Real Estate Information Archive

August 15, 2016

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.

OUR LOCAL STATS REALLY SHINE IN THE HOTTEST SUMMER FOR RESIDENTIAL real estate IN TEN YEARS 

As most of you are aware, I publish quarterly statistics from the National Association of Realtors^® that track the Median Sales Prices of all single family home sales closed that were listed on MLS nationally, and specifically list the top 178 Metropolitan areas, of which Colorado Springs is one.

I’m trilled to report that the survey, which was released last week for the second quarter 2016 shows Colorado Springs with a 5.9% appreciation in home values from the same quarter last year.    When you consider that for the entire U.S.A., the appreciation was 4.9%--that translates into a full percentage point higher—or literally—Colorado Springs is showing a 20% higher home value appreciation than the country at large and is among the top 75 markets in appreciation.

That’s not just good news, but GREAT news for all the local buyers and sellers and certainly explains why the spring buying and selling frenzy is continuing into fall.  I can’t remember ever being quite as busy as I have been this summer.  It certainly makes sense when you consider that interest rates are flat and continue to be historically low, while rental rates are skyrocketing.  This translates into many folks coming into the market for the first time while competing with those looking for investment properties. 

To view the survey in its entirety, please chick here.

Several weeks ago—before this survey was released—Tatiana Bailey, PhD, Director of the Economic Forum at UCCS, asked for my estimate on where home values might be in terms of appreciation by year end.  I told her 6.0%.  Well, I didn’t have a crystal ball, but it sure looks like I’m right on target at the moment and hopefully we will end up even higher than that if things keep going like they have. 

As a reminder to you—since a number of the economic experts, such as Tatiana, ask my opinion on matters concerning Residential real estate—you can feel very comfortable that when you are working with me you not only get my special brand of customer service, but also a professional, knowledgeable approach to buying and selling based on my 44 plus years in the local market.

When you want my opinion on all of your options—buying, selling or investing--even if you are simply starting your decision process, please give me a call at 598-3200 or email me at Harry@HarrySalzman.com and let’s find the best way to help you take advantage of this “hot” time in Residential real estate.

 

AND NOW SOME DETAILS FROM THE SURVEY

Realtor.org, 8.10.16 ,RISMedia, 8.11.16

Homes for sale in July are moving two percent more quickly than last year as prices continue to hit new record highs, confirming a record-breaking summer and the hottest July in a decade. 

“The best spring in a decade has transitioned into the decade’s hottest summer,” says Jonathan Smoke, chief economist of realtor.com. “Pent-up demand left over from two years of tight supply against the backdrop of mortgage rates near three year lows have encouraged buyer activity at a time when sales usually begin to decline. While prices are higher as a result of the strong demand and limited supply, the lower mortgage rates are neutralizing the impact on purchasing power.”

Lawrence Yun, NAR chief economist, says a faster pace of home sales amidst languishing inventory levels pushed home prices higher in most metro areas during the second quarter.  “Steadily improving local job markets and mortgages rates teetering close to all–time lows brought buyers out in force in many large and middle-tier cities,” he said.  “However, with homebuilding activity still failing to keep up with demand and not enough current homeowners putting their home up for sale, prices continued their strong ascent—and in many markets at a rate well above income growth.”

“Many listings in a majority of markets—and especially those in lower price ranges—had multiple offers and went under contract quickly because of severely inadequate supply.  This in turn dented affordability and without a doubt priced out a segment of buyers attempting to seek relief from fast-growing rents,” Yun added.

I’ve experienced this myself in recent months with a number of my clients.  As I’ve said time and again—when you find what you are looking for—there’s no time to delay.  Multiple offers are apparently not going away—and “the early bird gets the worm” so to speak.

 

LOCAL RENTERS ARE BEING SQUEEZED IN SEVERAL DIRECTIONS

With local rental rates rising even faster than the rest of the country, renters are being forced to consider new options.  Rental properties are in short supply here at present and investors are picking up many of the homes that might have been affordable for first time buyers.  When homes in the lower price ranges come on the market they have multiple offers immediately. 

