HERE'S A BRAIN-TEASER QUIZ FOR YOU
April 25, 2011
HARRY'S WEEKLY UPDATE
A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET
"NEIGHBORHOODS" OFFERS AN IN-DEPTH LOOK AT OUR real estate MARKET
On Sunday, April 24, 2011, the Gazette published its annual "Neighborhoods" guide to real estate in El Paso County. This invaluable resource gives neighborhood-by-neighborhood analysis within our county and shows where prices are rising and falling. It contains maps and data about where you live and charts on how your area is doing.
The guide contains a 10 year comparison of median sales prices in each of 80 neighborhoods in El Paso County, per the county Assessor's office. The numbers shown in the guide do not differ significantly from the data published by the Pikes Peak Association of Realtors in the MLS.
Some of the significant data for El Paso County shown in the guide are:
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Approximate population 622,263
- Houses in County 163,221
- Houses sold in 2010 (no foreclosures) 5,681
- Foreclosure sales, 2010 1,499
- Total houses sold 2000-2010 121,861
- Median sales price 2000-2010 $195,763
- Median sales price 2010 (no foreclosures) $210,000
- Median sales price 2010 with foreclosures $200,000
- Average age of houses in years 18
The guide data shows the increase in median sales price of homes between 2000 and 2010 to be 34%, or 3.4% per year, which is slightly less than the PPAR figure of 4.18% annual appreciation. Considering the fact that last years sales were down, that kind of growth is surprisingly good and compares very favorably with the national figures.
In May, NAR will report on the first quarter sales for the nation and we are looking forward to seeing how our county compares with the rest of the nation. Indications are that we will look very good, compared to the rest of the U.S. We will share the NAR data with you as soon as we receive the report.
To see all of the information in "Neighborhoods", click here.
WANT TO MAKE 100% PROFIT PER YEAR ON YOUR INVESTMENT? ..BUY A HOUSE !!
The Gazette Guide to real estate which we feature, below, makes a great case for buying a house in El Paso County RIGHT NOW !!!
Here's the facts:
- You can currently buy a home through FHA with 3.5% down (That's your investment)
- Homes in El Paso County have appreciated an average of 3.5% per year during the past ten years (Even including the recession)
- That means you will make back your investment (i.e. your down-payment) the first year you own your home
- After ten years, you will have made 1,000% on your original investment. .And that's not even counting the money you will make with your home-interest payment deductions and your property tax deductions)
Let's see the stock market try to match that kind of return !!!
Call us at (719) 598-3200 or 800-677-MOVE (6683).
AND SELLERS, TAKE NOTE. THERE'S A BRIGHT SIDE FOR YOU, TOO
The "Return on Investment" arguments that we discussed, above, can also make it easier for you to sell your house. We are experts at showing prospective Buyers how buying your home makes sense for them. We are also able to negotiate to make the entire transaction as simple, convenient and cost-effective as possible for both the Buyer and the Seller.
Call us at (719) 598-3200 or 800-677-MOVE (6683).
HOUSING IS BOUNCING BACK
Nationally, sales of existing homes rose 3.7% in March, with distressed sales making up 40 percent of all purchases. This marks the sixth consecutive monthly rise for existing home sales in the last eight months, the National Association of REALTORS reported Wednesday.
NAR's housing affordability index shows the typical monthly mortgage principal and interest payment for the purchase of a median-priced existing home is only 13 percent of gross household income, the lowest since records began in 1970.
"We're clearly on a recovery path," says Lawrence Yun, NAR chief economist. "Although home sales are coming back without a federal stimulus, sales could be notably stronger if mortgage lending would return to the normal, safe standards that were in place a decade ago - before the loose lending practices that created the unprecedented boom and bust cycle," Yun explained.
So , let's take a look at who's buying and currently driving the market:
First-Time Buyers: A NAR practitioner survey shows first-time buyers purchased 33 percent of homes in March, compared with 34 percent of homes in February. When the federal first-time buyer stimulus was being offered, first-time buyers accounted for 44 percent in March 2010.
Investors: Nationally, all-cash deals made up a record number of sales last month and accounted for 35 percent of all resold homes. Investors continue to make up a big part of those cash deals. Investors are buying distressed homes and flipping them for a slight profit or turning them into rentals.
Traditional buyers: Traditional buyers are re-emerging. Mortgage applications to buy homes rose 10 percent over a seven-week period, according to the Mortgage Bankers Association's most recent report.
It's obvious that the market is making "slow, steady progress" and demand in housing is rising even with higher mortgage rates.
