January 23, 2012


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


SOUTHERN COLORADO ECONOMIC FORUM PREDICTS GROWTH IN 2012

Last Thursday, we had the opportunity to attend the economic forecast breakfast of the SCEF, at the Cheyenne Mountain Resort. The event was sponsored by VectraBank. About 240 people attended the meeting which featured presentations by Ted Mossman, Pikes Peak Market President of VectraBank Colorado, Dr. Thomas Zwirlein, Professor of Finance at UCCS, and George Feiger, President and CEO of Contango Capital Advisors.

The SCEF is forecasting a 2-3% growth for our region in 2012, primarily as a result of the troops returning to our area from Afghanistan.

Dr. Zwirlein stated he was a little more optimistic than he was last fall, when the forum released its forecast for the year.
“National employment figures are improving, industrial production is looking better and the number of housing permits is getting back to a more normal level”.

By the end of the year, Colorado metro areas are expected to have recovered 48% of the jobs lost since the peak, on par with the recovery rate for all U.S. metro areas.

El Paso County is projected to create 23,000 jobs by 2019. Meanwhile, the population is expected to increase by 100,000. “We need 43,000 jobs to keep unemployment at its current level.” Dr. Zwirlein said. “We need 58,000 jobs to get it back to 5% unemployment.

The attendees at the forum seemed upbeat about the coming year, but agreed that our major problem will be creating more jobs.

 

AN OVERVIEW OF real estate MEDIA SHOWS THAT BETTER TIMES ARE NOW HERE

As we read the various resources for real estate news and information, it is obvious that the mood of the “experts” is upbeat. As evidence of this optimistic view of the Real Estate market, we offer these examples of recent news items:

• DECEMBER EXISTING-HOME SALES SHOW UPTREND (Realtor Magazine) ”Record-low mortgage rates, job growth and bargain home prices are giving consumers the confidence they need to enter the market. These are the early signs of what may be a sustained recovery.” (Lawrence Yun, chief economist for the National Association Of Realtors)

For all of 2011, existing-home sales rose 1.7% to 4.26 million from 4.19 million in 2010, and are expected to increase 12% this year, following a 2% jump last year, according to Moody’s Analytics.

Single-family home sales increased 4.6% to an annual rate of 4.11 million in December, up from 3.93 million in November, and are 4.3% higher than the 3.94 million-unit pace a year ago.

NAR President Moe Veissisaid is quoted as saying, “More Buyers are expected to take advantage of market conditions this year. The American dream of homeownership is alive and well. We have a large, pent-up demand, and household formation is likely to return to normal, as the job market steadily improves. When people buy homes, they stimulate a lot of related goods and services”.

• BUILDERS FEEL THE MOST UPBEAT IN MORE THAN 4 YEARS (Realtor Magazine) Builder confidence is at its highest level since June 2007. For the fourth consecutive month, builder sentiment for newly-built, single-family homes was on the rise, according to the National Association of Home Builders and Wells Fargo housing market Index.

USA Today is quoted as saying, “Investors are starting to get optimistic about the possibility of a rebound too, and are turning to homebuilding stocks. These equities have recently outperformed the broader stock market, and the S&P 1500 homebuilding index has increased 38% since mid-October”.

• 2012 IS THE YEAR OF THE POLITICAL ECONOMY (RISMedia) “Consumers seem to have gotten out of their summer rut due in large part to improving labor market conditions and improving attitudes toward employment prospects and future income. As consumer sentiment shows signs of improvement, so do recent housing indicators, which are trending in a positive direction, with incremental improvement expected to continue through 2012.”

• HOT RENTAL MARKET OFFERS real estate OPPORTUNITY (INMAN NEWS) The Rental market has gotten hotter. Phillip Lee, co-founder and CEO of RentMatch is quoted as saying, “Buying a house has always been the American dream, but rentals are the American reality, right now. Economic uncertainty, credit histories marred by foreclosures and short sales, and strict lending standards have helped keep many potential Homebuyers off the market, contributing to a rental boom”.

This is good news for Investors, however, keep in mind that, because of low home prices and record-low mortgage rates, housing affordability is now at a 40-year high. So, because rents are rising and house payments are falling, it’s getting to the point where it makes more sense for people to buy. (Ed. Note. Give us a call at 598-3200, or 800-677-6683(MOVE), to explore your options. Now might be the right time for you to make that decision to buy).

• CORELOGIC SAYS HOUSING MAY TURN THE CORNER IN 2012 (DSNEWS) Mark Fleming, CoreLogic’s chief economist, says housing statistics and the duration of the downturn indicate 2012 may be the year the housing market begins to turn the corner.

“The time is right in 2012 for prices to begin growing again”, Fleming said, “and housing affordability will put a floor under any further significant declines”.

• FREDDIE MAC APPROACHES 2012 WITH ‘CAUTIOUS OPTIMISM’ (DSNEWS) Frank Nothaft, chief economist for Freddie Mac, says Freddie Mac expects a 2%-5% increase in home sales in 2012, according to the GSE’s U.S. Economic and housing market Outlook for January. He states, “Housing is starting to raise hopes for continued gradual economic recovery”.

Citing a survey from the Mortgage Bankers Association, Mr. Nothaft points out that, “Almost 80% of households say now is a good time to purchase a home”.

• SALES STIR HOPE FOR housing market (The Wall Street Journal Jan. 21, 2012) The article points out that the increase in sales in 2011 was the result of low mortgage-interest rates, low prices, active Investor-Buyers and increasing consumer confidence. As a result, the supply of homes listed for sale is at the lowest level since 2006 and offers a glimmer of hope that the housing market could be starting to climb out of the downturn. ..(Ed. Note: That’s certainly the situation in Colorado Springs. Surveys show that we are better off than most other major metropolitan areas in the U.S and are more likely to see a quicker recovery.).


SO, WHAT DOES OUR LOCAL SURVEY TELL US?

Now, all of the above-referenced sources have been fairly accurate in the past in identifying trends in housing, but we have an even better measure of the condition of the local housing market, namely, the annual, official- but-unscientific, Harry Salzman Survey of Home Improvement Stores. We take this survey by asking the Managers of our local Lowe’s, Home Depot and Ace Hardware outlets a simple question……We ask them, “How’s business?”

Last week, as we conducted this survey, the answers of all of these Managers were unanimous. “Business is booming”, they tell us.

“Homeowners are fixing up their homes like we haven’t seen in a long time. They seem to feel better about the future and they are now willing to put more money in their homes …either to get them ready to sell, or, just to enjoy their homes more”.

These comments reinforce the article in the Wall Street Journal (Friday, Jan. 20, 201) that declared, “HOMEOWNERS STOP WAITING TO SPRUCE UP”. The article points out that, “…Americans are stepping up spending on home improvements for the first time in years”.

The bottom line is that consumers seem to be more confident in the economy and are willing to start spending, again. That results in more local jobs and more tax revenues to pay for local government services.

2012 is beginning to look really good. It’s about time !!!!

 

LATEST STATISTICS

CLICK HERE to see the latest Sales and Listing statistics for the Pikes Peak area.

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. Call us at 598-3200,or, 800 877-MOVE (6683).


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