Real Estate Information

                                    

January 12, 2015

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.

                                    

THE NEW YEAR IS STARTING OFF VERY POSITIVE FOR THE housing market

I hope everyone had a happy, healthy holiday season.  From everything I’ve been reading it appears that the housing market is off to a great start.  And as you will read, 2014 ended on a strong not and predictions for 2015 remain very positive.  This is great news for both Buyers and Sellers, and I’m happy to share some of the news with you.  As always, I’ll keep you abreast of all the happenings in real estate during 2015, both on local and national fronts.  So let’s get started.

 

DECEMBER LOCAL STATISTICS ARE POSITIVE

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

Despite the unusually cold weather and the busy holiday season, December still proved that the housing recovery is continuing to remain strong in our area.  The total number of Single Family/Patio Homes sold in the Pikes Peak area during 2014 was 11,197 for a 3.8% increase year over year from 2013.  This represents the highest number of single family/patio homes sold since 2006—before the recession.  Sales of Condo/Townhomes were 1,474 in 2014, for a 6.6% increase from 2013. 

These numbers indicate that the combination of historically low mortgage rates and homes priced to sell are helping fuel this growth.  The number of listings in both categories continues to dwindle as many renters are finding a way to become homeowners, some for the first time.

Here are some highlights from the monthly PPAR report.  Please click here to view the detailed 18-pages which includes both the monthly and annual reports.  If you have any questions, please give me a call.

In comparing December 2014 to December 2013 in PPAR:                    

                        Single Family/Patio Homes:

• New Listings are 676,  Down 9.1%
• Number of Sales are 873, Up 28.4%
• Average Sales Price is $255,652, Up 7.3%
• Median Sales Price is $225,000, Up 6.5%
• Total Active Listings are 2,599, Down 19.4%

                        Condo/Townhomes:

• New Listings are 98, Up 18.1%
• Number of Sales are 125, Up 26.3%
• Average Sales Price is $176,950, Up 18.8%
• Median Sales Price is $150,000, Up 15.4%
• Total Active Listings are 303, Down 12.9%

 

SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*

                                                Median Sales Price               Average Sales Price

Black Forest                             $405,000                              $487,052

Briargate                                   $290,000                             $312,823        

Central                                      $184,000                              $208,810

East                                           $187,000                              $193,603

Fountain Valley:                       $201,249                              $204,179

Manitou Springs:                     $227,500                              $227,500

Marksheffel:                             $255,000                              $273,664

Northeast:                                 $207,750                              $227,881

Northgate:                                $352,706                              $360,356

Northwest:                                $305,000                              $333,365

Old Colorado City:                  $207,500                              $235,432

Powers:                                     $228,750                              $232,899

Southwest:                               $230,000                              $285,060

Tri-Lakes:                                 $348,000                              $400,549

West:                                         $179,750                              $212,500

*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.

 

2014:  A YEAR OF JOBS, RECORD-LOW INTEREST AND TIGHT INVENTORY SETS THE STAGE FOR 2015 GROWTH

RisMedia,, 12.24.14, Realtor.com, 12.24.14,  Relator Mag,, 12.24.14, 1.8.15, & 1.9.15

Realtor.com’s “Top 10 real estate Trends of 2014” nationally:

1. Improving economic fundamental.  Strong consumer confidence returning with higher GDP (Gross Domestic Product) and an influx of new jobs during the latter half of the year.

 

2. Historically low mortgage rates continue.  Mortgage rates declined despite the end of quantitative easing.

 

3. Deceleration of abnormal home price gains or return to normal price.  After several years of abnormally high levels of home price appreciation, price increases in 2014 moderated and we are now experiencing increases consistent with long-term historical performance.

 

4. Decline of distressed sales.  Foreclosures and short sales declined throughout the year and while total home sales decreased in 2014, normal (non-distressed) home sales increased over 2013.

 

5. End of the era of major investors active in purchases.  Large scale purchase activity by major investors declined as the number of distressed properties dropped.  This enabled more room for traditional first-time home buyers.

 

And,  “Factors Holding Back Recovery”:

1. Tight credit standards and limited mortgage availability.  Despite historically low rates, many households were prevented from capitalizing on mortgage access due to new lending and qualification regulations that took effect in January 2014. 

 

2. Tight supply of inventory.  While total inventories increased as the year progressed, supply did not outpace demand.  Monthly supply of new homes and existing homes remained beneath normal levels and days on the market was down year over year.

 

3. Depressed levels of first-time buyers.  The share of first-time buyers fell to the lowest level in over twenty years according to NAR.  “But the first-time buyer share is showing signs of modest improvement by the year-end,” said Lawrence Yun, NAR Chief Economist.  Federal policy actions, such as revised regulations for lenders and new low down-payment programs introduced in December are anticipated to have a positive impact in 2015.

 

4. Record levels of renters and ever-increasing rent prices.  Continued decline in home ownership rates resulted in record numbers of renting households.  Rent increases became an inflationary concern in 2014, and looking ahead, the pace of these increases are not slowing down.

 

5. Lack of recovery in homebuilding and low share of new home sales.  Single family starts barely increased in 2014 over 2013.  New home prices increased substantially again in 2014, revealing that higher priced product is limiting the demand.

 

Housing Forecast from NAR:  “HOME SALES ONLY GOING UP FROM HERE”

NAR is predicting that existing home sales will likely rise about 7 percent this year, as a strengthening economy and job growth leads to a healthier market.

Lawrence Yun said, “Home prices have risen for the past three years cumulatively about 25 percent, which boosts confidence in the market and traditionally gives current home owners the ability to use their equity buildup as a down payment towards their next home purchase.  Furthermore, first-time buyers are expected to slowly return as the economy improves and new mortgage products are made available in the marketplace with low down payments and private mortgage insurance.”

Several “speed bumps” that could still jeopardize the pace of the housing markets recovery include the anticipated rise in mortgage interest rates that are expected this year, Yun added.  And the fact that many homeowners have now locked in some of the lowest mortgage rates in history in recent years and may be hesitant to give up their low financing rate to move.  Also, lenders are being slow to ease underwriting standards to more normalized levels.

Yun is forecasting a growth in home prices, but at a more moderate pace than seen in recent years.  He expects it to moderate between 4 percent and 5 percent growth in 2015. 

 

Realtor.com’s “2015 Housing Forecast: Stage Set for the Return of First-Time Home Buyers”

Among the key developments forecasted is that first time buyers are set to return to the market in 2015.  “In 2015, increases in employment opportunities will empower younger buyers to return to the market and fuel the continued housing recovery,” said Jonathan Smoke, chief economist for realtor.com.  “If access to credit improves, we could see substantially large numbers of young buyers in the market.”

Realtor.com’s “Top 5 Housing Predictions for 2015”:

1. Millennials will drive household formation.  Households headed by millennials will see significant growth as a reflection of economic gains.  They will also drive two-thirds of household formations over the next five years.  Additional jobs and household formations will be the two key factors driving first-time home buyer sales.

 

2. Existing home sales will increase +8%.  Existing home sales will grow as more buyers enter the market motivated by a clear belief that both rates and prices will continue to rise.  While the majority of housing activity in 2015 will be driven by baby boomers preparing for retirement, millennials will account for 65 percent of first-time buyer sales.

 

3. Home prices will gain +4-5%.  Low inventory levels and demand by improved employment opportunities will push home prices up in 2015.  While first-time buyers have many economic factors working in their favor, increasing home prices will make it more difficult to get into high priced markets.

 

4. Mortgage rates will end the year at 5%.  Rates will increase in the middle of 2015, as the Federal Reserve increases its target rate by at least 50 basis points before the end of the year.  30-year fixed-rate mortgages will reach 5 percent by the end of 2015.  One year adjustable rate mortgages (ARMs) will rise minimally.  While still at historic lows, rate increases will affect housing affordability for first-timers trying to break into the housing market and will be another factor pushing them to less expensive locales.

 

5. Home affordability will decrease 5-10%.  Affordability will decline in 2015 based on home price appreciation and increasing mortgage interest rates.  This decline will be somewhat offset by increasing incomes.  When considering historical norms, housing affordability will continue to remain strong next year.

MORTGAGE RATES KICK OFF 2015 AT A 20-MONTH LOW

Borrowing rates moved even lower last week, with the 30-year fixed-rate mortgage averaging 3.73 percent, its lowest average since May 2013. 

According to Frank Nothaft, Freddie Mac’s chief economist, “Mortgage rates fell to begin the year as 10-year Treasury yields slid beneath 2 percent for the first time in three months.” 

Again, many economists have predicted that mortgage rates will rise sometime this year, with the 30-year fixed-rate mortgage likely reaching the upper 4 percent or 5 percent range by the end of the year.

So, what does all this mean to you?  Well, once again, now is the time to sell and trade up or buy for the first time or for investment purposes. 

If you’ve been waiting for the holiday season to be over and wondering what 2015 has in store for the real estate Market, my suggestion is to wait no longer.  Inventories are not getting any larger which is a plus for Sellers, but could hamper your buying expectations.  However, there are always homes available to suit most of a Buyer’s needs and wants.  If you are considering a move and wondering what’s available, please give me a call at 598-3200 or email me at Harry@HarrySalzman.com and let’s get the ball rolling.  I’ll be happy to help you determine if indeed, the time is “right” for your personal family situation.

 

FHA LOWERS ITS MORTGAGE COSTS

Realtor.mag, 1.8.15

The Federal Housing Administration is reducing its annual mortgage insurance premiums by 0.5% in a move to “expand responsible lending to creditworthy borrowers,” the While House said in a statement last Wednesday. 

FHA also said it would take added steps over the next few months to “cut read tape and clarify lending standards” in reducing mortgage costs for hundreds of thousands of creditworthy borrowers, according to the White House. 

This move comes after several calls from industry trade groups, associations and members of Congress urging the agency to lower its insurance premiums, which were increasingly blamed for sidelining thousands of would-be buyers.  FHA-backed loans allow buyers to put down as little as 3.5 percent on the purchase price, and they are a major financing resource for first-time buyers. 

FHA’s mortgage insurance premiums will be reduced from 1.35 percent to 0.85 percent.  The reduction in premiums on mortgages could save an average borrower $1,000 a year on a $200,000 loan, approximately $83 monthly. 

This is a big deal for hundreds of thousands of buyers and I will keep abreast of the status on this and let you know as soon as it takes affect.  Anyone wishing additional information, please feel free to call me to discuss how it might affect you on a home purchase and loan. 

