September 15, 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.

                                      

INSIDE THIS ISSUE…

As you are probably aware, our first “Update” each month normally deals with local housing statistics and findings while the second has more emphasis on national housing news.  In this issue, along with national news, I would like to share with you how homeownership impacts your net worth and how you can prepare for homeownership if you are new to the market.  I also want to reemphasize the importance of using a qualified, knowledgeable real estate Broker in all your home Buying and Selling transactions and will explain in more detail why this should be of utmost importance to you.

So, sit back, relax and take a minute to digest information that I hope will help you in making informed decisions when it comes to residential real estate.

 

HOMEOWNERSHIP’S IMPACT ON NET WORTH

Keeping current matters, 8.12.14

During the housing bust, homeownership may have lost some of its allure as a financial investment and more and more homeowners began to question whether owning a home was truly a good way to build wealth. 

The Federal Reserve’s Study of Consumer Finances, which is conducted every three years, provides a snapshot of family income and net worth along with basic demographic details and more detailed information on where families keep the wealth they have accumulated. 

The most recent study, conducted in 2013, offers a picture of the situation as home and equity prices normalized for most household balance sheets.  

Some of their findings from that and a study done a year earlier reveal:

  • The average American family has a net worth of $77,300
  • Of that net worth, 61.4% ($47,500) of it is in home equity
  • A homeowner’s net worth is over thirty times great than that of a renter
  • The average homeowner has a net worth of $174,500 while the average net worth of a renter is $5,100
  • Many households own a primary residence (65.2%).  It is the most commonly held non-financial asset after vehicles (86.3%)

                   

BOTTOM LINE:  The Fed study found that homeownership is still a great way tor a family to build wealth in America.  Naturally, if they had asked me I would have saved them the time from doing a formal study because over the course of the past 42 years in the real estate arena I’ve found this to be absolutely true.  Homeownership is not just a big part of the American Dream—it plays an enormous role in the net worth of many families. 

 

INTERNET HOME INFORMATION VS. real estate PROFESSIONALS

Inman.com 9.8.14

There are a number of Internet sites that purport to reveal how much your home is worth.  They are called “automated valuation model” (AVM) sites and they use statistical modeling techniques that calculate the property value by comparing it with similar-sized homes that have already sold in your area.  These tools crunch their data with publicly available numbers from several listing services and combine them with regional trends to set a sales price for your property.

Amazing, right?  With that type of information readily available, the question every Seller asks themselves is:  Do I really need a real estate Agent to help me through the “assessment” process?

Well, guess what?  There’s a reason why we real estate Brokers exist.  Actually, there is more than one reason why we are vitally important in any Real Estate transaction. I’d like to share them with you.

  • These tools are not always accurate. 

Actually, some Realtors also use these tools to start a customer’s property evaluation. However, there is a lot more detail that is done after those results are revealed.  Most AVMs confirm their evaluations may be off by 5 percent and actually they are sometimes inaccurate by up to 20 percent, according to a study by Standard & Poor’s.  One of the reasons being that old data is being used, especially in a fast-moving market. 

This would mean that anyone strictly using this data may be pricing their home way higher or under market and consequently losing either money or potential Buyers.

 

  • There are several factors contributing towards the price of a home that the tools do not necessarily catch. 

Market data is only one of several pieces of information that compose the valuation range of a property.  The rest is very property-specific and includes such things as whether you have made upgrades or whether your roof is too old—just to name a couple.

Other factors include the old “Location! Location! Location!” that I always talk about.  Is the neighborhood desirable for potential Buyers?  Is it safe?  Are there good schools?  How close are shopping malls or grocery stores?  The AVM tools just can’t possibly know these things. And most often, location is one of the most important factors in a Buyer’s decision-making process.

        

  • Here is where a Realtor’s experience counts—A LOT—in this process.    

real estate Agents are trained to do a comparative market analysis (CMA) for every property they list for sale.  To help pin down the ideal listing price range, a Broker will go to the property and literally inspect the home, the neighborhood and everything necessary to demonstrate to potential Buyers how the selling price is the “right” price. 

This is where using an experienced, knowledgeable Broker is especially important because you have the services of someone uniquely qualified to evaluate and negotiate the best price for your home.  

Preparing a CMA is an art, not a science and no one size fits all.  Well-thought-out CMAs need deep knowledge of property sales in a given neighborhood.  With my 42 plus years of selling local real estate, you can rest assured that my judgments are based on my vast understanding of the local market and all the peculiarities that affect price, such as lot size, lot orientation; tax-assessed value; and features of the lot, including terrain, access and privacy, improvements and additions, conditions, quality and age.

