October 1, 2012

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

 

THE SOUTHERN COLORADO ECONOMIC FORUM WAS A GREAT SUCCESS

The 16th annual SCEF at the Antlers Hilton Hotel on Sept. 28, 2012 was a “SOLD OUT” success. Over 600 people, representing local businesses and organizations, heard a variety of presentations by experts in the field of market predictions. The overall mood at the forum was very positive about our local economic picture over the next few years, but was tempered by some concerns about the effects of cut-backs in our local military presence and possible looming tax increases, either of which could weaken our recovery. We think the keynote speaker summarized the big picture very well, and we are reprinting some of his comments, below.

 

SPEAKER AT FORUM SEES ECONOMIC RECOVERY PICKING UP SPEED

The Gazette, September 28, 2012 – Wayne Heilman

At the Southern Colorado Economic Forum which took place on Friday, Sept. 28, 2012, the keynote speaker painted a very optimistic economic picture of the coming year. The following comments are excerpted from Wayne Heilman’s Gazette article which reviewed Mr. Paulsen’s presentation.

The U.S. economy is already gearing up to a faster growth rate as evidenced by a wide variety of economic indictors ranging from accelerating housing construction to increased bank lending, economist and top Wells Capital Management executive, Jim Paulsen, said Friday in Colorado Springs.

“The growth of the national economy is not enough to please everyone, but this recovery is very similar to the recoveries of the last 25 years,” said Jim Paulsen, chief investment strategist for Wells Capital Management, a unit of Wells Fargo & Co., and keynote speaker at the Southern Colorado Economic Forum. Economic growth, he said, starts to “gear up when confidence finally starts to grow. That is happening now. If you want consumer confidence to grow, get the unemployment rate down — and it is down a full percentage point in the past year.”

Paulsen pointed to declining unemployment, rising consumer confidence, higher household net worth and lower debt, increasing housing construction and prices, more bank lending, gains in state tax collections and exports and reduced financial market volatility as indicators that the U.S. economic recovery is gaining strength. He predicted that U.S. economic growth would accelerate next year to 3 percent from the current 1.3 percent and that the nation’s unemployment rate would fall from 8.1 percent now to near 7 percent by the end of next year.

“I’m not saying that growth will explode, but it will feel a lot better — it will feel like a recovery,” Paulsen told more than 600 business and civic leaders attending the half-day event at the Antlers Hilton hotel.

“If the job market is so dead, than why are consumer confidence, housing construction and auto sales all growing right now? While unemployment is still way too high, the combined message of all these indicators are that the economy is getting better. I see a lot of evidence that economic growth is starting to gear up.”

Paulsen, who has now been the forum’s keynote speaker for three consecutive years, predicted at last year’s forum that the recovery from the 2007-08 recession would gain strength in the next year and “gear up” late this year. He noted both Friday and last year that recoveries since 1985 have taken longer to gain strength, but tend to last longer as a result of the slowing growth of the U.S. labor force. That slowdown is a product of baby boomers producing fewer children to fuel labor force growth, which is a key ingredient for economic growth.

The biggest threat to the recovery is the Chinese economy falling into a recession, which would end the U.S. recovery and throw the nation’s economy back into a recession, Paulsen said. His overall message, though, was more optimistic than the forum’s forecast for the Colorado Springs economy; the forum sees the local economy remaining flat at best, and it could be pushed into a recession if Congress and the president don’t avoid both the so-called “fiscal cliff” i.e.— automatic cuts to the Department of Defense budget scheduled to take effect in January and the expiration of a variety of tax cuts at year’s end.

These predictions should encourage our local Buyers and Sellers of homes, homebuilders, retailers, contractors, appliance stores and clothing stores which are now beginning to experience a surge in purchasing that has resulted from the Waldo Canyon fire.

 

PACE OF LOCAL HOMEBUILDING EXPECTED TO KEEP ACCELERATING

The Gazette – September 26, 2012- Rich Laden

The pace of homebuilding has rebounded nicely this year in the Colorado Springs area and should continue to gain steam in 2013 — and would grow even faster if the local economy added significant numbers of jobs, according to an analysis by a national housing research firm.

Pent-up demand on the part of homebuyers, combined with current homeowners who have seen their property values improve and are now seeking to move up, have propelled homebuilding, John Covert, Colorado/New Mexico director of Houston-based Metrostudy told about 25 members of the Housing and Building Association of Colorado Springs on Wednesday.

“Rates are still at historic lows, the existing home market is in better shape than it’s been in the last several years. Listings are way down, pricing stability has occurred and actually some pricing power has returned to the re-sale market,” Covert said. “That’s letting people get out of those homes to go buy a new home.”