 

HARRY’S RESOLUTIONS FOR 2015  (Feel free to make them yours)

#1.  Learn to Better Manage My Time

 

#2.  Do My Part to Help the Environment

 

#3.  Start Saving Better For the Future (Broncos fans take note)

 

#4.  Make Sure to Use Sunscreen

 

#5.  Try to Keep a Positive Attitude

 

 

                                                            

December 22, 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.                              

                            

 

Wishing you and yours safe and Happy Holidays and a very Happy, Healthy, Prosperous New Year, too.

-Salzman real estate Services, LTD.

 

Look for our Regular e-Newsletter to resume on January 12, 2015

                                                            

December 8, 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.

                                   

HOME BUYING AND SELLING IS A “BALANCING ACT”

One of the questions I’m asked most often is “When is the “right” time to Buy or Sell a home?”  My response is normally the same—“It’s always the right time.” 

There are so many factors entering into the home buying and selling equation that are different for each individual situation.  Very few of us ever get to buy at the bottom of the market and Sell at the top, let alone making sure to find the lowest interest rate available at that time.  Most home decisions are based on needs, such as up-sizing or downsizing or moving to a new neighborhood or city.  You can’t always do that at the exact time you might want.  And even if you can, the market conditions and mortgage interest rates are in a constant flux of change. 

So rather than worry about the “right” time for buying or selling, consider what is the “right” time for you personally and what it’s going to take to make you happy.  As long as you and your family are happy with your home decisions, then it’s always going to turn out “right”.

 

NOVEMBER LOCAL STATISTICS

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

I’m happy to share with you the fact that the Pikes Peak area has been very fortunate in the number of recent residential closings.   Sales in November 2014 were more than 10% over last November.  Some of this is attributed to the fact that people like to be settled prior to December so they can celebrate the holidays in their “new” home.  Another factor is the still historically low mortgage interest rates.

The average and median sales prices are approximately the same as last November.

The number of listings is down about 15% from the same time last year and some of that might be due to Thanksgiving being so late in the month.  There is usually a group of Sellers who wait until after the holiday season to put their homes on the market. 

Positive statistics for El Paso County only as of November 30, 2014:

• There were 2609 Active Listings
• 699 were sold
• Those were sold at 98.3% of the Listing Price
• The average days on the market was 89

This is VERY positive and indicates that both Buyers and Sellers are aware that interest rates are not going to stay this low forever and that mortgage lending is going to have even more new regulations in the coming months that can slow down the closing process.

Here are some highlights from the PPAR report.  Please click here to view the detailed 10-pages .  If you have any questions, please give me a call.

In comparing November 2014 to November 2013 in PPAR:

                                              Single Family/Patio Homes:

• New Listings are 783, Down 15.1%
• Number of Sales are 782, Up 10.3%
• Average Sales Price is $245,488, Down 1.0%
• Median Sales Price is $216,750, Down 1.5%
• Total Active Listings are 3,134, Down 14.8%

                        Condo/Townhomes:

• New Listings are 118, Up 25.5%
• Number of Sales are 122, Up 8.9%
• Average Sales Price is $156,153, Down 8.9%
• Median Sales Price is $136,212, Up 0.9%
• Total Active Listings are 346, Down 11.1%

 

COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*

                                                Median Sales Price             Average Sales Price

Black Forest                            $433,750                              $404,237

Briargate                                  $271,672                              $292,547        

Central                                      $163,950                              $170,352

East                                           $179,900                              $191,414

Fountain Valley:                       $184,500                              $192,714

Manitou Springs:                     $310,000                              $331,214

Marksheffel:                             $313,116                              $299,941

Northeast:                                $213,000                              $237,815

Northgate:                                $332,041                              $355,332

Northwest:                               $308,500                              $335,188

Old Colorado City:                  $167,450                              $201,437

Powers:                                    $220,000                              $218,806

Southwest:                              $260,282                              $364,937

Tri-Lakes:                                $360,500                              $384,232

West:                                         $297,500                              $312,733

*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.

 

5 MISTAKES FIRST-TIME HOME BUYERS MAKE

Realtor Mag 2014

First-timers are eager to jump into home ownership but real estate experts say they see them committing the same mistakes time and time again.  Here are some of the most common ones, as identified by experts in a CNBC article:

 

1. They are unprepared to compete against all-cash offers.  Buyers need to be ready to make a quick decision if the housing market is heating up.  Home buying is a lot like finding a job—it takes a lot of time to prepare—so that when the deal you want comes along, you’re ready to pounce on it.  Buyers should save as much as possible for a down payment, repair any credit blemishes and get preapproved for a loan to put themselves in a better position to compete.

 

2. They place a car ahead of the home.  Lenders are going to look at an applicant’s debt-to-income ratio to determine how well they can afford a mortgage.  It is much easier to own a home if you can show a history of saving and not have gotten into too much debt.

 

3. They place too much emphasis on online loan information.  Online sites can be a great place for obtaining general information about loan products and estimated costs, but visiting with a lender face-to-face will make the process less mysterious and help answer questions that inevitably arise.  It is important to talk to several lenders in order to get a feel for the various types of loans available and determine what fees, closing costs, etc. are charged by each. 

 

4. They bank too much on online home values.  Some real estate websites are giving Buyers a false sense of home values, the CNBC article notes.  If a Buyer believes that the actual value of the house is one thing but it is actually something more, or less, then it’s a disservice to the client.  You need to spend time with someone who understands the market, who’s been there day in and day out.  You can get the best feel by working with a competent, experienced Real Estate Broker and by driving around neighborhoods to get a sense of things about homes that may be less valuable or even more valuable than the perceived online value.

 

5. They forgo the home inspection.  About 10 percent of homes recently purchased weren’t inspected by a home inspector, according to Bill Loden, president of the American Society of Home Inspectors.  Some Buyers were trying to cut down on costs but defects later discovered could potentially result in the loss of thousands of dollars.  “It takes a trained eye to see the problems that can exist in a home,” said Loden.  “The inspection can also give the first-time Buyer a bit of schooling on the house and how to maintain it.”  Buyers also should be prepared to ask questions that are community specific and the home may require additional inspections from a specialist to rule out potential problems.

 

If you know a family member or co-worker considering home buying for the first time, please share this information in order to help them avoid the pitfalls listed.  Better yet—have them call me at 598.3200 or email me at Harry@HarrySalzman.com and I can provide them with all the necessary steps to prevent additional stress and help them make their dream a reality.

 

HARRY’S HUMOR OF THE DAY

 

  

November 10, 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.

 

                                            

THE “AMERICAN DREAM” IS STILL VERY MUCH ALIVE

I recently came across this pin I received many years ago and it caused me to think about some of the reasons I first went into real estate (other than needing a job!).  What I have done every day for the past 42 plus years has given me great personal satisfaction and continues to do so.  I see myself as a “conduit” of sorts in helping others to achieve both their personal and financial residential Real Estate goals. 

I’ve sold many “first-time” homes and watched as the owners built enough equity to trade-up to another home.  The folks that I’ve helped relocate from around the world, around the country or just around the corner have contributed to making my adopted hometown a more special place to live.  For those interested in investment income as part of their “financial management portfolio” I’ve helped find the right property for their needs. 

Each and every client has played a role in not only making me better at what I do, but has given me insight into the importance of a real estate Broker’s relationship with their clients.  My Investment Banking background has certainly played a role in helping my clients determine exactly what is best for their particular wants, needs and budget.  No sale is ever the same and no client is either. 

In today’s housing market, it’s more important than ever to have the type of knowledge and experience that a qualified real estate Broker such a I brings to the table.  There are so many federal and state regulations that are constantly changing and new mortgage lending acts that affect how and to whom a lender can provide help.  While it can be somewhat confusing to know which way to go when you are in the market—that’s our job.  The homework I do for you can save you time, money and disappointment—not to mention stress. 

Achieving the “American Dream” is still my goal for all my clients and, even in tough times, there is most always a way to achieve it.  With mortgage rates still historically low and home prices rising steadily but slower than in the recent past, there are great opportunities out there. 

If you or any family member, co-worker or friend is interested in finding out how to make today’s market work best, please give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let me see how I can make the dream a reality.

 

OCTOBER LOCAL STATISTICS CONTINUE UPWARD TREND

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

Local home sales have risen for five of the past six months, with sales in October totaling 972, a 4.6% increase over the same period last year.  Sales year-to-date in 2014 have been the highest of any similar period since 2006. 

Low interest rates are helping to drive sales during what is normally a slower time of year for the residential real estate market.  The supply of local homes has slowly decreased in each of the last three months, helping to boost prices.   This low interest rate trend won’t be around forever, but at the moment it is helping keep payments down even with higher home prices.

Here are some highlights from the PPAR report.  Please click here to view the detailed 10-pages .  If you have any questions, please give me a call.

In comparing October 2014 to October 2013 in PPAR:                     

                        Single Family/Patio Homes:

• New Listings are 1,187, Up 1.3%
• Number of Sales are 972, Up 4.6%
• Average Sales Price is $256,678 Up 3.6%
• Median Sales Price is $224,950, Up 3.2%
• Total Active Listings are 3,501, Down 10.5%

                        Condo/Townhomes:

• New Listings are 145, Up 7.4%
• Number of Sales are 134, Up 0.8%
• Average Sales Price is $161,523, Up 6.8%
• Median Sales Price is $147,000, Up 13.2%
• Total Active Listings are 386, Down 11.9%

 

COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*

                                                Median Sales Price             Average Sales Price

Black Forest                            $408,688                              $425,919

Briargate                                  $279,500                              $300,357       

Central                                      $188,000                              $208,983

East                                          $180,000                               $190,473

Fountain Valley:                      $195,000                              $198,090

Manitou Springs:                    $350,000                              $347,500

Marksheffel:                            $222,500                              $248,545

Northeast:                                $225,000                              $240,988

Northgate:                                $364,658                              $389,713

Northwest:                               $313,000                              $347,572

Old Colorado City:                  $194,850                              $212,286

Powers:                                    $214,950                              $220,462

Southwest:                              $260,750                              $361,472

Tri-Lakes:                                $385,529                              $391,763

West:                                        $237,500                              $327,909

*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.

 

HOME PRICE GROWTH REMAINS STEADY IN MAJORITY OF METRO AREAS IN THIRD QUARTER

National Association of Realtors, 11.6.14

The median existing single-family home price increased in 73% of measured markets, with 125 out of 172 metropolitan statistical areas  (MSA’s) showing gains based on closings in the third quarter compared with the third quarter of 2013.

