Real Estate Information Archive

February 7, 2023

 

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 Residential real estate issues that will help to make you a more successful and profitable Buyer and Seller.

WITH SPRING BUYING SEASON ALMOST UPON US, THE LOCAL housing market IS SHOWING SIGNS OF INCREASED ACTIVITY

It’s  been a long couple of months in the Residential real estate market, both locally and nationally, but things are starting to look up here just in time for the traditional busy time of year.

To begin with, mortgage interest rates have been falling and should go down a bit more in the coming months.  And, as you will see in the statistics below, there are more homes on the market now, and I would suspect that there will be even more in the next month or two.

Traditionally, folks wait to put their homes on the market after the holiday season and while we saw fewer new listings last month compared to a year ago, there are considerably more homes for sale than there were last year at this time.  Almost two hundred percent more single-family, townhomes were actively for sale in last month compared to last January!  

That is great because there are many folks looking to buy here for so many various reasons.  First, rental prices are still going through the roof and many renters are looking for ways to become homeowners.  Then we have new companies relocating here and their employees are also looking for to relocate and find housing. Folks who had waited too long to sell and trade up and found themselves in a bind due to the rising interest rates along with the greater home appreciation are now finding ways to make their dreams a reality.

Colorado Springs is as desirable a place to live as it’s ever been, and the city is still getting great press.  A recent article in Fortune Magazine entitled “Best Place to Travel in 2023” includes Colorado Springs among many foreign cities, as well as some others in the U.S.  And, as you well know, once you visit Colorado Springs, somehow you start thinking about relocation!  It’s happened to the best of us and I’ve no doubt it will continue for years to come.

Those who were thinking prices were going to fall are realizing that it’s just not going to happen.  Yes, the bidding wars and sales considerably over listing price may be gone now that there are more homes for sale, but don’t think you’re going to see a drop in home values here.

I’ve personally predicted an increase of 3%-5% for 2023.  I wouldn’t even be surprised if this is on the low side, but we will have to wait and see.  What I do predict is that home values here in general are not going to slide.

If you’ve even considered a move, to sell and trade up, move to a new neighborhood or for investment purposes, you might want to get a jump on the sure to be busy spring buying season.

Knowing what you want, need, and can afford is the first step.  The second step is to contact me.

My almost 51 years in the local residential real estate arena, coupled with my investment banking background, give me an edge that my clients have found to be crucial in helping them and their families realize their personal real estate visions.

If Residential real estate is among your hopes and dreams for 2023, please give me a call at 719.593.1000 or email me at Harry@HarrySalzman.com and let me help make them come true.

And now for statistics…

 

JANUARY 2023

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

Here are some highlights from the January 2023 PPAR report. 

In El Paso County, the average days on the market for single family/patio homes was a 50.  For condo/townhomes it was 37.  

Also in El Paso County, the sales price/list price for single family/patio homes was 98.4% and for condo/townhomes it was also 99.0%.  

In Teller County, the average days on the market for single family/patio homes was 56 and the sales/list price was 97.5%.

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 January 2023 to January 2022 for All Homes in PPAR:

                        

                        Single Family/Patio Homes:

·       New Listings were 965, Down 18.2%

·       Number of Sales were 739, Down 30.2%

·       Average Sales Price was $525,254, Up 6.1%

·       Median Sales Price was $445,000, Even

·       Total Active Listings are 1,639, Up 198.5%

·       Months Supply is 2.2, Down 6.6%

 

Condo/Townhomes:

·       New Listings were 181, Down 11.7% 

·       Number of Sales were 90, Down 43.0%

·       Average Sales Price was $335,963, Down 1.9%

·       Median Sales Price was $337,250, Down 2.2%

·       Total Active Listings are 256, Up 224.1%

·       Months Supply is 2.8, Down 5.2%

 

JANUARY 2023 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 33.2%

 

• Median Sales Price for All Properties was Even

 

• Active Listings on All Properties were Up 108.4%

 

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 in order to get a good idea of the local pulse.  As an example, here is a detailed report on the Colorado Springs area:

housing market SHOWS SIGNS OF THAWING

The Wall Street Journal, 2.6.23

As I was writing this, I glanced online and saw an article saying pretty much what I had shared above.  So, here’s what it said:

“A decline in mortgage rates has more people interested in buying a home”

In response to signs that the Federal Reserve is nearly finished lifting rates, the average 30-year home loan rate has come down by just about a full percentage point from a 20-year high above 7% in November.

Mortgage applications are up by about a quarter since the end of last year and a measure of signed real estate contracts rose in December after six months of declines.  In addition, the number of people contacting real estate agents has rebounded from a November low, according to Redfin Corp’s internal data.

While rates are still considerably above the 3% range of a year ago, the fact that they are now a percent lower than November is a good sign and folks are pleasantly happy.

The housing market is a barometer of how the economy is responding to a loosening of financial conditions in recent weeks.  Stocks and bonds have both rebounded strongly to start the year on the premise that inflation is coming down without putting the U.S. into a deep recession.

The Fed is still indicating that it is committed to keeping rates high until inflation is lower and it is willing to risk a recession to do so.  Only time will tell how this will play out.

However, economists at Goldman Sachs Group have said this past month they expect the worst of the downturn has passed and housing is poised to exert less of a drag on economic growth going forward.

Execs at D.R. Horton, Inc., the largest U.S. homebuilder by volume, told analysts in January that they have seen heightened sales activity in the first few weeks of the year.  Nets sales, they said, are expected to increase significantly from the first quarter to the second, when the traditional spring selling season happens.  

As I have always said, it appears that folks “are less focused on the specific rate than they are on identifying a window of where they are comfortable with their monthly output”, according to a Redfin agent in Washington, D.C. also.

The Journal cited an example of an assistant superintendent in a Phoenix school district who started looking to buy a house with her boyfriend in the past few weeks.  After looking at about a half dozen houses, they made an offer that was accepted last week.

They decided to purchase knowing that rates might fall, and they could refinance their current mortgage later on. According to her, “I’m thinking this isn’t a forever thing.”  Exactly what I’ve been telling my clients.

Homebuilders have been offering incentives to sell their finished homes and some buyers are signing up for mortgages with rates that are temporarily lowered for the first few years.

Refinancing has fallen drastically from when homeowners were refinancing at rates that were around 3% or lower. Far fewer can save money at rates above 6%.

Pending home sales—a leading indicator for the housing market—rose 2.5% in December, led by gains in the South and the West, according to the National Association of Realtors (NAR).  

So, once again, if you’re even considering a move—the best first move would be to give me a call.  I’ve been through most all cycles imaginable over the last 51 years and can help you navigate the still somewhat stormy seas of home buying and selling.

 

ECONOMIC & WORKFORCE DEVELOPMENT REPORT

Data-Driven Economic Strategies, January 2023

As always, I like to share the wonderful economic data I receive from our “local economist”, Tatiana Bailey.  You will see in these charts what’s happening locally in terms of the economy as well as the most recent Workforce Progress Report.

To read the report, please click here and if you have any questions, please give me a holler.

January 24, 2023

 

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.

