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HARRY'S BI-WEEKLY UPDATE 7.24.17

by Harry Salzman

July 24 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.

LET’S TALK ABOUT RENTALS FOR A MOMENT OR TWO…

The record-setting statistics that I’ve been showing you lately are continuing, but with that great news I’ve also been writing about the shortage of available listings.  That’s been affecting a number of my clients, which I’ll write more about later on.

The biggest news now is “RENTAL PROPERTIES”.  According to an article in Saturday’s Wall Street Journal, “Wall Street is the New Suburban Landlord.”  What this means is that large companies are buying up homes and then renting them our rather than selling.  And many individual investors are also scooping up homes as investment properties.

Other companies are purchasing multifamily condo buildings, buying the units back from owners, and converting them into rental apartments.

The reasons are varied, but most agree that since homeownership is the lowest in five decades it’s likely to stay that way and that rent rates will continue to rise.  These same investors are “wagering that many people no longer see owning a home as an essential part of the American dream” states the Journal article.

If the Millennials and Gen Zer’s want to maintain the suburban lifestyle of the past they are going to need to rent—especially at first.  Many of these folks have substantial college debt, no down payment, no real credit, and low FICO scores.  Others don’t know where they will end up career-wise so a non-permanent solution makes sense. 

Homes are also increasing so quickly in value so what might have been affordable for first-timers could be impractical today.  Slowly rising interest rates are also beginning to slow down the market.

Even some experienced homeowners who might have recently sold their home quicker than expected and without having decided where to go could need temporary lodging for several months.  And if they were planning on moving into a newly constructed home it might not be ready just yet.

I’ve had a number of clients purchase rental properties in the past year and a half.  If that is something you have even considered—NOW is the time.  Home prices are escalating and rental prices are too—so while you’re building equity in your investment you are also collecting rent with the option to raise it at the end of a lease. 

Someone I recently spoke with has been purchasing rental properties for more than 15 years.  Recently she decided to have the homes appraised and low and behold—her equity is now more than a millions dollars.  That’s the EQUITY—not including the actual home values.  Most impressive to say the least.

Homes have been doing better than stocks, bonds, equities, etc for some time now, with few exceptions, so if you own your own home you are probably ahead of the game and happy about it.  If you owned another property you would not only be gaining equity, but most likely receiving rental income that would cover your monthly payment and then some. 

According to a study recently released by REAL Trends, Inc and NEXZUS Publishing Group, about 23 percent of residential home built for one to four families are now owned by investors.

Out of about 125 million households in the U.S., an estimated 43 million live in investor-owned housing units according to the study.  “While most real estate industry and consumer publications have focused on the impact institutional buyers have had on this rental market, the facts show that it is somewhat ordinary American families who own the majority of these investor-owned residential properties.”

There are a number of things to consider if you are interested in rental property and since I’ve been putting my money where my mouth is for many years I can give you advise and answer most questions you might have.  I can also help direct you to a qualified property manager if that is the way you want your rental property handled.  In that case, you would not have to worry about the upkeep and other duties of a “landlord” and would be paying someone else to care for your property while still receiving the benefits.

I also get asked the tax questions a lot but will always refer you to your personal accountant and/or investment advisor as I’m not qualified to give you advise in those areas.  Each person needs to see how investment property fits into their own financial portfolio and only these professionals can help you with that.

If you are anyone you know are interested in discussing how to make rental property work for you, I’d love to discuss it.  Just give me a call at 593.1000 or email me at Harry@HarrySalzman.com and let’s talk.

I also am available to help those looking to rent a home if that is the option.  You can also pass on my information to anyone who might need help in that area.

My 45+ years in the local real estate arena along with my personal brand of customer service make me one of the best choices you can make for yourself, a friend or a family member when it comes to any form of residential real estate

I can you help buy, sell, buy new construction and buy for investment purposes.  I do it all.  I do it well.  And I do it with extensive knowledge of not only the Colorado Springs market  and regulations, but with long professional relationships with local realtors and builders, which can help you in getting what you seek. I look forward to helping you again soon.

 

JUNE 2017 LOCAL MARKET UPDATE AND MONTHLY INDICATORS ILLUSTRATE OUR CONTINUING UPWARD TREND IN GREATER DETAIL

Pikes Peak REALTORS® Services Corp.,

These reports, issued today, of the continued fabulous residential real estate growth contain much greater detail than the first of the month reports and cover ALL residential areas in the Pikes Peak Region.

The local median sales price increase year-over-year in all properties was 8.3%, a good sign that our housing market is continuing to appreciate.

In the recently published June 2017 Monthly Indicators and Local Market Update for El Paso and Teller Counties, new listings year-over-year were up 7.9% for the single-family/patio homes and up 9.1% for condo/townhomes. 

