May 23, 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

CITY OF COLORADO SPRINGS SHOWS 40% BETTER MEDIAN SALES PRICE APPRECIATION THAN THE U.S.A. AS A WHOLE FOR FIRST QUARTER 2016 COMPARED TO FIRST QUARTER 2015

National Association of Realtors®, May 2016

Wow.  And another Wow awhile I’m at it.  As most of you know, I track the quarterly Median Sales Price of Existing Single-Family homes, based on sales closed, for approximately 178 of the top Metropolitan Areas in the country.  While the city of Colorado Springs has done well in comparison to itself in the last four quarters, it has fallen behind percentage-wise to other measured cities and the country as a whole at times.

I’m thrilled to report that the most recent results show a whole other picture and from all the recent local housing market activity I’m not entirely surprised.  In the first quarter 2016, Colorado Springs has shown a 9 percent increase in the Median Sales Price of Existing Homes compared to first quarter 2015.  We outpaced the country as a whole (6.3 percent) and even the Western U.S. (7.1%).  Please click here to see the results of all measured cities. 

Considering the improved economy and job market locally and the continued low mortgage loan interest rates, this is not a huge surprise—but again—it’s most certainly a BIG WOW for us.

According to Lawrence Yun, chief economist for the NAR, “Current homeowners in many metro areas—especially those who purchased a home immediately after the downturn—have enjoyed a sizeable boost in housing equity and household wealth in recent years.”

He added that this is not the case for renters.  “At a time of stagnant wage growth (in general) and mounting rent increases…their inability to reach the market because of affordability and supply restrictions is contributing to rising wealth inequality in the U.S.”

This has been a very busy spring buying season but for reasons in addition to the usual ones.  We, like the rest of the country, are experiencing a shortage of listed homes and those that go on the market are selling fast—often with bidding wars—and going for listing price and more. 

With rental prices rapidly escalating and the uncertainty of how high the annual increases may be, a lot of folks are looking to buy—many for the first time.  Those people are in competition with others who are looking for investment properties to rent and oftentimes they get outbid by all cash offers or by those who have fewer restrictions in their offer. 

I’ve been telling you for some time that if you are in the market—you need to be prepared.  Prepared means knowing what you want, need and can afford and prepared to make an informed decision in a very short period of time—often minutes or hours.  I’m here to do the homework in helping you find what might be available for your personal situation and to help you find a reputable lender to get pre-approved, but I can’t make the final decision for you. 

Gone are the days where you can think it over for a day or two.  If you are seriously looking, you need to be ready to say “yes” practically on the sport when you find what you are looking for.

If you are planning to sell and trade up, you need to know exactly what you might do if your present home sells prior to you finding a new place because, at present, homes are not on the market for more than a month on average. 

It sounds like a lot of pressure, and it is.  That’s why you need a professional, knowledgeable real estate Broker like me on your side.  My 44+ years in the local arena, along with my national relocation network of Realtors/Brokers, gives me an advantage in knowing how to survive the buying and selling wars that are the norm today. 

If you are in the market, or know someone who is, please call me at 598.3200 or email me at Harry@HarrySalzman.com and let’s get going.  There may not be a lot of inventory, buy somehow there is most always a home that’s exactly what you are looking for as long as you are open to the possibilities of new neighborhoods and other not-thought-of options.

 

THIS INFOGRAPHIC EXPLAINS THE housing market IN A NUTSHELL…

Keeping Current Matters, 5.13.16

Some Highlights:

  • Home sales are up 1.5% year-over-year and 5.1% month-over-month.
  • Demand is still much higher than the available housing inventory, which declined 2.2% from March 2015.
  • This is the 49th consecutive month with year-over-year price gains.

 

WITH RISING RENTS, MORE INVESTORS ARE BEING COMING LANDLORDS

USA Today 5.15.16

With fewer homes on the market many folks who were previously “flippers”—those who bought low, fixed up the house, and turned around and sold it for a nice profit—are considering that it might be more profitable to become landlords. 