 

 

WHETHER IT’S YOUR PERSONAL HOME, OR A HOME YOU PURCHASE FOR SPECIFIC INVESTMENT PURPOSES, ALL real estate IS AN INVESTMENT

​​

As you know by now, I don’t just sell Residential real estate, I totally believe in it, and most especially as a means of investment.  It can be the home you live in or the home you buy to rent out to others, ALL Residential real estate is an investment.  And like any investment, it’s not going to appreciate overnight.  While Residential Real Estate has traditionally outperformed the stock and bond market over the long haul, the key to that is “time”, or the “long haul”. 

I may be celebrating almost 51 years in the local residential real estate arena, but prior to that I was a Finance major at Arizona State University. After graduation I moved to Denver, associated with a Wall Street type firm, and began my professional career for three years as an Investment Banker.

Wanting to move to a smaller community, I relocated to Colorado Springs and decided that with my finance background, and knowledge about the mortgage market, selling Residential real estate might be a good fit.  That way I was able to help others invest in themselves by purchasing real estate and I could assist clients in finding the best mortgages and more. The rest, as they say, is history. 

I still start each morning reading The Wall Street Journal, with particular emphasis on the numbers—the prices of lumber, steel, aluminum, and more since they affect new home construction prices. Then I look at all different types of current mortgage rates which are the average of 4800 mortgage companies.  From that I can determine the best mortgage products for my clients for either purchasing a personal residence or investment properties.

Why is this of importance to you?  If you haven’t figured it out by now, my experience, in Residential real estate as well as financial matters concerning same, is why I’ve consistently been one of the top agents in the Springs.  I would have retired by now except that it’s still a pleasure for me to help people on their road to financial success in real estate, and I have enjoyed working with not only the children, but recently some grandchildren, of clients and friends.  I don’t call it work, although at times the recent market swings did require a lot of finagling for sure.  The satisfaction I get from helping folks is what keeps me going, and I’m always learning new ways in which to help.

Some folks have been timid about jumping into today’s market due to the higher mortgage rates coupled with higher prices on homes.  I’ve been around long enough to see rates as high at 20% so when I look at the 6%+ of today I don’t think “high”.  I also know that once inflation settles down, rates will go back down a bit as well.  

Will they go back to the 3% of several years ago?  I seriously doubt it.  That was unrealistic and created a Sellers’ market like none I had ever experienced.  It also created unrealistic home value appreciation that could never be sustained.  We are now experiencing a more normal appreciation and that is a boon for both Buyers and Sellers.

Since I am a “numbers” guy, and one who totally believes in Residential real estate as an investment in all areas, I decided to look at the type of home appreciation that we saw over the last 15 years.  I put it in chart form, and it is reproduced below.

Basically, what you will see is that even through the mortgage crisis of 2007, as well as the ups and downs of the past several years, Residential real estate as an investment has held its own very well.

I have compared the realized gains of both the average and median single-family home prices in Colorado Springs over the past 15 years and the chart will show you the 5-year, 10-year and 15-year gains to homeowners.  

Those numbers and more are why I totally believe in Residential real estate as an investment.  After all, in most cases, your home is your greatest asset.  And over the long haul, it’s likely to provide you an excellent return on your investment, as well as providing you with tax benefits not available to renters.

Any questions regarding my chart, please give me a holler.

And if you are wanting to move but think now isn’t the “right” time, you owe yourself a call to me.  There are a number of ways to make buying a home, either for yourself or for investment purposes, a reality but you won’t know unless we sit down and look at all the numbers.

I can be reached at 719.593.1000 or emailed at Harry@HarrySalzman.com and I look forward to talking with you soon.

 

WHY INVESTING IN real estate IN 2023 COULD BE A GOOD DECISION

Transactly 12.30.22

Here are some valid reasons from other professionals on real estate investment property purchases in 2023:

 

Strong rental demand

One of the most compelling reasons to invest in real estate is the potential for steady rental income.  With so many people opting to rent rather than buy, the demand for rental properties is strong, which often leads to higher occupancy rates and higher rent prices.  This trend is likely to continue in the coming years, as rising housing prices and tighter lending standards make it hard for many to become homeowners.

 

Potential for long-term appreciation

While it’s not possible to predict exactly how much a property will appreciate over time, real estate has a history of increasing in value over the long term, as I portrayed in the chart above. This is due to a number of factors, including inflation, population growth, and economic expansion.  By holding onto a  property for a number of years, you may be able to sell it for a significantly higher price than you paid for it.

 

Diversification of your investment portfolio

Investing in real estate can help diversify your investment portfolio.  While stocks and bonds are often a significant part of any investment strategy, adding real estate to the mix can help reduce risk and increase potential returns.  This is because the performance of real estate tends to be less correlated with other asset classes, meaning it can provide a buffer against market volatility such as we’ve seen in recent times.

 

Potential tax benefits

Owning rental properties can also offer a number of tax benefits.  For example, you may be able to deduct certain expenses related to your rental property, such as mortgage interest, property taxes and repairs.  As always, I would advise you to contact your investment and tax advisors to see how owning a rental property can provide you with these type of benefits.

 

Opportunity for passive income

Investing in real estate can also provide a source of passive income, which can be especially attractive for those who are looking to supplement their retirement income or simply want to generate additional income without having to work full-time.  By hiring a property manager to handle the day-to-day responsibilities of the property, you can potentially earn rental income without having to put in a lot of time or effort.

 

Ability to leverage your investment

Another advantage of investing in real estate is that it can be done with leverage, meaning you can borrow money to make a larger investment than you could afford to make with your own cash.  This can allow you to acquire more property or invest in more expensive properties, which can lead to higher returns.  However, it’s important to be mindful of the risks associated with leverage, such as the possibility of defaulting on your loan or losing your investment if the value of the property decreases.

 

Overall, investing in real estate in 2023 has the potential to be a good decision for those who are looking for a long-term investment with the potential for steady rental income, appreciation, and tax benefits.  While it’s important to carefully consider the risks and do your due diligence before making any investment, real estate can be a valuable addition to a well-diversified portfolio.

 

 

HOME SALES NUMBERS NATIONALLY IN 2022 WERE THE WORST SINCE 2014

The Wall Street Journal, 1.21-22. 2023, The Gazette, 1.21.2023

Home sales nationally last year were the lowest in nearly a decade according to a recent report from the National Association of Realtors (NAR).  This was the biggest annual decline since 2008, during the housing crisis of the late 2000’s.  

According to NAR, the median national home price for last year jumped 10.2% to $386,300 and it’s up 42% from 2019 before the ultralow interest rates and pandemic-fueled demand sent the market into a frenzy. That translates to a median $114,000 increase in housing wealth in three years.

“So, homeowners have done well during this housing (market) from 2019 through Covid until now,” said Lawrence Yun, chief economist for NAR.  “The one big negative for home sales is home prices, which have risen dramatically, much faster than peoples’ income.”

Mortgage rates more than doubled in 2022, climbing to a two-decade high of 7.08% in the fall with the Federal Reserve continuing to boost its key lending rate in a quest to cool the economy and tame inflation.  

Home sales slowed from the fast pace at the start of 2022 as the surge in borrowing costs limited the buying power of home hunters.

While rates have come down since the high of late last year, they are still significantly higher than the beginning of 2022.  

According to Yun, “Mortgage rates have fallen in the recent past weeks, so I’m very hopeful that the worst in home sales is probably coming to an end.  Maybe this latest monthly figure (from December) will be the cyclical low point.”