Lawrence Yun, NAR chief economist, says home prices in the third quarter continued to stabilize towards a healthier growth.  “Home-price gains returned to more normalized levels of low-to-mid-single digit rate appreciation in many metro markets as inventory levels steadily increased,” he said.  “Moreover, there are a good number of local markets that are still remarkably affordable with median prices at or under $200,000.”

He added that “given the improving labor market and historically low interest rates, more buyers are anticipated to enter the market next year.”

Nationally, median sales price for all the MSA’s rose by 4.9%.  Colorado Springs saw a 4.2% increase, which, while less than the national average, was considerably better than in the last report. 

To read the 3-page report comparing all 172 metro areas in the survey, please click here.

 

FIRST TIME BUYERS HIT A 27 YEAR LOW

The Wall Street Journal, 11.7.14

Of the primary residences sold this year so far, only 33% were purchased by first-time Buyers—the lowest level since 1981.  NAR reported that first-time Buyers typically make up 40% of home sales. 

Some of the reasons cited for the decline include higher student loan debt, rising rents and a weaker job market.  These make it much harder for would-be Buyers to save for a down payment and qualify for a mortgage, particularly in today’s bank lending environment. 

Also, many first timers have not been able to get as much help from their families as in the past, because their parents’ homes may have fallen sharply in value, according to a survey by the New York Fed. 

Rising prices during the past two years have fixed a number of problems in the housing market.  This makes consumers more willing to purchase homes or fix up the ones they live in.  It also make sit easier for owners to sell if they get into trouble on their mortgage, limiting foreclosures. 

However, the NAR survey found that rising prices have made them less affordable for the marginal or first-time Buyer.  Even though it’s been possible throughout the housing downturn to get a mortgage with a down payment of just 3.5% through the FHA, they have raised the fees that they charge significantly over the past few years, making those loans more expensive. 

 

AS HOME OWNERSHIP DROPS…WHO’S TO BLAME?

Realtor Mag. The Gazette, 10.29.14

Home ownership in the United States dropped to a 20-year low in the third quarter as more American became renters, yet another sign that the housing recovery is still mending from the Great Recession. 

The Census Bureau reported last week that 64.4% of U.S. households owned their homes, down from 64.7% in the prior three months.  That’s the lowest rate since 1995, and down from a peak of 69.2% in 2004, before millions of homes were lost to foreclosure during the recession. 

The number of owner-occupied homes fell from 74.9 million in the third quarter 2013 to 74.2 million in the third quarter this year.  Rental households grew from 39.9 million to 41.1 million during the same period.

While Millennials and their changing preferences often take the heat for the decline in home ownership numbers, they can’t take the blame for the latest dip according to an article in The Atlantic.

Instead, it’s Generation X, those between the ages of 35-44 who have had the sharpest drop in home ownership since the recession.  Home ownership among that group has dropped 9% since 1994. 

According to an analysis of Census data by The Atlantic, home ownership for the Millennials in the last 20 years has fallen less than for any other age group under 64.

The article says that employment may be the key factor that is keeping Gen Xers away.  Researchers noted that employees in their 40’s once outnumbered their 55-plus cohorts in the workforce by 16 million, but now there are actually more workers older than 55 than fortysomethings. 

 

THE REASONS RENTERS KEEP RENTING

Realtor Mag, Housing Perspectives/ 10.29.14

The majority of Americans who do not own a home say they hope to one day and have strong feelings about home ownership.  But about 20% of renters are adamant about renting and say they intend to stay renters now and into the future. 

Researchers at Harvard’s Joint Center for Housing Studies  recently surveyed such renters to find out why.

The bottom line:  it’s not the lifestyle choices but financial constraints that renters say keep them from purchasing a home in the future.  More than half of those surveyed said they do not intend to buy because they think they cannot afford it or their credit is not good enough.

According to the research, the top 10 reasons renters give for not planning to buy a home:

1. Cannot afford the purchase or upkeep of a home.
2. Not good enough credit for a mortgage.
3. Not a good time economically to buy a home.
4. Cheaper per month to rent than to buy.
5. Don’t want to be concerned with doing the upkeep.
6. Don’t plan to be in a certain area for an extended period of time.
7. Rather use the money for other investments than a home.
8. Process of buying a home seems too complicated.
9. Purchasing a home limits flexibility in future choices.
10. Can live in better neighborhood by renting.

Another bottom line as far as I see it:  If you are looking for Investment Property to rent out, now is a great time.  There is a shortage of apartment rentals available, rental rates are rising each quarter and there are plenty of folks looking to rent.  If you are interested in discussing this possibility, give me a call and let’s see where you can go with this.

 

HARRY’S HUMOR OF THE DAY

This was shared with me this past week.  Thought you would find it interesting.

“The Commerce Department reported that September new home sales increased 0.2% from August.  The problem is the report has a reported margin of error of +/- 15.7%.  September sales could have been up as much as 15.9% or down by 15.5%, no one knows!

The month before, sales were up 18%, but were they?  In August the margin of error was +/- 16.3%!!!  The solution?  Totally ignore these monthly reports..”

By Elliot F. Eisenberg, Ph.D.

GraphsandLaughs, LLC

 

 

October 27, 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.

 

                                                  

 NOTE TO SELLERS -- “TAKE TWO TYLENOL AND CALL ME IN THE MORNING”

The Wall Street Journal, 10.24.14

An article to be published next year in the Journal of Experimental Social Psychology is entitled, “Can Acetaminophen Reduce the Pain of Decision-Making?”.  It builds on previous work that shows emotional pain can overlap with the physical kind. 

This study caused Stefanos Chen, a columnist for The Wall Street Journal, to wonder if the painkiller Tylenol (brand name for Acetaminophen) could compel homeowners to reduce their asking price.

I, of course, read this article and couldn’t help but smile.  I thought you might enjoy a brief synopsis. 

According to Nathan DeWall, co-author and professor of psychology at the University of Kentucky, “when people talk about decisions they have to make, they talk in terms of pain.”  Consider the neighbor who says that selling his house “hurt”. 

An experiment of 95 undergraduate students showed, as predicted by researchers, that “loss aversion”, a decision-making theory that people would much rather avoid losses than acquire gains,  can be proven scientifically.  Loss was found easier to accept by those taking acetaminophen than those who did not. 

“It was easier for them to give up something they owned—and that’s really hard for people to do,” Prof. DeWall said of the group on acetaminophen. 

“It’s the same principle at play when a sentimental homeowner balks at an agent’s comparable sales figures and demands a higher price for his home,” he added. 

The study certainly offers insight but not all the answers, he said.  “I’m not saying that if you take acetaminophen people are going to stop fighting with their real-estate agents.”

The moral of the story?  When you and your real estate Agent are at odds over the pricing of your home or the thought of lowering the asking price—try Tylenol—and see if it helps.  It certainly can’t hurt!

 

RELAXED MORTGAGE LENDING RULES, LOWER DOWN-PAYMENTS, IN THE PIPELINE

The Wall Street Journal, RealtorMag, The Gazette, HousingWire, 10.14

So many stories this last week concerning new rules and regulations for home financing.  This past year has been tough for those looking for mortgages, especially first-time borrowers, in part due to the Dodd-Frank Act which went into effect January 10, 2014.  This regulation was intended to help financial institutions avoid sending the housing market into another recession due to “risky” mortgages made to borrowers who had marginal credit and little documentation to justify the loans. 

Unfortunately, as I and many others predicted, enforcement of the new regulations hampered many borrowers from obtaining a mortgage and the housing market slowed down substantially.  

Several things are in the pipeline and include:

• An agreement between Fannie Mae and Freddie Mac, which could lower barriers and restrictions on borrowers with weak credit.  This would help lenders protect themselves from claims of making bad loans and would require a 3% down-payment (as was once the case) rather than the 5% minimum of recent times.  It’s possible the 3% could be limited to first time homebuyers, but those are the ones who have been hurt the most recently and this will drastically reduce their expense in obtaining their first home mortgage.

Fannie and Freddie do not make loans directly.  They buy them from lenders and package them into securities and then give guarantees to make investors whole if borrowers do not repay.  This payback comes from penalties charged to mortgage lenders and in turn, lenders have been making mortgage loans only to borrowers with excellent credit in the recent past.  Regulators and lenders are still walking a fine line between expanding mortgage access and moving too far toward the loose credit that led to the crisis.  Borrowers will still be required to not carry excessive debt relative to their income, but with the “lower down-payment loans” made “sellable”, more buyers will qualify for loans.

• A long stalled provision of the Dodd-Frank Act has been approved by The Federal Reserve, Securities and Exchange Commission and the Department of Housing and Urban Development which will result in relaxed mortgage-lending rules. 

Originally, lenders were required to hold 5% of the risk of mortgages packaged and sold to investors or require a 20% borrower down payment. But regulators, concerned that overly stringent rules would harm the housing market’s continued recovery, backtracked on the 20% down payment. 

Banks will now be able to avoid the 5% risk-retention requirement if they verify a borrower’s ability to pay back the loan and comply with other requirements, such as a borrower’s debt payments not exceed 43% of income.  These represent an effort to ensure that more mortgage loans are available to consumers.

• Mortgage lenders are looking to lower the minimum FICO scores that borrowers need to qualify for a jumbo loan.  A FICO score is the most commonly used method for determining credit scores and is used by Trans-Union, Equifax and Experian, the nation’s three biggest credit agencies. 

While today a borrower may be able to get a jumbo loan with a FICO score as low as 680 out of a possible 850, many lenders draw the line at anything below 720.  The best terms go to those with a score of 760 and higher.  Now, though, lenders are wanting to get more jumbo loans, those that exceed Fannie Mae and Freddie Mac conventional loan limits of $417,000 in most places and $625,00 in some high-price areas.  To do so they are looking at lowering the required minimum FICO score if all other factors are met.  

I realize all of this can be a bit complicated and every situation is different.  That’s why I’m here for you.  I study all the new regulations as they come out and do my best to mesh the best mortgage lender for each individual client.  My forty-two plus years in the local real estate arena has given me the edge in knowing exactly what’s available and I can help steer my clients in the right direction for their personal situation.  If you, or any family member or co-worker is in the market for a new, or new-to-you, home, please give me a call at 598-3200 or email me at Harry@HarrySalzman.com and let me put my extensive knowledge to work for you. 

