HARRY'S BI-WEEKLY UPDATE 4.4.16
April 4, 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.
MARCH 2016 WAS THE 20TH STRAIGHT MONTH OF INCREASED LOCAL RESIDENTIAL real estate SALES
Statistics provided by the Pikes Peak REALTORS Service Corp, or it’s PPMLS
It’s beginning to sound like a broken record (which, it literally IS), but I am happy to once again report that prices and sales are continuing their upward climb for the Pikes Peak Region in the Residential real estate Market.
In the Cumulative Year-To-Date Summary you will see that total sales numbers in Single Family/Patio Homes is up 16.2% over March 2015 while Condo/Townhome sales are up 2.6% over 2015. Homes are selling, on average, at 99.5% of the list price and I believe all of these numbers would have even been higher if there had been more homes available for sale.
The Monthly Summary shows that total active listings continue their downward trend from the same month last year. However, new listings are up 10.3% year-over-year for Single Family/Patio Homes and up 15.9% for Condo/Patio Homes.
With spring buying season just getting underway, along with the continued increase in sales prices and low interest rates, I’m expecting to see more folks hopping off the fence and venturing into the market. Homes that were at one time “underwater” are now presenting opportunities for owners to check out all available options once again.
According to Jonathan Smoke, realtor®.com’s chief economist, “I would use the term ‘pent-up-demand’ liberally—we’re seeing it come through in the marketplace. The people who didn’t buy last year were frustrated because they were outbid or couldn’t find a home that met their needs. So they more or less took the holidays off, and are back with way more intensity.”
He added that “the early readings on March inventory and activity on realtor®.com indicate that early bird buyers are emerging in markets that typically have buyers sidelined with winter weather (like Colorado Springs)”.
The good news is that inventory is picking up, due in part to situations I mentioned above. It’s a small but much needed growth and should lead to a significant uptick in sales this year according to Smoke.
Once again, Colorado Springs is listed in the top 20 housing markets in America—at number 11—up from number 18 in February. The median age of our inventory in March was 44 days—down from 67 days in February—and that’s just another thing to add to the spring buying frenzy!
I am continuing to see a number of folks looking for investment properties to compensate for the stock market volatility that’s plagued us in recent months. Rental prices are continuing to rise and that is making investment properties a good idea for those wanting to get into that niche of the housing market. While that isn’t affecting the upper end of the market much, it is cutting in to the available properties for first-time buyers to some extent.
In general, there are still fewer homes available in most neighborhoods and most price ranges, with the current average days on the market a low 44, and those in the low and mid-range tend to go quickly. These are the homes that are receiving competing bids, some over asking price. Making a quick decision is now the rule in order to secure the home you want.
It’s worth repeating one more time that it’s more important than ever to know what you want, need and can afford prior to the hunt for a new home. There’s no longer the luxury of “let me think about it for a couple of days or even a few hours” at present.
If you’re planning to sell to trade up or move to another neighborhood, another factor to consider is that with homes selling so quickly you need to have a good idea of where you might want to move because you more than likely won’t have the luxury of time on your side to search for a replacement home.
To discover the options available for you, give me a call sooner than later and let’s see what we can do to make this happen. I can be reached at 598.3200 or by email at Harry@HarrySalzman.com.
Here are some highlights from the March 2016 PPAR report. Please click here to view the detailed 15-page report, including charts. If you have any questions, as always, just give me a call.