Homebuilders and sellers are offering incentives to potential buyers and cutting prices in response to the low demand.  And a measure of U.S. home-builder confidence rose this month, ending a 12-month streak of declines, according to the National Association of Home Builders.

Home sales typically lag during the winter months and pick up during the spring buying season.  While this was not the case in the last several years during the frenzy, getting back to “normal” seasonal based buying could see more homes on the market and more sales during that period this year.

Pricing and incentives are going to be very important in homes sales this spring and having a seasoned, knowledgeable real estate professional on your side will make the difference between a sale and disappointment.

That’s where I come in.  Having someone like me on your side can make the difference whether you are looking buy or sell.  Spring buying season will be here before you know it, so if you’re looking to buy or sell, give me a call and let’s map out your strategy early.  Knowing in advance your individual needs, wants and budget will make you more prepared as a buyer and understanding the true value of your present home will make you equally prepared as a seller.  I can help with both.  

Give me a call sooner than later and let’s see how we can make your Residential real estate wants and needs a reality.

 

AVERAGE LONG-TERM U.S. MORTGAGE RATE IS LOWEST SINCE SEPTEMBER

The Gazette, 1.20.2023

As I mentioned earlier, mortgage rates are down from their high in the fall of last year and are now at their lowest since September.  

This is a significant plus for the spring buying season and while home prices are still high, some sellers are lowering sales prices in order to attract potential buyers. 

Colorado Springs has been like the rest of the nation with low sales numbers but with interest rates hopefully on their way down, we are likely to see sales numbers go up. 

Important to note is that over the next few years Colorado Springs is getting some relocating companies that are bringing with them very high paid employees.  These folks will be looking for homes and will be able to afford them.  This is one of the reasons that while we’ve had a slow selling of homes for six months during the latter part of 2022, things are likely to pick up over the next year and into the foreseeable future.

 

COLORADO SPRINGS RESIDENTIAL real estate ANNUAL REVIEW OF 2022 AND 2023 FORECAST

ERAShields real estate, 1.2023

It is my pleasure to share with you some local data compiled by my company.  It provides you with a look back at 2022 and a forecast for 2023.  

I am reproducing one page below and to read the report in its entirety, click here.

If you have any questions, please ask. 

FYI….

Conventional and VA new loan limits for El Paso County are now $726,200.

And VA can exceed that when a buyer doesn’t own property with the VA, with no down payment required.

 

FHA loan limits:

El Paso and Teller Counties:  $517,500

Pueblo and Fremont Counties:  $472,030

Denver areas:  $787,750

January 9, 2023

 

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 Residential real estate issues that will help to make you a more successful and profitable Buyer and Seller.

 

 

HAPPY NEW YEAR….AND WELCOME TO 2023

Just as I began my January 2022 eNewsletter by saying “As we bid adieu to another unprecedented year, here’s wishing you a very Happy, Healthy New Year”, I again wish you the same. The “unprecedented” year I referred to in 2021, continued in 2022, but for quite different reasons.

Many of those reasons this past year had to do with the unprecedented doubling of the mortgage interest rates.  I have never seen anything quite like that and hope we don’t experience a rise in rates that fast again.  Was it just two years ago that my “2020” vision predicted that interest rates appeared likely to remain low for the foreseeable future”?  Who knew how short that “future” would be?

And then last year at this time I had predicted that the Federal Reserve would raise rates as soon as April and sure enough they did.  What I didn’t expect was the rates to almost double from 3 ½ % in June to 7% in December.  As you are aware, this slowed down the then prevalent Seller’s market fast and along with it the quick sales with bidding wars and offers over list price.

This hurt first-time buyers as well as those who could not qualify for the higher rates more than ever.  And at the same time, the rental market was flooded with those folks.  Fortunately for them, rental rates did not keep up their rapid increase, but it did provide those looking for investment properties a better market from which to choose.

My predictions for 2023 include the expectation that things will slow down in terms of time.  It will take a bit longer to sell, and pricing adjustments will be necessary, but home values will still rise by 3% to 5%.  Nothing is “black and white” anymore and anything is negotiable.

I also believe:

• Seasonal fluctuations such as “spring buying” will return, rather than the recent steady year-round demand we’ve seen, and year-end sales will slow down.

 

• Interest rates above 5 percent will become the norm.  I expect by the end of 2023 that rates will level off at about 5 ½  percent to 5 ¾ percent.

 

• Assumable loans might become more popular and Buyers assuming a VA or FHA loan are going to be a big trend for the next decade.  That process can take longer but can save the Buyer a lot of money in the end.

 

• The market will be more balanced.  Although inventory will remain low, interest rates and inflation will put the ball back in the Buyer’s court when it comes to closing cost help, inspections, repair negotiations and offers below initial asking price.

 

• Homes will continue to appreciate as they have in the past, although not as rapidly.  As I’ve said time and again, you can’t only look at the last quarter or even the last couple of years.  real estate is a long-term investment.  When you look at the value of home ownership compared to other investments, it’s still going to be extremely positive.

 

• For most, your home will likely continue to be your largest and fastest growing investment.  

 

I have always said that no one can every expect to buy at the lowest price point, nor sell at the highest.  It just isn’t possible and most anyone who thinks they can will likely lose in the long run.

Yes, prices are holding steady, but those who are waiting for them to drop lower before they buy will likely be in for a very long wait. 

Lawrence Yun, Chief Economist of the National Association of REALTORS (NAR), expects home prices to hold steady throughout most of 2023 because of the low inventory in most areas.  Colorado Springs is most definitely one of those areas as you will see in the statistics below.

Yun still does not foresee a housing market crash like that in 2008 because conditions are fundamentally different.  He expects the national median home price to increase by about 1 percent while home sales will decline about 7 percent, but he also predicts that the market will rebound strongly in 2024.  

“The market will see a 10 percent increase in sales and a 5 percent increase in the national median home price next year”, he said.

Tatiana Bailey, Executive Director of Data Driven Economic Strategies, and our “local” economist, has said that the high credit card usage, paired with the lower money in savings accounts show that folks are doing whatever they can to offset inflation.  

“So, we better get inflation down”, she said, “but if you’re making it more difficult for people to borrow money, then is the medicine really helping?  My personal view is that the Federal Reserve had to raise interest rates, but I think they should have done it more slowly.”

I could not agree with her more, but what’s done is done and now we have to hope that the Federal Reserve will start lowering rates, a quarter percent by each calendar quarter, in order to get mortgage interest rates, among others, more affordable for most.

We have had to play with the cards dealt by the Fed for the last six months or so and while it’s been challenging for both Buyers and Sellers, I do believe things will begin to improve just in time for the “spring buying season”.

Markets such as Colorado Springs that were so popular when the pandemic hit and working from home became a “thing”, are seeing folks continuing to relocate there.   IT company Zivaro and manufacturer Entegris, which makes products for the semiconductor industry, have announced expansions into Colorado Springs and will create up to 1,000 new, well-paying jobs in our community in about mid-2024.

Along with these companies and others will be relocated employees looking for housing and this will help drive up our local sales and prices.  It will also put additional pressure on local folks who are looking to move or trade up and that will be true until there are more available homes for sale and more newly constructed ones as well.  

According to the 2023 forecast of Knock Buyer-Seller Index, there is a great divide between the best markets for Buyers vs. Sellers.  The pandemic markets have become the 2023 top Buyers’ markets, moving at a faster pace than the rest of the nation on average.  

