August 4, 2014

 

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 JUST OUT AND POSITIVE

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

Some interesting facts came to mind as I was looking over the new PPAR report yesterday.  While local sales are basically the same as they were a year ago, you will notice in the full report an “Investor Snapshot” that indicates Single Family/Patio Homes sales in July were the highest for July since 2007! 

When you consider that in July 2007 our market had 7065 listings vs. 4230 for this July, we had 40% fewer homes for sale last month than 7 years ago!  And the Average Sales Price on Single Family/Patio Homes in July was 4.0% higher than a year ago while the Average Sales Price on Condo/Townhomes was 5.3% higher. 

What does this mean?  The time to Buy is NOW.  Homes are worth more, interest rates are still historically low and while there are fewer listings, there are still plenty of choices in most price ranges.  

The local stats include “all homes”—both resale and new homes sold through July 31, 2014 as compared to July 31, 2013.

In comparing July 2014 to July 2013 in PPAR:                     

                        Single Family/Patio Homes:

  • New Listings are 1647, Down 0.7%%
  • Number of Sales are 1,199, Down 0.2%
  • Average Sales Price is $267,109 Up 4.0%
  • Median Sales Price is $230,000, Up 1.9%
  • Total Active Listings are 4,226, Up 2.2%

                        Condo/Townhomes:

  • New Listings are 186, Down 16.6%
  • Number of Sales are 158, Up 5.3%
  • Average Sales Price is $163,793, Up 3.0%
  • Median Sales Price is $148,750, Up 4.5%
  • Total Active Listings are 401, Down 13.6%

 

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

                                                Median Sales Price               Average Sales Price

Black Forest                             $400,950                              $664,954

Briargate                                   $322,000                              $326,596                    

Central                                      $176,200                              $213,829

East                                           $185,000                              $185,052

Fountain Valley:                       $190,000                              $190,786

Manitou Springs:                     $325,000                              $332,545

Marksheffel:                             $271,460                              $256,492

Northeast:                                 $225,000                               $244,227

Northgate:                                $400,000                              $393,017

Northwest:                                $334,000                              $346,728

Old Colorado City:                  $167,500                               $207,601

Powers:                                     $225,450                              $225,794

Southwest:                               $265,000                               $347,439

Tri-Lakes:                                 $375,000                              $416,624

West:                                         $225,775                              $294,950

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

An interesting note in terms of financing of the 1357 total local single family/patio homes and townhomes/condos sold in July:

Financing                               Number                      Percentage of Total

Cash                                        183                              13.5%

Conventional Loan                  488                                 36%

FHA                                         186                              13.7%

VA                                           465                                 34%    

Other Financing                      35                                  2.8%

As you can see illustrated above, the majority of sales were financed either through conventional lenders or VA. 

Click here to see the full 12-page report and see how your neighborhood is doing.  If you have any questions please give me a call.

 

U.S. HOME OWNERSHIP NEARS 20 YEAR LOW

REALTORMag, KeepingCurrentMatters, Housingwire, late July issues

Lots of reasons cited, but the fallout from the housing crisis continues as the number of Americans who own homes has dropped to the lowest level in nearly two decades according to the U.S. Department of Commerce.  The percentage of homeowners today is 64.8%.  Large metro areas such were among the lowest of any in the country, but those areas were the ones hit the hardest in the housing crisis.

“The falling home ownership in recent years is partly due to the struggles of first-time buyers,” Lawrence Yun, chief economist for NAR wrote in the Economists’ Outlook blog.  “Lower wages and larger student debts among recent college graduates have limited the Millennial generation from taking advantage of the historically low interest rates.”

This is indicative of the fact that only 35.9% of those under 35 are homeowners, an historical low.

Home ownership peaked in 2004 at 69.4 percent of adult population and has been dropping steadily ever since.  There were higher numbers in the past few months, but the number of renters grew faster.  Yun said that in the past three months, the number of renter households rose by 312,000 while the number of homeowners rose by 54,000.

“The strange pattern of more homeowners but a falling home ownership rate will continue for the next two years at least,” Yun notes.  “That’s because household formation of young adults who had been living with their parents will seek out their own housing with an improving economy, first as renters before making the shift to homeowners. This trend also means that housing demand for both home purchases and rentals will be on the increase.”

As more homes come on the market, this should help increase the totals.

Other sources have cited low inventory as another reason for the low ownership rates.  According to Freddie Mac:  “Including newly built homes in the inventory count, the total number of homes for sale relative to the number of households in the U.S. has been running at the lowest level in more than 30 years.  The relatively low for-sale inventory reflects several features of today’s market.” 

According to NAR, “History shows us that a balanced real estate market requires a six month supply of available housing inventory.”  In their Existing Homes Sales Report last week, NAR revealed that we are still only at a 5.5-month supply of homes for sale.  We have not reached the 6-month mark in over two years.

This has been blamed on the recent increase in Buyers who are continuing to put a strain on this number.

