HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

DO YOU HAVE MONEY TO BURN ?

If you are not under contract by April 30, 2010 to buy your new home, you will be throwing away your chance to cash in on the federal tax credit of between $8000 and $6500. That’s when this program expires (and it doesn’t look like it will be renewed). Also, consider this: New FHA rules go into effect on April 5, 2010 and they will make it even more expensive for you to buy your home after that date.

Finally, just one more piece of evidence that inflation will begin to hit the housing market within the next two quarters (and thus, will increase the price you will have to pay for your new home) ….Builders use lots of copper in the construction process (wiring, piping, etc.) and earthquake-stricken Chile is the 3rd largest producer of copper in the world. In our last issue, we pointed out that a lumber shortage is beginning to affect building prices. Now it appears that a shortage of copper will also begin to be a factor for builders. Don’t be a Mugwump. Call us.

IT’S HARD TO CLIMB INTO THE LIFEBOAT WHILE YOU’RE STILL UNDER WATER

The Wall Street Journal (March 3, 2010) featured an interesting article explaining why the federal programs designed to help troubled homeowners stay in their homes have had such limited success. In theory, homeowners should be lined up to take advantage of these programs. Around 37% of all borrowers with 30-year conforming fixed-rate mortgages have mortgage rates of 6% or higher. Many of these homeowners could refinance at today’s rates and reduce their rates by a full percentage point, thus saving, on-average, $2,600 every year. Yet, through December, only 188,000 borrowers who owe between 80% and 105% of the value of their homes had refinanced.

Some mortgage bankers say that higher fees by lenders have undermined the effort to encourage refinancing. For example, a borrower with 20% down and a 695 credit score seeking to refinance must pay fees equal to 1% of the loan amount. These fees rise for borrowers with weaker credit scores, higher loan-to-value ratios or other risk factors. These fees “have defeated the Fed’s purchase program”, according to Alan Boyce, a mortgage-securities-market veteran. These loan fees are “partly responsible for why there’s been no refinancing boom.”

Furthermore, many homeowners are so far underwater that refinancing is out of the question. For example, John Albright, a retired Navy officer in Manassas, VA,, hasn’t been  able to refinance because the value of his home has plunged. He figures the market-value of his home is now around $275,000, but he and his wife owe more than $500,000 on their mortgage. When he tried to refinance, his lender told him he would have to come up with about $200,000 to pay down his mortgage before refinancing would be possible. Falling home values are one of the biggest factors raising borrowers refinancing costs. Furthermore, borrowers with less than 20% equity may have to pay for mortgage insurance.

As a result of all of these factors, borrowers who are now refinancing tend to be those who need it least. They are people who have very good credit “and the savings really aren’t going very far down the credit spectrum”, according to Michael Fratantoni, the head of research and economics for the MBA.

The Obama administration is planning to extend for a year a program launched last April to help homeowners with little or no equity to refinance. Last September, it was even expanded to include borrowers who owe up to 125% of their home value, but fewer than 2,000 borrowers have used the program through December. The program, which had been set to expire this June, was called “a failure” last week by analysts at Barclays Capital.

The bottom line is that, unless something changes, it looks like troubled homeowners will just have to keep paddling as fast as they can for a while.  

HOMEBUYERS EXPECT THEIR AGENTS TO BE GOOD NEGOTIATORS

In 2009, the National Association of Realtors published the results of their survey of home Buyers and Sellers.  The comments from the survey respondents reinforced our long-held opinion that that the negotiating skills of agents are a huge factor in bringing real estate transactions to successful and satisfying conclusions. Some of the survey responses indicated that:

  • 99% of Buyers believe negotiation skills are “Very Important”. or, “Somewhat Important” in their real estate agent
  • Only 42% of all Buyers felt that their agent negotiated “better contract terms” on their behalf
  • Only 36% of all Buyers felt that their agents “negotiated a better price”
  • Buyers gave “Negotiating Skills” the lowest satisfaction rating of all agent skills and qualities.

Just a few of the areas of a typical real estate transaction in which negotiating skills become a factor are:

v  Establishing current market value/price

v  Listing details – What stays and what goes, allowances, etc.

v  Amount of earnest money required

v  Choices in financing

v  Establishing and coordinating performance dates

v  Inspection, replacement, repairs of problems

v  Special add-ons such as Warranties, Job-Loss-Protection, etc.

With these facts as background, we were excited to hear that the real estate Negotiation Institute had scheduled their Certification Program for Real Estate Professionals this month in Colorado. This would mark the first time this program has been available in our state. Because we have always been convinced that negotiating on behalf of our clients is one of our major responsibilities, we immediately enrolled in this important CNE program and are pleased to announce that we have successfully completed the training and have been awarded the coveted “Certified Negotiation Expert” designation by the CNE. We are especially proud of this achievement, since only 5000 of the 1.1 million Realtors nationwide have been awarded this certification.  

And, please remember, I would be honored to use my negotiating skills 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. 

COLORADO SPRINGS IS WIRED

Forbes.com has ranked Colorado Springs as the nation’s sixth-most-wired city in its annual ranking, ahead of technology hotbeds such as Boston and San Jose, California. Our first appearance on the list was triggered as a result of higher broadband usage than in previous years – 69%. Or, just 2% less than top-ranked Raleigh, NC., and eighth among all cities. We rank 11th in the number of companies providing broadband access with 15, and also 11th in Wi-Fi hot spots. How about that !!!

LATEST STATISTICS LOOKING GOOD !!

On Friday, March 5, 2010, The Gazette reported that “home sales and prices rose again last month in the Pikes Peak region, continuing a string of better showings for the local resale market”. Single family/patio home sales in February were 504, compared with 464 in February of 2009. New listings were 1,389, compared with 1,312 in 2009. It was the eighth straight month that year-over-year sales have improved, after nearly three years of declines. For the first two months of the year, sales totaled 1,035, a 12.9% increase over the same period in 2009. It looks like we are well into a rebound from the recession.

LAS VEGAS, HERE WE COME !!

This week, we will be attending the annual meeting of “Leading real estate Companies of the World”, in Las Vegas, NV. This is a great opportunity for us to keep current on the latest information about Real Estate and relocation and it helps us serve our clients more effectively. Many of our readers will also be there, so we look forward to seeing you all there. 

JOKE OF THE WEEK

With Springtime just around the corner, we thought it might be time for a couple of jokes about robins from Aesop’s fables. The first one warns us about complacency and the second one urges us to control our appetites.

1      Two robins were sitting in a tree. "I'm really hungry", said the first one. "Me, too," said the second. "Let's fly down and find some lunch." They flew to the ground and found a nice plot of plowed ground full of worms. They ate and ate and ate and ate until they could eat no more. "I'm so full I don't think I can fly back up to the tree", said the first robin. "Me, either. Let's just lay here and bask in the warm sun", said the second. They plopped down, basking in the sun. No sooner had they fallen asleep than a big fat tomcat sneaked up and gobbled them up. As he sat washing his face after his meal, he thought, "I just love baskin' robins."

2      Two robins were sitting in a tree. "I'm really hungry", said the first one. "Me, too," said the second.    "Let's fly down and find some lunch." They flew to the ground and, in the middle of the road, they found some road apples (Our urban readers will have to find a horseowner to translate that expression for them). They ate and ate and ate and ate until they could eat no more. Then, they flew into the front yard of the adjacent lot and perched on the handle of the homeowner’s lawnmower to rest. Unfortunately, they had gorged themselves so much that, when they tried to fly off, they both had heart attacks and fell to the ground, dead. The moral to the story is, “ Don’t fly off the handle, if you are full of road apples”.