Real Estate Information Archive

July 7, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

"IT WAS THE BEST OF TIMES. IT WAS THE WORST OF TIMES"

This famous quote from Charles Dickens in A Tale of Two Cities might also apply to what's happening in our present real estate market. Are these the "worst" of times? For some people, they are. Our heart goes out to the people who have lost their homes through no fault of their own .unexpected loss of jobs, rising cost of living..huge jump in ARM payments, etc., etc., etc.. For those unfortunate victims of the recession, these truly look like the worst of times. They have now lost their homes, must relocate and take a step down on the economic ladder. We all hope and pray they can ride out this temporary economic downturn and return to normalcy in the near future.

Realistically speaking, however, these are the best of times for many people. The drop in market values of residential housing, while creating some serious problems for Sellers, has created great opportunities for Buyers. Let's take a look at some of the factors that make this "the best of times" for anyone who is thinking of buying a home:

• Wholesale Mortgage Interest Rates are at their lowest level since 1971
• The Wall Street Journal (July 7, 2010) showed Freddie Mac at 4.05% for a 30 day lock and 4.14% for a 60 day lock on 30 year, fixed-rate mortgages. Fannie Mae was at 4.117% and 4.188% for the same mortgages. 
• Home prices are still extremely-low 
• Foreclosures and short-sales are still coming into the inventory of available homes and are artificially lowering prices for all homes

Do these factors actually create a big difference to Buyers? Absolutely!!! Let's look at two examples from our own personal experience.

• A family friend of ours in Phoenix was recently able to fulfill her life's dream by buying her first home. The home was built and sold five years ago for $350,000. Our friend just bought the foreclosed property from the bank for $90,000, thanks in part, to the federal tax credit of $8000 to first-time homebuyers. Her mortgage interest rate is less than 5% for a 30 year, fixed-rate loan and her PITI payments are significantly less than she had been paying for rent.  
• An investor-client of ours just closed on a 5-year-old home that originally sold for $440,000. He bought the foreclosure from the bank for $310,000 and leased it for $1975 per month on the very day he closed on the sale.

How long will this "Buyers' Opportunity Market" last? Well, we don't have a crystal ball, but let's look at a couple of the factors that will determine how long this opportunity will continue. On the positive side, in the near-future, foreclosures will continue to affect the market, probably for the rest of 2010. This will tend to hold home-prices down.

Also, on the positive side, interest rates will stay low as long as there is no demand for mortgage money (Mortgage lenders are starving for loan-applications. Apparently, the typical Summertime Buyer bought earlier this year, to get the federal tax-credit, so, this year, there is no summer rush.) Lenders are currently offering rates as low as 3.75%-3.875% on 15 year loans, because nobody is borrowing.

The biggest pressure to push prices and rates higher will be inflation. Fred Crowley, chief economist for the Southern Colorado Economic Forum, recently stated to us that, "Inflation must happen as a result of the dramatic increase in government spending". 

The bottom line for Homebuyers and Investors is, "BUY NOW !!!".

Call us. 

FEDERAL HOMEBUYERS' TAX CREDIT DEADLINE EXTENDED

The deadline for closings on home purchases eligible for the federal Homebuyers tax credit has been extended from June 30, to September 30, 2010. This extension was offered because many of the eligible contracts had suffered delays caused, primarily, by the slow response times of lenders. This extension will be welcomed by many Homebuyers who were about to lose the tax credit through no fault of their own.

It is estimated that this extension will affect at least 200,000 homebuyers, but that 'official' estimate overlooks the other individuals and companies that would have been negatively affected, had the extension not been granted. e.g. the homesellers, mortgage loan processors, homebuilders, sub-contractors, title companies, etc., etc.,etc. The ripple effect of the tax-credit is hard to measure, but it is easy to see that the tax credit benefitted the entire economy.

Our thanks go out to NAR and NAHB for their heavy lobbying for this extension. It's too bad that the obvious benefits had to be 'sold' that hard. Obviously, congress does not fully appreciate how so many people are seriously impacted by their tax-related decisions.

COLORADO SPRINGS CONTINUES TO OUTSHINE THE REST OF THE COUNTRY

The Research Division of the National Association of Realtors just released their "Local Market Report" for the major U.S. Markets. We thought our readers might be interested to see how our local market compares with the rest of the country, for the first quarter of 2010. As always, Colorado Springs compares favorably with most of the 150 largest metropolitan centers in the nation. The report tracks such data as local job market, foreclosure rates, housing inventory, prices, affordability, Please click here to see the complete report which proves, once again, that we live in the best place in the U.S.

PORTFOLIO, INC. AGREES

On June 30, 2010, Portfolio,Inc. released its "Quality of Life" survey results for the Top Ten midsized metropolitan areas in the U.S. The survey compared 109 medium sized markets with populations between 250,000 and 750,000 in 20 statistical categories. The best cities have healthy economies, moderate cost of living, light traffic, impressive housing inventories, and high-powered educational systems. Colorado Springs ranked 7^th on the survey. 

THOSE NEW WINDOWS COULD LEAVE YOU OUT IN THE COLD

If you were counting on the federal government to help you pay for those new, energy-efficient windows, or those new, energy-efficient appliances, better think again. The Department of Energy has long-championed the PACE Program (Property Assessed Clean Energy Program). This program lets homeowners use special property-tax assessments to pay off, over 15 to 20 years, the cost of new improvements. The process results in PACE liens against the homeowner's property which are funded by municipal bonds. These liens are senior to existing mortgages.

In May, Fannie Mae and Freddie Mac said the PACE liens violated the terms of their contracts to purchase loans from lenders and said they would require borrowers to pay off the liens before refinancing or selling their properties. This announcement led most municipalities to suspend their PACE programs.

We urge any of our readers who might have become involved with the PACE Program to consult with their lender, to see how this inter-agency dispute might affect them.and Good Luck !!

As this feud between Fannie, Freddie and PACE heats up, one is tempted to ask whether the government's right hand knows what its left hand is doing. In the meantime, please close the windows. It's cold in here.

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

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ..And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK 

All's fair..

One Sunday afternoon a couple sees an ad in the paper. They can't believe their eyes. There is a house in the paper for $1000 that is in the nicest part of town. We are talking about a Highland Park mansion for $1000. They think this has to be a misprint, but decide to call anyway.

They say to lady who answers we saw your ad, and realize it is a misprint correct. She tells them no it's not & you are actually the first ones to call.

They decide to go look at the house. They race over as fast as they can. They pull up to the most beautiful house on the block. In front of the house is a fountain that cost at least $30,000. They ring the door bell & the lady answers. She starts showing them the house. They realize this house is over 5000 sq ft and it is obvious that expense was not a problem in building this house. The house had marble imported from Italy & a chandelier imported from France. The landscaping was breath taking & the house had a great pool & a nice tennis court.

The couple said to the lady this is the most beautiful house we have ever seen, what's the catch? The lady assured the couple there was no catch. The couple wanted the house for $1,000 but was leery of doing the deal. Finally the lady said you seem like a nice couple, so I'll let you know the truth.

She told them this house is completely paid for, and not a penny is owed against it. Well, last week I got a call from my Husband. He informed me he is leaving me for his secretary. He then told me I could have everything we own as long as he could have the proceeds off the sale of the house. I agreed and he asked me if I could sell the house while he & his new girlfriend hung out in the Caribbean?

HOUSE SOLD.

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

IS THE ELEVATOR GOING UP OR DOWN?

It's almost impossible to tell if the economy is getting better or worse, by reading the papers. Within the last week, for example, some of the featured stories in The Gazette and in The Wall Street Journal were headlined, "Mountain West's Recovery Staggers", "Signs Signal Improvement in Local Economy", "Hiring Picks Up Only slightly", "Springs is 20^th- best Among Nation's Metropolitan Areas", "Sales of New Homes Plunge", "Mortgage Rates Hit New Lows", "Occupancy Rates Leaping At Springs Hotels".

Now, there's a collection of headlines that would confuse anyone. But, here are some facts that tell a very clear story:

• Mortgage rates are at an all-time low. You can now buy a home with a rate as low as 4%.
• Home prices are very low. The foreclosures and short-sales that are now on the market have pulled down the price of every other listing. (To get an idea of how dramatic this is, call me about our Featured Listing shown at the end of this eNewsletter).
• Inflation will almost certainly rise, as new government expenditures begin to affect the economy
• Mortgage rates will eventually rise
• Home prices will eventually rise

How can you benefit from these facts? Well, let's assume that five years ago you bought a home and created a loan for $250,000. Your mortgage payments are $1,580.17 per month for a 30-year mortgage with a rate of 6 1/2%. Your current balance is $234,027 which you will be paying on for the next 25 years.

Today, you could put that $234,027 towards a bigger home in a better neighborhood, refinance at 4%, and end up with a 15 year mortgage that would cost you $1,731.07 per month (only about $151 per month more than you are now paying). By doing this, you will be living in a better house, you will have taken ten years off your mortgage and, more importantly, you would be able to pay off your mortgage completely by the time you are ready to retire.

Prospective Homeowners and Investors may never have an opportunity like this again!! Call me.

