HARRY'S BI-WEEKLY UPDATE 1.25.16
January 25, 2016
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.
COLORADO SPRINGS IS NUMBER SIX IN TOP TEN HOUSING MARKETS FOR 2016
Bloomberg New, 12.8.15
Rising home prices are not a problem in the “Bargain Belt”—parts of the South and Midwest where the job market gains have outpaced the rise in home prices, says Ralph McLaughlin, an economist for Trulia, an online residential real estate site for home buyers, sellers, renters and real estate professionals in the United States.
Here are the top ten, in reverse order, of McLaughlin’s take on the hottest housing markets for 2016 based on job growth, vacancies, good affordability, search data and presence of millenials:
10. Tacoma, WA
9. Las Vegas, NV
8. Riverside, CA
7. Columbia, SC
6. Colorado Springs, CO
5. San Antonio, TX
4. Baton Rouge, LA
3. Austin, TX
2. Charleston, SC
1. Grand Rapids, MI
Those of us who live here know this is a great place to live based on all of the above factors and so much more. It’s always nice, though, to see that we are getting national exposure as a “hot” housing market. Our continued median home price increases and low available listings are most definitely contributing to the “sellers” market we’ve been experiencing. Hopefully, now that the holiday season is over and we prepare for the Spring selling period we will see more folks trading up or relocating to new neighborhoods and using their increased home equity to do so.
LOCAL MARKET UPDATE AND MONTHLY INDICATORS CONTINUE TO SHINE
Pikes Peak REALTORS® Services Corp.,
The recently published Monthly Indicators and Local Market Update for December 2015 for El Paso and Teller Counties gives you a complete report of what the local housing market is doing and breaks it down by neighborhood.
It provides greater detail than the monthly “PPAR Monthly Statistics” that I share in the first eNewletter of each month.
The “Activity Snapshot” shows the one-year change:
- Sold Listings for All Properties was up 27.3%
- Median Sales Price for All Properties was up 7.4%
- Active Listings on All Properties was down 38.5%.
Again, you can see that while prices continue to rise, active listings are way down. There’s not much I can do but warn you again that if you’ve even considered a new home, NOW is the time.
You can click here to read the 16-page Monthly Indicators or click here to get specific information on the neighborhood of your choice from the 33-page Local Market Update.
If you have any questions concerning the reports, please contact me.
VOLATILE STOCK MARKET HELPS KEEP MORTGAGE RATES LOW
While the month of January hasn’t been too good for the stock market, it has been good for folks who are still wanting to get in on the recent historically low mortgage interest rates. Even though the Federal Reserve raised rates for the first time in many years in December, it hasn’t yet affected mortgage rates, most likely due to the volatility of the stock market and other economic indicators.
This is great news for those who have been sitting on the fence or have considered purchasing residential real estate for investment purposes. While home prices have been rising steadily, lower interest rates help make monthly payments more affordable for many. And with rental rates continually on the rise, if you’ve been thinking of investment property, now is a good time.
As I’ve said several times, being a landlord isn’t for everyone, but if you think it’s something you want to consider, please give me a call and let’s discuss the possibilities.
Also, if you are one of those “fence sitters”, NOW is the time to make your move. Just give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let’s see if we can make your real estate dreams a reality.
HOUSING EXPECTATIONS FOR 2016
National Association of Realtors®, 1.12.16
The Infographic from NAR pictured below shows their Housing Expectations for 2016. As you can see, everything is on an upward trend, including interest rates, so again—advanced notice to the “fence sitters”.
Lawrence Yun, NAR Chief Economist, points to pent-up buyer demand, sustained job growth and improving inventory conditions as reasons for his expected gain (from 2015) in new and existing-home sales.
However, despite his forecasted increase in sales, Yun cites rising mortgage rates, home prices still outpacing wages and shaky global economic conditions as headwinds that will likely hold back a stronger pace of sales.
