HARRY'S BI-WEEKLY UPDAATE 11.10.14
November 10, 2014
HARRY’S BI-WEEKLY UPDATE
A Current Look at the Colorado Springs Residential real estate Market
As part of my Personal Service, it is my desire to share current real estate issues that will help to make you a more successful and profitable buyer or seller.
THE “AMERICAN DREAM” IS STILL VERY MUCH ALIVE
I recently came across this pin I received many years ago and it caused me to think about some of the reasons I first went into real estate (other than needing a job!). What I have done every day for the past 42 plus years has given me great personal satisfaction and continues to do so. I see myself as a “conduit” of sorts in helping others to achieve both their personal and financial residential Real Estate goals.
I’ve sold many “first-time” homes and watched as the owners built enough equity to trade-up to another home. The folks that I’ve helped relocate from around the world, around the country or just around the corner have contributed to making my adopted hometown a more special place to live. For those interested in investment income as part of their “financial management portfolio” I’ve helped find the right property for their needs.
Each and every client has played a role in not only making me better at what I do, but has given me insight into the importance of a real estate Broker’s relationship with their clients. My Investment Banking background has certainly played a role in helping my clients determine exactly what is best for their particular wants, needs and budget. No sale is ever the same and no client is either.
In today’s housing market, it’s more important than ever to have the type of knowledge and experience that a qualified real estate Broker such a I brings to the table. There are so many federal and state regulations that are constantly changing and new mortgage lending acts that affect how and to whom a lender can provide help. While it can be somewhat confusing to know which way to go when you are in the market—that’s our job. The homework I do for you can save you time, money and disappointment—not to mention stress.
Achieving the “American Dream” is still my goal for all my clients and, even in tough times, there is most always a way to achieve it. With mortgage rates still historically low and home prices rising steadily but slower than in the recent past, there are great opportunities out there.
If you or any family member, co-worker or friend is interested in finding out how to make today’s market work best, please give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let me see how I can make the dream a reality.
OCTOBER LOCAL STATISTICS CONTINUE UPWARD TREND
Statistics provided by the Pikes Peak REALTORS Service Corp, or it’s PPMLS
Local home sales have risen for five of the past six months, with sales in October totaling 972, a 4.6% increase over the same period last year. Sales year-to-date in 2014 have been the highest of any similar period since 2006.
Low interest rates are helping to drive sales during what is normally a slower time of year for the residential real estate market. The supply of local homes has slowly decreased in each of the last three months, helping to boost prices. This low interest rate trend won’t be around forever, but at the moment it is helping keep payments down even with higher home prices.
Here are some highlights from the PPAR report. Please click here to view the detailed 10-pages . If you have any questions, please give me a call.
In comparing October 2014 to October 2013 in PPAR:
Single Family/Patio Homes:
- New Listings are 1,187, Up 1.3%
- Number of Sales are 972, Up 4.6%
- Average Sales Price is $256,678 Up 3.6%
- Median Sales Price is $224,950, Up 3.2%
- Total Active Listings are 3,501, Down 10.5%
Condo/Townhomes:
- New Listings are 145, Up 7.4%
- Number of Sales are 134, Up 0.8%
- Average Sales Price is $161,523, Up 6.8%
- Median Sales Price is $147,000, Up 13.2%
- Total Active Listings are 386, Down 11.9%
COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*
Median Sales Price Average Sales Price
Black Forest $408,688 $425,919
Briargate $279,500 $300,357
Central $188,000 $208,983
East $180,000 $190,473
Fountain Valley: $195,000 $198,090
Manitou Springs: $350,000 $347,500
Marksheffel: $222,500 $248,545
Northeast: $225,000 $240,988
Northgate: $364,658 $389,713
Northwest: $313,000 $347,572
Old Colorado City: $194,850 $212,286
Powers: $214,950 $220,462
Southwest: $260,750 $361,472
Tri-Lakes: $385,529 $391,763
West: $237,500 $327,909
*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.
HOME PRICE GROWTH REMAINS STEADY IN MAJORITY OF METRO AREAS IN THIRD QUARTER
National Association of Realtors, 11.6.14
The median existing single-family home price increased in 73% of measured markets, with 125 out of 172 metropolitan statistical areas (MSA’s) showing gains based on closings in the third quarter compared with the third quarter of 2013.
Lawrence Yun, NAR chief economist, says home prices in the third quarter continued to stabilize towards a healthier growth. “Home-price gains returned to more normalized levels of low-to-mid-single digit rate appreciation in many metro markets as inventory levels steadily increased,” he said. “Moreover, there are a good number of local markets that are still remarkably affordable with median prices at or under $200,000.”