 

MORTGAGE RATES STILL HISTORICALLY LOW, DEFYING EXPERTS’ PREDICTIONS

Housing Wire 10.15.14, The Wall Street Journal 10.26.14

Despite experts who have long predicted differently, interest rates keep tumbling and are offering borrowers a fresh opportunity to save money.

The week ending October 17, 2014 saw the fixed-rate, 30-year mortgage fall to 4.03%, the lowest level since June 2013 and it remained there through last Thursday.  This compares to 4.29% in mid-September and can translate into tens of thousands of dollars in savings through lower monthly payments over the course of a 30-year mortgage. 

Along with lower interest rates, home loan demands have surged, with applications jumping nearly 12% in the week ending October 17^th compared with a week prior, according to the Mortgage Bankers Association. 

This increase is being driven by those wishing to refinance existing mortgages, but falling interest rates are also helping ease the sting of rising home prices by making it possible to afford a house that might otherwise by out of reach. 

All of this is good news for both Buyers and Sellers.  If you are looking to Sell and Trade Up, or Buy for the first time or for Investment purposes, the low mortgage loan rates are going to work in your favor. 

First time buyers will find that with increasing rental payments, it makes sense to own if at all feasible.  When you rent, you’re paying someone’s mortgage, so why not find out if it’s to your advantage to pay your own?

If you’re looking to Buy for Investment purposes, those higher rental prices are going to help you recoup your investment a lot sooner. 

And, if you’re looking to Sell and Trade Up, the lower interest rates will help you keep your new mortgage payments down while helping your potential Buyers do the same.

All in all, it’s a great time to be in the housing market and if you’ve been sitting on the fence, now is a great time to give me a call and determine whether or not your real estate dreams can be realized. 

 

WHEN PURCHASING A NEW HOME, SHOULD YOU RENT YOUR HOUSE RATHER THAN SELL IT?

Keeping Current Matters, 10.14.14

A recent study concluded that 39% of Buyers prefer to rent out their last home rather than sell it when purchasing their new home.  The reasons cited were that “many homeowners were able to refinance and ‘locked in a very low mortgage rate in recent years.  That low rate, combined with a strong rental market, means they can charge more in rent than they pay in mortgage each month…so they are going for it.’”

Residential real estate is a great investment right now and in some cases this makes perfect sense.  However, there are a number of questions you might ask yourself BEFORE you decide to follow this path.

1. How will you respond if your tenant says they can’t afford to pay the rent this month because of more pressing obligations?  (This happens most often during holiday season and back-to-school time when families with children have extra expenses).
2. Because of the economy, many homeowners cannot make their mortgage payment.  What percentage of tenants do you think cannot afford to pay their rent?
3. Have you interviewed experienced eviction attorneys in case a challenge does arise?
4. Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?
5. Will you allow pets?  Cats? Dogs? How big a dog?
6. How will you actually collect the rent?  By mail?  In person?
7. Repairs are part of being a landlord.  Who will take tenant calls when necessary repairs come up?
8. Do you have a list of craftspeople readily available to handle these repairs?
9. How often will you do a physical inspection of the property?
10. Will you alert your current neighbors that you are renting the house?

Bottom line:  Historically, renting out Residential real estate is a great investment but not one without its challenges.  Be certain that you have decided to rent your home because you want to become an Investor, not because you are hoping to get a few extra dollars by postponing a sale.

 

WINTER SKI GUIDES AVAILABLE AT THE OFFICE

We have a limited number of copies of the 2014-15 Winter Guide produced by Colorado Ski Country USA at the office, so if you’re interested, just stop by and pick one up. 

 

HARRY’S PHILOSOPHY OF THE DAY

(some more words of wisdom I picked up at the Chicago conference..)

 

“Luck is a dividend of sweat.  The more you sweat, the luckier you get.”  --Ray Kroc

“To find joy in work is to discover the fountain of youth.”  --Pearl S. Buck

“”Try not to become a person of success, but rather try to become a person of value.”

--Albert Einstein

“The two most important days of your life are the day you were born and the day you found out Why.” --Mark Twain

 

 

 

                                                            

October 14, 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.

                             

SEPTEMBER LOCAL STATISTICS LOOKING GOOD

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

Local homeowners should be happy with the recently released housing statistics. While the month-over-month averages are not increasing as quickly as they did several years ago, the slow, steady growth we are seeing is a good sign that the housing market is stabilizing and continuing to provide increased equity for homeowners.

In general, September is a slower sales month.  People with children still at home and in school want to make certain they are settled in prior to the start of the school year, therefore more sales usually happen prior to Labor Day.

As you will see, September sales in El Paso County show that the relationship of selling price to listing price is 98.4%.  And the average days on the market is 80.  This means that if you are planning to Sell and you price your home realistically, it’s going to happen.  If you are in the market to Buy, it’s also a good time because prices are not increasing at too fast of a pace and interest rates are still historically low.  There are fewer homes available, though, and that’s possibly due to the higher price of rentals.  A number of renters are looking to become first-time homeowners, figuring that if they are going to pay someone’s mortgage it might as well be their own!

Here are some highlights from the report.  Please click here to view the detailed 10-pages .  If you have any questions about the report or anything else to do with Residential real estate, please call me at 598.3200 or email me at Harry@HarrySalzman.com.  

In comparing September 2014 to September 2013 in PPAR:                       

                        Single Family/Patio Homes:

• New Listings are 1,249, Up 8.0%
• Number of Sales are 1,026, Up 23.8%
• Average Sales Price is $253,218 Up 3.3%
• Median Sales Price is $225,000, Up 5.6%
• Total Active Listings are 3,831, Down 5.9%

                        Condo/Townhomes:

• New Listings are 172, Up 19.4%
• Number of Sales are 153, Up 51.5%
• Average Sales Price is $162,458, Down 6.6%
• Median Sales Price is $150,000, Up 7.9%
• Total Active Listings are 405, Down 11.2%
•  

COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*

                                                Median Sales Price             Average Sales Price

Black Forest                            $393,500                              $380,587

Briargate                                  $272,750                              $312,731       

Central                                      $176,500                              $215,121

East                                          $175,250                              $185,264

Fountain Valley:                      $190,950                              $199,041

Manitou Springs:                    $275,250                              $294,493

Marksheffel:                             $258,000                              $277,047

Northeast:                                $220,000                              $243,386

Northgate:                                $350,000                              $377,733

Northwest:                               $307,250                              $336,629

Old Colorado City:                  $174,450                              $195,653

Powers:                                    $222,000                              $223,671

Southwest:                              $240,500                              $317,226

Tri-Lakes:                                $349,625                              $360,214

West:                                         $242,500                               $295,602

*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.

 

WORLDWIDE relocation COUNCIL MEETING FOCUS WAS “ENJOY LIFE”

I just returned from a week in Chicago where I attended meeting with Realtors from all over the world who specialize in relocation—either around the world, around the country, or simply around the corner.  It’s always energizing to share stories and gather new information that I can use to help turn what can be a stressful experience for my clients into one that is as stress-free as possible. 

Easing stress during relocation for the entire family is of prime importance to me.  There are so many stress triggers that need to be dealt with, such as:

• Possible Negative Equity in the current home and its subsequent listing for sale
• Loss of spousal income and spousal job search
• Unfamiliarity of new town or neighborhood
• Schools
• Disclosure/Inspection issues
• Household goods move
• Mortgage qualifications

These stress triggers, and more, are just another reason why it’s important to deal with a competent real estate Broker who can assist you in all the above areas and help you find solutions to potential problems even before they surface. 

A Broker familiar with relocation will be acquainted with Brokers all over the world who can help with getting a current home listed when the move entails a cross-country or cross-the-world situation.  My many years of involvement with the Worldwide Relocation Council (WRC) has given me the pleasure of meeting Brokers who have the same “customer service” orientation as I do.  Knowing this, I can make certain that my clients will receive the same good advice that I give on a local level.

The “Enjoy Life” theme also concentrated on the “retirement journey” that many of us will travel, either soon, or one day in the future.  There are so many questions involved in setting goals and objectives for Retirement and many of them need to be answered long in advance of the actual act of retiring. 

Some of the Goals and Objectives might include:

• Where do I want to live?  City, State, Country, Home, Condo, Retirement Community?
• What do I want to be able to do with my time?
• How is my health now and expectations for future?
• Estimate how much you will need—one rule of thumb is that you will need 70% of your annual pre-retirement income to live comfortably
• Create an overall plan, including financial lifestyle, family, long-term care, insurance, will

Looking at these areas are important to do BEFORE you decide to retire as the answers to many of these questions will determine where, when and IF you are ready to retire.

A MetLife Study of Baby Boomers (1946-1964) done in April 2012 showed:

• 2011--- oldest Baby Boomers reached new milestone—Age 65
• 45% of Boomers age 65 are now fully retired
• 14% are retired, but are working part-time or seasonally
• 37% of those who retired earlier than planned cited health-related reasons and 16% cited job loss
• 27% of those working said they needed income for daily living and 13% cited desire to stay active
• On average, Boomers not retired yet plan to do so by age 68.5
• 71% are married or in a domestic partnership, 12% divorced or separated, 10% widowed and 7% single
• 83% have children, 84% have grandchildren and 24% caring for at least 1 parent
• 93% currently own their own homes, valued at $255,000

Lots to think about.  It’s always a good idea to make plans earlier than necessary and I’d certainly recommend you talk to your financial, tax and other advisors for help for your individual situation.  One thing you might ask them about is the possibility of owning investment property, which can help grow equity while providing you with a monthly income, probably more then the mortgage payment.  If that’s something that you are considering, give me a call and I can help you define your investment property goals. 

As an aside…I did manage some personal time in Chicago and lo and behold, I couldn’t escape my profession even while taking a leisurely walk.  The first building I saw was “The Realtor Building”, home to the National Association of Realtors, on Michigan Avenue.  There was a wooden-horse decorating contest going on and here is a picture of me with the one designed by the Realtors—entitled “The A-MARE-ICAN Dream of Property Ownership.”

 

A FEW MISTAKES THAT CAN SABOTAGE YOUR HOME SALE

RISMedia, 10.3.14 & The Wall Street Journal, 10.2.14

I’ve been asked over and over what I think needs to be done in order to get a home in “Selling Condition”.  My answer will differ from home to home and some will need more updating than others.  I wanted to share some information I recently read.  Not all of it will apply to all Sellers, but it’s certainly a good place to start. 

