Real Estate Information Archive

                                                            

March 23, 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.

                     

A NEW CHAPTER BEGINS FOR SALZMAN real estate SERVICES

As you know, I’ve always tried to share any and all information with you on a timely basis.  Well, today’s top story is about ME.  Local readers may have seen this in The Gazette, but for many I’m sure this will be first-time news.

Salzman real estate Services has been in its present location on Garden of the Gods Road ever since I had the building constructed 37 years ago.  It has NEVER been for sale.  That being said, last September I received an offer for my property that was “too good to refuse” and that began “the beginning of the end” of Salzman real estate Services in it’s current location.  On April 1, demolition will begin and soon we will see a Taco Bueno thriving there.  The chain is opening its first three locations in Colorado and my property is one of the three they chose.  I somehow figured 37 years ago that due to its proximity to I-25, one day someone might want to build a restaurant there, but I didn’t know it would be NOW. 

Let me emphasize that I am NOT leaving the real estate arena.  I will simply be working with all of you from a different location and in a new collaboration that I will tell you about next week.  I’ve had a number of offers and am close to announcing a decision.  You, my friends, will be among the first to know the news.  The exceptional customer service for which I am known will NOT change.  Nor will my dedication to making sure that your personal goals become mine when I’m working with you.  In fact, without having to deal with the day-to-day concerns of owning a building, I’ll have even more time to devote to my clients.  So in some ways, this is a bonus for us all.  I will also continue working on my many community service projects.  Nothing will change except for my physical location and collaboration.

As those of you who have moved from long-time residences know, one can accumulate a lot of “stuff” in 37 years.  These past couple of months I’ve discovered just how much “stuff” that is!  Looking back through old files has been heartwarming as it’s made me realize just how many lives I’ve helped influence when it comes to individual family real estate decisions.  And through those files I’ve revisited the many relationships I’ve been very fortunate to develop along the way.

Change of any kind is a bit difficult but going through that “stuff” helped make me even more aware that it’s not the Salzman real estate “building” that made a difference—it’s the people I’ve met and continued to work with during the last 42 plus years in the local Real Estate business that matter the most.  I look forward to a continuation of those relationships and to developing new ones in the coming years.

You, your family members and friends you’ve referred are what makes it all worth it.  As I say goodbye to 538 Garden of the Gods Road later this week I take with me 37 years of memories in this building and relationships made here that I’m simply moving “with” me. 

If you’re in the neighborhood this week, stop in and say goodbye to 538.  I look forward to you joining me in the next chapter of Salzman real estate Services and to sharing my new location and collaboration with you in the next week. 

 

A RECENT RECOGNITION BY COLORADO SPRINGS MAYOR STEVE BACH

Last week, Mayor Steve Bach recognized me for my “leadership and for improving the economic vitality of Colorado Springs.”

Me and my six partners in this venture, gifted property appraised at $422,000 to The Foundation for Colorado Springs’ Future, Inc. which is owned by the Economic Development Committee, and is now part of the Regional Business Alliance of Colorado Springs.

“Our city is fostering an environment for quality jobs growth and we thank Harry Salzman and his partners for their generous gift that will continue to support the attraction of new development and young professionals to our city,” said Mayor Bach.

I am pleased to do anything that I can to help our wonderful city retain and attract more jobs.  This is just our way of giving back to a community that has given so much to us.  I am hopeful that this gift will encourage others to do the same.  Together—we CAN make a difference.

 

CITY OF COLORADO SPRINGS RANKS HIGH IN AFFORDABILITY

The Gazette, 3.14.15

In the Forbes 2015 survey of the most affordable cities, Colorado Springs came in at 11^th.  It was the ONLY metro area in the West to make the list. 

We were chosen when Forbes looked at the 100 biggest metro areas with populations of at least 600,000.  Then they looked at housing affordability, using an index assembled by the National Association of Home Builders and Wells Fargo & Company. 

Then they added cost-of-living components like food, utilities, gasoline, transportation and medical expenses and weighted its various factors using a methodology similar to what the U.S. Bureau of Labor Statistics employs for the Consumer Price Index.

The result was a list of 21 cities (1 was a tie) and most of the cities were in the Midwest and South. 

This survey only re-enforces what those of us who live here already know—we’ve got a good thing going.  Hopefully surveys like these will help bring Colorado Springs to the attention of more employers and companies looking to relocate.  It’s certainly a good factor for young professionals who are looking to start families and want a healthy, affordable community in which to reside.

 

LOCAL JOB STATISICS IMPROVE

The Gazette, 3.18.15

Nearly 4,900 jobs were added in the Colorado Springs area in 2014, according to data released by the U.S. Bureau of Labor Statistics last week.  This is a 1.9% increase from 2013.

According to my friend Tom Binnings, senior partner in Summit Economics LLC, a local economic research and consulting firm, “This is good news because it shows that the local economy has generated about 5,000 new payroll jobs in each of the past two years.” 

There is some local concern that budget cuts are reducing local military employment but fortunately the private sector job growth is improving to make up the difference.  

