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HARRY'S BI-WEEKLY UPDATE 3.20.17

by Harry Salzman

                                                            

March 20, 2017

 

HARRY’S BI-WEEKLY UPDATE

          A Current Look at the Colorado Springs Residential real estate Market

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

SO THERE’S A “NEW NORMAL” YOU MIGHT WANT TO KNOW ABOUT…

It’s been crazy out there in real estate Land in recent months and it’s getting more so by the day.  I’ve been filling you in on some of the quick turnarounds and higher than list price sales I’ve been involved in recently, and now we have another situation that I’ve not seen in this area before.

The shortage of available listings has caused a frenzy that has led to the quick turnarounds and higher than list offers, however, appraisers have not yet prepared themselves for this.  What I mean by that is when an appraiser looks at a home for the lender in order to justify the mortgage amount, the home needs to come in at close to or above the selling price.  Since homes are selling so fast and for so much, the appraisers have no real “comparables” – the price at which other similar homes have sold for. 

What this means to all of us is that the appraised value of many homes is coming in lower than anticipated.  That affects both the buyers and the sellers—and oftentimes that is the same person who is moving to trade up.  The difference between what a person is paying for a home and what the lender is willing to lend has to come out of the buyer’s pocket.  And sellers are affected the same as they have to accept less for their home to compensate for the appraisal unless they want to go through the listing process all over again. 

This is causing frustration on both sides.  I’m hoping that somehow the appraisers quickly become more aware of what’s going on in our market and will begin valuing homes at closer to what a buyer and seller agree is a fair price rather than on what homes “used” to be worth.  Our higher median sales prices are great for us but the appraisers and lenders need to keep a better pulse on what’s happening out there.

Most potential sellers believe that waiting until spring is in their best interest and traditionally they would be correct.  NOT THIS YEAR.  Part of the “new normal” has disproved the traditional fact that buyer demand has seasonality to it.  Demand is very strong all over and the economy, job market improvement and interest rates have driven it to this point.  We shall see what happens as the rates start to rise, but I suspect the frenzy will get even worse before it settles into a more established pattern.

Now let me tell you about the local “new” construction market.  In recent weeks, I’ve had a number of clients who wanted new construction as they have the time to wait for a home to be built.  I visited a number of homebuilders for them to seek out the types of floor plans and prices that they wanted and after narrowing it down, we began our search.  When we got to the new home sites—another big surprise—a number of the lots and homes that we had wanted to consider were already under contract! 

That, folks, is exactly how quickly things are moving in the Pikes Peak real estate Market.  You will see if the following stories more of what’s happening both locally and nationally.

I realize this is a “mixed bag” of positive news shadowed by some “hiccups” but “where there’s a will there’s a way” they say and somehow I always can find a way to make things happen. 

If you’re ready to make a move or even see how this “new normal” might affect you, please give me a call sooner than later at 598.3200 or email me at Harry@HarrySalzman.com and let me put my special brand of personal service to work for YOU.

 

FEBRUARY 2017 LOCAL MARKET UPDATE AND MONTHLY INDICATORS PROVIDE RESULTS IN GREATER DETAIL

Pikes Peak REALTORS® Services Corp.,

In the recently published February 2017 Monthly Indicators and Local Market Update for El Paso and Teller Counties, new listings year-over-year were down 4.0% for the single-family/patio homes and up 19.9% for condo/townhomes. 

The median sales price increase year-over-year in all properties was up 5.5%, which is a good sign that the housing market is continuing to appreciate.  If there were more listings, more people would be moving—either selling to trade up or buying for the first time.

     The “Activity Snapshot” shows the one-year change:

  • Sold Listings for All Properties was down 8.8%
  • Median Sales Price for All Properties was up 5.5%
  • Active Listings on All Properties was down 28.9%.

You can click here to read the 16-page Monthly Indicators or click here to get specific information on the neighborhood of your choice from the 33-page Local Market Update. These reports provide greater detail than the monthly “PPAR Monthly Statistics” that I share in the first eNewletter of each month.

You can see why now is a great time to list your home.  The only drawback, as I’ve mentioned time and again, is that you need to have an idea of where you want to go because your home will likely sell much quicker than it might have in the recent past.

If you have any questions about either of these reports please give me a call. 