There is currently a 51-year low of homeownership—62.9% of Americans own their own home. 

My advice?  Well, if you’re a first-time buyer, there are many new options available to you, from lower down payments to lower interest rates, and—starting in January 2017—a new incentive for first time Colorado buyers, explained further in the next article.

If you are an investor, or considering that route, now is a great time to buy.  I’ve found that folks do not even have to list their homes for rent—there is a waiting list for most rentals that come on the market.  I’ve been busy looking for investment homes lately for a number of my clients.  With homes appreciating at this pace and a shortage of rental properties, the timing is couldn’t be better.  If you’ve considered adding investment properties to your financial portfolio, don’t wait much longer.  I’ve had considerable experience in this arena and will be happy to discuss whether this might be an option.  Just give me a call and let’s see if this is a good direction for you.

 

HB 1467—FIRST-TIME HOMEBUYER SAVINGS ACT TAX DEDUCTION STARTING IN JANUARY 2017

Colorado Association of Realtors^® Legislative Review 2016

A “First-time Homebuyer Savings Account” (FHSA) will allow any Coloradan to set aside up to $50,000 toward the cost of purchasing a new home.  The earnings on those funds—interest and capital gains—are free from Colorado state taxes forever.  FHSAs will be a great way for future homeowners to start saving early for the costs of buying a home. 

These accounts will be easy to set up—and you can either open a new one or transfer money from an existing savings account to a FHSA.  The qualifying beneficiary of the account can be a child, or grandchild, or the account holder may designate himself or herself as the qualified beneficiary.  The qualifying beneficiary of the account must have never owned a single-family, owner-occupied residence (including condo, manufactured home or mobile home) or must have been off of the title for such a residence for at least three years due to dissolution of marriage.

This is fabulous news for renters and for parents and grandparents who wish to help family members in buying a first home. 

I’ll provide more information as it is released, but I wanted to give you a “heads-up” that something great is about to begin for first-time buyers.

 

THE IMPACT YOUR INTEREST RATE MAKES  (INFOGRAPHIC)

KeepingCurrent Matters, 8.5.16

Some Highlights:

• Interest rates have come a long way in the last 30 years.
• The interest rate you secure directly impacts your monthly payment and the amount of house that you can afford if you plan to stay within a certain budget.
• Interest rates are at their lowest in years… RIGHT NOW!
• If buying your first home, or moving up to the home of your dreams is in your future, now may be the time to act!

 

MASTER BATHROOMS:  THE MOST LUXURIOUS SPOT IN THE HOME?

RealtorMag 7.20.16

The American Institute of Architects’ spending projections for 2016 shows that a growing number of homeowners are opting for more luxurious bathrooms over sprucing up other rooms in the house—even kitchens.

“The master bedroom is becoming a real point of focus, and since it’s one of the most used rooms in the house, it’s an opportunity to make a statement.” Beth Fisher, senior management director of marketing for the Corcoran Sunshine Marketing Group, reported.

Architects surveyed by the American Institute of Architects say 29 percent of their clients are asking for a bigger bathroom, an increase from 25 percent a year ago.  “We’re seeing master bathrooms and master bedrooms being almost the same size,” says Allison Greenfield, partner at Lionheart Capitol in Miami.

How much owners stand to get back on these ultra-luxury bathroom redos in still in question.  Remodeling Magazine’s Cost vs. Value report shows that upscale bathroom remodeling recouped only 56 percent of its cost at resale time.  However, to a number of owners, that’s not the driver behind these remodels.  Those owners simply want a quiet sanctuary shut off from a 24/7 smartphone-dominated world, noted MarketWatch.

 

 

 

 

 

 

 

August 1, 2016

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 OF MORE GOOD NEWS FOR LOCAL HOMEOWNERS

July PPAR statistics came out this afternoon and once more the Pikes Peak housing market has performed extraordinarily well now has shown 24 consequent months of increased local Residential real estate sales.

