HARRY'S BI-WEEKLY UPDATE 12.6.17
December 6, 2017
HARRY’S BI-WEEKLY UPDATE
A Current Look at the Colorado Springs Residential real estate Market
As part of my Unique Brand of 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.
ALMOST GOODBYE TO 2017…
IT’S BEEN A WILD RIDE AND IT APPEARS THAT 2018 WILL BE MORE OF THE SAME
As this year comes to a close, I must say that I cannot ever remember the local residential real estate market to be quite like it’s been in 2017.
Yes, most homes are continuing to sell as soon as they are listed and in the lower price ranges we are still seeing multiple offers and bidding wars. The shortage of available homes and still historically low interest rates are the driving forces behind this surge. With Colorado Springs making the “Top 10” lists for so many things, I don’t expect this frenzy to stop anytime soon.
In fact, Realtor.com predicts that Colorado Springs, already on track to break home sales records for 2017, will continue to be one of the nation’s hottest markets in 2018—coming in at number 8.
Our local job growth, thriving economy and relative low cost of living, coupled with high marks on the “best place to live and play” index is also contributing to the increased median home prices.
Sales of newly built homes are continuing to rise, driven in part by demand for entry-level homes. This supports the longer-term positive trend in the market and is helping boost the homeownership numbers. Folks are realizing that rental rates are escalating with no real benefit to anyone but the one who owns the home and/or apartment. It is proving much cheaper to own than rent and people are finding a way to do that if at all possible. There are more ways than you might imagine for getting into a starter home, or to sell and trade up. If this is something you are thinking of, please give me a call and let me help make that a reality.
The Wall Street Journal reported last Friday that the U.S. economy is headed into the final stretch of 2017 powered by one of the sturdiest periods of growth in it’s nine-year expansion. The article cited new home sales rising in October to a 10-year high and contracts signed for existing homes rebounded strongly in October after several months of declines. Consumer confidence has also risen for five straight months to a 17-year high, according to the Conference Board.
All in all, it’s been a great year for all local homeowners and I’d like to thank you for the confidence you’ve continued to place in me when it comes to helping make your residential real estate dreams come true. It has been my pleasure this year, as always, to provide my “special brand of customer service” to suit your individual needs, wants and budget and I look forward to assisting you, your family members or co-workers again in the coming year.
WOW…WOW…AND ANOTHER WOW.
The most recent report from PPAR came out on yesterday afternoon and shows that homes are selling at 99.5% of listing price and a very low average of 33 days on the market. And even more amazing is that the average sales price of Single Family/Patio homes has increased by 10.1% year over year and is up 13.0% for Condo/Townhomes. This trend is continuing to put a lot of pressure on both buyers and sellers in terms of decision-making, but NOW is still a great time to buy AND sell.
With homes still selling within days of being listed, if you are planning to sell your home, you need to know where you are planning to go next because the short turnaround times don’t give you a lot of leeway to decide after the sale. It’s best to find your next home prior to listing your present one at this time.
As much as I hate for my clients to face disappointment per a possibility of multiple offers, it’s becoming a regular thing. That’s why you need to keep an open mind to look at properties in areas where you might have not considered in order to find what you want, need and can afford. Even when it comes to purchasing a newly constructed home, I’m seeing lot choices going quickly and with multiple offers, so making an informed decision is essential no matter what you are seeking.
Homeownership rates are continuing to rise in this tight market as more people are finding a way to purchase a home despite all of the above-mentioned obstacles. This can be partially attributed to the high rental rates but most likely because prices are quickly escalating and interest rates are sure to follow. Folks just don’t want to be left out if at all possible.
Despite all this, there are still homes available in most neighborhoods and in most price ranges. If you are in the market—either as a first-time buyer, as a trade-up buyer or for investment purposes, please give me a call sooner than later. I can be reached at 593.1000 or by email at Harry@HarrySalzman.com .
For more details on the local November 2017 PPAR reports, please see the next article.
SALES AND PRICES KEEP ESCALATING DESPITE LOW INVENTORY
Statistics provided by the Pikes Peak REALTORS Service Corp, or it’s PPMLS
You will see in the Cumulative Year to Date Summary that total sales numbers year-over-year in Single Family/Patio Homes are up 4.9% and down 8.2% for Condo/Townhomes. You will also see that the median home price in all listed neighborhoods increased in value year-over-year. This is not always the case, but it’s apparent that our hot real estate market is affecting most all of our neighborhoods in a positive way.
Year-over-year, new listings are up 8.9% for Single Family/Patio Homes and down 0.6% for Condo/Townhomes. It appears that those who have been thinking of listing their home are beginning to realize that it is certainly going to get a lot more attention in this type of sales environment. Just remember if you are considering listing your home that it’s likely to sell fast, so once again…you need to be prepared for that inevitability.
Here are some highlights from the November 2017 PPAR report. Please click here to view the detailed 15-page report, including charts.