 

FREDDIE MAC BEGINS 3% DOWN PAYMENTS THIS WEEK

RelatorMag, 3.18.15, Freddiemac.com, 3.18.15

We’ve been reporting about the new down payment requirements from Fannie Mae and Freddie Mac and Freddie Mac has announced that they will be launching the new program this week—at the start of the Spring buying season.  Fannie Mae began insuring 3 % down payment mortgages in December.

According to Dave Lowman, executive vice president for Freddie Mac, “Lenders will be ready to serve qualified working families who are ready to buy and keep the recovery going”. 

The Federal Housing Finance Agency, conservator of Fannie Mae and Freddie Mac, said recently that it wanted to make it a priority to “work to increase access to mortgage credit for credit-worthy borrowers.”  This is in response to tight credit conditions and high down payment requirements in recent years that have been blamed for sidelining potential homebuyers and slowing down the housing recovery.

In addition to the lower down payment requirements, “Freddie Mac’s Home Possible Advantage Program”, which is aimed at supporting first-time buyers as well as low and moderate-income borrowers, is allowing no minimum from borrowers in contributions.  This means parents or relatives can now cover 100% of the down payment through gifts.  The same is true for all Freddie Mac Home Possible mortgages, whether the down payment is three percent, five percent or something else.  This makes Home Possible a powerful option for families who want to help their children settle into a home of their own.

In order to limit default risk, Home Possible Advantage is available as a fixed-rate mortgage for primary residences only; this insures that principal and interest payments stay the same and borrowers won’t worry about the future mortgage payment shock. 

If you have any questions about these programs, or wish to help family members purchase first-time homes, please give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let’s see if we can make that happen.

 

THE IMPORTANCE OF GETTING THE ‘RIGHT’ MORTGAGE

The Wall Street Journal, 3.14.15

With Spring Buying season already underway, many Buyers are rushing to get pre-approved for mortgages prior to the Federal Reserve raising rates, which could happen in the next few months. 

Lenders are doing their part by accepting smaller down payments and offering lower interest rates on certain loans.  However, mortgage loans aren’t “one-size-fits-all” and the best deals and strategies often vary significantly depending on whether you are taking out a “jumbo” mortgage or looking for a modest first home.

Borrowers with less than stellar credit or who are trading up to a larger home can also have different options or challenges.  It is very important to make certain that you find a mortgage tailored to your individual situation and budget requirements. 

As I’ve said before, making certain that you work with a qualified, knowledgeable real estate professional is probably the most important home decision you can make.  We have the experience to make certain that you are steered in the right direction when it comes to mortgage lending. 

With my Investment Banking background, I’m acutely aware of what’s available in the mortgage lending arena, have reputable mortgage lending sources, and will help you avoid a mistake that could cost you not only a lot of money, but also a lot of stress and aggravation. 

No one knows when the rates will be going up, but according to recent articles concerning the Fed, changes WILL be coming.  If you have been waiting, wait no longer.  These historical interest rates will soon be a thing of the past. Spring buying” frenzy” will probably be a bit crazier than usual with folks who see this as a “last chance” for great rates.  So if you’re in the market, give me a call sooner than later to make certain that you can not only find the home you want, but also get the rate you want, too.

 

HARRY’S JOKE OF THE DAY  (found when I was going through files in the office!)

 

 

 

 

 

                                                            

March 9, 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.

                                        

2015 CONTINUES TO DELIVER GOOD NEWS TO HOMEOWNERS

And so it goes…the good news in the real estate market just keeps coming.  Despite the worst weather in the Pikes Peak region since 1987, the housing market shows no sign of slowing down.  This is great for both Buyers and Sellers and it will likely continue this trend, at least until the Fed finally readjusts its plans and interest rates start inching up.  And then, my friends, all that I’ve been warning you about will come to pass. 

We’ve enjoyed historically low interest rates for several years now and that’s going to end before 2015 comes to a close.  No one knows exactly when the rates will go up, but all the economists have agreed that it’s going to happen based on the improved economy and job market.

What can I add?  Once more, if you’ve been on the fence, it’s starting to look like “do or die” time.  Housing prices are going up, inventories are getting lower and interest rates will be on their way up soon.  If you’ve waited for the “right” time—well, I wouldn’t wait much longer. 

Those looking to Sell and Trade Up, Buy for Investment Purposes, or first-time Buyers might want to give me a call in the near future to see how we can make those wishes come true.  There’s a “right” situation out there for everyone, but first you need to sit down and assess what’s “right” for your individual needs, wants and budget. 

Give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let’s work together to see what we can do for you.

 

FEBRUARY LOCAL STATISTICS CONTINUE TO SHINE

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

As elsewhere around the country, these local numbers indicate that the combination of homes priced to sell and historically low mortgage rates are continuing to help fuel the housing market.  The number of home listings in both categories remain low 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 10-page report.  If you have any questions, please give me a call.