In comparing March 2016 to March 2015 in PPAR:
Single Family/Patio Homes:
- New Listings are 1,790, Up 10.3%
- Number of Sales are 1,172, Up 16.2%
- Average Sales Price is $268,010 Up 3.3%
- Median Sales Price is $239,500, Up 6.4%
- Total Active Listings are 1,941, Down 23.5%
Condo/Townhomes:
- New Listings are 204, Up 15.9%
- Number of Sales are 155 Up 2.6%
- Average Sales Price is $160,251, Up 4.6%
- Median Sales Price is $161,404, Up 12.9%
- Total Active Listings are 142, Down 45.8%
COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*
Median Sales Price Median Sales Price
March 2016 March 2015
Black Forest $480,000 $389,950
Briargate $310,000 $317,500
Central $200,000 $163,000
East $203,000 $180,000
Fountain Valley: $218,500 $189,900
Manitou Springs: $362,000 $277,000
Marksheffel: $252,000 $268,000
Northeast: $231,050 $215,500
Northgate: $411,059 $354,790
Northwest: $365,000 $335,000
Old Colorado City: $236,200 $205,000
Powers: $245,000 $219,950
Southwest: $249,085 $269,500
Tri-Lakes: $461,725 $420,000
West: $234,900 $214,650
*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.
COLORADO SPRINGS RENTS RISE FASTEST IN NATION
The Gazette, 4.2.16
Rental rates in Colorado Springs rose 11.4% in March compared to March 2015 according to a survey by Apartment List, a San Francisco-based rental service, putting us at the top of the survey of 100 cities.
This didn’t come as a surprise to me as I’ve had difficulty finding rental places for clients who need temporary housing. Most available units are requiring longer leases at increased rates compared to even seven or eight months ago. And, as I mentioned earlier, this has been an impetus for many of my clients to consider rental properties as investments.
While we topped the list, it’s important to note that Colorado Springs still remains cheaper than many other cities to rent an apartment or home. According to the survey, the median apartment rent of $1,010 a month for a two bedroom unit ranked 51st in the nation.
An improved economy, increased job opportunities and young people looking to rent for the first time are driving up prices, especially since there are fewer units available.
I’m certain you can guess my thoughts on this issue. Home ownership is certainly something to consider, if possible, for many reasons.
To begin with, you don’t have to deal with rents going up each year. And when you add that to the fact that you are building equity with each mortgage payment, it becomes a no-brainer. Low interest rates, along with new regulations that allow for lower down payments and other down payment alternatives are worth considering for first-time buyers.
Why not give me a call today and let’s see if buying a home is a viable option for you or a family member. It’s possible that reality is more plausible than you might think.
2016 PREDICTED TO BE HOUSING’S ‘GOLDEN YEAR’
RealtorMag 4.1.16
Low Mortgage Rates. Improving Job Market. Gradual Increase in Housing Supply.
These are the three reasons given by mortgage giant Freddie Mac officials to make the prediction that this year housing starts and home prices will reach their highest levels since 2006.
According to Freddie Mac’s monthly Outlook for March, we can “expect the 30-year mortgage rate to remain very attractive throughout the spring home-buying season, staying below 4 percent until the second half of the year.”
That said, there are still a few challenges for the housing market, particularly with wage growth and “if wages and incomes do not start rising, then rising interest rates, home prices and rents will squeeze households and ultimately slow housing markets,” Freddie Mac noted.
However, officials there remain upbeat and the Outlook noted that the “nation’s housing markets should sustain their momentum from 2015 into 2016 and 2017.”
UPDATE: DODD-FRANK ACT CONTINUES TO IMPACT MORTGAGE LENDING
Mortgage lending has changed in a number of ways since the implementation of the Dodd-Frank Act last October and other changes are due in the next few years.
At present, some lenders have been forced to eliminate some mortgage products due to lack of clarity around the enforcement the TRID “Know Before You Owe” integrated disclosure.
Each new regulation has added to the cost of the mortgage process while adding to processing times. And, in January 2019 there will be additional changes, more than likely adding to the cost and time required for loan processing.
I’ve experienced the frustration of my clients when an “all cash” deal has trumped their offer because there are no “wait times” imposed by lenders and law. This Act was meant to make things easier for the consumer and to make certain that they understood all costs and requirements prior to closing. The intent was good—and still is—but it’s continuing to make the home buying process a bit more lengthy and confusing for some.
It’s not going to get better I’m afraid, but lenders I work with are doing their best to make the best of the situation for all concerned.
