June 15, 2015

 

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.                          

                               

THE #1 REASON TO BUY RIGHT NOW...THE MONEY!!

Keeping current matters 6.9.15

Here we go again…I often feel like I’m repeating myself but my clients keep asking and I keep saying---if you’ve even been considering a residential home purchase, NOW is the time to start acting on that.  

Recent data backs me up:

  • “The current tightness of supply conditions would normally be consistent with much faster price growth.  The continued steady growth in home sales that we expect this year will only add to this upward pressure on prices.” -- Ed Stansfield, chief property economist at Capital Economics

 

  • “The S & P/Case Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a 4.1% annual gain in March 2015…with a 0.8% increase for the month.” -- Case Shiller Home Price Index

 

  • “All signs are pointing toward continued price appreciation throughout 2015…Tight inventories, job growth and the impact of demographics and household formation are pushing price levels in many states toward record levels.”  -- Anand Nallathambi, CEO of CoreLogic

 

  • “Even with further acceleration, the pace of price growth remains too high.  Strong buyer demand and low inventories coupled with relatively low new construction are helping to push prices up, keeping the housing market tipped in favor of sellers.”  -- Danielle Hale, Director of Housing Statistics at NAR

 

  • “The first quarter saw strong and widespread home price growth throughout most of the country.  Home prices are now, on average, roughly 20% above where there were three years ago.  This run-up has been historically exceptional and is particularly notable in light of the limited household income growth and modest rate of overall inflation observed during that same time period.” -- FHFA Principal Economist Andrew Lerventis

Bottom Line:  Considering that a home makes up the greatest percentage of accumulated wealth in most families, waiting to buy probably doesn’t make much sense from a purely pricing standpoint.

If you, or any family member or co-worker has been waiting to sell and trade up, or buy for the first time or for investment purposes—don’t delay much longer.  Give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let’s see how we can start the process of letting your home put equity in your pocket.

 

housing market ON TRACK FOR BEST YEAR SINCE 2006…COLORADO REALTORS HAVE HIGHEST MEDIAN PRICE RISE EXPECTATIONS

RealtorMag, 6.9.15  &6 11.15

Now at its midpoint in 2015, the residential real estate market is on track for its best year since the peak of the housing bubble in 2006 according to Jonathan Smoke, chief economist for realtor.com.  The good news is that this time it’s NOT a housing bubble, Smoke noted.

With the median home prices rising 9% in April year-over-year, homeowners are seeing strong gains in equity lately.

In a survey conducted by the New York Federal Reserve Bank, both renters and homeowners expect prices to continue to increase in the coming year, but renters expect to face more price growth.

The Fed survey shows that, as prices grow, consumers’ attitudes toward housing as a financial investment remain positive.  More than 60% of renters and owners believe that buying a property in their ZIP code is a good investment, while only 10% consider it a bad investment.  Even better, the percentage of homeowners who believe housing is a good investment rose from 58.5% in the 2014 survey to 63.2% in this recent survey.

And the latest ‘REALTORS Confidence Index” indicates that Realtors are also growing more upbeat and expect prices to increase at a slightly faster pace in the next 12 months.  Those surveyed expect the median price growth in the next 12 months to be 3.9% nationwide. Of special note to you, my readers…Colorado Realtors reported the highest price expectations, with median growth expected at 6%.
 

The good news just keeps coming…

Fannie Mae’s May 2015 National Housing Survey indicates that Americans’ attitudes about the housing market are strengthening, which coincides with recent forecasts that predict a pickup in housing activity for the year.

The recent survey indicated more consumers reported an increase in household income, which is nearing an all-time-high for the survey.  The percentage of consumers surveyed that said their household income is “significantly higher” than 12 months ago grew six percentage points to 28% over the past two months.

According to the report, “as job growth appears to be driving meaningful income growth, the outlook for housing market growth also is improving”.

Notable, too, is that the share of consumers who say now is a good time to sell a home continues to rise, also reaching a survey all-time-high in May--49% of respondents.  And the number of consumers wanting to buy rather than rent on their next housing move rose three percentage points to 66%.

Doug Duncan, senior vice president and chief economist at Fannie Mae, notes that the survey high of those who say it’s a good time to sell, as well as the growing percentage of consumers who say their household income is significantly higher than last year, indicate “things are looking up for housing”.

