November 7, 2011

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

 

GOOD NEWS – LOCAL HOME SALES RISE WHILE PRICES FALL

The Gazette (November 5, 2011) notes that local home sales totaled 758 in October, a 20.1% jump over the same month last year. This increase in home sales was the fourth consecutive month of year-over-year increases in home sales.

Through the first 10 months of 2011, single family home sales totaled 7,164 in the Pikes Peak region, a 2.3% increase over the same period last year.

Another good sign that our local market is stabilizing and starting to grow was the fact that the inventory of available homes fell to 3,959. That’s its lowest point in nearly two years and represents a 22.7% decline from the same month last year, and the fewest number of listings in any month since December of 2009, when 3,951 homes were listed.

Some of the other indicators that point to a recovering local housing market and a great opportunity for homebuyers are:

? Low mortgage rates are still available ….Buyers can still get an FHA 3.75%, 30 year, fixed-rate, residential mortgage, with a minimum down-payment of 3.5%.

? The local unemployment rate in September fell to 9.3%, the lowest level in nearly two years, as nearly 1,800 residents returned to the job market, and even more than that found work, according to the U.S. Bureau of Labor Statistics.

? According to the Gazette (Friday, Nov. 4, 2011), U.S. merchants are reporting solid gains for October, a sign that consumers are starting to spend, again…..a sure sign that the economy is still on track to recover…And, as a result of the influx of troops returning to Fort Carson, our local retail sales will even outdistance the national figures.

? Experts are predicting that the housing market will show some very encouraging signs of recovery in the second quarter of 2012, as the inventory of foreclosures shrinks and as the federal government introduces some housing programs designed to stimulate the housing market (just in time for the upcoming elections).

The bottom line for Buyers is that, as mortgage rates and home prices start to rise (as they definitely will) and as the inventory of available homes continues to shrink, the people who buy their new home today will look back in two years and see that they made one of the best investments of their lifetime.

Call us at 598-3200 or, 800 677-6683 (MOVE) to discuss this present market and where it is headed. Don’t miss the boat !!!

 

HOMEOWNERSHIP RATE RISES ONLY SLIGHTLY AFTER TWO YEARS OF DECLINE –

After falling to a 13-year low during the second quarter, the homeownership rate posted a highly unexpected rise in the third quarter, according to a Census Bureau report released Wednesday.

With foreclosures forcing homeowners out of their homes and buyers waiting on the sidelines as home values declined, the homeownership rate has been on the decline for quite some time. In fact, according to Bloomberg, the rise in the third quarter of 2011 is the first in two years, according to the most recent Census figures.

However, the 0.4% increase, which brought the homeownership rate from 65.9% to 66.3% for the third quarter of 2011, was not large enough to result in an annual increase.

The declining homeownership rate is a reflection of the increase in foreclosures and of the economic uncertainty which has plagued all segments of our economy.

One result of this decline in homeownership is that investors are now looking at an increase in the number of families which have now become prospective renters, rather than homeowners. These investors are seeing a unique opportunity and they are putting their investment money into rental property. For more details, see the following article……

 

RENTAL YIELDS LOOK BETTER THAN EVER

As homeownership has been declining, rentals have become a more significant factor within the real estate industry. In fact, rental property now presents a great opportunity for investors. Capital Economics predicts that, "Rental yields will soon rise above 5.5%, comfortably beating the yields available on Treasuries and equities."

As evidence that the local "Smart Money" is betting on the value of investment property, note that 3 upscale apartment projects were recently announced for the Springs.

The Gazette (November 5, 2011) reported that over $100 million will be spent on "an explosion of apartment development taking place in the Pikes Peak region".

Norwood Development Group and Western National Group will partner to develop the projects on Nor’wood sites on the city’s east, northeast and northwest sides. The complexes will add about 835 units at a time when apartment vacancy rates have plunged to single digits and rents are soaring.

The complexes will feature one-, two-, and three bedroom units, with rents ranging from about $850 to $1,400.

Call us at 598-3200 or, 800 677-6683 (MOVE) to explore the investment opportunities currently available for smart investors. You may not want to buy a new residence, but you should consider buying some investment property. It’s a great opportunity and a chance to build your retirement plan.

 

PACE OF LOCAL HOMEBUILDING PICKS UP

The Gazette reports (Wednesday, November 2, 2011) that Colorado Springs –area builders saw a big jump last month in the pace of home construction.

Single-family building permits in the Springs and El Paso County totaled 139 in October, a 36.3% increase over the same month a year ago, according to a report released Tuesday by the Pikes Peak Regional Building department.

Kyle Campbell, board president of the Housing and Building Association of Colorado Springs said single-family permits were issued across a wide range of prices. Campbell said he couldn’t pinpoint a single factor for the uptick in construction activity, but pent-up demand on the part of recession-weary consumers and mortgage rates that remained at the lowest level in decades are possible reasons.

It’s a good sign that things are picking up !!!

 

WHY 20% DOWNPAYMENTS DON’T ALWAYS MAKE SENSE

Those buyers who have enough money to put 20% - or more- down on the purchase of a home may want to consider another approach –preserving some of their cash for savings, investing or other purposes.


With today’s interest rates and the competitive pricing of private mortgage insurance, borrowers can retain some of their money by putting less money down on a home- say only 10% - and still get a low monthly payment.

In the past, the adage was’ "The more you borrow, the more you leverage". In today’s financial times, the scenario is much different. Today, borrowers can leverage private mortgage insurance to put as little as 5% down on home and still have a competitive payment. By utilizing this strategy, home buyers are able to leverage their current assets, while still keeping sufficient cash reserves.

Give us a call at 598-3200 or, 800 677-6683 (MOVE) to discuss this strategy and we will be pleased to explore your various options with you.

 

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.


Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 39 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.


Just click on the icon at the top of this email to listen to my podcast for this month …

 

LATEST SALES AND LISTING STATISTICS

Click here to see the latest Sales and Listing statistics for the Pikes Peak area.

 

JOKE OF THE WEEK

We just had a great idea for balancing the federal budget.

The present plan calls for a panel of really smart guys to balance the budget by a certain date and, if they can’t, then the Defense budget gets cut.

Our idea is that, if these geniuses fail to balance the budget by deadline time, the salaries of all Congressmen and Senators would get cut.

Wanna bet on how fast the budget would get balanced?