Real Estate Information Archive

Housing is on a steady path to recovery as I’ve just mentioned and home prices nationally have risen approximately 20% in the last three years, according to the Federal Housing Finance Agency (FHFA) and Standard & Poor’s (S & P) Case-Shiller house price indices—and both consumer and industry professionals expect this upward trend to continue through 2015.

The anticipated increase is the result of intersecting economic factors that make up the big picture that is today’s housing market.

What’s impacting prices now?

• Wages and inflation.  A recent study by RealtyTrac illustrates a disconnect between home price growth and wage growth, despite the improved economy.   Between 2012 and 2014 home prices increased by 17% while wages increased only 1.3%--a 13 to 1 disparity.  Also, home prices continue to outpace inflation rates according to S & P, growing twice as fast in 2014.

According to Nobel Laureate Robert Shiller, inflation rates likely affect home prices only indirectly.  Because pay increases often boost perceptions of buying power, inflation may have a greater impact on consumer confidence, which, in turn, could also boost housing activity.

 

• Interest Rates and Inventory.  Interest rates do tend to be influenced by inflation rates.  Mark Palim, Fannie Mae V.P., Economic & Strategic Research Group, says that while it’s reasonable to assume rising mortgage-interest rates equal falling house prices, there’s little evidence of a casual relationship between the two.  In fact, higher mortgage rates have a tendency to predicate a decrease in purchases rather than a dip in prices.

Interest rates DO play a role in overall affordability.  Today’s rates have significantly accelerated demand in many markets.

“The biggest factor in price gains has been the current low interest rates spurring demand,” says Gabe Sanders of BlueWater real estate in Stuart, FL.  “And our low inventory, which makes buyers willing to spend more, since they can’t find enough available in lower-priced properties.” 

In Sanders’ market, prices on the lower end have risen much more than those of mid-range, similar to those price increases in the Pikes Peak area.  This demonstrates what’s being experienced nationwide—escalating prices, due to a shortage of affordable listings—which have adversely tipped the scale, especially for first-time homebuyers.

The solution?  According to Lawrence Yun, new construction gains are essential to counter the lack of inventory and rise in prices.  He says that post-crash, single-family construction has been slow to pick up steam, primarily because of construction costs that fail to meet buyer expectations.

 

• Demographics.  Generational shifts have historically affected demand and caused price increases in the housing market.  Today this is due to baby boomers and millenials, although some of the latter have been priced out of the market due to statistically lower incomes and sluggish wage and job growth.  Too few first-time buyers are also hurting those seeking to sell and trade up or relocate. 

In some areas, such as Beverly Hills, international buyers are driving up prices to an all time high due to the area’s high-end status and temperate climate.  Hint to Pikes Peak area homeowners—let’s not tell them about all the wonderful reasons they might want to relocate here!

 

• Oil Prices.  Home prices in the near future could be affected by another distinct market trend.  With the decline in oil prices, markets with oil economies may see home prices drop at the end of the year into 2016, according to a report by Trulia.  On the other hand, non oil-producing markets, may see a boost in prices.  These findings are similar to oil and home price fluctuations since the 1980’s.

 

While many factors go into the home pricing scenario, these large-scale influencers play a predominant role.  Home prices in the Pikes Peak area are affected by decisions of the Department of Defense (DOD) and other factors that might not affect the country in general. 

As I’ve said time and again, there is a housing solution for most all who are looking.  That’s why it is so important to find a knowledgeable, competent real estate Professional to help you navigate through the home Buying and Selling waters.  

We do the homework, know the area and can help you price your current home right.  Too high won’t get potential buyers, and too low will leave money on the table—neither one a good option.  And most importantly, we work for you.  Your goals become ours and since we are not as emotionally involved, we can help keep you on track when you possibly find yourself in a bidding war when buying a home.  “Winning the battle but losing the war” is NOT the outcome a good real estate Professional advocates for you. 

 

FIVE MISTAKES PEOPLE MAKE WHEN SELLING A HOME

Cheatsheet.com 4.13.15, Realtor mag, 4.13.15

A survey by the NAR found that 83% of people view their home as a good financial investment.  Not only is it a good investment, but it’s also filled with tons of personal memories since the average homeowner has lived in his or her home for a decade or more.  Therefore, when it’s time to sell, no matter the reason, it’s easy to become more than a little emotional.  Another reason to consult a knowledgeable, competent real estate Professional.

Letting emotions, rather than knowledge, drive home selling decisions can make it difficult to find a buyer or force you into accepting a lower price than you might like.

The best news is that the market is tight and it’s a Seller’s Market at the moment.  That’s pushing up prices and the NAR says that “the typical seller receives 97% of his final asking price and the home was on the market for about a month.”