 

COUNTY WEBSITE NOW LIVE AND PROVIDES EXCELLENT INFORMATION

The Gazette, 3.13.17

Looking for property information and other data, including census, sales and permit numbers in El Paso County?  County Assessor Steve Schleiker has great news for you.  A new website, years in the making, is now live and can provide you will all that information and more.

While the site is an especially important resource for the real estate community, Schleiker said “it can be utilized by a number of different offices and departments in El Paso County in getting information out to our citizens.”

He is hoping it will also be a useful resource for businesses or families interested in moving to the county who are now able to look up average property values, sales growth, population data, and even the number of parks and schools in areas of their choosing by using the map’s zoom function. 

To visit the site, go to www.elpasoco.com and click on the banner link across the top of the web page.

 

COLORADO SPRINGS JOB MARKET RANKS THIRD BEST IN THE COUNTRY

The Gazette, 3.14.17

And the good news just keeps on coming.

According to a survey by staffing firm ManpowerGroup, the Colorado Springs job market ranks as the nation’s 3rd best for the second quarter 2017.

The survey indicated that 28 percent of employers surveyed were expecting to hire and none planned layoffs.  The rest anticipated no change or weren’t certain of their plans.

This is the city’s best outlook in 10 years.  The outlook level in the second quarter 2017 is more than twice as strong as the first quarter’s 12 percent and up from 16 percent a year earlier.

 

3 QUESTIONS TO ASK IF YOU WANT TO BUY YOUR DREAM HOUSE

keepingcurrentmatters, 2.21.17

There’s so much talk about the housing market at present and though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.

Ask yourself the following 3 questions to help determine if now is a good time for you to buy in today’s market.

  1. Why am I buying a home in the first place?

This is truly the most important question to answer.  Forget finances for a moment.  Why did you even begin to consider purchasing a home?  For most, the reason has nothing to do with the money. 

For example, a survey by Braun showed that over 75% of parents say “their child’s education is an important part of the search for a new home.”

This survey supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the top four reasons Americans buy a home have nothing to do with money.  They are:

  • A good place to raise children and for them to get a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of the space

What does owning a home mean to you?  What non-financial benefits will you and your family gain from owning a home?  The answer to that question should be the biggest reason you decide to purchase or not.

  1. Where are home values headed?

According to the latest Existing Home Sales Report, from the NAR, the median price of homes sold nationally in December (the most recent data available) was $232,200, up 4.0% from last year.  The increase also marks the 58th consecutive month with year-over-year gains.

If we look at the numbers year over year, CoreLogic forecasted a rise by 4.7% from December 2016 to December 2017 nationally.  On a home that costs $250,000 today, that same home will cost you an additional $11,750 if you wait until next year.

What does that mean to you?

With prices increasing each month, it might cost you more if you wait until next year to buy.  Your down payment will also need to be higher in order to account for the higher price of the home you wish to buy.

  1. Where are mortgage interest rates headed?

A buyer must be concerned about more than just prices.  The “long term cost” of a home can be dramatically impacted by even a small increase in mortgage rates. 

The Mortgage Bankers Association, the NAR, and Frannie Mae have all predicated that mortgage interest rates will increase over the next twelve months.  We’ve seen evidence of that starting to happen as the Federal Reserve just increased their rates this month.

Only you and your family will know for certain if now is the right time to purchase a home and answering these 3 questions will help you make that decision.

 

FED VOTES TO RAISE RATES:  THE HOUSING IMPACT

RealtorMag, 3.17.17

Last Wednesday the Federal Reserve starting picking up the pace by raising its key interest rate just three months after its last rate hike.  In announcing that short term interest rates will increase by one-quarter of a percentage point, they also suggested that two similar increases will occur later this year.

“If you think it’s been hard so far to find a home that fits your budget and your needs, it’s going to get worse,” say Jonathan Smoke, realtor.com’s chief economist.  “There will be even fewer homes for sale now.”

Homeowners who already have lower mortgage rates locked in may have less incentive to trade up or buy a new home.  Their increasing desire to stay put could continue to press already tight inventories of home for sale all across the country.

As of last Tuesday, the 30-year fixed-rate mortgage averaged 4.39 percent, according to Mortgage Daily News.  Last summer, rates were near record lows of 3.44 percent.

As long as rates keep changing slowly, “The small changes we’re seeing shouldn’t price too many people out of homeownership,” Smoke says, “But if you keep adding it on, it will price people out.”

