HARRY'S BI-WEEKLY UPDATE 2.5.20
February 5, 2020
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.
2020 IS OFF TO A VERY BRIGHT START…
I last wrote as I finished my annual “State of Residential real estate” presentation before the Colorado Springs City Council. I hope you enjoyed looking at the slides I presented as much as City Council did. There is so much to be thankful for as citizens of “Olympic City USA” but along with that comes challenges. The most obvious is the shortage of available existing home listings. Our local MLS listings are at an all-time low and that creates problems not only for those who want to sell and trade up or buy for investment purposes, but also for folks who are relocating to the Springs for employment or retirement reasons.
There’s a reason Colorado Springs shows up on so many “Top 10” lists, as those of us who live here know. You just can’t beat the views, outdoor activities, relative low cost of living, sense of community and small business opportunities. Here are four recent rankings:
- The National Association of Realtors (NAR) ranked Colorado Springs among the top 10 metropolitan areas predicted to outperform the nation for at least the next 3-5 years.
- The Federal Housing Finance Agency (FHFA) ranked Colorado Springs 9th in the U.S. for home price appreciation.
- NAR ranked Colorado Springs 5th in the 20 Hottest Midwest Housing Markets in October 2019.
- Realtor.com ranked Colorado Springs 7th in the Top 10 Housing Markets Positioned for Growth.
And just last month, Colorado Springs was ranked #13 on the prestigious New York Times’ “52 Places to Visit in 2020” list. The Springs is the third highest ranked U.S. place among seven stateside locations included on this global list. We earned this accolade thanks in part to being “the gateway to alpine vacationlands, the impending opening of the U.S. Olympic & Paralympic Museum, the soon to come zero-energy Pikes Peak Summit Complex and the flourishing culinary scene”.
Our home appreciation is among the best in the nation and this is in part due to the lack of available homes for sale. We are not alone in this trend, as there is also a national shortage of available homes. The reasons are many and include the still historically low interest rates, the increasing rental rates, millennials finally deciding it’s time for home ownership, and folks staying in their present homes for considerably longer than in the past.
New home starts are up locally, as you might imagine. This has become a viable choice for a number of my buyers due to the lack of existing homes for sale. Fortunately, I have a good relationship with a number of local builders and that has been a blessing for my clients. I help them with site and home selection, as well as assist in finding the best lender for their individual needs. And, this is provided at no additional cost to them. It’s obviously an invaluable service I can provide by helping navigate clients through the new home purchase waters. I might mention that due to the rising cost of lumber and other materials, new homes are going to keep increasing in price, so if that’s on your horizon, NOW would be a great time to start the conversation.
Did I mention that I’m not called “Mr. Negotiator” for nothing? This comes in handy for my clients not only when they are buying or selling an existing home, but also when looking to purchase new construction.
Speaking of negotiations, it’s so much more important these days to have a seasoned, knowledgeable real estate professional on your team. My 47 plus years in the local arena, along with my investment banking background, has afforded me the opportunity to work in every type of cycle and to find the way to make all your residential real estate dreams come true. I invest the time to find out your realistic wants, needs and budget requirements long before the search begins. That way, when you find what’s right for you, we can make an offer quickly based on actual facts. These days of multiple and over list price offers does not give you much time to make a decision.
In fact, some of my clients, after losing a home or two of their choice, have made an offer on a home based on the listing and without ever having set foot in the home. Unfortunately, that’s the reality today when we have only 1,190 homes available in all price ranges. In the not so distant past, we would have almost 5,000. You do the math. It’s tough out there, but fortunately you’ve got a secret weapon—me. And with me in your corner, you’ve got a far better than average chance of achieving your residential real estate goals.
If you’ve even considered the possibility of selling in order to trade up, now is a great time. With so few homes for sale, yours would certainly get more than a few viewings and would likely sell quickly. It might be necessary to lease your home back from the buyers if possible, in order to make your move, but you are likely to get top dollar for your present home. You might even have more home equity than you’d expect in order to compensate for paying more for your next home. With today’s low interest rates, that move could possibly translate to a monthly payment that’s less than you might anticipate.
However—you won’t know any of that until you give me a call. We can sit down and take all of your personal information into consideration and see if a trade up home can become a reality for you. Just give me a call at 593.1000 or email me at Harry@HarrySalzman.com and let’s get the ball rolling.
And now for statistics…
JANUARY 2020
Statistics provided by the Pikes Peak REALTORS Service Corp., or it’s PPMLS
Here are some highlights from the January 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 28. For condo/townhomes is was 22.
