Real Estate Information Archive

August 10, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

VOICEAMERICA IS CALLING

No matter where you are in the nation, if you listen to VoiceAmerica.com this Wednesday at 2pm MST, you can hear my interview with Deborah L. Hoskins, JD, CFP. Deborah is host of the show, "The Wise and The Wary". She has been an attorney for 26 years, specializing in estate planning, disability planning and elder law. In addition to her duties as Talkshow host, she is a public speaker and writer on elder law issues and financial planning for women and retirees.

Deborah's press release describes our upcoming interview as follows:

"How to Close a real estate Deal

In today's real estate market, traditional Realtor strategies simply aren't good enough. You need the right people and the right tools to get you to the closing table. Your agent needs to be creative and aggressive, and needs to have the expertise to negotiate the best deal for you. Listen in as Deb interviews Harry Salzman, CRS, CRP, a national expert on innovative negotiation strategies for the real estate market, as he explains common seller mistakes and suggests effective remedies. "

VoiceAmerica is the single largest producer of original Internet talk radio programming in the world. Since 1999, the VoiceAmerica Talk Radio Network has been streaming live Internet talk radio programs, featuring more than 200 hosts broadcasting on seven genre-based channels:

• VoiceAmericaT Variety Channel,
• VoiceAmericaT Health & Wellness Channel,
• VoiceAmericaT Business Channel,
• VoiceAmerica Sports,
• 7th Wave Network,
• The Green Talk Network
• Power Up Motorsports Channel.

We are honored to have been asked to address Deborah's listeners. Give us a call and let us know how you liked the interview.

COLORADO SPRINGS RANKS HIGH IN SURPLUS OF HIGHLY SKILLED WORKERS IN RELATION TO DEMAND

Colorado Springs MSA ranked 51 of 366 metros in surplus of highly skilled workers relative to demand according to Chmura Economics & Analytics. More Information

CALIFORNIA COMPANIES RELOCATING TO COLORADO SPRINGS

Why are California companies fleeing to Colorado? Joseph Vranich, The Business relocation Coach, says high taxes, undue regulation, excessive fines and fees, high workers' comp costs, a legal environment stacked against businesses, and lengthy permitting requirements are why companies are relocating out of California.  More Information


Did You Know:  

• Colorado ranked 3rd best state in the country for doing business, according to CNBC. (07/10). They cite the strength, health and diversity of the state's economy More Information
• Colorado Springs ranked 7th "Best Mid-Size City" by Portfolio.com. The study was ranked on healthy economies, moderate living costs, light traffic and strong educational systems. Portfolio.com compared 109 medium-sized markets with populations between 250,000 and 750,000. More Information
• Colorado continues to have the lowest percentage of obese adults at 18.9 percent according to Trust for America's Health. More Information
• Colorado Springs ranked 19th "Best City for Families" according to Parenting.com. Cities were ranked based on health, safety, education, economy and recreation.
  More Information
• Colorado Springs has 5 high schools listed on Newsweek's annual America's Best High Schools list. The ranking is based on how hard their staffs work to challenge students with advanced-placement courses and tests.
  More Information
• Colorado Springs was listed in RelocateAmerica.com's "Top 100 Places to Live in America for 2010". The list focused on communities poised for recovery and future growth. The editorial team discovered communities with strong local leadership, employment opportunities, thriving community commitment, improving real estate markets, growing green initiatives, plentiful recreational options and an overall high quality of life. More Information

NOTICE TO ABSENTEE HOMEOWNERS - VACANT HOMES POSE INSURANCE RISKS

RISMEDIA, August 4, 2010--As the U.S. housing market struggles to rebound, many homeowners are stuck with hard-to-sell properties longer than expected. Some frustrated home sellers who must relocate for a new job opportunity, want to downsize or simply want to buy a new place have left homes empty. Vacant or unoccupied homes can leave the homeowner exposed to loss and liability that may not be covered by their insurance, according to the National Association of Insurance Commissioners (NAIC).

The Pending Home Sales Index, released today by the National Association of Realtors, dropped 2.6 percent to 75.7 based on contracts signed in June from 77.7 in May, and is 18.6 percent below June 2009 - another sign of the stagnant housing market.

"In many cases, people who have been trying to sell their homes for awhile have moved forward with their plans regardless, leaving a vacant home on the market," said NAIC President and West Virginia Insurance Commissioner Jane L. Cline. "Having an unoccupied home can create several insurance implications that typically are not covered under a standard homeowners policy."

The Added Risks of Vacant Homes

Homeowners policies are meant to insure homes that are occupied, so they generally include exclusions for neglect or property abandonment on a home left vacant or unoccupied for a specified number of consecutive days.

In insurance terms, a vacant home is one the resident has moved out of and taken his/her belongings with him/her. An unoccupied home is one where the resident is not staying at the home, but the furniture and other belongings remain.

Because vacant and unoccupied homes pose a higher risk for damage than occupied homes, insurance companies insure these properties differently and usually at a higher price. These risks include:

-- Break-ins: When a home has been unoccupied for awhile, it can show signs that nobody is around - unkempt lawn, full mailbox, no lights on - that can tip off burglars to an easy target.

-- No emergency response: Without anyone home to call 911 or respond to emergencies, a manageable problem - such as a small electrical fire - can turn into a much larger, more costly disaster.

-- Property liability: There is no one present to prevent others from entering the property or to supervise activity, which could increase the likeliness of an accident on the premises or property damage when the owner is not there.

Keeping A Vacant Home Properly Insured

The definition of vacancy and unoccupancy can vary from policy to policy. Some insurers may not pay claims if a home is vacant for 60 days or more. Some policies might automatically shift to a different amount of coverage (e.g. liability insurance only) after a specific number of days unoccupied.