That doesn’t mean every home sells quickly or every seller gets the price they wanted, but the chances are much better if you avoid these five mistakes when listing your home.

1. Not being realistic about your home’s value.  What you think your home is worth and what you can actually sell it for are often two very different numbers.  Unfortunately nobody cares what you paid for it nor what you put into it.  All that matters is what you can realistically sell it for today. 

Even in a Seller’s Market you need to be careful to price your home realistically.  Properties that are overpriced at the outset tend to eventually sell at a lower price than they would if they had been appropriately priced in the first place.

Choose a price based on factors like comparables and appraised value.  If you’re not getting any interest, adjust your strategy.  According to an article by a Realtor in The Washington Post, “no offers within a 30-day period means the price is too high”.

 

2. Not making your home looks its best.  Simply from watching HGTV and the like, we now know that good staging and curb appeal help to sell homes.  “At a minimum, homeowners should conduct a thorough cleaning, haul out clutter, make sure the home is well-lit and fix any major aesthetic issues,” said Chris Polychron, President of NAR, in a statement about the value of home staging.  Simply repainting with neutral colors, sprucing up landscaping or purchasing new furniture can help.  According to the real estate Staging Association, “Overall, professionally staged homes can sell five to seven times faster than non-staged homes”.

 

3. Refusing to negotiate.  When setting a fair and reasonable price for your home you should build in some “wiggle room”, especially if you need to sell quickly.  Many buyers want to feel they are getting the best deal on what is probably the biggest purchase of their lives.  Therefore, most will make an offer considerably below your asking price, particularly if they think it’s a buyer’s market. 

You can make your buyers happy while also getting the price you need by being willing to accept slightly less than asking price for your home.  Alternately, you might agree to concessions like paying the closing costs, throwing in extra appliances or making certain repairs to the property in order to sweeten the deal.  An experienced Broker like me can help you negotiate the tricky dance of getting the price you want without scaring off a potential buyer. 

 

4. Hiding the truth about your home.  Trying to cover up or hide problems with the home from potential buyers is not a good idea.  Serious flaws, like foundation problems, leaky roofs, or mold, could come to haunt you later.  If you aren’t upfront about the problems at the start, the buyer will likely find them out during the home inspection.  This could result in the buyer withdrawing his offer or asking you to fix the problem.  If the issue is serious enough and isn’t discovered until after the sale, this could result in costly litigation.

Zillow, the real estate website, recommends being upfront with both your listing Broker and your buyer about any potential issues with your home.  You can then price the home accordingly and document the problems you’re aware of and have the buyer sign off on them to avoid legal issues later. 

 

5. Not having a backup plan.  In a perfect world, you sell your current home and buy a new one without any difficulty.  In reality, that’s not always the case, especially in a Seller’s Market.  Smart sellers have contingency plans in place to avoid either getting stuck with two mortgages at once or not having a place to live, or to protect them if a deal falls through.

You may want to be prepared to find temporary housing, like a rental or staying with family if your home sells too quickly.  If you must move before selling your current home, make sure you’ve budgeted enough to afford carrying the cost of the old home.  And lastly, if there are multiple people interested in your home, you may be able to accept backup offers, which involve agreeing to sell to a second buyer if the first one backs out.

 

Planning ahead can most certainly help when it comes to selling your home.  Today’s market, with faster turnaround times, makes it even more crucial that you have a good idea of your next move and be ready to carry though on it.  A little forethought can save you a lot of potential headaches down the stretch. 

 

SKY SOX TICKETS ARE YOURS FOR THE ASKING

Just a reminder that baseball season is in full swing and Salzman real estate Services has four first row seats, right behind the Sky Sox dugout.  These are available for free on a first-come, first served basis.  They go quickly, so please call 598.3200 and let me know what game you’d like tickets for and I will put them aside for you to pickup prior to the game.

 

HARRY’S JOKES OF THE DAY

A real-estate agent, had difficulty getting a listing from a customer whose theory was that "there is no substitute for experience." After he asked her a third time how many years she had been in the business, she told him: "Sir, there is a little-known historical fact that Moses brought three tablets down from the mountain-two were the Ten Commandments and the other was my real-estate license!" She got the listing.

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A broker was dismayed when a brand new real estate office much like his own opened up next door and erected a huge sign which read 'BEST AGENTS.'

He was horrified when another competitor opened up on his right, and announced its arrival with an even larger sign, reading 'LOWEST COMMISSIONS.'

The broker panicked, until he got an idea. He put the biggest sign of all over his own real estate office. It read: 'MAIN ENTRANCE'.