There’s time to take advantage of what are still historically low rates, but that time may be running out.  If you’re looking to lock in a good rate, sooner rather than later needs to be your motto.

 

HARRY’S INTERESTING real estate FACTS OF THE DAY

The Hartford Courant, 2.21.17

  1. We hear a lot about foreclosure statistics and how many homes are “underwater” (meaning that the owner owes more on the house than it would sell for in the marketplace today).  Did you know that almost 30 percent of Americans own their home “free and clear,” without a mortgage?  That’s approximately 21 million households.

 

  1. In the United States, there are five times as many vacant houses as there are homeless people.

 

  1. Warren Buffet is one of the richest men in the world, and he still lives in the same house he bought in 1958.  He paid $31,500 for it.

 

  1. In 2009, there were more foreclosures in the United States than there were marriages.

 

  1. In Scotland, homeowners paint their door red when the pay off their mortgage.

 

  1. In the United States, if you see a winged eagle over the front door, it may mean that the homeowners have paid off their mortgage.  The eagle symbolizes “freedom” from the mortgage payment.

 

  1. A homeowner’s net worth is over 30 times greater than that of a renter.

 

  1. Charles “Pretty Boy” Floyd was a Great Depression era gangster who was viewed positively by the public.  When he robbed banks, he would destroy mortgage documents, which freed many citizen of their debts.

 

  1. Think your house is too small?  The typical home site in many developing countries is 75 square feet.

 

  1. According to the Aspiring Home Buyer Profile, conducted by the NAR in 1981, a typical first time buyer purchased a 1,700 square foot home, costing $70,000 ($201,376 in inflation and adjusted dollars).  In 2006, at the height of the market and before the “burst of the bubble” (and the era of McMansions), a typical first time homebuyer purchased an 1,815 square foot home, costing $214,000.  In the 2016 survey, purchased homes were 1,650 square feet and cost $182,500.

 

  1. Eight out of 10 non-homeowners indicate that owning a home is part of their American Dream.

 

  1. Being unable to afford to buy is the number one reason non-owners list as to why they don’t.

 

  1. The average mortgage down payment for homebuyers has been 6 percent for first time buyers for the last three years running.

 

  1. Those in the business point out that unrealistic expectations about how much of a down payment is necessary to purchase a home have kept credit worthy borrowers with manageable levels of debt from exploring the prospects of buying a home.

 

  1. Ninety percent of those that responded to the 2016 NAR Survey indicated that they worked with an agent to buy or sell a home, rather than go it alone.

 

  1. Some doorknobs disinfect themselves, including lead, iron, silver, aluminum and copper.  The best material to use for a self-disinfecting doorknob?  Brass.

 

FEATURED LISTING

 

“THIS SPACE AVAILABLE FOR YOUR LISTING”

 

I’m all sold out.  I can’t keep a listing around for long so if you’re ready to sell—I’m ready to list. 

Just give me a call today and we can get you headed toward a new home.

HARRY'S BI-WEEKLY UPDATE 3.6..17

by Harry Salzman

March 6, 2017

HARRY’S BI-WEEKLY UPDATE

                        A Current Look at the Colorado Springs Residential real estate Market

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

LOCAL HOME SALE PRICES ARE WAAYY UP…

If you are a local homeowner you’ve got a lot to celebrate.  In comparing February 2017 real estate average and median sales prices to February 2016—they are up—up—up.  That should put a big smile on your faces.

In the Single Family/Patio Home category, average sales price in February was $301,385 and median sales price was $255,000.  In the Condo/Townhome category the average sales price was $182,241 and the median sales price was $180,000.  This continues to be a Sellers Market with homes selling at 99.7% of listing price and a low average of 38 days on the market

As you will see in the Cumulative Year to Date Summary, total sales numbers in Single Family/Patio Homes and Condo/Townhomes are down 0.6% and up 7.6% respectively for year-over-year.  This number would have been much higher if we had more listings.  (For example, in Single Family/Patio Homes we had 7,065 active listings in July 2007.  January 2017 was an all-time low at 1,331.) 

The Monthly Summary shows that compared to a year ago, total active listings are down 23.8% for Single Family/Patio Homes and 15.9% for Condo/Townhomes, continuing a downward trend that tends to favor sellers.  New listings are up 1.8% for Single Family/Patio Homes and up 15.1% for Condo/Townhomes. 

For more details on the February report, please see the next article.

