HARRY'S BI-WEEKLY UPDATE 12.5.18
December 5, 2018
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.
IT MAY BE TRADITIONALLY HOLIDAY TIME, BUT IT’S ALSO A GREAT TIME FOR BUYERS, SELLERS AND INVESTORS
The Gazette, 11.17, 12.4, The Wall Street Journal, 11.28
It’s been a busy month and lots of positive stuff coming our way. Colorado Springs has consistently been one of the hottest housing markets in 2018 and now—in 2019 it could be ranked as Number 1 in the nation!
real estate service Trulia has ranked our city as the Number 1 market poised for growth next year. That’s a great indication that prices and sales are going to continue to climb in 2019, which is great news for buyers, sellers and investors alike.
The ranking was based on looking at the 100 largest housing markets and ranking them on five indicators: job growth over the past year, a tight supply of rental properties, the affordability of homes for first-time buyers, a large share of millennials who represent more potential entry-level buyers and data that indicates more people are researching moves to Colorado Springs instead of leaving here and relocating to another city.
And these new residents and recently hired folks are going to need places to live—either to buy or to rent!
This is all great news for local residential real estate because while our home sales numbers are leveling off, the rate of appreciation is slowing to more historically normal averages, and inventory, while still low, is increasing. We are headed into a more normal housing market and that’s good for everyone.
Interest rates are higher than they’ve been in a number of years, but they are still at affordable levels and while the Fed has indicated they will raise rates again this month, they seem tentative about the pace of further increases after that. This provides a good opportunity for those who have been wanting to “trade up” or move to a new neighborhood as mortgage rates will still be reasonable.
Local homebuilding is on pace for a 13-year high and this has become a viable option for many of my clients with the shortage of available homes for sale. In case you are not aware—this is an area where I can be of service to you. I’ve got long time relationships with many local builders, know the “ins and outs” of what needs to be done and can help you in making the right decisions—even in securing financing that is tailored to your needs. And as a buyer, all of this is provided by me with no additional cost to you!
Investment options, which were getting scarce, are once again a possibility for those who wish to become landlords. The shortage of rental properties in general is providing a good incentive for investors. In fact, just this past week I was out with long time family clients of mine who were looking for an investment property. While we lost the first one in a bidding war, my clients ended up purchasing TWO properties! As most of you know, I put my money where my mouth is and am a true believer in rental properties, which I’ve owned for many years. So, if you are thinking those type of investments might be right for you, just give me a call and let’s get rolling.
In fact, if you’ve even THOUGHT about what your possibilities in residential real estate might be—I’m your man. With more than 46 years of experience in the local real estate arena and a background in investment banking, I am doubly qualified to help you make the decisions that are right for your individual needs, wants and budget. So don’t wait—give me a call at 593.100 or email me at Harry@HarrySalzman.comand let’s make your real estate dreams come true.
And now for November statistics…
Homes are selling at 99.1% of listing price with the average days on the market at 33.
This continues to be great news for both buyers and sellers and with homes not selling at such a frenzy but still selling quickly, it still necessitates knowing where you plan to move next prior to listing your present home.
NOVEMBER 2018 BROUGHT ABOVE AVERAGE GAINS IN HOME VALUES
Statistics provided by the Pikes Peak REALTORS Service Corp, or it’s PPMLS
Here are some highlights from the November 2018 PPAR report. A look at the Median Sales Prices will show that prices are continuing to rise while sales are also continuing to slow down. Please click here to view the detailed 15-page report, including charts.
As you will see, all areas but two had an increase in median home prices year-over-year. If you’re shopping for a new home, it’s going to cost you more, so the sooner you start the better. If you have any questions about the report or to find out how your individual situation relates to the stats, just give me a call.
In comparing November 2018 to November 2017 for All Homes in PPAR:
Single Family/Patio Homes:
· New Listings are 1,110, Up 2.8%
· Number of Sales are 1,096, Down 12.7%
· Average Sales Price is $342,617, Up 8.0%
· Median Sales Price is $303,000, Up 8.2%
· Total Active Listings are 2,153 Up 31.0%
· Months Supply is 2.0
Condo/Townhomes:
· New Listings are 145, Down 10.5%
· Number of Sales are 181, Up 8.4%
· Average Sales Price is $225,240 Up 9.8%
· Median Sales Price is $214,000, Up 14.4%
· Total Active Listings are 164, Up 64.0%
· Months Supply is 0.9
COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*
Median Sales Price Median Sales Price
November 2018 November 2017
Black Forest $567,500 $470,500
Briargate $399,725 $369,500
Central $247,500 $234,750
East $267,000 $244,000
Fountain Valley: $269,700 $247,000
Manitou Springs: $390,000 $365,900
Marksheffel: $306,288 $331,539
Northeast: $305,000 $271,400
Northgate: $460,000 $430,042
Northwest: $398,750 $389,950
Old Colorado City: $285,000 $289,000
Powers: $299,900 $275,000
Southeast: $232,500 $206,500
Southwest: $354,200 $302,000
Tri-Lakes: $534,900 $455,000
West: $319,250 $240,000
*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.