FOOT-DRAGGING BY BANKS MAY HALT UP TO 140,000 CLOSINGS

As we all know, the recently deceased First-Time Homebuyers' Tax Credit was offered to Homebuyers who closed on the purchase of their homes by June 30^th, 2010. Unfortunately, many eligible sales will have failed to close by that deadline, primarily because of the slow response time of their lenders. Now, Congress has chosen not to extend the closing deadline, thus voiding the tax-credit for the 140,000 Buyers involved. Unfortunately, many of these Buyers, if they do not get this tax-credit, may back-out of their contracts. This would be a very unfortunate problem for the already-strapped real estate market.

The federal tax credit proved to be a great incentive for Buyers and, since its expiration, home sales have dropped off by 32%. This represents a record-low seasonally-adjusted annual rate. The expiration of the tax-credit and an excess supply of existing homes for sale also lead to a decline in new-home construction and applications for home-buying loans.

NEW FEDERAL AGENCY TO BE CREATED TO OVERSEE BANKS AND FINANCIAL MARKETS

At a cost of only $19 billion per year, Congress is about to enact the most sweeping remapping of financial regulation since the 1930s. The overhaul will put U.S. banks and financial markets under tighter government control for years to come, according to The Wall Street Journal.

The legislation expands the regulatory reach of Washington's major agencies, including the Federal Reserve, Securities and Exchange Commission and Commodity Futures Trading Commission. It also creates, under the Federal Reserve, a new "consumer protection" agency, the Consumer Financial Protection Bureau, with power to oversee all manner of financial products from mortgages to credit cards.

Opponents of the bill are concerned that it could restrict access to credit and enshrine the idea that the government won't allow big firms to fail. The bill sets stricter limits on prepayment penalties, fees for paying off a loan early. Banks say that potential for greater liability could lead to higher costs for borrowers and provisions that require stricter checks on a borrower's ability to pay could make it harder or more expensive for self-employed borrowers or for those who rely on commission or seasonal income to qualify for loans.

NEW SURVEY REVEALS TOP "MUST-HAVES AND BIGGEST "TURN-OFFS" IN A HOME

Forget that "man cave" or home theater room: what men crave more than women in a new house is a luxurious bathroom, a guest bedroom, a dining room and views. On the other hand, female house hunters value a home office more than a kids' playroom, dining room or luxurious bathroom. These are just a few of the more surprising findings of a recent survey of 1,000 house hunters by ZipRealty.Inc.

Other survey highlights:

• Both men and women home hunters rated green features higher this year compared to 2008, with 27 percent of this year's respondents ranking a green home high priority.
• The percentage of home shoppers ranking a home office as a high priority is up from 35 percent in 2008 to 39 percent in 2010.
• The three biggest turn-offs when viewing a home in person are structural damage, bad odors, a busy street and an awkward floor plan. While searching online, lack of parking and few or no photos and low square footage are the biggest deal-breakers.

Top 10 Most Desired Home Features:     

1.       Garage or parking space            86.8%

2.       Master suite                            78.9

3.       Ample storage space                 72

4.       Large or walk-in closets             66.5

5.       Guest bedroom                         66.4

6.       Outdoor entertainment area        64.3

7.       Gourmet or updated kitchen        60.6

8.       Breakfast room or eat-in kitchen  55.8

9.       Large yard                               43.2

10.   Wood floors                                40.8

Male versus Female House-Hunting: 

Must-Haves and Deal-Breakers Differ 

"Overall, the same things you would always expect to top the list of 'must-haves' and 'deal breakers' for house hunters still show up, but it is interesting to see men place a higher priority than women on things often characterized as stereotypically female priorities, such as a luxurious bathroom and a dining room," said ZipRealty Vice President of Marketing Leslie Tyler. "Also, women's growing desire for a home office may speak to the fact that more women are working from home these days."

• A higher percentage of women reported ample storage and a large yard as a high priority compared to men, and reported that when viewing a home in person they would be turned off by small bedrooms and a lack of common space more often than male respondents. In fact, 60 percent of women compared to 49 percent of men reported they wouldn't consider a home with small bedrooms.
• Forty-four percent of men rated a home with a view as a high priority, compared to only 33 percent of women, while 28 percent of men reported a luxurious bathroom as a high priority, compared to only 23 percent of women, and more than 70 percent of men indicated a guest bedroom as a must-have, compared to only 63 percent of women.
• A higher percentage of men reported when searching for homes online disdain for outdated furniture or paint and unkempt landscaping compared to women -- and men reported they're more likely to be turned off by a lack of curb appeal than women are.

Top 10 Features Desired by Men   

1.       Garage or parking space            85.5%

2.       Master suite                           79.8

3.       Ample storage space                71.2

4.       Guest bedroom                        70.2

5.       Large or walk-in closets            64.2

6.       Outdoor entertainment area       63.4

7.       Gourmet or updated kitchen       59.1

8.       Breakfast room/eat-in kitchen    55.2

9.       View                                     44.5

10.   Large yard                                43

Top 10 Features Desired by Women

1.       Garage/parking space               87.7%

2.       Master suite                           77.8

3.       Ample Storage Space               72.7

4.       Large or walk-in closets            68.7

5.       Outdoor entertainment area       64.2

6.       Guest bedroom                        63.9

7.       Gourmet or updated kitchen       61.8

8.       Breakfast room/eat-in kitchen    56.1

9.       Large yard                              43

10.   Wood floors                               40.9

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

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ..And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK

The ANT and the GRASSHOPPER 


OLD VERSION

The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks the ant is a fool and laughs and dances and plays the summer away. 
Come winter, the ant is warm and well fed. The grasshopper has no food or shelter, so he dies out in the cold.

MORAL OF THE STORY: 

Be responsible for yourself!

MODERN VERSION

The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks the ant is a fool and laughs and dances and plays the summer away. 
Come winter, the shivering grasshopper calls a press conference and demands to know why the 
ant should be allowed to be warm and well fed while he is cold and starving. 

CBS, NBC , PBS, CNN, and ABC show up to provide pictures of the shivering grasshopper next to a 
video of the ant in his comfortable home with a table filled with food. 

America is stunned by the sharp contrast. 

How can this be, that in a country of such wealth, this poor grasshopper is allowed to suffer so? 

Kermit the Frog appears on Oprah with the grasshopper and everybody cries when they sing, 'It's Not Easy Being Green.' 

ACORN stages a demonstration in front of the ant's house where the news stations film the group singing, "We Shall Overcome." 

Political demagogs appear on TV to condemn the ant and blame President Bush, President Reagan, Christopher Columbus, and the Pope for the grasshopper's plight. In an interview with Larry King, they fume that the ant has gotten rich off the backs of grasshoppers, and they call for an immediate tax hike on the ant to make him pay his fair share. 

Finally, the EEOC drafts the Economic Equity & Grasshopper Opportunity Act retroactive to the beginning of the summer. 

The ant's taxes are retroactively raised by 50% and, because he cannot pay them, his home is confiscated by the Government Green Czar and given to the grasshopper. 

The story ends as we see the grasshopper and his free-loading friends finishing up the last bits of the ant's food while his new house (which happens to be the ant's old house), crumbles around them because the grasshopper can't get a government loan to pay for maintaining it. 

The ant disappears in the snow, never to be seen again.  

Eventually, the grasshopper is found dead in a drug related incident, and the house, now abandoned, is taken over by a gang of spiders who terrorize the ramshackle, once prosperous and once peaceful, neighborhood.

The entire nation collapses, bringing the rest of the free world with it.

MORAL OF THE STORY: 

Fairy tales ain't what they used to be

June 21, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

PARDON US, IF WE BLOW OUR OWN HORN

Since 1977, Salzman real estate Services, LTD has been a proud affiliate of Leading Real Estate Companies of America. Leading RE members are independent Brokers who specialize in relocation and, as a member of this progressive organization, we are able to utilize their marketing concepts to provide the most aggressive, creative relocation services for individuals and corporations in our local market.

The top 12 real estate organizations in the U.S. were recently listed by "Real Trends 500" and the results show that, out of the top 12 producers in 2009, six were members of Leading RE. Furthermore, nationwide, Leading RE members sold more homes than any other Real Estate organization. In fact, Leading RE:

• Is 27% ahead of its closest competitor in sales volume
• Leads all national brands in total units sold, with nearly one million sales
• Has 28% of the total home sales among the top 500 U.S. real estate firms
• Has the #1 firms in sales volume, transaction sides or both in 41 of the top 90 American markets - almost twice the number of #1 market leaders than its closest competitor

For a breakdown of the top twelve real estate producers in 2009, Click Here.    

A JUMP IN COLLECTED SALES TAX INDICATES COLORADO SPRINGS IS ON THE MEND

In a sign that the local economic recovery is gaining strength, Colorado Springs sales tax collections jumped in May by the biggest percentage in 2 ½ years, when compared with a year earlier (The sales tax receipts in May, 2010, were up 10.22% from May 2009).

The jump was fueled by big gains in auto (+20.28%) and building materials (+20.91%). Terri Velasquez, the city's chief financial officer, stated, "While we are still down from pre-recession levels, this is a significant rise and shows we are experiencing a recovery in sales tax revenues."

Sales tax revenues are a direct reflection of the public's confidence in the economy and they fund more than half of the city's annual budget for services such as police and fire protection, parks and roads.

