May 9, 2011

HARRY’S WEEKLY UPDATE
A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

 

SHOULD YOU BUY THAT NEW HOME OR INVESTMENT PROPERTY NOW? LET’S LOOK AT THE NUMBERS.


WHAT DO THE LATEST NUMBERS FROM PPAR TELL US ABOUT OUR LOCAL real estate MARKET?

Our local market is trending up, and looks promising. In fact, compared to most other parts of the country, our local real estate market is looking fabulous. Here are some examples from the recent PPAR report for April of 2011:

• Average sales price in April - $215,466 (+1.9% from March 2011)
• Median sales price in April - $284,950 (+2.8% from March 2011 and +1.4% from April 2010)
• Average sales price in the first quarter of 2011 - $ 216,714 (+1.1% from 2010)
• Number of Single-family home sales in April – 748 (down 5.6% from 2010, primarily because of the artificial boost to sales caused by federal tax credit that was available in the first part of 2010)
• Number of First Quarter sales in 2011 – 2433 (down 4.6% from 2010, again, because of the artificial boost to sales caused by federal tax credit that was available in the first part of 2010)

It’s interesting to note that April sales of homes in El Paso County under $200,000 represented 56% of total sales. Sales of all homes under $300,000 represented 81% of all sales.

To see the latest Sales and Listing statistics on our local market, CLICK HERE

WHAT DOES THE LATEST “QUE” TELL US ABOUT OUR LOCAL real estate MARKET?

FIRST, WHAT IS THE QUE ?

The Southern Colorado Economic Forum (SCEF), sponsored by the University of Colorado in Colorado Springs, is an organization dedicated to reporting on the economic condition of the Southern Colorado business community. SCEF issues a quarterly report which covers such activities as: Residential sales, Multi family market, Airport trends, Sales taxes, Vehicle sales and registrations, Employment trends, etc. and contains 16 different statistical types of flow charts containing the most recent data. The report, referred to as the “QUE” is issued by Fred Crowley, the chief economist for the SCEF. The most recent QUE contains data for the first quarter of 2011.

To summarize some of the data in the most recent QUE:


• Our local Business Conditions Index (BCI) is 22.2% higher than Feb. 2009
• Our Employment rate, new vehicle registrations earnings and foreclosures are all better than 12 months ago
• Our Residential single-family permit level is improving.
• Our Housing price trends suggest there is stability in the local market.
• The trend over the past 12 months suggests the average sale price for a home over the last 12 months is increasing in the region. This trend suggests the housing market is recovering
• Further increases in housing prices are anticipated
• Increases in real rents are expected in 2011
• President Obama’s goal to end military deployments is expected to boost the local economy in 2012.

However, keep in mind that, as with most other areas of the economy, the future of real estate will be strongly affected by interest rates and job growth.

To see a complete copy of the latest QUE for the first quarter of 2011, CLICK HERE

AND, IF YOU WOULD LIKE TO LEARN MORE ABOUT OUR LOCAL ECONOMY ….

You might want to attend the 15th Annual Southern Colorado Economic Forum, Oct 14, 2011. Salzman real estate Services is proud to be the only residential Real Estate company to be listed as a “Forum Partner” in this annual event which supports the University of Colorado at Colorado Springs. Click here to learn more.

HERE ARE SOME COMMENTS ABOUT OUR CURRENT MARKET FROM ONE EXPERT

The following comments are excerpted from “All this bearish news makes me bullish” by Brett Arends, a senior columnist for MarketWatch and a personal-finance columnist for the Wall Street Journal.

There are several reasons I think this is a good time to buy:

• First, prices in many areas are now cheap. They have corrected a long way since the bubble began to burst five years ago. There are deals aplenty.
• The second reason: There are tons of foreclosures and short sales on the market. And there are plenty more sitting in the wings. Banks are holding back big shadow inventories of homes. And that means you can get a great deal. They have to sell. You don’t have to buy. You hold all the cards. Remember, the name of the game isn’t “let’s make a deal.” It’s “take it or leave it.”
• Third, in many places rental yields are terrific. It’s cheaper to own than to rent. And rents are rising, because so many former owners are now renters.
• The fourth reason I’m bullish is that you can get a very cheap mortgage. Thirty-year conforming loans are going as low as 4.3%. Throw in the tax break on the interest, and you are talking cheap finance.
• The fifth reason is that, as painful as this collapse has been, real estate has historically proven to offer very good long-term protection against inflation. Returns have typically averaged about 1% or 2% above inflation. At a time when everyone has been piling into gold, commodities and TIPS bonds to protect themselves against the possibility of inflation, it seems odd that the most popular and successful hedge, namely real estate, goes a-begging.
• The sixth reason I’m bullish is perverse, but I’m sticking by it. Everyone else is bearish. You cannot find a real-estate bull anywhere. No one wants to own this asset. No one wants to talk about it. No one wants to hear about it. Everyone seems to agree it’s just going down, down, down — forever. They said much the same about stocks in 1987, 2002 and 2009; Treasury bonds in 1982; and gold in 2000. I cannot prove this is capitulation, but it sure smells something like it.
• There are good homes out there going really cheap. If you hunt down the bargains, you’re disciplined about price, you get the right financing, and you hold on for five years or more, you’ll probably do pretty well from here.

