HARRY'S BI-WEEKLY UPDATE 2.20.20
February 20, 2020
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.
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AHEAD OF THE CURVE…YUP…THAT’S ALWAYS MY GOAL…
As most of you know, several years ago I decided to add another designation under my name--“The real estate Therapist”. I even went so far as to trademark it in the State of Colorado. My reasoning was the realization that the service I provide my clients is 90% seasoned real estate professional and 10% “therapist”.
The time I spend with clients prior to even beginning the home search gives me great insight into the family dynamics and helps me assist them in determining how best to make their wants and needs fit their budget and other requirements. I often find that family members might have different wants and needs, yet obviously they need to come to a consensus prior to the housing search. I take it all into consideration, help them reach a common goal, and do my best to manage the stress involved in the entire home buying and selling process. Thus, my role as “The real estate Therapist”.
Therefore, I was not entirely surprised when just this month there was an article on HousingWire titled “Some Homebuyers Value their real estate Agent as much as their Therapist” which went on to say that some homebuyers become best friends with their agents! I’ve known this for as long as I can remember.
The article went on to say that according to a new survey from Century 21, a majority of homebuyers and sellers say they value and confide in their real estate agents more than a therapist and know them better than their own neighbors.
After all, finding and having the “right” real estate professional by your side is so important in navigating through what for most is the biggest emotional and financial decision of their life. It is my honor and privilege to have earned the trust and friendship of so many of my clients and their families, and it is not something I take for granted.
So…a big thanks to all of you for giving me that trust and for your friendship. I look forward to working with you and your family members for many years to come.
Now on to some continued great news about Colorado Springs real estate…
COLORADO SPRINGS IS NUMBER ONE FOR HOME BUYERS IN RECENT NATIONAL SURVEY
National Association of Realtors, 2.19.20
The National Association of Realtors (NAR) has created the profile of homebuyers for each metropolitan statistical area (MSA) and I wanted to share this information with you—especially since Colorado Springs is right at the top once again.
Each year, the American Community Survey releases the Public Use Microdata Sample (PUMS) which include population and housing unit records with individual response information. Focusing on homeowners who moved into their home within the last year, NAR was able to identify characteristics of the homebuyers and their homes at a local level.
In answer to the question of “Where are People Buying Homes?”— Colorado Springs was a resounding number one choice, followed by Las Vegas-Henderson-Paradise, NV, Cape Coral -Fort Myers, FL, and Phoenix-Mesa-Scottsdale, AZ.
Based on the NAR’s Home Buyers and Sellers Survey, nationally a typical homebuyer was 46 years old and earned nearly $92,000 in 2017. Our local typical homebuyer that same year was 38 years old with an average income of $82,489.
THAT BEING SAID…
Our biggest hurdle at the moment is a shortage of available homes for sale. Just like the rest of the USA, the supply shortage is creating problems for those looking to buy, most especially for the entry-level buyers.
Low mortgage rates and a strong job market and economy isn’t enough to help the Millennial and Gen X buyers coming into the very competitive housing market this homebuying season, due in part to rising prices and fast-selling homes.
Compounding the problem locally is actually the fact that we are the number one place in the nation where people want to buy. As most of you may know, Amazon just completed the purchase of over 69 acres near the Colorado Springs Airport where they are building a 4 million square foot distribution center. They are looking to employ 1,000 people, many of whom will be looking for a place to call home. With only 1171 homes (1039 single family, 26 condos, 76 townhomes and 30 patio homes) listed for sale today in all price ranges on the Pikes Peak area MLS, you do the math!
You might be interested to know that one year after Amazon announced its HQ2 move to Northern Virginia, home prices there were up 33% year-over-year! With that came an even greater housing shortage, so once again, if you or a family member are wanting to sell and trade up…don’t delay. I cannot emphasize that enough.
If you have even thought of selling your home to move to another neighborhood or to trade up, NOW is the time. Not only will you get more than you might think for your present home, you might find with the low interest rates that your monthly payment won’t be much more than what you are presently paying since the low mortgage rates are offsetting home affordability issues at present.
With so few existing homes available, yours will get more attention than in the past, and you might be surprised to find it in a bidding war—resulting in more money for you. That’s just today’s reality.
