HARRY'S BI-WEEKLY UPDATE 3.28.16
March 28, 2016
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.
FEBRUARY LOCAL MARKET UPDATE AND MONTHLY INDICATORS CONTINUE TO PROVIDE MIXED BAG DUE TO SHORTAGE OF AVAILABLE LISTINGS
Pikes Peak REALTORS® Services Corp.,
In the recently published February 2016 Monthly Indicators and Local Market Update for El Paso and Teller Counties, new listings year-over-year continued their significant downward trend for properties in both the single-family/patio homes and condo/townhomes categories. With that came a pending sales increase year-over-year of 58.3% for single-family/patio homes and 50.7% for condo/townhomes.
The median sales price increase year-over-year in all properties was up 8.5%, which actually is a good sign that the housing market is continuing to stabilize. If there were more listings, more people would be moving—either selling to trade up or buying for the first time.
I’m finding there are those who wish to move but are afraid to list their homes because if they sell quickly, which has been the case in recent months, they might not be able to find the home they are wanting to buy as quickly as they’d like.
The shortage of available homes is continuing to affect the number of sales in communities all over the U.S. However Colorado Springs, while experiencing the same type of listing shortage, is still experiencing a significant number of sales. This bodes well for our community and is indicative of the increased job market and improved local economy.
You can click here to read the 16-page Monthly Indicators or click here to get specific information on the neighborhood of your choice from the 33-page Local Market Update. These reports provide greater detail than the monthly “PPAR Monthly Statistics” that I share in the first eNewletter of each month.
The “Activity Snapshot” shows the one-year change:
- Sold Listings for All Properties was up 23.1%
- Median Sales Price for All Properties was up 8.5%
- Active Listings on All Properties was down 51.3%.
If you have any questions concerning the report, please give me a call at 598.3200.
SPRING BUYING SEASON IS STARTING EARLY IN COLORADO SPRINGS, BUT SLOWER IN PARTS OF THE U.S.
The Wall Street Journal, 3.11.16, 3.22.16, Keeping Current Matters, 3.15.16, 3.24.16
While sales of previously owned homes was lower in a number of regions of the U.S. in February, Colorado Springs continued to see escalating sales as you just read. Much of this nationally has to do with the shortage of homes for sale, but while we too have had a record low number of available listings, we’ve still had monthly sales increases for the past 19 months.
Along with increased sales has come the frenzy that I’m starting to think is less the exception and more the norm at this point in time. Buyers are outnumbering sellers and this is creating a shortfall of inventory that is driving up prices and continuing to bring multiple bids to the table.
Lawrence Yun, chief economist for the NAR says, “Given that prices are rising, more people will be pushed to the borderline of conventional mortgage limits and may need a large down payment or a jumbo mortgage.” Jumbo mortgages are those that have higher limits than conforming limits of $417,000 and up to $625,500 in some high-priced areas.
As I wrote in the last edition, there are a number of ways to go with a jumbo loan, as with a conventional one, and depending on how long you expect to stay in a home can help determine whether to go with a fixed or adjustable rate loan. And a number of lenders are providing longer lock-in rate periods for a slight premium.
In today’s housing market, having a knowledgeable, experienced real estate Broker on your side is especially important. With so many available options and considerably less time to make an informed decision, it’s more essential than ever to have the aid of someone, like me, who not only has years of experience, but also keeps up with the ever-changing federal regulations and lending rules.
I’ve also found in today’s multiple-offer market that it’s equally important to know how to make your first offer one that the seller cannot overlook. There have been recent experiences where the offer my client has made is one of up to 12—and our offer was the one the seller accepted. This comes from years of writing offers that make the most sense for both the buyer and seller. I know how to negotiate an offer that stands out from the rest and today that’s a necessity. While it may not be accepted every time, there’s a good chance we’re in the final two—and oftentimes have the winning offer.
A use of an “Escalation Clause” can, in some cases, help. This is one in which the offer purports to beat all other offers submitted by a certain deadline. A proposed escalation clause might read as simply as “Purchase Price shall be $1,000 more than any other bona fide offer submitted to Seller on or before (a specified date)”. A maximum price should most often be included in this type of offer.