While substantial home price growth is being seen all over the country, according to David M. Blitzer, S & P Dow Jones Index Committee chairman and managing director, it’s “not alarming” because it is being driven by the lack of inventory as well as the continued low interest rates.  That is an entirely different scenario than we had prior to the 2007 housing bust, which is a good thing for us all.

Lawrence Yun, chief economist of NAR, says that Americans’ interest in purchasing a home is at the highest level since the Great Recession.  More households are feeling confident about their financial situation, and job growth is strong.  However, despite their optimism, more buyers are faced with limited choices due to the shortage of homes for sale, which is driving up prices.

I’m finding a number of things in recent days:

  • Homes, particularly in the $300,000 and under range, are getting multiple offers as soon as they are listed on MLS—many over listing price, with no contingencies and with quick turnaround times.

 

  • 32% of the active listings on single family/patio homes are in that under $300,000 range.

 

  • Quite a number of folks are turning to new construction if they are in a position to wait for their home to be built.

 

  • Folks are worried about the inevitable interest rate increases and those who have been sitting on the proverbial “fence” are thinking about making a move NOW to sell and trade up.

 

  • There are lots of people interested in looking for investment properties with a number of them wanting multiple properties. Along with the lowest home ownership rate in years providing many folks who want or have to rent come increased rental rates that benefit the landlords.  If this is something you have considered or want to investigate, give me a call and let’s see if it can work for you, too.

There is a lot of movement beginning to happen at once.  I have spent a lot of time doing research on most types of new construction so that once I know what my clients are looking for I can take them to see the properties that meet their wants, needs and budgets. 

You might not be aware, but—this service is at no additional cost to the buyers.   My special brand of customer service includes doing the research so that I can take you to see exactly what you are seeking, without having to go look at each new development by yourself. 

Another advantage is that I know the “right” questions to ask the builders so that there are no surprises later on.  This is something I’ve been doing for almost 45 years so you might say I’ve got just a bit of experience in this arena!

Whether you’re in the market for a new home, an existing home or an investment property—I can help you with it all.  Let me remind you again that if you are planning to sell and trade up you need to have a plan.  Your present home will more than likely sell quickly so you must know where you are going next.  Getting preapproved from your lender of choice is also a requirement before you even begin the search for a new home.  When you find what you are looking for you won’t have the luxury of thinking about it or taking time to get a loan approval.  There will be other offers for the sellers to choose from and yours will go to the bottom of the pile.  I don’t tell you this to frighten you—it’s just how things are these days and I want my clients to be as prepared as possible.

A recent example is a former client who wanted to sell and trade up.  I advised them NOT to list their present home until they had an “accepted offer” on one they wished to buy because I knew their home would sell fast.  Well, sure enough, the buyer found another home and we got the offer accepted quickly.  I put their present home on the market the next day and it sold the day after!  That’s the kind of craziness we are seeing today.  It’s a “new normal” to say the least.

So…a word to the wise should be sufficient.  That, and giving me a call at 598.3200 or email me at Harry@HarrySalzman.com to get the ball rolling.  I’m going to get it done for you “one way or another” and to your complete satisfaction.  That’s my motto—and it’s on the wall in my office—because my commitment to my clients is most important to me and the reason my repeat business is so good.  I WILL get it done for you, with as little stress and problems as possible. 

 

LOCAL real estate SALES SLIGHTLY DOWN…BUT ONLY BECAUSE OF LOW INVENTORY

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

Here are some highlights from the February 2017 PPAR report. Please click here to view the detailed 15-page report, including charts. If you have any questions, just give me a call.

In comparing February 2017 to February 2016 in PPAR:                     

                        Single Family/Patio Homes:

  • New Listings are 1,273, Up 1.8%
  • Number of Sales are 800, Down 8.0%
  • Average Sales Price is $301,385, Up 11.5%
  • Median Sales Price is $255,000, Up 6.3%
  • Total Active Listings are 1,342, Down 23.8%

                        Condo/Townhomes

  • New Listings are 175, Up 15.1%
  • Number of Sales are 126, Down 3.8%
  • Average Sales Price is $182,241, Up 6.5%
  • Median Sales Price is $180,000, Up 16.2%
  • Total Active Listings are 122, Down 15.9%

 

COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*

                                                Median Sales Price             Median Sales Price

                                                  February 2017                        February 2016

Black Forest                            $489,950                              $405,000                       

