HARRY'S BI-WEEKLY UPDATE 5.6.21
May 6, 2021
HARRY’S BI-WEEKLY UPDATE
A Current Look at the Colorado Springs Residential real estate Market
As part of my Special Brand of Customer 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.
WE INTERRUPT OUR REGULAR COLUMN FOR A WORD FROM THE EDITOR (aka WIFE)…
This was too cute a story not to share with Harry’s friends, clients and readers.
The Salzman household, like so many others during the past year or so, has been busy cleaning closets, the basement and just about everywhere else in preparation for some remodeling. In doing so, we have come across many years’ worth of memorabilia. When I walked into the office one day, I saw a box that had the above pictured banner sitting on top.
I could easily ascertain from the year on it that Harry must have been all of nine years old when he won this “award” so I of course wanted the back story. And this is what he told me:
“You know, when I was young, I knew that in order to be successful in life no one was able or going to hand anything to me on a silver platter. I was aware quite early that any success I achieved would have to be through my own doing since my parents were not in a position to help financially. I knew that I wanted to be the first in my family to graduate college and I knew I wanted to be the best at whatever I chose to do.
When I was in the Cub Scouts, we supported the Boy Scouts in their annual revenue drive. We were asked to sell raffle tickets in order to raise money and earn badges. I was determined to be the best at that.
I figured out that if I went door-to-door there would be a possibility that no one would be home, and I’d be wasting time. So, I asked my mother if I could skip school one day and go with her to her office building in downtown Phoenix and that way I could go from office to office and hit up everyone who worked in that big building. She agreed and it was a great success.
But of course, me being me, I couldn’t rest there. The following Saturday I asked my mother to drop me off downtown at Walgreens, which at that time had a soda fountain in the store. I sat at the counter and every time someone came in to eat or purchase a drink, I asked them to buy a raffle ticket from me.
And that’s how I won the “1956 Boy Scout Exposition Champ Salesman” award!”
I have known Harry since he was 13 so didn’t know him at the time he won this, but his answer did not surprise me. He is one of the hardest working people I have ever known and has been since we first met. He was always striving to be the best and wouldn’t ever settle for less. I could tell you many more stories of how impressed I was with his tenacity and imagination when it came to sales and you’d love them all, but it would take days. His ingenuity, his devotion to perfection, his art of negotiation and so much more were prevalent way back then, and he continues to amaze me daily with his “ideas” of how he can do more for his clients.
Those of you who I have not met are probably thinking, “well, of course she’s saying that because she’s his wife!” But I’m guessing even if you don’t know me, you probably do know Harry well enough to know that his special brand of customer service is just an ingrained part of him…and now you know it went back to when he was only nine years old.
And if you haven’t yet experienced working with Harry, all I tell you is that he’s been preparing to work hard for you since 1956. That’s better than money in the bank…but with Harry you’ll get more of that as well.
Thank you for indulging me this story…I knew it wasn’t one Harry would share himself.
AND NOW BACK TO OUR REGULARLY SCHEDULED COLUMN…
What can I tell you that you haven’t heard from me over the last several months? Home values and prices are still going through the roof and interest rates are continuing to remain historically low. And, unfortunately, there are still very few homes available for resale.
With apartment rents continuing to rise and interest rates so low, folks are wanting to get into home ownership, many for the first time. The shortage of available homes for sale, along with higher prices and stricter loan qualifications, especially for first-time buyers, continue to make it difficult to find a home.
Bidding wars with very creative offers are making things even hard for buyers. Sellers, on the other hand, are oftentimes shocked at what they can get for their present home. However, finding the next one is presenting challenges that even a few years ago might have been hard to imagine.
New construction, an option many of my clients have considered in recent days, is booming, but there is a shortage there as well. More and more homes are being built but builders are finding it difficult to keep up with the demand. This is especially true in recent times when the cost of construction, including lumber, cement, aluminum, copper and more is going up almost daily. Home builders are trying new ways to compensate for that, which I will explain later in this eNewsletter.
The Residential real estate market today, and most especially here in Colorado Springs, is not for the timid or uninformed buyer. It’s more essential than ever to be working with a professional, seasoned broker who knows how to navigate these new waters.
Fortunately for you…you’ve got me. And they don’t call me “Mr. Negotiator” for nothing. I’ve been working in the local arena for 48 years this month and have seen most all cycles. This one is tough for sure, but when you have me on your side you’ve won at least one of the battles. And for the other battles--you’ve got me fighting them for you.
If you’ve even considered a move, now is the time to get started. Prices aren’t going down any time soon and mortgage rates essentially have nowhere to go but up, so today is the best time to start. It shouldn’t take long to sell your present home and it will likely go for far more than you might imagine. However, finding a replacement could take some time so it’s best to start in that direction first.
The best move you can make is to call me at 593.1000 or email me at Harry@HarrySalzman.com to get any and all of your Residential real estate questions answered. I look forward to speaking with you.
APRIL 2021
Statistics provided by the Pikes Peak REALTORS Service Corp., or it’s PPMLS
Here are some highlights from the April 2021 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 a very low 9. For condo/townhomes it was also 9.
Also in El Paso County, the sales price/list price for single family/patio homes was 104.2% and for condo/townhomes it was 104.1%.
It’s noteworthy that in April of 2020, we couldn’t show homes due to the pandemic so it is no surprise that the number of listings and sales in comparing this year to last would be up considerably. The numbers aren’t indicative of more available homes or more home sales.
