HARRY'S BI-WEEKLY UPDATE
May 6, 2013
HARRY’S BI-WEEKLY UPDATE
A Current Look at the Colorado Springs Residential real estate Market
AN AMAZING APRIL FOR real estate SALES
You are about to see the fabulously positive residential activity for April. When providing our professional opinions to our readers regarding the most current home data, we always include up to date market conditions.
The reason for this is to allow our readers to experience what is actually happening in the real estate market as we deal with it on a daily basis. The few years prior to 2012 haven’t been too exciting to say the least, but…those days are gone. The current housing market is the most exhilarating that we’ve experienced in a long while.
So, here’s the WOW for a Seller of mine. This long time client wanted me to list an investment house that had been occupied by a tenant for the past 8 years. I made some suggestions as to how the home might be more marketable with a few “updates”. The house went on the market as a new listing on MLS at approximately 11:30 a.m. on April 28th. By the end of that same business day we received not 1, not 2 offers at full price but a 3rd offer just over list price and….a 4th offer for considerably OVER list price. Yes, that was all on the afternoon/evening of the listing day.
But, I can’t stop there…the next day another offer was received. Unfortunately that Realtor should have contacted me to see if the property was available prior to taking the time to create an offer that had no chance of being taken, and thus disappointing their clients.
Talking to the other Realtors whose offers were not taken gave us all a glimpse at the “New Normal” that is trending in real estate now. There are simply not a lot of choice of listings compared to a year ago, and current listings have fewer days on the market.
AND NOW FOR THE NUMBERS…
April activity in Colorado Springs was exciting. Many of these numbers seem ‘off the chart” positive and yet they are real, as I’ve personally experienced. To illustrate that, here are some highlights of the April 2013 Pikes Peak Association of Realtors (PPAR) Report for Single Family/Patio Homes (Year-over-year comparing April 2012 to April 2013)
- Number of Sales—932. Up 18.9%
- Average Sales Price---$235,161. Up 6.3%
- Median Sales Price---$214,925. Up 11.6%
Locally, home prices have continued to increase in 20 of the past 22 months—yes, that’s almost two years. Last month was the best April for sales since 2006.
The total active Single Family/Patio Homes as of April 30, 2013 is 3377, which is about the same as the 3383 of a year ago.
I really encourage you to look over the actual activity in all areas in and around Colorado Springs to see for yourself why I’m so excited about this data. All of the numbers are moving up on a regular monthly basis.
Taking a look at Sales Activity only in 2013, between January and April of this year we are at 3121 home sales which is up 25.1% over that same period a year ago. Now that’s a huge WOW!
To look at the 12-page PPAR Report and see how your area is performing, please click here. I am available to answer any questions you may have concerning this report or any of your real estate needs. Just call me at 598.3200 or email me at Harry@HarrySalzman.com .
And to make the picture even brighter, mortgage rates are bottoming out again with 30-year fixed rates today at 3 3/8%, and 15-year fixed rates at 3.0% (and maybe some at 2 7/8%).
As you are aware, I’ve been predicting this for more than a year now and here you will see actual numbers to back up my words. So, if you, your family, friends or co-workers are thinking of selling and trading up, buying or looking for investment property, NOW is the time. I will be happy to discuss all our your viable options in these areas, and as always, will take your individual needs, wants and budget into consideration.
A WORD ABOUT “ASSESSED PROPERTY VALUES”
During the past week most local property owners should have received the latest “Real Property Notice of Valuation”. No, this isn’t a tax bill, it is what the El Paso County Assessor feels the property value will be based on for the 2013 tax assessment.
What might this mean to a property owner? The Assessor’s office can use comparable properties to establish real property values from a 24 month time period. The new and updated Assessor’s value of a property (per Colorado Revised Statute 39-1-104 (10.2) (a) (b) (c) (d) ) began July 1, 2010 and ended June 30, 2012.
What I believe is that the Residential Market Value of your home today is higher than what your home was worth over the period of July 1, 2010 to June 30, 2012.
I have already been fielding questions from clients to explain their current situation and am more than happy to help explain what the value stated on the Assessor’s form you just received means to you.
The good news is that the 24 months of real estate values that was used for this current assessment was lower than today’s probable home value.
Even though today’s assessed value of a home is “x”, the current market has nothing to do with the recently received assessed value because the local market was most probably lower during the two year period on which the assessment is based.
It is also worth keeping in mind that today’s market value, even a “current market anaylsis” has nothing to do with the appropriate value for the most current Assessors Property Value.
LOCAL JOBLESS RATE IS AT A 4-YEAR LOW AND HOMEBUILDING STARTS JUMP
The 8.3% unemployment rate for Colorado Springs is the lowest since February 2009 and that’s great news for the housing recovery here. More people working is helping to fuel the jump in homebuilding starts. The 302 permits in April in Colorado Springs and El Paso County is a 58.1% jump over April 2012. It’s also the highest number of permits issued by Regional Building in any month since June 2006.