According to the real estate Staging Institute, a “staged” home sells 70% faster than a non-staged home.  Below is a list of common staging mistakes to avoid:

1. Mistake:  Not creating space.  Clutter robs a home of space.  Make sure everything is cleared from the countertops and remove at least two-thirds of books on the shelves.  Closets should be half full.  If a Buyer sees a jam-packed closet they will think it’s too small for them.
2. Mistake:  Excessive furniture.  Too much, or over-sized furniture can ruin a home sale.  Swap out a king sized bed for a queen in order to create more space unless the room is large.  Pull furniture two or three inches from the walls throughout the house and allow the corners of the room to be visible.
3.  Mistake:  Household smells.  The only thing as important as decluttering is having an immaculate house.  A house that smells odd to a prospective Buyer, whether because of a cat’s litter box, a dog or exotic food smells, can easily be a deal breaker.  Don’t try to mask smells with room freshener.  Simply open windows a few minutes before your home is being shown.
4. Mistake:  Failure to edit.  Too many personal items can increase clutter.  Remove as much as possible to allow the potential Buyers to picture the home as one they want for themselves.
5. Mistake:  Having more than one focal point in a room.  Every room needs a focal point but more than one is overkill.
6. Mistake:  Color Faux Pas.  It’s important to maintain a continuum of a neutral paint color throughout the main areas of the house to provide a sense of openness and flow.  This also helps make a room look bigger.
7. Mistake:  Covering up the light.  Lighten up!  You want as much light to come in as possible.  Remove unneeded blinds.  Pull drapery aside.  You want a Buyer to think: “I could live here, it’s nice and bright.”
8. Mistake:  Skipping the walk-though.  Make a trip through your home and test all the cupboards, cabinets and drawers for proper opening and closing.  Squeaky cupboards or jammed drawers will make the Buyers think they will need to fix them.  Replacing hinges and greasing drawer tracks is inexpensive and quick.
9. Mistake:  Neglecting the exterior.  The front porch is the home’s first impression.  Painting the front door and placing seasonal planters on each side improve the look.  Keep lawns freshly mowed and pressure-wash outdoor decks and aluminum siding.  This can do wonders for a home’s first impression and boost its value.

So there you have it.  Just some common sense suggestions that can help get a home ready for sale.  This is a great time to pare down and get rid of things you have been saving but really don’t want to move to your next home.  And, as always, I’m here to help with suggestions for your individual property to make certain the “first impression” is a good one.

 

HARRY’S PHILOSOPHY OF THE DAY

(some other words of wisdom I picked up at the Chicago conference..)

 

“Never get so busy making a living that you forget to make a life.” –Dolly Parton

“”Don’t be afraid to give up the good to go for the great.”  --John D. Rockefeller

“”Things work out best for those who make the best of how things work out.”  --John Wooden

“We make a living by what we get, but we make a life by what we give.”  --Winston Churchill

“Choose a job you love and you will never have to work another day.”  --Confucius

 

 

 

 

                                                            

September 29, 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.

                             

 

                                       

 

 

GUESS I’D RATHER BE IN COLORADO….

For those of you who have gotten to know me well, that goes without saying, but it’s most especially true this time of year when we get to see the Aspen trees change color in the mountains.  I don’t think there is anything as spectacular and there’s just a short window for viewing.  This past weekend, we were able to see nature at its best and I wanted to share several pictures I took with you.  It’s impossible to capture the magnificence of it all, but the photos above will give you a small idea of what I’m talking about. 

Those of us that call Colorado home know that our state is gorgeous in all four seasons.  And each season offers something for everyone—from sporting activities to sightseeing and great food.  For those looking to relocate here, you’re in for a treat.  You will soon realize what I mean when I talk of our “Rocky Mountain High”.  There’s just nothing like it.

SPEAKING OF FOUR SEASONS, HOME BUYING CAN BE TRICKY WITHOUT A COMPETENT real estate BROKER

The Wall Street Journal, 9.22.14

There have been lots of articles about the housing recovery and how it’s starting to slow down a bit to catch its breath so to speak.  Prices are continuing their upward climb and mortgage rates are still historically low.  However, the market’s foundation is starting to wobble a bit and forecasters are beginning to rethink their higher price valuation predictions. 

The slowdown is good news for homebuyers, of course.  The recent weakness in real estate investments, including homebuilders, has created opportunities for bargain hunters, some analysts say.  However, if the Federal Reserve begins raising interest rates next year as expected, the cost of financing will increase—making things tougher for Buyers and Investors alike. 

Many analysts argue that now is a good time to buy.  The slowing growth in prices makes homes more affordable, even as rental costs inflate for single-family homes and multifamily apartments.  Interest rates remain low, with the average for conforming 30-year fixed-rate mortgages recently at 4.19%, close to the lowest levels of the year. 

Some of the slowdown has to do with the time of the year, but I’ve found that no matter what the season, if you are dealing with a competent real estate Broker who has been successful during all seasons and some recent economic cycles, you can expect to find just what you are looking for.  It’s easy to find a home, either for personal use or investment, when the market is hot, but market conditions change and you need to make certain that you are dealing with someone who knows the “ins and outs” of every season and every cycle. 

With my 42 plus years in the local real estate arena, I’m uniquely qualified to help you and your family with all your Real Estate needs.  Just give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let’s see if now is the right time to make things happen for you.

 

MORTGAGE LENDING CAN BE PUZZLING

The Wall Street Journal, 9.12 and 9.22.14

With the mortgage credit game changing constantly and with more changes to come, it’s hard to know exactly where to get the best loan for your specific needs.   Those with top credit scores will find it much easier than most to qualify for loans of all types and will find that the shift in mortgage lending rules will present an opportunity to get a larger loan—and better home—without having to pay a higher interest rate. 

While fixed rate mortgages have been the norm lately, Adjustable Rate Mortgages (ARMs) with a 30 year repayment period and fixed rate for the first 10 years offer a conservative option for those looking for lower payments.  Most borrowers won’t need the loans for more than the fixed period as the typical Seller in 2013 owned his home for nine years, according to the National Association of Realtors. 

Borrowers who are considering an ARM should look for one with a fixed rate at least as long as the period they are planning to keep the house since the loan’s interest rate will rise considerably once the fixed period ends.  They should also put aside some of the savings they realize from the lower initial monthly payments in case they need to stay in the home longer than originally planned.

But no matter what type of mortgage loan a borrower may want, it’s not a “one size fits all” type of situation.  What is the best type of loan for those who qualify for the best rates and terms? Where do you go for lending if you are not in the select group with top credit scores?  What if you’ve had a bankruptcy or foreclosure?  These questions, and others, are very important to borrowers and another reason why you need to work with a qualified, competent real estate Broker.  A good Broker will have established contacts with lenders and can help direct you to the one that will work best for your individual financial situation.  This should be done prior to finding a home so that you won’t be disappointed.  You will know in advance what best fits your budget and being pre-approved will give you peace of mind while shopping for homes.  The “wrong” lender can make the home buying experience an unpleasant one and that’s something I’ve seen too often when the Broker hasn’t done everything necessary to help their Buyer. 

An important part of my service is making certain that I understand the needs of each client and with my investment banking background I do the homework to make certain that my clients are directed to a competent mortgage lender best suited for their needs. 

Today’s mortgage lending is getting more and more complicated but it doesn’t need to be for you.  Making sure you deal with the “right” real estate Broker can help alleviate many of the problems which could arise long before they do. 

Enough said for today.

 

HIGHER RENTS, LOWER WAGES ARE LEAVING MORE CASH-STRAPPED

RealorMag, 9.16.14

Nationwide, rents have risen by 6 percent according to data compiled from Harvard’s Joint Center for Housing Studies, and renters are increasingly becoming cash-strapped while facing the higher rents in conjunction with shrinking or stagnant paychecks. 

Traditionally, homeowners have long outnumbered renters by more than three to one, according to Realty Trac.  However, since the recession, the rate of homeownership has been steadily dropping from a 69.2 percent peak in the fourth quarter of 2004 to 65.42 percent in the fourth quarter of 2013, according to Census data.

The number of renter households has risen to 43 million, or 35.4 percent of all U.S. households, which is up from 31 percent in 2004, according to the Harvard report.

This means, of course, that 64.6 percent of households own their own home, townhouse or condo and I am a firm believer that somehow we need to help turn those renters into owners so that they can start building equity rather than helping someone else do so. 

This is obviously a great time for Investors to get in the market since rental income is going up, but it’s also a good time to turn renters into first-time or once-again homeowners.  If you know someone who is renting and wants to find out the feasibility of owning, please refer them to me and let me see if I can help them realize their “American Dream”.

 

LOCAL SALES TAX REVENUE CONTINUES TO INCREASE

The Gazette, 9.20.14

A healthy tourist season helped sales tax collections increase for a fourth straight month in August, according to a report from the Colorado Springs Finance Department.  Collections of the city’s 2 percent sales tax in August (July sales) were up 8 percent from August 2013. 

No wildfires or flooding most certainly contributed to this increase in tourism.  “The fact that there were no natural disasters certainly makes it more likely that tourists will want to visit the region, but the magnitude of the increase was perhaps unexpected,” said Tatiana Bailey, executive director of the Southern Colorado Economic Forum.  “One of the benefits of a strong tourism season is other businesses that cater to tourists—restaurants and retail shops—are also having a strong year.”

 

COLORADO SPRINGS RANKED AMONG “INTELLECTUAL ELITE”

The Gazette, 9.17.14

Colorado Springs is ranked 8^th in the nation among “intellectual hubs” out of 50 of the largest metro areas studies by WalletHub.com.  In comparison, Denver was number 28. 

UCCS spokesman, Tom Hutton, pointed to the growth of UCCS and the presence of Colorado College, Pikes Peak Community College, the Air Force Academy and others as some possible reasons for the high ranking.  And the officers corp at area military installations add more educated individuals to the population as does the tech sector, and many bright retirees who move here from all over the world. 

Some of the factors used to identify intellectual hubs by WalletHub, a financial network, included “education level” and “quality of education”.

Here’s some of what makes Colorado Springs so high on the list:

• Second in percentage of high school diploma holders
• Fourth in percentage of college or associate degree holders
• 15^th in percentage of workers with jobs in computer, engineering and science
• 22^nd in percentage of graduate or professional degree holders
• 23^rd in percentage of bachelor’s degree holders
• 31^st in public school system ranking

So there you have it.  Just another feather in our ski-cap.  In any case, a great bragging point when speaking to our friends in Denver.