He added that “given the improving labor market and historically low interest rates, more buyers are anticipated to enter the market next year.”
Nationally, median sales price for all the MSA’s rose by 4.9%. Colorado Springs saw a 4.2% increase, which, while less than the national average, was considerably better than in the last report.
To read the 3-page report comparing all 172 metro areas in the survey, please click here.
FIRST TIME BUYERS HIT A 27 YEAR LOW
The Wall Street Journal, 11.7.14
Of the primary residences sold this year so far, only 33% were purchased by first-time Buyers—the lowest level since 1981. NAR reported that first-time Buyers typically make up 40% of home sales.
Some of the reasons cited for the decline include higher student loan debt, rising rents and a weaker job market. These make it much harder for would-be Buyers to save for a down payment and qualify for a mortgage, particularly in today’s bank lending environment.
Also, many first timers have not been able to get as much help from their families as in the past, because their parents’ homes may have fallen sharply in value, according to a survey by the New York Fed.
Rising prices during the past two years have fixed a number of problems in the housing market. This makes consumers more willing to purchase homes or fix up the ones they live in. It also make sit easier for owners to sell if they get into trouble on their mortgage, limiting foreclosures.
However, the NAR survey found that rising prices have made them less affordable for the marginal or first-time Buyer. Even though it’s been possible throughout the housing downturn to get a mortgage with a down payment of just 3.5% through the FHA, they have raised the fees that they charge significantly over the past few years, making those loans more expensive.
AS HOME OWNERSHIP DROPS…WHO’S TO BLAME?
Realtor Mag. The Gazette, 10.29.14
Home ownership in the United States dropped to a 20-year low in the third quarter as more American became renters, yet another sign that the housing recovery is still mending from the Great Recession.
The Census Bureau reported last week that 64.4% of U.S. households owned their homes, down from 64.7% in the prior three months. That’s the lowest rate since 1995, and down from a peak of 69.2% in 2004, before millions of homes were lost to foreclosure during the recession.
The number of owner-occupied homes fell from 74.9 million in the third quarter 2013 to 74.2 million in the third quarter this year. Rental households grew from 39.9 million to 41.1 million during the same period.
While Millennials and their changing preferences often take the heat for the decline in home ownership numbers, they can’t take the blame for the latest dip according to an article in The Atlantic.
Instead, it’s Generation X, those between the ages of 35-44 who have had the sharpest drop in home ownership since the recession. Home ownership among that group has dropped 9% since 1994.
According to an analysis of Census data by The Atlantic, home ownership for the Millennials in the last 20 years has fallen less than for any other age group under 64.
The article says that employment may be the key factor that is keeping Gen Xers away. Researchers noted that employees in their 40’s once outnumbered their 55-plus cohorts in the workforce by 16 million, but now there are actually more workers older than 55 than fortysomethings.
THE REASONS RENTERS KEEP RENTING
Realtor Mag, Housing Perspectives/ 10.29.14
The majority of Americans who do not own a home say they hope to one day and have strong feelings about home ownership. But about 20% of renters are adamant about renting and say they intend to stay renters now and into the future.
Researchers at Harvard’s Joint Center for Housing Studies recently surveyed such renters to find out why.
The bottom line: it’s not the lifestyle choices but financial constraints that renters say keep them from purchasing a home in the future. More than half of those surveyed said they do not intend to buy because they think they cannot afford it or their credit is not good enough.
According to the research, the top 10 reasons renters give for not planning to buy a home:
- Cannot afford the purchase or upkeep of a home.
- Not good enough credit for a mortgage.
- Not a good time economically to buy a home.
- Cheaper per month to rent than to buy.
- Don’t want to be concerned with doing the upkeep.
- Don’t plan to be in a certain area for an extended period of time.
- Rather use the money for other investments than a home.
- Process of buying a home seems too complicated.
- Purchasing a home limits flexibility in future choices.
- Can live in better neighborhood by renting.
Another bottom line as far as I see it: If you are looking for Investment Property to rent out, now is a great time. There is a shortage of apartment rentals available, rental rates are rising each quarter and there are plenty of folks looking to rent. If you are interested in discussing this possibility, give me a call and let’s see where you can go with this.
HARRY’S HUMOR OF THE DAY
This was shared with me this past week. Thought you would find it interesting.
“The Commerce Department reported that September new home sales increased 0.2% from August. The problem is the report has a reported margin of error of +/- 15.7%. September sales could have been up as much as 15.9% or down by 15.5%, no one knows!
The month before, sales were up 18%, but were they? In August the margin of error was +/- 16.3%!!! The solution? Totally ignore these monthly reports..”
By Elliot F. Eisenberg, Ph.D.
GraphsandLaughs, LLC