HERE'S A BRAIN-TEASER QUIZ FOR YOU
Consider the following recent articles from the Gazette and decide which conclusion is the most logical.
- Area apartments filling up; rents going up (Friday, April 25, 2011)
- INVESTORS STILL BUYING UP HOUSES (Friday, April 21, 2011)
- HOME PRICES DROPPED IN 2010 (Sunday , April 24, 2011)
- PEOPLE ARE MOVING HERE FASTER THAN THE JOBS ARE (Monday, April 25, 2011)
Possible conclusions:
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Golly, with home prices so low, but climbing, and mortgage rates still very low, this is probably not the time to buy an investment property.
- Hmm, with more people coming to live here every day, thus causing apartments to fill up and rents to rise, this is probably not the time to buy an investment property
- Gee, with foreclosures still adding more families to the pool of prospective renters ..families that are used to living in well-maintained homes, but are now not credit-worthy enough to qualify for home loans, this is probably not the time to buy an investment property.
- Gosh, with rentals in short supply, with rents going up, with more families looking for places to rent, with both the cost to acquire investment property and mortgage rates still very low, I'd be crazy not to investigate buying some investment property.
If you chose option #4, give us a call. We will be happy to assist you in cashing in on our present "Opportunity Market".
Call us at (719) 598-3200 or 800-677-MOVE (6683).
PROPOSED 20% MINIMUM DOWN RULE WOULD SEVERELY DISRUPT THE housing market
A plan unveiled by the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve on March 29 to require a minimum 20% down payment for "qualified residential mortgages" would disrupt the fragile housing market and jeopardize the struggling economic recovery, according to both the National Association of Home Builders and the National Association of Realtors.
In addition to NAHB and NAR, diverse industry and consumer groups and housing finance experts took strong exception to the proposal, pointing out that it could prevent millions of credit-worthy borrowers from buying homes and would be a major setback for the housing industry as it slowly emerges from its worst downturn since the Great Depression.
Lawrence Yun, NAR chief economist said, "Given that FHA and VA government-backed loan programs turned a modest profit over to the U.S. Treasury last year, and have never required a taxpayer bailout, we believe low-down payment loans should continue to be available for those consumers who have demonstrated financial responsibility and are willing to stay well within their budget. Raising the down payment requirement would unnecessarily deny credit to many worthy middle-class families and veterans."
By mandating a 20% down payment on qualified residential mortgages, the Administration and Federal regulators would essentially exclude those without huge cash reserves - which constitutes most first-time home buyers and many middle-class households - from a chance to buy a home. First-time home buyers historically average 40% of home-buying activity. It would take an average family 12 years to scrape together a 20% down payment.
Borrowers who can't afford to put 20% down on a home and who are unable to obtain FHA financing would be expected to pay a premium of two percentage points for a loan in the private market to offset the increased risk to lenders.
To meet the 20% down payment requirement and adding in another 5% in closing costs, the buyer of a $172,000 median-priced home would have to bring more than $43,000 to the table. (And even with a 10% down payment requirement, that buyer would need to bring $25,000 in cash to the closing.)
This would disqualify about five million potential home buyers, resulting in 250,000 fewer home sales and 50,000 fewer new homes being built per year, according to the National Association of Home Builders.
Six federal agencies are seeking comments on the risk retention proposal.
The proposed rule will become effective one year after the final rule is published in the Federal Register.
Editor's Note: We are very concerned about this proposed rule. This proposal, combined with the Dodd-Frank financial reform law passed last year, which requires lenders to retain 5% of the credit risk of each loan they grant, will further diminish mortgage credit availability and drive costs higher.
We should point out that millions of low down-payment loans have been originated safely for decades. Low-down-payments are not what drove this lending crisis. It was lax underwriting standards.
We are very concerned that when combined with other recommendations from the Administration's white paper on housing finance - including 10% down payment minimums for Fannie Mae and Freddie Mac mortgages and possibly higher down payments for FHA borrowers - this proposal will move the lending industry's goalposts unacceptably far from the reach of low-, moderate- and middle-income home buyers.
Basically, the government is telling Mr. and Mrs. America, "Thanks for paying your mortgage during these tough times, and thanks for building your wealth around housing, as we have encouraged you to do, but we are now changing the rules. We are going to reduce the value of your retirement nest egg even more than the recession already has. And as an extra thank you, your kids are going to find homeownership that much more difficult to obtain."
And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.
Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 39 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.
Just click on the icon at the top of this email to listen to my latest podcast. ..And, if you would like to learn more about our Job Loss Protection Program, please contact us.
LATEST STATISTICS
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