Many homeowners policies have a "vacancy clause" that can be triggered if the homeowner is gone for an extended period of time. If this happens, the homeowner could violate the terms of their contract and some or all of their coverage may not apply in the event of a loss.

"Before you decide to leave a home vacant or unoccupied for a long period of time, talk to your insurance agent or company to learn how they define vacancy and unoccupancy, and whether the company will pay claims if a house is unoccupied," said Cline. "Be honest about your situation, because while an extra policy might cost more, it could save you money down the road should there be an accident or damage to the home."

Many insurance companies offer an endorsement that will provide coverage for a dwelling that is unoccupied for an extended period of time. Vacancy policies can also be purchased for different term lengths to cover a few months to a year, depending on the need.

The cost of vacancy coverage depends on the company and state in which the property is located, but costs usually are higher than a typical homeowners policy due to the overall increase in risk.

Better talk with your insurance agent today !!!

STRATEGIES FOR A SIDEWAYS MARKET

If you're not sure this is the time to buy, consider the following:

Mortgage interest rates are at an all-time record low. (This past week, we found 30-year, fixed rate mortgages for 4.25% - 4.375%, without loan origination fees or discount points).

The good news is that foreclosures are down, down, down. New foreclosure filings in Colorado are at their lowest point in over a year. (2010 second quarter filings were down 15.7% from 2009. Locally, El Paso County filings were down 12.5%.)

Bloomberg News reports that service industries expanded faster than forecasted in July, and might even increase employment in the second half of 2010. They report, "Record low mortgage rates may prevent housing from slumping much more. July's rebound in stock prices, the biggest in a year, will probably help underpin consumer confidence".

The Non-Manufacturing Employment Gauge of The Institute for Supply Management (ISM), climbed to the highest level since the recession began in December, 2007. The survey covers such services as utilities, retailing, health care, housing and finance.

Locally, single-family homebuilding permits for the first seven months of 2010 were 43% over the same period in 2009.

All of these factors indicate a great opportunity for Buyers to make their move. Call us.

THINKING OF SELLING YOUR HOME?

In "The Old Days", Sellers could list their house at their "hoped-for" price, engage in some price dickering with the prospective Buyer, offer some minor price reductions for deferred maintenance issues, and then close the deal. However, in today's competitive market, Sellers should be aware that their house must be aggressively priced right from the start, or, they won't even see any prospective Buyers. That's why it's important to engage the services of an experienced Realtor for advice about a proper listing price. There are also incentives that your Realtor can explain to you that will serve as an inducement for prospective Buyers. Call us.

Furthermore, considering that many of the homes on today's market are in "like-new" condition, it is extremely important that, in order to be competitive, the Seller's house must be in terrific condition. Make those needed repairs before you list.

Finally, be sure to discuss the house's appearance with your Realtor. You may have to do some landscaping and painting on the outside and some 'staging' on the inside. Gone are the days when Buyers would overlook overgrown yards, peeling paint, toys on the floor, family pictures on the wall and rooms full of moving boxes.

However, the 'up' side of this market for Sellers is that, although you might have to take less for your home than you wished, your replacement home will cost much less than it would have three years ago and your new mortgage will be a big improvement over your present mortgage.

It's a whole new ball game out there and we can help you win it. 

WHAT IS YOUR WASHING MACHINE SAYING TO YOU?

How's this for a novel idea to improve customer service? On August 4, 2010, Sears announced Kenmore Connect, a technology developed with LG Electronics to speed up appliance repairs. The way it works is that the owner of the ailing Kenmore appliance calls customer service and holds his cellphone up to the machine. The company representative identifies the problem by reviewing screens of data generated by the washing machine via a toll-free phone line.

This new technology is expected to streamline repair service to customers, and the savings to Sears could be staggering. Kenmore presently maintains the nation's largest repair fleet of more than 10,000 trucks and handles 12 million service calls annually. This new program will be able to identify problems that could be resolved with a minor adjustment, thus eliminating the need for a visit from the repairman. (This type of problem accounts for about 60% of present repair calls) Betsy Owens, Vice-President of Kenmore, estimates that Kenmore could eventually reduce its truck runs by half.

Kenmore Connect will come with appliances priced from $799 to $1,499.

By the way, we can guarantee you that, if your home has one of these appliances, it will make it much easier for us to sell.

2010 PARADE OF HOMES IS NOW OPEN 

LATEST STATISTICS

At press time, the statistics for July were not yet available, but, Click here to see the real estate sales and listing statistics for the Pikes Peak area for June, 2010.

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

Part of rebuilding New Orleans caused residents often to be challenged with the task of tracing home titles back potentially hundreds of years. With a community rich with history stretching back over two centuries, houses have been passed along through generations of family, sometimes making it quite difficult to establish ownership. Here's a great letter an attorney wrote to the FHA on behalf of a client: 

You have to love this lawyer........

A New Orleans lawyer sought an FHA loan for a client. He was told the loan would be granted if he could prove satisfactory title to a parcel of property being offered as collateral. The title to the property dated back to 1803, which took the lawyer three months to track down. After sending the information to the FHA, he received the following reply.

(Actual reply from FHA):

"Upon review of your letter adjoining your client's loan application, we note that the request is supported by an Abstract of Title. While we compliment the able manner in which you have prepared and presented the application, we must point out that you have only cleared title to the proposed collateral property back to 1803. Before final approval can be accorded, it will be necessary to clear the title back to its origin." 