“We have found that these two indicators—good time to sell and income growth—are key drivers for the performance of the housing market.  The increase in these indicators suggest our forecast of moderate improvement in the housing market in 2015 is on course and mirrors the near-term performance of other leading market data, including mortgage applications and pending home sales,” he added.

Lots of statistics, but all consistent in the fact that home ownership is a good investment and one that can provide substantial equity over time, especially during this “non-bubble” median housing price rise.

 

MORTGAGE RATES RISING

The Wall Street Journal, 6.12.15

With the good news of median home price increases and job growth comes the reality that the historically low interest rates we’ve seen in the past few years are most likely going to climb too.  The positive economic data you just read boosted the confidence among many traders that the Federal Reserve will raise short-term rates later this year for the first time since 2006.

This past week saw mortgage rates going above 4% for the first time this year.  The mortgage rate increase from 3.87% to 4.04% on 30-year, fixed-rate loans was the sharpest since 2013 and was similar to the one-week advance in May 2013 when then Fed Chairman Ben Bernake suggested the Fed would soon slow its bond-buying stimulus program.

However, according to Donald Frommeyer, CEO of the National Association of Mortgage Brokers, “rates are still pretty good.  I haven’t had anybody tell me that rates are too high now.” 

The National Association of Realtors said two weeks ago that its pending-home-sales index, which is based on contract signings for purchases of previously owned homes, increased 3.4% in April to its highest level in nine years. 

Many in the housing industry say that to the extent higher interest rates reflect a more robust economy and wage growth, they shouldn’t harm the housing market. 

Bottom Line:  While interest rates are rising and will likely continue to at a slow pace, they are still historically low and if you want to take advantage of this possibly “once-in-our-lifetime” mortgage rate scenario, don’t wait too long.  It won’t be here forever.

 

LOCAL HIRING OUTLOOK LOOKS GOOD

The Gazette, 6.9.15

With the best hiring outlook since second quarter 2007, the percentage of Colorado Springs employers planning to hire in the July-to-September quarter exceeds those planning cuts by 26 percentage points. 

According to a survey by staffing firm ManpowerGroup, 30 percent of local employers intend to add staff and only four percent anticipate reductions.  The remaining employers don’t expect any changes in staff levels. 

Another indicator of our improving job market comes from estimates released in May by the Colorado Department of Labor and Employment that showed a 3 percent growth year-over-year for March—the highest in almost nine years.

The survey placed Colorado Springs in a six-way tie for 15th best among the nation’s 100 largest metropolitan areas—with Albuquerque, N.M; Greenville, S.C.; Minneapolis, MN; Oxnard, CA and Providence, R.I.

For four consecutive quarters the local hiring outlook has been more optimistic than the same quarter a year earlier. 

“This is good news, and it reflects the national numbers with much of the growth coming from construction,” said Tatiana Bailey, director of the Southern Colorado Economic Forum.  “We are seeing strong consumer sentiment—people are confident enough to buy houses and other big-ticket items.”

As you read earlier, more jobs translate into more home sales and that in turn helps increase home prices.  It’s a “Win-Win” all around and especially so for Colorado Springs homeowners.

 

U.S. HOUSEHOLD WEALTH HITS NEW HIGH

The Associate Press, 6.12.15

The Federal Reserve announced last week that the value of Americans’ stock holdings, real estate and other assets rose to a new high of $84.9 trillion from $83.3 trillion in the first quarter of 2015.

While the typical household isn’t necessarily benefitting since only 10% of the richest households own 80 percent of stocks, there are signs that Americans are continuing to repair their finances, which could help the economy in the long run.

In another win for the American Dream, rising home prices are helping to rebuild Americans’ ownership of their homes and home equity was equal to 55.6% of the value of U.S. housing in the first quarter, the highest ratio in more than eight years.  This is great news, especially since the majority of Americans consider a home to be their greatest financial asset. 

 

SKY SOX TICKETS GOING FAST

Another reminder—I still have tickets available to a number of Sky Sox games but they are going quickly now that the weather has improved.  There are four first row tickets behind the Sky Sox dugout available at no charge on a first-come, first served basis.  Just give me a call at 598.3200 and I’ll be happy to reserve them for you.

 

HARRY’S JOKE OF THE DAY