Yun indicated that “Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved, however, supply shortages still exist in parts of the country, wages are flat and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates.”

“The good news,” he said, “is that price appreciation has decreased to its slowest place since March 2012 behind much-needed increases in inventory.  With rents rising 4% annually, potential buyers are less likely to experience ‘sticker shock’ and can make smart decisions on whether or not it makes sense to buy or continue renting.”

Bottom line?  If you or someone you know are considering selling to trade up….now might be the best time to cash in on your home equity and, while a change in home ownership may not be as easy as it once was, locally we still have a decent selection available. 

Also, with the influx of renters, those looking to Buy a home for Investment might want to get in that market as soon as possible.

If you’re sitting on the fence or looking for Investment property, give me a call at 598.3200 or email me at Harry@HarrySalzman.com and let’s discuss whether or not this is the right time for you.  

 

FHA FEES, DODD-FRANK ACT STILL HAVING AFFECT ON HOME LOANS

RealtorMag 7.28.14

The Dodd-Frank Act, which went into effect January 10, 2014 is still having an adverse effect on borrowers as lenders are trying to comply with new regulations for mortgage loans.  Hopefully as lenders find ways to deal with the regs and still make loans to eligible borrowers things will improve. 

FHA rate increases in mortgage insurance have caused borrowers to walk away and transactions to fall though according to the NAR’s second Survey of Mortgage Originators which includes questions to lenders about the impact of changes to the FHA program.  The FHA has, in recent years, increased its premium structure as a way to make up for the 2 percent capital reserve ratio it’s required to keep but lost when many loans went sour during the housing crisis. 

The rise in FHA fees is also pricing some buyers out of the market.  68.4 percent of mortgage originators indicated that they had clients who chose not to buy or who put off buying indefinitely due to the increase in FHA mortgage insurance rates.

 

AND LOCALLY…

The Gazette, 7-23 & 31, 2014

Foreclosure rates in the Springs area have fallen according to a report by CoreLogic, a California based housing data firm. 

The percentage of local area mortgage holders who were delinquent on their loan payments by 90 or more days declined to 2.5 % in May, down from 3% during the same time in 2013. 

Foreclosure notices in El Paso County were 117 in June, down 17% from May and nearly 28% lower than the same month last year.

The job market locally took another positive turn in June as the unemployment rate fell to 6.8%, the lowest in 5 ½ years and the biggest month-to-month drop since at least 2000 according to the U.S. Bureau of Labor Statistics. 

The number of Colorado Springs residents looking for jobs in June fell by more than 1400 from May, more than doubling the largest decline in the unemployed during the past 14 ½ years.

Great news for the county and good for homeowners because as the economy improves, so does the housing market.

 

FAMILES NEED TO HAVE THE ‘FINANCIAL’ TALK

RISMedia, 7.29.14

This is a tough one.  It’s the conversation many families put off.  And then put off some more.

It’s the discussion between elderly parents and their adult children concerning the parents’ finances. 

Lauren Brouhard, a Sr. V.P. at Fidelity Investments says that “Money is a taboo subject for families, be we do find that silence can be costly.”

“It’s a difference between destiny and certainty,” say Michael B. Cohen, an elder law attorney.  “A failure of the family to communicate will lead to mere destiny, whereas if there is a family discussion, then a plan can be discussed for certainty.  If nothing else, there will be a better understanding of what is truly important to the parent and what risks they are willing to take, if any.”

Adult children can broach the subject by using another person’s situation as an example.  That can be used as a bridge to ask the parents whether they have done estate planning and have medical documents prepared to spell out their desires.

Parents can also initiate the talk and feel secure knowing they have expressed their desires so that their wishes can be accurately carried out.

“One of people’s big fears as they age is being a burden on others,” Brouhard says.  “Taking the time to have more detailed conversations can really dramatically increase peace of mind and reduce anxiety for many families.”

“Short of these discussions there are often surprises about a parent’s wishes and what responsibilities a parent may be assuming a child may or may not be willing to take on—important matters that really impact everyone’s life in the family,” Brouhard says.

For example, a Fidelity study found a wide gap in expectations about who will care for a parent if they become ill.   Of adult children surveyed, 43% expect they or a sibling will need to handle caregiving duties.  Only 6 % of parents expect this.

It’s important for adult children to remember that these decisions are up to their parents as long as they are capable of making them.

“When it comes to finances, it’s not a democracy,’ Brouhard says.  “While different family members should have a role in the planning process, ultimately, it’s going to be up to the parents to make the important decisions that they have a right to make about their future, as well as how they disperse their assets and who’s in charge of what.”

 

SKY SOX TICKETS AVAILABLE

Just a reminder that I have 4 front row seats to all Sky Sox games available to you on a first-come-first-served basis.  They’ve been going fast lately, so just give me a call and I’ll be happy to put tickets aside for you.

 

HARRY’S JOKE OF THE DAY