In comparing February 2015 to February 2014 in PPAR:

            Be Sure To Take A Second Look—These Number Are A Real “WOW”                       

                        Single Family/Patio Homes:

• New Listings are 1,127, Up 5.8%
• Number of Sales are 717, Up 25.1%
• Average Sales Price is $248,279, Up 8.2%
• Median Sales Price is $225,000, Up 14.8%
• Total Active Listings are 2,429

                        Condo/Townhomes:

• New Listings are 143, Up 13.5%
• Number of Sales are 100, Up 51.5%
• Average Sales Price is $144,165, Down 14.3%
• Median Sales Price is $138,000, Even
• Total Active Listings are 272

 

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

                                                Median Sales Price             Average Sales Price

Black Forest                            $377,838                              $430,153

Briargate                                  $279,000                              $293,508        

Central                                      $154,500                              $166,361

East                                          $172,500                              $182,699

Fountain Valley:                      $197,950                              $198,226

Manitou Springs:                    $290,000                              $290,000

Marksheffel:                             $236,000                              $250,303

Northeast:                                $211,500                              $226,488

Northgate:                                $365,000                              $361,681

Northwest:                               $310,500                              $317,777

Old Colorado City:                  $205,000                              $221,336

Powers:                                    $220,000                              $233,151

Southwest:                              $250,225                              $305,272

Tri-Lakes:                                $427,000                              $429,850

West:                                        $201,500                              $260,403

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

 

REALTORS CONFIDENCE INDEX INDICATES SPRING MARKET OPTIMISM

Realtor.org 3.2.15

I thought you might be interested to see the January results of Realtors Confidence Index, a monthly survey that is sent to more than 50,000 real estate professionals.  The survey asks about their expectations for home sales, prices and market conditions and is a key indicator of housing market strength.

Highlights from the January Survey:

• Realtors reported more Buyer activity in their markets on the heels of lower mortgage rates but not enough inventory to match demand.
• Local markets broadly picked up across all property types in January 2015 compared to December 2014, although activity was more modest compared to a year ago.
• Problems facing potential home Buyers included modest income growth, weak credit and income profiles, and in the case of condominium Buyers, projects not meeting eligibility guidelines for borrowers to obtain FHA/VA or conventional financing.
• Realtors in states adversely affected by the harsh winter (e.g. MA, PA, and IL) reported market slowdowns.   (an aside here—Colorado Springs, which certainly was affected by the weather, did NOT have those slowdowns!)
• Looking ahead at the Spring market and the increased buying interest, Realtors were broadly more optimistic about the outlook for the next six months.

 

2015: A YEAR OF HOUSING OPPORTUNITY FOR MANY

keeping current matters, 2.24.15

                            

When the housing market crashed, many believed that so too would the desire of American’s to again own a home.  Contrary to that, many recent reports are showing that, especially among younger generations, the American Dream of homeownership is still very much alive.

In a recent speech at the National Press Club, Julián Castro, Secretary for HUD, summed up what it means to own a home:

“Homeownership is still the cornerstone of the American Dream—a fact you can see in the lives of everyday folks.

It’s a source of pride.  It’s a source of wealth, both providing a nest and a nest egg.  And it strengthens communities and fuels growth in the overall economy.”

Castro appropriately entitled his speech, 2015: A Year of Housing Opportunity”, a theme that rang true throughout:

“Opportunity is not an abstract concept—it’s a path to a more prosperous life, and housing often serves as its foundation.  T. S. Elliot once said that ‘Home is where one starts from.’

A home is often a primary source of wealth in a family…Having a home is a generational way to pass that wealth on.  We want people responsible enough to own a home to have that opportunity.”

Bottom line of his speech:

“Over the years-through decades of economic downturns and wars—the American people have always held on to this Dream, and always will.”

With the improving economy, more and more Americans will qualify for homeownership, thus allowing more families to obtain the American Dream.

 

TOP 10 real estate TIPS FOR 2015

Bankrate.com,, The Gazette 1.25.15

With the single-family home sector predicted to outperform the strong one in 2014, it’s important to let proven facts lead the way.  Here are a few tips that can help in the real estate process.

1. SELLERS--DO SWEAT THE SMALL (CHEAP) STUFF

Little touches go a long way in the Buyer’s eye.  Make sure your entry way has trimmed bushes, clean walkways, and new welcome mats.  Inside, de-cluttering makes a big difference for first impressions.  Focus on uncluttered closets, rooms and most especially kitchen counters.  Remove family mementos, prescriptions from the medicine cabinets and hide piles of toys.  The idea is to allow the Buyer to picture the home as “his”, not yours.

2. BUYERS—TAKE NOTE(S)

When looking at a number of properties, it’s often possible to forget the pros and cons of each.  Keeping a list of those for each home visited and later creating a rating scale of 1-10 to help you determine what you liked about these homes will come in handy.   It also helps to carry of checklist of the specific home features you want to compare with each home visited.

3. SELL BY SEASON

Winter:  Spotlight functional fireplaces.  Near the holidays, add touches like wreaths or pine cone centerpieces.  Also, displaying pictures of the home in other seasons allows the potential Buyer to picture the house with greenery, rather than snow!

Spring:  Fresh-cut flowers bring the weather indoors.  Do extra Spring-cleaning and use pops of color in the entryway and landscape.