Colorado Springs is Number Two in the top five Buyers’ metros for 2023, just behind the Phoenix-Mesa-Chandler, AZ markets.

And, according to the Index, “although these markets will see median home price growth moderate and even decline from their pandemic peaks in 2023, prices are forecast to end the year 38% above pre-pandemic levels, 3% higher than the national average change.”

For Colorado Springs, the Index said:

 

• November 2022 median home price:  $425,000

 

• Forecasted 2023 home price change:  +1.2%

 

• Forecasted 2023 home sales change:  -18.3%

 

• Forecasted 2023 month’s supply:  4.2 months

 

• Forecasted sales-to-list-price ratio:  97%

 

The Index went on to say:

“Colorado Springs was viewed as an affordable alternative to high-priced West Coast metros and even neighboring Denver, where the median home price is 38% higher.  Located at the foot of Pikes Peak, Colorado Springs is known for its great weather, with over 300 days of sunshine a year, walkable neighborhoods, easy access to the outdoors, and a vibrant downtown.”

I could not have said it much better.  In fact, those are just some of the many reasons that I have mentioned to those I have helped relocate here over the last 50 plus years.

And, while it may be more difficult today, it’s still possible for you to find what you need, want, and can afford in a home.

That’s where I come into the picture.  The current market is not for the timid or inexperienced.  It takes a lot of advanced planning.

My almost 51 years in the local residential real estate arena, coupled with my investment banking background, give me an edge that my clients have found to be crucial in helping them and their families realize their personal real estate visions.

A new year brings with it a lot of new hopes and dreams. If Residential real estate is among your hopes and dreams for 2023, please give me a call at 719.593.1000 or email me at Harry@HarrySalzman.com and let me help make them come true.

 

And now for statistics…

 

DECEMBER 2022

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

Here are some highlights from the December 2022 PPAR report. 

In El Paso County, the average days on the market for single family/patio homes was a 40.  For condo/townhomes it was 34.  

Also in El Paso County, the sales price/list price for single family/patio homes was 98.8% and for condo/townhomes it was also 99.2%.  

In Teller County, the average days on the market for single family/patio homes was 56 and the sales/list price was 97.7%.

Since these are year-end statistics, I am providing you with both the regularly posted year-over-year monthly stats as well as the cumulative year-to-date comparison of 2022 to 2021.  

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 December 2022 to December 2021 for All Homes in PPAR:

                        

                        Single Family/Patio Homes:

·       New Listings were 659, Down 33.8%

·       Number of Sales were 851, Down 41.0%

·       Average Sales Price was $490,910, Down 3.0%

·       Median Sales Price was $441,000, Down 2.0%

·       Total Active Listings are 1,909, Up 189.7%

·       Months Supply is 2.2, Down 4.6%

 

Condo/Townhomes:

·       New Listings were 116, Down 17.1% 

·       Number of Sales were 125, Down 42.9%

·       Average Sales Price was $368,781, Up 4.8%

·       Median Sales Price was $320,000, Down 4.5%

·       Total Active Listings are 244, Up 174.2%

·       Months Supply is 2.0, Down 4.1%

 

The Cumulative YTD Summary: (comparing Jan-Dec 2022 to Jan-Dec 2021)

 

                        Single Family/Patio Homes:

• New Listings were 19,180, Down 2.4%
• Sales were 15,259, Down 16.0%
• Average Sales Price was $535,404, Up 8.9%
• Volume was $8,169,729,636, Down 8.5%

 

Condo/Townhomes:

• New Listings were 2,595, Down 7.2%
• Sales were 2,305, Down 14.2%
• Average Sales Price was $368,323, Up 12.5%
• Volume was $848,984,515, Down 3.5%

 

And FYI…

While the average sales price for single family/patio homes was down 3% in comparing December 2022 to December 2021, when looking at the cumulative year-to-date summary for January to December 2022, the average sales price for single family/patio homes was UP 8.9%.

 

Now a look at more statistics…

 

DECEMBER 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 41.6%

 

• Median Sales Price for All Properties was Down 1.7%

 

• Active Listings on All Properties were Up 111.5%

 

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 in order to get a good idea of the local pulse.  As an example, here is a detailed report on the Colorado Springs area:

 

INFOGRAPHIC:  TIPS TO REACH YOUR HOME BUYING GOALS IN 2023

Keeping Current Matters, 1.6.2023

 

December 28, 2022

 

HARRY’S NEW YEAR GREETING

        

December 20 2022

 

HARRY’S HOLIDAY GREETING

        

 

December 13, 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 Residential real estate issues that will help to make you a more successful and profitable Buyer and Seller.

 

 

HOMEOWNERSHIP AS AN INVESTMENT IN YOUR FUTURE IS AS TRUE TODAY AS IT WAS LAST YEAR AND WILL CONTINUE TO BE IN YEARS TO COME

Some days when you read the paper or listen to the news, the mention of Residential real estate has to do with the fact that values are not appreciating as much as they had been in recent years and that would be true.

However, what you don’t hear is that while the appreciation is down from it’s crazy rise in recent years, homes are still appreciating.  As you will see below, our local average sales price appreciation year-over-year for single family/patio homes in November was 3.6%.  While it’s not the 15% of recent times and is a bit below our “normal” appreciation, there is some great news to be garnered there.

First let’s talk about the value of homeownership.  When you own a home, you are paying down a mortgage loan, which, over time is creating equity.  You are also seeing appreciation, whether it be 3.6% or 15%, that is also creating equity.  This home equity is creating wealth for you and that’s why homeownership is often the greatest financial asset for many families.

This is true whether you buy a home today, tomorrow or whether you bought it 15 years ago.  

And now let’s consider renting.  At present, rental prices are the highest they have ever been, and rental properties are difficult to find at times.  When you rent a home, you are creating additional wealth for your landlord by helping to pay down his or her home mortgage while getting no financial value for yourself.

First-time homebuyers are being hit hard because of the fast increase in mortgage loan rates and millennials, while having more dollars to spend are less “wealthy” without homeownership.  Their financial futures will often be hurt due to lack of owning a home.

Older folks (those 65 and older) who are renting rather than owning are also creating a substantial wealth “gap”.  This is illustrated in the graphic below:

 

So basically, no matter whether you are a first-time buyer or a senior who is considering renting rather than owning, it’s time to think again.

Yes, interest rates are higher than they were.  But what goes up will go down and when rates go down, it’s likely you can refinance at a lower rate.  5-1 ARMs (adjustable-rate mortgages which are usually 1% to 1 ½% less than 30-year fixed-rate loans) are again gaining popularity. In my opinion we will see interest rates drop within the next one to two years and when that happens, you will be able to refinance for a lower fixed-rate loan.

Now let’s talk about home appreciation.  While the fast appreciation of recent years did provide substantial equity for many folks, it also made homeownership unaffordable for others.  With home price appreciation slowing down, homes are a bit more affordable for some.  Also, higher interest rates on lower prices often don’t affect the monthly bottom line any more than lower interest rates on higher prices!  Something to think about for sure.

What’s the bottom line here?  When it comes to Residential real estate, there’s no right or wrong time to buy or sell.  The last several years have most definitely been a boon to sellers, but at the expense of buyers who had to “get in line” and into bidding wars to often make an offer on a home sight unseen just to be try and “win” it.  

