Real Estate Information Archive

August 20, 2018

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.

 

WHAT THIS eNEWSLETTER MEANS TO ME…AND HOPEFULLY TO YOU, TOO

I get a lot of positive feedback from folks who read or have read my eNewsletter, while others have wondered how and why I take the time to continue writing it.

My answer is simple—I do it for YOU, my readers and clients.  I spend a lot of time keeping up on all things concerning residential real estate, some regulatory, some not, and know that in order for me to best serve my clients, information is crucial. Not just for me, but for you, too. Knowledge and implementation equal a better rate of return. 

Purchasing a home is most often the most important financial decision a family can make as it is oftentimes their greatest asset.  Would you want to be less informed about a home purchase than that of securities or car? I certainly hope not.

What I try to do every other week, is give you a condensed view of what’s happening—both local and nationally—and at times often compare the two so you can see just where the Colorado Springs area stands in relation to the rest of the country.

As most of you know, I take great pride in our city and have served on various local government committees in order to give back to the community that has treated me so well. Because of that, I often have been able in a small way to affect positive change.

When Colorado Springs was recently named the “Best Place to Live in the U.S.”, I couldn’t help feeling lots of pride, especially knowing that in my own way I have contributed to help make this a reality.  

My “official" recorded title is “The real estate Therapist” for many reasons.  The first is that I spend as much time as necessary with my clients to determine their exact needs, wants and budget BEFORE ever starting a home search.  When it comes to relocation…Is there a trailing spouse?  Are there children?  Is being close to a good school or parkland a requirement?  What about the commute?

These are all things that come into play whenever I first talk to a client.  “Stage of life” is another important consideration.  Retirees might want to sell and scale down or move to a ranch from a two-level home.  First-time homebuyers without children might want a location closer to downtown or where there are more activities geared to them and their peers.  When it comes time to sell and trade up, schools might be the greatest consideration.  There’s always a reason that people want to move and it’s my job to help determine that reason and make that move as stress free as possible.

And getting back to the eNewsletter.  There are reasons for the articles I publish. It’s important for you to know that homes in the Colorado Springs area are selling for over list price on a regular basis these days so if you are thinking of making an offer under the list price you will be forewarned that it probably won’t happen.  In fact, if you are like the client I told you about last week, the offer won’t even be considered, let alone countered.  So, then again…information is worth time and money and can save you disappointment in the long run.

I realize not everyone is moving all the time, so I also try to provide information concerning your present home and its current value, among other things.  I’ve found that folks often wonder what their home is worth and if it’s possible to move and trade up or go to a different neighborhood but aren’t sure if that is possible.

That’s why I’m here—just a phone call away.  I can provide you with all the information you might need to make an informed decision. Sometimes I might advise you just to stay put if that is in your best interest at the moment.  But you won’t know unless you call.

I can be reached at 593.1000 or by email at Harry@HarrySalzman.comand welcome talking to you, your coworkers, family and friends.  It’s worth the to find out how to maximize your residential real estate investment and I’m always happy to be of help. 

COLORADO SPRINGS CITED FOR BEING SMALL-BUSINESS FRIENDLY

The Gazette, 8.15.18

On top of being named the most desirable place to live in the U.S.A. and the second among the best places to live, both by U.S. News and World Report, Colorado Springs was ranked last week as the nation’s fourth friendliest city for small businessin the seventh annual survey by Thumbtack.com, a San Francisco based online consumer service.

Colorado Springs’ number four ranking out of 57 cities was a tremendous improvement over last year when it was ranked 37 out of 80 metro areas.  The city also received an overall A+ grade this year, up from a B in 2017.

While voluntary and not scientific, the cities and states were ranked in nine areas of performance based on 7,629 responses from small business owners across the country, though only 32 respondents were from Colorado Springs.

Besides its overall A+ grade, Colorado Springs also received grades of A and A- in employment, labor and hiring regulations; tax regulations; licensing regulations and training and networking programs.  The city earned Bs for its ease of hiring and overall regulations.  It received a C+ in the ease of starting a business. Government websites, however, got an F—a grade shared by 34 other cities in this year’s survey.

The only other Colorado city in this year’s survey—Denver—ranked number 41 and received an overall grade of C-.

“Generally speaking, Colorado Springs has a lot to be happy with, with regard to how small-business owners are feeling,” said Lucas Puente, Thumbtack.com’s lead economist.