Summer:  Highlight patios and outdoor areas.  Swap out dark curtains and towels for lighter colors.  Keep the house cool, but not cold.

Fall:  Display vases of fall foliage or tri-colored corn.  Put pumpkins in the entry. And most importantly, keep leaves at bay.

4. DRILL DEEPLY

It’s a good idea to look at the entire neighborhood at various times of the day.  Here are some signs to determine if the potential new neighborhood is fading or flourishing:

Bad Signs:  A major local employer is moving away or struggling, adjacent neighborhoods are progressively turning into rentals, nearby commercial spaces remain persistently vacant and a few too many for-sale homes are lingering on the market.

Good Signs:  Schools are well-rated and in high demand.  Young and artsy types are moving in.  Older couples are “aging in place” and nearby commercial properties are getting redeveloped and quickly leased.  For-sale homes are quickly generating multiple offers.

5. ‘BIG DATA’ IS EVERYWHERE, SO TAP IN

Banks use “Big Data” to gauge the worth of foreclosures and short sales, and mobile apps now offer it for consumers and real estate agent use.  “Livability” ratings, which rank and contrast neighborhoods by air quality, traffic choke points and specific data on a home’s energy efficiency are oftentimes available if you ask.

6. TRANSPARENCY EQUALS TRUST

Since Buyers will certainly enlist inspectors to check over your home, why not go transparent with your own presale inspection?  That way you will know in advance what issues (plumbing, roof, HVAC, etc) might come up and lead to disappointment and delay the sale of your home.  You can provide the Buyer with a copy of the inspection, along with receipts for any repairs that you have already done and explain how or if you’ve adjusted your asking price accordingly.

7. MATH VS. EGO

Buyers need to be careful not to get into a win-at-all-costs type of negotiation and will stubbornly let a few thousand dollars keep them from getting the “right” house.  At an interest rate of 4.5 percent, the difference of paying $200,000 and $195,000—assuming 1.25 percent property tax and 15 percent down—is only about $25 per month on a 30-year mortgage.

8. RETAIN MINERAL RIGHTS

With so many giant natural-gas fields (shales) in play across the U.S. and new ones pending, homeowners should exercise “Seller’s market” clout to retain mineral rights.  While this intent need not be mentioned in the sales contract in many states, it’s always safest to note it, provided the Buyer doesn’t protest.  You can avoid that scenario by conveying those rights to a trustworthy relative or to an energy company buying them BEFORE listing the house.

9. BUYING?  THEN COOL IT FOR AWHILE

Lenders consider your debt-to-income ratio when determining the mortgage amount you can afford.  It’s best to avoid making new purchases like a car or opening new credit cards and the like prior to purchasing a new home.  Acquiring new debt, moving large sums of money around, changing banks or becoming self-employed immediately before buying a new home can adversely affect the financing outcome.

10. THE PRICE IS RIGHT

It is of utmost importance to price your home realistically from the beginning.  Accurate pricing sells homes. Don’t play pricing games.  Activity in the first month of a listing is always the best, so don’t risk wasting it.  Pricing too high will scare off brokers and Buyers and pricing too low will risk leaving dollars on the table.  Hiring a knowledgeable broker with a good track record will provide you with the data support that will yield the pricing that is “right on” for your home.

 

HARRY’S JOKE OF THE DAY

(Not as funny as you might think—good examples of why you need a competent, experienced real estate Professional)

  

 

 

 

 

 

 

 

 

 

 

                                                            

February 23, 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.

                              

LOTS OF POSITIVE NEWS ON THE HOME FRONT ONCE AGAIN

It’s always a pleasure to share good news and as a local Realtor, it’s even more pleasurable to be able to provide positive statistics concerning real estate in the Pikes Peak area. 

I recently received the Final Quarter 2014 Statistics from both UCCS College of Business and the National Association of Realtors (NAR) and am delighted to share them here with you. 

Despite the once-in-several-decades blizzard we are experiencing as this is being written, I can’t help but rejoice in knowing that you, my readers and clients, continue to have the possibly once-in-a-lifetime opportunity to participate in today’s housing and interest rate market.

As with all good news, there is a flip side.  In the case of the housing market, coming out of the recession means that the Fed will soon change direction and when that happens, interest rates are going to rise.  I’ve documented that in the last several eNewsletters, so suffice it to say—you’ve been forewarned. 

Anyone sitting on the fence about making a move, either from across town or across the country—NOW is the time.  There are fewer choices available, but I feel confident that I can help you find the right home for almost any of your wants, needs and budget.  Even if it’s just a subtle dream, give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let’s see if we can make that happen for you.  There’s never been a better time and remember—time is beginning to run out!

 

SOUTHERN COLORADO ECONOMIC FORUM’S QUARTERLY UPDATES & ESTIMATES

College of Business and Administration, UCCS, Southern Colorado Economic Forum, February 2015

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

• The trend in home sales continues to improve, with a 3.8% increase year-over-year.

 

• The December 2014 year-to-date number of sales was 11,197.  That’s 411 more than a year ago.

