Real Estate Information Archive

August 21, 2017

HARRY’S BI-WEEKLY UPDATE

                               A Current Look at the Colorado Springs Residential real estate Market

As part of my unique brand of 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.

DOUBLE RAINBOW FROM MY OFFICE WINDOW…

A 90% SOLAR ECLIPSE IN COLORADO SPRINGS TODAY…

HOME PRICES ECLIPSING THE 2016 HIGH IN THE SECOND QUARTER …

ALL-IN-ALL IT’S DEFINITELY A GOOD LIFE!

A lot going on these days and with the focus on today’s total Solar Eclipse over North America, I thought I’d write once again about the “sky high” local home appreciation and what it means to you and me.

The just released quarterly National Association of Realtors (NAR) median single-family price data for 175 Metropolitan Statistical Areas (MSA’s) is just one more “plus” for the Colorado Springs area.  This data has been tracked by NAR since 1979 and I’m thrilled to tell you that while the average sales price of all homes in this survey increased by 6.2%, home prices in Colorado Springs increased by 9.6%.  What that means is that our local homes prices increased more than 50% over the measured average of all 175 MSAs.  Now that’s certainly something to cheer about.  If you’d like to see the complete listing, please click here.

Lawrence Yun, chief economist at NAR, says home prices in most metro areas continued their fast ascent in the second quarter because supply remained at pitiful levels, something we are definitely seeing in the Colorado Springs area. 

“The 2.2 million net new jobs created over the past year generated significant interest in purchasing a home in what was an extremely competitive spring buying season”, Yun said.  “Listings typically flew off the market in under a month—and even quicker in the affordable price range—in several parts of the country.  With new supply not even coming close to keeping pace, price appreciation remained swift in most markets.”

Yun added, “The glaring need for more new home construction is creating an affordability crisis that needs to be addressed by policy officials and local governments.  An increasing share of would-be buyers are being priced out of the market and are unable to experience the wealth building benefits of homeownership.”

“Mortgage rates have subsided in recent months, which has only somewhat helped take away some of the sting prospective buyers are experiencing with the deteriorating affordability conditions in many areas,” Yun said.  “Household incomes may be rising and giving consumers assurance that now is a good time to buy, but these severe inventory shortages will likely continue to be a drag on sales potential the second half of the year.”

The Pikes Peak area is most definitely one of those to which Yun is referring.  I can’t ever remember a time when home sales have moved as quickly and with so many multiple offers in most price ranges.  I can barely list a home on MLS and it’s been shown multiple times and the sellers have received more than one offer in record time.  While this is great news, it places a lot of stress on both buyers and sellers.  Yes, understanding that “time is of the essence” is extremely important to all parties.

Sellers have to know where they are planning to move because oftentimes the buyers want to close quickly.  That’s one of the reasons I’ve encouraged my clients to purchase their “next” home prior to listing their present one, if applicable. 

Buyers, on the other hand, need to know what they need, want and can afford prior to the home search, as there is little time to make a decision when they find a home they like.  If they don’t make an offer, someone else will.  That’s today’s reality and unless the listing shortage goes away, it’s not likely to get any better.

Mortgage rates are still historically low, and with the stock market dropping lately, folks are seeing that home appreciation is most definitely outpacing the market over the long haul.  I’ve been telling you that for years and recent history has proved it time and again.

Many of my clients are adding one or more rental properties to their investment portfolios and with good reason.  Aside from the obvious home equity appreciation, there are still a number of people who cannot or choose not to own a home and those folks need to rent.  Investment properties are helping fill that need for those renters. 

Rents are at an all time high nationally and Colorado Springs has one of the highest percentage increases in rental rates in the country.  This is pushing those who had not considered homeownership in the past into the category of potential buyers.  Millennials and others who have not been real active in the housing market are beginning to move in that direction.  Let’s face it—you’re paying someone’s mortgage one way or the other—why not let that be your own?  Besides the obvious tax deductions and equity building, at least you know that your rent is not going to increase every time the lease is up. 

So there you go.  Lots of reasons to buy and trade-up, buy for investment purposes or buy for the first time.  I’m here to help and advise you with it all.  In todays market it’s more important than ever to have someone with my special brand of customer service who has experience in the bidding wars and can help you stand out in this competitive market.

Simply give me a call at 593.1000 or email me at Harry@HarrySalzman.com sooner than later and let’s see how we can make your residential real estate dreams come true.

 

HOUSING INVENTORY IS AT LOWEST IN TWO DECADES

Rismedia.com, 7.4.17, 8.10.17

Housing inventory is officially on its longest downward stretch in two decades with eleven percent less homes on the market year-over-year in June, according to the latest data from realtor.com. 

According to that data, sixty-three percent of homeowners surveyed recently say their current home meets their needs, with baby boomer homeowners especially unwilling to move—a problem for succeeding generations, who are missing out on the 33 million condos and single-family houses boomers currently own.  And 85 percent of those boomers surveyed say they have no plans to list their home for sale in the next year.  Sixty-five percent of Gen X homeowners and 52 percent of millennial homeowners echoed the same sentiment.