If the local economy were to add more jobs, especially positions in which employees come to the Springs from elsewhere, the homebuilding industry could see even stronger demand. However, it does take a while for those newcomers to actually buy a house, Covert said.

In the shorter term, pent-up demand will continue to drive the market in the next year or so and homebuilding activity should increase in 2013 over 2012, he said.

Single-family building permits through August of this year totaled 1,476, already topping the 1,399 for all of 2011, according to the latest Pikes Peak Regional Building Department figures.

The pace of home construction has improved so much that the Colorado Springs market is beginning to run low on new home sites, Covert said. Local builders now have a 33-month supply of lots upon which to build, about one-third the inventory they had four to five years ago, he said. The city of Fountain and the Briargate development on the Springs’ north side, popular housing areas, each have only an 18-month supply of lots.

The good news for homebuilders means some of them have added workers and are reinvesting in their companies, Covert said.

For homebuyers, however, the improvement in homebuilding means higher prices ahead. Builders’ labor and material costs are rising, Covert said, and the scarcity of lots means land prices will be going up — increases that would be passed on to buyers.

Our next Enewsletter on October 8, will have all local housing statistics as of September 30, 2012 and the first three quarters of this year.

 

housing market DISPLAYS NEW VIGOR AS PRICES RISE

The Wall Street Journal – September 27, 2012

Home prices notched their strongest year-to-date gains since 2005, climbing 5.9% through July and signaling the housing market's steady trudge toward recovery.

"Housing is no longer a negative. It is turning positive and we see the data reflecting that," said Ivy Zelman, chief executive at research firm Zelman & Associates.

Home prices typically are strongest in the summer, the busiest season for home sales, before declining later in the year. But the 5.9% rise far surpasses the 0.4% gain seen through the same period last year and the 2% gain in 2010.

Construction of single-family housing in August reached its highest level in more than two years, the Commerce Department said last week.

But rising demand, especially at the low end, is putting upward pressure on prices as traditional buyers—as opposed to investors—feel more confident about jumping into the market. In some cities, diminished supply has given rise to bidding wars—and headaches for would-be buyers.

The bottom line: Better Buy Now !! It will cost you more tomorrow !!

Call us at 598-3200, or, 800 677-6683 (MOVE) to discuss what this could mean to your financial security.

 

HOW HIGH WILL HOUSING PRICES BE IN 2016?

Daily real estate News | Monday, September 24, 2012

A quarterly survey of more than 100 economists shows growing optimism for the real estate market when it comes to housing prices. The majority of the economists surveyed say they expect home prices to steadily increase for the next four years.

The economists surveyed expect home prices to rise 2.3 percent this year over the fourth-quarter of 2011, according to the survey conducted on behalf of Zillow. In 2013, they expect prices to rise 4.7 percent; 8 percent in 2014; 11.4 percent in 2015; and 15.2 percent in 2016.

"This is further evidence that we're seeing a true recovery in the housing market," says Stan Humphries, Zillow's chief economist. "Not since mid-2010—in the midst of the homebuyer tax credits—have we seen this group so bullish on housing. It's refreshing to see this optimism at a time when the market seems to be making an organic recovery, in the absence of an artificial stimulant like the tax credits."

Not to be repetitious, but the bottom line is: Better Buy Now !! It will cost you more tomorrow !!

Call us at 598-3200, or, 800 677-6683 (MOVE) to discuss your new home

 

LATEST LOCAL STATISTICS FROM PPAR

Click here to see the most recent Sales and Listing information for the Pikes Peak area.

These statistics are published by the Pikes Peak Association of Realtors and can be helpful to you in evaluating and comparing current listings in the various neighborhoods in our area. If you would like to ask any questions about this data, please give us a call at 598-3200, or, 800 677-6683 (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.

 

JOKE OF THE WEEK

Football Rules from Around the World

SOCIALIST FOOTBALL: After you score, the state takes half your points and redistributes them to the opposing team.

COMMUNIST FOOTBALL: After you score, the state takes away all your points and gives you back what the Central Bureau of Points designates as appropriate (according to your needs).

FASCIST FOOTBALL: After you score, the state takes away all your points and sells them back to you.

NORTH KOREAN FOOTBALL: After you score, the state takes away all your points and shoots your team.

BUREAUCRATIC FOOTBALL: After you score, a tax of 80% will be imposed on the points. 10% of your points will be given to the scoring disadvantaged, 10% of the points will be given to the opposing team as an incentive "not to score," while 60% of the points will be used by the state for administration.

NFL FOOTBALL: Nobody but a replacement referee can take away your points.