           

 

                                                

May 4, 2015

 

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.

 

APRIL LOCAL STATISTICS CONTINUE THE POSITIVE GROWTH TREND

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

PPAR released April statistics on Friday and I am thrilled to report that things are continuing to look very good for the Pikes Peak Region in the Residential real estate market. 

April was the ninth straight monthly increase in sales. Sales in Single-family/Patio Homes were up 11.4% over March, with the Average Sales Price up 2.5% and the Median Sales Price up 4.4%. New listings were up 12.8% over March.  In the Condo/Townhomes category, everything but sales were up from March; however, year-over-year sales were up 37.2% as you will see. 

These numbers continue to reflect stronger consumer confidence along with continued historically low interest rates that many Buyers feel will soon go up.  “Act now” appears to be the current norm.

Here are some highlights from the monthly PPAR report.  Please click here to view the detailed 13-page report. The included charts will show you just how positive these statistics are. If you have any questions, please give me a call.

In comparing April 2015 to April 2014 in PPAR:                       

                        Single Family/Patio Homes:

• New Listings are 1831 Up 6.5%
• Number of Sales are 1,124, Up 21.9%
• Average Sales Price is $265,800, Up 10.3%
• Median Sales Price is $235,000, Up 10.1%
• Total Active Listings are 2,694, Down 27.0%

                        Condo/Townhomes:

• New Listings are 246, Up 24.9%
• Number of Sales are 129, Up 37.2%
• Average Sales Price is $166,814, Up 8.6%
• Median Sales Price is $145,000, Up 6.2%
• Total Active Listings are 281, Down 27.0%

 

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

                                                Median Sales Price             Average Sales Price

Black Forest                            $390,000                              $442,863

Briargate                                  $297,750                              $325,855        

Central                                      $180,000                              $222,440

East                                           $198,750                              $221,314

Fountain Valley:                       $206,000                              $209,831

Manitou Springs:                     $376,500                              $313,214

Marksheffel:                             $248,000                              $262,784

Northeast:                                $218,500                              $240,295

Northgate:                                $411,000                              $432,810           

Northwest:                                $317,000                              $336,953

Old Colorado City:                   $265,000                              $251,367

Powers:                                     $224,950                              $232,483

Southwest:                                $288,000                              $360,391

Tri-Lakes:                                  $368,000                              $404,367

West:                                         $252,000                              $270,181

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

 

THREE QUESTIONS TO ASK YOURSELF BEFORE BUYING A HOME

Keeping current matters, 4.21.15

If you are thinking about purchasing a home right now, there’s a lot of advice out there.  Friends and family as well as internet sites may have a lot of information, but it’s important to be fully aware of your actual needs and local real estate trends in order to make an informed decision.

There are three questions you should ask yourself before purchasing a home in today’s market:

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

This is by far the most important question to answer.  A study by the Joint Center for Housing Studies at Harvard University reveals that the four major reasons people buy a home have nothing to do with money:

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

2. Where are home values headed? 

Home Price Expectation Survey, published every quarter, can provide a fair assessment.  Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts and investment and market strategists about where prices are headed over the next five years.  They then average the projections of all 100+ experts into a single number.  Here’s what the most recent survey revealed:

• Home values will appreciate by 4.4% in 2015.
• The cumulative appreciation will be 19.3% by 2019
• Even the experts making up the most bearish quartile of the survey are still projecting a cumulative appreciation of over 11.7% by 2019

3. Where are mortgage interest rates headed?

A buyer must be concerned about more than prices.  The “long term cost” of a home can be dramatically impacted by an increase in mortgage rates.  The Mortgage Bankers Association (MBA), the NAR and Freddie Mac have all projected that mortgage interest rates will increase by approximately one full percentage point over the next twelve months.

I would stress one more important factor when making a decision about whether it’s the right time for you to buy a home.  Make certain you contact a competent, professional real estate Professional.  When presented with all your wants, needs, and budget constraints a competent broker can give you the best advice concerning today’s market and can address all your concerns prior to beginning the search.  And, if it appears that now is NOT the right time for your individual situation, he or she will be able to tell you that also. 

There have been more than several times in the last year that I have advised clients that it just didn’t make sense for them to purchase a home based on the information they provided me. 

I do the homework, know the market, and can help you make your home buying decision based on actual facts.  If you or any family member or co-worker is thinking of buying a home, please call me at 598.3200 or email me at Harry@HarrySalzman.com and let me help determine if it’s the best decision at the present time. 

 

NATIONAL HOME SALES AT 18-MONTH HIGH

RealtorMag 4.23.15, RisMedia, 4.30.15

Spring residential home sales are strong all over the country, with existing-home sales surging to the highest rate since September 2013.  More homes also went on the market, thus relieving some inventory constraints we’ve had, according to the latest NAR report.