 

• Active listings are 19.4% lower than a year ago, but the average sales price of a home sold is 7.3% higher than last year same period. The report notes that local home Buyers are equally, if not more, interested in buying existing homes than in building new ones.  The recent announcements regarding new company locations here will also likely impact housing.

 

• Foreclosures were approximately the same number as in 2013.

 

• Vacancies for multi-family housing dropped to 5.45% from 5.88% by year end, which is a positive indicator. Rental rates are continuing to rise.  The trend toward apartment and multi-family housing is continuing to rise and the growth of the UCCS student body is a factor in this increase.

 

The next several sections of the report include:

• Colorado Springs Airport Trends
• Employment Trends and Wages
• Colorado Springs Sales Taxes
• New Car Registration Trends

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

 

NAR YEAR-END STATISTICS ARE ALSO POSITIVE

Realor.org 2.12.15

The recently published Quarterly Report by the NAR indicates that the majority of the 174 metropolitan areas surveyed experienced a steady, but slightly stronger price growth in the fourth quarter of 2014. The median existing single-family home price increased in 86% of the measured markets. 

Lawrence Yun, NAR chief economist, says that improved sales activity compared to a year ago, along with tightened supply, contributed to faster price appreciation in the final quarter of 2014.  “Home prices in metro areas throughout the country continue to show solid price growth, up 25% over the past three years on average,” he said.  “This is good news for current homeowners but remains a challenge for buyers who are seeing home prices continue to outpace their wages.  Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying.”

The national median existing single-family home price in the fourth quarter was $208,700, up 6.0% from the fourth quarter of 2013. 

The NAR report uses “median” price and the UCCS report uses “average” price, but both scenarios indicate that Colorado Springs is experiencing good housing appreciation.  While the NAR report shows the national median price to have increased 6.0%, our median price increased 3.4%.  This is NOT a bad thing.  We did not experience the downturn in the housing market as horrifically as many parts of the country so we had less home equity to make up.  The good news is that we are slowly but surely increasing our median price of single-family homes and that is fabulous for those who want to sell and trade up or buy for the first time. 

To look at the 3-page report in it’s entirety and see how we compare to the rest of the 174 metro area surveyed, please click here.

 

MORE GOOD NEWS

Dsnews.com, 2.16.15

Predictions for the labor market have been revised upward according to a survey of economists released last week—which most always means good news for the housing market.

The Philadelphia Federal Reserve surveyed 39 economic forecasters and while their predictions regarding GDP and overall economic growth were changed little from a similar survey three months prior, the forecasts for job gains and labor markets were much improved. 

“It’s got to be positive for housing, because all your consumer numbers are going in the same direction,” said the managing director and chief economist with Wells Fargo, who was one of the panelists to participate in the survey.  “With more jobs, higher wages, and income growth, you always see an increase in consumer confidence.”

Coupled with the recent news of new companies relocating to Colorado Springs, this can only bring greater economic growth, and thus greater home appreciation to our local homeowners. 

 

SPRING housing market SURE TO BE ‘HOT’ THIS YEAR

Realtor.mag, 2.18.15

Historically low interest rates and a healthier economy will likely lure more homebuyers to the marketplace this Spring.

According to NAR’s latest housing report, Tight Supplies Put Home Prices On the Move:

“Interest rates below 4 percent, rising rents, and healthier local job markets are convincing more consumers to consider home ownership,” Chris Polychron, NAR President, said in a recent news release showing fourth-quarter 2014 home prices moving up.

Spring is always the “stellar” season for home buying and selling and this year portends to be bigger than usual.  As I mentioned earlier, interest rates are not going to stay down, nor are home prices.  The frenzy we saw last year was nothing compared to what I expect to see this Spring. 

First-time homebuyers with good credit are being afforded down payments as low as 3% through Fannie Mae and Freddie Mac and with rental rates rising, we also expect to see a number of investors rushing to find properties to provide rental income. 

Those who have seen increased home equity are finding that this is a good time to consider that move to a new home or neighborhood.  All in all, the time is right to consider what’s best for your personal housing situation.  As always, I’d be happy to help you sort out all the possibilities, so give me a call BEFORE the season gets under way.

     

TEMPTED TO PUT HOME EQUITY TO WORK?

Wall Street Journal, 2.6.15

Here are a couple of questions for homeowners who are tempted to borrow on their home equity to invest in the stock market.

1. What is my tolerance for risk? 
2. Do I have enough in reserve holdings to cover sudden swings in home values and the market?

According to a recent article in The Wall Street Journal, over the past five years, the total return for the S&P 500, including dividends, averages out to 15.45% a year.  Meanwhile, the average annual interest rates on a home-equity line dropped from 5.41% in 2010 to 5.05% in 2014, according to HSH.com.  Considering that math, a $100,000 home-equity line held for the past five years would have cost a borrower $25,980, but invested in the S&P 500, that money could have more than doubled to $205,102.

It appears to be a great deal, but one needs to consider that it has also been during an unusual bull market, says David Blitzer of the Index Committee at McGraw Hill Financial’s S&P Down Jones Indices unit. 

