HARRY'S BI-WEEKLY UPDATE
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June 24, 2013
HARRY’S BI-WEEKLY UPDATE Current Look at the Colorado Springs Residential real estate Market TRAGEDY STRIKES AGAIN IN COLORADO SPRINGS/EL PASO COUNTY
With a heavy heart, I realize that it was not quite a year ago when I wrote about the Waldo Canyon Fire that forced me and so many others to evacuate our homes and businesses, some never to return to what they had. Our community is still in the process of rebuilding from that event and now an even greater tragedy has befallen us.
While driving to an appointment on June 11th I could see smoke in the northeast part of the city and little did I know I was witnessing the start of the Black Forest Fire—the most devastating fire in the history of Colorado.
As I write this, that fire is 100% contained thanks to the hard work of all the first responders and those that followed. But the end of the fire is only the beginning for so many clients and friends who lost most everything.
509 homes were destroyed and many more damaged. All kinds of domestic animals were displaced and thanks to the hard work of the local human society and countless others, many are now reunited with their owners.
I am still working with clients who suffered losses in the Waldo Canyon fire to rebuild their homes and get their lives back to normal. Now I am saddened to add more families to those who are in need of housing, either immediately to rent or purchase, or to work with to find long-term housing solutions. With the rental housing shortage we are now experiencing this has become quite a challenge, but we at Salzman real estate Services are doing our best to help.
It was enlightening to see how much was learned from last year’s events, which prevented this from being even more tragic than it was. The fast response to all aspects of the Black Forest Fire, by everyone from the El Paso County Sheriff, Commissioners and the Mayor’s office to the firemen, police, local broadcast and print news, and others helped keep us all informed and safe throughout the last few weeks.
I am personally and professionally involved with so many of these individuals and I wish to publicly thank one and all for their tireless work on behalf of us all.
I was heartened again this year by the amazing response from friends and business associates from all over America who reached out to me. While I cannot thank you each personally, please know that your acknowledgement was greatly appreciated.
ON THE BRIGHTER SIDE…COLORADO SPRINGS IS A GREAT PLACE TO LIVE
The Gazette 6/11-13/13
It’s official.
According to the U.S. Bureau of Economic Analysis, incomes in the Colorado Springs area grew faster than the rest of the state or nation during 2011. The agency reported that real income, measured on a person-to-person basis, grew 2.7% to $36,200 in the Springs area between 2010 and 2011. That's 0.8 percentage points more than the 1.9% growth in Colorado during the same period and 0.7 percentage points more than the 2% growth nationwide.
Fred Crowley, senior economist for the Southern Colorado Economic Forum, said “these numbers show the underlying strength of the local economy. You get better mileage from your paycheck in Colorado Springs than in many other places. That is a good tool for economic development because it means you can get good workers at a very attractive rate.”
On top of that, the U.S. Council for Community and Economic Research’s survey for First Quarter 2013 showed that the cost of living in Colorado Springs is below the national average. Living costs were 4.9% below the national average in January to March, compared with 3.7% below the average for all of 2012. The sharp decline in gas prices compared to the rest of the nation helped contribute to this further living cost decline. Costs for clothing, recreation and personal care items also fell.
This index does not measure inflation; it compares prices in more than 300 metro areas for 57 goods and services bought by households where middle managers live. It is used to compare living costs when these managers are looking to relocate to another city.
Crowley said “the area’s cost of living looks to be very stable right now. That should help both the tourism industry, since gasoline prices have stabilized, but also potential employers, because it means lower costs for a well-educated and productive workforce.”
And if that wasn’t enough good news, the outlook for the Colorado Springs job market for the third quarter 2013 is the best in nearly five years and among the best in the nation, according to a quarterly employment survey by temporary staffing giant Manpower.
Colorado Springs ranked ninth for its hiring outlook among 100 metro areas surveyed. According to surveys by the U.S. Bureau of Labor Statistics, the area’s unemployment rate declined to 8.2% in April from 9.4% a year earlier and local payrolls grew by 1.6% during the same period.
So, there you go. When you add all this to what those of us who live here already know about the Colorado Springs area, why would you want to live anywhere else?
RENTAL, HOME AND MORTGAGE PRICES ON THE RISE
We’ve seen rental prices rise as the supply of rental listings drop and unfortunately, the Black Forest Fire will cause them to go even higher. Those who lost their homes are going to need temporary housing while deciding whether to rebuild or buy and there just isn’t much out there now. And what is out there is continuing to go up in price, both apartments and rental homes.
A number of renters (especially potential “first-time” buyers) are trying to get into home ownership because rising rents are making them rethink their current situations. This is not a great time for them because of limited listings below $200,000, mortgage rate increases and in some cases, still tight mortgage lending policies.
I’ve been talking about this happening for the past year and a half and it’s all starting to snowball at once. Yes, more homeowners are starting to sell and trade up because they are now getting more for their current homes. Inventories are quite lean and it’s going to cost more for the new home. When you add that to increasing mortgage rates, it’s putting a lot of pressure on those who have waited or had to wait until now to act.
I haven’t seen this much activity since 2006. Homes barely get listed on MLS and they have multiple offers, many over listing price. Sellers are once again getting into the driver’s seat and buyers are seeing their options quickly reduced.
While mortgage rates are rising, they are still a relative bargain. However, according to Lawrence Yun, Chief Economist for the NAR, they will continue to rise and will probably be near 5 percent by this time next year, compared to the 3.5 percent average of the past 12 months. Rates will be even higher in 2015 and 2016.
Yun says the recovery is strengthening and to expect limited housing supplies for the balance of the year in much of the country. “The housing numbers are overwhelmingly positive. However, the number of available homes is unlikely to grow, despite a nice gain in May, unless new home construction ramps up quickly by an additional 50 percent.” he said. “The home price growth is too fast, and only additional supply from new homebuilding can moderate future price growth.”
Friday’s Wall Street Journal reported that “sales of previously owned homes surged in May to the highest level since late 2009, pushing real estate prices up so quickly that a major real-estate trade group (NAR) warned about unsustainable gains.”
Last Thursday, NAR said “home sales rose 4.2% in May from a month earlier to a seasonally adjusted annual rate of 5.2 million, the first time the pace crossed 5 million since November 2009.
The figures, showing rising home prices and contracts closing at a brisk pace, boosted optimism for the housing market and its ability to support the broader economic recovery.”
So, for those sitting on the fence, it’s time to move. Yes, your present home will be worth more in time, but the cost of the home you may want to trade up to will also go up, along with the mortgage rate you will have to pay. I’m not speaking with my “salesman” hat, but with my “investment advisor” one when I tell you if you are serious about selling to trade up or looking for investment property, it’s time to give me a call and let’s see if there is something for your individual wants, needs and budget. Just call me at 598.3200 or email me at Harry@HarrySalzman.com .
JOKE OF THE WEEK
Not a lot to joke about this week, but look for my usual “humor” next time!
FEATURED LISTING
Harry A. Salzman. CRS, CRP, CNE email: Harry@HarrySalzman.com Serving: Colorado Springs, Monument. Air Force Academy, Fountain,
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