This can be attributed to the city providing a more welcoming environment for small businesses, according to Mayor John Suthers.  He cited the City Council’s agreement to phase out the city’s personal property tax on business equipment and machinery as a plus and also credited the Rapid Response Program started under former Mayor Steve Bach, for assisting business and expediting their regulatory hurdles.  A stronger economy also puts small business owners in a better frame of mind, he said.

I say—congratulations Colorado Springs on another mention in the “Best” lists.  My participation on PlanCOS Steering Committee over the past two and a half years has given me the opportunity to see first-hand just how hard Mayor Suthers and the City Council, among others, are working to make all of this a reality.  

Bravo to all and Bravo to all of us who live and work in Colorado Springs. 

 

AND JUST OFF THE PRESS…ANOTHER ACCOLADE

The Gazette, 8.17.18

Last Thursday, Colorado Springs was listed as Number 6 out of 300 metro areas nationwide in a survey of hot housing markets by Realtor.com.

This index is based on the number of online views received by homes listed for sale in each market, which indicates demand in a particular area.  

According to Realor.com, “This is a very hot market that is heating up compared to last month and heating up compared to last year.  Median days on the market is 32 with inventory moving 11 percent faster than last year and 27 days faster than the U.S. overall.  Properties in the area receive an average number of views 1.6 times higher than the U.S. average.”

So, there you go. A look at the following statistics will show you why we’re getting all this attention.

 

JULY 2018LOCAL MARKET UPDATEAND MONTHLY INDICATORSILLUSTRATE OUR CONTINUING UPWARD TREND IN GREATER DETAIL

Pikes Peak REALTORS^®Services Corp., 

These reports contain much greater detail than the first-of-the-month reports I share and cover ALL residential areas in the Pikes Peak Region. 

In the recently published July 2018 Monthly Indicators andLocal Market Updatefor El Paso and Teller Counties, new listings year-over-year were down 2.7% for the single-family/patio homes and up 1.7% for condo/townhomes.  

 

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

• Sold Listings for All Properties was down 3.6%
• Median Sales Price for All Properties was up 10.3%
• Active Listings on All Properties was down 10.4%.

 

You can click here to read the 16-page Monthly Indicatorsor click here to get specific information on the neighborhood of your choice from the 34-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 the local pulse. I have reprinted just one neighborhood, Falcon, below to show you the type of information available for all local areas.

For questions about any of these reports or just to find out how I can put my special brand of customer service to work for you, please give me a call.

 

BUYING NOW IS 26.3% CHEAPER THAN RENTING IN THE USA

Keeping Current Matters, 8.7.18

Results of the latest Trulia “Rent vs. Buy Report” shows that homeownership remains cheaper than renting, with a traditional 30-year fixed rate mortgage in 98 of the 100 largest metro areas in the United States.

In the six years of conducting this survey, this is the first time that is was cheaper to rent than buy in any of the metro areas.  No surprise, though, that those two metro areas were San Jose and San Francisco, CA, where median home prices have jumped to over one million dollars this year.

For the 98 metro areas where homeownership wins out, 97 of them show a double-digit advantage when buying.  The ranges go from an average of 2.0% less expensive in Honolulu, HI all the way up to 48.9% in Detroit, MI and 26.3% nationwide.

This map shows the 100 metro areas that were studied.  The darker the blue dot on the metro, the cheaper it is to buy there.

 

In calculating the true cost of renting vs. buying, Trulia includes all assumed renting costs, including one-time costs (like security deposits) and compares them to the monthly costs of owning a home (insurance, mortgage payments, taxes and maintenance), including one-time costs (down payments, closing costs, sale proceeds). They also assume that households stay in their home for seven years, put down a 20% down payment, and take out a 30-year fixed rate mortgage.  

The chart below was created with the date from the last six years of the study, showing the impact of the median home price, rental price and the 30-year fixed rate interest rate used to calculate the “cheaper to buy” metric.

In 2016, when buying was 41.3% less expensive than renting, the average mortgage rate was the driving force behind the difference. Rates this year are the highest they have been in six years, which has narrowed the gap, while home price appreciation has also been driven up by lack of inventory.

Bottom Line? 

Home ownership provides many benefits beyond the financial ones.  If you are one of the many renters or know someone who is and would like to evaluate the ability to buy this year, let’s get together and figure out how we can make that happen.

Home prices are increasing, but at a slower pace; however, mortgage loan rates will soon be going up even more so there’s little time to lose.  Give me a call today and let’s get the ball rolling.

I can be reached at 593.1000 or email me at Harry@HarrySalzman.com today and let me put my special brand of customer service to work for you.