Today’s market is becoming more normalized, and buyers are finding more choices and have time to consider their offer before jumping in just to try and get whatever home is available. This is a good thing.

Before you let negative news about the housing market get you down, don’t forget what I’ve said forever—at any time there is always someone looking to buy and someone looking to sell.  Their reasons vary, but the facts remain the same.

If you or a family member are even considering a move, or want to buy for the first time or for investment purposes, please give me a call at 719.593.1000 or email me at Harry@HarrySalzman.com and let’s put your wants, needs and budget requirements to work for you.  

I’ve been in the local Residential real estate arena for more then 50 years now and have seen just about every cycle imaginable.  If there’s a way to make it happen, I can find it, and I can help make your financial future a bit brighter with the addition of the home you desire.

 

And now for November statistics….

 

NOVEMBER 2022

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

Here are some highlights from the November 2022 PPAR report.

In El Paso County, the average days on the market for single family/patio homes was 33.  For condo/townhomes it was 29.  

Also in El Paso County, the sales price/list price for single family/patio homes was 98.6% and for condo/townhomes it was 99.1%. 

In Teller County, the average days on the market for single family/patio homes was 27 and the sales/list price was 98.2%. 

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 November 2022 to November 2021 for All Homes in PPAR:                       

                        Single Family/Patio Homes:

·       New Listings were 953, Down 20.6%

·       Number of Sales were 936, Down 36.2%

·       Average Sales Price was $525,923, Up 3.6%

·       Median Sales Price was $453,000, Up 0.7%

·       Total Active Listings are 2,430, Up 184.2%

·       Months Supply is 2.6, Down 5.1%

 

Condo/Townhomes:

·       New Listings were 143, Down 27.8% 

·       Number of Sales were 136, Down 40.6%

·       Average Sales Price was $368,724, Up 9.7%

·       Median Sales Price was $350,000, Up 7.7%

·       Total Active Listings are 262, Up 127.8%

·       Months Supply is 1.9, Down 3.1%

 

Now a look at more statistics…

 

NOVEMBER 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 35.2%

 

• Median Sales Price for All Properties was Up 5.8%

 

• Active Listings on All Properties were Up 108.0%

 

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:

2023 housing market PREDICTIONS

The Residential Specialist Nov/Dec 2022

As I mentioned earlier, 2022 marked the beginning of the end of an unprecedented seller’s market.  Mortgage interest rates climbed from around 3% to above 6% and by June 2022 inflation had reached its highest annual rate since November 1981.

According to one Realtor, “We saw one of the craziest markets on record over the last couple of years, but it did a U-turn in the span of a quarter, and we went from record highs in appreciation to a 20-year low in mortgage demand”.

Although the market has cooled in many regions, most real estate agents and experts across the country don’t foresee a crash or drastic downturn in 2023 but, like I have been saying, a return to what was prior to 2020—a normal, healthy market.

Here are a few predictions that Certified Realtor Specialists (CRSs) have for the 2023 national housing market outlook:

 

2023 will see a return to a slower, but still healthy market.

Despite what you read or hear about how drastically different 2022 has been from last year, you should take it with a grain of salt.  That’s because the last two years were highly unusual and fueled by low interest rates that we will probably never see again.  

Don’t compare 2022 or 2023 to 2021 or 2020 because that’s unrealistic.  What to expect in 2023 is that things will slow down in terms of time.  It will take a bit longer to sell and pricing adjustments will be necessary, but home values will still rise at a normal rate of 3% to 7%. 

 

Seasonal fluctuations will return.

We will again see seasonal adjustments which we haven’t see in two years.  The spring buying season will return, and the end of the year sales will slow down.

2023 will be like years before 2020 in terms of seasonal cycles.

 

Above 5% interest rates will become the new (and old) norm.

Realtors like myself who have been in the business for a while can remember a time when 5% and 6% rates were normal.  Some of us even remember the high interest rates of the 1980’s.  In those days a VA loan of 13% was considered low and rates of 18% to 20% were not unusual.

Millennials, who continue to make up the largest share of homebuyers today, are used to seeing rates below 4% but once they realize that above 5% interest rates are the new normal, they will adjust.

 

Assumable loans might become a more popular offering due to higher interest rates

A loan assumption, where a seller who has a VA or FHA loan can have their loan assumed by a qualified buyer, are going to be a big trend for the next decade.  The process takes longer but can save the buyer a lot of money.

 

It will be a more balanced market.

Supply is still relatively low everywhere in the country, and especially here in Colorado Springs, but interest rates and inflation will put the ball back in the buyer’s court when it comes to closing cost help, inspection, and repair negotiations, and below initial asking price offers—things that were thrown out the window during 2020 and 2021.

As we move away from a seller’s market, we will have a more balanced market in 2023.

 

FYI…

For more information, please give me a call.

 

ECONOMIC & WORKFORCE DEVELOPMENT REPORT

Data-Driven Economic Strategies, November 2022

Here is the most recent Economic Progress Report from Tatiana Bailey.  Please click here to see all the charts for El Paso County.

 

UCCS ECONOMIC FORUM REPORT

UCCS, College of Business, 11.22.22

As always, I’m happy to share the most current report from the UCCS Economic Forum.  The first page is printed below, and you can click here to get the report in its entirety.  

                ​

November 23, 2022

 

 

 

WISHING YOU A SAFE, HEALTHY, HAPPY THANKSGIVING FILLED WITH THE JOY OF FRIENDS, FAMILY, FUN AND YUMMY FOOD.

 

 

 

 

November 22, 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 Residential real estate issues that will help to make you a more successful and profitable Buyer and Seller.

 A VERY SAD TIME IN COLORADO SPRINGS…

It’s with a heavy heart that I begin today’s eNewsletter.  As I’m sure most all of you know, Colorado Springs, and more specifically the LGBTQ community here, was the target of a horrendous hate crime where five local citizens lost their lives and at least 25 others were injured.  

There are just no words to explain how shocked I was to see this unfold.  Most especially with it being so close to Thanksgiving Day, an occasion where we all take the time to be grateful for all that we have in our lives.

I work in an industry that has no tolerance for discrimination of any kind and it is my fervent belief that most people are good—and it is our differences that make us interesting.  Learning about how others live and believe opens up new worlds for us if we allow it.  

As we prepare for Thanksgiving, let us remember those who lost their lives in this tragic event and try to move forward with tolerance and kindness for all.

 

RESIDENTIAL real estate IS A BIG TOPIC THESE DAYS…

You can’t pick up a newspaper or look online these days without seeing article after article discussing the Residential real estate market.  Most are discussing it in “national” terms, and while I have always said that one needs to look at Residential Real Estate in “local” terms, they are overlapping in many areas now.

To begin with, the Seller’s Market of the recent past is essentially gone and while it has been replaced with a Buyer’s Market, there just aren’t a lot of buyers now, and the ones who are looking are in less of a hurry and more discerning in what they want.

There are several reasons for this, beginning with the fact that interest rates have more than doubled since January.  And even though rates fell last week, they are still preventing a number of folks, and most especially first-time buyers, from being able to qualify for a loan.

Across the U.S., existing home sales fell for a ninth straight month in October, with sales declining 5.9% from the prior month.  In Colorado Springs, the number of home sales has dropped each month since June, while the inventory has reached its highest level in three years.

Home prices here are continuing to rise monthly, year-over-year, but they are now going up by single digit percentages rather than the unsustainable double digits we saw in the last several years.

