Real Estate Information Archive

March 24, 2022

 

HARRY’S BI-WEEKLY UPDATE

A Current Look at the Colorado Springs Residential real estate Market

As part of my Special Brand of Customer 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.

 

 

RESIDENTIAL real estate SALES AND PRICES CONTINUE THEIR STATUS QUO…

Good news for many, but not so good for others. 

As you will see in the following story, the average American homeowner gained more than $55,000 in equity over 2021.  While that is a mind-boggling figure for those of us who have been in the business for many, many years and great news for current homeowners, it’s concerning for first-time buyers and those who want to sell and trade up.

I’ve been writing about the low number of existing homes for sale over the last couple of years and not much has changed.  It’s still Econ 101—Supply and Demand.  When there are fewer homes for sale, the “Seller’s Market” means higher list prices with bidding wars and sales way over list price.  That in turn helps raise the equity in all homes since scarcity of anything means it will cost more to buy.

A good example is a home I sold this past week.  It was listed at $479,000 and went on MLS Friday morning.  After the first showing we had an excellent offer and by the end of the day, there were more.  More than half of the offers had escalation clauses which meant the buyer was willing to go $1000 or more over the highest bid up to a set amount, which in one case was $550,000!

Yes…you read that right...one of the offers was up to $71,000 over the list price of the home!  

That’s what I mean about crazy times in the Residential real estate market. With interest rates on the rise, folks who have been taking a wait and see attitude are now jumping in before rates and home prices get any higher.  That’s making for an even more competitive market, and buyers are having to come up with inventive ways to get the seller to even consider their offer.  I recently read in The Wall Street Journal about how home buyers are getting very creative in their offers.  One example referred to an offer made by a potential buyer to the seller for a 50% discount for a year at his Washington, D.C. restaurant.  Yes, creative incentives are the norm these days and the more creative the better.

With rental rates at an all-time high, home ownership is on the mind of many renters.  However, first-time buyers are having a tough time qualifying for these higher priced homes.  I’ve had several parents who have used the equity in their present home to help their children with down payments on first homes.

It’s also a great time to buy an investment property if that’s something you have considered.  It’s not for everyone, but if it’s something you’ve considered, talk to your tax and investment advisors and then give me a call.

Today’s market makes it more important than ever to work with a seasoned, knowledgeable real estate broker like me.  I’ve worked in the local Residential Real Estate arena for almost 50 years and have seen just about every cycle imaginable.  I know how to write an offer that gets attention and coupled with my expertise in negotiation, I can make the whole process smoother.  Another important factor is my relationship with other brokers, since most that have dealt with me in the past know when I present an offer it’s very likely to close. 

And for my sellers, I provide the ability to review offers and point out the pros and cons of each.  This could mean taking a little less but knowing that it’s an offer that will close.  

After all, offers are only offers until they close.  So, turning away good offers for one that might offer a little more cash could hurt in the long run if it’s not a viable offer that can make it to the closing table.

For those of you who have waited, wait no longer.  NOW is the time to make your move.  While there are not a lot of existing homes from which to choose, we can usually find one that can work for you.  New home construction is also an option and that’s an area where I can assist you as well, for no additional cost to you.  

But don’t delay.  If you’ve even considered a move, either to sell and trade up or move to a new neighborhood, the best move you can make now is to call me at 719.593.1000 or email me at Harry@HarrySalzman.com and let’s figure out how we can make your Residential real estate dreams come true.

 

THE AVERAGE AMERICAN HOMEOWNER GAINED MORE THAN $55K IN EQUITY LAST YEAR

KeepingCurrentMatters, 3.21.22

As I just mentioned, home values are on the rise due to low supply and high demand.  Bidding wars are driving up prices and will continue to do so until there are more existing homes for sale.

According to Dr. Frank Nothaft, chief economist at CoreLogic, “Home prices rose 18% during 2021 in the CoreLogic Home Price Index, the largest in its 45-year history, generating a big increase in home equity wealth”.

In the latest Home Equity Insights from Corelogic, it showed that the average homeowner’s equity has grown by $55,300 over the last 12 months.  As I’ve mentioned before, our local average price increases have been considerably over the U.S. average for some time now.

Below is a graphic showing what’s happening across the United States.  It measures gains year-over-year for the 4^thQuarter 2021.