COLORADO NEEDS TO SELL ITSELF MORE EFFECTIVELY

The Wall Street Journal (June 19, 201) ran an article titled, "States See Growth in Jobs".  The article featured six charts and graphs and contained a "Recovery Scorecard" showing how effective each state was in attracting non-government jobs. The top six states for job growth were: Indiana, Wyoming, Delaware, Texas, Utah and Virginia. Unfortunately, Colorado was listed fourth from the bottom. Now, let's face it, folks. No matter how you slice it, Colorado is a better place to live than Indiana (unless you're a fan of humidity, bugs and flat landscapes). So, how does Indiana manage to attract businesses? Obviously, they do it by offering incentives that allow incoming businesses to make more profit in Indiana than in Colorado.

In these tough times, it's a shame that we don't seem to be attracting more new businesses (and jobs) to our state. Considering our quality of life, our natural attractions, our weather, our beautiful parks and the quality of our available workforce, the problem we should be facing is how to keep new businesses out of our state.

Maybe it's time for a high-level meeting of representatives from our state and local government, our business leaders and our Economic Development people, to plan and implement a strategy for getting our message out to prospective new businesses. There are plenty of businesses in states like California that are looking to relocate away from high taxes and congestion. Let's give them some financial reasons to consider Colorado for their new home.

If you would like to hear some examples of how other states have lured new businesses into their states, give me a call.

FANNIE AND FREDDIE TO DELIST FROM NYSE    

The federal regulator of Fannie Mae and Freddie Mac ordered the two mortgage-finance giants to delist their common and preferred stock from the New York Stock Exchange, the latest example of how the mortgage giants are shedding their ties to private ownership.

The move came one day after the NYSE formally notified the government that Fannie Mae no longer met listing standards because its shares had fallen below the $1 share-price threshold maintained by NYSE Euronext. The FHFA said it decided to relist because it could not be sure it could bring the companies' share price above the 1$ threshold.

Most analysts who cover the companies have long assumed that the companies' common stock doesn't have any value because the government has had to pump so much money into the firms to keep them afloat.

But, don't be concerned that we will be losing the services of the people who drove Fannie Mae and Freddie Mac into the ground. The same individuals will still be in charge of our national economic development. So, the news isn't all bad.

FIVE-YEAR ARM HITS RECORD LOW OF 3.89%

The five-year adjustable-rate mortgage slid just enough to break its record low, according to Freddie Mac's weekly survey of conforming mortgage rates, released last Thursday.

Five-year Treasury-indexed hybrid ARMs averaged 3.89% for the week ended Thursday, down from 3.92% last week and 4.97% a year ago. It is the lowest the ARM has been since Freddie Mac started tracking it in January 2005.

Fixed-rate mortgages inched up. The 30-year fixed-rate mortgage averaged 4.75%, up from 4.72% last week; it averaged 5.38% a year ago. The 15-year fixed-rate mortgage averaged 4.20%, up from 4.17% last week; it averaged 4.89% a year ago.

It's still a great time to buy a house. Give us a call.

5 COLORADO SPRINGS SCHOOLS ARE LISTED AMONG THE BEST

Five Colorado Springs high schools are among the best in the nation, according to Newsweek's annual "America's Best High Schools List ", posted this week on the magazine's website.

The list of more than 1,600 schools, about 6% of the nation's public high schools, are ranked on how hard their staffs work to challenge students with advanced-placement courses and tests.

The local high schools cited were:

• Rampart High School
• Liberty High School
• Pine Creek High School
• Cheyenne High School
• Palmer High School

The complete list is at www.newsweek.com/feature/2010/americas-best-high-schools.

Congratulations to our wonderful teachers and students.

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

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ..And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK

Mr. Smith climbs to the top of Mount Sinai to get close enough to talk to God. 

Looking up, he asks the Lord... 'God, what does a million years mean to you?' 

The Lord replies, 'A minute.' 

Smith asks, 'And what does a million dollars mean to you?'

The Lord replies, 'A penny.' 

Smith asks, 'Lord, can I have a penny?' 

The Lord replies, 'In a minute.' 

Or, if you didn't like that one,

John was on his deathbed and gasped pitifully. 'Give me one last request, Dear,' 

'Of course, John,' his wife said softly. 

'Six months after I die,' he said, 'I want you to marry Bob.' 

'But I thought you hated Bob,' she said. 

With his last breath John said, 'I do!'  

June 14, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET 

MORTGAGE RATES HIT LOW FOR YEAR

Rates on 30-year fixed mortgages fell this week to the lowest level of the year and were barely shy of the all-time low. Mortgage finance company Freddie Mac says the average rate sank to 4.72 percent, down from 4.79 percent last week. It was just above the record of 4.71 set last December.

The average rate on a 15-year fixed-rate mortgage hit 4.17 percent, down from 4.2 percent last week and the lowest on records dating back to August 1991.

Though mortgage rates are at attractive levels, the housing market hasn’t benefited. The number of customers applying for a mortgage to purchase a property fell to the lowest level in 13 years last week and was down 35 percent from a month ago, according to the Mortgage Bankers Association. That’s a sign the market is struggling without a tax credit of up to $8,000 for first-time buyers, which expired at the end of April.

The government has taken massive steps to help the housing market recover. A campaign by the Federal Reserve to reduce borrowing costs for consumers pushed rates down to extraordinarily low levels last year. Rates were expected to rise after the program ended this spring, but have fallen instead over the past two months.

Investors, wary of the European debt crisis and the turbulent stock market, have shifted money into the safety of U.S. Treasury bonds. That has pushed down the interest rate, or yield, on U.S. Treasury debt. Fixed mortgage rates tend to track that yield.

More recently, the latest report on the U.S. employment picture showed that few private-sector jobs are being created. That made investors nervous about the stock market and pushed up bond prices, which pulls down rates.

“Following a relatively weak employment report, bond yields fell this week and mortgage rates followed,” said Frank Nothaft, Freddie Mac’s chief economist.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day. Rates on five-year, adjustable-rate mortgages averaged 3.92 percent, down from 3.94 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 3.91 percent from 3.95 percent. That was the lowest average since May 2004.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.

The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 a point for 30-year, 15-year and 5-year loans. The average fee for 1-year loans was 0.6 of a point.

Source: Associated Press/AP Online 

NAHB SAYS, “NOW’S THE TIME TO BUY A HOME”

David Crowe, Chief Economist of the National Association of Homebuilders, has made a video explaining why buying a home makes sense. In this video, NAHB Chief Economist David Crowe explains the positive factors for home buyers in today's marketplace. Although the popular home buyer tax credit program has ended, he explains, there are still plenty of good reasons to consider homeownership -- including mortgage rates that are near historic lows, attractive home prices that appear to have stabilized in many markets, and an excellent selection of new and existing homes on the market. Click here to view this video.

And, keep in mind that Mr. Crowe is speaking to a national audience, so, if buying a house is a good idea for anyone in the U.S., it’s an even better idea for anyone in our local area. Our market numbers continue to outpace almost every other market in the country. Call us !!!

HOME REPAIR PROJECTS THAT MAKE SENSE

 If you are planning to remodel or add-on because it will increase your enjoyment of your home, that’s great. However, if your goal is to increase the resale price or marketability of your home, please give us a call to discuss it. It is not fun when you realize that a home repair project you just finished — and spent your savings and time on — either isn't going to save you money or wasn't even necessary to begin with.

Here are some of the more common repair/remodeling projects that we are asked about by our clients: 

• roof change
• deck change (increase size, replace with redwood or synthetic material)
• landscaping
• appliances
• kitchen cabinets
• bathroom cabinets
• bathroom fixtures
• new windows
• new furnace/AC
• fireplace change from wood to gas, etc.
• insulation upgrade
• wallpaper?
• replace formica tops with corian or granite
• upgrade exterior with stucco
• new paint
• new carpeting/floor covering
• adding outbuildings (barn, workshop, etc.)

Some of these projects make sense from a ‘return-on-investment’ standpoint, but some don’t. We will be happy to discuss the benefits and/or disadvantages of your proposed project, from the perspective of our local market.

A good resource for evaluating the ‘return value’ of many remodeling projects is the book, "Green Sense for the Home: Rating the Real Payoff From 50 Green Home Projects" (The Taunton Press; $21.95) by Eric Corey Freed and Kevin Daum. This book examines the issue and helps homeowners determine what projects make financial sense. Covering 16 projects you can do today (changing light bulbs or using less toilet water), 21 you can do tomorrow (adding solar power or installing a whole-house fan) and 13 you can do when building a new home (reclaiming your water and building with reclaimed or recycled materials), the book offers two different and sometimes opposing perspectives on each. An in-depth analysis breaks projects down according to their impact on the environment and, of course, your wallet.

Give us a call and let’s talk about the real market value of your project.

PROPOSED NEW TAX COULD CREATE MORE HARD TIMES FOR real estate

We try to remain ‘apolitical’ in our newsletters, but the following major issue could have a significant effect on everyone’s private property rights and we felt it should be brought to the attention of our readers. The following is excerpted from a June 8, 2010 article byJeffrey D. DeBoer, the President and CEO of The real estate Roundtable.

“Congress is seriously considering raising taxes on real estate at the exact moment that real estate is headed toward recovery. In a desperate search of revenue to pay for new government spending, the House last week passed an “Extender Package” that included a “carried interest” provision that would more than double the tax rate on a broad range of commercial and multi-family real estate owners of all sizes and property types.

real estate is a significant contributor to jobs and gross domestic product. This tax hike is being proposed at perhaps the worst possible time, as the industry and the economy continue to struggle to recover. Property values are down by at least 40 percent; the weak economy continues to hammer rents and occupancy rates in many markets; net operating incomes have fallen by 25-30 percent; and transaction volume is down by some 90 percent.

real estate makes up nearly 50 percent of all partnerships in America. While some will claim carried interest is a loophole, the carried interest tax hike now making its way toward the Senate floor is, more than anything, a tax on real estate partnerships large and small. It is not a tax on hedge funds that tangentially affects real estate; it is a real estate tax hike that tangentially affects hedge, venture capital and private equity.

