April 8, 2021

HARRY’S BI-WEEKLY UPDATE

A Current Look at the Colorado Springs Residential real estate Market

As part of my Personal Service, it is my desire to share current real estate issues that will help to make you a more successful and profitable buyer or seller.

 

GREAT NEWS FOR CURRENT HOMEOWNERS AND SELLERS…A MIXED BAG FOR BUYERS…AND TOUGH NEWS FOR FIRST-TIME BUYERS

It’s been another wild month in residential real estate.  Homes are appreciating at their fastest rate in 15 years. The shortage of available homes for sale locally, as well as nationally, is creating the best seller’s market in recent years but with that comes a tough time for buyers and most especially first-time buyers.  

A recent article in The Wall Street Journal mentioned that currently there are far more licensed Realtors than there are homes for sale!  That alone tells you that if you’re in the market you need a seasoned real estate professional like me more than ever before since expert negotiation and contract writing skills are an absolute necessity.

There are numerous reasons for the continued increase in home appreciation and the lack of available homes for sale is most likely the number one.  Other reasons include the still historically low interest rates and the current pandemic which has created a number of issues—such as folks not wanting to open their homes for showings yet wanting new homes that meet the wants and needs they discovered lacking in their current homes.

Folks are staying in their homes much longer than in the recent past with homeownership now averaging over 13 years vs. just 7 ½ years a few years ago.  Some older homeowners are choosing to “age in place” rather than downsize or move to a senior living type of environment.

Lower interest rates have let current homeowners refinance their existing mortgage, giving them more disposable income.  

Others are remodeling to meet their current needs which means they intend to stay put for a longer period of time.

However, there is still a group of folks that are ready to move today.  Some of their reasons include the following:

  • A decrease in family size—kids have gone off to college, married, or moved into their own homes
  • Some older homeowners want to move near family, sometimes to a different city or state
  • Corporate relocation
  • The need for a larger home due to a growing family
  • Wanting to sell and trade up to a larger or nicer home or a different part of town
  • Wanting to take advantage of today’s historically low mortgage interest rates

New home construction has become a great option in today’s environment, however the cost of homebuilding materials such as lumber, aluminum, cement and copper have driven up the cost of those homes as well.  

Mortgage loan qualification is getting tighter as well, which is beginning to hurt first-time buyers harder than most.  That creates a need for rental homes and an opportunity for investment buyers.  My investment buyers are constantly on the lookout to add to their portfolios and have even purchased newly built homes in order to attract higher-end and possibly longer-term renters.

As you can see, there are all kinds of things going on.  That’s why you need someone with significant experience who can help you wade through the current residential real estate waters in order to find what you might want, need and can afford for your individual family situation.

Lucky for you—you’ve got ME.  My 48 years in the local residential real estate arena, combined with my Investment Banking background and certification in Negotiation make me especially valuable to assist you with all your residential real estate needs.

If you’ve considered a move, your present home is most likely worth more than you might imagine, and you can use that equity toward a new home.  And with the current low mortgage interest rates, you could possibly make that move without adding too much more to your monthly output.  

However, you might not know about your actual equity and other possibilities unless you ask.

And that starts with a simple phone call to 593.1000 or an email to Harry@HarrySalzman.com to get the ball rolling.  Please call me even if you are considering a move…because you won’t know until you talk it through and see it on paper if this is the right time or right decision for you.

I look forward to speaking with you soon.

 

And now for statistics…

 

MARCH 2021

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

Here are some highlights from the March 2021 PPAR report.  Remember that the new format of this report no longer provides monthly statistics for each individual neighborhood.  However, if you are interested in what’s happening in your neighborhood, I can provide you with this information through other means.

In El Paso County, the average days on the market for single family/patio homes was a very low 10.  For condo/townhomes it was 8.  

Also in El Paso County, the sales price/list price for single family/patio homes was 103.4% and for condo/townhomes it was 103.0%.  

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 March 2021 to March 2020 for All Homes in PPAR:

                        

                        Single Family/Patio Homes:

·       New Listings were 1,620, Down 11.0%

·       Number of Sales were 1,342, Up 5.7%

·       Average Sales Price was $472,931, Up 21.0%

·       Median Sales Price was $410,000, Up 16.3%

·       Total Active Listings are 462, Down 65.2%

·       Months Supply is 0.3, Down 11.5%

 

Condo/Townhomes:

·       New Listings were 254, Up 2% 

·       Number of Sales were 210, Up 14.1%

·       Average Sales Price was $326,829, Up 25.1%

·       Median Sales Price was $303,145, Up 18.7%

·       Total Active Listings are 93, Down 38.8%

·       Months Supply is 0.4, Down 2.7%

Now a look at more statistics…

 

