August 6, 2012

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


OK, LET’S LOOK AT ANOTHER WAY OF THINKING OUTSIDE THE BOX …BY USING real estate TO SET UP YOUR FUTURE !!

Many home-owners feel trapped in today’s real estate market. They are treading water until prices go back up. However, if you are willing to think outside the box, there are several techniques you can use to make today’s market work to your advantage. Here’s one of them:

Let’s say you are a typical homeowner who bought your $250,000 home with a 30 year mortgage. You have an interest rate of 5.0% and have not recently re-financed your home, therefore, your existing monthly principal and interest payment is $1342.05.

So, do you have any options? ..Here’s one.

At our current mortgage rates, your Principal and Interest payment for a refinanced mortgage would be:

Mortgage term rate P&I monthly payment
30 year mortgage 3.5% $1,122.61
15 year mortgage 3.0% $1,726.45
10 year mortgage 2.75% $2,385.28

Sure, that 10 year mortgage payment of $2,385.28 is almost double your present payment of $1,342, but, after ten years, your home will be completely paid for, just in time to start paying for your children’s college costs, or, for your retirement in Hawaii.

Furthermore, there are a couple of other positive factors that might bolster your switch to a 10 year mortgage. First, although your refinanced P &I payment would be higher, your tax write-off would also be much higher, thus bringing your actual net home interest expense down to around just 2%. Second, home prices are now really rising. The home you buy today will be worth much more in ten years. ….This is the kind of investment you cannot come close to matching with today’s mutual funds.

If the thought of a ten year mortgage is just too steep for you, maybe a 15 year refinance might work for you.

Just a thought !!! Call us at 598-3200, or, 800 677-MOVE (6683) to discuss this idea !!!

 

HERE’S A BLAST FROM THE PAST
The other day, I found a copy of the paperwork from the first real estate sale I ever made, when I started out in Colorado Springs, 40 years ago. It was fun to compare the present real estate market with what it was back then.

The model home I sold is at the corner of Dublin and Turret. The original sale price in 1972 was $25,560. That same home, based upon current comparables, would sell for approximately $180,000, today.
The buyers didn’t have a checking account, so they paid the earnest money with $25 in cash, with the balance ($75) paid when they made their mortgage loan application.

The mortgage on the home was a 30 year fixed VA loan at 7%.
Several of my old friends always kid me about the fact that I have such a positive view of our local market, but I think the facts about this sale prove that my optimism is well grounded. If you look at the present market value of this sale, you see that, over the past 40 years, annual appreciation on this house has been 5.7% per year (from $25,560 to about $180,000)…and, in fact, the average appreciation of all homes in Colorado Springs has been between 5-6%.

That’s better than almost any mutual fund.

Call us at 598-3200, or, 800 677-MOVE (6683) to discuss this idea !!!

CURRENT MONTHLY STATISTICS SHOW GOOD GROWTH IN LOCAL real estate AS OF JULY 31, 2012

Highlights from this month’s PPAR sales and listing statistics:
• Number of Sales - Up 15% since last month and Up 21.% since July 2011
• Avg sales price $236,062 is up 5% since July 2011
• Median sales price $198,950 up 6.6% since July 2011
• So far in 2012, number of sales is up 6.9%
• Foreclosures - As of June 30, 2012, foreclosures are down 24.1% from June 30, 2011

These monthly reports show listings and sales in every neighborhood in our area and contains such information as average and median prices within those neighborhoods.

These reports are used by your real estate agent and by Buyers and Sellers alike as they determine the best deals available for their clients. Call us at 598-3200 to discuss the details of this valuable report.

Click here to see the complete report from the Pikes Peak Association of Realtors on your local real estate market.


HOME PRICES CONTINUE TO RISE
RISMedia –Aug1, 2012

Data through May 2012, released by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed that average home prices increased by 2.2 percent in May over April.

“With May’s data, we saw a continuing trend of rising home prices for the spring,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. We have observed two consecutive months of increasing home prices and overall improvements in monthly and annual returns.

“June data for existing home sales, new home sales, housing starts and mortgage default rates were better than their year-ago levels. The housing market seems to be stabilizing.

As of May 2012, average home prices across the United States are back to the levels where they were in spring 2003 for the 20-City Composite and to summer 2003 levels for the 10-City Composite.