The proposed increase to carried interest taxation would represent the largest tax increase for real estate in more than 20 years – since the Tax Reform Act of 1986, when property values plunged, pressure increased on savings and loan associations, there were forced government closures and ultimately the taxpayer was stuck paying to reset the system.

According to the IRS, these real estate partnerships hold over $1.5 trillion of commercial real estate assets throughout America, including: rental housing, office buildings, shopping centers, medical facilities, hotels, senior housing and industrial properties. The carried interest tax proposal would change the taxation of all these partnerships – for past and future investments.

This tax increase means fewer jobs to repair and upgrade buildings, when more than 2 million – or 25 percent – of Americans from the construction and building trades are out of work. It means reduced revenues to local governments for teachers, firefighters, roads and safe communities. It is impossible to understand how more than doubling the tax on the decision maker in a real estate partnership, as this proposal would do, will encourage any new business, put anyone back to work in construction, or shore up property values to help dig local budgets out of their deep holes.

In addition to hurting economic recovery and jobs, raising taxes on real estate hurts community banks. By most estimates, over $1 trillion in new equity capital is required to fill the equity gap. Now is not the time to destroy capital formation.

As Elizabeth Warren warns in the February Congressional Oversight Panel Report, today bank losses on commercial real estate loans could reach $300 billion, potentially wiping out "hundreds more community and midsize banks" and drying up the credit needed to restore the economy to health. Approximately $1.4 trillion in U.S. real estate loans will come due between 2010 and 2014, with nearly half of those loans currently "underwater." As defaults, foreclosures and mortgage losses continue to rise, a “significant wave of commercial mortgage defaults would trigger economic damage that could touch the lives of nearly every American.”

This proposal is a tax on real estate that is not only short sighted but is also coming at the worst possible time for the economy, jobs and the banking system. The Senate should reject this ill-conceived proposal.

Now is not the time to hit real estate because it is so important to the economy, jobs and the banking system.”

Our sources indicate that this proposed tax could happen with this congress.

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

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK 

June 7, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

THE NATIONAL ASSOCIATION OF REALTORS SAYS THINGS ARE LOOKING UP

Lawrence Yun, NAR Chief Economist, reported last week, "The second round of surging sales from the tax credit extension looks as strong as the original tax credit. Evidently, the tax stimulus, combined with the improved consumer confidence and low mortgage interest rates, are contributing to surging sales. The housing market now appears to be in a good position to return to sustainable levels even without government stimulus, provided the economy continues to add jobs."

NAR expects a net of 1 million additional jobs in the second half of this year and about 2 million in 2011.

"The Home Buyer tax credit brought close to 1 million additional buyers into the market, which is now helping the trade-up market and has significantly improved the inventory situation. This stabilized home prices more quickly and has preserved about $900 billion in home equity. In turn, that is keeping additional households from going underwater and risking foreclosure." Yun said.

"A big concern surfacing recently is insufficient time to close the deal at the settlement table. Under normal circumstances, two months would be enough time from contract to settlement date," Yun said. "However, the recent housing cycle has brought long delays related to the short sales approval process by banks, and from ongoing appraisal issues. There could be a sizable number of Home Buyers who responded to tax credit incentives, but who may encounter problems meeting the settlement deadline by June 30."

Distressed sales, i.e. short-sales and foreclosures, account for roughly one-third of all transactions and will likely continue to represent a sizable portion for the rest of the year. Why? Because mortgage delinquencies are still very high.

This delay by banks in the settlement process is the very reason we have urged Congress to establish some reasonable deadlines for banks and why NAR has asked Congress to provide flexibility on the deadline for closing.

Surprisingly, housing inventory - despite higher sales activity - has been rising. That is because fresh listings have been rising faster than the existing inventory has been absorbed. One reason for this rise is, apparently, that Homeowners who did not want to sell during the depths of the downturn last year are now putting their homes back on the market. As proof of this, see the numbers listed in our monthly PPAR report, later in this newsletter.

OUR LOCAL real estate MARKET CONTINUES TO CLIMB AND SHOW STRENGTH

This past Thursday, the Pikes Peak Association of Realtors announced figures for May, 2010. Home sales maintained a upward climb, despite the demise of the federal tax credit for Home Buyers which expired April 30, 2010.

Last month, total single-family home sales, including resale and new construction, totaled 888. That represents an increase of 6.7% over the same month last year. Of the 888 sales, 844 were resales, a 7.9% increase over May, 2009.

The median price for all homes sold was $194,450, an increase of 2.8% over May, 2009.

The number of single-family homes on the market as of May 31, 2010 was 5550, an increase of 10.1% over May 31, 2009, an indication that reluctant Sellers are regaining confidence in market pricing and they are putting their homes back on the market. Their confidence is well placed. The statistics show that, of the 888 homes sold last month, the "selling price to listing price" ratio was 97.6%, which means that Sellers received only 2.4% less than their asking prices. .and better yet, "sold" homes were on the market for only 77 days, on average.

We hate to tell Realtors in most other parts of the country how well our local market is doing. They always get so depressed.

MORE GOOD NEWS - BUILDING PERMITS ARE UP !!!

On June 2, 2010, the Pikes Peak Regional Building Department published their monthly report showing the number of new home building permits. In May, 2010, single-family permits in El Paso County totaled 135, an increase of 25% over the108 permits issued in May of 2009. Furthermore, during the first 5 months of 2010, single-family permits showed an increase of 79.6% over 2009 (670 vs. 373).

Those figures represent an increase in single-family building permits for 11 of the past 12 months.  

WSJ SAYS RETAILERS ARE ALSO DOING WELL

Last Friday, the Wall Street Journal published figures showing that the major retailers are also feeling the growth in consumer confidence and loosening their purse-strings. Some of the retail outlets tracked in May showed the following increases over May of 2009:

• Target + 1.3%
• Macy's + 1.4%
• Kohl's +3.5%
• Nordstrom +3.7%
• Costco + 5%
• Saks + 5.8%

Overall, in May, the 28 retailers tracked by Thomson Reuters posted "same store sales growth" of 2.5% over 2009. It looks like we are on our way back to normal.

MORTGAGE RATES - HOW LOW CAN THEY GO ???

We still can't believe it. Last week, we were able to negotiate a mortgage for a transferee coming to Colorado Springs that should make him happy for the next 30 years. How's this for a deal? The Buyer qualified for a VA Jumbo loan. The sales price was $439,900. Down payment on the 30 year fixed-rate mortgage was only $5,725, with no origination fee and no discount points and the rate was locked in at 4.75%. Wow !!! Things can't stay this good forever. Call me .  

THE PIKES PEAK REGION IS THE BEST PLACE TO BUY YOUR HOME

The Colorado Springs Regional Economic Development Corporation is promoting our area nationwide, but especially in those troubled areas of the country where businesses are fleeing from excessively high taxes. These overtaxed businesses are looking to relocate and the CSREDC is "selling" our area as the best place to live and work. We are linking here to their latest promotional piece, "The Top Ten Reasons to Locate Your Company in Colorado Springs and the Pikes Peak Region", to assist them in their efforts to attract businesses, but also to encourage any of our readers who are considering relocating here to buy now, while home prices and mortgage interest rates are low and inventories are high. It's a great place to live !!!   

GREECE AND OIL COULD BE BIG FACTORS IN THE housing market

The domino theory is at work again. If Greece is unable to raise money to pay for government spending, they could go bankrupt. (Hey, hold on, there! You mean countries actually have to pay for the programs their legislators pass. Bummer!!! With our luck, that might even happen here). However, Greece's traditional sources for borrowing are asking if they will ever get their loaned funds back from the Greek treasury. Germany, in particular, is irate that its citizens, who typically retire at a much older age than do Greeks, are being asked to provide pension money for Greek citizens.

If Greece defaults, then German banks will see their capital evaporate. That, in turn, will make it difficult for them to lend to other countries like Portugal or Spain to finance their budget deficits. If these countries also default as a result, then another major credit crisis will hit us. (Ireland would have been on this list of endangered countries, but they decided to reduce their unsustainable government debt by cutting government salaries, furloughing many government employees and convincing its investors that it will repay the loans. Where do those crazy Irish get these strange ideas?)

The bottom line for the U.S. would be that, because of our global linkages, our banks would also take a hit. This would make it very difficult to obtain Jumbo loans and second-home financing. So, if you're thinking of getting a Jumbo loan, or buying a second-home, it would be prudent to make your move right now.

The other source for concern is the oil-spill in the Gulf of Mexico. Obviously, the local economies that will be directly affected by the spill will have a hard time recovering from the effects of the spill. For the rest of us, the price of oil will rise measurably - or more oil will have to be imported. Either way, our cost of living will go up and the recovery from the recession will slow down. Slower economic growth will mean slower job expansion and a higher U.S. budget deficit.

Oh, for the days when worrying about Greece and oil just meant making an appointment to have the car serviced.

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

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ..And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK

At a recent computer expo (COMDEX), Bill Gates reportedly compared the computer industry with the auto industry and stated "If GM had kept up with technology like the computer industry has, we would all be driving twenty-five dollar cars that got 1000 mpg."