NEW HOMES MAY ADD ROOM FOR HOUSEMATES
The Wall Street Journal, 1.23.16
Last week was the home industry’s largest home-building trade show and one of the new models featured an unexpected design concept: roommates.
In a nod to rising housing costs across the U.S., many buyers are looking for a home that can be used for non-traditional living arrangements to help ease families’ financial burdens. I have also found this to be something some of my buyers are considering when looking to sell and trade up or buy for the first time along with their parents.
With affordability concerns, some folks are starting to look for second stories or basements that can house aging parents or recent college grads with shaky employment prospects.
U.S. home prices have increased by 25% since the beginning of the recovery in 2011, according to the S&P/Case Shilling Home Price Index, while median incomes have hardly increased. And apartment rents have jumped by 20% since 2010, according to data tracker Reis, Inc., making it harder for folks to save for a down payment.
If you are looking for a multi-generational living environment, there are certainly homes that can be used or transformed to suite your needs and wants. Just give me a call and let’s see what might be available for those purposes.
NO HOUSING BUBBLE IN SIGHT
RealtorMag,, 11.21.15
While we are nearing the 10-year anniversary of the 2006-2007 housing bubble, housing experts say that there are many reasons why Americans shouldn’t be concerned about a housing crisis repeat anytime soon.
They site these six reasons to back them up:
- Fixed-rate loans have become more common. With historically low interest rates, many Americans have refinanced to a fixed-rate mortgage, so when rates begin to rise—which is likely to happen this year—there will not be as much shock with short-term Adjustable Rate Mortgages compared to the 2006-2009 era. During that period, many people had their ARMs reset and then could no longer afford their payments, thus sending defaults skyrocketing.
- Old distress is being flushed out through bank repossessions. While bank repossessions have recently reached the highest levels in more than two years, the reason behind this has been attributed to banks who are flushing out old distress rather than adding more.
- Foreclosures have fallen drastically. Despite the rise in bank repossessions, the number of loans in foreclosure is 2.1 percent, the lowest level since 2007, according to the Mortgage Bankers Association.
- First-time buyer programs are bringing new buyers into the market. New programs that assist first-time buyers with a down payment are growing. The FHA moved last year to reduce its annual mortgage insurance premiums by up to $900 a year—a move that has been predicted to help jump-start home sales by up to 5.6 million, the most since 2006. And according to NAR, this could lure 140,000 new buyers to the market.
- The economy is strengthening. Over the past five years, the U.S. has added jobs at a steady rate, now replacing many of the jobs that had been lost during the recession. The quality of jobs is improving as the economy strengthens.
- New-home construction remains dismal. The supply of existing home for sale is lower now than it was in 2000. New single-family starts remain 60 percent below the peak in 2006 and are about 25 percent below the average for the past 15 years. An oversupply of the homes on the market isn’t likely anytime soon.
SHOULD I BUY NOW OR WAIT UNTIL NEXT YEAR?
KeepingCurrentMatters, 1.22.16
A very good question that can be answered by the inforgraphic below:
Some Highlights:
The “Cost of Waiting to Buy” is defined as the additional funds it would take to buy a home if prices and interest rates were to increase over a period of time.
Freddie Mac predicts interest rates to rise to 4.7% by next year.
CoreLogic predicts home prices to appreciate by 5.3% over the next 12 months.
If you are ready and able to buy or trade up to your “dream home”, now is the time to find out if it’s possible. Just give me a call and we can see if your wants and needs can fit into your budget.
HARRY’S JOKES OF THE DAY
Low Maintenance:
I just listed a low maintenance house. In the past 25 years, there has been no maintenance.
Competition:
A small real estate broker was dismayed when a brand new corporate chain much like his own opened up next door and erected a huge sign which read BEST AGENTS. He was horrified when another competitor opened up on his right, and announced its arrival with an even larger sign, reading LOWEST COMMISSIONS. The small real estate broker panicked, until he got an idea. He put the biggest sign of all over his own brokerage-it read... MAIN ENTRANCE.
