HARRY'S BI-WEEKLY UPDATE 7.21.20
July 21, 2020
HARRY’S BI-WEEKLY UPDATE
A Current Look at the Colorado Springs Residential real estate Market
As part of my Unique Brand of 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.
HOMES PRICES UP…MORTGAGE RATES DOWN...NOW IS A PERFECT TIME TO INVEST IN RESIDENTIAL real estate
Local residential real estate has been keeping me very busy these days. With home prices continuing to escalate and mortgage interest rates reaching their lowest levels since record keeping began, it’s no wonder that folks are rushing back into the market.
Yes, this past week the 30-year fixed-rate mortgage loans dipped below 3% which is totally amazing since I can still remember selling homes when the rates were hovering above 18% in the early 1980’s.
And despite the ongoing pandemic, home prices are continuing to rise all over the country and especially here in Colorado Springs.
While that’s great news…it comes with a record low inventory that is causing multiple offers, bidding wars and more. Unscrupulous lenders are also popping up and creating problems for both sellers and buyers alike. I recently was on the listing side of a deal where the buyer’s lender was not quite ethical and it presented a number of problems to be solved prior to closing.
That’s why I cannot emphasize enough the importance of dealing with an experienced, knowledgeable real estate professional like myself when it comes to one of the most important financial decisions of your life. My 47 plus years in the residential real estate arena, along with my investment banking background, give you an exceptional advantage in today’s market. There are more hurdles than I’ve ever encountered, but fortunately I know how to navigate through the buying and selling wars and can get the job done for my clients. These days it is especially important for sellers to follow my “atypical” advice in order to avoid potential disaster from an unqualified lender on the buyer’s side or other unforeseen pitfalls.
The low inventory was tight before COVID hit and now it seems even worse. Showings were severely curtailed for months and now that homes can be shown once again, buyers are ready to pounce. When we made an offer for one of our clients several days ago, the listing agent told us there were already 12 offers before ours! And while I certainly know how to write an offer that at least gets noticed, even I can’t perform magic—especially at unprecedented times such as we are experiencing now. As much as I hate to see disappointed clients, this is becoming more common as the year goes on. That’s why it is so important to do as much homework as possible prior to the search and have considered alternatives in case you are unable to get your first choice.
This is a reason that new home construction is again booming, and folks are looking at that as an option. Prices on new homes are also escalating due to the higher cost of some materials but there are options available in most price levels and in various neighborhoods. When it comes to site location, home details and good financing, I can help you in a new construction purchase also. I have an excellent working relationship with a number of local homebuilders and my help comes at no additional cost to you.
Here is the bottom line:
If you have been wanting to move, either to upgrade or move to a new neighborhood, NOW is the time. You are likely to get more for your present home than you think and the increased equity, along with the low mortgage interest rates equals a win-win for you.
However, you won’t know any of this until you give me a call to discuss all the possibilities. I can be reached at 719.593.1000 or by email at Harry@HarrySalzman.com and the sooner we talk, the sooner we can put your residential plan in place.
RATE FOR 30-YEAR MORTGAGE FELL TO LOWEST ON RECORD LAST WEEK
The Wall Street Journal, 7.17.20, RealtorMag, 7.15.20
For the seventh time this year, the Freddie Mac mortgage interest rates hit a new low—falling to 2.98%--the lowest rate in the almost 50 years of record-keeping.
What this means for many potential buyers is that they can expand their budgets and get more home for the buck. This is especially good for first time buyers who are facing record low inventories in starter home properties. They are able to look at homes that cost a bit more for the same budgetary requirements.
Not all rates are declining at the same pace, though. Jumbo loans, those too big to sell to Freddie or Fannie and which allow buyers to qualify for higher loans to purchase homes, are requiring somewhat stricter credit score requirements and larger down payments. Because of the pandemic, there are fewer investors interested in buying these types of loans, according to Mike Fratantoni, chief economist at the Mortgage Bankers Association. Since requirements vary from financial institution to financial institution, if a jumbo loan is something you are considering, it’s important to shop around for the best rate.