 

HELP WANTED IN COLORADO SPRINGS

The Gazette, 9.24.14

Pikes Peak Workforce Center’s semi-annual Job Fair will be held on October 8^th and 114 Colorado Springs area employers say they have openings for 6,000 to 7,000 positions within the next two to three months. 

According to Jeanne Cotter, Workforce Center spokeswoman, this will be one of the largest job fairs the Center has held in terms of the number of openings.  The spring job fair had a similar number of employers but only 2,500 positions were available then. 

This comes along with the Colorado Springs area unemployment rate falling to 6.5 percent in July—the lowest in almost six years. 

The job fair will be from 11 a.m. to 3:30 p.m. October 8 at the Hotel Elegante Conference and Event Center, 2886 S. Circle Drive.  Doors will open at 9:30 a.m. for veterans and the spouses only.

For a complete list of employers who plan to attend, go to www.ppwfc.org and click on “fall job fair”.

 

BE SURE TO REGISTER SOON FOR SOUTHERN COLORADO ECONOMIC FORUM

The Southern Colorado Economic Forum is being held on Friday, October 10, 2014 at the Antlers Hilton Hotel Ballroom. 

You won’t want to miss out on all the useful information that is presented at this Forum so it would be wise to get your registration in as soon as possible for this always-sold-out event.  You can register online at : www.SouthernColoradoEconomicForum.com . 

Salzman real estate Services, LTD is proud to be the only Residential Real Estate sponsor and has been since the Forum’s inception 18 years ago. This is a “must attend” event for anyone in business in the Colorado Springs area and I know you will find it a useful tool in making business decisions for the coming year. 

 

HAPPY NEW YEAR TO MY JEWISH READERS

The Jewish New Year 5775 is now upon us and I’d like to take a moment to wish all my Jewish readers a heartfelt “L’Shana Tova” (Happy New Year). 

To all my readers, Jewish or not, I wish you a year filled with much good health, happiness, success, love and most importantly...Peace. 

 

HARRY’S JOKE OF THE DAY

 

 

 

 

                                                            

September 15, 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.

                                      

INSIDE THIS ISSUE…

As you are probably aware, our first “Update” each month normally deals with local housing statistics and findings while the second has more emphasis on national housing news.  In this issue, along with national news, I would like to share with you how homeownership impacts your net worth and how you can prepare for homeownership if you are new to the market.  I also want to reemphasize the importance of using a qualified, knowledgeable real estate Broker in all your home Buying and Selling transactions and will explain in more detail why this should be of utmost importance to you.

So, sit back, relax and take a minute to digest information that I hope will help you in making informed decisions when it comes to residential real estate.

 

HOMEOWNERSHIP’S IMPACT ON NET WORTH

Keeping current matters, 8.12.14

During the housing bust, homeownership may have lost some of its allure as a financial investment and more and more homeowners began to question whether owning a home was truly a good way to build wealth. 

The Federal Reserve’s Study of Consumer Finances, which is conducted every three years, provides a snapshot of family income and net worth along with basic demographic details and more detailed information on where families keep the wealth they have accumulated. 

The most recent study, conducted in 2013, offers a picture of the situation as home and equity prices normalized for most household balance sheets.  

Some of their findings from that and a study done a year earlier reveal:

• The average American family has a net worth of $77,300
• Of that net worth, 61.4% ($47,500) of it is in home equity
• A homeowner’s net worth is over thirty times great than that of a renter
• The average homeowner has a net worth of $174,500 while the average net worth of a renter is $5,100
• Many households own a primary residence (65.2%).  It is the most commonly held non-financial asset after vehicles (86.3%)

                   

BOTTOM LINE:  The Fed study found that homeownership is still a great way tor a family to build wealth in America.  Naturally, if they had asked me I would have saved them the time from doing a formal study because over the course of the past 42 years in the real estate arena I’ve found this to be absolutely true.  Homeownership is not just a big part of the American Dream—it plays an enormous role in the net worth of many families. 

 

INTERNET HOME INFORMATION VS. real estate PROFESSIONALS

Inman.com 9.8.14

There are a number of Internet sites that purport to reveal how much your home is worth.  They are called “automated valuation model” (AVM) sites and they use statistical modeling techniques that calculate the property value by comparing it with similar-sized homes that have already sold in your area.  These tools crunch their data with publicly available numbers from several listing services and combine them with regional trends to set a sales price for your property.

Amazing, right?  With that type of information readily available, the question every Seller asks themselves is:  Do I really need a real estate Agent to help me through the “assessment” process?

Well, guess what?  There’s a reason why we real estate Brokers exist.  Actually, there is more than one reason why we are vitally important in any Real Estate transaction. I’d like to share them with you.

• These tools are not always accurate. 

Actually, some Realtors also use these tools to start a customer’s property evaluation. However, there is a lot more detail that is done after those results are revealed.  Most AVMs confirm their evaluations may be off by 5 percent and actually they are sometimes inaccurate by up to 20 percent, according to a study by Standard & Poor’s.  One of the reasons being that old data is being used, especially in a fast-moving market. 

This would mean that anyone strictly using this data may be pricing their home way higher or under market and consequently losing either money or potential Buyers.

 

• There are several factors contributing towards the price of a home that the tools do not necessarily catch. 

Market data is only one of several pieces of information that compose the valuation range of a property.  The rest is very property-specific and includes such things as whether you have made upgrades or whether your roof is too old—just to name a couple.

Other factors include the old “Location! Location! Location!” that I always talk about.  Is the neighborhood desirable for potential Buyers?  Is it safe?  Are there good schools?  How close are shopping malls or grocery stores?  The AVM tools just can’t possibly know these things. And most often, location is one of the most important factors in a Buyer’s decision-making process.

        

• Here is where a Realtor’s experience counts—A LOT—in this process.    

real estate Agents are trained to do a comparative market analysis (CMA) for every property they list for sale.  To help pin down the ideal listing price range, a Broker will go to the property and literally inspect the home, the neighborhood and everything necessary to demonstrate to potential Buyers how the selling price is the “right” price. 

This is where using an experienced, knowledgeable Broker is especially important because you have the services of someone uniquely qualified to evaluate and negotiate the best price for your home.  

Preparing a CMA is an art, not a science and no one size fits all.  Well-thought-out CMAs need deep knowledge of property sales in a given neighborhood.  With my 42 plus years of selling local real estate, you can rest assured that my judgments are based on my vast understanding of the local market and all the peculiarities that affect price, such as lot size, lot orientation; tax-assessed value; and features of the lot, including terrain, access and privacy, improvements and additions, conditions, quality and age.

I know which homes are uniquely “right” based on the priorities of my clients.  An Internet search cannot possibly take your needs and wants into consideration.   

BOTTOM LINE:  Every home is unique and must be valued accordingly. 

I hope this gave you a little insight into what actually needs to go into the pricing of your home in order to get the best value without pricing it out of the market.  My job is to help you take all factors into consideration and make certain you are not “leaving any money on the table” or asking more than potential Buyers are willing to spend for the property.  I give each property a CMA based on my many years in the business.  This gives a property an “appropriate” selling price and helps reduce time on the market. 

If you are considering a move, please give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let me help you with your Buying and/or Selling concerns.  With more than 2000 transactions over the past 42 years, you can rest assured I’m uniquely qualified to help you with all your real estate needs.

 

FOURTH QUARTER SLOWEST IN TERMS OF HOME SALES

Generally speaking, the fourth quarter of the year is the slowest in residential real estate sales.  The holidays are approaching, schools are in session and the cooler weather are just some of the reasons for this trend.

That said, the fourth quarter is oftentimes a good time for Buyers because Sellers are more motivated due to the slower demand and prices can be negotiated a bit easier than during the Spring frenzy.

Sellers also need to take a look at their current listing price and determine if a slight reduction or other changes could help in getting their property to closing quicker. 

There are a number of factors to consider whether Buying or Selling this time of year and if you have any questions on either, please give me a call and let’s see how we can help make your goals a reality.

 

HOUSING RECOVERY WILL CONTINUE GRADUALLY

RisMedia, 9.11.14, CoreLogic, 9.5.14, DSNews, 9.9.14

Home prices rose nationally by 7.4% in July 2014 over July 2013, according to CoreLogic, a leading global property information analytics and data-enabled services provider.   This represents 29 months of consecutive year-over-year increases in home prices nationally, a sign that the housing market is finally returning to a more normal state.

The CoreLogic forecast indicates that home prices, including distressed sales, are projected to increase 0.6% month over month from July 2014 to August 2014 and on a year-over-year basis by 5.7% from July 2014 to July 2015.

“Home prices continued to march higher across much of the U.S. in July.  Most states are reaching price levels not seen since the boom year of 2006,” said Anand Nallathambi, president and CEO of CoreLogic.  “Our data indicates that this trend will continue, with more states hitting new all-time peaks this year and into 2015 as the recovery continues.”

According to Fannie Mae’s August 2014 National Housing Survey” Americans’ attitudes toward the housing market continued to soften in August and suggest that housing activity may resume its modest recovery in 2015 after some pullback this year.”

Another good sign in the local market saw foreclosure filings fall in August.  Filings through the first eight months of the year totaled 1,267, an 8.8 percent decline over the same period in 2013.  An improving single-family housing market has contributed to a better outlook on foreclosures. 

BOTTOM LINE:  With home prices rising slowly but steadily, mortgage rates still historically low and a less frenetic selling period during the last quarter of the year—NOW is a great time to Buy.

 

SOUTHERN COLORADO ECONOMIC FORUM SET FOR OCTOBER 10

The 18^th Annual Southern Colorado Economic Forum will be held at the Antlers Hilton Hotel on October 10, 2014 from 7:00  – 11:30 a.m.

The event is chaired by Ron Chernak, President of the FBB, Ltd,  It includes a Keynote address by Gary Schlossberg, Senior Economist, Wells Capital Management as well as Forum Results: Economic Conditions in the Pikes Peak Region and the Outlook for the Next 12 Months—presented by Tatiana Bailey, Ph.D. and Tom Zwirlein, Ph.D., College of Business and Administration, UCCS. 