Annoyed, the lawyer responded as follows: 
(Actual response):

"Your letter regarding title in Case No.189156 has been received. I note that you wish to have title extended further than the 206 years covered by the present application. I was unaware that any educated person in this country, particularly those working in the property area, would not know that Louisiana was purchased by the United States from France in 1803, the year of origin identified in our application. For the edification of uninformed FHA bureaucrats, the title to the land prior to U.S. ownership was obtained from France, which had acquired it by Right of Conquest from Spain.

The land came into the possession of Spain by Right of Discovery made in the year 1492 by a sea captain named Christopher Columbus, who had been granted the privilege of seeking a new route to India by the Spanish monarch, Queen Isabella. The good Queen Isabella, being a pious woman and almost as careful about titles as the FHA, took the precaution of securing the blessing of the Pope before she sold her jewels to finance Columbus 's expedition. 

Now the Pope, as I'm sure you may know, is the emissary of Jesus Christ, the Son of God, and God, it is commonly accepted, created this world. Therefore, I believe it is safe to presume that God also made that part of the world called Louisiana. God, therefore, would be the owner of origin and His origins date back to before the beginning of time, the world as we know it, and the FHA. I hope you find God's original claim to be satisfactory. Now, may we have our damn loan?"

The loan was immediately approved.

(These are the same geniuses charged with the Government mortgage bailout.)

August 2, 2010 

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

WAITING FOR MORTGAGE RATES TO GO DOWN ??   GOOD LUCK !!!

In our 38 years of experience, we have never seen mortgage interest rates as low as they are today.  As an example, last Friday we placed a 30-year, fixed-rate mortgage at 4.25%, with no origination fees or discount points. (This rate required that the loan close within 30 days. A 60 day closing would increase the rate slightly and a 15 year mortgage would result in a slight decrease to 3.875% - 4%.). Today, in the Wall Street Journal, we were shocked to see that wholesale rates had gone down even further.

We don't see how it can get much better than this.

Better buy now !!

NAR TO THE RESCUE

As a part of their efforts to protect the private property rights of Homeowners, the National Association of Realtors recently joined forces with the American Land Title Association to ask U.S.Treasury Secretary Timothy Geitner to use the consumer-protection agency created by the recent financial-reform legislation to outlaw "capital recovery fees".

These proposed fees, also known as "re-conveyance fees" and "transfer taxes" are inserted by developers into covenants governing newly-built subdivisions and commercial real estate developments. They require Sellers of a property to pay a percentage, often 1% of the selling price, to the developer of the property every time it changes hands, for up to 99 years.

Thanks to the efforts of the NAR-led coalition, these fees have been outlawed and the "Wall Street Home Resale Fees" are now a thing of the past.

We can't help but imagine the fade-out to this story: The Homeowner watches as the man on the white horse rides away. "Who was that masked man who just saved my home?" he murmers. The announcer replies, "That was NAR, the loan arranger".

Thanks, NAR.

5 REASONS WHY YOU SHOULD BUY A HOME TODAY

A good friend of ours ran the following article in Keeping Current Matters. We thought was an excellent summary of what we have been telling our clients for the past several months and we are reprinting it here:

This might be the best time to buy a home in American real estate history.

Owning a home makes more sense than not owning a home for the vast majority of families in this country. Let me give you five reasons why.

1. real estate is a Great Long Term Investment

Don't take my word on this. This is what Mike Mandel, former chief economist at BusinessWeek and current Senior Fellow at Wharton's Mack Center for Technological Innovation, had to say

"We've just had the biggest boom and bust in real estate in recent history. Nevertheless, real estate has still greatly outperformed the stock market over the past ten years."

Click here to see his chart which shows the actual difference between historical real estate growth and the stock market history.

2. A Home Is a Better Place to Raise a Family

Don't take my word on this. When Fannie Mae asked current renters for the major reason to buy a house in their  National Housing Survey 2010, these were the answers renters gave (they could pick multiple answers):

• 78% said it was a good place to raise children
• 75% said because they would feel safe
• 70% said because you have control of your own space

3. A Home Creates a Sense of Community

Don't take my word on this. The Federal Reserve Bank of New York just published a paper The Homeownership Gap. The paper explained:

Because owners have a financial interest in their property, they have incentives to take measures that will maintain or increase the value of that property. Some of these measures-such as fixing a leaky roof-are closely related to the house itself. Others, such as investing resources in the betterment of the neighborhood and the community, have broader beneficial effects on the local area, creating what economists call "positive externalities."

4. It's Cheaper to Own Than Rent in Many Parts of the Country

Don't take my word on this. Housing Wire just reported on a Credit Suisse study:

While a segment of the renting population continues to rent, many are looking to dip their toes in the homeownership waters. Credit Suisse said the percentage of median household income needed to pay the mortgage on a median priced home is at a 30-year low. Low mortgage rates and property values makes homeownership more attractive than renting for many. In many markets - including Washington DC, California's Inland Empire, Las Vegas and Phoenix - paying for a mortgage is less expensive than renting.

5. The People Who Do Buy a Home Don't Regret It

Don't take my word on this. Probably the best people to ask if buying a home makes sense are the people who currently own homes. A recent national poll commissioned by Bankrate.com found:

Ninety percent of homeowners say they don't regret buying their home despite a nationwide tsunami of foreclosures, short sales and loan modifications.

It's a great long term investment. It's a great place to raise a family. It gives you a greater sense of community. It's less expensive than renting. People who currently own have no regrets.

Buying a home seems like a "no brainer to me".

NEWS FLASH - ALL BUYERS ARE NOT THE SAME

The expiration of the federal tax credit for Homebuyers has motivated Sellers to re-examine their strategy for selling their homes. We are advising our clients that there is no "One-size-fits-all" strategy that will be the most effective. In general, we have found that the price of the listing is a great indicator of which strategy will be most effective.  