If it’s good enough for the personal finance columnist of the Wall Street Journal, it’s good enough for me. Where do I sign Up ???

 

JUST IN TIME FOR BUYING SEASON, RATES HIT YEARLY LOWS
Daily real estate News | May 6, 2011

The 30-year fixed-rate mortgage, a popular choice among buyers, sank even lower this past week, matching its yearly low of 4.71 percent from January, reports Freddie Mac in its weekly mortgage market survey. Last year at this time, the 30-year fixed-rate mortgage averaged 5 percent.

Meanwhile, the 15-year fixed-rate hit a new yearly low of 3.89 percent this week. Last week, the 15-year fixed-rate mortgage averaged 3.97 percent. The 15-year rate averaged 4.36 percent last year at this time. It reached its lowest level on record in November when it averaged 3.57 percent.

The one-year adjustable-rate mortgage averaged 3.14 percent, down from last week’s 3.15 percent. Last year at this time, it averaged 4.07 percent.

"Weaker economic data reports reduced Treasury bond yields and allowed mortgage rates to drift lower for the third consecutive week,” says Frank Nothaft, Freddie Mac’s chief economist.

Source: “30-Year Fixed-Rate Mortgage Matches Yearly Low of 4.71 Percent,” Freddie Mac (May 5, 2011)

 

BIG JUMP EXPECTED IN NEW U.S. HOUSEHOLDS
Daily real estate News May 4, 2011


Millions of young adults are beginning to move out of their parents’ homes and create new households at the fastest rate since 2007. Some housing experts are predicting these young adults may provide a major jump to U.S. housing starts--possibly by more than 50 percent, even by next year--and increase housing consumption at a rate nearly double that of the past two years, Bloomberg News reports.

In 2011, between 750,000 and 1 million new households are expected to be created, says UBS Securities LLC’s Maury Harris and IHS Global Insight’s Patrick Newport. In the year ended March 2010, new households stood at 357,000--the lowest on record, according to U.S. Census data. The “depressed rate” in new household formation has continued to jeopardize the housing market’s recovery, experts say.

But as the employment picture continues to improve, more young adults are leaving Mom and Dad’s house and making a new home for themselves. The “moving-back-in-with-Mom-and-Dad phenomenon” had caused a backlog of pent-up households, Charles Lieberman, chief investment officer with Advisors Capital Management LLC in Hasbrouck Heights, N.J., told Bloomberg News. “Improved economic conditions” will “enable these households to split up and resume living in their own residences.”

Housing starts are expected to get a boost to about 648,000 this year and near 900,000 in 2012 (it stood at 586,800 last year), says Brad Hunter, chief economist and national director of consulting for Metrostudy. The increase in housing starts, he says, reflects a “shadow demand” for new homes among family members who have moved in together because of economic conditions.

“The demographic component of housing demand is strong," he says. "It’s just the economic and psychological components that are holding things back.”

This increase in households is great news for Homebuilders, Sellers and Investors. A rising tide of Households raises all boats.

Call us at 598-3200, or, 1-800-677-MOVE(6683)

 

GALLUP SAYS IT’S TIME TO BUY
Rismedia, May 5, 2011

Consumer attitudes towards the housing markets are echoing views in the years immediately preceding the peak of the housing boom, according to a new national survey by the Gallup poll.

Americans continue to see a buyer’s market in housing, according to an April 2011 Gallup poll. Sixty-nine percent of respondents say now is a good time to buy a house.

Historic Gallup data shows that many Americans also thought it was a good time to buy between 2003 and 2005, when housing prices were increasing and getting financing was relatively easy. Those attitudes began to change in 2006 as some homebuyers began to realize a housing bubble was taking shape in local markets across the country.

Men (74 percent) are about 16 percent more likely to see now as a good time to buy a home than women (64 percent). Americans making $75,000 or more a year (86 percent) are 18 percent more likely to see 2011 as a good time to buy a home than those making $30,000 – $75,000 (73 percent), and 72 percent more likely than those making less than $30,000 (50 percent).

Americans’ expectations for home prices in their local markets are slightly better now than they were in January. Currently, 30 percent of Americans say home prices will increase and 28 percent say they will decrease in the next year.