Please click here to view the detailed 10-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 April 2021 to April 2020 for All Homes in PPAR:
Single Family/Patio Homes:
· New Listings were 1,879, Up 28.9%
· Number of Sales were 1,489, Up 22.1%
· Average Sales Price was $481,857, Up 21.8%
· Median Sales Price was $425,000, Up 18.1%
· Total Active Listings are 557, Down 64.9%
· Months Supply is 0.4, Down 2.9%
Condo/Townhomes:
· New Listings were 217, Up 11.3%
· Number of Sales were 221 Up 27.7%
· Average Sales Price was $324,193, Up 20.6%
· Median Sales Price was $305,000, Up 19.7%
· Total Active Listings are 75, Down 62.5%
· Months Supply is 0.3, Down 2.3%
Now a look at more statistics…
APRIL 2021 MONTHLY INDICATORS AND LOCAL MARKET UPDATE 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
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 21.3%
- Median Sales Price for All Properties was Up 19.7%
- Active Listings on All Properties were Down 56.3%
Also in El Paso County, the sales price/list price for single family/patio homes was 104.2% and for condo/townhomes it was 104.1%.
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 in general:
PREVIOUSLY OWNED U.S. HOMES ARE NOW MORE EXPENSIVE THAN NEW ONES
Bloomberg News, 5.1.21
It’s now cheaper to buy a new home than a previously owned one for the first time in more than 15 years.
With price increases in the broader market due to the lack of available listings both locally and nationwide, the premium for newly built homes vanished last month, erasing the discount traditionally associated with older properties.
Nationally, the median sales price of a previously owned single-family home rose to $334,500 in March, the latest National Association of Realtors data show. Meanwhile, new properties sold for a median of $330,800 according to a government report, marking a reversal in the differential for the first time since June 2005.
Prices can vary widely each month depending on the composition of properties sold and increased on a year-over-year basis—but the gains were much larger for older homes. This is due to the lack of available existing homes for sale—with only 900,000 existing homes for sale nationally—down more than 30% from one year ago.
On the other hand, the number of new homes sold and awaiting start of construction climbed to the highest level since September 2006.
WITH LUMBER PRICES BREAKING NEW RECORDS, BUILDERS ARE OFFSETTING THOSE COSTS WITH ESCALATION CLAUSES
Realtor Mag, 4.23.21, NAHB 4.23.21, The Wall Street Journal, 5.3.21
While the escalating lumber prices are generating fabulous profits for sawmill owners, home buyers, renters and do-it-yourselfers are footing the bill.
Lumber and plywood are flying off the hardware store shelves and being bid up by home builders as prices are reaching record numbers. On-the-spot prices for two-by-fours and other wood products have also jumped to fresh highs.
When the economy was shut down last year to slow the spread of the coronavirus, sawmills sent workers home and curtailed production. By April 2020, 40% of North America’s sawmill capacity was shut down. While U.S. wood product output returned to pre-pandemic levels in December, production remains about 16% lower than the 2006 peak, which is the last time so many houses were being built.
And these price increases are being passed on to consumers. It’s not only new homes and renovations that are costing more due to lumber prices.
New apartments being built to help with the lack of available housing for sale are charging higher rents due to the increased building costs.
While home builders are doing their best to obtain lumber price guarantees from suppliers, they can only get them for around two months at max, and reorders are continuing to cost more.
To offset this and protect themselves from ongoing price increases in the lumber market, more home builders are adding escalation clauses to their sales or construction contracts.
According to the most recent National Association of Homebuilders and Wells Fargo housing market Index survey, 47% of builders said they were “including price escalation clauses in their sales contracts”. Another 10% are including shared price clauses in their contracts, which are similar to price escalation clauses in that they tie the final house price to the price of building materials. Paul Emrath, NAHB’s vice president for survey and housing policy research explained, “The difference is that, in the typical shared price clause, the home builder agrees to absorb part of the material price increase, with the home buyer covering the rest”.
APARTMENT RENTS RISE WITH PERKS AND DISCOUNTS FADING
The Wall Street Journal, 4.24,21
Americans are now paying more for rent again, ending a period during the pandemic when they enjoyed flat or falling rental prices.
The record low inventory of homes for sale is fueling the rental market and landlords and apartment buildings are able to increase prices nationwide.
Rising rents add to the mounting evidence that the economy is rapidly gaining strength and analysts are forecasting that the U.S. economy could grow around 7% in 2021, which would be one of its strongest years in decades.
real estate investors believe the rental market is primed for another period of price growth, comparable to the years that followed the financial crisis, when effective rents outpaced inflation. According to Matthew Lawton, an executive in the capital-markets division at brokerage JLL, “In some markets like Nashville and Denver, they increased more than 10% for multiple years”.
As more people are priced out of the for-sale market during the hottest home sales market in 15 years, they will search for rental properties.
I’ve got a number of clients who are constantly on the lookout for investment properties, and while they may cost more to buy these days, the monthly rental price they can get for these homes more than compensates for the cost of the home over the long run.
If buying for investment purposes is something you have considered, please give me a call and let’s discuss whether it might be an option for you. Of course, I recommend that you first talk with your tax and wealth advisors to see if it that’s something viable for your individual financial situation.
UCCS ECONOMIC FORUM UPDATE
College of Business, UCCS, 4.30,21
As always, I’ve included the most recent economic update from the UCCS Economic Forum. It provides data concerning all aspects of the economy, on both the National and Colorado Springs levels.
You can click here to read the report in its entirety and if you have any questions, please give me a call.