Buyers of homes under $200,000 are most interested in price. They are usually in jobs which are highly dependent on the local economy and can best be motivated to buy with a very competitive price and "reassuring" incentives, such as our Job Loss Protection Program. Call us to learn more about this very effective incentive.

Buyers of homes over $300,000 often have very specific requirements for their homes and, although competitive pricing is essential, they can also be influenced by such incentives as home warranties, life insurance and "discounts with deadlines", which are, essentially, price reductions.

The bottom line, however, is that there are some 'tried and true' incentives which are still the best methods for triggering sales

Here's what works best:

-Price it right. Buyers have access to lots of data, and they'll know if your house is too expensive.

-Offer to pay some of the buyer's closing costs.

-Maximize exposure. Saturate the Internet and all forms of social media with your listing.

-Use great photos, not just good ones. Make sure your house makes a great first impression.

-Make it sing. Listing information must be complete and well-written.

-Curb appeal matters. Spend a little money on flowers, new plants and fresh paint.

-Inside, your house should look fresh, so make sure the paint, carpeting, light fixtures and appliances are updated and clean. Get rid of the family pictures.

-De-clutter. Eliminate one-third to two-thirds of your stuff; hire a stager.

-Network. Sales come together because brains understand homes better than computers.

-Be patient. Statistics say that it takes 21 showings, not including open-house traffic, to sell a house.

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 North Carolina Department of Labor claimed a small Monroe, NC farmer was not paying proper wages to his help and sent an agent out to investigate him.

 Department of Labor employee:  I need a list of your employees and how much you pay them.

Farmer:  Well, there's my farm hand who's been with me for 3 years.  I pay him $200 a week plus free room and board.  

Then there's the mentally challenged worker.  He works about 18 hours every day and does about 90% of all the work around here.  He makes about $10 per week, pays his own room and board, and I buy him a bottle of bourbon every Saturday night so he can cope with life.  He also sleeps with my wife occasionally.

NCDL employee:  That's the guy I want to talk to...the mentally challenged one.

Farmer:  That would be me.

July 26, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

THE NEWS AIN'T ALL BAD

Locally, initial claims for unemployment are down 28.6%. The unemployment rate is down to 9.1%. New auto and truck sales are up 7.2%. Taxable retail sales are up 7.2%. The hotel occupancy rate is up 77.7% and foreclosure filings are down 7.9%.

SO, WHY DO I HAVE THIS UNEASY FEELING?

Because local Realtors report that telephone requests for information about listings have dried up and appointments for showings by other Realtors have almost disappeared.

and

Because local Lenders are reporting a big reduction in calls from "Rate Shoppers". Calls from individuals who need mortgage money have dried up and the only calls that are coming in are from people who want to refinance.

and

Because the chief Economist for NAR is predicting an increase in interest rates as a result of the recent overhaul of the financial industry. The $18-$29 billion predicted annual administrative cost of that legislation will increase lenders' costs and will be passed along to consumers. (You remember consumers, don't you?. They are the ones that the law was passed to protect).

The positive side of all of this s that Homeowners are taking their money out of the stock market and using it to remodel their homes or buy investment property.  That's why the story that appears, below, should interest you.

BIG SUPPLY PLUS LOW DEMAND = OPPORTUNITY

Although Colorado Springs has a lot going for it and is better off than most other parts of the country, the local real estate market outlook does, necessarily, reflect the national Real Estate market outlook....and that's not a very happy picture. The Wall Street Journal summed up the problems facing the national market in two recent articles, "housing market Stumbles" (July 21, 2010) and "Home Inventory Rises as Sales Fall" (July 24, 2010).

Some of the various reasons for the current grim National outlook are:

• Tremendous decrease in housing starts (Locally, single-family home permits are down 12.3%. Builders are uneasy about the future.)
• Weak job growth (Locally, wage and salary jobs are down 1.7%)
• Elimination of the federal tax credit for home buyers, which resulted in:
• A decrease in real estate sales (Buyers chose to close before June 30, 2010, in order to take advantage of the federal tax credit.

One result of these negative pressures is an increase in the inventories of new and resale home inventories.

To what extent does our local market reflect this growth in inventories? Well, in Colorado Springs, the month of June showed an increase of 6.6% in listings over May, 2010 and an increase of 15.4% over June, 2009. These increases translate into a growth of inventory of available homes to a level that cannot be absorbed within a reasonable time frame.

What accounts for this sudden growth in inventory? Well, keep in mind that, basically, there are three types of Sellers with homes for sale. First, there are those individuals who have to move out of their homes. They have changed employment or lost their jobs .They are worried about foreclosure..A personal crisis requires them to move closer to some member of their family, etc., etc... The bad economy has contributed to an unusual increase in this type of listing.

Then, there are those Sellers who don't have to move, but would like to cash in on the value of their homes and move up into bigger, better homes. These individuals, misled by the recent, artificial upsurge in sales created by the deadline for the federal tax credit, have concluded that the time is now ripe for them to place their homes back on the market. Because they don't really have to sell, they are not very aggressive in their pricing and are not that interested in negotiating.

(This type of Seller puts the Realtor in an awkward position. Because the Seller's asking price does not reflect realistic market pricing, the house does not attract prospective Buyers. Furthermore, Lenders' appraisals will come in far below the asking price, thus killing the sale. In such instances, everyone is unhappy. The Buyer doesn't see any activity. The prospective Buyer and his Realtor waste a lot of time and the entire deal falls through. For these reasons, responsible Realtors tend to refuse this type of listing).

