Real Estate Information Archive

July 27, 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.

 

LOTS OF QUESTIONS…STILL THE SAME ANSWERS…

I’ve recently been asked many questions in regard to the local Residential real estate market.  

• Is it a good time to buy? 

 

• Is it a good time to sell? 

 

• What about the rising interest rates?

  

• Are home prices going to continue to rise?

  

• How will this affect my personal situation?

 

• And that’s only a few of them

 

Those of you regular readers know my answer already since I’ve never wavered in reply.  It’s always a good time to buy and sell if that is what you need or want to do and it’s a matter of finding the best way for your personal situation.

There are always folks who need to buy and those who need to sell, both for various reasons, and my job is to make the process as easy as possible to meet the needs, wants and budgets of my clients and potential clients.

I’ve been saying for quite some time that price appreciation this year locally will fall to around 10%, which is certainly a good return, but will allow the market to normalize somewhat.  The recent fast pace of price appreciation has made it difficult for first-time buyers especially, and has driven up demand as folks have been worried that if they don’t sell and trade up soon they could be priced out of the market.  

High demand and low inventory across the country, and most especially here in the Colorado Springs area led to selling prices over asking price and created bidding wars which favor all-cash buyers who have been willing to forego inspections and contingencies.  Again, a detriment to first-time buyers, and for those who need to apply for a mortgage. 

However, if you are ready to sell and trade up or move to a new location or even are looking to buy for investment purposes, there is no better time than the present.  Your current equity will likely give you an excellent down payment and even with the higher interest rates you could possibly keep your monthly output close to what you currently pay.  

And I can tell you this much—if you’ve waited for prices to come down, you’re going to wait a very long time and it is doubtful that you will see that happen.  You hopefully will see prices rising more realistically in the next few years as more homes become available for sale.  

If you have waited for interest rates to go back down, well, good luck with that as well.  Writing as someone who had an interest rate of 8.5% on my first home in 1972, and have seen them as high as 20%, I still consider today’s rates to be excellent.  Why?  Because the annual appreciation of about 10% now equals about 4% above a 30-year fixed-rate mortgage of 6% today.

While I was starting to write this column yesterday, news from The Wall Street Journal flashed across my screen.  I couldn’t wait to share it with you since it answers many of the questions I’ve been asked.  So, without further ado:

 

AND IT’S GREAT NEWS FOR THE COLORADO SPRINGS housing market…

The Wall Street Journal, 7.26.22

The article is titled: “Low-Cost Cities with Strong Economies Remain Attractive as housing market Slows” and it goes on to add that “Remote workers help push small, affordable areas to the top of the latest WSJ/Realtor.com index”.

As remote and new hybrid work schedules are becoming more common, employees are willing to relocate for cheaper housing or a better quality of life.  Work/life balance is becoming very important and that has helped push smaller, affordable markets to the top of the second quarter “Emerging Housing Markets Index” published by The Wall Street Journal/Realtor.com.

The index identifies the top metro areas for home buyers seeking a strong housing market, flourishing economy, and appealing lifestyle.  The methodology explored two main areas:  real estate markets (50%) and Economic health (50%).  

Those two areas comprise eight key indicators:

• real estate Supply (16.6%)
• real estate Demand (16.6%)
• Median Home Listing Price (16.6%)
• Unemployment (6.25%)
• Wages (6.25%)
• Regional Price Parities (6.25%)
• Amenities (6.25%)
• Commute (6.25%)
• Foreign-Born Residents (6.25%)
• Small Businesses (6.25%)
• Property Taxes (6.25%)

Overall, existing-home sales have dropped for five consecutive months.  After two years of fast-rising home appreciation and low interest rates, declining affordability and economic uncertainty is beginning to push some buyers out of the market.  Some sellers are lowering their list prices and price growth is expected to continue to slow in the coming months.

This comes as the U.S. median home price hit a record high of $416,000 in June according to the National Association of Realtors, up 13.4% on the year and the highest since records began in 1999.  As you know, our local median single family home price for that same period was $495,000, up 14.6% year-over-year and our average sales price was $551,304, up 12.6% year-over-year.  