This is a good indication that folks are now realizing that it is a GREAT time to list a home and trade-up or move to a new neighborhood.  The only drawback, as I keep mentioning, is that you need to know where you intend to move BEFORE you list your home as it is going to sell much faster than it would have in past years.

     The “Activity Snapshot” for June 2017 shows the one-year change:

  • Sold Listings for All Properties was up 8.6%
  • Median Sales Price for All Properties was up 8.3%
  • Active Listings on All Properties was down 22.0%.

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. I recommend that you check out your own neighborhood, or one that you are considering, to get a good idea of what’s transpiring there.  I have reprinted just one neighborhood, Southwest, below to show you the type of information available for all local areas.

              

Despite rising home prices, interest rates, while slowly rising, are remaining historically low for the time being as I mentioned above.  That won’t always be the case, so “sooner than later” should be your motto if a real estate move is in your immediate future.  If you’re thinking of a move or looking for investment property—I’m just a phone call away.

 

COLORADO SPRINGS IN THE NEWS...AGAIN

The Gazette, 7, 18 & 22,.17

Our unemployment rate was the lowest in the nation for the fourth consecutive month.

It remains a record low for the state in records beginning in 1976 and is the fourth-lowest of any state during the 41-year period.  Wow.

According to Rich Wobbekind, senior economist for the Leeds School of Business of UCBoulder, “This rate does suggest we are at full employment.  We are really scrapping the bottom of the barrel.  At 2.3 percent, the people who are unemployed don’t have the skills needed for the current job openings, so employers either have to find the people by recruiting out of state or from people who have retired but are willing to come off the sidelines to be part of the workforce again.”

 

We are the 28th best for first time homes among 62 cities with a population of 300,000 or more.

A new study released last week by WalletHub , a personal finance website, submits that Colorado Springs remains a great place for first-time homebuyers.  Only caveat here—IF they can find an affordable starter home.

The survey is based on nearly two dozen measurements of market attractiveness, affordability and quality of life. 

This would be great news—as any recognition is—but we are falling short in providing homes these first timers can afford.  This is just another reason that buying rental property is a smart idea.  A number of these young folks who are choosing to move here will need housing until they can afford to buy their own home.

 

NEW CONSTRUCTION PRICES COULD ESCALATE AS FIRES BURN CANADIAN FORESTS

The Wall Street Journal, 7.24.17

The wildfires in Canada are pushing up the price of lumber and threatening the supply to U.S. homebuilders.  This fire season across the border has been harder on the lumber industry than in more than a decade.

This comes at a time when existing home listings are so low that many folks are seeking new construction.  I’ve been taking a lot of clients to see if new constructions can help in their home search to satisfy their wants, needs and budget.  The problem has been that the builders are swamped and building as quickly as they are able to keep up with the new demand.

Now when you add this to the mix, the price of new homes will have to increase along with the price of lumber.  And that’s hoping that the supply holds steady.  If not, it will not only cost more, but the wait will be longer.  This is another reason to buy NOW.

Demand is continuing, but lot availability is becoming an issue and rising interest rates could also limit some from buying.

That said, though, the Colorado Springs issued 1,781 permits for new construction of single-family homes for the first half of 2017—matching that of the first half of 2016 when the annual total of permits were at the highest level since 2006.

So all in all..it’s been a good year for new home construction, too. 

 

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Colorado Springs

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HARRY'S BI-WEEKLY UPDATE 7.10.17

by Harry Salzman

July 10, 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.

Optimized by JPEGmini 3.9.27.0L 0x39aa2ab7

AND ONCE AGAIN…LOCAL HOME SALES AND PRICES CONTINUE UPWARD…

It would get a bit tiring to read (and write) except all this great residential real estate news is affecting us all in such a positive way!    

In comparing June 2017 real estate average and median sales prices to June 2016—they are once again up—up—up.  I’m still busier than ever, although things have slowed down a bit so I can at least catch my breath.  Listings are up but continue to be a problem because the lack of inventory makes it more difficult for buyers.  In fact, I’ve had to direct a number of clients to new construction because of this. 

In case you are not aware, that’s another part of my special brand of customer service.  I take the needs, wants and budget of my buyers into consideration and then proceed to find them new construction that fits their personal scenario.  With me, they can be certain in talking to the homebuilder that they are getting exactly what they are being promised and I can help direct them to the best financing for them.  All of this is at no additional cost to the buyer.  Whether it’s an existing home or new construction—I do it all—and more—to make certain that my clients get the very best residential real estate situation for them.

And now for the good news…

In the Single Family/Patio Home category, average sales price in June was $326,263 and median sales price was $285,250.  This is an increase of 10.6% and 8.7% respectively year-over-year.

In the Condo/Townhome category the average sales price was $199,134 and the median sales price was $180,000 up 8.7% and 5.9% respectively year-over-year.