I’ve been saying for quite a while that what we were seeing in terms of multiple offers on day one and sales considerably over listing price was not something we should anticipate lasting forever.  The low interest rates and lack of available homes for sale created a type of market was not healthy for buyers or sellers in many ways.

A home is often the greatest financial asset of most families and the purchase of such deserves the time and consideration that the last several years did not afford.  Buying a home should not be as stressful and frenetic as we were seeing, and it was only a matter of time until this changed as it has.  

The typical “buying season” for Residential real estate is usually the spring to early summer, since most families like to be in place prior to a new school year for their children and in place for the holiday season.  In the last few years, that fell to the wayside and homes were being bought whenever they could be bought.  

Now that things are normalizing, home sales at this time of year would typically be slow, and that’s what we are also seeing here in Colorado Springs.

Folks that were waiting to see how much more their homes could appreciate prior to putting them on the market have found that it’s too late.  I’ve had clients in recent days lower their asking price after finding few potential buyers for their properties.  

Buyers today can afford to be much more discerning when looking at homes, and with more to choose from, they can request contingencies that only six months ago would have been unheard of.  Home inspections are also back in the picture.

This is not to say that homes are not selling, because they are.  As I’ve said time and again, there will always be those who need to buy and those who need to sell, all for differing reasons.  But most homes have been on the market considerably longer than the one day of the recent past, and sales contracts are looking more like they did several years ago.

And for those who are waiting for home values to go down, you may be waiting a long, long time.  Nothing that we are seeing today portends that homes will not continue to appreciate, albeit at a slower, more reasonable pace.

Some folks who wished to sell but were unable, are turning their properties into rentals until they can sell them.  Others are waiting to see how interest rates will go and staying put for the moment.  I don’t have any two clients with the same wants and needs, so their preferences are all across the board.

I’m guessing a number of you who have considered selling to trade up or to move to a new location have a lot of questions in regard to all of the above.  

Please give me a call at 719.593.1000 or email me at Harry@HarrySalzman.com  so we can discuss your personal situation and figure a way to try and make today’s Residential real estate market work for you.

 

COLORADO SPRINGS HOME PRICES CONTINUE TO SURPASS MUCH OF THE COUNTRY IN THE THIRD QUARTER OF 2022

The National Association of Realtors, 11.10.22

In the recently published report, single-family, existing-home sales grew in nearly every measured metro area. 

The median price nationally rose 8.6% quarter-over-quarter to $398,500. 

The median price of single-family homes in Colorado Springs rose 4.8% to $462,200 during the second quarter of the year, per NAR.  This price reflects detached, single-family and patio homes but not townhomes or condominiums.  

The median price in the Springs ranked 37^th highest of the 185 cities surveyed.  And once more, the good news is that while our home values are increasing, they remain less than those in the Denver, Boulder and Fort Collins areas, which makes our city more attractive to potential companies and individuals wanting to relocate to Colorado.

To see all 185 metro areas in alphabetical order, please click here.  To see them in ranking order, click here.  Or click here to see what income levels are required to purchase homes based on either a 5, 10 or 20 percent down-payment.

 

ERA SHIELDS QUARTERLY “STAT PACK” PROVIDES A GOOD RESIDENTIAL real estate OVERVIEW

ERAShields, Quarter Three, 2022

As always, I am pleased to provide you with all the most current local information.  This easy-to-understand report, along with graphs, gives you a good idea of the state of local Residential real estate.  

Below I’ve reprinted the first page of the report and you can click here to read the report in its entirety. 

UCCS ECONOMIC FORUM UPDATE

College of Business, UCCS, updated 10.28.22

Here is the most recent economic update from the UCCS Economic Forum.  It provides data concerning all aspects of the economy, on both the national and Colorado Springs area levels.

I’ve reproduced the first page of the graphs and you can click here to see the report in its entirety.  If you have any questions, please give me a call.

 

 

HARRY’S THOUGHT OF THE DAY:

November 7, 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 Residential real estate issues that will help to make you a more successful and profitable Buyer and Seller.

 

 

NO MATTER THE CURRENT STATE OF THE MARKET, OVER TIME, HOME OWNERSHIP IS ONE OF THE MOST ESSENTIAL KEYS TO BUILDING PERSONAL WEALTH

Yes, you read that right!  A home is often the largest personal asset of many families.  

It is certainly up there as the most expensive purchase for most, and it allows the building of equity while providing tax deductible considerations and more.

In times like today when interest rates are at their highest level in more than 15 years and local home prices are still rising, albeit considerably slower than in the recent past, home ownership is still very desirable on so many levels.

Rental rates are higher than ever and climbing steadily.  In recent times the lack of available homes for sale created the need for rentals on a large scale and prices went up accordingly.  They do not appear to be going down and more investors seem to be looking to scoop up homes for investment purposes and/or companies are building new projects to accommodate those needing or choosing to rent.

I’ve talked to several young professionals who would love to buy a starter home because they are aware that the monthly cost of a home would likely be less than that of their current rental expense.  However, saving for a down payment can be tough when your current rental housing output keeps escalating.  

It’s most certainly a problem and one not likely solved in the near future.  

In Colorado Springs, we face the same higher interest rates and inflation as the rest of the country, but we are in a better position than many other cities in that people want to relocate here and have for some time now.

I just returned from a international relocation conference and had the opportunity to speak with folks like myself who help relocate employees and others to various cities for both employment and personal reasons.

What I learned is that those of us who live in “desirable” cities that provide a good “work/life balance” have a distinct advantage over crime-ridden, overpopulated cities.  People are willing to drive further to have their own home in a city where they can enjoy “living”.

Some of this is a result of the recent pandemic where working from home became popular, and some just makes sense, and most especially to those millennials who are looking to put down roots and start raising a family.

In any case, this is all good news for those of us who live in the Colorado Springs area.  

Yes, interest rates are high.  However, speaking as one who had an 8.5% mortgage on my first home here, I consider 7% “reasonable”.  Let’s face it, the very low interest rates of the last several years were not going to stay around forever, and the fast acceleration of home values were not sustainable either. 

It’s fair to say home values were needing to “normalize” and now they have.  Do I think the home appreciation in Colorado Springs will continue to slow down?  Possibly.  And I also believe that those values will not rise quick as fast as they did any time too soon.  And that’s a good thing.  Building home equity, steadily and over time, provides the stability most homeowners need and want.  Paying rent to someone else does not do anything but put extra income in the hands of the landlord.  

Waiting for interest rates to fall probably isn’t a great idea either.  There are several ways to work around the fixed rates of today, such as getting a 5 or 7 year Adjustable-Rate Mortgage (ARM) and refinancing when rates fall, and several other strategies.  The best advice for today’s market is to shop around.  You will find that rates vary from lender to lender, and I can help direct you to several that often have very competitive rates and terms.

There are two and a half times as many actively listed homes here at present than a year ago.  Some of those belong to folks who kept waiting for prices to go up even higher and some are simply those who find that now is the time they want to sell.  

That makes today’s market a good one for buyers.  There isn’t the frenzy we saw even six months ago where homes were selling “as is” in one day with multiple offers and bidding wars.  Buyers have time to make informed decisions, request contingencies and have home inspections.  When it comes to such a big financial investment, that is a very good thing as well.