IS THE REAL-ESTATE REBOUND FOR REAL?
HOTWIRE.com – August, 2012

For investors, "home" is no longer a four-letter word.

Standard & Poor's on Tuesday reported that home prices rose 0.9% in May from the prior month, and have risen 2.6% since bottoming in January.

Some of the world's smartest investors, including Warren Buffett, are taking notice, placing big bets on a continued recovery in the housing market.

What does Warren Buffett see that no one else does? He just made an outsize bid on ResCap loans, the latest example of his bet that the housing market represents a great investment opportunity.

Home valuations are almost as low as they were in the first quarter of 1998, well before the most recent real estate run-up began. That has caught the attention of many investors, including Mr. Buffett, who in February said he would buy "a couple hundred thousand" homes if it were practical.

Not only are single-family home prices steadily climbing, but the Joint Center for Housing Studies at Harvard University in a June report said inventories of new, single-family homes in March were at the lowest level in 49 years. The upshot: It would take less than six months to sell the current inventory, the traditional boundary between a strong and weak market, says Eric Belsky, managing director of the center.

Most economists say the odds are good that real estate will be stronger over the next few years than it has been in the past.

Smaller investors could benefit from the trend as well, experts say, by directly buying properties.

Banks are willing to lend for investment properties as long as the investor can make at least a 30% down payment on the home, says Bankrate.com senior financial analyst Greg McBride.

"There's great opportunity in actually buying residential homes directly for investors who have the capital," Mr. Luschini says. "Prices are clearly turning the corner, and housing affordability is the highest in a generation."

PEOPLE STILL WANT TO BUY HOMES: FANNIE MAE

An overwhelming 85% of Americans prefer homeownership over renting, Fannie Mae said in a new study.

Demographics such as income, age, marital status and employment status are still considered significant drivers in the decision of buying a home or renting, Fannie found that beliefs about housing help determine whether Americans intend to rent or buy their next residence.

Fannie produced the national housing survey based on feedback from 12,014 interviews that occurred in 2011.

When looking at feedback from Americans who already have a mortgage, 40% cited attitudes about finances—such as the ease of getting a mortgage, affordability, homeownership benefits and financial stressors—as drivers that will shape whether they buy or rent their next property. About 39% of homeowners in the same group cite attitudes about housing as influencing their next move, while 21% say demographics such as income, age, marital status, employment, race, etc., will be primary drivers of their next decision.

Thirty-three percent of current renters say demographics like employment, age, income and marital status also are important homeownership drivers, while only 25% cite financial attitudes as having an impact on their next housing.

What's keeping homeownership alive is the fact that it's not a stock or bond, but something desirable for individuals and families to live in even without a significant return on investment. "The nonfinancial benefits that people derive from the consumption of housing mitigate the negative financial experiences that many homeowners have had," said Deggendorf.

The good news is homeownership as a goal for Americans hasn't changed in the past six years.

"Our study shows that the negative housing events of the past few years have not discouraged people from wanting to own a home," the Fannie study concluded. "Exposure to mortgage default, perceived home value appreciation/depreciation, and self-reported underwater status are not significant factors in the models in predicting individuals’ intentions to own a home for their next move."

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


JOKE OF THE WEEK

"Daddy," a little girl asked her father, "do all fairy tales begin with 'Once upon a time'? "

"No, sweetheart," he answered. "Some begin with 'If I am elected.'"

It was election time and a politician decided to go out to the local reservation and try to get the Native American vote. They were all assembled in the Council Hall to hear the speech. The politician had worked up to his finale, and the crowd was getting more and more excited. "I promise better education opportunities for Native Americans!"

The crowd went wild, shouting "Hoya! Hoya!" The politician was encouraged by their enthusiasm. "I promise gambling reforms to allow a Casino on the Reservation!"

"Hoya! Hoya!" cried the crowd, stomping their feet.

"I promise more social reforms and job opportunities for Native Americans!" The crowd reached a frenzied pitch shouting "Hoya! Hoya! Hoya!"

After the speech, the Politician was touring the Reservation, and saw a tremendous herd of cattle. Since he was raised on a ranch, and knew a bit about cattle, he asked the Chief if he could get closer to take a look at the cattle.

"Sure," the Chief said, "but be careful not to step in the hoya."