Briargate                                  $388,225                              $317,250        

Central                                     $180,000                              $179,900

East                                          $230,000                              $192,000

Fountain Valley:                      $230,000                              $222,000

Manitou Springs:                    $185,990                              $267,500

Marksheffel:                             $261,407                             $270,000

Northeast:                                $259,500                              $247,400

Northgate:                                $440,000                              $360,000          

Northwest:                               $395,000                              $319,500         

Old Colorado City:                  $236,500                              $191,000

Powers:                                    $254,900                              $233,000

Southwest:                               $246,000                              $162,000

Tri-Lakes:                                 $485,000                              $450,000

West:                                        $250,000                              $262,450

*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.

 

YELLEN SAYS FED RATES WILL INCREASE

Dsnews.com, 3.3.17

According to her last public remarks prior to the March 14-15 meeting, Federal Reserve Chairman Janet Yellen announced plans to increase the federal fund rate.

“We currently judge that it will be appropriate to gradually increase the federal funds rate if the economic data continue to come in about as we expect,” she said at a speech in Chicago and according to prepared remarks found at Business Insider.

Whether or not these increases come at the March meeting or later in the year remains to be seen, but Credit Suisse finds it probable that it will be sooner than later.  James Sweeney, managing director of Credit Suisse said at the end of last week:

“In response to these developments the market implied probability of a March hike has risen from 25 percent on February 1st to over 75 percent now.  This market action could be self-fulfilling, because it undercuts claims that the Fed needs to use a meeting to ‘prepare the market’ for an upcoming hike.”

What does this mean to you?  Well, for starters, the mortgage interest rates will rise accordingly.  If you are looking to get preapproved at today’s rates, you will need to hurry.  No one knows how much of a hike the fed funds will get, but most economists are saying it’s going to happen.  I’ve been telling you this for over a year now, and while they have not moved too swiftly during that time, an increase is inevitable.  Each increase in the mortgage rate will mean a larger monthly payment for the length of the loan.  It may not be a lot, but over the term of the loan it could add up to a substantial amount.

I’ll keep you posted.

 

“NEW” HOMES ARE ABOUT TO GET PRICIER

realtormag.com, 3.1.17

The reason for my sharing this information is due to my visit last Friday to check out nine models at local homebuilders for my clients.  Homebuilders traditionally increase home prices in the spring.  This year, according to the builders I met with, it appears that prices will be going up in the very near future due to a large buyer demand as well as the facts listed below.

Since this is an avenue many folks are considering due to the limited available listings, it is likely a good idea to start your search with me sooner than later.  We can lock in prices before they increase which can help offset any increasing interest rates that may happen. 

According to the article I read, new homebuilders are getting increasingly concerned about the price of building materials.  In 2016, this was low on their list of concerns, but it’s now one of their top five. 

The increased cost of lumber is the chief catalyst.  “Negotiations on a new softwood lumber agreement between the United States and Canada ground to a halt at the end of 2016 and likely are stalled pending the results of an investigation into unfair import practices requested by the U. S. Lumber Coalition,” the National Association of Home Builders (NAHB) reports. 

Homebuyers will likely see price hikes because of this.  According to NAHB/Wells Fargo housing market Index, builders cited the following as the 10 most significant problems they expect to face in 2017:

  1. Cost/availability of labor:  82%
  2. Cost/availability of developed lots:  67%
  3. Impact/hook-up/inspection or other fees:  61%
  4. Building material prices: 60%
  5. Federal environmental regulations and policies:  52%
  6. Local/state environmental regulations and policies:  52%
  7. Regulation of banking/financial institutions:  48%
  8. Development standards (parking, setbacks, etc):  47%
  9. Inaccurate appraisals:  46%
  10. Health insurance:  40%

 

STATISTICS FROM THE UCCS ECONOMIC FORUM SHOW MORE GOOD NEWS

UCCS Economic Forum, 2.23.17

I just received the January statistics from the UCCS Economic Forum and, as always, want to share them with you.

The charts, which you can access by clicking here, will provide you with graphic detail about how we as a city, as well as El Paso County, are doing in many areas that affect our economy and growth.  You can also see how we are doing locally in comparison to the U.S. in general. 

If you have any questions about these graphs, or about any of the information I’ve shared in this eNewsletter, please give me a call at 598.3200.

 

HARRY’S THOUGHT OF THE DAY

 

 

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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
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