 

CONSIDERING NEW CONSTRUCTION?  HIRING AN AGENT IS IMPORTANT HERE, TOO

Many times homebuyers think they don’t need to hire an agent when building a new home since they are buying directly from the builder and they already have contractors, lenders, and inspectors.  So why involve someone else?

In all honesty, buying ANY home without a knowledgeable professional on your side can be a very costly mistake.  It can mean paying more than you should, missed opportunities for upgrades, contract errors that are not in your favor or a delayed closing.

Here are three reasons to have a professional like me on your side BEFORE visiting the sales office:

1.  Expert Negotiation:  While their advertising would have you believe otherwise, builder’s prices aren’t always set in stone.  Agents are skilled negotiators who can likely get the price dropped slightly or have a few upgrades thrown in.

 

2. Preferred Vendors:  You builder might have an affiliate mortgage lender or title company, but chances are they aren’t going to offer the best deal.  It’s important to shop around, and what’s better than a vendor your agent already knows and trusts?

 

3. Guidance and Support:  The homebuying process can be complicated, with lots of twists and turns and steps along the way. When buying new construction, you also have design reviews, electrical work and other construction needs.  An agent can guide you through all of these, making sure your purchase stays on track, on time and on budget from start to finish.

It’s important to note that while you may be working with an agent or representative of the builder, they may not have YOUR best interests at heart.  Enlisting your own trusted agent can give you an advocate from the very first meeting to closing day.

I saved the best for last…  

All of this new construction advice is available AT NO ADDITIONAL COST TO YOU.  

However, a word to the wise……if new construction is a consideration, just give me a call BEFORE you begin the search. I have long time relationships with most local builders and can help guide you every step of the way.  I’ve seen most new models and can help address which ones might be just right for your particular situation.  This will help save you time, money and take away a good amount of stress.  Homebuying should be as stress free as possible and that’s my goal for all my clients.

 

AND THIS FROM ELLIOT EISENBERG, ‘THE BOWTIE ECONOMIST’…

Blog on 8.16.18

“One week from today [which was 8.16.18], the current bull market will reach 3,453 days in duration, surpassing the longest bull market of 3,452 days, which went from 10.1.90 through 3.24.00.  During this near 10-year period, US equities have returned about 420%, excluding dividends, since the bull began on 3.09.09.  One reason for its success, it began during the trauma of the Great Recession and many investors (wrongly) believed equities would never recover.”

 

HARRY’S JOKES OF THE DAY:  

(with thanks to my fraternity brother and fellow Realtor, Gary Shapiro of Scottsdale)

 

FEATURED LISTING:

The last of my listings sold this week.  One was listed and sold, both by me, on the same day—at asking price.  

Your home can be featured here in the next eNewsletter!

August 6, 2018

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.

 

THIS COMES TO YOU FROM THE “MOST DESIREABLE PLACE TO LIVE IN THE USA”

The Gazette, 7.31.18, U.S. News and World Report, 7.18

Yes, you read that right. I’ve told you this all along and folks who live here already know…but our poorly kept secret is out---Colorado Springs was just declared “the most desirable place to live in the United States” by U.S. New and World Report.

Colorado Springs has grown at a rate of more than 12 percent between 2010 and 2017, according to U.S. Census Bureau estimates.  And it’s not just retirees and military personnel.  Even the Millennial population has increased by 14.7 percent from 2010 to 2015, according to a study from Brookings Institution’s Metropolitan Policy Program.  

In some ways this ranking should come as no surprise since Colorado Springs officials and volunteers have been positioning the City for this type of growth for the past several years and more.  

The City for Champions initiative is taking hold with the construction of the Olympic Museum, the Air Force Academy Visitor Center, UCCS Sports Medicine facility and a newly approved 10,000-seat multi-use stadium downtown, along with a 3,000-seat indoor arena for Colorado College’s men’s hockey team. 

Recent investment in the public infrastructure and the approval of resurrected stormwater fees are a testament to the public’s active investment in Colorado Springs.  

Yes, we have the magnificent views, Garden of the Gods, Pikes Peak, fabulous hiking and biking trails, a vibrant, growing downtown and so much more.  But in economic terms, the best news is the investment of companies and restaurants, along with relocated employees, who are now calling our City “home”. Again, our local government officials, along with the Chamber/EDC and the Visitors and Convention Bureau, have done a fabulous job of putting us forefront in the minds of companies and others who are looking to relocate.  

Of the top five most desirable cities listed in the survey, Colorado Springs has the smallest metropolitan population—listed as 688,643.  We also are the most affordable in terms of median home prices. When you add that to our relatively low cost of utilities and other peripheral expenses, it’s no wonder people are starting to realize that Colorado Springs is “the most desirable place to live”.