Some highlights from the report:

• Properties typically stayed on the market for a shorter time in March than in February.  Short sales were on the market the longest, with foreclosures and non-distressed homes selling in one-third the time of short sales.  Forty percent of homes sold in March were on the market for less than a month.
• All-cash sales represented 24 percent of transactions in March, down from 33 percent a year ago.  Individual investors, who account for many cash sales, purchased 14 percent of the homes in March, vs. 17 percent a year ago.
• Distressed sales accounted for 10 percent of sales in March, down from 14 percent a year ago.

According to Lawrence Yun, chief economist for NAR, contract signings picked up in March as more buyers than usual entered this year’s competitive spring market.  “Demand appears to be stronger in several parts of the country, especially in metro areas that have seen solid job gains and firmer economic growth over the past year,” he says.  “While contract activity being up convincingly compared to a year ago is certainly good news, the increased number of traditional buyers who appear to be replacing inventors paying in cash is even better news.  It indicates this year’s activity is being driven by more long-term homeowners.”

Yun expects a gradual improvement in home sales in the months ahead but says insufficient supply and accelerating prices could be a drawback to sales reaching their full potential.

He added, ”The modest rise in housing supply at the end of the month despite the strong growth in sales is a welcome sign.  For sales to build upon the current pace, homeowners will increasingly need to be confident in their ability to sell their home while having enough time and choices to upgrade or downsize.  More listings and new-home construction are still needed to tame price growth and provide more opportunity for first-time buyers to enter the market.”

Bottom Line?  With prices increasing, housing supply better but still low, and the inevitability of mortgage interest rate increase—if you’ve been waiting—Wait No More.  Enough said.

 

SEVEN EFFICIENT TIPS FOR DOWNSIZERS

RisMedia, 4.25.15

Retirement goals have changed for many since the recession, with one major asset hanging in the balance—housing.

Though many Baby Boomers intend to “age in place” in their current homes, more than half will downsize either by buying a smaller home or one of equal size but with reduced expenses, according to the Demand Institute’s recent Housing & Community Survey.

There is growing debt in households where the head of the family is over 55 according to the Employee Benefit Research Institute.  Much of that debt is tied to mortgages, so downsizing may not only be preferable but could possibly be a necessity for some.

If you or a parent are looking to downsize in the foreseeable future, here are seven ways to pare down possessions.  Cutting down clutter not only helps in the downsizing, but helps make the current home more presentable to potential buyers.

1. Plan backwards from moving day.  Start downsizing three months prior to a planned move.  It is much easier to tackle one room at a time, especially for homeowners who have stayed put for many years. 

 

2. Stick to the OHIO rule.  “Only handle it once”.  It is best to avoid “maybe” plies, particularly when helping a parent who may have a hard time letting go.  Ask yourself or your parent if they would replace the item if it disappeared—this will help make the process feel less like a trashing of beloved possessions.

 

3. Remember more isn’t always better.  We all have duplicate items around “just in case” the original breaks but is it really necessary to have multiple sets of mixing bowls?  Don’t be afraid of purging duplicates.  The same holds true for clothes—don’t hold on to ones that don’t fit, but “may” fit one day. 

 

4. Scale back collections.  Cutting back on a collection can be upsetting for anyone, downsizing or not.  Because it took years to grow it, approach the process as gently, and practically, as possible.  Decide which items are favored more than others or limit the amount based on available space.  A bookshelf can only hold so many books, for example.

 

5. Get cash for your castoffs.  Following the previous three-month rule, if you’re planning to sell an item, start early.  Some things may not sell as quickly as you’d like and you don’t want to be burdened with things you no longer want come moving day.  Sites like eBay charge a selling fee, and some items sell better than others on Craigslist.  Doing a little research will result in the best place for you to sell.

 

6. Contact an auction house.  If you or your parent have an assortment of valuable items, like antique furniture or artwork, you might consider enlisting an auction house rather than an antique dealer.  Dealers want the most bang for their buck—not yours.  It is best to compile a list so that the items can be appraised in one visit.  An Estate Sales Group can help facilitate the sale or auction of high-end belongings, too.

 

7. Donate as much as you can.  When donating items to charitable organizations, parting with possessions is much more manageable.  Parents especially may feel less overwhelmed if they understand that their items are going to those in need.  In many areas, the Salvation Army or Goodwill can transport large items such as furniture or appliances.  Other household items or clothing can be donated to either of them or to a local charity of your or your parent’s choice.

 

HARRY’S JOKE OF THE DAY