 

HERE’S SOME STARTLING NEWS ….NEARLY HALF OF HOME BUYERS SURVEYED DON’T UNDERSTAND ESSENTIAL INFORMATION ABOUT MORTGAGES
RISMEDIA, May 5, 2011

As the housing market continues to struggle, home buyers appear ill-prepared to take out a mortgage, answering basic questions about mortgage information wrong nearly half (46 percent) of the time, according to a recent Marketplace survey. In fact, 44 percent admitted they are not confident in their knowledge of mortgages or the mortgage process. The Marketplace survey surveyed prospective home buyers, asking them to gauge their own knowledge of mortgages, and asking basic questions about mortgage facts.

More than half (57 percent) of prospective home buyers who were polled do not understand how adjustable rate mortgages (ARMs) work. When asked if interest rates on 5/1 ARMs always reset higher after five years, the majority of home buyers answered yes. In fact, the interest rate will adjust to the prevailing rate after five years, even if rates have declined. Currently, many borrowers whose ARMs have recently reset have lower interest rates than they did when they took out the loan.


Additionally, one-third (34 percent) of the respondents who are prospective home buyers do not understand that lender fees are negotiable and that they vary by lender. They believe lenders are required by law to charge the same fees for credit reports and appraisals, when in fact home buyers can save money by shopping for the lowest fees.


Additional Survey Findings

• More than half (55 percent) of prospective home buyers in the study do not understand that mortgage rates vary throughout the day. In reality, mortgage rates can change rapidly, similar to how stock prices can change throughout the day. To get the optimum rate, it is important to monitor rates and shop around.
• More than one-third (37 percent) of prospective home buyers who were polled believe that pre-qualifying for a loan means they have secured financing. In fact, “pre-qualification” is used to describe the earliest step in the process when a lender approximates how much you can afford, but does not run your credit or request any sort of documentation to verify the information you provide. Although there is not a reliable industry standard definition of pre-qualification, it is not until a lender has approved your loan application without conditions that you can rest assured that the lender has committed to financing your loan.
• More than two in five (42 percent) of the polled prospective home buyers do not understand that Federal Housing Administration (FHA) loans are available to ALL buyers. Instead, they believe only first-time buyers qualify. FHA loans can cost less for many buyers, including repeat buyers with low to average credit scores and with down payments of less than 20 percent.
Let us help you negotiate your way through the mortgage maze. Call us at (719) 598-3200, or, 1-800-677-MOVE(6683)


LANDLORDS SAY THEY'LL RENT TO THE FORECLOSED
Daily real estate News - May 4, 2011

Eighty-two percent of independent landlords say they would rent to someone who had lost a home in foreclosure, if the applicant had otherwise good credit, according to a new survey by The National Association of Independent Landlords.

"Landlords typically won't rent to applicants with poor credit--and a foreclosure will absolutely slam someone's scores,” says Tracey Benson, president of The National Association of Independent Landlords. “The exception is when they see people who have paid their bills their whole life, but lost their job, can't meet their mortgage and must hand their keys back to the bank.”

Benson says that applicants with a foreclosure aren’t necessarily bad credit risks. “Often, they lost their jobs and homes through no fault of their own," she says.

As such, "because of this abundance of defaults, there is a greater need for rental property, so landlords should carefully vet applicants," Benson says, adding that landlords should do a thorough background check to determine whether defaulting applicants were a victim to financial woes or following a lifelong trend of not paying bills.

Investors, take note !!!

Let us localize this situation to Colorado Springs residential real estate investments. Call us at 598-3200, or, 1-800-677-MOVE(6683)

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 39 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, please contact us.

JOKE OF THE WEEK

The worried housewife sprang to the telephone when it rang and listened with relief to the kindly voice in her ear. "How are you, darling?" it said. "What kind of a day are you having?"

"Oh, mother," said the housewife, breaking into bitter tears, "I've had such a bad day. The baby won't eat and the washing machine broke down. I haven't had a chance to go shopping, and besides, I've just sprained my ankle and I have to hobble around. On top of that, the house is a mess and I'm supposed to have two couples to dinner tonight."

The mother was shocked and was at once all sympathy. "Oh, darling," she said, "sit down, relax, and close your eyes. I'll be over in half an hour. I'll do your shopping, clean up the house, and cook your dinner for you. I'll feed the baby and I'll call a repairman I know who'll be at your house to fix the washing machine promptly. Now stop crying. I'll do everything. In fact, I'll even call George at the office and tell him he ought to come home and help out for once."

"George?" said the housewife. "Who's George?" "Why, George! Your husband! Is this 223-1374? "No, this is 223-1375." "Oh, I'm sorry. I guess I have the wrong number."

There was a short pause and the housewife said, "Does this mean you're not coming over?"