HARRY'S BI-WEEKLY UPDATE 8.7.17
August 7, 2017
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.
HERE WE GO AGAIN...FORTUNATELY FOR US
I’m thrilled to keep bringing you excellent news about the local housing market as well as the accolades that are continually bestowed upon the city of Colorado Springs.
A good number of my clients have been calling about investment properties, and while it’s not quite as easy to find them as in the recent past—where there’s a will—I will try to find a way. Interest rates are still historically low but on the upward swing and will more than likely continue that way.
If you have considered rental property, there’s no better time than the present. Since that’s another area of my expertise, I’d be happy to discuss the possibility of rentals with you Give me a call at 593.1000 or email me at Harry@HarrySalzman.com and let’s see if this is something you might want to consider.
And now for some stats…
Homes are selling at 100.3% of listing price and a VERY LOW average of 21 days on the market. Yes, you read that right. It’s unbelievable and continues to put a lot of pressure on both buyers and sellers in terms of decision-making.
When selling your home, you need to know where you are going to next because the short turnaround times don’t give you a lot of leeway to decide after the sale. It’s best to find your next home prior to listing your present one at this time.
If you are buying, you need to know in advance exactly what you want because most often you don’t get the luxury of “thinking about it” for even a few hours. If you don’t make an offer—one that’s going to get noticed—someone else will.
That’s the hard reality these days, but it’s accurate, and the main reason you need a seasoned professional real estate agent like me who knows the process and can get an offer to the table that most likely won’t need to be revised. That doesn’t mean it will be accepted, and not all are for one reason or another, but my track record is outstanding. However, disappointment, much as I hate to see it for my clients, is still somewhat of a norm, especially in the under $300,000 price range.
Colorado Springs is appearing on most of the “top” lists—hottest housing markets, best places to live, great cost of living, work/life balance and on and on.
Just this week we have even topped Denver as “one of the top 5 big cities to live in, and one of the most affordable” according to WalletHub who compared 62 cities with populations above 300,000 using several factors: affordability, economy, education and health, quality of life and safety.
This is something we who live here know—it’s the best place to live and raise a family or retire, but…now the whole world is finding out and there you go. That’s a part of what’s keeping our housing inventory so low.
For more details on the local July 2017 PPAR reports, please see the next article.
DESPITE LOW INVENTORY, LOCAL RESIDENTIAL real estate IS STILL HOT
Statistics provided by the Pikes Peak REALTORS Service Corp, or it’s PPMLS
You will see in the Cumulative Year to Date Summary, total sales numbers in Single Family/Patio Homes and Condo/Townhomes are up 10.8% and 7.1% respectively for year-over-year.
New listings are up 0.6% for Single Family/Patio Homes and down 18.5% for Condo/Townhomes. If you’ve been thinking of listing your home, it’s certainly going to get a lot more attention in this type of sales environment. Just remember that it’s likely to sell fast, so again…you need to be prepared for that inevitability.
Here are some highlights from the July 2017 PPAR report. 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 2017 to July 2016 in PPAR:
Single Family/Patio Homes:
- New Listings are 1,943, Up 0.6%
- Number of Sales are 1,646, Up 10.8%
- Average Sales Price is $323,247 Up 9.9%
- Median Sales Price is $285,000 Up 10.7%
- Total Active Listings are 2,366, Down 14.9%
Condo/Townhomes:
- New Listings are 229, Down 18.5%
- Number of Sales are 255, Up 7.1%
- Average Sales Price is $201,662 Up 8.6%
- Median Sales Price is $192,000 Up 15.8%
- Total Active Listings are 163, Down 25.9%
COLORADO SPRINGS AREA MONTHLY SINGLE FAMILY/PATIO HOME SALES ANALYSIS*
Median Sales Price Median Sales Price
July 2017 July 2016
Black Forest $480,000 $427,500
Briargate $390,500 $337,450
Central $234,500 $209,450
East $240,000 $217,500
Fountain Valley: $260,000 $232,000
Manitou Springs: $380,000 $375,800
Marksheffel: $323,000 $257,500
Northeast: $265,000 $250,000
Northgate: $446,928 $415,000
Northwest: $360,000 $365,000
Old Colorado City: $322,500 $225,000
Powers: $275,000 $255,000
Southwest: $333,500 $286,500
Tri-Lakes: $473,950 $413,415
West: $270,000 $260,500
*Statistics provided by the Pikes Peak REALTORS Services Corp,or its PPMLS.