 

What does this mean to you?  Well, if you are considering selling to trade up or move elsewhere, the equity in your present home will likely mean a larger down payment on your next home.  If you’ve worried about rising home prices, your current equity can likely go a long way to helping even things out.

If you want to know how much equity you have in your present home, give me a call and I can help you with that.  I believe you might be surprised what you can easily afford and keep your monthly output close to what you are currently paying.

 

WHAT YOU NEED TO KNOW IF YOU’RE THINKING ABOUT BUILDING A HOME

KeepingCurrentMatters, 3.23.22

With options for existing homes nothing like they once were, you might be considering new construction as an option. Homebuilders today are doing all they can to keep up with the demand, but they are currently facing obstacles outside of their control.

Supply chain issues are a big hurdle.  According to a recent article from HousingWire, “nearly everything needed in the homebuilding process is facing some sort of delay and subsequent price increase.”

And it’s not just lumber. Roofing materials, windows, garage doors, siding, and gypsum (which is used in drywall) are also affected.

When supplies are low, charges inevitably go up and a lack of availability is causing delays, meaning builders are struggling to stay on schedule.

Another challenge is the skilled labor shortage.  It’s nothing new since it’s been an issue for more than a decade now, but the good news is that a February jobs report shows employment in the construction industry is showing gains.  

How does this impact you?

When you weigh your options in trying to decide between buying an existing home or building a new one, factor the potential delay in the new home construction into your decision.  It doesn’t mean you shouldn’t consider new home construction, but it does mean you should consider your timeline and if you are willing to wait while your home is being constructed.

And once again, if new construction is in your plans, I’m your guy.  I can help with site and elevation selection as well as help in getting you the best mortgage to fit your needs.  This all comes as part of my special brand of customer service and at no additional cost to you.  So, if new home construction is in your plans, I’m only a phone call away.

 

WHAT ARE THE BENEFITS OF BUYING AND OWNING A RENTAL PROPERTY?

American Family Insurance, 3.8.22

Investment properties can be an appealing source of income, even to those who have never considered it before.  The benefits of investing in rental property can help you advance towards your long-term financial goals.

Buying an investment property is not a lot different from purchasing a single-family home for private use.  The process is very much the same, from making an offer to closing the deal.  real estate professionals such as me, work with investor buyers just as we do buyers for homes of their own.

Selecting the property is somewhat the same, as you will want to look at the property through a similar lens—seeking the perfect blend of affordability, financial opportunity, and potential resale value.

Fixer-uppers have great potential here in that rental properties that require a bit of an up-front investment are worth your consideration.  

As I’ve mentioned in the past, I’ve also had investors purchase newly constructed homes with the idea that there would be little, if any, required maintenance for many years and they could attract long term renters at a better monthly rental fee.

There are a number of benefits of investing in rental properties which include:

• Generating a monthly passive income stream
• Making the right purchase can increase your resale price
• Rental unit furniture, appliances and other items may qualify for a tax deduction
• Write off of your landlord insurance
• Through 2025, there is a special income tax deduction that affords business owners a deduction up to 20% of net rental income or 2.5 percent of the purchase price of the property and/or other expenses likes salaries for rental property employees.  Please check with your tax attorney or CPA for details.
• Renters pay down your principal

 

Now, the potential problems with owning a rental property:

• Troublesome tenants
• Lack of liquidity
• Maintenance Costs
• Insuring your investment

 

There are lots of things to take into account when considering becoming a landlord.  As I’ve said time and again, this is something you need to discuss with your tax and investment advisors.

The bottom line is that over the long haul, the appreciation of single-family homes has been greater than the growth of public stocks on the NYSE.  This is certainly something worth considering in your long-term financial goals.

I’ve been a landlord for many, many years and would be happy to share the upside as well as the downside with you.  Just give me a call and we can discuss.

 

PRICING YOUR HOME RIGHT IS CRITICAL

KeepingCurrentMatters,

The price you set for your house sends a message to potential buyers.  Price it too low and it might raise questions about the condition of the home.  Price it too high and you might deter potential buyers.

Even in a Seller’s Market, it’s crucial to send the right message to potential buyers.  You need top aim directly for the center…not too low and not too high:

Don’t try to figure this out by yourself.  When you’re ready to list your home, give me a call.  I can help you determine the correct listing price, based on actual facts and comparables.  That way you will be able to get the very best price possible for your present home.