And speaking of the housing market…when I looked into my “crystal ball” prior to my annual presentation to the Colorado Springs City Council and El Paso County Commissioners in January, I predicted a 7-8% appreciation on single-family homes here.  As you will see in the July 2018 PPAR Report, my prediction has come to fruition.  Our average sales price year-over-year is up 7.5% and our median sales price year-over-year is up 8.8%! Great news for all homeowners and also for those looking to buy in our area.

I have also said that while prices will continue to escalate, albeit more slowly than the frenzy of the recent past, sales will be slightly down.  Some of this is due to the lack of available listings and some due to the price escalations.  In either scenario, it’s much better for the market because as home values rise a bit slower, more people can afford to still buy before increased interest rates keep them from homeownership or from trading up.

So, yes, this is a GREAT time to sell and trade up.  While listings are still slightly down, more folks are starting to see that it makes sense to “test the waters” in terms of selling their present home. I want to remind you that with most homes selling at listing price or over, it is especially important to have someone like me on your side when making an offer.  When my clients listen to my advice, accumulated over my 46 plus years in the business, they most often get what they want—or at least present an offer that gets good consideration.  

A few weeks ago, I had a client who wanted to offer, against my advice, considerably less than asking price of a home and sure enough—the seller did not even consider the offer.  I hate to see my clients disappointed and that’s why I offer the best advice available to try and prevent that from happening. In this particular case, my client unfortunately learned the hard way and hopefully will have better results with a more “realistic” offer next time!

The Colorado Springs area is still experiencing a boom in new home construction.  Single-family home permits are up 22 percent over 2017 through the first seven months of 2018, according to the Regional Building Department.  At this pace, new home construction here is looking to reach a 13-year high.  If new construction is something you’ve considered, I can help you in that area, too.  My long-term association with most local builders can provide you my expertise-–all at no additional cost to you.

If you’re even considering a move and wondering how to make it happen, simply give me a call today at 593.1000 or email me at Harry@HarrySalzman.com and let’s see how I can put my special brand of customer service to work for you.

And now for July statistics…

Homes are selling at 100.2% of listing price with the average days on the market at a very low 21.  

This continues to be great news for both buyers and sellers but with homes selling so fast it still necessitates knowing where you plan to move next prior to listing your present home.

The Monthly Summary shows that compared to a year ago, total active listings are up 0.8% for Single Family/Patio Homes and down 1.2% for Condo/Townhomes.  New listings are down 3.0% for Single Family/Patio Homes up 7.0% for Condo/Townhomes.  

Please see the next article for the just released local statistics and be sure to check out the next eNewletter which will provide the quarterly stats for the 174 top Metropolitan Statistical Areas. I am fairly certain that Colorado Springs’ median home prices will again be considerably higher than the U.S. average.

 

JULY 2018 WAS ANOTHER RECORD SETTING MONTH IN LOCAL RESIDENTIAL real estate

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

Here are some highlights from the July 2018 PPAR report. A look at the Median Sales Prices will show that prices have continued their record setting pace for the fifth straight month!  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 2018 to July 2017 for All Homes in PPAR:                      

                        Single Family/Patio Homes:

·       New Listings are 1,884, Down 3.0%

·       Number of Sales are 1,592, Down 3.3%

·      Average Sales Price is $347,517, Up 7.5%

·      Median Sales Price is $310,000, Up 8.8 %

·       Total Active Listings are 2,385, Up 0.8%

·       Months Supply is 1.5

                        Condo/Townhomes:

·       New Listings are 245, Up 7.0%

·       Number of Sales are 235, Down 7.8%

·      Average Sales Price is $234,064, Up 16.1%

·      Median Sales Price is $218,000, Up 13.5%

·       Total Active Listings are 161, Down 1.2%

·       Months Supply is 0.6

 

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

                                        Median Sales Price               Median Sales Price

                                                     July 2018                                July 2017

Black Forest                             $557,000                              $480,000                     

Briargate                                   $409,950                              $390,500            

Central                                      $234,750                              $234,500

East                                           $265,000                              $240,000

Fountain Valley:                       $279,900                              $260,000

Manitou Springs:                     $445,500                              $380,000

Marksheffel:                              $320,628                             $323,000

Northeast:                                 $294,250                              $265,000

Northgate:                                 $450,000                              $446,928          

Northwest:                                $419,000                              $360,000            

Old Colorado City:                   $325,000                              $322,500          

Powers:                                     $299,900                              $275,000

Southeast:                                $232,000                              $207,000

Southwest:                               $357,000                              $333,500

Tri-Lakes:                                 $507,000                              $473,950

West:                                         $297,500                              $270,000

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

 

DESPITE RISING HOME PRICES ACROSS THE U.S.A., ECONOMISTS ARE SAYING WE ARE NOT HEADED TOWARD ANOTHER HOUSING BUBBLE

Keeping current matters, 7.26.18

While home prices are continuing their climb due to lack of inventory locally and nationwide, sales are slightly down for this very same reason.  Rising mortgage loan rates are also beginning to affect sales numbers too.  