Recently General Motors addressed this comment by releasing the statement: "Yes, but would you want your car to crash twice a day?"

Not only that, but....

• Every time they repainted the lines on the road you would have to buy a new car.
• Occasionally your car would die on the freeway for no reason, and you would just accept this, restart and drive on.
• Occasionally, executing a maneuver would cause your car to stop and fail and you would have to re-install the engine. For some strange reason, you would accept this too.
• You could only have one person in the car at a time, unless you bought "Car95" or "CarNT". But, then you would have to buy more seats.
• Macintosh would make a car that was powered by the sun, was reliable, five times as fast, twice as easy to drive, but would only run on five percent of the roads.
• The Macintosh car owners would get expensive Microsoft upgrades to their cars, which would make their cars run much slower.
• The oil, gas and alternator warning lights would be replaced by a single "general car default" warning light.
• New seats would force everyone to have the same size butt.
  The airbag system would say "are you sure?" before going off.
• If you were involved in a crash, you would have no idea what happened.

• June 1, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

 HOW DOES “THE QUE” SAY WE ARE DOING ??

The “QUE” is the Quarterly Update and Estimates Report that is published by the Southern Colorado Economic Forum of the College of Business and Administration of the University of Colorado at Colorado Springs. Salzman real estate Services, Ltd. has been a supporter of this important and informative project from its inception and we thought some of our readers might want to study the complete First Quarter Report for 2010, so we are linking here to it here.  

One of the significant sections of the latest report is the Business Conditions Index (BCI) which reports on such areas as:

•            Single-family and Townhouse permits
•             New car sales
•             Employment rate
•             Foreclosures
•             Wages and Salaries
•             Sales and use tax collections
•             Airport emplanements

The encouraging “bottom-line” news is that the first quarter of 2010 in El Paso County shows a 15.7% increase in activity over the first quarter of 2009. Further, the report states that “The current flow information suggests the second quarter of 2010 will see modest gains in the BCI”. This re-emphasizes our previous observation that the Colorado Springs area is coming out of the Recession.

The “QUE” also has data derived from another project created by UCCS, namely, the Renewable Energy Survey. This survey contains such questions as:

•             What is your monthly utilities bill?
•             What is your household income?
•             Are you willing to pay higher prices for renewable energy?
•             Do you currently have renewable energy?
•             Do you plan to install renewable energy?
•             Would you pay extra for a residence/business whish uses renewable energy?

These data are reported and grouped by household income, sex, education, etc.

Some of the interesting highlights of the report findings are:

1. Only 21.9% of the respondents were willing to pay higher prices for electricity from   renewable energy.
2. Another 43.6% indicated they might be willing to pay higher prices for electricity from renewable energy.
3. Lower income respondents were more willing than higher income respondents to pay higher prices for electricity from renewable energy. (Whooda thunk it?)
4. Only 6.4% of respondents think solar panels are attractive. (Surprise, surprise)
5. 20.4% of respondents think wind farms are attractive. (Are you kidding?)

To help promote the Southern Colorado Economic Forum, you can receive a free subscription to the “QUE” by sending an email to fcrowley@uccs.edu and entering the word “subscribe” in the Subject line.

As always, the University is always prepared to accept any donation you would care to make.

THE VIEW FROM THE SUMMIT

Last week, the Gazette published some encouraging information about the economy of Colorado Springs. The data, provided by Summit Economics, Llc., compared April 2010 to April 2009 and  showed:

• Initial claims for unemployment went down 22.7%
• Single-family home permits were up 69.3%
• New car and truck registrations were up 14.4%
• Taxable retail sales were up 5.5%
• Hotel occupancy rates were up 56%
• Foreclosure filings were down 11.5%
• The unemployment rate was unchanged at 8.4%, but was still better than most other U.S. cities.

To add to the good news, the most comprehensive quarterly analysis of median selling prices for homes is the National Association of Realtors report. This report analyzes data from 153 of the largest multiple listing services in the nation. The most recent NAR report shows that existing-home sales in April 2010 were 22.8% higher than April of 2009.

And, on a personal note, when we have occasion to attend national meetings and conferences, we have the opportunity to compare our local conditions with other Realtors and relocation experts from around the country. During these discussions, we are consistently impressed with how well Colorado Springs is doing, compared to almost every other part of the U.S. We are the envy of almost everyone else at the meeting.

We are lucky to live here !!!

LET’S TALK ABOUT MORTGAGE RATES

Did you know that last week you could have obtained a 30 year, fixed-rate home mortgage for 4.5%?  The rates have not been this low since Dwight Eisenhower was president. What accounts for these low mortgage rates?

Well, the most commonly cited reason for our current low mortgage rates is the sad state of the European Money Markets. The sinking value of the European markets is pushing global investors to put their money into U.S. Treasury Bonds, which are viewed as a more secure investment. As a result, Treasury yields have fallen, which has taken our mortgage rates down, as well.

How long can this influx of foreign money into Treasury Bonds continue? ..Probably not much longer. Sooner or later, the European crisis will end and the big investors will probably move from bonds into stocks. When that happens, our mortgage rates will begin to rise.

As a prospective Homeowner or Investor, what does all of this mean to you? The bottom line is that you may never have a better opportunity to buy a home or an investment property. Give us a call and let’s discuss it.

WHAT SHOULD YOU LOOK FOR IN A REALTOR?

Today, there are approximately 3400 Realtors in the Pikes Peak area. …and every one of them is willing to put a sign in your front yard. But, if you really want to sell (or buy) a home in the Pikes Peak area as quickly as possible, you should utilize the services of an effective, proven Realtor who knows how to negotiate the best deal possible for you. Here are some of the things you should look for:

•  Does your Realtor know what you should do to your house in order to make it more saleable? There are some “improvements” you might make that would actually reduce the price of your home (e.g. adding a swimming pool). Other improvements might only allow you to recoup the actual price of the improvement, but would make your house more interesting to prospective Buyers. Some improvements will actually net you more money than the improvement cost. A good Realtor can also advise you whether you should actually make improvements, or, adjust your sales contract with ‘allowances”. There are some improvements like painting, that influence Buyers more than a simple ‘allowance’ at closing.
• Does your Realtor know how to negotiate? Many contracts fall apart because of problems that a good Realtor can resolve. Tax implications, aggressive terms, allowances, are all specific items that can be negotiated in order to make the contract more appealing to both parties.
• Does your Realtor have good relationships with lending institutions? All banks are not alike. Just last week, we developed a good working relationship with a bank on the East Coast that will offer mortgage loans to our clients who work in specific professions. These loans require no down payment and waive several normal loan requirements.
• Does your Realtor know neighborhoods? Your Realtor should be able to give you a comprehensive view of the value of surrounding homes, tax histories, improvement histories, school systems, planned developments, etc.
• Does you Realtor have relationships with local suppliers to obtain special pricing? As with many areas of our lives, it’s not a matter of “what you know”, as it is “who you know”. We have special pricing worked out with many local service and product suppliers in order to make the most effective deals for Buyers and Sellers. Some of our ‘preferred pricing’ relationships are with Lowe’s, LazyBoy Furniture, Floorcraft. Sherwin-Williams, Staging companies, etc.   

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

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK

Three contractors are bidding to repair some minor damage to the basement of the White House, one from Texas, one from Boston and one from Chicago. They go with a Secret Service official to examine the basement.

The Boston contractor takes out a tape measure and does some measuring, then works some figures with a pencil. "Well," he says, "I figure the job will run about $100,000: $40,000 for materials, $40,000 for my crew, $10,000 for the union boss and $10,000 profit for me."

The Texas contractor also does some measuring and figuring, and then says “I can do this job for $70,000: $30,000 for materials, $30,000 for my crew and $10,000 profit for me."

The Chicago contractor doesn't measure or figure, but leans over to the Secret Service official and whispers, "$72,000."

The official, incredulous, says, "You didn't even measure like the other guys! How did you come up with your bid?"

The Chicago contractor whispers back, "$1,000 for me, $1,000 for you, and we hire the guy from Texas to fix the basement." 

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

THE FEDERAL TAX CREDIT FOR HOMEBUYERS INCREASED SALES …BUT, DID IT CHANGE REALITY?

On May 24, 2010, in an article by Kelly Evans, the Wall Street Journal pointed out that the recent federal Homebuyers’ tax credit did, in fact, stimulate the sale of residential real estate. Home sales in April, the last month for the tax credit, were up 5% from March. The Commerce Department was expected to say that new-home sales climbed 3% in April, after a 27% surge in March, to a 423,000 annualized pace.

On the other hand, the Mortgage Bankers Association’s latest weekly index of purchase applications plunged 27% to its lowest level since records began in 1997, despite falling borrowing rates.

Some ‘experts’ are recommending an extension of the federal tax-credit as a means of stimulating more residential home sales. They reference the federal “cash for clunkers” programs as an example of how such federal support money can stimulate activity within an industry. However, as the WSJ points out, there is a significant difference between the recent tax credit for Homebuyers and the ‘cash for clunkers’ program. In the ‘clunkers’ program, the vehicles that were turned in to obtain the “discount” on the purchase of new vehicles were scrapped and thus removed from the national inventory of vehicles. The tax credit for Homebuyers, however, although it did result in the sale of 1 million units, did not ‘scrap’ any houses and, thus, did not reduce the national inventory of houses.  Inventories of existing homes are still elevated and the rising rate of delinquencies and foreclosures ensures a steady stream of supply that will keep downward pressure on prices for some time to come. In other words, the tax credit program, rather than fixing the problem, may have only delayed the inevitable. Speaking of foreclosures and short sales, let’s consider the following.