However, 35 percent of millennial homeowners surveyed have plans to list their home for sale in the next year and if their plans pan out, the housing market could gain a boost in entry-level stock.

Colorado Springs’ housing market remains HOT—and is holding at number 8 in the realtor.com “hotness index” with the median age of housing inventory at a low 33 days. 

Again, what this means is that if you’ve considered listing your home, NOW is a great time.  The only caveat is again—be prepared for a quick sale and know what your next move will be.

 

SURVEY SHOWS HOMEOWNERSHIP IS A SOUND INVESTMENT—IF YOU CAN AFFORD IT

Rismedia.com, 7.12.17

With home prices nationally at an all time high, many folks believe in the wealth-building potential of homeownership but are also struggling to reconcile the outcome with its cost, according to a new survey by NAR.

In fact, affordability was identified by respondents as one of their top five challenges, ahead of employment security.  And 44 percent of them report the lack of affordable housing in their community as a “big” or “fairly big” issue. 

Some of these concerns are based on the myth that a significant down payment is required, which is not as much the case in today’s lending environment.  This is especially true for first time buyers, who are able to secure good rates with lower down payment and credit requirements than they imagine.

Despite the concern over affordable housing, this survey makes it clear that a strong majority still believe in homeownership and aspire to own a home of their own.  Building equity, wanting a stable and safe environment and having the freedom to choose their neighborhood remain the top reasons to own a home, according to NAR President Bill Brown.

The 2017 Housing Pulse Survey results are shown below:

 

21^st ANNUAL UCCS ECONOMIC FORUM IS SEPTEMBER 29

You will want to mark your calendars for the perennially sold out UCCS Economic Forum which will take place this year on Friday, September 29^th at The Antlers Hotel. 

The full agenda and early registration is now available by visiting: www.UCCSEconomicForum.com

 

HARRY’S THOUGHT OF THE DAY: (with thanks to Elliot Eisenberg, the Bowtie Economist)

“Domicile Dominion”

Among western industrialized nations, Singapore’s homeownership rate is tops; 90.8%, Norway follows at 82.8%, then Iceland at 77.8%, Italy at 72.9%, Finland at 72.7%, Luxembourg at 72.5%, Belgium at 71.3%, Sweden at 70.6%, Ireland at 68.6%, Netherlands at 67.8%, Canada at 67.6%, Israel at 67.3%, Australia at 67%, France at 65%, New Zealand at 64.8% and the USA in 16^th spot at 64.5%.  Including all nations, the US rates 41^st.

 

 

August 7, 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.

HERE WE GO AGAIN...FORTUNATELY FOR US

I’m thrilled to keep bringing you excellent news about the local housing market as well as the accolades that are continually bestowed upon the city of Colorado Springs.

A good number of my clients have been calling about investment properties, and while it’s not quite as easy to find them as in the recent past—where there’s a will—I will try to find a way.  Interest rates are still historically low but on the upward swing and will more than likely continue that way. 

If you have considered rental property, there’s no better time than the present.  Since that’s another area of my expertise, I’d be happy to discuss the possibility of rentals with you  Give me a call at 593.1000 or email me at Harry@HarrySalzman.com and let’s see if this is something you might want to consider.

And now for some stats…

Homes are selling at 100.3% of listing price and a VERY LOW average of 21 days on the market.  Yes, you read that right.  It’s unbelievable and continues to put a lot of pressure on both buyers and sellers in terms of decision-making. 

When 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 leeway to decide after the sale.  It’s best to find your next home prior to listing your present one at this time.

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 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 still 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 places to live, great cost of living, work/life balance and on and on.

Just this week we have even topped Denver as “one of the top 5 big cities to live in, and one of the most affordable” according to WalletHub who compared 62 cities with populations above 300,000 using several factors:  affordability, economy, education and health, quality of life and safety. 

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.  That’s a part of what’s keeping our housing inventory so low.

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

 

DESPITE LOW INVENTORY, LOCAL RESIDENTIAL real estate IS STILL 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 10.8% and 7.1% respectively for year-over-year.

New listings are up 0.6% for Single Family/Patio Homes and down 18.5% for Condo/Townhomes. If you’ve been thinking of listing your home, it’s certainly going to get a lot more attention in this type of sales environment.  Just remember that it’s likely to sell fast, so again…you need to be prepared for that inevitability.