“The last five years were not a typical five years; 2009 was pretty much the end of the recession, the bottom of the bottom,” he added.  “A rule of thumb (for annual total return) is 6% to 7%, or a double in 10 years.”

Blitzer says that investors need to accept that they could lose money over any given five years in the market, and that money would be borrowed against the equity in their home.  In other words, if home values plummet, a borrower could be out not only the money invested but owe more than the home is worth, he said. 

Most financial advisors suggest that potential borrowers consider all factors, including tax implications for dividends and capital-gains, as well as interest deduction on the interest of home equity loans.

Other factors include having the flexibility to sell an investment sooner or hold onto it longer, depending on stock market conditions.  Homeowners who know they are likely to move or sell the house within five years might not have that type of flexibility. 

“Typically, the stock market goes up and down faster and is more volatile than the housing market, even including the (recent) boom and bust,” Blitzer says.  “If you wait long enough, you are probably going to come out ahead in the stock market, but there are certainly some cases where five years are not long enough.”

A few more tips for those contemplating a home-equity line or loan:

• Fees differ among lenders.  Potential borrowers who shop around may save.  Some lenders charge no fees for their home-equity products while others may charge closing costs, third-party origination fees, mortgage taxes and annual fees, according to Matt Potere, home-equity product executive for Bank of America.

 

• Relationships may matter.  On the other hand, some banks may offer discounts to customers who already have other accounts.  For example, Bank of America Preferred Rewards members may save up to 0.375% on a home-equity-line interest rate.

 

• Don’t forget AMT.  Taxpayers subject to the alternate minimum tax need to keep in mind that they won’t be able to deduct home-equity interest.

Our suggestion?  Since borrowing on home-equity for investment purposes can be a tricky thing, we believe it is ALWAYS prudent to first check with your financial and tax advisors PRIOR to making any decisions.  You want to make certain that borrowing for ANY type of investment, including stocks, bonds or rental property, is something that makes sense for your overall personal financial strategy.

 

HARRY’S JOKE OF THE DAY

  

 

 

 

 

                                                           

February 9, 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.

                                      

JANUARY LOCAL STATISTICS REMAIN VERY POSITIVE

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

January in the Pikes Peak Area proved that the robust housing market appears to be continuing despite cold weather and post-holiday conditions.  Local residents are responding in a similar manner to folks all around the country as they realize better economic conditions than we’ve seen in several years.

The numbers here indicate that the combination of historically low mortgage rates and homes priced to sell are continuing to fuel this growth.  Listings in both categories continue to dwindle as many renters are finding a way to become homeowners, some for the first time, and many with the help of new low down payment requirements.

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

In comparing January 2015 to January 2014 in PPAR:                      

                        Single Family/Patio Homes:

• New Listings are 1082, Down 10.9%
• Number of Sales are 636, Up 6.7%
• Average Sales Price is $261,310, Up 11.4%
• Median Sales Price is $235,250, Up 11.0%
• Total Active Listings are 2,470, Down 23.5%

                        Condo/Townhomes:

• New Listings are 164, Up 16.3%
• Number of Sales are 99, Up 30.3%
• Average Sales Price is $176,602, Up 2.8%
• Median Sales Price is $142,000, Up 6.8%
• Total Active Listings are 297, Down 15.6%

 

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

                                                Median Sales Price             Average Sales Price

Black Forest                            $399,950                              $381,200

Briargate                                  $320,375                             $332,734        

Central                                     $182,500                              $209,461

East                                          $186,400                              $195,890

Fountain Valley:                      $218,169                              $217,889

Manitou Springs:                    $171,000                              $171,000

Marksheffel:                             $246,000                              $252,813

Northeast:                                $213,000                              $218,546

Northgate:                                $368,000                              $409,786

Northwest:                               $279,700                              $309,155

Old Colorado City:                  $225,000                              $262,746

Powers:                                    $235,250                              $237,317

Southwest:                              $234,000                              $336,791

Tri-Lakes:                                $412,000                              $432,866

West:                                        $201,000                              $330,971

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

 

A LOOK BACK TO AUGUST 1974… MUCH LIKE TODAY IN ALL BUT THE NUMBERS

Business Week, 8.10.74

While going through my archives, I came across an article from August 1974—more than 40 years ago.  It was published in the Personal Business section of the old Business Week magazine and I thought you might find it as interesting as I did, both then and now.

The section titled “It Doesn’t Pay to Wait to Buy a House”, talks about how for those who might have been scared out of the housing market due to tight money and high interest rates, then would be the time to take a look at what a new home would cost “today”.  It states:          

“According to the National Association of Home Builders, the cost of the average single family home is $35,800 this year compared with $25,600 in 1969.  And mortgage rates have risen to 9.5% to 10% today against 8% five years ago.”

What can I say?  I’ve always been an advocate of “the time to buy is NOW”, and this article backs me up perfectly.  You can no longer find a home for those kind of prices, but today’s mortgage interest rates are historically low.  Who could have imagined back in 1974 that in 2015 we would see 30-year fixed rates as low as 3.38%? 

Those interested in a little “blast from the past” can view the Business Week article by clicking here.  I know you’ll find it interesting.  Just as interesting as those folks 40 years from now who will look back and not believe that we could actually finance a home for under 4%.