WHY CALL THEM “SHORT SALES” WHEN IT TAKES SO LONG TO COMPLETE THEM???

During our current housing crisis, the real estate community has tried valiantly to dispose of the foreclosures and short-sale properties that have dragged down property values in most parts of the country. Only by “clearing the table” of these artificially depreciated properties as quickly as possible will real estate prices be able to again reflect their true market value. During this time of readjustment, however, it has become increasingly apparent that the biggest bottleneck in the process of selling-off these properties has been the slow reaction time of many banking institutions that postpone, delay, dither and quibble over valid offers for these properties. The result of this unnecessary delay in the selling process is that, too often, the prospective buyer gives up on the project and chooses to invest his money elsewhere.  

In an attempt to alleviate this problem, we have prepared a Press Release urging some of the more influential business journals throughout the nation to support some simple, sensible, new, federal regulations that would require Mortgage lenders and Realtors to provide a consistent level of service and reaction time to all parties involved in the sale of foreclosures and short sale properties. The basic requirements of these proposed regulations would be that:

• Foreclosure and Short Sale offers must be completely processed within a specified time period (e.g. 45-60 days)
• Lenders must publicize their processing time for new, foreclosure and Short Sale offers
• Lenders must establish a standardized list of procedures, requirements and deadlines for all parties involved in an offer for new, foreclosed or short sale properties
• Lenders must be subject to specific penalties, should they fail to meet the deadlines established in the regulations

We think these reasonable requirements for Lenders would greatly simplify and expedite the disposal of these distressed properties and would help the market to more rapidly re-establish realistic real estate prices throughout the nation.

If you would like to get involved in this effort, please give us a call.

MORTGAGE LOAN RATES FALL BELOW 5%

On My 24, 2010, the Wall Street Journal reported that, contrary to all expectations, home mortgage loan rates have gone down to the lowest levels of the year and back near 50 year lows.

How can this be?? We were told that the Fed’s withdrawal from mortgage-securities purchases would trigger a rise in interest rates. Instead, there seems to be plenty of money available for mortgages and, as a result, rates are falling. As one Realtor stated in the article, “It’s schizophrenic. We all had this expectation of higher interest rates and no more refinances. But I just locked in a 30 year loan with a 4.25% fixed rate …the lowest in my 24 years in the business”.

Where did all this mortgage money come from? Hold on to your hats !!! It’s from foreign investors who are pulling their money out of the shaky European economy and investing it in U.S. Treasury bonds. This massive wave of cash pushed down yields on Treasurys and, thus, pulled down mortgage yields, which are closely pegged to yields on 10 year Treasury notes.

These lower rates could widen the pool of people who qualify for a mortgage, while others may find they qualify for a slightly larger loan. “They can buy the place with the extra bedroom or the swimming pool” says Jay Brinkman, chief economist at the Mortgage Brokers Association.

Keep in mind that nearly half of all borrowers with 30-year conforming fixed-rate mortgages have mortgage rates of 5.75% or higher and could reduce their rates by a full point if they refinanced at current rates, according to investment bank Credit Suisse.

What does this all mean to prospective Homebuyers and Refinancers? Well, a 1% decline in mortgage rates for a $400,000 home can cut $250 off the monthly payment. So, if only 10 million of those 5.75% mortgage owners refinanced, it would pump an additional $2,500,000.000 back into the economy every month. What an ironic solution that would be to our economic problems !!!

Remember, although these rates are the lowest since the 1960s, they won’t last forever. Give us a call to discuss buying or refinancing your home. It might be the best opportunity you will ever have.

AND ANOTHER THING !!!

Colorado Springs continues to look good.

We just returned from the semi-annual meeting of the relocation Directors’ Council in Orlando, FL, where we were heartened to hear that Colorado Springs is in much better shape than most of the other major metropolitan areas in the country. After listening to reports from our colleagues from around the nation, it is obvious that the communities which are recovering the fastest from the recession are the ones which are offering incentives to attract businesses and are encouraging their businesses to offer innovative benefits to consumers. America was built on innovation and it’s time we all start expanding on that concept.

And, have you run into this before?

As we checked into the relocation Directors’ Council meeting, we were handed a FlashDisk containing a compendium of all of the meeting’s seminars. What a great learning aid. It sure was better than trying to take notes at every seminar.

Another example of Innovation in Action

We recently subscribed to Smarter Agent, an innovative new service for Realtors. This program allows us to display listing information on properties within any specified area in the country. It uses GPS to access the MLS listings and mortgage information nationwide and display them on our Blackberry. If our client wants even more detailed information, our CyberHomes program can generate a 10 page report on specific properties. The Smarter Agent program will also enable us to assist our incoming relocation clients with the sale of their homes, regardless of where they are moving from. Ten years ago, nobody dreamed that these innovative programs would be available, and now, I’ve actually turned into a full-fledged “real estate Geek”. Whooda thunk it?  

HERE’S AN OLD CHINESE PROVERB THAT WE JUST MADE UP 

“Unemployed people do not buy houses”.

Therefore, the answer to our present real estate problems is Job Creation. Local, State and Federal governments, please take note !!!

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

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK

15 things we wouldn’t know if it wasn’t for the movies 

1. The ventilation system of any building is the perfect hiding place. No one will ever think of looking for you in there, and you can travel to any other part of the building you want without difficulty.
2. You're very likely to survive any battle in any war unless you make the mistake of showing someone a picture of your sweetheart back home.
3. Should you wish to pass yourself off as a German officer, it is not necessary to speak the language. A German accent will do.
4. A man will show no pain while taking the most ferocious beating but will wince when a woman tries to clean his wounds.
5. If staying in a haunted house, women must investigate any strange noises in their most diaphanous underwear, which is just what they happened to be carrying with them at the time the car broke down.
6. If a large pane of glass is visible, someone will be thrown through it before long.
7. If someone says, "I'll be right back", they won't.
8. Computer monitors never display a cursor on screen but always say:
   Enter Password Now.
9. It is not necessary to say hello or goodbye when beginning or ending phone conversations. And none of your friends have to knock when they come for a visit.
10. Even when driving down a perfectly straight road, it is necessary to turn the steering wheel vigorously from left to right every few moments.
11. All bombs are fitted with electronic timing devices with large red readouts so you know exactly when they're going to go off.
12. A detective can only solve a case once he has been suspended from duty.
13. If you decide to start dancing in the street everyone around you will automatically be able to mirror all the steps you come up with and hear the music in your head.
14. Police departments give their officers personality tests to make sure they are deliberately assigned a partner who is their total opposite.
    
    And last but not least 
15. When they are alone, all foreigners prefer to speak English to each other.

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

THE LATEST STATISTICS ON HOME SALES ARE ENCOURAGING

This past week, the National Association of Realtors published their quarterly report on “Median Sales Prices of Existing, Single-Family Homes for Metropolitan Areas”. This report looks at every multiple-listing sale within 152 major metropolitan areas, or, in this case, 5.14 million sales (annually adjusted). These figures show that the Colorado Springs real estate market has outperformed most of the other markets in the country.

The bottom line is that the “Relative Strength” of the Colorado Springs housing economy looks great !!!

Some of the highlights of the report were:

·         Colorado Springs 1^st Quarter 2010 vs. 2009 = +2.7%

·         91 out of 152 national areas showed higher 1^st quarter median sales prices in 2010 vs. 2009

·         29 markets had double-digit increases, 3 were unchanged, while 58 had price declines

·         In the 4^th quarter of 2009, 67 metro areas reported gains, while, in the 3^rd quarter of 2009, only 30 showed gains

·         Distressed homes (which are discounted by 15%) accounted for 36% of total sales

·         National 1^st quarter sales in 2010 were 11.4% over 2009

These figures confirm the fact that many recent Homebuyers were motivated to take advantage of the recently-expired federal tax credit and decided to get off the fence, not only here, but nationwide.

As Lawrence Yun, Chief Economist for NAR recently pointed out,” We have been seeing this flattening of home prices in all areas lately. The tax credit was very effective in drawing down excess inventory, with about 1 million additional sales resulting directly from the stimulus”.   

These numbers demonstrate that the entire nation is seeing this recovery. And, the current prospects for our local investors look even better. Our local sales in April were up 11.9% over 2009. Our average sales prices were up 4.7%. Our median sales prices were up 4.2% and our Active listings were up 2.8% over 2009…. So, what does this mean to you, a Colorado Springs Homeowner, a current or prospective investor , or someone just sitting on the fence? It means that we have more opportunities for you right here in Colorado Springs than they have in any other part of the country.

As we shared with you in previous issues, a monthly comparison of April 30, 2010 compared to April 30, 2009 shows:

·         Local sales are up 11.9%

·         Average sale prices are up 4.7%

·         Median sale prices are up 4.2%

·         Active listings are up 2.8%

With low, 30 year-fixed rates still available (4.875% for owner-occupied, 5.25% – 5.5 % for non-owner occupied) and the ability to reduce these rates even further for 15 year mortgages (typically, .25% - .375% lower), it’s a great time to buy. Give us a call.