In Residential real estate, there are always those who need to buy and those who need to sell.  The economic climate may enter into those decisions, but it is often not the primary reason.  

If you are wanting to find out how the present market is going to affect any buying or selling thoughts of yours, please give me a call at 719.593.1000 or email to Harry@HarrySalzman.com . 

I look forward to speaking with you soon.

 

And now for October statistics….

 

OCTOBER 2022

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

Here are some highlights from the October 2022 PPAR report.

 

In El Paso County, the average days on the market for single family/patio homes was 31.  For condo/townhomes it was 22.  

Also in El Paso County, the sales price/list price for single family/patio homes was 98.8% and for condo/townhomes it was 99.8%. 

In Teller County, the average days on the market for single family/patio homes was 42 and the sales/list price was 98.0%. 

 

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 October 2022 to October 2021 for All Homes in PPAR:

                        

                        Single Family/Patio Homes:

·       New Listings were 1,239, Down 22.4%

·       Number of Sales were 1,100, Down 33.0%

·       Average Sales Price was $532,488, Up 4.4%

·       Median Sales Price was $465,000, Up 4.3%

·       Total Active Listings are 2,645 Up 152.4%

·       Months Supply is 2.4, Down 4.6%

 

 

Condo/Townhomes:

·       New Listings were 165, Down 33.5% 

·       Number of Sales were 150, Down 40.0%

·       Average Sales Price was $367,514, Up 12.5%

·       Median Sales Price was $337,500, Up 3.4%

·       Total Active Listings are 264, Up 104.7%

·       Months Supply is 1.8, Down 2.6%

 

Now a look at more statistics…

 

OCTOBER 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 35.2%

 

• Median Sales Price for All Properties was Up 5.8%

 

• Active Listings on All Properties were Up 108.0%

 

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:

 

HOMEOWNERSHIP WINS OVER TIME…AN INFOGRAPHIC

Keeping Current Matters 11.4.22

Here’s a graphic representation of what I was talking about earlier.  A “key” to a family’s financial health is homeownership.

 

 

IF YOU BELIEVE HOMEOWNERSHIP IS OUT OF REACH…MAYBE YOU SHOULD THINK AGAIN

Keeping Current Matters, 11.3.22

A recent “2022 Consumer Insights Report” from Mynd indicates that there’s a portion of millennial and Gen Z buyers who are pursuing homeownership as a way to build their wealth, but it might not be exactly the way previous generations have done it.  The study explains how they are breaking into the market:

 

“…younger generations of Americans are not buying into that dream in the same way that older generations have.  A growing number of Americans are choosing to make their first real estate purchase as an investment property.” 

 

Instead of buying a home and moving in, some young buyers are purchasing a home so they can rent it out.  This tactic may be gaining popularity, at least in part, because of the affordability challenges brought about by today’s higher mortgage rates.  The report mentions how many people in this group are considering this approach.  It says:

 

“Almost half of Millennials and Gen Z (43%) are considering buying an investment property compared to only 9% of Baby Boomers and 27% of Gen X.”

 

This strategy allows buyers to continue living in their current location like a busy city apartment or a neighborhood they know and love, where they couldn’t afford to buy.  But instead of giving up on the idea of owning a home, they buy a home in a more affordable area with the intention of renting it out.

That way they’re getting the best of both worlds.  They live where they want, and they still own a home where they can afford it. 

Their goal is to generate passive income and diversify their assets.  It works like this:  in addition to having a rental stream of income, the equity they build in the home they own will also help grow their net worth over time.

If this is something that you or someone you know has considered, please give me a call.  I’ve had personal experience in this area and can certainly help provide answers that can help get the ball rolling.

 

HOME BUYERS ARE MOVING FARTHER AWAY THAN EVER BEFORE

The Wall Street Journal, 11.3.22

As I mentioned earlier, the rise of remote workers and the ballooning cost of housing in major metro areas are leading Americans to move much further away when buying a home.

According to a National Association of Realtors (NAR) survey, buyers who purchased homes in the year ending this past June moved a median of 50 miles from their previous residences.  That is the highest recorded distance on record, going back to 2005 and follows five straight years in which the median distance moved was constant at 15 miles.

Some of this is due to employers changing their in-office requirements which gave some remote workers the ability to move farther from their offices.  

Smaller communities were especially popular—48% of home purchase were in small towns and rural areas, a record in data going back to 2003 and up from 32% a year earlier, according to the survey.

Suburbs are traditionally the most popular destinations for home buyers, but the share of suburban home purchases dropped to 39% from 51% the prior year.  Only 10% of purchases were urban areas, down from 13% the year before.

NAR polled 4,850 people who bought primary homes during the 12-month period.  

This survey reflects a 12-month period in which the housing market was upended by the surge in interest rates.  The pandemic spurred the biggest housing boom in years as people took advantage of record-low mortgage rates and sought more space to work from home.  Home prices rose to record highs.  Now that mortgage rates have more than doubled, home purchases have dwindled, and buyers have focused more on affordability.

Colorado Springs, while not considered a “rural” area by any means, is still a great choice for those who do not want the higher prices and congestion of living in a city such as Denver.  Folks relocating to southern Colorado are choosing our city and immediate surrounding areas as a place to call home and are willing to commute to do so. 

Again…one more reason why I believe our housing market is very stable and should continue that way into the future.

 

ECONOMIC & WORKFORCE DEVELOPMENT REPORT

Data-Driven Economic Strategies, October 27,2022

As most of you know, Tatiana Bailey, our “local” economist and previous Director of the Southern Colorado Economic Forum at the UCCS College of Business, has started a new non-profit company called Data-Driven Economic Strategies (DDES), along with Rebecca Wilder who worked alongside her at UCCS. 

I know many of you enjoy seeing the “data” as it pertains to Colorado Springs in terms of economy, jobs and more.  I will continue to publish her reports when I receive them and you can click here to see the first one under the new banner. If you have any questions, please give me a call.

 

HARRY’S THOUGHT OF THE DAY:

 

 

If you haven’t done so already, please vote.  

It’s a right that many around the world don’t have and one I never take for granted. 

No matter who or what you personally support, if you don’t vote you are missing the opportunity to get your voice heard.  

October 24, 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.

 

 

SO MANY QUESTIONS AND NO STOCK ANSWERS…

With a recession literally knocking on the door and mortgage interest rates escalating daily, I get regularly questioned about the “state of Residential real estate”.

And, like most things, there is no “right” answer to any of these questions.  It’s not a matter of one-size-fits-all…but then, again, purchasing Residential real estate never falls into a one-size-fits-all category.

Each transaction must be considered against an individual family’s needs, wants and budget requirements and I have yet to find two families with the exact same situation.

Another thing that I tell my clients is that all Residential real estate must be looked at from a LOCAL point of view.  What’s happening in the Colorado Springs area is often quite different from other parts of the country.  

As an example, our city is experiencing fabulous growth as more and more companies and their employees relocate here.  In addition, now that “work from home” (WFH) has become the norm for some—it’s somewhat of a “no-brainer” to choose a city such as Colorado Springs, known for the fabulous “work-life balance” so many crave.

For several years now we have had fewer available homes for sale than ever before, and this is one reason our home values have skyrocketed and created a sellers’ market that essentially still exists today.  

Local homebuilders were not able to keep up with demand, in part due to the shortage of supplies such as lumber, cement and steel but there are still an historic number of local homes under construction due to having so many folks wanting to buy.