One thing I can tell you for sure...the interest rates aren’t going to stay this low forever.  With the economy improving along with the job market, the Fed is sure to raise the cost of money to hold back inflation and with that--up goes the mortgage interest rates. 

As you can see from the PPAR statistics, the number of available homes is continuing to decline as folks realize the current low rates aren’t a “sure thing” for the future.  While there are fewer listings, there are always homes available to meet most needs, wants and budgets.  If you are still on the fence, I wouldn’t advise waiting a lot longer.  Why not give me a call today and let me run the numbers and see if we can make it the “right time” for you.  I can be reached at 598.3200 or by email at Harry@HarrySalzman.com .

 

HOMEOWNERSHIP IS AT LOWEST RATE IN TWO DECADES

LA Times, 2.15, The Gazette 2.1.15

According to the U.S. Census Report, the national home ownership rate fell last quarter to the lowest level in two decades. 

Despite the housing recovery of recent times, the ownership rate has been on a steady decline since the housing boom of the last decade. This has been attributed to families struggling to purchase a home because of home prices rising faster than incomes in recent years, along with tighter lending standards.

Analysts are hopeful that the housing market will pick up again this year after a slow 2014.  Job growth in 2014 was the strongest since 1999 and mortgage interest rates are still low.  On top of that, the government is taking steps to ease lending standards, with new programs from both Fannie Mae and Freddie Mac intending to back loans with down payments as low as 3 percent.

So, once again, if you or anyone you know has been left out of home ownership in recent times, now could be the perfect time for getting back in the market or purchasing a home for the first time.  Just give me a call and let’s find out if we’ve got the answer to your home ownership dreams.

 

A FEW HEADLINES FROM REALTORMag THIS WEEK…

• Mortgage Rates Fall Again.  Average rates fell again for the week ending February 5:

--30-year fixed rate mortgages averaged 3.59 percent

--15-year fixed-rate mortgages averaged 2.92 percent

--5-year hybrid adjustable-rate mortgages averaged 2.82 percent

--1-year ARMs averaged 2.39 percent

 

• Why Homebuyers Need to Act Now.  Homebuyers need to move fast if they want to spend less, according to Jonathan Smoke, chief economist at realtor.com.  “Delayed purchases will only result in higher monthly payments as prices and rates rise,” Smoke wrote.  Realtor.com is forecasting that affordability may decline as much as 10 percent over the year.

“Right now, the Fed is using the word ‘patient’ to describe its approach to picking the time to raise the target rate,” Smoke notes.  “However, when the Fed ‘loses patience’, rates will go up at least 20 to 40 basis points in anticipation of the target rate officially going up…so, Buyers beware:  The clock on these low mortgage rates may be ticking.”

 

• Millennials Move Toward Home Ownership.  Young couples and singles in their late 20’s and early 30’s are making a belated entry into the home-buying market according to several recent housing reports.  Rising rates, moderating home prices and new, lower down payment requirements are providing good reasons for these individuals to now enter the market. 

Jonathan Smoke has called 2015 the “year of the millennial” in real estate.  He says that home Sellers should be encouraged by this, particularly those who own affordable home and are looking for a long-over-due upgrade.  With the move by many lenders to permit smaller down payments on home purchases, more millennials will likely make a move and that means home Sellers “who’ve been sitting on equity in entry-level homes can finally upgrade to bigger homes and retirement homes.”

 

HARRY’S JOKE OF THE DAY    (HAPPY VALENTINES DAY)

                 

 

                    

 

 

 

 

 

                                                           

January 26, 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 AMERICAN DREAM OF HOME OWNERSHIP IS ALIVE AND WELL

The housing news, both on a national and local front, has been very positive and from the looks of it, more and more folks will be able to afford the home of their dreams.  Many will see greater appreciation in their current homes and first-time buyers are being afforded a number of options to make it easier to switch from renting.

All sources I’ve seen are predicting a strong housing market for 2015.  From NAR Chief Economist, Lawrence Yun...to Freddie Mac…to our local Southern California Economic Forum’s Director, Tatiana Bailey...the news that’s coming my way has all been positive. 

This is not “wishful thinking” from an eternally positive Broker/Owner—namely me.  This is reality—with all the respected industry economists agreeing.  There’s no better time than now to get off that fence and make your personal dreams a reality. 

With interest rates remaining at historic lows and current home appreciation on the rise, it’s time to put the equity you’ve built to work for you.  There are too many options to go into here, but why not give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let me help you figure out what is the best plan for your particular wants, needs and budget. 

 

A LOOK AT SOME OF THE HOUSING EXPECTATIONS FOR 2015, LOCAL AND NATIONAL

From UCCS, College of Business and the Southern Colorado Economic Forum:

I’d like to share with you a presentation by Tatiana Bailey, Ph.D., Director of the Southern Colorado Economic Forum.  She spoke to the Pikes Peak Area Realtors (PPAR) on January 9, 2015 and I asked her permission to share the slide overview with you.  