MARCH 2021 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 Up 5.3%
  • Median Sales Price for All Properties was Up 16.7%
  • Active Listings on All Properties were Down 63.4%

You can click here to read the 16-page Monthly Indicators or click here to get specific information on the geographical area of your choice from the 18-page Local Market Update. I recommend that you check out your own area or one that you are considering, to get a good idea of the local pulse. As an example, here is a detailed report on the Colorado Springs area:

  

 

I was thinking about these statistics and decided to call Steve Schleiker, El Paso County Assessor to ask a few questions.  This is what I found out:

 

  • In 2020, the total number of Single Family/Patio Home sales was 18,747.
  • As of the end of 2020, the total number of Single Family/Patio Homes in El Paso County was 208,615. 
  • Therefore, only 8.98% of the total homes in El Paso County were sold in 2020. 
  • When compared to the typical average of 15-20% sold, it helped make better sense of all of the above statistics!   

 

RECORD HOME PRICES KEEP MOUNTING

The Gazette, 3.7.21

I’m reprinting a copy of an article Rich Laden wrote for yesterday’s Gazette where he quoted me on the current state of our residential real estate market that I thought you might enjoy.

COLORADO SPRINGS HOUSING AFFORDABILITY RANKS 58TH AMONG TOP 100

The Colorado Springs Business Journal, 3.30.21

While our housing market is booming, homes in Colorado Springs are still more affordable than in many other U.S. cities, according to the April installment of the RealtyHop housing affordability index.

The Springs market was ranked 58th in the index, which ranks home affordability for the average family in the 100 most populous U.S. cities.  

Cities were ranked from least affordable (Los Angeles, CA at #1) to most affordable (Detroit, MI at #100).  Colorado Springs ranks a bit below the middle.

Colorado Springs climbed five places in the rankings—in February the city placed 63rd—which indicates that the average home was slightly less affordable in March than the month previous.

Both Denver (at #37) and Aurora (at #47) were ranked as less affordable than the Springs.

  

PACE OF LOCAL HOMEBUILDING

The Gazette, 4.3.21

As you can see below, local homebuilding is doing its best to keep up with the demand…

 

AND TO ILLUSTRATE WHAT’S GOING ON ALL OVER THE COUNTRY…

The Wall Street Journal, 3.31.21

 

MORTGAGE LENDERS TIGHTENING STANDARDS

The Wall Street Journal, 4.2.21

While the mortgage market is humming, getting approved for a home loan is as difficult as it’s been in years.

According to the Mortgage Bankers Association (MBA), mortgage credit availability, a measure of lenders’ willingness to issue mortgages, is near its lowest level since 2014.

While more home loans are being made than almost ever before, they are almost all going exclusively to borrowers with pristine credit histories and considerable down payments.

Borrowers whose qualifications fall just outside the stellar category are finding fewer lenders willing to approve their application.  This segment would have qualified for a home loan a year ago and are now out of luck, being deemed too much of a credit risk.

The availability of mortgage loans fell as much as 35% year over year in 2020, when lenders wanted to protect themselves from making loans to borrowers who might lose jobs during the pandemic.  While MBA’s mortgage credit index has drifted higher since last fall, it remained about 31% lower in February than the same time last year.

Since strict lending requirements play an important role in keeping the housing market healthy, making sure borrowers can afford mortgage payments is key to limiting defaults.  Ultraliberal lending policies along with loan approvals for people with spotty income histories or lots of debt, helped spark the 2008-09 financial crisis and lenders are not wanting a repeat performance.

With so few available homes for sale, lenders can be choosy about who they lend to and that is unlikely to change until the housing supply increases and demand is lower.

Still, credit requirements should loosen slightly this year as interest rates rise, drying up refinancings, according to Mike Fratantoini, the MBA’s chief economist.

“Since lenders aren’t being flooded with calls to refinance, more of their resources can be used to reach out to first-time buyers for purchases,” he added.

 

UCCS ECONOMIC FORUM DASHBOARD (and more!)

UCCS College of Business, updated 3.26.21

I just received the most recent economic report from the UCCS Economic Forum.  It presents both the big picture of the US as well as our local economic trends, along with charts and graphs.  Please click here to see the 9-page report and if you have any questions, please give me a call.

 

I CAN’T OVEREMPHASIZE THE “VALUE OF SOUND ADVICE” …

As we navigate through unprecedented times, the importance of having someone like me who can help you make objective decisions is invaluable.  My extensive knowledge of many sectors of the Colorado Springs economy provides valuable assistance to my clients.

I’ve been here for every kind of residential real estate cycle imaginable and work with you to establish your personal home ownership goals.  Your goals become mine and it is my greatest privilege to assist you in making one of the largest investments of your life.