Homes are selling at 100.4% of listing price and a VERY LOW average of 24 days on the market.  Yes, you read that right.  It’s still unbelievable and puts a lot of pressure on both buyers and sellers in terms of decision-making. 

If you are selling your home, you need to know where you are going to next because the short turnaround times don’t give you a lot of time to decide after the sale.

And if you are buying, you need to know in advance exactly what you want because most often you don’t get the luxury of “thinking about it” for even a few hours.  If you don’t make an offer—one that’s going to get noticed—someone else will.  That’s the hard reality these days, but it’s accurate, and the main reason you need a seasoned professional real estate agent like me who knows the “ins and outs” of the process and can get an offer to the table that most likely won’t need to be revised.  That doesn’t mean it will be accepted, and not all are for one reason or another, but my track record is outstanding.  However, disappointment, much as I hate to see it for my clients, is becoming somewhat of a norm, especially in the under $300,000 price range. 

Colorado Springs is appearing on most of the “top” lists—hottest housing markets, best place to live, great cost of living, work/life balance and on and on.  Relator.com just listed the “Top 20 Performing Housing Markets in the USA and while California dominated with 8 cities on the list, Colorado Springs came in at number 8! This is something we who live here know—it’s the best place to live and raise a family or retire, but…now the whole world is finding out and there you go.

If you’re looking to sell and trade up—NOW is a great time and if you’re looking to buy for the first time or investment purposes—there are still homes available in most price ranges. 

Simply give me a call at 593.1000 or email me at Harry@HarrySalzman.com and let me run the numbers for you.  With mortgage interest rates still historically low you might find that the house of your dreams is simply a phone call away.

For more details on the local June 2017 PPAR reports, please see the next article.

 

DESPITE LOW INVENTORY, LOCAL RESIDENTIAL real estate IS HOT

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

You will see in the Cumulative Year to Date Summary, total sales numbers in Single Family/Patio Homes and Condo/Townhomes are up 4.5% and 18.1% respectively for year-over-year.  This number would have been even higher if we had more listings.

New listings are up 10.8% for Single Family/Patio Homes and down 13.2% for Condo/Townhomes. It appears that sellers are beginning to realize that listing their home in this “hot” market will make it much easier to sell.

Here are some highlights from the June 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 June 2017 to June 2016 in PPAR:                      

                        Single Family/Patio Homes:

  • New Listings are 2278, Up 10.8%
  • Number of Sales are 1,743, Up 5.6%
  • Average Sales Price is $326,263 Up 10.6%
  • Median Sales Price is $285,250 Up 8.7%
  • Total Active Listings are 2,162

 

                        Condo/Townhomes:

  • New Listings are 301, Up 13.2%
  • Number of Sales are 248, Up 21.6%
  • Average Sales Price is $199,134, Up 18.7%
  • Median Sales Price is $180,000 Up 5.9%
  • Total Active Listings are 161

 

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

                                                Median Sales Price             Median Sales Price

                                                  June 2017                             June 2016

Black Forest                            $571,000                              $433,500                      

Briargate                                  $386,000                              $355,500          

Central                                      $228,500                              $200,000

East                                           $236,250                              $223,000

Fountain Valley:                       $259,825                              $229,900

Manitou Springs:                     $397,500                              $347,500

Marksheffel:                             $316,750                             $279,900

Northeast:                                $270,000                              $243,450

Northgate:                                $472,455                              $397,500      

Northwest:                               $370,000                              $377,500          

Old Colorado City:                  $248,500                              $240,000

Powers:                                    $272,000                              $250,000

Southwest:                              $421,000                              $342,250

Tri-Lakes:                                 $479,649                              $425,000

West:                                        $285,000                              $250,000

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

 

HOMES IN THE USA ARE ALSO ZOOMING TO A NEW HIGH

RealtorMag, 6.21.17

Prices all across the country have rose to a new high in May and this doesn’t appear to stop buyers as demand remains high despite housing shortages. 

In May, existing home sales—which include completed transactions for single-family homes, townhomes, condos and co-ops—rose 1.1 percent month over month to a seasonable adjusted annual rate of 5.62million.  Existing-home sales are now 2.7 percent higher than a year ago.

“The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level,” says Lawrence Yun, NAR’s chief economist.  “Those able to close on a home last month are probably feeling both happy and relieved.  Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace, and the prevalence of multiple offers in some markets are pushing prices higher.”

The median existing-home price for all housing types rose to $252,800 in May.  That surpasses last June’s peak of $247,600 NAR reports.

According to Yun, “This is not sustainable in the long run.  Current demand levels indicate sales should be stronger, but it’s clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions.”

“With new and existing supply failing to catch up with demand, several markets this summer will continue to see homes going under contract at this remarkable fast pace of under a month,” Yun says.