While we have seen an uptick in available homes for sale in the past several months, we are still seeing some multiple offers.  Maybe not 15, as I had on one home and probably closer to 2 or 3, but the good news is that we are still seeing competitive offers on a number of listings.  

With so many folks wanting to relocate here and only so many homes for sale, our housing market is geared to remain healthy even while other areas might not far so well.

So let me cut to the chase---out of the 300 metro areas surveyed, Colorado Springs ranked number 20.  Yes, once again, our city is considered one of the cities that continue to remain attractive even as the housing market is slowing nationwide.

As you will see, Denver is not among the top 20—it is ranked number 66. Fort Collins came in at 11 and Boulder at number 14, so that is great for Colorado in general and for us in the Colorado Springs area, just another reason to be happy we live in a city that is so desirable. 

I know, I know… I would have liked to have kept it a secret, too, but…in terms of inevitable growth, it is a big “wow” that our economy, small business friendliness, unemployment and housing demand is so fabulous.

And once again, I want to give a big shout out to all of our hard-working city and county employees, our Chamber and EDC, and folks such as Mayor John Suthers, Doug Price of Visit Colorado Springs, Chancellor Venkat Reddy at UCCS and so many more who have worked tirelessly to get the Colorado Springs as healthy as it is today and have brought in new businesses, and with them, new residents.  Colorado Springs is no longer that little tourist town south of Denver and our future is looking very bright. Bravo to all.

Here are the top 20 markets as identified in the Index:

There you have it.  

Yes, it could take a bit longer to buy or sell today and you may pay a higher interest rate, but there are a lot of options, and you have your ace in the hole—me.  With my 50 years in the local real estate arena, along with my Investment Banking background, I’ve seen it all and understand what it takes to work in all types of situations.

So, here I am, ready, willing, and able to answer all your questions personally.  Simply give me a call at 719.593.1000 or email me at Harry@HarrySalzman.com and we can go from there.  If I can’t give you the answer to every question you might have, fortunately with all my experience and local connections, I know where to get any answer, and that’s as important as knowing it all!  

 

RENT VS. BUYING?  AN INFOGRAPHIC

KeepingCurrentMatters, 7.15.22

 

July 7, 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.

 

 

YOUR HOME IS LIKELY YOUR MOST “APPRECIATED” ASSET…IN MORE WAYS THAN ONE…

Our homes are our safe havens, our respite from the frenzy of everyday life.  They are where we make memories with our friends and family and oftentimes our “office” away from the office.  A reflection of our individual tastes and often our largest personal asset. 

During the Covid pandemic we found our homes to be our “everything”.  They served as schools, offices, restaurants, entertainment centers and so much more.  And during that forced quarantine many of us came to “appreciate” our homes more than ever before.  Some found new wants and needs and have addressed those, or at least know what they consider to be essential in a future home.    

With the stock and bond markets in constant flux recently and home appreciation staying at historically high levels, it’s likely you are finding home “appreciation” on the financial side as well as the emotional one.

According to an annual survey from Gallup, Americans have chosen real estate as the “Best Long-Term Investment” for 9 years in a row. 

This chart below illustrates the survey findings:

 

 

Due to inflation reaching its highest level in 40 years, it’s more important than ever to understand the financial benefits of homeownership.  To put it in simple terms, rising inflation means prices are increasing in all areas…goods, services, housing costs and more.  

When you purchase a home, you lock in your monthly payments, effectively shielding yourself from increases on one of your largest monthly budgetary items.  If you are a renter, you don’t have that same benefit and aren’t protected from these increases, especially when rents are rising as quickly as they are today.  

According to Danielle Hale, chief economist at realtor.com, “Rising rents, which continue to climb at double-digit pace…and the prospect of locking in a monthly housing cost in a market with widespread inflation are motivating today’s first-time homebuyers.”