And while foreclosures aren’t yet a thing of the past, they are falling quickly as local housing demand and home prices rise. Just more good news in the local market.
AND NOW FOR THE NATIONWIDE REPORT FROM THE LAST FEW DAYS
Our local real estate Market is on a roll and ahead of many other communities in the rest of the country. That being said, it’s always good to follow what’s happening nationally because good news there ultimately means even better news for us.
The Wall Street Journal reported on May 1 that “home prices are rising at the fastest rate in seven years, with some communities seeing double-digit gains, as buyers are returning to a market where the number of properties for sale is in short supply.” Prices jumped 9.3%--the quickest rise since 2006, with gains seen all across the country.
Even with some concerns that traditional Buyers are facing still stringent mortgage lending standards and being squeezed out by investors able to make winning cash bids, “for now, recent data suggest home price gains are likely to continue. Sales of previously owned homes rose by 10.3% from one year ago in March, even as supplies of homes for sale fell by 16.8%.
Demand has picked up as the economy has added jobs, which has boosted household formation. Rising rents and falling mortgage rates have made (home) ownership more attractive.”
The article goes on to say that “even with the gains in home prices, housing is more affordable than at any time in the past 30 years because mortgage rates are so low.
The concern is that home prices could more easily rise above their traditional relationship to incomes because lower mortgage rates will enable buyers to swallow price increases. ‘We are encouraging people to buy an asset that, when [mortgages] rates go back to 6% to 8%, will look a bit overpriced,’ said Stan Humphries, chief economist at Zillow.”
The WSJ also says that “what’s bad news for home buyers is good news for builders; the low inventory of previously owned homes for sale is driving up new-home sales—and prices. New home sales jumped 1.5% in March to an annual pace of 417,000, the second-highest monthly sales pace in three years. Year-over-year March sales were up 18.5%.”
USAToday reported on May 1 that “a tight housing supply and investor buyers pushed up February home prices at their fastest monthly rate in eight years, but job growth is a factor, too. ‘Prices are growing faster in markets with stronger job growth,’ says Jed Kolko, chief economist for real estate website Truilia.”. We can see this in our own local market as I mentioned earlier.
On Friday USAToday reported that “home loans get dirt cheaper” and that “about a quarter of refinancing applications in March were for 15-year fixed-rate loans, according to the Mortgage Bankers Association. For purchase loans, 85% of consumers take longer loans. But applications for 15-year mortgages to buy homes have risen nearly twice as fast as 30-year purchase-loan applications.”
Citing a report from the Standard & Poor’s/Case-Shiller 20-city home price index, The Gazette on May 1, reported that “U.S. home prices rose 9.3% in February compared with a year ago, the most in nearly seven years. The gains were driven by a growing number of buyers who bid on a limited supply of homes.”
REALTORMag reported that home “sales have been above year-ago levels for 21 consecutive months, while prices show 13 consecutive months of year-over-year price increases.
Lawrence Yun, NAR chief economist, said there is more demand than supply in the current market. ‘Buyer traffic is 25 percent above a year ago when we were already seeing notable gains in shopping activity,’ he said. ‘In the same timeframe housing inventories have trended much lower, which is continuing to pressure home prices. The good news is home construction is rising and low mortgage rates are continuing to keep affordability conditions at historically favorable levels. The bad news is that underwriting standards remain excessively tight, while renters are getting squeezed by higher rents.’
‘The inventory improvement last month results from a seasonal gain, but conditions continue to broadly favor Sellers. We need a housing supply of over 6 months to have a generally balanced market between home Buyers and Sellers, but it’s unlikely we’ll get there without greater increases in housing construction,’ Yun said.”
THERE’S NO BETTER TIME THAN THE PRESENT
As you can tell from both national and local news, today we’ve got the best of both worlds. Sellers are seeing quick turnaround times at prices that are considerably higher than in the recent past and Buyers are seeing mortgage rates that allow for the price increases. If you’re looking to sell and trade up or seeking investment homes to rent, this is an opportunity that won’t be around forever. Home prices will continue to rise, but we don’t know how long these historically low interest rates will be available.
Again, what all this means is exactly what I’ve been telling you for the past year. Now is the time to sell and trade up or invest. Call me with any questions, or simply to find out what’s going to make the most sense to you personally in this fast changing market.
JOKE OF THE DAY
Why did the man take his computer to a clinic?
It had a virus.
What do you get when you cross a computer with a toad?
A wart processor.
How was the computer convention?
Crowded. You couldn’t get a nerd in edgewise.
Jimmy was explaining to his dad the kind of computer he wanted. “First we’ll discuss hardware, and then we’ll talk about the software I need.”
“Wait a minute,” said Jimmy’s dad. “How is hardware different from software?”
Jimmy just shook his head and said, “Hardware is the part of a computer that you can kick.”
Did you hear about the computer with the corrupt hard drive?
Its backup was worse than its byte.
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