 Finally, there are the foreclosures and short-sales that Lenders are now listing. Unfortunately, these listings are slow to sell, primarily because of unrealistic pricing by the lenders and slow response time to offers (Almost every Realtor has horror stories about losing sales because a lender would not respond to their offer in a timely manner).

Right now, all three types of Sellers have placed homes on the market and our inventories have grown accordingly.

The bottom line for Sellers is: If you really want to sell, work with your Realtor to establish a realistic listing price and be ready to negotiate.

The bottom line for Buyers is:  Low mortgage interest rates and an oversupply of homes for sale make this a great time to buy your new home.

The bottom line for investors is: CALL ME. The following story shows how our present market offers a once-in-a-lifetime opportunity for investors.     

A BEDTIME STORY FOR PROSPECTIVE INVESTORS

Here's a true story that should make prospective Investors sit up and take notice.

On July 23, 2010, we negotiated a sale for a Buyer, on a home that sold for $313,500. (A comparable home in a similar neighborhood sold for $346,000 on July 2, 2010). Our Buyer paid 25% down and we obtained a 30 year, fixed-rate mortgage @ 4.75%. We required the Seller to pay all Buyer's closing costs, including prepaids.

The PITI monthly payment will be $1530 and the home will rent for between $1800-$1850.

Based upon just these factors, here's how our Investor will realize a minimum 9.4% annual rate of return on his investment:

• Loan amount = $235.125
• Buyer will receive income tax deductions of $11,090 for interest paid and $2,737 for property taxes paid
• At a tax bracket of 28%, the income tax savings to the Investor will be $3,872/year, or, $323/month.
• That makes the monthly cost approximately $1,200 ($1,530 - $323)
• Minimum rental income should be $1800

Bottom line: The Investor will put about $600 per month into his pocket. That's $7,200 annual income.

Considering the original investment of $78,375, that income of $7,200 represents a rate of return of at least 9.4% ($78,375 divided by $7,200).

Additional factors that will benefit the Investor are:

• Depreciation write-offs of $9,580 annually ($313,500 minus $50,000 for land, divided by 27.5 years)
• All fixed expense write-offs
• Local rentals are projected to rise
• A conservative estimate of just 3% appreciation will increase the home's value by $9,000 - $10,000/year.
• Inflation will add even more value to the home

Considering all of these benefits, our Investor should realize a total annual rate of return of 20%-25% annually, on his original investment.

If all of this sounds too good to be true, consider the following:

• We currently have access to all-time-low mortgage interest rates
• Because of the large number of foreclosures and short sales, there is now a high level of demand for high-quality rentals from the people who have had to move out of their "formally-owned" homes
• Rental vacancy rates are near record lows, because of increased demand
• There is a Buyer's market because of the high inventory of available homes
• And, perhaps an even more persuasive factor: INFLATION IS COMING

Call me and let's discuss this opportunity !!!

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

real estate AD EUPHEMISMS


Starter home - run down 

Needs TLC - Major structural damage.

Spacious - average size

Charming - small

Comfortable - very small

Cozy - very, very small 

Low maintenance - no lawn 

Easily maintained - Requires at least two gardeners and live-in maid.

Convenient - Located on freeway entrance ramp.

Walk to stores - nowhere to park your car

Close to lakes - Impossible to park from April to October.

Natural setting - forget about planting, the deer will eat everything

Secluded setting - far, far away 

Park-like setting - there's a tree down the block

Executive neighborhood - high taxes

Sophisticated City living - Next to a noisy bar.

Old World charm - Has some woodwork, needs cleaning.

Contemporary feeling - Has no woodwork, needs cleaning.

Security system - Neighbor has a dog.

Neutral decor - brown walls.

Unique city home - Used to be a warehouse.

Daring design - Still a warehouse.

Sophisticated - Black walls and no windows.

Prestigious - expensive

Bright and sunny - Venetian blinds not included 

Useful outbuildings - No inside toilet. 

Motivated Seller - Has been on the market for 14 years.

Much potential - Grim. 

One-of-a-kind - Ugly as sin.

MUST SEE TO BELIEVE - An absolutely accurate statement.

July 19, 2019

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

IF YOU HAVE EVER CONSIDERED BUYING INVESTMENT PROPERTY, NOW IS THE TIME TO DO IT

IF YOU HAVE NEVER CONSIDERED BUYING INVESTMENT PROPERTY, NOW IS THE TIME TO GIVE IT SOME SERIOUS THOUGHT

All of us are interested in making good investments. The good news is that today's real estate market is offering investors the chance to make some terrific investments in residential investment property. Just look at the facts and examine why this opportunity now exists:

• Lenders are reporting an excess of available money and a low demand for loans. As a result, in an attempt to encourage borrowing, lenders have lowered their mortgage rates to all-time lows.
• Foreclosures and short sales are adding to the inventory of available homes for sale, thus driving selling prices down.

Bottom line:    Home prices and mortgage interest rates are both at record lows

• The families which have lost their homes to foreclosures and short-sales are now in the market for high-quality rentals.

Bottom line:      Investors are currently renting their newly-acquired properties almost immediately. (We recently closed on two separate rental properties which were leased on the same day they closed.)

• Out-of-control government spending will definitely create inflation, which will increase both the future value of the home you buy today, and the mortgage rate you will have to pay, if you don't buy now.  

Bottom line:      The great deal you can make on Investment Residential real estate today will probably turn out to be one of the best investments you ever made. Call us and let's talk about the possibilities. The timing will never be better.