I can’t predict which way rates are headed, but I can tell you this. Rates this low are exceptional and if you are in the market, NOW is a great time to buy.
BIDDING WARS KEEP HEATING UP
RealtorMag, 7.14.20
real estate agents all across the country are dealing with multiple offers and bidding wars are involved in considerably more than half of all sales nationally, just as they are locally. They have been growing steadily since May, when states began to open up after mostly being on lockdown during the initial stages of the pandemic.
“Bidding wars continue to be fueled by historically low mortgage rates and fewer homes up for sale than almost any time in the last two decades,” says Taylor Marr, economist for brokerage Redfin. “It’s like a game of musical chairs where only the best bidders get a seat. Both renters and move-up buyers who have held onto their jobs are vying for the small number of single-family homes on the market as they realize they need more space for their families.”
Both buyers and sellers are affected by the multiple offers and bidding wars, so once more let me remind you of the importance of having a seasoned professional like me on your team.
And in the same vein…
SHOULD PRE-APPROVAL LETTERS BE REQUIRED FOR HOME TOURS AT PRESENT?
RealtorMag, 7.8.20
As a result of the pandemic, many home sellers are attempting to limit the number of people who walk through their properties. Because of this, it is strongly suggested that sellers limit in-person tours to only potential buyers who can show they have been approved for a mortgage.
I have always suggested that my clients require a pre-approval letter, but in the current environment it is a MUST. Sellers and listing agents are more cautious about who is coming into their homes and they should ensure that only those truly qualified are coming through their doors.
A pre-approval letter is important, but more important is that it be from a reputable lender. As I mentioned earlier, one of my recent sellers was faced with a pre-approved buyer who had an unscrupulous lender, and this created a host of problems to get the deal done.
These, and other issues should be addressed prior to listing a home in all circumstances, but most especially during the current pandemic. As I become aware of other potential problems I will most certainly pass them on to my clients so that we can have the “cleanest” possible solution to showing homes—both in health and financial terms.
HOW TO MAKE YOUR OFFER STAND OUT IN A HOT MARKET
Rismedia, 7.17.2020
With the low inventory along with historically low interest rates, homes are selling faster than ever. New listings often have multiple offers before anyone has even toured the home in person. As I’ve been telling you time and again…this requires homework on your part, and mine, to ensure you know in advance exactly what you need, want and can afford.
It may be a bit more difficult in recent times, but it is still possible to make an offer that stands a decent chance of getting noticed.
Keeping your offer simple is one of the most important things. The fewer contingencies, the better. Price is not always the motivating factor in a seller accepting an offer. Most often, it’s a combination of the terms that work out best for the seller, Price is important, too, but as I always say, sometimes NOT getting a home is a win because you don’t want to overpay or extend your budget simply to win a bidding war. I know when it’s time to walk away and will guide you through the process.
One of the reasons I keep advising my clients to do their homework is because when you find “the one” you have to move fast. There’s little or no time to mull over what you’ve seen because by then it’s likely that one or more potential buyers will have made an offer.
However, the best tool you have in making your offer stand out is ME. I’ve been doing this for almost half a century and know how to write an offer that will at least get a second look, if not make it to the closing table. If we both do our parts successfully, I still can’t promise that we will be victorious, but I do know that our chances are far better than most.
US HOME PRICES END FIRST HALF OF YEAR ON A HIGH NOTE
Rismedia, 7.21.20
And we end this eNewsletter as we started...telling you that home prices, despite the ongoing pandemic, are still on the rise and continuing to escalate.
Home prices nationally increased at an annualized rate of 6.3% during the first six months of 2020, with a national median home price increasing to $256,740 in June.
As you’re no doubt aware from our last eNewsletter, our local median price is over $400,000 and our price increase, will lower than in the recent past, is far better than the national average.
So, we are all off to a good start and I expect us to continue to well for the foreseeable future.