Some might be concerned that we may be headed for another housing “boom & bust” but it is important to remember that today’s market is quite different than the bubble market of twelve years ago.

Here are four key metrics that will explain why:

1. Home Prices
2. Mortgage Standards
3. Foreclosure Rates
4. Housing Affordability

 

1.  Home Prices

There is no doubt that home prices have reached 2006 levels in many markets across the country. However, after more than a decade, home prices should be much higher based on inflation alone. 

From the latest data available:

“The inflation-adjusted U.S. median sale price in June 2006 was $247,110 (or $199,899 in 2006 dollars), compared with $213,400 in March 2018”.

 

2. Mortgage Standards

Many are concerned that lending institutions are again easing standards to a level that helped create the last housing bubble.  However, there is proof that today’s standards are nowhere near as lenient as they were leading up to the crash.

The Urban Institute’s Housing Finance Policy Center issues a monthly index which: 

“Measures the percentage of home purchase loans that are likely to default—that is, go unpaid for more than 90 days past their due date. A lower HCAI indicates that lenders are unwilling to tolerate defaults and are imposing tighter lending standards, making it harder to get a loan.  A higher HCAI indicates that lenders are willing to tolerate defaults and are taking more risks, making it easier to get a loan.”

Their July Housing Credit Availability Index revealed:

“Significant space remains to safely expand the credit box. If the current default risk was doubled across all channels, risk would still be well within the pre-crisis standard of 12.5 percent from 2001 to 2003 for the whole mortgage market”.

 

3. Foreclosure Rates

A major cause of the housing crash last decade was the number of foreclosures that hit the market.  They not only increased the supply of homes for sale but were also being sold at 20-50% discounts.  The foreclosures helped drive down all home values.

Today, foreclosure numbers are lower than they were before the housing boom.  Here are the number of consumers with new foreclosures according to the Federal Reserve’s most recent Household Debt and Credit Report:

2003:  203,320 (earliest reported numbers)

2009:  566,180 (at the valley of the crash)

Today:  76,480

Foreclosures today are less than 40% of what they were in 2003.

 

4. Housing Affordability

Contrary to many headlines, home affordability is better now than it was prior to the last housing boom.  In the same article referenced in #1, Corelogic revealed that in the vast majority of markets, “the inflation-adjusted, principal-and-interest mortgage payments that homebuyers have committed to this year remain lower than their pre-crisis peaks.”

They explained further:

“The main reason the typical mortgage payment remains well below record levels in most of the country is that the average mortgage rate back in June 2006, when the U.S. typical mortgage payment peaked, was about 6.7 percent, compared with an average mortgage rate of about 4.4 percent in March 2018.”

The “price” of a home today may be higher, but the “cost” is still below historic norms.

Bottom Line:

Using these four metrics to compare today to last decade’s housing bust, we can see that the current market is not anything like that bubble market.

 

HOMEOWNER RATE INCHES UP

The Wall Street Journal, 7.27.18

Homeownership in the U.S. continues to climb, with more Americans benefiting from the sharp rise in home values in recent years.

However, homeownership still remains historically low—at 64.3%-- and has risen tepidly this year despite strong economic growth.  

While 64.3% indicates a small percentage growth, the rate remains well below the peak of 69.2% in late 2004 and a full percentage point below the 50-year average. 

More and more renters say they aren’t interested in buying a home due to financial concerns, according to a survey released by Freddie Mac.  

“Homeownership has bottomed out but is likely to go more or less sideways for the foreseeable future,” economist Mark Zandi of Moody’s Analytics said.  “Easing credit standards and a strong job market will support homeownership, but higher mortgage rates and the change in tax law weigh on it”.  

At present, homeownership among younger Americans is driving the rise in overall homeownership rates.  The rate among those under the age of 35 rose to 36.5% in the second quarter, up 1.2 percentage points from the previous year.  That was faster than the 0.6-point gain in overall homeownership.