If you’re even considering a move and wondering how to make it happen, NOW is the time. Let me put my special brand of customer service to work for you, your family members, co-workers or friends. Give me a call today.
UCCS ECONOMIC FORUM DASHBOARD
UCCS Economic Forum, Updated 11.28.18
As always, I like to share with you the information I receive from the UCCS Economic Forum as soon as I get it. It provides you with the Big Picture of the U.S. Economy as well as what’s happening in the Colorado Springs area.
Once again, very positive data and definitely worth a look. To see the 32 charts, please click here. If you have any questions, please give me a call.
HOME APPRAISALS GO HIGH-TECH
The Wall Street Journal, 11.30
Some interesting news is possibly in the making! In this case, let’s hope it doesn’t come to fruition.
A proposal for loosening real-estate appraisal rules so a majority of homes can be bought and sold without being evaluated by a licensed human appraiser was made last month by the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and the Federal Reserve. This potentially opens the door for cheaper, faster, but also largely untested property valuations that are based on computer algorithms.
The proposed plan would increase to $400,000 from $250,000 the value of homes that can be bought and sold without a tape-measure-toting appraiser visiting the property. More than two-thirds of U.S. homes sell for $400,000 or less, according to U.S. Census data and NAR.
Had this plan been in force last year, about 214,000 additional home sales, or some $68 billion worth, could have been made without an appraisal, according to the proposal.
One issue is that automated valuations done by computers are largely unregulated. The 2010 Dodd-Frank financial overhaul required regulators to propose quality-control standards for so-called automated valuation models, or AVMs, but they have yet to do so.
The immediate effect of dropping appraisal requirements would be limited because a vast majority of home loans in that range are bought these days by Fannie or Freddie or guaranteed by other federal agencies. Those typically require appraisals regardless of home value.
While there is a shortage of human appraisers and at times getting an appraisal can take much longer than we would like, “there’s still no computer that can see, hear, taste, smell and touch,” said an appraiser from Virginia. “Have you ever been in a hoarder’s house?” he added!
I’ll end this story as I started it—let’s hope this doesn’t happen. Appraisals are necessary and worth the time and money that they take in order for a buyer to make certain they are getting exactly what they think they are.
HOMEOWNERSHIP DELAY HURTS FINANCIAL HEALTH
REALTORmagazine 11.19
A new report from the Urban Institute warns that millennials who put off homeownership may be severely curtailing their ability to build wealth over their lifetimes. Purchasing a home at an early age offers a “big bang for their housing buck” concludes the report’s authors.
Researchers tracked individuals since 1968 to identify those who reached age 60 between 2003 and 2015 and how homeownership has affected their finances. Of those now in their early 60s, individuals who had purchased their first home between the ages of 25 and 34 had a median housing wealth of $150,000, while those who waited to buy until they were between 35 and 44 had $72,000 less. Those who did not buy until 45 or older had median wealth of at least $100,000 less than those who purchased between the ages of 25 to 24, according to the study.
Those who bought their home at the youngest ages—before 25—had the second largest amount of equity, at a median of $130,000. Researchers said they likely didn’t have the most equity due to their younger age and because they had lower incomes and less education at that point in their lives. But those who purchased at younger ages still tended to have the largest returns on their initial investment, the report showed.
The difference in housing wealth among the age groups is due to home appreciation and paying down their mortgage debt, researchers noted.
Half of the older adults in the study’s sample bought their first home between 25 and 34; 27% purchased their first home before age 25. That is much higher than today’s generation. In 2016, 37% of those between the ages of 25 and 34 owned a home, as did 13% between ages 18 and 24.
The delay in homeownership for millennials could have long-term economic consequences. Equity is usually the largest single source of personal wealth. “While people make the choice to own or rent that suits them at a given point, maybe more young adults should take into account the long-term consequences of renting when homeownership is an option,” the researchers noted in the report.
AND ONE LAST NOTE…FYI
Housingwire.com, 11.27
After not increasing the maximum conforming loan limits on mortgages to be acquired by Fannie and Freddie for 10 years, the Federal Housing Finance Agency has now increased the conforming loan limit for the third straight year.
Last week, the FHFA announced that it is increasing the conforming loan limit for Fannie and Freddie mortgages in nearly every part of the U.S. The limits will rise from this year’s total of $453,100 to $484,350 for 2019. That’s an increase of 6.9% from this year’s loan limit to next.