 

HOW TO FIND A HOUSE TODAY

Rismedia.com, 6.17

This may be the most difficult year in a decade to buy a home, especially for the first-time buyer.  As previously mentioned, prices are soaring and supplies are short—fueling greater demand and multiple offers in the lower price ranges.

There’s not a lot of leeway for mistakes in today’s marketplace.  Discipline is essential, and the learning curve is stepped up.  I’ve been telling you for awhile now that home buying is a more serious business today than ever and even more difficult for move-up buyers as well as first-timers.

Here are five tips on house-hunting in today’s market that will help put you ahead of the competition and may spell the difference between success and failure.

 

(Please note that while a lot of these tips are applicable for any real estate sale, some of the statistics listed are national ones, not local.)

Hire A Specialist

real estate is a large and complex field.  Buying a home is one of the biggest investments you will ever make and it’s essential to have someone like me in your corner.  With 45 years in local residential real estate and an investment banking background, I am well prepared to guide you through the entire process.

Don’t Start Until You’re Ready

It’s important to know in advance what you need, want and can afford.  There’s no sense looking at homes that don’t fit you personal specifications.  It’s also imperative that you improve your credit if necessary, have the money for a down payment and get pre-approved by the lender of your choice prior to the search.

Make a Budget and Stick to It

The amount for which your lender approves you is NOT your budget.  Your pre-preapproval is conditional and can change when you apply for a mortgage.  It also does not include many of the costs of homeownership, like taxes, home insurance and maintenance.  Figure out in advance what you can afford and stick to it.  There are few heartaches worse than falling in love with a house you can’t afford or stretching yourself so thin that you are “house poor” for the foreseeable future.  Don’t let your emotions get the better of you—winning a bidding war could mean a loss to you in monetary terms.  That’s what you have me for—to help keep the emotional part in check so you end up with a home that fits you in “all” areas of importance to your family.

House Hunt Every Day

Looking for a new home today is like a second job and financially, it may even be more important to you than a second job.  The outcome will determine where you live and how much you spend on housing for years to come.  Be proactive and look at all the emails I send you.  Spend time learning about new neighborhoods you might not have considered before.  Ask me as many questions as you need to feel comfortable with the entire process. 

Be Flexible

You might find that you cannot afford to live where you might like, or you can’t afford the size or amenities you would like.  If those are deal-breakers for you, you many not be ready to buy in today’s market—or you might want to revisit your criteria and look at homes in other neighborhoods or an older home you can improve over time.  Starting out in a condo might be an acceptable solution for first-time buyers.  Prices are not likely to decline so you will be building equity while you wait until you can afford the home of your dreams. 

Sweeten Your Offer

Don’t rely on real estate sites to determine the value of a home you like.  I can show you a comparative market analysis (CMA) to help determine it’s real value.  The only thing I can tell you is that with prices rising so quickly, it’s often hard to get a true CMA since other homes in the area may not have sold in recent times.  This is what I was telling you about appraisals.  The appraisers use current CMA, but those are changing almost too fast to keep up with current prices. 

Sellers are not only looking for the best price.  They also want an offer that will close on time from a buyer whose financing will not fall through.  Consider sweetening your offer by increasing the down payment. If you are selling to trade-up, sell your current home before you buy a new one.  Most sellers these days react negatively to offers that are contingent upon a buyer first selling his current home.

Don’t Lose Your Deal

Nationally, about 23% of contracts on homes today have a delayed settlement and 7% of contracts fail to close and are terminated.  The leading causes for delayed settlements are issue relating to obtaining financing and appraisal issues.

Most appraisal issues result from appraisals that come in lower than the contract price and buyers must come up with more cash.  One way to protect against a low appraisal is to know the value of the house before you make an offer and make a larger down payment than you have to.

Persistence Pays Off

Learn from your experiences.  Don’t despair if a seller selects another offer over yours.  A better home may come on the market tomorrow.  Last year buyers searched for an average of 10 weeks and looked at a median of 10 homes according to NAR’s 2016 Profile of Buyers and Sellers but that’s just a national average for all buyers.  If you’re a first-time buyer in a hot market like ours expect the hunt to take longer.  Don’t quite after weather turns cold.  Fall and winter can be a great time to find a home—there is often less competition than in the spring and summer and sellers can oftentimes be more motivated.

 

SKY SOX TICKETS STILL AVAILABLE

The Sky Sox are number one in their division right now and tickets are going fast.  If you would like to enjoy a game from my front-row tickets, please give me a call so I can put them aside for you.

I have four tickets and they are free to you for the asking, based on availability.  Friday night fireworks and Sunday 50-cent hot dog days are the first to go, so call as soon as you know when you might want the tickets.

 

 

 

 

 

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Harry A Salzman
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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