HARRY'S BI-WEEKLY UPDATE 12.6.16
December 5, 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.
*** SO THIS JUST HAPPENED…***
The Wall Street Journal, today
At press time I was reading today’s Wall Street Journal and a headline on the front page hit home as it’s what I’ve been telling you would happen for the last couple of years.
“Home Buyers Miss Out On Low-Cost Loans” is what it says and according to the article, the low interest rates and accompanying looser credit requirements of recent times are now a thing of the past.
First-time buyers and those with marginal credit will be the ones hit the hardest. According to the article, “Analysts at Pacific Investment Management Co. estimate between one million and 1.4 million Americans who would have been eligible for a mortgage in 2002, before the loosening of lending standards that caused the subprime crisis, couldn’t get a mortgage today.”
I’ve been encouraging those who can and want to be home investors to get on it sooner than later. Information in this article again supports that in saying homeownership levels will remain low and rental properties are in high demand for those who can’t afford or can’t obtain a home of their own.
I don’t want to say “I told you so”, but there you go. If you’ve even been considering whether this is the time to sell and trade up or buy for investment purposes—call me today. Time is no longer on your side.
THE LOCAL housing market CONTINUES IT’S UPWARD TREND
November PPAR statistics show the Pikes Peak housing market continuing to perform extraordinarily well and now we have 28 consequent months of year-over-year increased local Residential real estate sales.
Homes are selling at 99.2% of listing price with the average days on the market down to 36. This continues to be great news for both buyers and sellers.
As you will see in the Cumulative Year to Date Summary, total sales numbers in Single Family/Patio Homes and Condo/Townhomes are both up 15.9% year-to-date. Even more amazing, though, is the fact that the total VOLUME of sales to date over last year for Single Family/Patio Homes increased close to $800,000,000 and for Condo/Townhomes it increased close to $76,000,000. That’s a LOT of sales dollars and is indicative of how residential real estate in the Colorado Springs area is escalating in value. And, it’s the second consecutive year setting an annual record--with still another month to go. Fabulous news for our local homeowners.
The Monthly Summary shows that compared to a year ago, total active listings are down 26.5% for Single Family/Patio Homes and 18.7% for Condo/Townhomes. This downward trend is continuing to be great for sellers. New listings are up 9.7% for Single Family/Patio Homes and 37.0% for Condo/Townhomes. This tells me that people are starting to realize that even though this is not the “normal” selling season, the time to sell and trade up is NOW before interest rates and home prices get even higher. I wrote about that in the last eNewsletter and I can see that interested people are realizing it might be a good idea NOT to wait--for a variety of reasons.
An article I read in Saturday’s Wall Street Journal had the headline—“Homeowners Hit The Jackpot”. It referenced the fact that many folks who have lived in their homes for 15, 20, 30 years and more are pocketing substantial gains when they are ready to sell. The article went on to say that homeowners are staying in their homes longer—a median of 10 years, the longest tenure since at least 1985, according to NAR.
Lawrence Yun, NAR chief economist, said the shift is partly due to an aging society and tight inventory in many markets. “Home sellers know they can find a buyer, but they would have difficulty finding a new home once they sell,” he said.
While locally we have just a slight increase in new listings, I’m finding that there are homes available in most neighborhoods and in most price ranges. The biggest issue is knowing what you need, want and can afford prior to beginning the process of selling to trade up or move to a new location. Most homes do sell quickly so having those decisions made in advance can make a lot of difference if your home sells fast.
If you have been thinking of listing your home, I cannot emphasize strongly enough that NOW is the time.
With interest rates just starting to increase and home equity building at a steady pace, it’s time to make your move either to sell and trade up or buy for the first time or for investment purposes. To get the ball rolling, simply call me at 598.3200 or email me at Harry@HarrySalzman.com and let’s see how I can put my special brand of customer service to work for you, your family members or co-workers.
NOVEMBER 2016 WAS THE 28TH STRAIGHT MONTH OF INCREASED LOCAL RESIDENTIAL real estate SALES
Statistics provided by the Pikes Peak REALTORS Service Corp, or it’s PPMLS
Here are some highlights from the November 2016 PPAR report. Please click here to view the detailed 15-page report, including charts. If you have any questions, just give me a call.
In comparing November 2016 to November 2015 in PPAR:
Single Family/Patio Homes:
- New Listings are 992, Up 9.7%
- Number of Sales are 1,196, Up 46.7%
- Average Sales Price is $288,295, Up 7.9%
- Median Sales Price is $256,566 Up 8.0%
- Total Active Listings are 1,932, Down 26.5%
Condo/Townhomes:
- New Listings are 163, Up 37.0%
- Number of Sales are 182 Up, 42.2%
- Average Sales Price is $181,591, Up 13.5%
- Median Sales Price is $166,108, Up 6.9%
- Total Active Listings are 178, Down 18.7%
COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*
Median Sales Price Median Sales Price
November 2016 November 2015
Black Forest $424,500 $344,000
Briargate $353,250 $314,156
Central $212,500 $185,950
East $220,000 $205,500
Fountain Valley: $234,450 $194,950
Manitou Springs: $322,000 $266,750
Marksheffel: $259,900 $260,000
Northeast: $260,000 $237,500
Northgate: $400,000 $389,000
Northwest: $388,000 $336,700
Old Colorado City: $233,750 $237,500
Powers: $243,750 $229,550
Southwest: $265,500 $251,000
Tri-Lakes: $446,750 $400,000
West: $213,900 $216,500
*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.
SPRINGS AREA HOMEBUILDING AT 10-YEAR HIGH
The Gazette, 12.2.16
Permits issued through November for single-family homes in Colorado Springs and the rest of El Paso County were the most since 2006 according to a Pikes Peak Regional Building Department report released last week.
