March 31, 2014

 

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.

                                           

SPRING HAS SPRUNG...SORT OF

More like a trampoline than straight up, but Spring is certainly trying its best to arrive.  However, the Spring real estate Buying and Selling season started early this year for my clients.  I’m not certain if it’s due to light inventory, rising home values or fear of increased mortgage interest rates but we’ve seen a sort of frenzy in the last month that appears to be fueled by at least some of these reasons.

Spring is the traditional selling seasons for lots of reasons, prime among them the fact that families like to relocate after the finish of a current school year and prior to the start of a new one.  I’m finding that many of my Buyers and Sellers are among that group and lower inventories are pushing them to start a bit earlier this year. 

Some things I’ve recently read:

“We had ongoing unusual weather disruptions across much of the country last month, along with the continuing frictions of constrained inventory, restrictive mortgage lending standards, and housing affordability less favorable than a year ago,” says Lawrence Yun, NAR’s chief economist.  “Some transactions are simply being delayed, so there should be some improvement in the months ahead.  With an expected pickup in job creation, home sales should trend up modestly over the course of the year.”

Housing starts were mostly flat in February, due in part to inclement weather.  However, according to Doug Duncan, Fannie Mae’s chief economist, the housing market is expected to show a relatively strong performance beginning with this Spring season.

Inventories of homes for sale have increased 10 percent year-over-year which signals Seller optimism according to realtor.com’s latest National Housing Trend Report, which tracks 146 markets. 

Colorado Springs is number 72 in the cities tracked by this report—almost dead center.  Some important things to remember include the fact that our home prices did not fall as sharply or as low as many other cities so we did not have as much equity to recover.  We also did not have the large number of foreclosures that many other cities experienced. 

The good news for us from that report is that the median home price in the Colorado Springs area is up 6.7 percent year over year and 2.2 percent month over month (yes, even with bad weather!)  Our local inventory is down 12.4 percent year over year and 15.9 percent month over month.  The median age of inventory is 89 days, up 17.1 percent year over year, but down 6.3 percent month over month.

Some important things to consider if you’ve wanted to Buy or Sell or simply on the fence:

  • Start early and be sure to interview “competent” lenders and get a “pre-approval” letter.  That “lender approval letter” should be included with the offer to purchase a home.  A recent listing of mine had an offer that included such an unprofessional “pre-qualified” letter from the lender that after I explained it to my client, the offer was rejected.
  • Be realistic in pricing your home.  This will help it sell faster and avoid back and forth counter offers. 
  • Be open to buying in neighborhoods you might not have considered.  With low inventory, sometimes it pays to look in areas you had not previously considered.  You never know what you might find there.
  • Mortgage rates are going up.   It’s going to happen, so if you’re thinking about it, now’s the time to save on your house payment.  Also—be prepared to provide more documentation to your mortgage lender than in the past due to the new regulations that went into effect in January.
  • Local inventory is lower and the “best” priced homes go quickly depending on price range and location.  You might sell your home quickly and if you are looking to Trade Up, know what you want, need and can afford so that you can find your next home while there are more choices available.

Home Buying and Selling is not quite as simple as it once was, and that’s where it’s extremely important that you choose a competent real estate Agent to help you navigate through the home Buying and Selling “wars”.

If you’re reading this, you’re one of the lucky ones because you’ve got ME.  With my investment banking background and forty plus years in the local real estate arena, I’ve got the credentials and experience to help you make the right decision for your family.  Whether you want to downsize or upsize or simply move to a new neighborhood, I’ve got the knowledge to provide expert advice that will make the process as stress-free as possible.  Call me today at 598.3200 or email me at Harry@HarrySalzman.com and let’s talk.  Spring is here and it’s best to get ahead of the “frenzy” if you can.

 

SOUTHERN COLORADO ECONOMIC FORUM’S QUARTERLY UPDATES & ESTIMATES

Southern Colorado Economic Forum February 2014

The latest update on the El Paso County Economy, including housing trends, was published on March 27, 2014 and you can click here to read the 10-page report in full.  Here are some of the highlights I thought you would find interesting:

  • Single-family permit activity, while slower than February 2013, was still strong--up approximately 21.4% (475 units).  The year 2014 is expected to have a more modest gain of about 10 percent.
  • The trend in home sales continues its upward trend and through December 2013 there were 1,648 (18.2%) more homes sold than in 2012.  While not setting records, this is a considerable gain over the weak sales trends of the previous five years.  Rising mortgage rates, low job growth and declining real income in El Paso County will be the challenge for 2014 homes sales to grow more than 5-10 percent.
  • The home supply grew by 3.3 percent while sales increased 18.3 percent, suggesting that demand exceeded supply.  The net effect was average prices increased by 7.1 percent in 2013.
  • Foreclosures were well below the Forum’s projections and additional declines are expected in 2014.

The next several sections of the report include:

  • Colorado Springs Airport Trends
  • Colorado Springs Sales Taxes
  • New Car Registration Trends
  • Employment Trends and Wages
  • Personal Thoughts about our Employment Base

It is with pleasure that Salzman real estate Services, a supporter since the Southern Colorado Economic Forum was created by the UCCS College of Business in 1996, is able to share these types of statistics and forecasts with you as soon as they become available, each and every quarter.  I would be happy to answer any questions you might have concerning the detailed reports and how they might affect you personally or any question you might have concerning Real Estate in general.

