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"