March 9, 2022

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.

 

ANOTHER MONTH AND MORE OF THE SAME…

What can I say?  The Residential real estate Market in Colorado Springs is hot, hot, hot.  And it would even be hotter if there were more existing homes for sale.  

Our average sales price for single family/patio homes was $514,757 in February!  That number is even astonishing to me, having worked in this arena for 50 years next month.  I can still remember average home prices in the $25,000 range.  Of course, I can also recall interest rates of 16% so while home prices have risen, interest rates have declined sharply, which has helped keep monthly payments more affordable than you might expect.

That’s why I tell my clients to look at their total monthly output rather than focusing on the higher prices of today.  The still historically low rates have made it easier on the pocketbook, but rates are beginning to rise and will do so slowly over the next year.  I don’t see them getting to 16% anytime soon, but they will be higher by year-end according to most economists.

With the traditional spring buying season just about here, it’s definitely time to consider your options if a move is even remotely in your future.  Homes sell faster than ever before and multiple offers and ones over list price have become the norm in recent times.  

Just this past week, a broker in our office listed a home for $425,000 and it had 24 offers! The accepted offer was far above list price.  Hard to imagine, but there are a lot of folks looking for homes and very few existing ones to choose from.  It’s most definitely still a Seller’s market and will continue that way until more homes come up for sale.  As you will see below, at the end of February there were only 487 active listings of single-family/townhomes in the Pikes Peak Area MLS and 63 condo/townhomes.  With so few homes available you can see why competition is so fierce.

There are a lot of things to consider if you are wanting to make a move.  To begin with, you will need to decide exactly what your needs, wants and budget considerations are upfront because when you find a home there is no time to delay in making your best offer.  And when I say best offer, I mean that.  Today’s market finds very creative offers that buyers are hoping will set them apart from the rest.  There is essentially no room for renegotiation and contingencies on the buying side.  

However, with U.S. home prices predicted to rise another 10% this year (and Colorado Springs area homes will likely rise conservatively 10 to 12%), there’s no time like the present to start your search.

I realize this sounds a bit crazy, but it’s today’s reality.  It is more important than ever to have a seasoned professional, well respected real estate broker such as me on your side because experience and negotiation expertise such as mine is more crucial than ever before.  Sellers are wanting their brokers to work with brokers on the buying side who they know can bring an offer to closing.  

Lately with the stock market in a slump, I’ve seen an uptick in those seeking homes for investment purposes.  Over the long haul, real estate has surpassed stock and bond returns and today even more so.  That, unfortunately, is adding to the housing shortage and hurting first-time buyers even more.

However, it’s not all dismal news.  I truly believe that, while it may take considerably longer than in the past, there is most definitely a home for everyone.  It may not be exactly what you want, but especially for first-time buyers, homeownership is a far better option than renting if possible.  Homes can be updated and renovated, and when the time is right, can likely be sold for a profit or used as a rental property when it’s time to move on or trade up.

There’s a lot to discuss if a move is a consideration and I’ve got the experience to guide you when you’re ready.  

So, if Residential real estate is among your hopes and dreams for 2022, please give me a call at 593.1000 or email me at Harry@HarrySalzman.com and let me help make them come true.

And now for statistics…

 

FEBRUARY 2022

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

Here are some highlights from the February 2022 PPAR report.  Remember that the new format of this report no longer provides monthly statistics for each individual neighborhood.  However, if you are interested in what’s happening in your neighborhood, I can provide you with this information through other means.

In El Paso County, the average days on the market for single family/patio homes was a very low 10.  For condo/townhomes it was 11.  

Also in El Paso County, the sales price/list price for single family/patio homes was 103.0% and for condo/townhomes it was 103.1%. 

In Teller County, the average days on the market for single family/patio homes was 20 and the sales/list price was 101.6%. 

Please click here to view the detailed 10-page report, including charts.  If you have any questions about the report or to find out how it relates to your individual situation, just give me a call.