COLORADO HAS CALIFORNIA WORRIED

The following article by Jan Norman. staff small-business columnist, was published in the Orange County Register on May 13th, 2010.

“An average of 15 to 20 companies move from other states to Colorado Springs every year and 30% are from Southern California, said Dave White, executive vice president of marketing for the Colorado Springs Regional Economic Development Corp. “ Approximately 60 Southern California companies are currently looking at Colorado Springs for a possible relocation”, he added.

A couple of the most recent California catches are Billet Racing Products that moved from Laguna Niguel in September, and Corinthian Colleges in Santa Ana that just opened an enrollment center in Colorado Springs that will employ 600.

I called White because my recent update of California companies leaving the Golden State included half a dozen that landed in Colorado Springs. Readers demanded to know why, and rightly so.

It was a softball question that White teed it up and crushed it.

‘Every state in America is focusing on California,’ he said. ‘It’s low hanging fruit’ for those assigned to develop their local economies and add jobs.

Remember, he promotes Colorado Springs for a living but, he’s a Southern California transplant and professes to love California and Disneyland. But business is business.

Here are some of his favorite selling points for California firms to move to Colorado Springs :

• California’s top income tax is 10.55%; Colorado’s is 4.63%
• California’s top corporate income tax is 8.84%; Colorado’s is 4.63%  based only on sales within Colorado
• Colorado’s worker’s compensation insurance costs 25% what California businesses pay
• Colorado Spring Utilities’ electricity rate is 4.5 cents per kilowatt hour; Southern California Edison’s is 10 cents
• Colorado Spring’s property tax rate is 0.4% to 0.5% of real value depending on location; Orange County’s is 1% (or more for Mello Roos fees, for example)

‘My wife and I laugh that the only thing cheaper in California is the citrus,’ White said.

Colorado Springs comes looking for companies to lure away from the beaches and sun and Disneyland, he admitted.

‘We do have a campaign. We think Colorado Springs is a good match for companies seeking to relocate. We can’t compete with southern states that throw millions of dollars in incentives and tax breaks at big projects. Our sweet spot is small to mid-sized companies where the owner moves with the company. They’re driven as much by lifestyle as by incentives.’

And the city is getting ready for another California campaign, but White wouldn’t disclose details. (Nevada is preparing another campaign too, but that’s another story.)

Unlike Virginia and Texas, which have been running television commercials in Southern California, and Nevada, which regularly runs newspaper ads and billboards, Colorado Springs tends to send direct mail to company owners.

‘They did fly a plane over Los Angeles on Valentine’s Day pulling a banner that said ‘Colorado Loves LA,’ but that was Metro Denver and the state, not us,’ White said.

Colorado does offer incentives to relocating companies, but they don’t receive them until they create new jobs, White said. For example:

• The state and city may give as much as $5,000 per job plus tax credits.
• The city might rebate the property tax up to $800 per job.
• The legislature just passed an additional $2,500 per job credit against the corporate income tax.

‘We also have asked private entities to provide incentives,’ he added. ‘A country club might waive the membership fee, or the health clubs might give six months free membership. We have a pass to various tourist sites. We don’t have the beaches but we do have Pikes Peak.’

And when business executives come to check out the town, the governor, mayor and civic and business leaders show up to greet them, White added.

Does Arnold do that?” (End of article)

Well we’re sorry, California, but, as you pointed out in your article, business is business. But, you still have Disneyland.

Unfortunately, California is a living example of the fact that you can’t get more eggs by killing the chicken.

Speaking of chickens, we’re not trying to be Chicken Little, dashing around screaming, “The Sky is falling, the Sky is falling”, but we thought that any of our readers who own a house, or are trying to buy or sell a house would be interested in the following article.

A LICENSE REQUIRED FOR YOUR HOUSE ???

If you think the housing market is depressed now, wait until you read the Cap and Trade Bill (H.R. 2454) that has passed the House of Representatives and is now being considered by the Senate. The Bill requires that, beginning one year after enactment of the Cap and Trade Act, you won't be able to sell your home unless you obtain a federal license and retrofit your home to comply with the energy and water efficiency standards of H.R. 2454. This will represent one of the largest tax increases any of us has ever experienced.

The Congressional Budget Office estimates that in just a few years the average cost to every family of four will be $6,800 per year. No one is excluded. 

But wait. This awful bill has many more surprises in it. Probably the worst one is this: A year from now you won't be able to sell a home without the permission of the EPA Administrator. Even pre-fabricated homes ("mobile homes") and commercial buildings are included.

To obtain this permission, you will have to have the energy efficiency of your home measured. (Sect. 202 - Building Retrofit Program). After the government notifies you what your retrofit energy efficiency requirement is, you will be required to make specified modifications to your home under the retrofit provisions of the Act. (Note also that the EPA administrator can set higher standards at any time, even above the automatic energy efficiency increases which are already built into the Act.)

After the initial inspection and retrofit, you will have to get your home measured again and get a license (called a "label" in the Act) which must be posted on your property to show what your efficiency rating is; sort of like the Energy Star efficiency rating label on your refrigerator or air conditioner. If you don't get a high enough rating, you will not be allowed to sell.

Keep in mind that the requirements in the bill have been set low initially so the bill would be able to get through Congress. After passage, however, the Administrator is permitted to set higher standards every year.

The Act also allows the government to give homeowners who meet certain energy efficiency levels a grant of several thousand dollars to comply with the retrofit program requirements. As always, the government will determine who qualifies to receive these grants. Based upon the exemptions allowed in other such government programs, we can expect these grants to be awarded only to those who “don’t have an income of more than $50K per year", or "whose home selling price is not more than $125K". Thus, low income Homeowners will get a tax refund to offset the cost of this new program and, when this happens, the $6,800 estimated cost to the average taxpayer will go even higher, in order to “bail out” those who qualify for the exemption.

Sect. 204 - Building Energy Performance Labeling Program establishes a labeling program that will identify the achieved energy efficiency performance for "at least 90 percent of the residential market within 5 years after the date of the enactment of this Act." The EPA administrator will get $50M each year to enforce the labeling program and the Secretary of the Department of Energy will get an additional $20M each year to help the EPA.

Homeowners will be required to post the BEPL label in a conspicuous location in the home and will not be allowed to sell their home without having this label. And, as with all licensing programs, the Homeowner will probably be required to obtain a new label on a regular basis, possibly every year.

 The government estimates the cost of measuring the energy efficiency of your home should only cost about $200 each time. (When the California auto smog inspections first started, they were projected to  cost only $15. The current price for that program’s inspection and certificate is $50, a 333% increase).

This bill is an absolute type of a “taking away” of private property rights of every homeowner in the U.S. We believe that any type of implementation of this bill will dramatically decrease a Homeowner’s ownership rights. We have been vested with as Americans.

Will this bill help get America back on track? Well, as we pointed out, above, you can’t get more eggs by killing the chicken.

We recommend you call or contact your friends in Washington to vote against this bill.

CHECK OUT the following relating to this new, proposed law; 

HR2454 American Clean Energy & Security Act:   http://www.govtrack.us/congress/bill.xpd?bill=h111-2454

San Francisco Examiner OpEd, May 16, 2010
http://www.sfexaminer.com/opinion/columns/oped_contributors/Cap-and-trade-is-a-license-to-cheat-and-steal-45371937.html

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

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 38 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK

A pollster was working outside the United Nations building in New York. He approached three men: a Texan, a Californian and a New Yorker. "Excuse me." he said. "I would like to ask your opinion on the current meat shortage." The Texan replied, "Excuse me, but what is a shortage?" The Californian asked, "Excuse me, but what is meat?" The New Yorker replied, "What is 'Excuse me'?"

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

SINGLE-FAMILY PERMITS UP ALMOST 70% FROM '09

 In their May 4, 2010 issue, the Gazette reported that the pace of home construction continued to improve in the Colorado Springs area, while the number of new foreclosure filings eased slightly.

Single-family building permits totaled 127 during April, a nearly 70% increase compared with the same month last year. For the first four months of this year, single-family permits totaled 535, about twice as many as the same period in 2009.

These numbers are significantly lower than those from a few years ago when monthly permits routinely totaled several hundred, but they are getting back on track and should hopefully reach 2000 permits in 2010.

Local Home sales totaled 792 in April of 2010, an increase of 11.9% over April of 2009. Median home prices rose to $187,500, an increase of 4.2% from April of 2009. This marks the sixth straight monthly rise in prices and the tenth straight monthly increase in sales. It is also encouraging to note that the sale prices for these homes averaged 98% of their listed prices.   

The inventory of local homes for sale increased 2.8% in April, however, mortgage rates remain low and the Homebuyers' tax credit will still be available to soldiers returning to Ft. Carson from Iraq and Afghanistan. Foreclosure rates are also declining. All of this is good news for Sellers. The bad news is that many homeowners who were unable to sell their houses last year and who took their homes off the market may re-list this year, thus increasing the competition. In fact, there has been a 2.8% increase in the number of listings since April, 2009.

And, don't forget, even if you're not involved with buying or selling a house, you are deeply impacted by our real estate market. As we pointed out last week, every home sale results in approximately $11,000 in new taxes. So, 2000 building permits results in $22 million income available for schools, police, firefighters, road repairs, etc.  

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

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ..And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

AND, BY THE WAY..

