HARRY’S COLUMN

HARRY’S PREDICTION FOR 2010 – (NOSTRADAMUS, LOOK OUT !!)

Like politics, all real estate is local. That’s why our annual prediction emphasizes the Colorado Springs economy, not the national picture. With that in mind, let’s review some of the factors that will affect our local Real Estate during the coming year:

1.       According to the Southern Colorado Economic Forum, the Colorado Springs unemployment rate is now 7.2%, as opposed to the national unemployment rate of 10%. Those figures demonstrate that the Colorado Springs area is now 28% better off than the rest of the country.

 

2.       Our local real estate Market is outperforming the national market.  Just last week, the Pikes Peak Association of Realtors (PPAR) announced that single-family home sales in November, 2009 totaled 794 (compared to 497 in November, 2008).  It was the biggest percentage gain in monthly home sales in the 15 years since PPAR began to keep records.

 

3.       Another, very significant NAR statistic from November of 2009 is that the median price for sold- homes in Colorado Springs was $187,950. The comparable number from 2008 was $187,000.This is a very persuasive indication that our local market has ‘bottomed-out’ and we are looking at a growing market in 2010. 

 

4.       With the extension and expansion of the First-Time-Home-Buyers’ tax credit, the government gives up to $8000 to first-time Buyers and up to $6500 to repeat Buyers, if they go under contract by April 30, 2010 and close by June 30, 2010. This is one of the reasons our local housing industry is poised to show growth in 2010. Call us to discuss the details of how the Home Buyers’ tax credit might help you.

 

5.       We are communicating with several hundred prospective buyers who are waiting for “Something to happen” to give them a more secure feeling about buying a home. In addition, Gen Y families (born 1977-94) are now at their peak time for buying their first home. This huge group of young adults is marrying and having children. In fact, many of these prospective home buyers are just waiting for the ‘trigger’ that will nudge them buy (e.g. finding a new job, having  a ‘trailing spouse’ find a job, waiting for their present house to sell or close, choosing the best school for their children, etc.) As these prospective homeowners begin to make their move, our local market is poised to really prosper.

 

6.       The present low interest rates for 30 year fixed-rate mortgages can’t stay low too much longer. When the looming inflation begins to raise these very favorable rates, the mortgage you get today will look like gold. An interest rate increase of even 1% takes many prospective Buyers out of the market.

 

7.       Building permits are up. Elected officials who are worried about declining revenues should keep in mind that every new home built generates between $6000 and $10,000 of sales tax revenue.

 

8.       Our inventory of homes for sale is declining. In November of 2008, there were 5547 homes for sale. In November of 2009, there 4301 homes for sale, a decline of 22.5%.

 

Add all of these factors together and it leads me to my prediction for 2010. !!

 

NOW IS THE TIME TO BUY !!

 

FHA CONSIDERING TIGHTER REGULATIONS

If you needed another reason to buy now, consider that the Federal Housing Authority is about to make buying a home more difficult. Because FHA reserves are dwindling, that agency is considering implementing the following ‘improvements’ to the present regulations:

1. Increasing the annual mortgage insurance premium that borrowers have

     to pay.

2. Increasing minimum down payment for FHA loans.

3. Setting a minimum credit score for all borrowers

4. Reducing amount that sellers can provide towards buyers’ closing costs from

    6% to 3%

For prospective homebuyers, the two rays of hope relating to these proposed changes are that they haven’t been approved yet and, if approved, it will take some time to implement them. 

 

KEEP TRACK OF YOUR MILEAGE – THE RULES HAVE CHANGED

 

The IRS has announced new standard mileage rates for use of an automobile in business or moving beginning January 1, 2010. According to the IRS, these new, reduced rates are based upon the fact that the costs for operating a vehicle have gone down since last year. The new rates are 50. per mile (down from .55 per mile) for business and 16.5 per mile for relocation (down from 24 per mile  ..This is the lowest rate since 2005).

 

JOKE OF THE MONTH

 

As he’s driving through the woods, a guy has a flat tire. He stops, jacks up the car, takes off the wheel lug nuts, puts them in the hubcap and is getting the spare out of the trunk, when another car speeds by, hits the hubcap and scatters the lug nuts into the woods.  

 

After an hour of unsuccessful searching, the guy decides he might as well start walking the ten miles to town to buy some new lug nuts.  As he starts walking, he hears a voice say, “Hey, why don’t you just take one nut from each of the other three wheels, attach the spare tire with them and then drive to town?”

The guy looks around to see who is talking and sees a man looking at him through a chain link fence. A sign on the fence reads,” State Institution for the Insane”.

The guy says, “Hey, that’s a great idea. How did a smart man like you end up in there?”

The man behind the fence says, “Hey, I’m crazy, but I’m not stupid”.

And the moral for our times is ???????