One of the advantages of investing in real estate is that it often acts as a good hedge against inflation since there will always be people looking to buy homes, regardless of the economic climate, and because as inflation rises, so do property values.

My background in Investment Banking gives me a head up on many Realtors as I better understand the financial implications involved in purchasing a home, no matter the economic cycle.  Yes, today’s interest rates are most certainly higher than a year ago, as I and many others predicted, but that doesn’t mean first-time buyers or others cannot afford to purchase a new home.  It simply is a matter of understanding the options and finding a way to make it work for each individual situation.

Not only do I study the money markets each day, but I also look at the prices of commodities such as lumber, concrete, and steel.  Those prices affect how homebuilders price the new homes being built.  At present, most of these commodities are down, which will translate into better prices for new home construction.  

There is so much more than interest rates to consider when looking for a home and that’s why you are fortunate to have me in your corner.  I’ve just celebrated 50 years in the local Residential real estate arena and have been around for most every cycle imaginable.  I’ve witnessed 30-year fixed mortgage interest rates as high as 20% (1982) and as low as 2.5% (2020).  I’ve sold homes for $18,000 and for over a million dollars.  I’ve sold homes to first-time buyers, as well as investment properties for those wanting to be landlords.  And along the way I have learned the” ins and outs” of getting a deal done right. 

But the most important thing I’ve learned is that each client has their own wants, needs and budget requirements.  That’s why I look at each client individually and sit down with them to come up with a plan before the home buying or selling process begins, something that’s even more crucial in today’s fast paced buying and selling environment. 

It all starts with a call to 719.593.1000 or email to Harry@HarrySalzman.com so we can begin work to make your housing dreams come true.  

 

And now for statistics…

 

JUNE 2022

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

Here are some highlights from the June 2022 PPAR report.

In El Paso County, the average days on the market for single family/patio homes was a very low 9.  For condo/townhomes it was 7.  

Also in El Paso County, the sales price/list price for single family/patio homes was 102.1% and for condo/townhomes it was 102.5%. 

In Teller County, the average days on the market for single family/patio homes was 16 and the sales/list price was 100.6%. 

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 June 2022 to June 2021 for All Homes in PPAR:   

             

                        Single Family/Patio Homes:

·       New Listings were 2,350, Up 25.3%

·       Number of Sales were 1,712, Up 10.4%

·       Average Sales Price was $551,304, Up 12.6%

·       Median Sales Price was $495,000, Up 14.6%

·       Total Active Listings are 2,125 Up 265.1%

·       Months Supply is 1.2, Up 25.5%

 

Condo/Townhomes:

·       New Listings were 302, Up 46.6% 

·       Number of Sales were 218, Down 0.9%

·       Average Sales Price was $366,659 Up 15.0%

·       Median Sales Price was $348,000, Up 12.1%

·       Total Active Listings are 200, Up 181.7%

·       Months Supply is 0.9, Down 199.9%

 

Now a look at more statistics…

 

JUNE 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 Down 7.5%

 

• Median Sales Price for All Properties was Up 10.3%

 

• Active Listings on All Properties were Up 100.9%

 

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:

 

BUYERS’ 5 WORST FEARS ABOUT THE 2022 real estate MARKET AND WHY THEY MAY NOT BE VALID

The Close, 6.13.22

 

1. Is There a Housing Bubble?  No, there is no bubble at present.  And the current conditions are different from what happened during the housing bubble of 2007 and 2008. If you look at the types of mortgages that were issued prior to the bubble bursting, you can see we were headed for a crash.  The current market situation is very different.  During the recession of 2008, inventory exceeded the demand once the bubble burst, but in this market, the inventory is chasing demand.  As long as demand outpaces supply, the market should remain stable.

 

2. Is There a Recession Coming?  Yes, a recession is on the horizon but that’s not necessarily a bad thing when it comes to real estate.  Typically, when we have a recession that requires the Federal Reserve to increase interest rates to reverse inflation, mortgage rates will drop.  In each past recession, mortgage rates came down and they should here as well.  

