June 29, 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.

                                                

BUYERS FLOCKING TO housing market

The Associate Press, 6.23.15, The Wall Street Journal, 6.22.15

Home sales across the U.S. are headed toward their best year since 2007.  Yes, folks, real estate is a hot commodity again and prices are reflecting that.  With a strong job market, still historically low interest rates and new incentives for first-time buyers, pressure is mounting for buyers to act fast or possibly miss out.

NAR reported last week that national sales of existing homes climbed 5.1 percent last month to a seasonally adjusted annual rate of 5.35 million.  And May was the third consecutive month of the sales rate exceeding 5 million homes.

Factors helping this buying surge include a lower unemployment rate and still affordable mortgage rates.  More Americans feel secure enough, or have recovered sufficiently from the housing bust, to consider a move. 

Listings are still not keeping up with sales, thus fueling higher price gains.  Nationally, the Median home price climbed 7.9 percent over the past year to $228,700, just $1,700 shy of the peak in July 2006. In the first quarter of 2015, 51 metro areas posted double-digit percentage price gains.

First timers, aided by the new regulations, made up 32 percent of homes sold last month nationally, compared to 27 percent a year ago.  This is promising, but still behind the historically average of first-time buyers composing 40 percent of the market.

Prices and property values in the Pikes Peak area have risen in 12 of the last 13 months in a year-over-year basis according to PPAR and the median price of a local single-family sold in May rose to a record high of $243,000. 

Our area’s unemployment rate remains at its lowest level since right before the 2008 financial crisis and this is contributing to the surge of home buying locally.

While mortgage rates are still low, they are beginning to rise as the Federal Reserve prepares for an interest rate hike for the first time in nearly a decade.  Many folks are realizing that if they don’t buy now, they face the possibility of not only paying more for their home, but also paying higher monthly payments.

For five years, mortgage rates have hovered around 50-year lows and most economists believe this will start to reverse if and when the Fed begins to raise rates.  While modest increases may knock some potential buyers out of the market, many economists feel that most home buyers will hang in there because the monthly cost of an average-size home remains relatively affordable when compared with average incomes.  Apartment rent increases will also keep those wishing to own their own home in the market.

As I’ve been advising you for months, if you are sitting on the fence, now is the time to act.  Prices are continuing to rise and interest rates aren’t going to get any lower, and the longer you wait, the less opportunity you have to take advantage of the present housing market. 

Those of you who have waited out the recession now have equity again building in your home, and with prices steadily increasing, have an excellent opportunity to trade up or make a move to a new neighborhood.  You can still take advantage of a low interest rate, probably one much better than what you currently have.  And while there aren’t as many homes to choose from, there are still homes available in most neighborhoods and more than likely one just right to fit your present wants, needs and budget. 

With rental prices on the upswing, investment properties are still a good option for those in the market, but I wouldn’t advise waiting too long as home prices are rising steadily and there are not as many “bargains” as in the recent past.

If you or any family member or co-worker is even considering a move, please give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let’s see what we can do to help you achieve your home ownership goals.  I’d hate to see anyone miss out on this “once-in-our-lifetime” housing market that’s sure to be a “thing of the past” in months and years to come.

 

5 STATISTICS TO GAUGE THE housing market

REALTORMag 6.22.15

This is an overview from last week’s NAR report on U.S. housing:

  1. Inventory:  Total housing inventory rose 3.2 percent to 2.29 million existing homes available for sale by the end of May.  That is 1.8 percent higher than a year ago.  Unsold inventory currently is at a 5.1-month supply at the current sales pace, down from 5.2 months in April.  

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  1. Home Prices:  The median existing-home price for all housing types was $228,700 in May—nearly 8 percent above May 2014 homes prices.

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  1. Days on the Market:  Properties typically stayed on the market for 40 days in May, up from 39 days in April.  Still, that marks the third shortest time since NAR began tracking days on the market in May 2011.  Forty-five percent of homes sold in May were on the market for less than a month.

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  1. All-cash sales:  All-cash sales comprised 24 percent of transactions in May, down considerably from a year ago when they made up 32 percent of transactions.  Individual investors, who account for the bulk of cash sales, purchased 14 percent of homes last month, down from 16 percent a year ago.  Sixty-seven percent of investors paid cash in May.

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  1. Distressed sales:  Foreclosures and short sales remained at 10 percent for the third consecutive month in May.  Distressed sales are below the 11 percent share a year ago.  Seven percent of May sales were foreclosures and 3 percent were short sales.  Foreclosures sold for an average discount of 15 percent below market value in May while short sales were also discounted 16 percent.

 

LOCAL MARKET UPDATE AND MONTHLY INDICATORS

Pikes Peak REALTORS Services Corp.,

I just received a report from PPAR that gives complete details on housing activity for El Paso and Teller Counties for the month of May.  It is all such positive news that I wanted to share it with you.  You can click here to read the16-page Monthly Indicators or click here to get specific information on the neighborhood of your choice from the 31-page Local Market Update.

If you have any questions concerning the report, or any other real estate concerns, please give me a call.

 

GOOD NEWS FOR HOMEOWNERS—90% OF PROPERTIES NOW HAVE EQUITY

REALTORMag, 6.17.15

During the first quarter of 2015, approximately 254,000 properties regained equity according to CoreLogic’s latest equity report.  This brings the total number of U.S. residential properties that have equity to about 44.9 million—or 90 percent—at the end of the first quarter.

According to Frank Nothaft, chief economist for CoreLogic, “About 90 percent of homeowners now have housing equity, and, as a result, have experienced an increase in wealth, which can spur additional consumption and investment expenditures.  The remaining 10 percent of owners with negative equity will find their home value rising while they continue to pay down principal on their amortizing mortgage loan.”

“Many homeowners are emerging from the negative equity trap, which bodes well for a continued recovery in the housing market,” says Anand Nallathambi, president and CEO of CoreLogic.  “With the economy improving and homeowners building equity, albeit slowly, the potential exists for an increase in housing stock available for sale, which would ease the current imbalance in supply and demand.  There are still about 5 million homeowners who are underwater and we estimate that a further appreciation in home values across the U.S. would reduce the number of owners with negative equity by about one million.”

The report indicates that the majority of positive equity properties are centered at the high end of the housing market, with 94 percent of homes valued at greater than $200,000 having equity, compared with 85 percent of homes valued at less than $200,000.

As I mentioned above, this is GREAT NEWS.  It gives those who couldn’t take advantage of the historically low interest rates an opportunity to sell and trade up and possibly lower their monthly payment in the process.  If you aren’t aware of the current value of your home and are thinking of selling, I would be happy to give you an estimate based on the home itself and the current comparables.  Again I would suggest you not wait too long as no one knows for certain when the interest rates will rise but we do know that they will.   

 

HARRY’S “NO JOKE” REMINDER…

“You Only Live Once”, AND…

 

HARRY’S JOKES OF THE DAY