HARRY'S BI-WEEKLY UPDATE 8.6.18
August 6, 2018
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.
THIS COMES TO YOU FROM THE “MOST DESIREABLE PLACE TO LIVE IN THE USA”
The Gazette, 7.31.18, U.S. News and World Report, 7.18
Yes, you read that right. I’ve told you this all along and folks who live here already know…but our poorly kept secret is out---Colorado Springs was just declared “the most desirable place to live in the United States” by U.S. New and World Report.
Colorado Springs has grown at a rate of more than 12 percent between 2010 and 2017, according to U.S. Census Bureau estimates. And it’s not just retirees and military personnel. Even the Millennial population has increased by 14.7 percent from 2010 to 2015, according to a study from Brookings Institution’s Metropolitan Policy Program.
In some ways this ranking should come as no surprise since Colorado Springs officials and volunteers have been positioning the City for this type of growth for the past several years and more.
The City for Champions initiative is taking hold with the construction of the Olympic Museum, the Air Force Academy Visitor Center, UCCS Sports Medicine facility and a newly approved 10,000-seat multi-use stadium downtown, along with a 3,000-seat indoor arena for Colorado College’s men’s hockey team.
Recent investment in the public infrastructure and the approval of resurrected stormwater fees are a testament to the public’s active investment in Colorado Springs.
Yes, we have the magnificent views, Garden of the Gods, Pikes Peak, fabulous hiking and biking trails, a vibrant, growing downtown and so much more. But in economic terms, the best news is the investment of companies and restaurants, along with relocated employees, who are now calling our City “home”. Again, our local government officials, along with the Chamber/EDC and the Visitors and Convention Bureau, have done a fabulous job of putting us forefront in the minds of companies and others who are looking to relocate.
Of the top five most desirable cities listed in the survey, Colorado Springs has the smallest metropolitan population—listed as 688,643. We also are the most affordable in terms of median home prices. When you add that to our relatively low cost of utilities and other peripheral expenses, it’s no wonder people are starting to realize that Colorado Springs is “the most desirable place to live”.
And speaking of the housing market…when I looked into my “crystal ball” prior to my annual presentation to the Colorado Springs City Council and El Paso County Commissioners in January, I predicted a 7-8% appreciation on single-family homes here. As you will see in the July 2018 PPAR Report, my prediction has come to fruition. Our average sales price year-over-year is up 7.5% and our median sales price year-over-year is up 8.8%! Great news for all homeowners and also for those looking to buy in our area.
I have also said that while prices will continue to escalate, albeit more slowly than the frenzy of the recent past, sales will be slightly down. Some of this is due to the lack of available listings and some due to the price escalations. In either scenario, it’s much better for the market because as home values rise a bit slower, more people can afford to still buy before increased interest rates keep them from homeownership or from trading up.
So, yes, this is a GREAT time to sell and trade up. While listings are still slightly down, more folks are starting to see that it makes sense to “test the waters” in terms of selling their present home. I want to remind you that with most homes selling at listing price or over, it is especially important to have someone like me on your side when making an offer. When my clients listen to my advice, accumulated over my 46 plus years in the business, they most often get what they want—or at least present an offer that gets good consideration.
A few weeks ago, I had a client who wanted to offer, against my advice, considerably less than asking price of a home and sure enough—the seller did not even consider the offer. I hate to see my clients disappointed and that’s why I offer the best advice available to try and prevent that from happening. In this particular case, my client unfortunately learned the hard way and hopefully will have better results with a more “realistic” offer next time!
The Colorado Springs area is still experiencing a boom in new home construction. Single-family home permits are up 22 percent over 2017 through the first seven months of 2018, according to the Regional Building Department. At this pace, new home construction here is looking to reach a 13-year high. If new construction is something you’ve considered, I can help you in that area, too. My long-term association with most local builders can provide you my expertise-–all at no additional cost to you.
If you’re even considering a move and wondering how to make it happen, simply give me a call today at 593.1000 or email me at Harry@HarrySalzman.com and let’s see how I can put my special brand of customer service to work for you.
And now for July statistics…
Homes are selling at 100.2% of listing price with the average days on the market at a very low 21.
This continues to be great news for both buyers and sellers but with homes selling so fast it still necessitates knowing where you plan to move next prior to listing your present home.
The Monthly Summary shows that compared to a year ago, total active listings are up 0.8% for Single Family/Patio Homes and down 1.2% for Condo/Townhomes. New listings are down 3.0% for Single Family/Patio Homes up 7.0% for Condo/Townhomes.
Please see the next article for the just released local statistics and be sure to check out the next eNewletter which will provide the quarterly stats for the 174 top Metropolitan Statistical Areas. I am fairly certain that Colorado Springs’ median home prices will again be considerably higher than the U.S. average.
JULY 2018 WAS ANOTHER RECORD SETTING MONTH IN LOCAL RESIDENTIAL real estate
Statistics provided by the Pikes Peak REALTORS Service Corp, or it’s PPMLS
Here are some highlights from the July 2018 PPAR report. A look at the Median Sales Prices will show that prices have continued their record setting pace for the fifth straight month! Please click here to view the detailed 15-page report, including charts. If you have any questions, just give me a call.
In comparing July 2018 to July 2017 for All Homes in PPAR:
Single Family/Patio Homes:
· New Listings are 1,884, Down 3.0%
· Number of Sales are 1,592, Down 3.3%
· Average Sales Price is $347,517, Up 7.5%
· Median Sales Price is $310,000, Up 8.8 %
· Total Active Listings are 2,385, Up 0.8%
· Months Supply is 1.5
Condo/Townhomes:
· New Listings are 245, Up 7.0%
· Number of Sales are 235, Down 7.8%
· Average Sales Price is $234,064, Up 16.1%
· Median Sales Price is $218,000, Up 13.5%
· Total Active Listings are 161, Down 1.2%
· Months Supply is 0.6
COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*
Median Sales Price Median Sales Price
July 2018 July 2017
Black Forest $557,000 $480,000
Briargate $409,950 $390,500
Central $234,750 $234,500
East $265,000 $240,000
Fountain Valley: $279,900 $260,000
Manitou Springs: $445,500 $380,000
Marksheffel: $320,628 $323,000
Northeast: $294,250 $265,000
Northgate: $450,000 $446,928
Northwest: $419,000 $360,000
Old Colorado City: $325,000 $322,500
Powers: $299,900 $275,000
Southeast: $232,000 $207,000
Southwest: $357,000 $333,500
Tri-Lakes: $507,000 $473,950
West: $297,500 $270,000
*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.
DESPITE RISING HOME PRICES ACROSS THE U.S.A., ECONOMISTS ARE SAYING WE ARE NOT HEADED TOWARD ANOTHER HOUSING BUBBLE
Keeping current matters, 7.26.18
While home prices are continuing their climb due to lack of inventory locally and nationwide, sales are slightly down for this very same reason. Rising mortgage loan rates are also beginning to affect sales numbers too.
Some might be concerned that we may be headed for another housing “boom & bust” but it is important to remember that today’s market is quite different than the bubble market of twelve years ago.
Here are four key metrics that will explain why:
- Home Prices
- Mortgage Standards
- Foreclosure Rates
- Housing Affordability
- Home Prices
There is no doubt that home prices have reached 2006 levels in many markets across the country. However, after more than a decade, home prices should be much higher based on inflation alone.
From the latest data available:
“The inflation-adjusted U.S. median sale price in June 2006 was $247,110 (or $199,899 in 2006 dollars), compared with $213,400 in March 2018”.
- Mortgage Standards
Many are concerned that lending institutions are again easing standards to a level that helped create the last housing bubble. However, there is proof that today’s standards are nowhere near as lenient as they were leading up to the crash.
The Urban Institute’s Housing Finance Policy Center issues a monthly index which:
“Measures the percentage of home purchase loans that are likely to default—that is, go unpaid for more than 90 days past their due date. A lower HCAI indicates that lenders are unwilling to tolerate defaults and are imposing tighter lending standards, making it harder to get a loan. A higher HCAI indicates that lenders are willing to tolerate defaults and are taking more risks, making it easier to get a loan.”
Their July Housing Credit Availability Index revealed:
“Significant space remains to safely expand the credit box. If the current default risk was doubled across all channels, risk would still be well within the pre-crisis standard of 12.5 percent from 2001 to 2003 for the whole mortgage market”.
- Foreclosure Rates
A major cause of the housing crash last decade was the number of foreclosures that hit the market. They not only increased the supply of homes for sale but were also being sold at 20-50% discounts. The foreclosures helped drive down all home values.
Today, foreclosure numbers are lower than they were before the housing boom. Here are the number of consumers with new foreclosures according to the Federal Reserve’s most recent Household Debt and Credit Report:
2003: 203,320 (earliest reported numbers)
2009: 566,180 (at the valley of the crash)
Today: 76,480
Foreclosures today are less than 40% of what they were in 2003.
- Housing Affordability
Contrary to many headlines, home affordability is better now than it was prior to the last housing boom. In the same article referenced in #1, Corelogic revealed that in the vast majority of markets, “the inflation-adjusted, principal-and-interest mortgage payments that homebuyers have committed to this year remain lower than their pre-crisis peaks.”
They explained further:
“The main reason the typical mortgage payment remains well below record levels in most of the country is that the average mortgage rate back in June 2006, when the U.S. typical mortgage payment peaked, was about 6.7 percent, compared with an average mortgage rate of about 4.4 percent in March 2018.”
The “price” of a home today may be higher, but the “cost” is still below historic norms.
Bottom Line:
Using these four metrics to compare today to last decade’s housing bust, we can see that the current market is not anything like that bubble market.
HOMEOWNER RATE INCHES UP
The Wall Street Journal, 7.27.18
Homeownership in the U.S. continues to climb, with more Americans benefiting from the sharp rise in home values in recent years.
However, homeownership still remains historically low—at 64.3%-- and has risen tepidly this year despite strong economic growth.
While 64.3% indicates a small percentage growth, the rate remains well below the peak of 69.2% in late 2004 and a full percentage point below the 50-year average.
More and more renters say they aren’t interested in buying a home due to financial concerns, according to a survey released by Freddie Mac.
“Homeownership has bottomed out but is likely to go more or less sideways for the foreseeable future,” economist Mark Zandi of Moody’s Analytics said. “Easing credit standards and a strong job market will support homeownership, but higher mortgage rates and the change in tax law weigh on it”.
At present, homeownership among younger Americans is driving the rise in overall homeownership rates. The rate among those under the age of 35 rose to 36.5% in the second quarter, up 1.2 percentage points from the previous year. That was faster than the 0.6-point gain in overall homeownership.