The sales price/list price for single family/patio homes was 99.9% and for condo/townhomes was 100.2%.
Please click here to view the detailed 9-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 January 2020 to January 2019 for All Homes in PPAR:
Single Family/Patio Homes:
· New Listings were 1,333, Up 6.6%
· Number of Sales were 916, Up 1.6%
· Average Sales Price was $375,516, Up 9.2%
· Median Sales Price was $336,795, Up 11.0%
· Total Active Listings are 1,190, Down 26.4%
· Months Supply is 1.3, Down 17.0%
Condo/Townhomes:
· New Listings were 200, Up 17.0%
· Number of Sales were 136, Down 4.2%
· Average Sales Price was $268,866, Up 20.0%
· Median Sales Price was $242,500, Up 18.6%
· Total Active Listings are 126, Down 11.9%
· Months Supply is 0.9, Up 2.8%
JANUARY 2020 LOCAL MARKET UPDATE AND 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.
It is broken down by geographical areas and you can look to see how your neighborhood is doing in terms of sales, prices, and more.
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 0.2%
- Median Sales Price for All Properties were Up 10.5%
- Active Listings on All Properties were Down 30.8%
You can click here to read the 16-page Monthly Indicators or click here to get specific information on the geographical area of your choice from the 18-page Local Market Update. I recommend that you check out your own area or one that you are considering, to get a good idea of the local pulse. As an example, here is a detailed report on the Colorado Springs area:
A 2020 ECONOMIC OUTLOOK ON real estate FROM THE NATIONAL ASSOCIATION OF REALTORS (NAR)
RealtorMag, 1.16.20
Lawrence Yun, chief economist for NAR is predicting that a recession is unlikely this year. According to him, “We expect 2020 will be a year of slower growth but not a recession year. However, an all-out trade war would lead to an economic downturn in nearly every country, including the U.S.”
Here is the rationale behind his prediction…
- Unemployment Stays Low … Phase 1 of the Trade Agreement with China takes pressure off industries that were feeling the effects of threatened tariffs.
- MORTGAGE RATES TO SUSTAIN HOUSING DEMAND … Fed unlikely to raise rates in 2020 and given the existing conditions, home sales—existing and new homes combined—are expected to increase by a little over 4%, from 6 million in 2019 to 6.3 million in 2020.
- MODEST IMPROVEMENT IN HOUSING SUPPLY … Housing supply expected to improve this year, but the new supply still will not meet the demand that will be created in 2020 by new household formation, estimated at 1.2 million, and demolished or obsolete housing, estimated at about 450,000.
- COMMERICAL … Bright Outlook for Multifamily and Industrial Properties. Investors are expected to pay a premium for multifamily, industrial and warehouse properties because of low rental vacancy rates and the sustained demand for ecommerce sales. Low rental vacancy rates mean higher demand for apartments, especially more affordable ones to help the high rental rate burden for many.
UCCS ECONOMIC FORUM DASHBOARD
UCCS Economic Forum, College of Business, Updated 1.24.20
Here’s a look at the economic picture from a different perspective. As always, I like to share with you the updated Dashboard from the UCCS Economic Forum. You can click here to see both the National and Local economic “big picture”.
housing market’S “CHOKEPOINT” SHOULD BE FEATURED IN PRESIDENTIAL DEBATES
Housing Wire, 1.13.20
The lack of new supply has become the housing market’s “chokepoint”, driving costs of living higher, and should be at the forefront of the 2020 election debates, according to Lawrence Yun, Chief Economist for NAR.
Instead, there has barely been a mention, other than when former Democratic candidate Julian Castro made an issue about housing NOT being an issue.
Yun said that the number of single-family homes for sale dipped to 1.45 million in November 2019, the lowest level for that month in a data series that goes back to 1982. In the intervening years, the U.S. has added 96.5 million people.
“We have an acute housing shortage,” Yun said. “Consequently, people’s rents and home prices are rising faster than income growth and have been for years. This issue should be at the forefront of election debates.”
While some candidates have proposed plans to make public colleges and universities free, Yun suggested candidates look into ways to boost employment in construction.
“No one has discussed ideas for making training in the construction industries free,” Yun said. “There’s an acute shortage of workers, and the cost would be much less than college tuition.”
The housing shortage and subsequent rise in prices is an issue for us all one way or another and one we might consider addressing with our Congresspeople and Senators.