HOMEOWNERSHIP IS UP AS MARKET TURNS
The Wall Street Journal, 8.17
The homeownership rate in the USA climbed in the second quarter—a signal that the sharp downturn that began after the housing crash is beginning to reverse.
According to the Census Bureau, the homeownership rate hit 63.7% in the second quarter—a jump of nearly a full percentage point from a year ago when it reached a 50-year low of 62.9%.
Ralph McLaughlin, chief economist at home tracker Trulia said that “The damage the great recession has done to the homeownership rate is likely reversing course.”
I’m adding my two-cents worth in saying that I believe the high rental costs are also a big contributor for many folks turning to ownership if they are at all able to do so. Rents just keep on going up along with home prices, so it makes double sense to buy now if at all possible. Homeowners are earning equity while paying down a mortgage on a home that they own—rather than doing the same thing for their landlord.
FIRST-TIME HOMEBUYERS REAPPEAR
The Wall Street Journal, 7.16.17
First-time homebuyers accounted for 33% of all home sales in the USA in May, up from 30% a year earlier, according to the most recent data from NAR. Once more—my opinion-- folks are finding it cheaper to buy than to rent and earning equity while doing so.
These prospective buyers are showing more interest in home purchases despite rising prices and anxiety over affordability. Google searches related to buying a first home jumped 11 percentage points to 44% of all home-buying related search activity in 2017 compared to a year earlier, according to a study of search data conducted by Chase Home Lending.
First-time buyers are critical to the market because they bring new demand, allowing homeowners to trade up and stimulating demand for builders to construct new homes.
Demand from Millennials had been soft due to stagnant wage growth, student loan debt and their wariness about the benefits of homeownership.
So far this year, new purchasers accounted for 42% of all buying through April, up from 40% in 2016 and 31% during the lowest point of the recent housing cycle in 2011, according to the most recent data from Fannie Mae, which defines first-time buyers as anyone who hasn’t owned a home in the last three years.
Amy Bonitatibus, chief marketing officer at Chase Home Lending said “I had assumed that we would see Millennials come in in force in the next two years. They’re already here and buying today.”
While affordability still remains part of the picture, there are still homes available for first-time buyers and good incentives from lenders to help them make this a possibility.
If you or any family member is considering a first-time home purchase, please have them call me at 593.1000 or email me at Harry@HarrySalzman.com and let me see what can be done to make this possibility a reality.
THREAT OF RISING MORTGAGE RATES SPUR ON NUMBER OF MORTAGE APPLICATIONS
RealtorMag. 7.19.17
Total mortgage application volume for refinancing and home purchases jumped 6.3% several weeks ago on a seasonally adjusted basis, according to the Mortgage Bankers Association. Borrowers appeared worried that interest rates are rising and are seeking to lock in rates as soon as they can.
While rates have been holding steady in recent weeks, the threat of increases remains a constant worry and probably for good cause. These still historically low rates are not here to stay. I’ve been saying this for some time but apparently borrowers are finally taking this thought to task and making their move while they can do so at today’s rates.
THE HIGH IMPACT OF LOW INTEREST RATES ON YOUR PURCHASING POWER
Keeping Current Matters, 7.11.17
As I just mentioned, interest rates for a 30-year fixed rate mortgage are still near record lows in comparison to recent history.
The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.
Simply put, purchasing power is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain monthly housing budget.
The chart below shows what impact rising interest rates would have if you planned to purchase a home within the national median price range, and planned to keep your principal and interest payments between $1,850-$1,900 a month.
With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000). Experts are predicting that mortgage rates will be closer to 5% by this time next year.
What does that mean to you? Act now if you want to get the most house for your hard-earned money.
SKY SOX TICKETS AVAILABLE BUT GOING FAST
The Sky Sox are number one in their division right now and tickets are going fast. If you would like to enjoy a game from my front-row tickets, please give me a call so I can put them aside for you.
I have four tickets and they are free to you for the asking, based on availability. Friday night fireworks and Sunday 50-cent hot dog days are the first to go, so call as soon as you know when you might want the tickets.