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

                        Single Family/Patio Homes:

• New Listings are 1,943, Up 0.6%
• Number of Sales are 1,646, Up 10.8%
• Average Sales Price is $323,247 Up 9.9%
• Median Sales Price is $285,000 Up 10.7%
• Total Active Listings are 2,366, Down 14.9%

 

                        Condo/Townhomes:

• New Listings are 229, Down 18.5%
• Number of Sales are 255, Up 7.1%
• Average Sales Price is $201,662 Up 8.6%
• Median Sales Price is $192,000 Up 15.8%
• Total Active Listings are 163, Down 25.9%

 

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

                                          Median Sales Price             Median Sales Price

                                                        July 2017                              July 2016

Black Forest                            $480,000                              $427,500                      

Briargate                                  $390,500                              $337,450           

Central                                     $234,500                              $209,450

East                                          $240,000                              $217,500

Fountain Valley:                      $260,000                              $232,000

Manitou Springs:                    $380,000                              $375,800

Marksheffel:                             $323,000                             $257,500

Northeast:                                $265,000                              $250,000

Northgate:                                $446,928                              $415,000          

Northwest:                               $360,000                              $365,000           

Old Colorado City:                  $322,500                              $225,000

Powers:                                    $275,000                              $255,000

Southwest:                              $333,500                              $286,500

Tri-Lakes:                                $473,950                              $413,415

West:                                        $270,000                              $260,500

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

 

HOMEOWNERSHIP IS UP AS MARKET TURNS

The Wall Street Journal, 8.17

The homeownership rate in the USA climbed in the second quarter—a signal that the sharp downturn that began after the housing crash is beginning to reverse.

According to the Census Bureau, the homeownership rate hit 63.7% in the second quarter—a jump of nearly a full percentage point from a year ago when it reached a 50-year low of 62.9%.

Ralph McLaughlin, chief economist at home tracker Trulia said that “The damage the great recession has done to the homeownership rate is likely reversing course.”

I’m adding my two-cents worth in saying that I believe the high rental costs are also a big contributor for many folks turning to ownership if they are at all able to do so.  Rents just keep on going up along with home prices, so it makes double sense to buy now if at all possible.  Homeowners are earning equity while paying down a mortgage on a home that they own—rather than doing the same thing for their landlord.

 

FIRST-TIME HOMEBUYERS REAPPEAR

The Wall Street Journal, 7.16.17

First-time homebuyers accounted for 33% of all home sales in the USA in May, up from 30% a year earlier, according to the most recent data from NAR.  Once more—my opinion-- folks are finding it cheaper to buy than to rent and earning equity while doing so.

These prospective buyers are showing more interest in home purchases despite rising prices and anxiety over affordability.  Google searches related to buying a first home jumped 11 percentage points to 44% of all home-buying related search activity in 2017 compared to a year earlier, according to a study of search data conducted by Chase Home Lending.

First-time buyers are critical to the market because they bring new demand, allowing homeowners to trade up and stimulating demand for builders to construct new homes.

Demand from Millennials had been soft due to stagnant wage growth, student loan debt and their wariness about the benefits of homeownership.

So far this year, new purchasers accounted for 42% of all buying through April, up from 40% in 2016 and 31% during the lowest point of the recent housing cycle in 2011, according to the most recent data from Fannie Mae, which defines first-time buyers as anyone who hasn’t owned a home in the last three years.

Amy Bonitatibus, chief marketing officer at Chase Home Lending said “I had assumed that we would see Millennials come in in force in the next two years.  They’re already here and buying today.”

While affordability still remains part of the picture, there are still homes available for first-time buyers and good incentives from lenders to help them make this a possibility. 

If you or any family member is considering a first-time home purchase, please have them call me at 593.1000 or email me at Harry@HarrySalzman.com and let me see what can be done to make this possibility a reality.

 

THREAT OF RISING MORTGAGE RATES SPUR ON NUMBER OF MORTAGE APPLICATIONS

RealtorMag. 7.19.17

Total mortgage application volume for refinancing and home purchases jumped 6.3% several weeks ago on a seasonally adjusted basis, according to the Mortgage Bankers Association.  Borrowers appeared worried that interest rates are rising and are seeking to lock in rates as soon as they can.

While rates have been holding steady in recent weeks, the threat of increases remains a constant worry and probably for good cause.  These still historically low rates are not here to stay.  I’ve been saying this for some time but apparently borrowers are finally taking this thought to task and making their move while they can do so at today’s rates.

 

THE HIGH IMPACT OF LOW INTEREST RATES ON YOUR PURCHASING POWER

Keeping Current Matters, 7.11.17

As I just mentioned, interest rates for a 30-year fixed rate mortgage are still near record lows in comparison to recent history.

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.

Simply put, purchasing power is the amount of home you can afford to buy for the budget you have available to spend.  As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain monthly housing budget.

The chart below shows what impact rising interest rates would have if you planned to purchase a home within the national median price range, and planned to keep your principal and interest payments between $1,850-$1,900 a month.

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000).  Experts are predicting that mortgage rates will be closer to 5% by this time next year.

What does that mean to you?  Act now if you want to get the most house for your hard-earned money.

 

SKY SOX TICKETS AVAILABLE BUT GOING FAST

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.