The year to date total of 3,017 marks the first time permits have surpassed 3,000 in a decade and by reaching the 3,000 mark, the local homebuilding industry has achieved a state of “equilibrium”—it’s building enough homes to meet demand without overbuilding.
Just another sign that things are looking good in the Springs.
NATIONALLY, HOME PRICES ARE EXCEEDING THE “HOUSING BOOM” LEVEL
The Washington Post, 11.30.16, The Wall Street Journal, 11.30.16
Homes prices, nationally, reached a new high in September—rising above the previous high set in July 2006 during the “housing boom”, according to the Standard & Poor/Case Shiller Index released last week.
David M. Blitzer, managing director and chairman of the index committee at S & P Dow Jones Indices, said in a statement that “The new peak set by the S & P/Case-Shiller CoreLogic National Index will be seen as marking a shift from the housing recovery to the hoped-for start of a new advance”.
While housing has lagged behind some sectors of the economy in recent years, there are signs of increasing strength. Robert Shiller, the economist at Yale University who co-developed the above referenced index, said the record provides a significant psychological boost for homeowners, some of whom are finally seeing their homes above water after four years of recovery. About 12% of homeowners who have a mortgage now owe more than their home is worth compared to 30% at the bottom of the market, according to Zillow.
Despite prices having bounced back, many economists have tempered their enthusiasm about what it means for the housing market’s overall health. “Crossing this threshold is largely symbolic,” said Ralph McLaughlin, Trulia chief economist. “The housing market recovery has been very uneven across the U.S. When controlling for inflation, markets that have reached their pre-recession peaks are few and almost exclusively in the West and South. And within those markets, it’s mostly high-end homes that have surpassed the peak.”
While prices have recovered, the market is flashing caution signs. The country in general is building far fewer homes than normal, the homeownership rate is near a 50 year low and mortgages remain difficult to come by, especially for less affluent buyers. The rise in mortgage interest rates could also curtail home buying for some.
As I mentioned earlier, the Colorado Springs housing market is on the upswing and is doing so at a reasonable pace—one that appears to be maintainable in the near future. Considering we are one of the “hottest” housing markets in the country, I for one am extremely positive about the continued housing records we are setting.
2017 NATIONAL HOUSING FORECAST, TOP HOUSING TRENDS & TOP HOUSING MARKETS
realtor.com
2017 National Housing Forecast
In general, the national real estate market is predicted to slow compared to the last two years, across the majority of economic indicators.
However, “West is Best” and lucky for us—that’s where we are. Western metropolitan areas are forecast to see a price increase of 5.8% and sales increase of 4.7%--much higher than the U.S. overall of 3.9% and 1.9% respectively.
Realtor.com is forecasting the homeownership rate will stabilize at 63.5% after bottoming at 62.9% in 2016. New home sales are expected to grow 10%, while new home starts are expected to increase 3%.
Prior to the election, demographics and an improving economy were laying the foundation for a substantial increase in first-time buyers in 2017 but due to mortgage rate increases over the last few weeks, realtor.com predicts first timers will face new hurdles as they navigate the qualification and buying process. While higher rates are associated with anticipation of stronger economic and wage growth next year, higher rates will make qualifying for a mortgage and finding affordable inventory more challenging.
Top Housing Trends for 2017
- Millennials and Boomers will Dominate the Market. Next year, the housing market will be in the middle of two massive demographic waves, millennials and baby boomers—that will power demand for at least the next 10 years. Although increasing interest rates have prompted realtor.com to lower its prediction of millennial market share to 33% of the buyer pool, millennials and baby boomers will still comprise the majority of the market. Baby boomers are expect to make up 30% of buyers in 2017 and given they’re less dependent on financing, they are anticipated to be more successful when it comes to closing.
- Midwestern Cities will Continue to be Hotbeds for Millennials. Midwestern cities are anticipated to beat the national average in millennial purchase market share in 2017. This year, average millennial market share in these markets is 42%, far higher than the U.S. average of 38%. With strong affordability in 15 of the 19 largest Midwestern markets, realtor.com expects this trend to continue in 2017 even as interest rates increase.
- Slowing Price Appreciation. Nationally, home prices are forecast to slow to 3.9% growth year-over-year, from an estimated 4.9% in 2016. Of the top 100 largest metro areas in the country, 26 markets are expected to see price acceleration of 1% or more. Likewise, 46 markets are expected to see a slowdown in price growth of 1% or more.
- Fewer Homes on the Market and Fast Moving Markets. Inventory is currently down an average of 11% in the top 100 metro areas of the U.S. The conditions that are limiting home supply are not expected to change in 2017. Median age of inventory is currently 68 days in the top 100 metro areas.
- Western Cities will Continue to Lead the Nation in Prices and Sales. Western metro areas in the U.S. are forecast to see a price increase of 5.8% and sales increase of 4.7%, much higher than the U.S. overall. These markets also dominate the ranking of the reator.com 2017 top housing markets.
Top Housing Markets in 2017
Despite a more moderate housing market overall in 2017, strong local economies and population growth will continue to fuel the nation’s top markets.
While Colorado Springs is forecast as the “12th Top housing market” in the top 100 metro areas in 2017, we share many of the commonalities of the top 10.
Our relatively affordable rental prices, low unemployment, increasing population of millennials and baby boomers, along with a high number of listing views on reator.com, puts us up there with the top 10.
As I’ve been saying all along, those of us who live here know the reasons we do, and now the rest of the nation is finding that out too.
Here’s to another great year in 2017 for our city.