 

In comparing February 2022 to February 2021 for All Homes in PPAR:                     

                        Single Family/Patio Homes:

·       New Listings were 1,186, Down 12.1%

·       Number of Sales were 1,015, Up 3.5%

·       Average Sales Price was $514,757, Up 13.2%

·       Median Sales Price was $465,000, Up 15.4%

·       Total Active Listings are 487, Up 5.4%

·       Months Supply is 0.5, Up 1.6%

 

Condo/Townhomes:

·       New Listings were 199, Up 3.1% 

·       Number of Sales were 160, no change from last February

·       Average Sales Price was $353,683, Up 17.6%

·       Median Sales Price was $362,500, Up 22.9%

·       Total Active Listings are 63, Down 11.3%

·       Months Supply is 0.4, no change from last February

 

Now a look at more statistics…

 

FEBRUARY 2022 MONTHLY INDICATORS AND LOCAL MARKET UPDATE ILLUSTRATE OUR LOCAL TRENDS IN DETAIL

Colorado Association of REALTORS^{® ,} Pikes Peak REALTORS Service Corp, or it’s PPMLS

Providing greater detail than the above report, this contains information on both El Paso and Teller counties for Residential real estate. 

The “Activity Snapshot” for all residential properties in El Paso and Teller counties shows the Year to Date one-year change:

 

• Sold Listings for All Properties were Up 1.1%

 

• Median Sales Price for All Properties was Up 16.0%

 

• Active Listings on All Properties were Down 20.2%

 

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

 

RENTAL PROPERTIES IN COLORADO SPRINGS SEE SIGNIFICANT SPIKE IN 2021

Colorado Springs Business Journal, 2.25-3.3.22

Rental rates in Colorado Springs have continued their upward climb according to rental listing site Dwellsy.    The Colorado Springs Metropolitan Statistical Area (MSA) shows a very significant 42.6 percent jump in median monthly rent prices from January to December 2021.

One of the driving factors is the demand for single or multi-family rental properties.  Median monthly rent prices for single-family properties rose 42 percent from January to December, reaching $2,300 per month, while rent prices for multi-family units alone went up by 21 percent to $1,325 per month, according to the Dwellsy analysts who separated the two categories.

RentPath reported an average rental listing price of $1,150 per month for one-bedroom units and $1,327 per month for two-bedroom units in December.

This illustrates the demand for and availability of homes for rent vs. apartments last year.  With more folks working from home, there is a greater demand for space, which often translates to a single-family rental.

The chart below illustrates the rental increases in Colorado Springs and other Colorado cities in 2021 vs the U.S. market as a whole:

 

 

As I have been telling you, investment properties have become a hot commodity as they represent not only extra monthly income, but home appreciation is significantly outperforming stocks and bonds at present and has done so consistently over the years.  

This is also just another reason contributing the housing shortage as properties bought for investment take homes away from those who are looking for homes to buy for themselves and their families.

If you are renting or know someone who is, now is the best time to start looking toward homeownership if possible.  Not only are you essentially investing in yourself rather than contributing to someone else’s income, you are building equity in your own home.

There are lots of possible ways to get into homeownership and/or investment property purchases.  If either of these are something you are now considering, please give me a call and let’s see how we can make it work for you.

 

ERA SHIELDS “STAT PACK” PROVIDES A GOOD RESIDENTIAL real estate OVERVIEW

ERAShields, 2.28.22

As always, I am pleased to provide you with all the most current local information.  This easy-to-understand report, along with graphs, gives you a good idea of the state of local Residential real estate.  

Below I’ve reprinted the first page of the report and you can click here to read the report in its entirety.  

UCCS ECONOMIC FORUM UPDATE

College of Business, UCCS, updated 2.25.22.22

Here is the most recent economic update from the UCCS Economic Forum.  It provides data concerning all aspects of the economy, on both the national and Colorado Springs area levels.

I’ve reproduced the first page of the graphs and you can click here to see the report in its entirety.

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

And for those of you who like to plan ahead, the always informative UCCS Economic Forum Event this year will be held at the ENT Center for the Arts on Thursday, September 1, 2022, from 1:30-4:30, with a networking and happy hour to follow.  Full agenda and registration will be available in June.

 

 

FEATURED LISTING:

YOURS, HERE?  IT MOST CERTAINLY WILL GET A LOT OF ATTENTION—NOT ONLY FROM ME, BUT ALSO FROM MY READERS AND ANYONE LOOKING TO BUY.