HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

UP, UP AND AWAY !!!  LOCAL SALES ARE LOOKING GOOD

Our local Residential real estate market experienced another solid gain through March 31, 2010. The 723 residential sales in March, 2010, represent an increase of 27.7% over March, 2009 and 26.4% over February, 2010. Our average sales price is now $215,625, an increase of 4% from February, 2010. Our median sales price is now $189,900, an increase of 4.3% from February, 2010. These increases represent 9 consecutive monthly increases in local residential sales. How many other communities can say that??

In addition to the rise in home sales, another significant indicator of our local economy’s strength is the income derived from sales taxes. Sales tax revenues were up 3.38% from March, 2009. This was the fifth consecutive month of increases and demonstrates our citizens’ confidence in our economy.

ONE MAN’S TRASH IS ANOTHER MAN’S TREASURE – OR – TO PUT IT ANOTHER WAY, ONE MAN’S FORECLOSURE IS ANOTHER MAN’S OPPORTUNITY

Even if you already own your home and don’t intend to sell, the real estate market has some opportunities that you should explore. First, let’s quote from some recent headlines: “Home Resales Continue to Streak” (The Gazette). “Check the Real Estate: It Is Time to Dive In” (The Wall Street Journal). “Homebuyers Scramble as Rates Jump” (Associated Press).

Are these headlines accurate? Well, all we can say is that we have negotiated more contracts in the past four weeks than we have in the last six months. Obviously, home prices are trending upward and people are jumping into the market, before they get priced out of it.

In addition to the rise in basic home prices, mortgage rates are also rising. On April 9, the Wall Street Journal reported the published mortgage rate from Freddie Mac was 5.21% and the Associated Press reported, “more than 5.3% in the past week”. These rates represent an 8 month high for 30 year, fixed-mortgages. This rise in rates can be traced to several factors e.g. An improving economy, the end of the government’s push to make mortgages cheaper by means of mortgage-backed securities, the beginnings of inflation, etc.

What do these trends mean to prospective homebuyers? Well, for every 1% rise in rates,300,000 to 400,000 “would-be-buyers” are priced out of the market. The rule of thumb is that, with every 1 percentage point increase in rates, a buyer’s purchasing power is reduced by about 10%. This means that the buyer who can qualify for a $300,000 home today, will only qualify for a $268,500 home when interest rates go from 5% to 6%.

Is this news bad for everyone? Well, for prospective buyers, it could represent bad news. It means they might have to settle for a less expensive home, or, if they are near the bottom of the ladder, they might have to defer purchasing in favor of renting. For investors, however, the current upward trend in prices and rates means that their pool of prospective renters will increase. To put it another way, for every buyer who is lost, another renter enters the market.

If you would like to explore the benefits of owning rental property, please give us a call. The time is right to consider this opportunity.

NEGOTIATING MEANS – “EVERYBODY WINS”

Since we announced our certification by CNE as a Certified Negotiation Expert, we have been asked by several of our clients and fellow Realtors why we are so strongly emphasizing the Realtor’s role as a negotiator in today’s real estate market. The answer is simple. When we consider that all Realtors, as well as their clients, now have access to all of the same internet sources of information about properties on the market, it’s obvious that the role of the Realtor must change.

In today’s market, the Realtor cannot remain merely the conveyor of data from the Buyer to the Seller, but must become, rather, the facilitator for resolving differences between the Buyer and the Seller. If Realtors cannot or will not serve as that facilitator, they really have nothing of value to contribute to the process. I was reminded of that fact just last week, when another Realtor submitted an offer on one of our listings.

Our client, the Seller, had ‘dug their heels in’ with an “absolute minimum” selling price of $319,000. The prospective Buyer had ‘dug their heels in’ with an offer of $315,000. At this point, the only options were to call off the deal, or, to negotiate. i.e. to make winners of both the Buyer and the Seller.

So, after reviewing the current market data with the Buyer’s agent, as a facilitator, we took the opportunity to point out several significant factors:

  • The market has taken a turn for the better and, based upon the most recent sales data from all national and local sources, the experts say that it does not appear that prices will go down any further. In fact, prices have now started to rise
  • Last month, properties in the neighborhood involved sold for 99.2% of their listed price, indicating that the Seller’s asking price was appropriate and reasonable.
  • The difference between the two parties was only $4000. That translates into an increase in the monthly mortgage payment of only $22.08, or $1324 over the five-year period that the Buyer will probably own the house.
  • When the income tax deduction on the loan interest is factored in, the actual difference between offer and demand is closer to $1000 over the five-year ownership period.
  • The federal tax credit expires at the end of this month
  • Through our preferred lenders, we had access to a better interest rate for the mortgage than the Buyer did. (That, alone, should have sealed the deal)

Considering all of these factors, the Buyer chose to sign the contract and both parties left the table happy. That’s the goal of negotiation and demonstrates the new role of the Realtor.

Today’s Realtor must know and understand the latest statistics and must be familiar with the local market. He/she must have developed good local resources for funding and services and must be willing to serve as a negotiator and facilitator. That way, “Everybody Wins”.

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

We don’t know why the following joke seems, somehow, timely.

The photographer for a national magazine was assigned to get photos of an enormous forest fire. Smoke at the scene was too thick to get any good shots, so he frantically called his office to ask them to hire a plane.

"It will be waiting for you at the airport" his editor assured him. 

As soon as he got to the small, rural airport, sure enough, a plane was warming up near the runway. He jumped in with his equipment and yelled, "Let's go! Let's go!" The pilot swung the plane into the wind and soon they were in the air.

"Fly over the north side of the fire," said the photographer, "and make three or four low level passes." 

"Why?" asked the pilot.

"Because I'm going to take pictures! I'm a photographer, and photographers take pictures!"  the photographer replied impatiently.

After a long pause the pilot said, "You mean you're not the instructor?" 

AND BY THE WAY

Aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it deosn’t mttaer in waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht the frist and lsat ltteer be at the rghit pclae. The rset can be a total mses and you can sitll raed it wouthit porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe. Pettry amzanig huh?