HUD RELEASES 2009 AMERICAN HOUSING SURVEY

HUD's 2009 American Housing Survey (AHS) provides one of the most thorough views inside the homes of millions of Americans and reveals everything from the square footage of the unit to how many homes have front porches, garages or even usable fireplaces. First conducted in 1973, the survey's long-term design allows analysts to trace the characteristics of U.S. housing units and their occupants. For example, the 2009 survey reveals that significantly more American homes are larger and have more bedrooms and bathrooms than homes 37 years ago. In addition, homes of 1973 were significantly less likely to have central air conditioning and other amenities considered commonplace today.

Here are just some of the findings of a comprehensive national sample of the more than 130 million residential housing units released recently by the U.S. Department of Housing and Urban Development.

There are 130,112,000 residential housing units in the U.S.; 86% of these are occupied. The median age of 'the American home' is 36 years, though the survey finds that homes newly constructed since the 2007 AHS are generally larger, more expensive, have more bedrooms and bathrooms and are more likely to include amenities such as central air conditioning. Some of the other key findings of the 2009 AHS include: 68% of U.S. homes are owner-occupied; 51% are located in suburban areas; 29% in central cities; and 20% outside metropolitan areas; and 18% are located in the Northeast; 23% in the Midwest; 37% in the South; and 22% in the West.

Unit size
-The median size of an occupied home is 1,800 square feet (compared to 1,610 in 1985, the earliest year this information was collected), with owner-occupied units being larger than renter-occupied ones. Newer Homes are also usually larger, with a median size of 2,300 square feet.
-Median lot size for single-family homes, including mobile homes, is 0.27 acres (compared to 0.36 acres in 1973) with owner-occupied units generally having more land than renter-occupied ones.

Rooms
-Most homes (53%) have six or more rooms, with owner-occupied units generally having more rooms than renter-occupied ones. In 1973, only 39% of homes had six or more rooms. Newly constructed homes generally have more rooms - 65% have six or more rooms.
-Most homes have three or more bedrooms (64% compared to just 48% in 1973). -New homes generally have more bedrooms - 80% of them have three or more bedrooms.
-More than half of U.S. homes (51%) have two or more bathrooms compared to just 19% in 1973. Again new units have more bathrooms, with 89% of them having two or more bathrooms.

Equipment
-All units have a refrigerator and kitchen sink and almost all homes (99%) have a cooking stove or range. Overall, 98% of units have a full kitchen.
-The most commonly used cooking fuel is electricity (60%) followed by piped gas (35%).
-Two-thirds of the homes (66%) have a dishwasher, 51% have a disposal in the kitchen sink and 3% have a trash compactor. New units are more likely to have these amenities.
-More than eight in ten homes have a washing machine (84%) and clothes dryer (81%).
-About two-thirds of U.S. homes (65%) have central air-conditioning and another 21% have window units - new units are more likely to have central air-conditioning (89%). By contrast, only 17% of U.S. homes had central A/C in 1973 although 30% contained window units.
-About nine in 10 homes (93%) reported a smoke detector while 36% reported having a working carbon monoxide detector.

Amenities
-Most homes have a telephone (98%), porch, deck, balcony or patio (85%) and a garage or carport (66%).
-About half (48%) have a separate dining room and three in ten units (30%) report two or more living rooms or recreation rooms.
-About one-third (35%) have a usable fireplace.
-New construction is more likely to have all these amenities.

To see the complete HUD report, click here.

BET YOU CAN'T ANSWER THIS ONE

Which real estate network dominates the Real Estate market???  

Salzman real estate Services, LTD is proud to be an affiliate of Leading Real Estate Companies of the World, the network that is 27% ahead of its closest competitor in sales volume, with nearly one million sales in 2009. Leading RE had 27% of the total home sales market among the top 500 U.S. real estate firms. To see more about Leading RE, click here

If you already knew this, you deserve a reward, so, I will buy you a cup of coffee the next time you stop by the office.

SALES TAX REVENUES ARE UP. THAT'S A GOOD SIGN

The latest figures show city sales tax revenues were up for the eighth month in a row. In their July 16^th report, the city of Colorado Springs reported an increase of 7.16% in sales tax revenues, the second largest increase in 2 ½ years. They also reported that revenues for June 2010 were up 5.65% over June 2009.

The increase in sales tax revenues were attributed to an increase in consumer confidence and spending and the arrival of an additional 3500 troops from Afghanistan at Fort Carson.

The Sales tax revenues help fund our police department, fire department and parks, so the increase will benefit all of us.

WEIGHTS ARE DOWN, THAT'S ALSO A GOOD SIGN

Yesterday, the CBS Sunday Morning Show discussed the problem of obesity in America, and Colorado Springs was boosted in a segment entitled, "Welcome to Thin City".

Colorado was cited as the least obese state in the U.S. and Colorado Springs residents were said to be "the most fit", and more involved in outdoor activities. I do feel guilty, however, that, as I was watching this wonderful story about Colorado fitness, I was sitting on my couch.

To see more about this great PR coverage of our city, click here. If you don't already live here, after you see this story, you'll wish you did.

HERE'S THE TOP 6 PROPERTY VALUE RAISING PROJECTS

Most homeowners enjoy the every project that they have made in their home. They like to add, improve and make changes all over the house for them to live comfortable and pretty satisfied of what they are seeing around. But it isn't all about that because everything that we do in our home can add to its real estate property value.  And when the time comes that you'll be decided to sell your home you will gain get more money out of these projects that you've done.  According to BrokerAgentSocial, here are some of the projects that will help to raise your home value.

Basement Improvements - This is one of the most important remodeling works that you can do in your home. You can improve your basement by finishing, adding flooring, insulation, drywall and lighting. Furthermore, you can transform this into a usable place in a way of adding a living space. A living space will cost you less than adding a whole new room.