Further down the road there will likely be a time when the higher mortgage interest rates of today will allow homeowners to refinance to a lower rate.  Wherever that rate lands, it is sure to be more attractive than today.  

Also, contrary to what you might think, housing values typically increase during a recession.  Therefore, even if homes are appreciating a bit slower during a recession, they are still appreciating.  In our last nine recessions, home values have gone up during eight of them and then went up a lot after each of eight of nine recessions.  The only anomaly was when we had the housing bubble in 2007 and 2008.

Overall, the housing market is stable, even as inflation drives prices up.

                        

3. Inflation is Too High—I Won’t Be Able to Afford to Buy a House Right Now.  As I stated earlier, purchasing a home now means a buyer’s mortgage payment will stay the same year over year, whereas renters might get slapped with rental increases each year as inflation or appreciation increases.  Also, your mortgage becomes easier to manage as your income increases.

That doesn’t mean affordability is easy today, but it’s not as bad as you might think.  Homes prices have gone up, on average around 18% but mortgage rates have gone up about 2% over the past year.

 

4. Will Mortgages Continue to Rise?  In most likelihood, they will probably level off before they reach 7%.  But here’s something to remember—you can refinance your mortgage after a year.  By that time, the rate will likely have dropped back to around 5%.

 

5. Will My House Be Worth Less in the Next Few Years?  This is a great question and one that gets asked the most.  The simply answer is no, most homes aren’t likely to lose value.  The demand for housing will continue to grow from people who will be looking to buy their first home in the next few years or for those relocating and want to own rather than rent.  

 

The real estate market looks like it will continue to grow and hum for the foreseeable future.  As long as demand remains high, and most economists suggest that it will, we will continue to have home appreciation.

I believe the November elections will change the political climate and assuming that happens, steps could be taken to modify what’s happening in today’s economy.  If so, we could experience a shorter period of time in the recession.

According to Tatiana Bailey, our “local economist” and director of the UCCS Economic Forum, there are approximately 12,000 people who at the moment are looking to buy a home here.  Considering at present there are only around 2,000 single family homes for sale, the Colorado Springs area housing market looks to remain strong for the foreseeable future.

Hopefully this answers some of your own questions and if you have others, please don’t hesitate to give me a call.

 

THE TIGHT housing market IS IGNITING HOT BIDDING WARS FOR RENTALS

The Wall Street Journal, 6.28.22

It’s no longer just houses that are going for over list price.  Landlords all around the country are now finding that rental units are being leased for over their asking price as well.  

With the low supply of available homes for sale, folks who either sold their home and have yet to find a new one, or those who want to wait out the interest rate hikes, are looking to rental solutions for now.  What they are finding out is that there are plenty of others in the same boat and some are willing to make an offer of 10-15% over the ask of the landlord.

As you might imagine, this is hurting those who cannot afford or cannot qualify to buy even harder.  This is something I had never heard of until recently and not something I hope to see continue.

What I do know is that the rental market is as hot as the housing market and my clients who look for investment properties are still looking, despite the higher interest rates because what they can get in rent will more than make up for the higher interest they might have to pay.  

If rental property is something you want to add to your investment portfolio, give me a call.  As a landlord myself, I’ve had a lot of experience in this area and can steer you in the right direction.  And, as always, before even considering it, please check with your tax and investment advisors to see if this is a viable option for you.

 

MORTGAGE RATES DROP AFTER THREE WEEKS OF INCREASES

The Wall Street Journal 6.30.22

While mortgage interest rates have dropped a bit, they remain near multi-year highs.  This is fastest acceleration in mortgage rates in decades.  At the busiest time of the year for home sales, these rates, along with continued home price appreciation has made it much more difficult for some would-be-buyers to purchase a home.

However, home price growth is staying strong throughout the country and bidding wars and sales over list price are still the norm even while sales are down somewhat.  In areas like Colorado Springs where a number of folks are being relocated along with their companies, home demand continues to far outpace the inventory of homes for sale.  

