HARRY'S BI-WEEKLY UPDATE 4.22.20
April 22, 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.
These are exactly my thoughts when it comes to this “invisible enemy” we’ve all been fighting. As Colorado begins to open things up a bit next Monday, I wonder exactly how we begin to approach this new normal. There are still so many unknowns and while I’m as ready as the next person for more normalcy, I’m hoping we move forward cautiously--one step at a time.
When it comes to residential real estate…it’s been confusing and inconvenient for some, to say the least. As brokers, we have not been allowed to show homes up to this point. What that has meant for some of my clients is that while they have had to close on homes they sold, they were unable to physically look at potential options for their next home. I’ve actually sold three homes in the last two weeks—all while staying in my home office, and the closings I’ve attended took place in our individual cars. To say this has been a wild ride would be putting it mildly.
I miss the face-to-face interaction tremendously but have been thrilled to Zoom or FaceTime with clients, associates and others. I’ve enjoyed “seeing” everyone and spending time discussing real estate plans, attending virtual classes and simply catching up. While things may be standing still in some ways, life still goes on, and I’ve enjoyed the interactions afforded through virtual means.
I’ve always emphasized the importance of looking at the economy and residential real estate through “local” eyes, and this is especially true at this point in time. Colorado Springs was ranked the number one housing market in the country by Realtor.com in March. While this likely won’t be the case for April, it’s indicative of the relative strength of our local economy heading into this pandemic and an indication that things will likely improve somewhat faster here than in other parts of the country. In fact, I have a number of clients who are ready to view homes as soon as we are able, not to mention some who are relocating here and need housing as soon as possible.
The spring buying season is here and those who have been considering a move are looking forward to listing their present home during this seller’s market. Available listings, while not plentiful, will likely increase and mortgage rates are still relatively low. The dynamics are there, but now we wait for the signal to start showing homes again. There are conflicting issues on the state and local levels as to what we as brokers are allowed to do in terms of showing homes and as soon as the rules are more concrete you will be the first to know. In the meantime, any questions or concerns you may have—just give me a call at 593.1000 or email me at Harry@HarrySalzman.com and I’ll be happy to discuss them with you.
THE CARES ACT AND REGULATORY ACTIONS CONCERNING MORTGAGE AND PERSONAL FINANCE—PLUS COVID-10 FAQS
National Association of REALTORS
Congress has passed relief packages to respond to COVID-19 and bank regulators have also adopted many new policies in light of needs of COVID-19. Please click here to read the provisions and actions that are designed to address home buying, homeowner/landlord, and personal finance issues.
If you have any questions, as always, just give me a holler.
COLORADO SPRINGS IS NUMBER ONE IN NATION EVEN AS NATIONAL HOME SALES DIP IN MARCH….AND HOME SALES ARE CONTINUING TO PUSH AHEAD
Realtor.com, 4.22.20
As I indicated earlier, it’s an interesting time for residential real estate. Nationally, existing home sales dipped in March while locally we saw a better scenario. However, despite the national numbers, they are not that far from what they were a year ago, and home prices continue to rise most everywhere, and especially here in Colorado Springs.
Here is a “Housing Snapshot” of existing home sales nationally in March 2020:
“Unfortunately, we knew homes sales would wane in March due to the coronavirus outbreak,” says Lawrence Yun, NAR’s chief economist. “More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.”
“Earlier in the year, we watched inventory gradually tick upward, but with the current quarantine recommendations in place, fewer sellers are listing homes, which will limit buyer choices,” Yun added. “Significantly more listings are needed, and more will come on to the the market once the economy steadily reopens.”
So, there you go…. home prices are holding steady and increasing…despite the pandemic. This is good news for us all and a great starting point for both buyers and sellers once we are able to get back to some semblance of normalcy.
HOW POTENTIAL MORTGAGE BORROWERS CAN COPE WITH A VIRUS-STRUCK MARKET
MortgageProfessor.com, 4.18.20
The housing finance system has not faced a pandemic such as COVID-19 before and within a very short time, a significant segment of potential home buyers who need mortgages to make their purchases, or to refinance the one they have, have had their ability to repay severely eroded—some because they have contracted the coronavirus, but more due to losing their jobs or their business. In response to the widespread deterioration in the ability-to-pay of prospective borrowers, credit standards have been markedly tightened—with the impact especially severe on these with the weakest credit credentials.
In an attempt to repair the process, the Federal Reserve has entered the mortgage-backed securities (MBS) market with massive purchases. While MBS prices ordinarily drive the entire market price structure, these purchases should have resulted in higher MBS prices and lower mortgage rates, but they haven’t. Of course, they might have prevented even higher rates.
The mortgage holiday, which allows existing mortgage borrowers who have lost their income as a result of the pandemic to defer their payments without penalty, has prevented a catastrophic explosion in default rates—for a while. But borrowers will have to make larger payments in the future or extend the terms of their loans.
As I mentioned earlier, we need to look at all of this from a local perspective and while folks here have been affected by COVID-19 in various ways, we have been more fortunate than much of the country.
Here are some ways that potential borrowers can cope:
- Prospective Home Buyers Who Will Need Mortgages: Those who have become sick, or lost their jobs or businesses, or had their credit score dropped significantly should put their purchase plans aside until their fortunes improve. Those not directly affected by the pandemic should consider waiting a few months until the market has stabilized, and rates are back to where they were before the pandemic. This applies to prospective refinancers.
- Homeowners in Process of Refinancing: If you have not already locked an advantageous rate, there is little likelihood that it will happen now. Back out to wait for the turbulence to end.
If your rate has been locked advantageously, the lender can unlock it only if you lose your job or if you incur a new debt. Lenders have become hyper-vigilant in checking employment status of borrowers with loans in process.
You are safe, however, against losing an advantageous refinance because your credit score has dropped. Lenders cannot undo the credit score used to qualify you for 120 days.
- Home Buyers in Process with Purchase Agreements and Locked Mortgages: Unless you lose your job or increase your debt, the rate lock will be honored, and the purchase will be executed.
If one or both of these conditions has been violated, the lock probably will be withdrawn, and the purchase will be cancelled. Your best option in that case is having your deposit with the seller returned. That will happen if your agreement of sale provides for the return of a deposit made by a prospective buyer whose failure to execute the transaction is due to a failure of the lender to deliver the promised loan.
Confusing? You bet. I’m guessing you might have some questions if any of the above scenarios apply to your individual situation, so please give me a call and we can discuss.
FEATURED LISTING:
Just sold my last three this week. That gives me lots of time to devote to yours. If you’re considering a move…please give me a call.
