HARRY'S BI-WEEKLY UPDATE 1.8.2021
January 8, 2021
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.
HAPPY TO SAY GOODBYE 2020…
As we bid adieu to a very unprecedented year, here’s wishing you all a very happy 2021 along with hopes of a return to normalcy. A new kind of normalcy, for sure, but any kind would be welcome at this point.
A year ago, I wrote about my “2020 Vision” and predicted that local home appreciation would remain high, new construction would become a viable choice for many, and interest rates appeared likely to remain low for the foreseeable future.
All of this was true…and for many of the reasons I mentioned. Those included the historically low inventory of existing homes for sale, the influx of new businesses and their relocated employees, and the high rental rates which would drive more folks to home ownership.
I certainly didn’t have any clue that a world-wide pandemic was on the horizon and that it would have such an effect on the housing market. For several months in 2020, Realtors were unable to show homes and even photograph ones that were going on the market. A good number of homeowners were also hesitant to let strangers into their home during this time. Therefore, my prediction that more homes would become available for sale did not come to fruition in 2020.
As a result of the pandemic, working from home (WFH) and home schooling have both changed what folks are looking for in their living situations and has driven a lot of home renovation and ideas of what is not only needed, but wanted, in a new home. As you might imagine, larger kitchens, home offices, private spaces and outdoor entertainment areas are popular requests now.
And with WFH becoming so prevalent, there has been somewhat of an exodus from the bigger cities toward places with access to “the great outdoors”. As most of you know, Colorado Springs most certainly has that…and so much more.
This has put even more pressure on buyers and there have been times where I’ve made an offer for a client only to find out that there were 14 others in line! Even though “Mr. Negotiator” is one of my aliases, there is a limit to even what I can do in a situation such as that. So “going, going, gone” also applies to just how fast home sales are in today’s market.
To give you an example, as I write this there are currently only 322 existing single-family homes available for sale in the city of Colorado Springs. New listings are disappearing as quickly as they come on the market and this covers all price ranges.
Homes across the U.S. appreciated in 2020 at the fastest rate since 2014 and until there are more existing homes for sale it’s likely that trend will continue throughout 2021. Interest rates remain historically low, another driver of potential sales.
New home construction was strong in 2020, looks to continue that way into the foreseeable future and new home prices are continuing to rise as well. This was an option for many of my clients last year and continues to remain so at the start of 2021. I’ve got a good working relationship with a number of local homebuilders, and that can help a lot. I can assist with site and home selection, as well as making certain that you can get the best financing to fit your individual needs. And, of course, this comes at no additional cost to you. It’s an excellent option for this coming year, especially with the list of new wants and needs. Your present home will no doubt sell quickly, and you could possibly lease it back from the buyer while your new home is being built. Lots of things to consider for sure.
Millennials are finally looking at homeownership and unfortunately are also faced with the same limited options. They are finding Colorado Springs a great place to call home and to begin raising families and interest rates are very favorable, but they too are being held back due to the listing shortage.
Home sales across the U.S. actually declined in November for the first time in six months due to an abundance of buyers and not enough sellers.
See a theme here? If you’ve even considered selling your present home, NOW is the perfect time. You’ve probably got more equity than you might imagine and when coupled with the low interest rates—it might just make sense for you to make a move now--and most likely you can ‘trade up”. As I tell my clients, it’s the monthly payments that you need to consider, not the price of the new home. At today’s interest rates it’s possible that you can get “more” or a different home for not much more than you currently pay.
I’m guessing that when more people are vaccinated and feel better about venturing a bit further than home, more of them will be listing their present home in search of new environs. This will help stabilize the escalating sales prices and help us return to more realistic home appreciation rates. As you will see below, our average sales price for single-family homes in December 2020 was $437,365—a 20% increase over the price in December 2019!
Yes, times are a bit challenging for Residential real estate, but if you know me at all—you know I relish a good challenge. I’ve been in the local real estate arena for almost 48 years and have been around for all the cycles. I know that ins and outs of doing whatever it takes for find solutions for most any of these challenges and my investment banking background gives me a heads up on the competition.
I work with each client to determine their individual needs, wants and budget and work to make things happen. If something is not in your best interest, I’ll tell you so. I’m in this business for long term relationships with my clients, not a quick sale. It’s been my pleasure to recently have worked with children and grandchildren of my past clients and I hope to continue that legacy.
A new year brings with it a lot of new hopes and dreams, and this year even more so than most. If Residential real estate is among your hopes and dreams for 2021, please give me a call at 593.1000 or email me at Harry@HarrySalzman.com and let me help make them all come true.
And now for statistics…
DECEMBER 2020
Statistics provided by the Pikes Peak REALTORS Service Corp., or it’s PPMLS
Here are some highlights from the December 2020 PPAR report. Remember that the new format of this report no longer provides monthly statistics for each individual neighborhood. However, if you are interested in what’s happening in your neighborhood, I can provide you with this information through other means.
In El Paso County, the average days on the market for single family/patio homes was a very low 16. For condo/townhomes it was 10.
Also in El Paso County, the sales price/list price for single family/patio homes was 101.3% and for condo/townhomes it was 98.4%.
Since this is also year-end statistics, I am providing you with both the regularly posted year-over-year monthly stats as well as the cumulative year-to-date comparison of 2020 to 2019.
Please click here to view the detailed 10-page report, including charts. If you have any questions about the report or to find out how it relates to your individual situation, just give me a call.
In comparing December 2020 to December 2019 for All Homes in PPAR:
Single Family/Patio Homes:
· New Listings were 939, Up 14.2%
· Number of Sales were 1,376, Up 10.3%
· Average Sales Price was $437,365, Up 20%
· Median Sales Price was $379,999, Up 15.2%
· Total Active Listings are 532, Down 59.1%
· Months Supply is 0.4, Down 5.7%
Condo/Townhomes:
· New Listings were 161, Up 33.1%
· Number of Sales were 222, Up 29.1%
· Average Sales Price was $295,153, Up 18.3%
· Median Sales Price was $290,000, Up 21.4%
· Total Active Listings are 70, Down 46.6%
· Months Supply is 0.3, Down 1.6%
The Cumulative YTD Summary: (comparing Jan-Dec 2020 to Jan-Dec 2019)
Single Family/Patio Homes:
- New Listings were 18,747, Down 1.0%
- Sales were 17,337, Up 8.0%
- Average Sales Price was $415,329, Up 13.4%
- Volume was $7,200,558,873, Up 22.4%
Condo/Townhomes:
- New Listings were 2,720, Up 10.8%
- Sales were 2,517, Up 12.8%
- Average Sales Price was $273,427, Up 10.3%
- Volume was $688,215,759, Up 24.4%
Now a look at more statistics…
DECEMBER 2020 MONTHLY INDICATORS ILLUSTRATE OUR LOCAL TRENDS IN DETAIL
Colorado Association of REALTORS® , Pikes Peak REALTORS Service Corp, or it’s PPMLS
Providing greater detail than the above report, this contains information on both El Paso and Teller counties for Residential real estate. I normally include the Local Market Update as well, but it was not available at press time.
The “Activity Snapshot” for all residential properties in El Paso and Teller counties shows the Year to Date one-year change:
- Sold Listings for All Properties were Up 10.7%
- Median Sales Price for All Properties was Up 15.6%
- Active Listings on All Properties were Down 56.7%
You can click here to read the 16-page Monthly Indicators.
housing market FORECAST FOR 2021
Keeping current matters, 12.18.20
As you read earlier, the housing market, while facing its fair share of ups and downs in 2020, not only met expert predictions, it surpassed them and broke records along the way.
Here’s what leading real estate experts around the country are predicting for 2021:
- Interest rates are projected to stay low. This was one of the biggest drivers for 2020 and should continue in 2021. Because of this, affordability reached one of the highest levels it has in the last 30 years. And while home prices continue to rise, in part from lack of inventory, the counter of low interest rates have made purchasing a home increasingly affordable, especially for first-time buyers. This infographic illustrates home affordability:
- Home sales are projected to grow by 7%. This indicates that experts believe we will likely see an increase in inventory for 2021. Whether it’s homeowners who waited out the pandemic or newly constructed homes, more inventory will be a welcome change.
- Home prices are projected to appreciate by 3.4%. That’s a simple case of supply and demand. But while 2020 saw homes appreciate on average nationwide at around 7 percent, this continued but lower appreciation is reflective of a more balanced market. With the end of the pandemic in sight, experts expect inventory levels to rise and home prices to appreciate at a steadier pace.
- Foreclosures should not lead to price declines. Due to the massive wave of unemployment, a number of homeowners across the country were led to enter mortgage forbearance. And while unemployment is slowly but surely declining (and ahead of expectations) it will be a while before we reach the pre-COVID levels. Hence, foreclosures are expected to rise. Experts do not anticipate this leading to a crisis like we saw in 2008 and they don’t expect it to lead to the major home value depreciation that followed. According to Lawrence Yun, NAR chief economist:
And one more infographic on the 2021 Housing Forecast: (just a reminder that all of these are NATIONAL forecasts, and I expect our local numbers will be considerably better. Please contact me for a more localized forecast)
NOTES FROM A ZOOM CONFERENCE
Like most people these days, I’ve been attending scheduled conferences via Zoom rather than in person. I thought I’d share some highlights of these meetings that you might find helpful.
The keynote speaker at the first conference on December 10th was Lawrence Yun, chief economist for NAR. Here are some of his “crystal ball” comments:
- After the widespread availability of the vaccine, we should see a fabulous increase in the economy which will lead to housing “wealth”
- Home sales are surging—both new and existing homes, but the record low supply is a challenge to affordability
- Home prices will be up 8% in 2021, in part due to the cost of lumber and new construction costs
- Mortgage rates will continue to be affordable
- The rate of return will remain positive for those who purchase for investment (rentals)
- Working from home will become the norm for many, with some going to the office no more than 1-2 days a week
And then from an economic panel of experts:
- A lot of “what if’s” will all turn positive
- Housing will be the best investment and rate of return for many
- Prices will be a detriment to first time buyers
- GDP growth should be around 3.5% in 2021
- Earnings growth in 2021 should also be good
- Inflation should be less then 2%.
- Much mobility will be on hold
- Optimistic that the economy will go up very strong
- housing market will see more inventory when people feel better about the pandemic (more vaccinations)
And some other thoughts:
- Developers are buying as much raw land as they can now
- The Housing Economy is at an all-time high and should continue
- Builders are selling more than they can build and are raising prices month after month
- For first-time buyers, the cost is getting in the door vs. the monthly payment
I’ll share some more conference material in the next e-Newsletter.
Until then…I hope to see or hear from you soon.