In comparing November 2017 to November 2016 in PPAR:
Single Family/Patio Homes:
- New Listings are 1,080, Up 8.9%
- Number of Sales are 1,255, Up 4.9%
- Average Sales Price is $317,368 Up 10.1%
- Median Sales Price is $280,000 Up 9.1%
- Total Active Listings are 1,643, Down 15.0%
- Months Supply is 1.3, down 3.0
Condo/Townhomes:
- New Listings are 162, Down 0.6%
- Number of Sales are 167, Down 8.2%
- Average Sales Price is $205,174, Up 13.0%
- Median Sales Price is $187,000, Up 12.6%
- Total Active Listings are 100, Down 43.8%
- Months Supply is 0.6, down 5.3
COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*
Median Sales Price Median Sales Price
November 2017 November 2016
Black Forest $470,500 $424,500
Briargate $369,500 $353,250
Central $234,750 $212,500
East $244,000 $220,000
Fountain Valley: $247,000 $234,450
Manitou Springs: $365,900 $322,000
Marksheffel: $331,539 $259,900
Northeast: $271,400 $260,000
Northgate: $430,042 $400,000
Northwest: $389,950 $388,000
Old Colorado City: $289,000 $233,750
Powers: $275,000 $243,750
Southwest: $302,000 $265,500
Tri-Lakes: $455,000 $446,750
West: $240,000 $213,900
*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.
If you have any questions about these reports and how they might relate to you and your future housing plans, please give me a call at 593.1000.
SOME FORECASTS FOR 2018…
Rismedia.com, 11.29.17, The Wall Street Journal, 12.1.17
In a recent study by the National Association of Realtors (NAR), Colorado Springs is once more listed as one of the cities where considerable price and sales gain will be seen.
By the way, given the November PPAR statistics I just shared with you and their year-over-year comparisons, I believe our local market will out perform the national predictions shown here. Furthermore, the housing appreciation in Colorado Springs should more than likely be two times greater than the 3.2% national forecasted home value indicated below.
The following inforgraphic from realtor.com will show you some of their predictions for the coming year:
Realtor.com anticipates that mortgage rates will continue to grow along with home prices, averaging 4.6 percent and possibly reaching 5 percent by year-end. Interestingly though, more first-time homebuyers were able to get an FHA mortgage this year than last, despite a slight uptick in rates.
One caveat is tax reform. These forecasts were made prior to the House bill passing and the Senate bill being voted on; as such, realtor.com cautions that certain cuts--among others, the mortgage interest deduction and the state and local tax deduction--could lead to less in the way of prices and sales.
5 HOUSING TRENDS TO WATCH FOR IN 2018
Realtormag, 11.29.17
According to realtor.com’s 2018 National Housing Forecast, home shoppers may have it a bit easier in 2018 because inventory constraints of for-sale homes and rising prices may finally start to ease.
“Next year will set the stage for a significant inflection point in the housing shortage,” says Javier Vivas, director of economic research for realtor.com. “Inventory increases will be felt in higher priced segments after spring home buying season, which we expect to take hold and begin to provide relief for buyers and drive sales growth in 2019 and beyond.”
But again, the big wild card for 2018 will be any impact from the proposed tax reform legislation, which is currently being debated by Congress, realtor.com adds.
Here is an abbreviated closer look at realtor.com’s five housing prediction trends for 2018:
- Inventory to start increasing: Positive year-over-year inventory growth by the fall of 2018—which will be the first time since 2015, the majority of which will be in the mid-to-upper-tier price points, which includes homes priced above $350,000. On the other hand, recovery in the starter home market will likely linger since levels are “significantly depleted by first-time buyers”.
- Price appreciation to slow: Home buyers will likely see home prices moderate in the new year. The majority of the slowing price appreciation will be centered in the higher-priced ranges as more inventory becomes available. Entry level homes will likely continue to see price gains due to a larger potential buyer pool as well as a more limited number of homes for sale in this price range.
- Millennials to gain market share: The largest cohort of millennials are expected to turn 30 in 2020. “Millennials are a driving force in today’s housing market,” says Vivas. “They already dominate lower price home mortgages and are getting close to overtaking older generations for mid-and upper-tier mortgages. While financially secure in general, their debt to income ratios have started to increase as they compete for higher priced homes.”
- The South to lead in sales growth: Realtor.com forecasts that Southern cities will top national averages in home sales growth in 2018.
- Tax reform wild card: Tax reform could dampen 2018 sales and price forecasts, realtor.com reports. “While the ultimate impact of tax reform will depend on the details of the plan that is finally adopted, both versions include provisions that are likely to decrease incentives for mobility and reduce ownership tax benefits,” realtor.com reports. “On the flip side, some taxpayers, including renters, are likely to see tax cuts. While more disposable income for buyers is positive for housing, the loss of tax benefits for owners could lead to fewer sales and impact prices negatively over time with the largest impact on markets with higher prices and incomes.”
AND THE GOOD NEWS JUST KEEPS ON COMING…
A big plus for those seeking jumbo conventional and VA loans—beginning next month (January 2018) the jumbo/conforming limits will increase considerably. This chart below illustrates the new limits, which are increasing for only the second time in 11 years. The first increase came last year.
UPDATE FROM THE UCCS ECONOMIC FORUM (11.30.17)
UCCS Economic Forum, College of Business
As always, I am providing you a look at the report I receive from the UCCS Economic Forum, which will give you not only the “Big Picture” of the U.S. Economy, but also how things are shaping up locally.
To view the report, please click here. If you have any questions, please give me a holler.