New construction starts are up locally and that’s been a great option for some of my clients. I have a good working relationship with a number of local builders and can help navigate you through the new home buying market as well. There’s no extra cost to you and with so many more options and decisions to make in that arena, my knowledge can be invaluable and save you both time and money.
This is a lot to consider if changing homes is in your near future. However, with me by your side we can make it happen. Just give me a call at 593.1000 or email me at Harry@HarrySalzman.com and let’s work together to make all your residential real estate dreams come true.
NAR JUST RELEASED Q4 2019 RESULTS FOR MEDIAN SALES PRICES OF TOP 175 CITIES
National Association of Realtors, 2.12.20
Colorado Springs is ranked number 26 of 175 cities in the NAR quarterly comparison of the top metropolitan statistical areas for median sales price of existing single-family homes, with a median price of $322,200 at the time of the survey. The national average is $274,900. To see the complete list of 175 cities, in statistical order, please click here. To see the alphabetical order, please click here.
NAR also included a survey of the qualifying income based on sales price for existing single-family homes in these same areas. It was broken down by percentage of down payment. This information only considers conventional mortgage loans. A number of homebuyers in Colorado Springs choose to finance their homes through FHA or VA, which would be based on different income requirements.
Based on conventional mortgage loans, the qualifying income necessary at the end of the last quarter of 2019 in Colorado Springs was:
5% Down: $68,756
10% Down: $65,137
20% Down: $57,900
To see the report of all 175 cities, please click here.
WE CAN’T RELY ON LOW MORTGAGE RATES FOREVER
Realtor Mag, 2.7.20
Mortgage loan rates keep falling and sub 4% rates are improving buyers’ purchasing power, but higher borrowing costs will come at some point, according to Lawrence Yun, NAR’s chief economist.
He added that “at some point, mortgage rates are going to revert back to normal”, noting that the interest rate for a 30-year mortgage was 8.1% in 2000.
Affordability is still lower than historical norms even with today’s low rates and Yun says that the lack of available inventory is continuing to push prices higher. He said that home ownership has remained flat since 2007 and the wealth gap between renters and homeowners is growing.
A word to the wise----if you are thinking the low interest rates are here to stay---you might want to reconsider. What goes down will eventually go up, and sometimes with little warning.
NOW A FEW 2020 real estate TIPS AND TRENDS
Rismedia, American Home Shield, 2.14.20
The new year and new decade will undoubtedly bring new trends to the residential real estate market and will see a continuation of some trends that currently affect both real estate investors and homeowners across the USA. Low mortgage rates, a changing rental landscape, low inventory and other factors will shape 2020 and could influence the decisions to buy and/or sell real estate this year.
- Mortgage Rates Will Stay Low at Present. The Fed has announced plans to keep short-term rates low for the time being, so homebuyers can expect mortgage interest rates to remain low through 2020. Sellers in 2020 can expect buyers to ask them to contribute towards closing costs. Average closing costs will remain at about 2-5% of the price of the home.
- Landlords Will Face New Challenges. Residential landlords in some areas will need to prepare for rent-control ordinances that could come into effect due to the rapidly escalating rental rates. Also, with the high cost of homes along with inventory shortage, breaking into the investment market can be difficult in some areas. Areas with especially high rental rates may find renters looking to move to more affordable areas or to purchase rather than rent if possible.
- Inventory Will Remain Low. Millennials are starting to look at buying their first homes, so the number of homes on the market in desirable areas will remain low, and bidding wars may continue. A number of baby boomers are either remaining in their homes longer or are looking to downsize into condos, townhomes or smaller homes, which will exacerbate the shortage of available properties on the market.
- Starter Homes Will Grow in Popularity. Starter home construction is speeding up to meet the needs of younger homebuyers who want to purchase their first homes and older home buyers who want to downsize. With unemployment and interest rates at record lows, and many millennials getting married and starting families, it’ll be no surprise to see newly built starter homes appearing on the market.
- Home Prices Will Slow, but Demand Concentration Will Increase. With new jobs becoming increasingly concentrated around major city centers and in increasingly popular places like Colorado Springs, a growing portion of workers in the service industry will relocate to those areas to seek employment. That means prices in those areas will continue to grow, but they can’t grow forever. Demand for housing in big markets like ours will continue to stay strong, so once more, if you’re thinking of making a move—now is the time.