And with home appreciation across the U.S. now “normalizing”, we are still seeing better returns than most of the country.  Some cities are slowing down or staying even, but Colorado Springs is continuing to thrive.  

While our home values are continuing to increase, the fact that they are doing so slower than in the past several years is a important for several reasons.

To begin with, there was no way to sustain the type of increases we had been seeing.  It would not have been too long before many more folks, and most particularly first-time buyers, would not have been able to afford a home.  As it is, with the interest rates more than double what they were at the beginning of this year, monthly payments are not as affordable for many.

The lack of available homes for sale created a frenzy that favored sellers and forced buyers into bidding wars and paying above list price for many homes.  There were no concessions for buyers and even appraisals went by the wayside in many cases.  It was one of those “buy as is” type situations--if you even got the opportunity to buy.  

Buyers today in most cases have the time to deliberate and to make realistic offers with some contingencies that we did not see even six months ago.  When you consider that a home is often the most valuable asset in a family’s financial portfolio, this is a good thing.  

If you are a regular reader of my eNewsletter, you know that I have been telling you for some time now that low interest rates and fast appreciation were not going to be here forever.  However, even I did not foresee things moving as fast as they have. 

Those of you who rent or have family members or friends who are renters have seen that rental rates are rising faster than ever.  Some of that is due to investors realizing that there are many who need to rent for whatever reason and these investors are either purchasing homes to rent out or going in with larger investment groups who are building apartments at a faster pace than we have seen in years.  Whatever the case, it is almost always preferable to own rather than rent, if possible, because one way or another you are helping to pay down a mortgage—be it yours or your landlord’s.  

If you have wanted to sell and trade up or move to a new location and were waiting, what should you do?  Again, it depends on your specific situation, but as I say…there are always those who need to sell and those who need to buy.  It’s just likely to take longer in this current marketplace. 

I’ve seen homes that might have sold in one day had they been listed 6-8 months ago compared to now seeing only a few prospective buyers.  The reason?  Buyers can be pickier than they were earlier in the year and are taking more time in decision making.  And of course, the interest rates are holding some back. 

While interest rate increases have hurt some potential buyers, but I don’t think they can be blamed for everything.  If you are selling to trade up, the equity in your present home can be used for a larger down payment which can help keep the monthly payment more reasonable.  And, when the rates go down, and they will at some point, you can likely refinance and get the payments even lower.  

I have been in this business for 50+ years, so interest rates of 7% don’t seem so high to those of us who can remember 18%.  Yes, compared to the 3% or so of recent times, it is a bit confounding, but those rates were unrealistic as well. 

If you’re wanting a home now and cannot wait indefinitely for interest rates to go down, you might be finding your life plans aren’t lining up with economic conditions.  If that’s the case, sometimes you must deal with higher monthly payments than you’d like until you can refinance down the road.  

You might need to make some concessions to accommodate a more expensive loan, like reworking your monthly budget-- but over the long haul, there’s a good reason why homeownership is a big part of the “American Dream”.  The sooner you are a homeowner, the sooner you can start building equity for you and your family.  

What I’m saying is that while there is no stock answer, and never has or will be when it comes to the buying and selling of Residential real estate, there IS an answer for each individual situation. 

Having seen almost every cycle imaginable over my fifty years here, I’m in a good position to help you and your family find the best answers for YOU.

It all begins with a call to me at 719.593.1000 or an email to Harry@HarrySalzman.com and we can start finding solutions that can work for you.

 

WITH THE LATEST NEWS ABOUT INFLATION, SHOULD YOU STILL BUY A HOME?

KeepingCurrentMatters, 10.19.22

The prices of groceries and most goods and services are climbing daily, so it’s no surprise that folks are wondering whether now is still the time to buy a new home.  If you fit into that category, here’s what you need to know.

 

Homeownership Is Historically a Great Hedge Against Inflation. 

 

In an inflationary economy, prices rise across the board.  Because you can lock in what is likely your largest monthly payment (your mortgage) for the duration of your loan, historically homeownership is a great hedge against those rising costs.  

According to James Royal, Senior Wealth Management Report at Bankrate, “A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment.  Sure, property taxes will rise, and other expenses may creep up, but your monthly housing payment remains the same”.

And, as I mentioned above, with rents being as high as they are, the ability to stabilize your monthly payments and protect yourself from future rent hikes may be even more important.  

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains what happened to rents in the latest inflation report: “Inflation refuses to budge. In September, consumer prices rose by 8.2%.  Rents rose by 7.2%, the highest pace in 40 years”.

Rental contracts are typically renewed annually, at which time a landlord may be more likely to increase monthly payments to offset the impact of inflation.  This could be part of the reason why a survey from realtor.com shows that 72% of landlords said they plan to raise the rent on one or more of their properties in the next year.

 

Bottom Line?  The best hedge against inflation is a fixed housing cost.  If you are wanting to find a way, I’m here--- ready, willing, and able to help you explore the possibilities.  

 

REPAIRS THAT PAY OFF IN A COOLING housing market

The Wall Street Journal, 10.11.22

In this slower-than-recent-times housing market, sellers are finding that remodeling properties can be a way to avoid cutting their asking price.

The bidding wars and frenzy of the recent past are gone, and buyers are looking much closer at what they want in a new home.  For sellers, making repairs, or even small improvements that buyers care about could make the difference between getting your asking price or giving a discount.

Between mid-July and mid-August about 95% of home sellers made updates or repairs before listing their properties, up from 71% of sellers six to 12 months ago, according to realtor.com.  They spent an average of $14,163.  

However, data suggests that not all renovations are worth the cost for sellers.  According to a recent NAR report, the top three interior remodeling projects with the highest return on investment are a hardwood flooring refinish, new wood flooring and an insulation upgrade.

Other sellers might find that smaller fixes such as a fresh paint job can make a bigger impression on buyers than pricier changes such as a renovated third bathroom, some real estate agents said.

At times, a big remodeling project, such as a new kitchen or deck, might not be worth the investment and could delay a seller’s timeline given supply and labor shortages.  

Focus on more affordable projects that appeal to buyers and look beautiful in photos, such as the refinishing of hardwood floors, suggested Jessica Lautz, a vice president at NAR.

A hardwood flooring refinish has a 147% cost recovery, meaning homeowners are likely to recoup well more than the cost, she added.  In comparison, a kitchen upgrade has a 67% cost recovery.

Giving the home a deep cleaning before showing it to potential buyers can also go a long way to presenting the home in its best light.

Enhancing curb appeal is another way to help a home stand out to buyers and reduce seller concessions. 

Anything that isn’t broken and isn’t overtly visible, such as a new air conditioning system, won’t impress buyers as much as improvements they can see, such as new doors for the kitchen cabinets or customizable closet shelves.  Aim to fix anything that an inspection would turn up.

These are just some possible ways to show your home in the best light without having to possibly lower the asking price or give unnecessary concessions.  

As with everything to do with Residential real estate, it must be “localized”.  Different neighborhoods attract different type of buyers, and the expectations can different so it’s important to know those differences when fixing up a home for sale.

When you are ready to sell, I’ll be happy to make suggestions based on years of experience working within most all local neighborhoods that can enhance the selling power of your home and get you the most return for your investment.

 

HARRY’S THOUGHT OF THE DAY: