August 4, 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.

                                                              

JULY LOCAL STATISTICS CONTINUE THE POSITIVE GROWTH TREND

Statistics provided by the Pikes Peak REALTORS Service Corp, or it’s PPMLS

PPAR released July statistics this morning and I waited to share what I anticipated to be more good news, thus the eNewsletter coming to you a day later than usual.

Once again, I am thrilled to report that things are looking very good for the Pikes Peak Region in the Residential real estate market. 

July was the twelfth straight monthly increase in sales.  In the Cumulative Year-To-Date Summary you will see that total sales numbers in Single Family/Patio Homes is up 28.4% over the same period last year.

These numbers reflect strong consumer confidence along with low, but slowly rising, interest rates that many buyers feel will soon go higher.  “Act now” continues to be the current norm and “act quickly” is becoming the new norm.

With the Federal Reserve signaling that interest rate hikes are on the horizon, possibly sooner than later, many people are beginning to realize that this could be the end of historically low mortgage interest rates, most likely in our lifetime. 

Low listings are still limiting choices but I still find that most of my clients are able to sell and trade up as long as they are realistic about the current market conditions and are able to make a quick decision once they find the property they want to buy. 

If you’ve been thinking about using the current equity available in your present home in order to trade up or move to a new neighborhood, don’t wait any longer if you want to take advantage of the still low interest rates.  “Wait and see” is no longer an option in most cases.

To discover the options available for your individual wants, needs and budget, give me a call sooner than later and let’s see what we can do to make this happen.  I can be reached at 598.3200 or by email at Harry@HarrySalzman.com. 

Here are some highlights from the July 2015 PPAR report.  Please click here to view the detailed 10-pages. If you have any questions, as always, just give me a call.

In comparing July 2015 to July 2014 in PPAR:                     

                        Single Family/Patio Homes:

  • New Listings are 1882 Up 14.3%
  • Number of Sales are 1,367, Up 14.0%
  • Average Sales Price is $275,417, Up 3.1%
  • Median Sales Price is $243,000, Up 5.7%
  • Total Active Listings are 3,409, Down 19.3%

                        Condo/Townhomes:

  • New Listings are 214, Up 15.1%
  • Number of Sales are 194, Up 22.8%
  • Average Sales Price is $169,899, Up 3.7%
  • Median Sales Price is $155,000, Up 4.5%
  • Total Active Listings are 300, Down 25.2%

 

COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*

                                                Median Sales Price             Average Sales Price

Black Forest                            $412,450                              $434,160

Briargate                                  $328,150                              $336,068         

Central                                      $180,000                              $215,897

East                                          $197,000                              $208,028

Fountain Valley:                      $217,000                              $213,815

Manitou Springs:                    $310,000                              $354,200

Marksheffel:                             $255,000                              $261,953

Northeast:                                $255,000                              $247,663

Northgate:                                $397,500                              $420,704           

Northwest:                               $355,500                              $366,781

Old Colorado City:                  $245,450                              $248,718

Powers:                                    $229,500                              $234,596

Southwest:                              $282,500                              $358,062

Tri-Lakes:                                $440,000                              $446,678

West:                                         $276,950                              $371,757

*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.

 

HOME PRICES ACROSS THE U.S.A. VAULT TO RECORD HIGH

The Wall Street Journal, 7.23.15,  Associated Press, 7.23.15, The Gazette, 7.23.15

Prices of existing homes in June escalated to record highs, toppling the previous high mark set in June 2006, as sales increased at their strongest pace in more than eight years.

This suggests that the housing market is quickly gaining the ground lost during the recession and recent slow recovery. 

According to the National Association of Realtors (NAR) the median sales price for a previously owned home jumped 6.5% in June from the same month a year earlier to a high of $236,400.  The previous high of $230,400 was recorded in July 2006.

This chart illustrates the recent trend:

Economists say that the numbers reflect a brisk summer selling season combined with stronger employment numbers.  The jump in sales also reflects buyers who are anxious to get into the market prior to the inevitable interest rate hikes and further prices increases.

“Everyone feels the door closing on really low interest rates and I think this is going to be one of the last months where everyone is scrambling to get under contract,” said Glenn Kelman, chief executive of Redfin, a real estate brokerage. 

Home prices have increased 35% since 2011, which benefits current homeowners who may want the opportunity to trade up to better homes or cash out at a profit.  Higher prices are also good news for those who have long owed more on their mortgage than their home is worth, thus preventing them from selling without suffering a loss. 

As you saw from the July PPAR statistics, Colorado Springs and the Pikes Peak area are keeping up with the rest of the country in existing home sales and escalating prices.

 

IMPLEMENTATION OF “TRID” EXTENDED UNTIL OCTOBER 3rd

I’ve previously mentioned the new mortgage loan rule changes that were due to go into effect on August 1, 2015 and wanted to let you know that the implementation date has been pushed up to October 3. 

On that date, the Consumer Financial Protection Bureau’s (CFPB) Truth-in-Lending Act (TILA) and real estate Settlement Procedures Act (REVPA) Integrated Mortgage Disclosure (IMD) rule goes into effect.  Quite a mouthful—so you can see why it’s simply called “TRID”.  It’s also known as the “Know Before You Owe” mortgage disclosure rule. 

The changes are being made so that borrowers can see the true cost of a mortgage loan and more easily compare loan costs of various lenders.  The potential borrower provides only six things in order to have deemed to have completed an application:

  1. Name
  2. Income
  3. Social Security Number
  4. Property address of purchased property
  5. Purchase price or estimated property value
  6. Mortgage loan amount

After that, the cost of the credit report is the only thing a lender can charge before providing a Loan Estimate.  This will be a boon to those wanting to easily and inexpensively compare and know all costs associated with a mortgage loan prior to closing. 

 

HOMEOWNERSHIP RATE DROPS TO 48-YEAR LOW

Housingwire, 7.28.15

Record sales aside, the homeownership rate in the United States continues to decline and is now at 63.4%--the lowest it has been since 1967, according to data from the Department of Commerce’s Census Bureau.  The steady decline since 2009 is illustrated below:

Ed Stansfield, chief property economist at Capital Economics said,  “This suggest that home ownership has not kept pace with the cyclical rebound in household formation which is now underway, and gives weight to the idea that first-time buyers in particular are still struggling to gain a foothold in the market.

“However, foreclosure rates are declining steadily, employment and incomes are growing at a healthy pace and credit conditions are gradually loosening,” Stanfield said.  “What’s more, there is no evidence of a fundamental shift in home ownership aspirations.  Accordingly, we expect that the home ownership rate will soon find a floor.”

And, from Elliot Eisenberg, the “Bowtie Economist”:

“In 1965 the US home ownership was 63% and rose to 65.6% in 1980.  Home ownership then fell and held steady at about 64% from 1984 through 1994, when it began a meteoric rise and peaked at 69.4% in 2004.  It’s since collapsed and is now 63.5%, where it was last in 1967.  Demographics aside, home ownership is for, at most, 65.5% of the population.  Above that, a bubble.”

With rental rates soaring and rental vacancies declining, it’s most definitely a good time to consider purchasing rental property as a potential investment.  I can’t give you tax advice, however, if you think this might be an option for you, I suggest you talk to your tax advisor soon and then call me at 598.3200 or email me at Harry@HarrySalzman.com.  There are a number of properties available in most neighborhoods that are just right for investment purposes and as the numbers attest—there are lots of folks still looking to rent.

 

HARRY’S JOKE OF THE DAY