HARRY’S COLUMN

HOW DOES THE LOCAL real estate MARKET LOOK ?? --- VERY ENCOURAGING !!

The January, 2010 Sales and Listing statistics for the Colorado Springs area were just released and they look very encouraging for the local real estate market and for the local economy. The month of January 2010 showed sales of 464 homes, which represents an increase of 12.3% over January of 2009. The median price of homes sold in January, 2010 was $178,290, an increase of 3.1% over 2009. This was the eighth straight monthly gain in our local market. As a result, the inventory of available homes on our market went from 4925 in January of 2009, to 4120 in 2010, a reduction of 16.3%. All of these statistics indicate that the worst is behind us and our local market is improving.  

One of the factors that helped improve our local sales figures was the First-Time Home Buyers Tax credit of $8000, which was recently extended to April 30, 2010 and expanded to include a $6500 credit to existing homeowners.

When you look at the shrinking inventory of available homes (which will eventually result in higher prices), the excellent long-term mortgage interest rates which are now available (but, perhaps, not for long), plus, the looming inflation that will definitely follow the proposed increases in government spending, plus, the huge influx of new prospective Buyers and Renters now entering the market, the bottom line becomes ACT NOW.

As a prospective HomeBuyer or Investor, you cannot afford to be a Mugwump, (i.e. an indecisive bird who perches on the fence with his ‘mug’ on one side and his ’wump’ on the other.. ) This market will not stay this good for very long. Give me a call !!

THE PRICE OF HOMES IS GOING TO GO UP SOON …AND WE’RE NOT JUST CRYING, “WOLF”.

For the past year, we have been predicting an upcoming increase in the price of homes, caused by several factors. If you are a prospective HomeOwner or an Investor, keep in mind that the window on the great deals you can get in our current market is going to close in the latter part of this year…..probably in the third or fourth quarter. Just for the record, we would like to list some of the factors that we predict will result in this increase.

  • Credit is about to tighten. The Wall Street Journal reports that the Chairman of the Federal Reserve, Ben Bernanke, is now in the process of laying out a blueprint for tightening credit. This will result in higher mortgage rates. We predict an increase of ½% in the third quarter of 2010 (Translated into pocketbook terms, that ½% increase will add about $100 per month to your monthly payments for a loan of $250,000.)
  • Some banks are already beginning to tighten their loan standards for residential mortgages. According to WSJ, some 17% of banks said they were making mortgage approval standards tougher even for borrowers with high credit scores and well-documented credit histories.
  • Inflation will begin to kick in during the latter part of this year and, if Congress passes even a portion of their proposed increases, (Health Care, Cap and Trade, etc.), inflation will force prices on everything to skyrocket. The Wall Street Journal, Feb.6, 2010, featured a cover article titled, “Protecting Yourself from the Giant New Deficit …How to Keep the Scary U.S. Debt From Eating Up Your Assets”. An excellent tool for protecting the value of your assets, according to the article, is to buy a home, or, trade-up from your existing home.
  • The Federal process of creating “Mortgage Backed Securities” which are the foundation for funding Fannie Mae and Freddie Mac will expire on March 31, 2010 and will be replaced by a new process which will increase the cost of capital in financial markets.   
  • The inventory of available homes is shrinking and, as supply goes down, prices will go up.

INVESTORS, TAKE NOTE.    AS HOME OWNERSHIP GOES DOWN, RENTALS GO UP

On February 2, 2010, the Commerce Department reported that, at the end of 2009, only 67.3% of all Americans owned their own homes. That number was the lowest since the second quarter of 2000. (The all-time highest rate of ownership was 69% in 2004, when liberal credit underwriting standards were bringing large numbers of traditionally-renting families into personal ownership).

These recently-displaced families are some of the almost-4-million Americans who have lost their homes through foreclosure or short-sales. Just because they have recently lost their homes, they have not just dropped off the edge of the earth. Rather, they have become the “New Renters”, a class of families which features a different ‘renters profile’ then we have seen in the past. These “New Renters” have demonstrated a respect for their personal property and a willingness to maintain the quality of their residences. In many cases, they even have a history of making their monthly payments on time.

If you are an Investor, these “New Renters” represent a great opportunity to purchase rental property. Please give me a  call to discuss this new opportunity in more detail.

WHAT DO BUYERS WANT ??

The February issue of REALTOR® Magazine contained a list of the things that today’s Buyers are looking for as they consider purchasing a new home. This list is the result of a survey of home Designers and Builders and should be very helpful to homeowners who are considering any remodeling projects. It allows you to spend your remodeling money where it will be most likely to show a good return on your investment, when you sell your home:

  1. Large kitchens and islands
  2. Energy efficiency, including energy-efficient appliances, super insulation and high-efficiency windows
  3. Home offices
  4. Main-floor master suites
  5. Outdoor living space
  6. Ceiling fans
  7. Soaking tubs in the master suite and/or an oversized shower with a seating area
  8. Stone and brick exteriors, rather than stucco or vinyl
  9. Community walking paths and playgrounds

  10.  Two-car garages, but three-car garages are even more desirable

Now, get busy !!!

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK

In honor of the Super Bowl, Here is the story of the Cajun in Hell

A Cajun who died went to hell. The devil assigned him the usual punishment....put him in the mass pit where the heat was melting others. The devil came back sometime later surprised to find the Cajun just sitting around, not even misting, much less sweating. "How come you're not so much as sweating here where everyone else is screaming for relief from the heat?"

The Cajun laughed and said, "Man, I was raised in the bayous of Sout Looziana. Dis ain't nothin' but May in Morgan City to me!"

The devil decided to really put the Cajun through it. He put him in a sealed off cave in the pit with open blazes and four extra furnaces blasting. When he came back, days later, the Cajun was sitting pretty, had barely begun to bead up with sweat. The devil was outraged.
"How is this possible? You should be melted to a shrieking puddle in these conditions!."

The Cajun laughed even harder than before."Hey, man! I done tole you. I was raised in Sout Looziana. You tink dis is heat?! Dis ain't nothin' but August in Cow Island !"

So the devil thought, 'Alright, a little reverse ought to do the trick.' He put the Cajun into a corner of hell where no heat ever reached. It was freezing and to add to the Cajun's misery, he added massive icebergs and blasting frozen air. When he returned, the Cajun was shivering, ice hung from every part of him but he was grinning like it was Christmas.

Exasperated, the devil asked "HOW? How is it possible?!You're impervious to heat and here you sit in conditions you can't be used to...freezing cold and yet you're happier than if you were in heaven. WHY?!"

The Cajun kept grinning and said, "Hey, man! Since dis is Hell, it must mean de Saints won da Super Bowl?"