I know which homes are uniquely “right” based on the priorities of my clients.  An Internet search cannot possibly take your needs and wants into consideration.   

BOTTOM LINE:  Every home is unique and must be valued accordingly. 

I hope this gave you a little insight into what actually needs to go into the pricing of your home in order to get the best value without pricing it out of the market.  My job is to help you take all factors into consideration and make certain you are not “leaving any money on the table” or asking more than potential Buyers are willing to spend for the property.  I give each property a CMA based on my many years in the business.  This gives a property an “appropriate” selling price and helps reduce time on the market. 

If you are considering a move, please give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let me help you with your Buying and/or Selling concerns.  With more than 2000 transactions over the past 42 years, you can rest assured I’m uniquely qualified to help you with all your real estate needs.

 

FOURTH QUARTER SLOWEST IN TERMS OF HOME SALES

Generally speaking, the fourth quarter of the year is the slowest in residential real estate sales.  The holidays are approaching, schools are in session and the cooler weather are just some of the reasons for this trend.

That said, the fourth quarter is oftentimes a good time for Buyers because Sellers are more motivated due to the slower demand and prices can be negotiated a bit easier than during the Spring frenzy.

Sellers also need to take a look at their current listing price and determine if a slight reduction or other changes could help in getting their property to closing quicker. 

There are a number of factors to consider whether Buying or Selling this time of year and if you have any questions on either, please give me a call and let’s see how we can help make your goals a reality.

 

HOUSING RECOVERY WILL CONTINUE GRADUALLY

RisMedia, 9.11.14, CoreLogic, 9.5.14, DSNews, 9.9.14

Home prices rose nationally by 7.4% in July 2014 over July 2013, according to CoreLogic, a leading global property information analytics and data-enabled services provider.   This represents 29 months of consecutive year-over-year increases in home prices nationally, a sign that the housing market is finally returning to a more normal state.

The CoreLogic forecast indicates that home prices, including distressed sales, are projected to increase 0.6% month over month from July 2014 to August 2014 and on a year-over-year basis by 5.7% from July 2014 to July 2015.

“Home prices continued to march higher across much of the U.S. in July.  Most states are reaching price levels not seen since the boom year of 2006,” said Anand Nallathambi, president and CEO of CoreLogic.  “Our data indicates that this trend will continue, with more states hitting new all-time peaks this year and into 2015 as the recovery continues.”

According to Fannie Mae’s August 2014 National Housing Survey” Americans’ attitudes toward the housing market continued to soften in August and suggest that housing activity may resume its modest recovery in 2015 after some pullback this year.”

Another good sign in the local market saw foreclosure filings fall in August.  Filings through the first eight months of the year totaled 1,267, an 8.8 percent decline over the same period in 2013.  An improving single-family housing market has contributed to a better outlook on foreclosures. 

BOTTOM LINE:  With home prices rising slowly but steadily, mortgage rates still historically low and a less frenetic selling period during the last quarter of the year—NOW is a great time to Buy.

 

SOUTHERN COLORADO ECONOMIC FORUM SET FOR OCTOBER 10

The 18th Annual Southern Colorado Economic Forum will be held at the Antlers Hilton Hotel on October 10, 2014 from 7:00  – 11:30 a.m.

The event is chaired by Ron Chernak, President of the FBB, Ltd,  It includes a Keynote address by Gary Schlossberg, Senior Economist, Wells Capital Management as well as Forum Results: Economic Conditions in the Pikes Peak Region and the Outlook for the Next 12 Months—presented by Tatiana Bailey, Ph.D. and Tom Zwirlein, Ph.D., College of Business and Administration, UCCS. 

There will be a question and answer period as well as a panel discussion entitled “Catching the Colorado Wave:  Entrepreneurship and Innovation in Southern Colorado”.  The moderator is Steve Bigari, CEO and Founder, Stellar Restaurant Solutions and Panelists include Tom Neppl, President and CEO, Springs Fabrication, Randy Scott, President, Southern Colorado Business Partnership, and Karla Tartz, Deputy Director, Office of Economic Development and International Trade.

Salzman real estate Services, LTD is proud to be a Sponsor of the Forum as we have been for each of the past 18 years.  We are the only Residential Real Estate Company to sponsor this event.

The information gathered at this Forum is invaluable for all business owners and professionals who work in the Pikes Peak area.  Reservations will go quickly for this always sold-out event, so I encourage you register on-line as soon as possible at: www.SouthernColoradoEconomicForum.com. 

 

 HARRY’S THOUGHT OF THE DAY

The first man to make a mountain out of a molehill

sold real estate.