The presentation includes information on both the national level, some of which I’ve shared with you previously, and a look at the local Pikes Peak area real estate market. 

Please click here for a look at some exciting statistics and projections.  If you have any questions, please give me a call.

 

From the National Association of Realtors:

The infographic below is from a video of NAR’s Lawrence Yun talking about his 2015 housing market expectations.  He expects existing-home sales to rise about 7 percent in 2015 behind a strengthening economy, solid job gains and a healthy increase in home prices.

 

                       

 

From Freddie Mac’s “2015 U.S. Economic and housing market Outlook for January”:

Realtor Mag, 1.21.15,  DS News, 1.21.15

Freddie Mac economists note that mortgage rates continue to remain below expectations, and they predict that mortgage rates will remain low at the beginning of 2015, staying around 4 percent for at least the first two quarters of the year.  Last week, mortgage rates dipped to a 20-month low, with the 30-year fixed-rate mortgage rate plunging to a 3.66 percent national average and the 15-year fixed-rate mortgage dropping to 2.98 percent.

“We…expect these low mortgage rates to help the growing purchase market continue to expand and reach the highest levels we’ve seen since 2006,” the economists noted.

But, as mentioned earlier, NAR’s Lawrence Yun predicts that mortgage interest rates could average around 5 percent—or higher—by the end of this year.

Buyers who have been sidelined due to high monthly rents preventing them from saving for a down payment on a home should be in a better position with new programs aimed to assist them in becoming homeowners.

Freddie Mac, along with Fannie Mae, believe its new announcement of offering mortgages with down payments as little as 3 percent, along with the FHA’s recent announcement that it will cut its premiums for new and refinancing borrowers by a half percentage point will help increase mortgage availability to first-time home buyers.

Economists also note in this report that home prices will likely rise by 3.5 percent this year.  Increased wages in the labor market will give consumers greater confidence.  The National Federation’s Independent Business Index for December showed that small businesses expect to raise employee compensation to the highest level since 2006.

In concluding, Frank Nothaft, Freddie Mac’s Chief Economist said, “On balance there are a lot of positive opportunities in the U.S. economy at the start of the year, and the real question is whether or not households and businesses will be able to seize these opportunities and make the most of them.  The reprieve in interest rates and drop in gas prices should help to spur economic growth.  Until rates start to rise later in the year, housing markets should respond positively, and we anticipate increases in home sales and continued improvement in construction activity.”

 

Down Payments Get Smaller

The Wall Street Journal, 1.25.15

More lenders are lowering down-payment requirements, allowing borrowers to commit 3 percent—or less—of a home’s purchase price to get a mortgage.  Many had been requiring at least 20 percent since the recession began. 

Some lenders are also waiving mortgage-related fees, and more are allowing down payments to be made by other parties, such as the borrower’s family. 

These deals are aimed at buyers with good credit scores and a steady income who have been unable to save enough for a sizable down payment.   In some cases, to qualify, borrowers will need a higher credit score and less debt relative to their income than is usually required, as well as having savings after the home purchase equal to at least 12 months of mortgage payments. 

Borrowers who want to get a mortgage with a particular lender could ask if they would allow a lower down payment than what is officially offered. 

In looking for loans, borrowers need to compare costs, including the interest rate, whether they have to pay any upfront fees to get that rate and what their total costs to get the loan will be.  A lower interest rate might not be such a good deal if it requires a larger out-of-pocket upfront expense.

So… what does all this mean to you?  To begin with, NOW is a great time to sell and trade up or buy for the first-time or investment purposes.  However, with all the options available in mortgage lending and in deciding what is best for your particular situation—it’s more important than ever to seek the advice of a reputable, knowledgeable real estate Professional. 

That’s where I come in.  As you can see from this eNewsletter, I do the homework so that you don’t have to.  I can help you determine the best housing situation and best lender for YOU.  As stated in the Freddie Mac report, it’s up to you to seize the possibly once-in-a-lifetime opportunities in the housing market.  In order not to miss out, give me a call and let’s see if we can make this positive market work for you.

 

5 FINANCIAL REASONS TO BUY A HOME

keeping current matters, 1.21.15

Eric Belsky, the Managing Director of the Joint Center of Housing Studies at Harvard University presented the top five financial benefits of homeownership in his paper entitled “The Dream Lives On:  the Future of Homeownership in America”.

I’ve mentioned these before, but with the market heading in such a good direction, I felt it important to reemphasize their importance. 

Here are the five reasons, each with an excerpt from the study:

1. Housing is typically the one leveraged investment available.  “Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money.  As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor.  Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity.  With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

 

2. You’re paying for housing whether you own or rent.  “Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

 

3. Owning is usually a form of “forced savings”.  “Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

 

4. There are substantial tax benefits to owning.  “Homeowners are able to deduct mortgage interest and property taxes from income.  On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

 

5. Owning is a hedge against inflation.  “Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

 

Bottom line?  Homeownership not only makes sense from a social or family reason, it also makes good financial sense.

 

HARRY’S JOKE OF THE DAY  (courtesy of Tatiana Bailey, Ph.D.)

                

 

 

 

 

                                    

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