Wells Fargo says the recovery is clipping along

In a speech attended by about 400 Colorado Springs bank clients and business leaders at the Antlers Hilton last week, we were encouraged to hear Jim Paulsen, chief investment strategist for Wells Fargo Capital Management predict that "the worst is over". He stated that the U.S. and global economies have been recovering for several quarters and that recovery will grow faster and last longer than the average economic recovery since World War II  

Mr. Paulsen said that recovery will be stronger and more sustainable because the financial market, businesses and consumers prepared for a depression and instead were hit by a less-severe recession.

"Fear of a Depression caused businesses and consumers to stop spending. That resulted in low interest rates, massive federal spending, deep cost-cutting and the hoarding of cash by consumers. All of which are now providing fuel to keep the recovery going" Mr. Paulsen said.

So, it turns out that "Fear" is the antidote for "Greed". Whooda thunk it ??

Homeownership declines, but that's good news for investors

On May 7, 2010, the U.S. Census Bureau and the Department of Commerce reported that the nation's Homeownership rate fell to 67.1% in the first quarter. The rate has not been that low  since the first quarter of 2000. The Homeownership rate reached its peak in 2004, when it was 69.2% for both the second and fourth quarters.

A big factor in this reduction in Homeownership is the increase in Foreclosures and Short sales. As always, "One man's meat is another man's poison". This reduction in Homeownership results in an increase in potential renters looking for high-quality rentals.

Combine the increase in potential renters with the low mortgage interest rates now available for investors (the interest rates for non-occupied properties are now about 5 ¾%) and you have the receipe for a successful real estate investment. Give us a call to discuss this opportunity.  

Risk wanes for real estate price declines

The risk of home-price declines decreased in 93% of the 384 markets tracked at the end of last year by analysts with PMI Mortgage Insurance Co., although half still showed an elevated or high risk of depreciation.

Overall risk of price declines "decreased dramatically" during the final three months of 2009, PMI said, largely because of improvements in affordability, and declining foreclosure starts. Affordability was helped by falling home prices, lower mortgage rates and increasing personal income.

Risky mortgage lending practices and loan products decreased sharply in 2009 "and are hardly present at all in 2010 lending" the report said.

Although Colorado Springs was not one of the surveyed markets, we have consistently been cited as one of the cities most likely to recover quickly from the recession, as opposed to states like Florida and Nevada, which still showed a 90% or greater chance of further price declines, according to the survey.  

That $10,000 kitchen remodel might only get you $3,000 when you sell !!

When preparing to sell your home, remember that upgrading your home does not necessarily require making major "improvements". Be cautious about investing in "improvements" that will not increase the marketability of your home. For example, putting in a swimming pool in Colorado may actually reduce the market value of your home. We have even heard of Sellers who had to fill in their pool, just to get prospective Buyers to look at their property. We can give you a pretty good idea of what your proposed remodeling project will do to the price of your home. Give us a call, before you decide to remodel.

JOKE OF THE WEEK

A blonde, wanting to earn some money, decided to hire herself out as a handyman-type and started canvassing a wealthy neighborhood. She went to the front door of the first house and asked the owner if he had any jobs for her to do.

"Well, you can paint my porch. How much will you charge?"

The blonde said, "How about 50 dollars?" The man agreed and told her that the paint and ladders that she might need were in the garage. The man's wife, inside the house, heard the conversation and said to her husband, "Does she realize that the porch goes all the way around the house?"

The man replied, "She should. She was standing on the porch."

A short time later, the blonde came to the door to collect her money.
"You're finished already?" he asked. "Yes," the blonde answered, "and I had paint left over, so I gave it two coats. "Impressed, the man reached in his pocket for the $50. "And by the way," the blonde added, "that's not a Porch, it's a Ferrari."

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

HOMEBUYERS' TAX CREDIT - THE IMPETUS FOR A RECOVERY, OR, A FLASH IN THE PAN ??

Last week’s Enewsletter article about how the government benefits from home sales generated a lot of positive feedback and a couple of questions from our readers. One question was, “How much tax money does a home sale generate?”. To answer that question, let’s look at a typical home sale to see where the money goes.

Let’s say that a Homebuilder builds a home and offers it for sale for $300,000. 

The “non-taxable sales items” built into that $300,000 selling price will total around $150,000.  e.g.:

• Lot cost
• Permits
• Utility fees
• School and park fees
• Overhead
• Supervision
• Brokerages costs
• Seller and buyer closing costs
• Etc., etc., etc.

And, oh yeah, profit

That means that around $150,000 of the $300,000 selling price is spent on building materials, which directly generate sales tax revenues of 7.4%, or $11,000. This income alone to the government more than pays for the $8000 Homebuyers’ tax credit, and we haven’t even considered the additional income taxes paid by the carpenters, plumbers, roofers, etc. that worked on the home. All of the income taxes generated by these construction-related jobs more than balance out the tax credit “cost” to the government for resale homes (which do not generate the sales taxes on materials created by new construction).

So, the recent tax credit to Homebuyers should not be seen as money “given away by the government”, but was, in reality, a method for ‘priming the pump’ of economic growth.

Too bad it’s no longer available.

Will the demise of the Homebuyers’ tax credit mark the end of the recent surge in home sales? It’s too early to tell, but it’s no coincidence that most of the title companies are very busy processing contracts that came in right before the deadline on the tax credits. Some experts are also concerned that the traditional “summer vacation” Homebuyers simply moved their normal purchases from June and July to March and April, in order to take advantage of this program.

Time will tell whether the tax credit program actually generated more home sales or, whether it only nudged Buyers into changing the timing of their purchases.  

LENDERS HAVE A PROBLEM – THEY HAVE TOO MUCH MONEY !!!

No, we’re not kidding.  Lenders all over the nation have money to lend, but nobody is asking them for loans. That’s not a hopeful sign for the economy, but it’s a great opportunity for people who are looking to finance a new home. Prospective Buyers are finding that lenders will compete for their business. For example, we recently arranged for a home loan at 4 7/8% with no origination fee and no discount points. An FDIC commercial bank in Florida is now making loans (to Doctors only) with no-down payment, no origination fee, no discount points, for a 6% 30 year fixed or a 5% 5/1 ARM. (It would almost make it worthwhile to go to medical school, just to get one of those loans).

Right now, there seems to be an oversupply of money and an undersupply of Borrowers.  

LANDLORDS ARE SMILING – MAYBE YOU SHOULD JOIN THEM

This past week, the Gazette reported that our local vacancy rate in multi-family residences was down to 6.2%. That’s the lowest vacancy rate since 2001. The article cited the two major factors for this phenomenon, namely, the increase in the number of troops at Fort Carson and the increase in the number of renters who used to be Homeowners, but who have lost their homes to Short Sale or Foreclosure. 

The bottom line for anyone who has ever considered purchasing income property is that our present market looks great for prospective investors. Consider the following factors 

• People who have recently lost their homes are now looking to rent
• These same people are more responsible than typical renters
• Prices for investment property are historically low
• Mortgage interest rates for investment property are historically low
• Inflation is approaching quickly, which means today’s investment property will be worth much more tomorrow

In the past, the industry considered a vacancy rate of 5% to be ‘Fully occupied” (because around 5% of rental units are always in the process of upgrading). Therefore, our present 6.2% vacancy rate is motivating investors to buy even more rental property. Maybe you should consider taking advantage of this opportunity. Give us a call to discuss the possibilities.

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

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK

THE FACTS OF LIFE IN THE real estate BUSINESS

If you are a Realtor,

•  Helping train new agents is training your enemy.
• A new agent will sell the most expensive listing in the office, then say, “Isn’t this fun?” Don’t answer.
• If you show a prospect enough property, he will get his own real estate license.
• If you show enough property, you may not make a sale, but you will need a new car.
• Creative financing is followed by creative litigation.
• Your next prospect will be a family with four children …One with a ball-point pen, one prone to car-sickness, and one who screams all the time. The fourth will be an infant overdue for a change.
• The fussiest buyers have the least money.
• Everyone wants the house that sold yesterday. It was on the market for two years.
• The cat that escaped has a pedigree and is in heat. The sign says, “Don’t let Whiskers out”.
• The house they left on the East Coast was bigger, better and cheaper. The weather is never mentioned.
• The house they left on the West Coast was bigger, better and cheaper. The weather is always mentioned.
• No matter how well you know the property you’re showing, they will ask you something you can’t answer.
• If the house sells quickly, the owner will believe the price was too low.
• If you break a date for a prospect, the prospect will stand you up.
• The friendly dog in the yard, wagging his tail, bites.
• The house down the street sold for more than you can get for the house up the street.
• Your own family will list with another agent, or buy from an owner, probably both.
• Whatever you learn in this escrow will not apply in the next.
• If you say you’re busy, the prospects think you’re making too much money.
• If you say you’re not, they think you’re unsuccessful.
• If your owner re-lists with another agent, he’ll lower the price. Even if he doesn’t, his house sells the next day.

And, if you are a landlord or a property manager,

• Tenants only lock themselves out in the middle of the night... or on Christmas.
• At least one tenant's check will be "lost in the mail" every month.
• A tenant's ability to see dirt and damage is much greater when they move in than when they move out.
• Your best tenants always get job transfers during the worst rental markets.
• The insurance inspector always shows up to take photos of the building as you are putting the evicted tenant’s possessions on the curb.
• Tenants always swear under oath that the window was broken when they moved in.
• If it exists, your tenant will try to flush it down the toilet.
• If it is pouring rain, you can be sure the windows are open at one or more at your units.

But, it’s still a great way to make a living !!!