Gutters improvement and repairs - If you want your home to be more appealing in its outside looks, gutters should be the first exterior features that you must consider to work on. Gutters repairs and maintenance will protect the rest of the home exterior from water damage. Maintain gutters regularly by patching holes, cleaning of debris that stop water from flowing and making sure that it is always in place and secure. 

A major lawn makeover - the lawn appearance effect the overall value of home that simply means irregular appearance of lawn detracts from the property overall appearance. Getting the lawn in shape is the first step in lawn total makeover. Test the soil to know if what chemicals will help the grass grows healthy and reseed bad areas.

Adding fence around - fence can give you privacy, security, protection and enhance the outside look of your home.  But before you start this outdoor home project of yours make sure to check the home owner's association rules if it's allowed. Some neighborhoods don't allow some fencing materials, and rules on how high should be the fence.

Update bathroom fixtures and hardware - Like any other parts of the house, little changes go a long way when it comes to bathroom updates. You can make the bathroom look stylish by just simply replacing the old hardware and fixture. If you are not contented enough of how the way it looks you can replace and upgrade your sink the trendy and modern one.

Replace outdated kitchen appliances with new ones - Many real estate professionals believe that this part of the house should be focused more when it comes to renovation and upgrades.  They believe that simple upgrade to this room will bring back a enormous investment in return. One way of improving your kitchen that could entirely change the overall looks is by upgrading the appliances.

BITS AND PIECES

HOME OWNERS STILL LOVE THEIR HOUSES

Daily real estate News, quoting from a news release from Bankrate.com, tells us that, despite declining home prices, 90 percent of Americans don't regret buying their current home.

Among the 9% who do regret the purchase, most say they are unhappy that they can't sell their home and move elsewhere, or, they can't afford their monthly mortgage payment.

Some 79% of those polled say they have a fixed-rate mortgage. Among those making over $75,000 per year, 90% say they have a fixed-rate mortgage. 

HOME PRICES CONTINUE GAINS OVER 2009

CoreLogic, in its monthly index, states that U.S. home prices, including distressed sales, increased by 2.9% compared to the same month last year.

May was the fourth straight month prices showed a year-over-year increase.

"Home price appreciation stabilized as home buyer tax credit sales peaked in late spring", says Mark Fleming, chief economist for CoreLogic. "But, given that the labor market and income growth remain tepid, we expect prices to moderate and possibly decline the rest of the year".

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

She spent the first day packing her belongings into boxes, crates and suitcases.

On the second day, she had the movers come and collect her things.

On the third day, she sat down for the last time at their beautiful
dining room table by candlelight, put on some soft background music, and
feasted on pound of shrimp, a jar of caviar, and a bottle of Chardonnay.

When she had finished, she went into each and every room and deposited
a few half-eaten shrimp shells, dipped in caviar, into the hollow of the
curtain rods. She then cleaned up the kitchen and left.

When the husband returned with his new girlfriend, all was bliss for the first few days. Then slowly, the house began to smell. They tried everything; cleaning and mopping and airing the place out. Vents were checked for dead rodents, and carpets were steam cleaned. Air fresheners were hung everywhere.

Exterminators were brought in to set off gas canisters, during which they had to move out for a few days, and in the end they even paid to replace the expensive wool carpeting.

Nothing worked. People stopped coming over to visit... Repairmen refused to work in the house....The maid quit...

Finally, they could not take the stench any longer and decided to move.

A month later, even though they had cut their price in half, they could not find a buyer for their stinky house. Word got out, and eventually, even the local Realtors refused to return their calls.

Finally, they had to borrow a huge sum of money from the bank to purchase a new place.

The ex-wife called the man, and told him that she missed her old home terribly, and would be willing to reduce her divorce settlement in exchange for getting the house back...

Knowing his ex-wife had no idea about the bad smell problem, he offered to sell the house to her for about 1/10th of what the house had been worth .. but only if she would sign the papers that very day. She agreed, and within the hour, his lawyers delivered the paperwork.

A week later, the man and his new girlfriend stood smirking as they watched the moving company pack everything to take to their new home.......

including the curtain rods!!! 

July 12, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

LOCALLY, HERE'S SOME GOOD NEWS, FOR A CHANGE

On July 11, 2010, the Gazette reported the following items: 

• The local unemployment rate has dropped to 8.3% (That's a drop of 21.7%)
• Single-family home permits are up 25%
• New car and truck registrations are up 38.3%
• Taxable retail sales are up 10.2%
• Hotel occupancy rate is up to 68.1%
• Foreclosure filings are down 18.4%

The Gazette also listed some local employers who have announced job openings 

• Everest University Online plans to hire 400 employees during the next 10-24 months
• USAA to add 237 jobs this year
• Affiliated Computer Services to hire 150 employees this year
• PRC to hire 150 sales reps at their local call-center
• Pikes Peak Behavioral Health Group has 38 open positions
• Intelligent Software Solutions to hire up to 30 software engineers
• CareCore National will hire 20 people, in addition to the 51 already hired
• Firstsource Solutions will hire 15 collection representatives
• Braxton Technologies has added 25 people this year and will hire 12 more software engineers
• Infinity Systems Engineering has some openings
• Ace Hardware Retail Support Center has openings
• Comcast has 20 openings at their local call-center

The bottom line is that 4,500 more area residents were employed in May than in January and 1,000 more job openings are scheduled for the coming months. All of these facts indicate that the Colorado Springs area is coming out of the recession and that companies are viewing our area as the place to move and expand.

NATIONALLY, NEWS IS ALSO GETTING BETTER

Realtor Magazine cites a recent survey by relocation.com which indicates that only 1% of their respondents said they were moving because of foreclosure. This compares to their February survey which found that 5% were moving because of foreclosure.