There will be a question and answer period as well as a panel discussion entitled “Catching the Colorado Wave:  Entrepreneurship and Innovation in Southern Colorado”.  The moderator is Steve Bigari, CEO and Founder, Stellar Restaurant Solutions and Panelists include Tom Neppl, President and CEO, Springs Fabrication, Randy Scott, President, Southern Colorado Business Partnership, and Karla Tartz, Deputy Director, Office of Economic Development and International Trade.

Salzman real estate Services, LTD is proud to be a Sponsor of the Forum as we have been for each of the past 18 years.  We are the only Residential Real Estate Company to sponsor this event.

The information gathered at this Forum is invaluable for all business owners and professionals who work in the Pikes Peak area.  Reservations will go quickly for this always sold-out event, so I encourage you register on-line as soon as possible at: www.SouthernColoradoEconomicForum.com. 

 

 HARRY’S THOUGHT OF THE DAY

The first man to make a mountain out of a molehill

sold real estate.

 

 

September 3, 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.

                                       

THE THOUGHT BEHIND THE LOGO

Have you ever looked at my company logo and wondered what it means?  I’ve been asked that question quite often and thought I’d take a minute to share the answer with you.

When I started my company back in 1978, I wrote a Policy and Procedural Manual and in it I wrote what I wanted my “Company Philosophy” to be.  Today that would be called my “Mission Statement” and it remains as true today as it did when I wrote it back then.

“The most important entity of a family is the love between the members of the family.  Next to the love within the family comes the family home.

To locate the absolute finest home for the family or to sell their house in order to purchase another is our business.

We feel that the home is the single most important physical element of people, and we place the housing needs of our Buyers and Sellers first.  This philosophy was incorporated into the Company Logo, as you see a house first before the ‘S’.”

So there you have it. 

Your goals come first. 

They become MY goals when working with you. 

That’s a philosophy I’m proud to have adhered to and will continue to do so for as long as I’m in business. After all, why change a philosophy that has passed the test of time?  It’s proven to me that my original reason for becoming a real estate Broker hasn’t changed and never will.

Thank you for letting me into your lives and helping you to make good financial decisions when it comes to home Buying or Selling.  After all, without you and your families I wouldn’t need the “house” before the “S”.

 

AUGUST LOCAL STATISTICS JUST OUT TODAY

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

PPAR reported the August stats this afternoon and I waited an extra day to send you this eNewsletter in order to get them to you in a timely manner.  Therefore, I won’t comment as much as usual except to say that things are continuing to look good in the local housing market. 

I was asked by Tatiana Bailey,the director of the Southern Colorado Economic Forum, to stick my neck out and make a prediction as to how I thought the local housing market would do in the next 12 months.  I told her I thought local housing would appreciate by 2-4 percent and I’m thrilled to see that in comparing January-August 2014 to January-August 2013, the cumulative year to date average sales price for Single-Family/Patio Homes was up 2.5% and for Condo/Townhomes it was up 2.7%.  And comparing August 2014 to August 2013 was also very positive, as you will see below.  So, at the moment my prediction is looking good. 

In comparing August 2014 to August 2013 in PPAR:                      

                        Single Family/Patio Homes:

• New Listings are 1422, Down 2.8%%
• Number of Sales are 1,111, Up 0.5%
• Average Sales Price is $258,398 Up 3.7%
• Median Sales Price is $230,000, Up 4.5%
• Total Active Listings are 4,104, Down 3.5%

                        Condo/Townhomes:

• New Listings are 183, Same as last year
• Number of Sales are 164, Up 1.9%
• Average Sales Price is $188,930, Up 2.5%
• Median Sales Price is $151,500, Up 1.1%
• Total Active Listings are 403, Down 14.6%

COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*

                                                Median Sales Price               Average Sales Price

Black Forest                             $348,000                              $395,616

Briargate                                   $295,000                              $315,827        

Central                                      $180,000                              $209,618

East                                           $195,625                              $205,629

Fountain Valley:                       $198,250                              $204,463

Manitou Springs:                     $319,200                              $297,000

Marksheffel:                             $230,000                              $238,770

Northeast:                                 $225,250                              $245,903

Northgate:                                $352,450                              $366,640

Northwest:                                $315,875                              $358,542

Old Colorado City:                  $207,500                               $219,882

Powers:                                     $232,250                              $244,227

Southwest:                               $268,000                              $310,392

Tri-Lakes:                                 $380,000                              $387,704

West:                                         $209,250                              $275,194

*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.

Click here to see the full -page report and see how your neighborhood is doing.  If you have any questions please give me a call.

LOCAL EMPLOYMENT AND SALES TAX REVENUE ARE LOOKING REAL GOOD

The Gazette 8.22.14 & 8.28.14

Colorado Springs sales tax revenues grew by the biggest percentage in 17 months and had double-digit gains in back-to-back months for the first time in more than 10 years according to a report by the city’s Finance Department.

Commercial machines accounted for much of the increase, but collections in all 13 industry categories tracked rose during that same period.

“The city collects money from a use tax, paid on manufacturing equipment, building materials and other items bought outside the city and used inside the city.  Collections from use tax rose 14.9 percent in July from the same month in 2013 to nearly $1 million, the highest monthly total since February.

Combined sales and use tax collections in July were up 12.1 percent from July 2013 to $13.9 million and this year are up 4.1 percent from the same period of 2013.”

In the job market, Colorado Springs unemployment fell to 6.5 percent—the lowest since November 2008 according to the U.S. Bureau of Labor Statistics. 

Local unemployment is now the closest it has been to the national average since it hit a high of 10 percent in late 2010, when the national rate was 9.8 percent.  In July, the national jobless rate was 6.2 percent.  Colorado Springs is now only 4,300 jobs below the September peak of 262,400.

And from where I sit, all this good news means more and more people are taking their recent equity increases and looking to Sell and Trade Up.  With interest rates still low, an increase in listings in most price ranges and positive employment news, now is a good time to begin the search if you’ve been waiting. 

If you or any family member or coworker is considering a move, please give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let’s see if we can make that dream a reality.

 

HOUSING OUTLOOK SHOWS OPTIMISM & RECOVERY ACCORDING TO ECONOMISTS, NAR

RealtorMag 8.31.14, The Wall Street Journal, 8.31.14, LA Times, 8.22.14, Housingwire, 8.31.14

The decreasing unemployment rate is also causing economists to gain increased confidence in the housing market over the next two years, according to a newly released poll by Reuters of 29 housing analysts, including investors and economists.

Economists surveyed expect existing-home sales to increase to 5.25 million units in the first three months of 2015.  Currently they stand around 5.09 million.  In changing their outlook, economists now also expect home resales to continue to inch up in 2015, reaching 5.29 million by the second quarter of 2015.

“Low mortgage rates and improving labor market dynamics should remain conducive to gradual growth in the housing sector,” Gennadly Goldberg, a strategist at TD Securities, said in a note to clients.

The NAR, in it’s latest housing data release, reports that existing-home sales were on the rise in July, with sales moving to the highest pace of this year.  It also marked the fourth consecutive month of sales gains. 

The housing recovery appears to be on track, with sales of previously owned homes rising more than expected in July.   The positive report from NAR is the latest sign that the housing market may be turning a corner after starting to slow last summer amid higher mortgage rates and prices.

“The number of houses for sale is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market,” says Lawrence Yun, NAR’s chief economist.  “More people are buying homes compared to earlier in the year, and this trend should continue with interest rates remaining low and apartment rents on the rise.”

“The increase in the number of new and existing homes for sale is creating less competition and is giving prospective buyers more time to review their options before submitting an offer,” he added.

And, more importantly, Yun explained that steady job additions to the economy are helping family finances and giving them added confidence to enter the market.

U.S. consumers also viewed the economy with increased optimism in August, hinting at a strong jobs report for the month.

According to The Conference Board, a private research group, consumer confidence rose to 92.4% in August from a revised 90.3% in July.  The August index is the highest level of confidence since October 2007, before the recession started. 

Consumers who own homes got more good news:  the S&P Case-Shiller report said home prices nationwide increased 6.2% in the year through June.

Another beneficiary of the good news on housing was the Dow’s recent rise.  Stocks such as Home Depot, and various Home Builder/Construction stocks increased due to these reports.

“Housing is an absolute must in terms of…long-term economic growth in the U.S.,” said Natalie Trunow, chief investment officer of equities at Calvert Investments, which has about $13 billion under her management.  The report on housing starts is “a positive sign for the home-builder sector,” she said, adding that she is looking to increase her position in stocks of homebuilders.

All in all—great news for the housing industry and consumers alike.

 

HOME BUYERS STRUGGLE WITH T.M.I.

The Wall Street Journal, 8.22.14

When it comes to mortgage advice, borrowers are struggling with information overload and are finding that specific totals on payments and rates are hard to get.

While a number of mortgage websites will define “balloon payments” and “debt-to-income ratio”, very few are giving the answer to the one questions on borrowers’ minds:  “What will I owe?”

Whether you’re a seasoned Buyer or new to the market, there’s a lot of information out there and it’s difficult to discern what’s really important.  Plenty of mortgage-education websites include a general discussion about income and down-payment requirements, but don’t get down to the specific questions of what documentation is needed so that borrowers can plan ahead. 

Here are a few tips to help you get the mortgage information you really need:

• Go Beyond Calculators.  Meet with several potential lenders to get a specific rate before shopping for a home.
• Prequalify.  This gives borrowers a chance to catch and correct problems before their dream house is on the line.  Jack Wind, executive vice president of home lending at a FL based financial institution said, “Before the crisis, Sellers had a lot more confidence that Buyers could find financing because it was readily available.  Now Sellers are asking Buyers to ‘get the loan and close within a reasonably short period.’”
• Clarity is coming.  New federal rules will replace the “good-faith estimate” document with a standardized “loan estimate” document starting August 1, 2015.  This new standardized summary—issued at the start of the loan process—will itemize key loan terms and estimated loan and closing costs, making it easier for borrows to compare loans.

I’m going to tell you this one more time because I think it’s of vital importance in today’s real estate market.  You need to have a qualified, competent real estate Broker to help you whether you are Buying or Selling.  There is just too much information for a lay person to easily comprehend.  Hey—it’s hard enough for us Brokers with things changing all the time in terms of disclosure and mortgage lending rules and more—so it’s almost impossible for the uninitiated to keep up.  That’s our job—to know how to navigate the housing and mortgage lending waters and to make certain that we get the best possible outcome for our clients. 