As I mentioned earlier, there are still ways of working within the tough new parameters and still be able to find a home that can work for you or a family member.  If you find yourself wondering how to make this happen, please give me a call and let’s look at the numbers and see what we can do.

 

AND JUST A REMINDER:

 

HARRY’S THOUGHTS OF THE DAY:

 

Speaking of Appreciation…

 

 

July 1, 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.

 

 

An Ode to Friendship, Residential real estate and Patriotism….and why I do the things I do.

 

For those of you who read my bi-Monthly e-Newsletters, you might have thought I forgot last week.  On the contrary, I will never forget last week.

I’ve been in local Residential real estate for a little over 50 years now and it’s truly become a passion, as well as a profession.  Finding the right property that suits the wants, needs and budget requirements of my clients has required me to know them on a very personal level.  

Buying a home, either for personal use or investment, most often provides my clients with one of their greatest financial assets.  Therefore, it’s crucial for me to spend the time to make certain we find the right fit for that particular time in their life.

relocation has been a specialty of mine for decades, oftentimes corporate relo, but I actually look at relocation also as simply making a move to a new neighborhood or transitioning to a better fit for a growing or empty-nesting family.

I’d like to share a personal experience, and the reason my regularly scheduled e-Newsletter wasn’t published this week.  While it’s a personal story, it is also actually defines why I do what I do.

My best friend of more than 50 years passed away a week ago.  While it’s been tough to grasp the reality of it, I was also able to appreciate how my chosen profession is truly an advocation.

I met Dr. Gary Markewich in 1973 when he and his family were relocating here for a stint at Fort Carson, and I sold him his first home.  And then his next home.  And his next.  During that time, he became my closest friend, and his family became part of mine.  

When he left the Army, Gary went into private practice in the Springs and eventually left to open a practice in Las Vegas.  Our friendship didn’t change except for the fact that we had to hop a plane to have in-person visits.

Four years ago, he decided to move back to the Springs to be near his sons, daughter-in-law, and grandchildren.  I facilitated the sale of his Las Vegas home and was assigned the task to find a different kind of home for him here.

Gary had been diabetic for many years and, as you might be aware, symptoms can include neuralgia.  He knew he needed a home where he did not have to navigate stairs but being the larger-than-life guy that he was, he wasn’t ready for any type of “assisted” living. 

Lucky for him, he had me.  Not just as a friend, but also as a Realtor.  I spent time trying to understand exactly what was important to him in terms of location, as well as his personal mobility.  Several homes I considered for him were either a bad fit in terms of location and/or for his health issues.

And then, one day as I was talking to long-time clients/friends, they asked me to list a home for one of their parents who was moving into an assisted living facility.  When I saw the home, I knew it would be a great fit for Gary since it had all the “handicap” requirements he might need either then or in the future and it was in the perfect location for him.  

Sight unseen (except for photos), he purchased the home and lived there happily for the last four years.  It was also close to my home and that gave us the opportunity to reconnect in-person on a much more regular basis.  For that I will be forever grateful.  

When he passed away peacefully in his sleep in his own home last week, it gave me some peace in knowing that I had been able to play a role in that.

And that’s when it really hit me even harder than usual. 

 

What I do makes a big difference in the life of my clients.  

 

The time I spend getting to know each client provides me with the information necessary to help them live the best life possible.  Homes are our “safe havens” and finding the right one at the right time can make such a difference.

I had not spent much time thinking of how much of a part my profession played in defining one of the most important friendships of my life until this week.  Dr. Gary Markewich was one of the finest, funniest, most intelligent, generous, and caring people I’ve ever had the privilege to call “friend”.

The best way to honor that friendship is for me to keep doing what I do…. helping people to live the best life possible by finding them the “right home at the right time”.  A “safe haven” when the world is not always quite so safe.

Thank you for allowing me to share this story.  It’s helped me to put it down on paper.  

 

Wishing you and your family, a healthy, happy July 4^th holiday and you will hear from me again next week with my regularly scheduled post.