the market in the winter, the seller is usually extremely motivated. Sellers tend to be more flexible and the prices more affordable.

However, the common weather-related winter obstacles are often still there: The house often lacks curb appeal, icy sidewalks, and snowy driveways.

But, when buyers come out in rougher weather, you know they are serious and motivated.


HOWEVER, SELLERS NEED TO GET PRACTICAL ABOUT PRICE

Sellers whose homes have lingered on the market for months--or years, in some cases--are banking on this spring to turn the tide.

Foreclosures and short sales are still flooding the market, which means many sellers are still up against big inventories and some big bargains that may pull away buyers.

As such, more real estate pros say it’s time to have tough conversations with sellers about slashing their sales price of their home, particularly if it hasn’t garnered any traffic in recent months or years. After all, spring usually brings out more buyers, as home shoppers look to buy and move before the next school year.

Experts suggest sellers check out the competition by visiting open houses or viewing online virtual tours of similar homes for sale to see how the seller’s house compares in price and appearance.

Sellers have to be very realistic about what is keeping their home from selling. "Sometimes it may actually be the person in the mirror, if your expectations are not realistic. Ultimately, there is a price at which all things sell.

 

4 RED FLAGS THAT SEND BUYERS RUNNING

How you present a listing online and the words you choose to describe it may be turning off some buyers. Bankrate.com recently asked real estate professionals to weigh in on what listing red flags are turning off their buyers.

1. No photos. One red flag in many buyers' eyes is the lack of photos for a listing. There can be some legitimate reasons for few (or no) photos in a listing: The sellers want privacy, or they have valuables they don't want in the photos. But many would-be buyers--rightly or wrongly--assume that there's something wrong. Sellers should have about a dozen photos for listings and photos that match the home’s description and showcases its best features.

2. Outlandish claims. Referring to the listing as “the best property on the market” might not be a good idea. Some buyers may be turned off to begin with and some will inevitably be disappointed if the claim doesn't live up to their expectations. Instead, focus on adjectives that are flattering to the property but leave some room for interpretation.

3. Priced too low. You want to price the property competitively but pricing too low may make some buyers suspicious or attract unqualified buyers. Typically, multiple buyers will be attracted to the low asking price and eventually the sales price will climb close to market value as competing offers bid up the price. However, the strategy is not without risk in that some buyers will be alienated by a potential bidding war.

4. Listing a property “as is” in the description. That’s not a deal breaker but when you see “as is” in a listing, buyers might be cautious. Some buyers take the “as is” phrase as the "previous owners stole everything including the kitchen and bathrooms. Most contracts state 'as is' anyway, but some agents restate that in the listing, which is a disservice to their sellers.


LEADING real estate COMPANIES OF THE WORLD MEET IN LAS VEGAS

This week, we will have the opportunity to speak with relocation experts from around the world at the Leading RE national conference in Las Vegas. This organization has over 5000 offices with more than 150,000 sales associates in over 30 countries around the world. It will be a great opportunity to learn about the current real estate market worldwide. We will report to you in next week’s eNewsletter about the international trends and how they will affect our local market.

 

JOKE OF THE WEEK

The Society of Adults, a non-profit group, in an effort to reduce the level of whining that now bombards our society, has requested that parents post the following Rules of Life in the bedrooms of all of their children.

Rules of Life

 Rule 1:

Life is not fair; get used to it.

Rule 2:

The world won't care about your self-esteem.

The world will expect you to accomplish something BEFORE you feel good about yourself.

Rule 3:

You will NOT make 40 thousand dollars a year right out of high school.

You won't be a vice president with a car phone until you earn both.

 

Rule 4:

If you think your teacher is tough, wait till you get a boss.

He doesn't have tenure.

Rule 5:

Flipping burgers is not beneath your dignity.

Your grandparents had a different word for burger flipping;

they called it opportunity.

Rule 6:

If you mess up, it's not your parents' fault,

so don't whine about your mistakes.

Learn from them.

Rule 7:

Before you were born, your parents weren't as boring as they are now.

They got that way from paying your bills, cleaning your clothes,

and listening to you talk about how cool you are.

So before you save the rain forest from the parasites of your parents' generation,

try delousing the closet in your own room.

Rule 8:

Your school may have done away with winners and losers but life has not.

In some schools they have abolished failing grades.

They'll give you as many times as you want to get the right answer.

This, of course, doesn't bear the slightest resemblance to ANYTHING in real life.

Rule 9:

Life isn't divided into semesters.

You don't get summers off, and very few employers are interested in helping you find yourself. Do that on your own time.

Rule 10:

Television is NOT real life.

In real life people actually have to leave the coffee shop and go to jobs.

Rule 11:

Be nice to nerds.

Chances are you'll end up working for one.

 

Displaying blog entries 1-4 of 4

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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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