According to Lawrence Yun, one of the biggest reasons more investors are opting to become landlords right now is because they like the income potential.  “Rents have been rising, hovering near six-or seven-year high levels and are seeing close to 3.5% growth from 12 months ago,” said Yun.  That means not just getting a steady flow of cash from a tenant but also the prospect of an even higher income stream with each passing year.  This is looking good right now considering what savings accounts and Treasury bonds are now paying,

The laws of supply and demand are on the landlords’ side at present.  On the supply side, there aren’t enough rental units available, with vacancy at just 7% first quarter 2016 according to the U.S, Census Bureau.  And vacancies are even less here in Colorado Springs!

On the demand side, many young people are being forced to rent due to having to be mobile for their professions.  They also don’t always have the means or desire to purchase property.  Older Americans are also choosing to rent as well.

If you are thinking of becoming a landlord there are a number of things to consider besides having the capital to do so. 

According to Yun you should:

  • Think local.  Successful investors prefer properties within a 30-minute drive of their primary residence, and not simply so they can be “on-call” to be a handyman.  “It’s about the unknown and a preference for knowing their local market,” says Yun.  Even if all the data and statistics may say the investment property 200 miles away may provide a better return, most people don’t feel comfortable not knowing the real estate market conditions.”  However, if the local rental market is not robust—you are better looking at other investments.

 

  • Look into regulations and taxes.  As a landlord you have to report any rental income to the IRS and you’ll be eligible for certain property-related deductions to offset any taxes.  Therefore, running this by your accountant is extremely important.  Understanding tenant and landlord rights is equally important and these vary by municipality and state.

 

  • Account for maintenance and vacancy costs.  It’s common for new landlords to underestimate the operating costs of rental properties, especially the maintenance and turn costs when a tenant vacates.

 

  • Think ahead.  If your rental is in a town where your children may want to go to college or if it’s a smaller home that you may consider moving into when you retire, there may be added benefit to owning a rental property beyond the short-term goal of making some money.  It’s possible the property you buy now to rent could be put to some other use further down the road.

 

I’ve been selling a number of homes in the last few months to those who have realized that they are getting a greater return from real estate than from any other long-term investments.  However, as I’ve said before—not everyone is in a position to be a landlord.  I’ve had many years of experience in this arena personally and if you’re interested, I would be more than pleased to share my experiences with you.  

And…if and when you are ready to get into the rental market, I’m here to help you all the way with finding the right property.

 

FOR THOSE WHO NEED ANOTHER REMINDER OR TO PASS ON TO SOMEONE WHO DOES…

Keeping Current Matters, 5.20.16

Some Highlights:

  • The percentage of income needed to afford a median priced home is almost half the percentage of income needed to afford median rent.
  • Buying costs are significantly less than renting costs.
  • The percentage of income needed to afford a median priced home is less than the historic norm.

 

AN INTERESTING TIDBIT AND ONE TO WHICH I HEARTILY CONCUR…

The Gallup organization recently released a survey in which Americans were asked to rank what they considered to be the “best long-term investment.”

real estate ranked number one, with 35% of those surveyed saying it was a better long-term investment than stocks & mutual funds, gold, savings accounts or bonds.

 

OTHER INTERESTING FACTS FROM THE U.S. CENSUS BUREAU…

  • Denver is now the 19th most populous city in the nation with an estimated 2015 population of 682,545.

 

  • El Paso County had an estimated 2015 population of 674,471.

 

  • Colorado Springs ranked as the 40th biggest city in the country with 456,568 estimated 2015 population.

 

All I can say is another “WOW”.  No wonder I’m getting so many calls from folks who might be working in Denver but want to live here.  Lots more open spaces and certainly less traffic.  But it’s still hard for me, after living here for 44+ years, to realize that we have grown so big.  And…I guess it’s not going to stop there.