Homes are continuing to sell at a whopping 99.8% of listing price.  Not only that—the average days on the market is a low 25.  This is such good news for both buyers and sellers. 

As you will see in the Cumulative Year to Date Summary, total sales numbers in Single Family/Patio Homes are up 14.9 over July 2015.

The Monthly Summary shows that total active listings are down 18.5% for Single Family/Patio Homes and 26.7% for Condo/Townhomes compared to a year ago.  This downward trend is continuing to be great for sellers.  While new listings are slightly up, it continues to be more difficult, but certainly not impossible, for current buyers to find a new home. 

Median Sales Prices are up 6.0% and 6.6% respectively for Single Family/Patio Homes and Condo/Townhomes—more wonderful news for both buyers and sellers.

Another feather in our cap is the fact that Colorado Springs is once again in the “Top 20 Hottest Housing Markets” for July 2016. 

That said, I am still as busy as I’ve ever been, much of it due to increased equity in homes and still historically low interest rates that are causing folks to realize that they can get more house for the same or even less money by trading up or moving to a new area.  A number of first-time buyers are in the market due to the increasingly high rental rates.  That is also driving those looking for investment properties as rental homes have had “waiting lists” in recent days.

However, some problems that have surfaced are the longer lending approval times, bidding wars, delays in getting home appraisals and fewer homes available in the $300,000 and under range. 

One more time--it’s very important in today’s market to know what you want, need and can afford prior to the hunt for a new home. There’s no longer the luxury of “let me think about it for a couple of days or even a few hours” at present, as you can see from the statistics.

If you’re considering a move, give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let’s get the ball rolling.  I look forward to putting my special brand of customer service to work for you, your family and friends or co-workers.

 

JULY 2016 WAS THE 24^TH STRAIGHT MONTH OF INCREASED LOCAL RESIDENTIAL real estate SALES

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

Here are some highlights from the July 2016 PPAR report.  Please click here to view the detailed 14-page report, including charts. If you have any questions, just give me a call.

In comparing July 2016 to July 2015 in PPAR:                      

                        Single Family/Patio Homes:

• New Listings are 1,932, Up 2.7%
• Number of Sales are 1,485, Up 8.6%
• Average Sales Price is $294,162, Up 6.8%
• Median Sales Price is $257,500 Up 6.0%
• Total Active Listings are 2,780, Down 18.5%

                        Condo/Townhomes:

• New Listings are 281, Up 31.3%
• Number of Sales are 238, Up 22.7%
• Average Sales Price is $185,685, Up 9.3%
• Median Sales Price is $165,750, Up 6.6%
• Total Active Listings are 220, Down 26.7%

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

                                                Median Sales Price             Median Sales Price

                                                  July 2016                               July 2015

Black Forest                            $427,500                              $412,450                      

Briargate                                  $337,450                              $328,150         

Central                                     $209,450                              $180,000

East                                          $217,500                              $197,000

Fountain Valley:                      $232,000                              $217,000

Manitou Springs:                    $375,800                              $310,000

Marksheffel:                             $257,500                             $255,000

Northeast:                                $250,000                              $255,000

Northgate:                                $415,000                              $397,500         

Northwest:                               $365,000                              $355,500         

Old Colorado City:                  $225,000                              $245,450

Powers:                                    $255,000                              $229,500

Southwest:                              $286,500                              $282,500

Tri-Lakes:                                 $413,415                              $440,000

West:                                        $260,500                              $276,950

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

 

HOME SALES ARE NOW AT THEIR FASTEST PACE IN NEARLY A DECADE

The Wall Street Journal, 7.22.16

The National Association of Realtors has said that in June 2016 the pace of existing-home sales increased to the highest level since February 2007. 

The housing market has been boosted in recent months by strong job growth, improving wages and mortgage rates that have dipped near historic lows since Britain’s decision to leave the European Union.

While economists had predicted the pace of home sales would be moderate in 2016 due to fewer homes for sale and lackluster economic growth, thus far the market has largely outperformed those expectations.