 

BUYING V. RENTING?

Keeping Current Matters 3.23.14 

A report released by Trulia last week explained that homeownership remains cheaper than renting in all of the 100 largest metro areas by an average of 38%.

Other interesting findings:

  • Even though prices increased sharply in many markets over the past year, low mortgage rates have kept homeownership from becoming more expensive than renting.
  • Some markets might tip in favor of renting this year as prices continue to rise faster than rents and if—as most economists expect—mortgage rates rise, due both to the strengthening economy and Fed tapering.
  • Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying—and rates haven’t been that high since 1989.

What’s this mean to you?  Buying a home NOW makes sense.  If you rent, your housing expense will only continue to rise (good news for Investment Buyers, though).  Locking in a mortgage rate at today’s prices will save you money as rates are not going to get any lower. 

It’s tougher for first time buyers in today’s market, but it’s NOT impossible.  Give me a call and let’s see what we can do to help make homeownership a reality.

 

3 MAJOR THINGS YOU NEED TO KNOW ABOUT THE 2014 NATIONAL housing market

HousingWire 3.23.14

Veteran housing economist, David Berson, gave his opinion on the near-term future of the housing markets:

Number 1:  2014 should prove to be the strongest year for housing activity since before the Great Recession:

  • 2014 should be the year when activity reaches the highest level since 2006/2007.
  • An improved job market, with employment growth accelerating and unemployment rates declining is propelling this market.
  • People buy homes when their job and income prospects improve—even if it’s more expensive to do so—rather than buy when it is inexpensive to do so but they’re worried about keeping jobs.

Number 2:  Demographics should start to favor housing activity:

  • The demographic most affecting the housing market is household formations.  These formations are affected by the job market as people “double up” when worried about the job and income-earning prospects.   Since the Great Recession, many young adults are still living with their parents.
  • With the increasing job market, there is a pent-up demand for households.  Both parents and those young adults living at home look forward to seeing themselves in their own households.
  • There is a current shortage of about three million households and beginning in 2014 the pace of household formations should accelerate to above-trend pace for several years, pushing up housing demand.

Number 3:  Mortgage availability shouldn’t worsen and may improve.

  • While mortgage credit isn’t as easy to get as it was during the housing boom, mortgage availability has increased slightly in comparison to recent years.
  • The government or government-sponsored share of mortgage lending has climbed to more than 90 percent in recent years and while that in an untenable situation in the long run, it is unlikely to change much this year.
  • Qualified Mortgage lending rules from the Consumer Financial Protection Bureau exempt home mortgages that qualify for purchase or securitization from Fannie and Freddie.  As a result, mortgage lenders won’t have to tighten their mortgage-underwriting requirements in response to QM as long as they sell their loans to the GSEs.

Just some things to consider when deciding whether 2014 is the right time for you to Sell and Trade Up or Buy for the first time or for Investment purposes.  There’s a lot of information coming from a lot of different sources, but most of them are saying that this year is still a great time to jump in the real estate market.

 

FANNIE MAE AND FREDDIE MAC ARE WINDING DOWN

RisMedia 3.20.14

As I’m sure many of you are aware, there is a bipartisan proposal that seeks to wind down mortgage giants Fannie Mae and Freddie Mac and completely overhaul the nation’s mortgage system. 

According to Don Frommeyer, President of NAMB (The Association of Mortgage Professionals), “A change in the mortgage system will be a welcomed change across the board as long as this function does not increase the cost to the consumer.  In the past 5 years, the cost to the consumer has increased largely due to the changes that have been made in the mortgage market.  We need to help consumers going forward.”

“With the proposed changes, Fannie and Freddie would be replaced with a federally insured mortgage system.  Investors will pay a fee to ensure insurance for mortgage securities they buy and potential homeowners will have the assurance that their mortgages are backed by strong capitol,” Frommeyer added.

The bill, proposed by Senators Tim Johnson and Mike Crapo, is still a long ways off from being passed or implemented but many feel this is necessary to prevent another housing crisis or mortgage fiasco. 

I’ll keep you abreast of this proposed legislation and the implications it could have on you.

 

COLORADO SPRINGS WATER EFFECIENCY REBATES AVAILABLE

I received an email from Frank Kinder, Sr. Water Conservation Specialist for Colorado Springs Utilities who wanted me to remind our local readers that they can save water indoors by installing  WaterSense approved toilets and can get rebates of $75 for up to 4 fixtures per home.  They will even recycle the old fixtures for you.

CSU also offers irrigation rebates for controllers, heads and nozzles.  So if you’re ready to remodel or just want to save some cash, check with CSU to see how you can “make every drop count.”

 

HARRY’S PHILOSOPHY OF THE DAY

ONE CHOICE

You’re always One Choice away from changing your life

One…

One tree can start a forest,

One smile can start a friendship,

One hand can life a soul,

One word can frame the goal,

One candle can wipe out darkness,

One laugh can conquer gloom,

One hope can raise our spirits.

And...one choice can change your life.

Think about that.  One choice, just one, can change

your life forever.  Simply put, your life today is what

your choices have made it, but with new choices, you

can change directions this very moment.

Something to think about as you begin a new week.