However, price is not always the only consideration in making offers, and the buyer who can submit an all-cash offer without any contingency on the sale of property is better to make that offer without an escalation clause.
Complicated? Yes. That’s where I come in. When you are working with me, there is never the need to feel you are “in over your head” with all the possible scenarios to consider and/or overcome.
Appraisals are another area causing concern in this market. With low supply and home values increasing rapidly, it is difficult for appraisers to find adequate, comparable sales to defend the sales price when performing the appraisal for a lender.
Just this last week I had two appraisals come in lower than the sales prices of homes for two of my buyers. I knew the appraisals weren’t nearly as high as they should have been so I did my homework and found the most current comparables and brought them to the attention of the appraisers. Due to my diligence, one of the appraised prices was changed upward and one of the sellers dropped their price so that a happy ending was had by all.
That’s just another service I provide based on my investment banking background as well as my 43+ years in the real estate arena. I seek the best financing available for my clients, based on their individual credit and financial information. While many homes are beginning to be out of the “affordable range” for some, especially first time buyers, there are usually possibilities available for most potential buying scenarios.
If you are in the market to sell and trade up or buy for the first time or for investment purposes, please give me a call sooner than later and let’s come up with a strategy that could work for you in today’s market. Interest rates are holding at historical lows and that can help offset the increase in home prices if you don’t wait too long.
Call me at 598-3200 or email me at Harry@HarrySalzman.com and let’s get the conversation started.
IS NOW THE TIME TO BUY?
Reatlor.org, 3.15.16, keeping current matters, 3.14.16
I get asked this questions daily. The answer is most always dependent on both time and money, aside from any other individual situations.
As a seller, you will be most concerned about the “short term price”—where home values are headed over the next six months.
Whereas, as either a first-time buyer or repeat buyer, you must not be concerned about only the price but also about the “long term cost” of the home.
Two of the major factors that influence the “cost” of a home are the home’s appreciation over time and the interest rate at which a buyer can borrow the funds necessary to purchase the home. The rate at which these two factors can change is often referred to as “The Cost of Waiting”.
To give as simple an answer as possible:
Corelogic’s latest Home Price Index indicates that prices are expected to rise by 5.5% by this time next year.
Freddie Mac’s most recent Economic Commentary & Predictions Table predicts that the 30-year-fixed mortgage rate will appreciate to 4.5% in that same time.
Here’s how it looks in graph form for a home selling at $250,000 today:
Another interesting tidbit to share is the result of the most recent quarterly “Housing Opportunities and Market Experience Survey” from realtor.org.
Highlights include:
- 75% of people believe now is a good time to buy a home. 44% believe that strongly.
- Not surprisingly, with home prices accelerating so quickly, those who are currently renting or living with someone else, those who are under 34 years of age, and those who live in urban areas are less confident now is a good time to buy. However, even among those groups the majority feel now is a good time to buy a home.
- Four in five people who currently own a home, those over 65 years of age, those with incomes over $50,000 and those in the Midwest believe now is a good time to buy a home.
- More than one-third of buyers of all ages would prefer to live in a close-in suburb. For those who are 55 to 64, rural settings are also attractive.
- Younger respondents and those who are renters and live with someone else are more likely than others to consider buying in an urban area.
All in all, it appears that the majority of folks feel like now is the time to buy. If you’re one of them, call me and let’s get the ball rolling. After all—as you’ve just seen—time is money and you don’t want to waste either one.
MARCH ECONOMIC DASHBOARD FROM SOUTHERN COLORADO ECONOMIC FORUM
Southern Colorado Economic Forum 3.23.16
As a sponsor of the Southern Colorado Economic Forum I receive their quarterly Economic Dashboard and am happy to share this information with you on a timely basis. As you will see in the charts, there are statistics on both national and local levels for factors that affect economic stability.
These include labor force/employment, wages, education demographics, real estate tourism, military and other metrics. For a look at the graphic depictions, please click here.