NAR chief economist, Lawrence Yun, still predicts that the market is likely to slow throughout the remainder of the year.  While demand may remain strong, inventory shortages are likely to depress purchase he said.

 

real estate BETTER THAN STOCKS, GOLD

RealtorMag.com 7.25.16

In a recent national survey conducted by Bankrate, it was found that despite recent gains in the stock market, Americans have more confidence investing in real estate. 

Consumers selected real estate as the top pick to invest money the wouldn’t need for more than 10 years, followed by cash investments such as certificates of deposit and savings accounts.  Coming in third was the stock market.

According to Sterling White, a co-founder of Holdfolio, a real estate Investment firm, “Homes are tangible.  You can physically see and feel the product.  So you know where your money is going:  it’s going into that house.  With stocks, you have no clue where your money is going.”

The millennials were the only group that valued cash investments above their other choices by a large margin.  Financial planners are finding this a bit concerning, especially since right now you are practically getting no interest from cash investments like CDs and savings accounts. 

It’s possible that many of these millennials are still mired in student loan debt and either cannot save for a down payment or do not have the credit to qualify for a mortgage.  Hopefully they will get more detailed information to help them find a way to invest in a home.  Mortgage lenders are going all out to decrease down payment and credit requirements for these folks.

 

AMERICAN’S TOP HOUSING CONCERNS

RealtorMag.com

It appears that Americans are concerned about the upcoming election as much as they are about low inventories and high prices.  Once more, millennials are driving this concern.

Lingering concerns about the housing crisis of 2008 is of particular concern to these folks.  Confidence, or a lack of it, is keeping the millennials away according to a recent survey.

The top concerns Americans’ expressed in the latest ValueInsured Modern Homebuyer Survey were:

• Global economy:  59% of Americans and 68% of millennials say that the global economic climate had them worried

 

• American economy:  63% of Americans and 70% of millennials say that the current U.S. economy has them concerned about the risks of buying a home

 

• National security:  48% of Americans and 61% of millennials say that national security is taking a toll on their home-buying decisions

 

• Job security/mobility:  55% of Americans and 71% of millennials say that the possibility of a job change or loss has them concerned.

 

RENTAL INCOME PROPERTIES ARE ON THE RISE

The Gazette, 7.31.16, Bloomberg News

The share of Americans’ total personal income coming from rental profit rose to a record 4.4% in the first quarter 2016 according to data released in a monthly Commerce Department report.

That is an all time high in figures dating to 1947 and is up from 0.7% 30 years ago.  That’s a big WOW.

I’ve personally helped a number of my clients find rental properties to add to their investment portfolios and a number of them have purchased several of these in recent months. 

Two economic trends are at the core of this.  First, historically low mortgage rates have cut down expenses that would eat into a landlord’s pocket.  At the same time, tight supply has pushed rental prices in the U.S. (and most especially the Pikes Peak area) up at more than double the rate of other goods and services. 

“The share of Americans renting their home is now nearing 50-year highs, and this rapid shift has occurred at a time when the rental housing stock has not had ample time to catch up,” said Ralph McLaughlin, chief economist at Trulia.  “Investors have been able to capitalize on the shortfall by taking higher rents.”

With homeownership in the U.S. falling to 63.5 percent in the first quarter, near a 48-year low, it’s easy to understand why.  The paradox is that as much as renters want to own a home, higher rents are making it harder for them to save for a down payment and less than stellar credit histories are also a detriment.

For those of you considering rental income properties, please give me a call.  As I’ve said in the past, being a landlord is not necessarily for everyone, but I can provide you with the tools necessary to determine whether or not this might be a good financial investment for you. 

 

SKY SOX TICKETS GOING FAST

Just a reminder -- I have four front row seats available on a first come, first served basis.  Just give me a call and I will be happy to put them aside for you.  They tend to go out the door quickly, especially for the Friday night fireworks and Sunday 50-cent hot dog games.  If you are interested, don’t wait until the last minute.  I’ll save them for you if you let me know in advance.