In February, the relocation.com survey found 13% of respondents were moving because of job loss, but in June, only 4% moved for that reason.

In the June survey, 4% said they planned to purchase a first home when they moved, while 10% said they planned to move to a better home in a nicer neighborhood.

Some 18% of June movers were previous homeowners who moved and were purchasing a new home, up from 12% in February, while 12 % were former renters who planned to purchase a home in the new locale.

All of these numbers demonstrate that the country is recovering from the recession.

GLOBAL INTEREST IN U.S. HOMEOWNERSHIP GROWS

International home buyers are increasingly attracted to property in the U.S., according to the National Association of Realtors. International buyers are coming from 53 different countries around the world, with the top 4 being Canada, Mexico, the U.K. and China/Hong Kong. International buyers were reported in 39 states in 2010, but a slight majority of the total buyers were concentrated in Florida, California, Arizona and Texas. These four states accounted for 53% of purchases and have remained the top destinations for the past three years, with Florida and California remaining the top two destinations.

The median price paid by international buyers for a home in the U.S. was $219,400, a decrease from 2009's median price of $247,100. However, the median price paid by foreign buyers was significantly higher than the overall median price, which was $172,500 in 2009. On average, foreign buyers tend to purchase closer to the upper end of the market; 16% of the total international purchases were for homes priced at more than $500,000.

55% of foreign buyers paid all cash, because of the difficulty in establishing credit in the U.S. Over 34% of potential foreign buyers were unable to complete transactions because of the problem of acquiring financing.

During the past 12 months, foreign buyers are estimated to have purchased $66 billion of U.S. residential property, or 7% of the residential market.

Realtors report that the changes in the value of the U.S. dollar and the perception that purchasing a home in the U.S. is more affordable are the two top reasons for the increased foreign interest. U.S. homes are also seen as holding their value better.

LATEST LOCAL STATISTICS LOOK GREAT !!!

Local home sales in June were 913, an increase of 4.6% over June of 2009. This represents a consistent year-over-year increase for 13 straight months. The median price of $205,000 showed a gain of 5.4% over last June and rose above $200,000 for the first time in 2 years. How many other cities can show that kind of growth?

Unfortunately, these very healthy figures will probably produce a temporary decline in prices in the months ahead. Sellers, encouraged by the increases in sales and prices, are putting their homes back on the market and many other Homeowners, for a variety of reasons, must relocate during the summer months. Both of these groups will add to the available inventory and this will predictably trigger a short-term price decline. The result will be that Sellers will be required to be very aggressive with the pricing of their homes. This means more flexibility in their pricing and more incentives to Buyers.

That's just one more piece of good news for Buyers. Combine record-low interest rates, the growing inventory of homes for sale, the artificial reduction of prices caused by foreclosures and short-sales and Buyers will have the opportunity of a lifetime to buy their new home or their investment property. You can hear more about this topic on our podcast, which has a link at the top of this email.2 

Click here to see the most recent real estate sales and listing statistics for the Pikes Peak area.

WOULD YOU BE BETTER OFF BY REFINANCING AND REINVESTING?

Considering the present cost of money and the fact that inflation is definitely coming, many Homeowners are considering borrowing against the equity in their homes and investing the money in residential real estate. Obviously, each person's financial situation and goals are different, but, looming inflation, current interest rates and your own specific tax bracket could combine to present a once-in-a-lifetime opportunity to increase the value of your portfolio with free money.

Let's take one example of how present conditions could work together to benefit an individual. Assuming a new, fixed-rate, 30-year mortgage at 4.375% and a tax bracket of 28%, the Homebuyer's tax deduction of 28% off of the 4.375% interest payments would bring the actual interest expense down to 3.15% (4.375 X .28 = 1.225% savings). Therefore, when (Note: That's not "if") inflation hits 3.15%, the investor's interest expense would be cancelled out by the appreciation in the value of the property. From then on, it's "free" money.

By the way, inflation is currently running at less than 1%. When the impact of congressional spending increases begins to hit the economy, inflation is bound to skyrocket (Can you say, "Jimmy Carter"?)

Can this investment plan apply to you? Well, the first thing you should do is to ask your accountant or tax advisor how this process would affect your investment portfolio. If he/she agrees that you could profit from this opportunity, call us. We would be happy to go over the numbers with you in more detail and we can show you some great properties.

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

On her recent visit to the United States, the Queen of England was riding in a taxicab in New York City. The cab was stopped in a traffic jam, so the driver, in an attempt to keep the Queen from being bored, said, "Your Highness, would you like to hear a riddle?"

The Queen answered, "That would be very pleasant, young man. Tell me the riddle"

Cabdriver:         "Here's the riddle, Ma'am.  'It's not my Sister. It's not my Brother. And yet, it's the child of my father and mother. Who is it??"

The Queen:       "My word, that's really a puzzler. I can't figure it out. It's not your brother or sister, but it's the child of your parents. Who is it, young man?"

Cabdriver:         "It's Me, Your Highness"

The Queen laughed out loud and slapped her knee. "That's really very clever, young man", she said. "I must remember to tell that one when I get back home"

The Queen returned to England and, that evening, was sitting in the Royal palace. She remembered the riddle and thought she would see if the Prince could figure it out.

The Queen:       "I say, Phillip. Those colonials are so clever. One of them told me this riddle and it's really quite amusing.

The Prince:        Fire away, Mum

The Queen:       "Here's the riddle, Poopsie.

 'It's not my Sister. It's not my Brother. And yet, it's the child of my father and mother. Who is it??"

The Prince thought for a while and finally said, "Well, that's really very confusing. I can't understand who it could be. Who is it?"

The Queen laughed and slapped her knee and replied, "It's a cabdriver in New York City"

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.