Those of you who have worked with me know that I take special pride in my Investment Banking background because it has afforded me the opportunity to help my clients make informed decisions and to get the best mortgage lending available.  I do the homework in order to make the entire process as stress-free as possible.  It’s my philosophy and my pleasure.  I look forward to my continued relationship with you all.

 

HARRY’S PHILOSOPHY OF THE DAY

I’d like to share another item from my 1978 Policy and Procedural Manual.  This was written by someone at the National Association of Realtors and says something about my “Product”.  Again…as true today as when it was written.  After all, as a wise man or woman once said, “They aren’t making any more LAND.”

“I AM real estate”

I am the basis of all wealth, the heritage of the wise, the thrifty, and prudent.

I am the poor man’s joy and comfort, the rich man’s prize, the right hand of capital, the silent partner of many thousands of successful men.

I am the solace of the widow, the comfort of old age, the cornerstone of security against misfortune and want.  I am handed down to children through generations as a thing of great worth.

I am the choicest fruit of toil.  Credit respects me.  Yet I am humble, I stand before every man bidding him know me for what I am and possess me.

I am growing in value through countless days.  Though I seem dormant, my worth increases, never failing, never ceasing.  Time is an aid and populations heaps up my gain.  Fire and the elements I defy, for they cannot destroy me.

I am trustworthy.  I am sound.  The thriftless speak ill of me.  The Charlatans of finance attack me.  Unfailingly, I triumph and detractors are disproved.

I am producer of food.  The basis for ships and factories; the foundation of banks.  Minerals and oil come from me.

I am so common that thousands unthinkingly and unknowingly pass me by.

I am real estate.

 

 

August 18, 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.                       

                                    

THE “GOOD OLD DAYS” ARE STILL HERE IN “MY” WORLD

When I saw this illustration I couldn’t help think about “Dick and Jane” and “Spot” and the early days of learning to read at school.  With most schools starting this week in Colorado Springs, a lot of kids will be attending a new school because of it being their first time, graduations, or their family has moved to a new neighborhood.

I personally have helped a number of families relocate this year and when there are children involved, one of the big considerations is moving to an area with good schools, parks and other children in the neighborhood for playmates. One of the many facets of moving involves the happiness of the “entire” family, especially the young members.  Oftentimes the parents might want to look at various neighborhoods recommended by friends and I have had to lead them in another direction entirely because of my awareness of the lack of “kid friendliness” of their first suggestion. 

My objective as a Realtor is to try my best to find the best fit for the family as a “whole”.  Having been involved in more than 2000 transactions during the last 42 years has given me extensive knowledge of local neighborhoods and how they might work for a particular family’s needs. 

Neighborhoods change over time, as do the demographics and the quality of schools located within them.  No matter how much you might like a home, if it no longer suits your family’s current needs there will be considerable stress for all.  And if you are looking to Buy, the house you think is great might not be located in the best area for the needs of all family members. 

These considerations are probably the most important when looking for a home or considering to Sell your present one.  The happiness of the entire family will play a role of great importance for the next several or many years, depending on your individual situation. 

My goal is to make sure that the “Good Old Days” are here to stay for every family I relocate and I can help you and your family share in that goal.  Your happiness is important to me.  I will always make that my main focus when working with each and every client. 

 

HOME PRICES ARE RISING AT SLOWEST PACE SINCE 2012, BUT THAT’S NOT SO BAD

NAR,8.12.14, Realtor.org 8.12.14, The Wall Street Journal, 8.13-16.14, RealtorMag, various dates, DSNews 8.7.14

The National Association of Realtor’s (NAR’s) latest Quarterly Report of Median Sales Price of Existing Single-Family Homes for Metropolitan Areas was released several days ago and home value appreciation continued to moderate in 122 of the 173 metropolitan areas surveyed. 

While the median existing single-family home price increased in 71% of measured markets from the second quarter 2013, the gain continued to be lower than in recent times.  Colorado Springs was among those cities and showed an increase in median home price of 1.4% compared to a year ago.

Forty-seven areas (27%) recorded lower median prices during that same time period.  To read the 3-page report in its entirety, please click here.

Lawrence Yun, NAR chief economist, says price increases are balancing out the benefit for both Buyers and Sellers.  “National median home prices began their most recent rise during the first quarter of 2012 but had climbed to unsustainable levels given the current pace of inflation and wage growth,” he said.  “At this slower but healthier rate, homeowners can continue steadily building equity.  Meanwhile, for Buyers, increased supply with moderate price gains is giving them better opportunities to choose.”

The national median existing single-family home price in the second quarter was $212,400, up 4.4% from the second quarter of 2013.  The median price during the first quarter of 2014 rose 8.3% from a year earlier.

Yun added that despite the stabilization in price growth, sharp increases still exist in some markets and are impacting sales, most notably on the West Coast where inventory shortages are more prevalent. 

Despite the slow increase in home prices, Yun still expects home sales to make a strong showing in the second half of 2014.  He also made the following forecasts.

• Higher inflation and higher interest rates.  The Federal Reserve is planning to end its purchasing of Treasury and mortgage-backed securities in October.  Yun expects interest rates to increase in 2015.  He also expects the Consumer Price Index (CPI) which measures inflation, to increase 3.5 percent in 2015.
• Multi-year housing expansion.  The population is on the rise.  The U.S. gained 34 million people since 2000, but home sales were 5.2 million in 2000 and 5.1 million in 2013.  The pent up demand will eventually equate to additional home sales over the next few years, Yun says.
• Continued inequitable wealth distribution.  Household net worth is at an all time high, but only for the 10 percent of the U.S. population that has investments in the stock market.  At the same time, rents are rising and incomes are generally stagnant.

According to Mark Fleming, the chief economist with CoreLogic, the ongoing slowdown in price appreciation reflects a “reversion to normality” that is “expected to continue across the country and should further alleviate concern over diminishing affordability and the risk of another asset bubble”.

Fannie Mae’s chief economist, Doug Duncan, in commenting on Fannie Mae’s July 2014 National Housing Survey says “the continued cautious sentiment expressed across the range of consumer indicators this month gives weight to our view that the first phase of the housing recovery is decelerating, and 2014 will be a year of mixed housing outcomes with home prices rising more slowly and home sales falling slightly.  We have always believed that for the housing recovery to be considered robust, we will need strong and sustained full-time job and income growth.  Recent data indicating the creations of more than 200,000 jobs over each of the last six months, combined with this month’s improvement in the share of consumers reporting significantly higher household income than a year ago, does provide some reason for optimism.  If these trends continue, they could lead to some upside in housing in 2015.”

For now, though, caution seems to be the rule.  Many economists are saying that price appreciation is slowing partly because Buyers, including Investors, have become more cautious and are pulling back amid the big price gains of the past year.  Also, these same price gains have persuaded more homeowners to put their homes up for sale which has added inventory.  The multiple-offer situations are not as prevalent as they were earlier this year.

There are also some Sellers who are listing their homes now rather than waiting for next year’s Spring buying season because of fear that interest rates will be higher at that time.

Highlights from the Fannie Mae Survey include:

• Half of respondents said they thought it would be difficult for them to get a home mortgage today
• The average 12-month home price change expectation dropped to 2.3%
• The average 12-month rental price change expectation fell to 3.8%
• The share of respondents who say their household income is significantly higher than it was a year ago rose by 4 percentage points to 28%--a survey high.

 And locally…

As I mentioned above, Colorado Springs saw a 1.4% increase in the median home price in the NAR Quarterly Report.  While this is lower than recent increases, it must be reiterated that our area never saw the dramatic drops or number of foreclosures that many areas in the country did. 

What these statistics mean to us is that our local homes are still increasing in value and providing steady home equity for owners.  More importantly, it means that more Buyers are NOT being priced out of the market by unsustainable home price gains that have kept them from qualifying for home financing.  It’s a “win-win” for all at the moment, most especially when you consider that mortgage loan rates are still historically low and lenders are slowly making funds more available.

 

MORTGAGES ROLL BACK TO YEARLY LOW

RealtorMag 8.15.14, Housingwire, 8.8.14

This past week, the 30-year fixed-rate mortgage rate averaged it’s low for the year at 4.12%.  The same low was reached in May as well as a week in July, this according to Freddie Mac in its weekly mortgage market survey.

The rates have countered many forecasters’ expectations so far this year by not rising, but dropping instead.

Will this continue?  According to the above statements by Yun, possibly not.  But it’s really anyone’s guess at the moment. 

The best advice I can give you is today’s interest rates are CHEAP.  If you Buy now, I believe you will be looking back a year from now and be happy that you did.

 

CHANGE IN CREDIT REPORTS COULD REVAMP CREDIT SCORES

The Gazette, 8.9.14, DSNews, 8.11.14

FICO, the company responsible for one of the most widely used measures of credit health is making changes to its current model that could boost credit scores nationwide.

In a recent announcement, analytics and decision management from FICO said its new credit model, FICO Score 9, “introduces a more nuanced way to access consumer collection information,” resulting in greater precision for lenders measuring a borrower’s credit stability.  The model will be available to lenders through the country’s various reporting agencies in the fall.

When I learn how the changes will effect home mortgage lending, you will read it here.

And good news for renters looking to buy…two of the national credit bureaus—Experian and TransUnion—have begun incorporating verified rental-payment data into credit files where it can be included in the computations of credit scores when they apply for a mortgage. 

 

MORTGAGE LENDING STANDARDS EASING

The Wall Street Journal 8.5.14, Bloomberg-BusinessWeek, 8.5.14

The Federal Reserve’s quarterly survey of banks showed that nearly one in four U.S. banks said they had eased mortgage-lending standards for borrowers with strong credit during the second quarter of 2014.  This is the largest such movement by lenders since the housing bust hit 8 years ago.

The standards have eased amid sustained increases across the U.S. in home prices and a plunge in refinancing activity over the past year. 

According to the survey, demand for prime mortgages rebounded to its highest level in a year, offering a hopeful sign for housing markets that have stumbled during the first half of the year. 

Over the past year, top policy makers have expressed concern that tight credit standards could hamper the housing recovery.  Fed Chairwoman, Janet Yellen,  speaking to a congressional hearing last month, said that while standards should have ratcheted up after the housing bubble, “it is now become the case than any borrower without a pretty pristine credit rating finds it awfully hard to get a mortgage.” 

While easing the lending standards will help some consumers, those who have high levels of debt, damaged credit from the recession or insufficient incomes to become home Buyers will have to wait for these to change in order to obtain mortgage loans. 

HARRY’S JOKE OF THE DAY