Real Estate Information

August 9, 2021

 

HARRY’S BI-WEEKLY UPDATE

A Current Look at the Colorado Springs Residential real estate Market

As part of my Special Brand of Customer 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.

 

RESIDENTIAL real estate IS STARTING TO SLOWLY “NORMALIZE” BUT MANY THINGS REMAIN UNCHANGED

In recent months I’ve been telling you about the difficulties that buyers have been experiencing and while there are still potential roadblocks to finding the home of your dreams, things are starting to look up a bit.

Let’s start with the average and median sales prices.  As you will see, they are down from June, but still considerably up year-over-year.  Some reasons for the slight downward shift include more existing homes for sale—26.3 % more active listings in July vs. June, and of course, the price point has kept some potential buyers out of the market.  

So, the good news is that there are more homes from which to choose, but unfortunately there are still more potential buyers than there are homes, so the bidding wars and fast turnaround times are still with us.

I’ve had several listings in the past couple of weeks, all of which sold within days of listing.  Great for the sellers, but still a little tough for buyers.  I’m finding more folks interested in testing the market right now while prices are still at all time highs. With the month-over-month sales and median prices starting to trend lower than the recent past, some potential sellers want to make certain they get the best price possible for their current home while possibly taking advantage of a slightly lower price point on the new one.

Many folks are wanting to take advantage of the still low interest rates and worry that possible impending inflation could ramp them up.  I personally don’t know which way the rates will go and have stopped trying to make predictions.  However, I don’t see rates staying this low forever.  

The important thing to consider is still the monthly cost of purchasing a new home, rather than the price.  If you are selling to trade up it’s likely that your present home has more equity than you might think.  Therefore, your down payment coupled with the low interest rates could possibly keep your monthly output the same or not too much more.  

NOW is the time to get started if you’ve even considered a move.  Prices aren’t going down anytime soon, and mortgage rates essentially have nowhere to go but up.  It shouldn’t take long to sell your present home and it will likely go for far more than you might imagine.  However, finding a replacement will likely take some time so it’s best to start in that direction first.  

Meanwhile, the best move you can make right now is to call me at 593.1000 or email me at Harry@HarrySalzman.com to get any and all of your questions answered.  I look forward to speaking with you and helping to make all your Residential real estate dreams come true.

 

AND TO ILLUSTRATE WHAT I JUST WROTE…

Keeping Current Matters, 7.21

 

JULY 2021

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

Here are some highlights from the July 2021 PPAR report.  The format of this report no longer provides monthly statistics for each individual neighborhood.  However, if you are interested in what’s happening in your neighborhood, I can provide you with this information through other means.

In El Paso County, the average days on the market for single family/patio homes was a very low 6.  For condo/townhomes it was 5.  

Also in El Paso County, the sales price/list price for single family/patio homes was 104.4% and for condo/townhomes it was 104.3%.  

Please click here to view the detailed 10-page report, including charts.  If you have any questions about the report or to find out how it relates to your individual situation, just give me a call.

In comparing July 2021 to July 2020 for All Homes in PPAR:

                        

                      Single Family/Patio Homes:

·       New Listings were 2,176, Up 10.5%

·       Number of Sales were 1,844, Down 6.8%

·       Average Sales Price was $501,138, Up 17.2%

·       Median Sales Price was $450,000, Up 19.4%

·       Total Active Listings are 981, Down 29.4%

·       Months Supply is 0.5, Up 4.3%

 

 

Condo/Townhomes:

·       New Listings were 317, Up 2.6% 

·       Number of Sales were 241, Down 8.4%

·       Average Sales Price was $324,807, Up 17.4%

·       Median Sales Price was $315,000, Up 25.5%

·       Total Active Listings are 104, Down 35.8%

·       Months Supply is 0.4, Up 4.3%

 

Now a look at more statistics…

 

JULY 2021 MONTHLY INDICATORS AND LOCAL MARKET UPDATE ILLUSTRATE OUR LOCAL TRENDS IN DETAIL

Colorado Association of REALTORS^{® ,} Pikes Peak REALTORS Service Corp, or it’s PPMLS

Providing greater detail than the above report, this contains information on both El Paso and Teller counties for Residential real estate 

The “Activity Snapshot” for all residential properties in El Paso and Teller counties shows the Year to Date one-year change:

 

• Sold Listings for All Properties were Down 6.3%

 

• Median Sales Price for All Properties was Up 19.2%

 

• Active Listings on All Properties were Down 38.6%

 

You can click here to read the 16-page Monthly Indicators or click here to get specific information on the geographical area of your choice from the 18-page Local Market Update.  I recommend that you check out your own area or one that you are considering, to get a good idea of the local pulse.  As an example, here is a detailed report on the Colorado Springs area in general:

 

WAITING TO BUY COULD COST YOU…

Keeping Current Matters, 7.21

 

Some Highlights:

• If you’re thinking of buying a home but wondering if waiting a few years will save you in the long run, it’s time to think again.

 

• The longer you wait, the more you’ll pay, especially when mortgage rates and home prices rise.  Even the slightest change in the mortgage rate can have a big impact on your buying power, no matter your price point.

 

UCCS ECONOMIC FORUM UPDATE

College of Business, UCCS, updated 7.30.21

As always, I’ve included the most recent economic update from the UCCS Economic Forum.  It provides data concerning all aspects of the economy, on both the National and Colorado Springs levels.  

I’ve reproduced just one of the charts below.  You can click here to read the entire report and if you have any questions, please give me a call.

 

 

July 26, 2021

 

HARRY’S BI-WEEKLY UPDATE

A Current Look at the Colorado Springs Residential real estate Market

As part of my Special Brand of Customer 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.

 

 

TO ALL WORKERS WHO HAVE JUMPED BACK INTO THE FREY AND ARE HELPING TO TRY AND GET OUR ECONOMY BACK ON TRACK…YOU ARE IN OUR DEBT

We are a country of so much fortitude and resilience and yet as I sit here thinking about recent days, I wonder what is going on with our labor force in general.  I work with so many folks who are either in the process of renovating their homes, as Carol and I are, and with many others who are looking to buy either an existing home or new construction.  What I’ve seen lately is exorbitant time delays, the rising and lack of materials and so much more that is threatening to really ramp up inflation.

It literally takes a village to renovate or build a home, and when a segment of that village stalls, everything gets backed up and can cause major concern for those needing a house now, not six months or a year from now.

The supply chain has been precarious in recent months, with suppliers running out of everything from light switches to paint.  I was truly amazed to hear that due to the chemical fires in Texas some of the tints needed to create paint colors were not available.  Who knew?  And some furniture that needs foam padding was hurt by those same chemical fires.  This is causing major delays and will continue to drive up the costs of these items, and of renovations and new construction as well. 

But what really is starting to hurt as much if not more than those type of problems is the lack of available labor to help all of our businesses, restaurants, hotels and the like get back on track for the onslaught of folks who are ready to finally get out and live life as normally as possible again.

There is not a restaurant I’ve been in recently whose owner or manager hasn’t shared with me the difficulty of staying open regular hours while still providing excellent customer service.  Some are limiting the number of seatings while others are choosing to change hours or close an extra day each week.  

This is the same in every local or national shopping store I’ve visited.  You see signs posted most everywhere offering excellent wages and benefits—and even a sign-up bonus for some. I don’t recall ever seeing this many cries for help, and it’s troubling when you consider how many are still collecting unemployment simply because they “can”.  

I’m not here to judge anyone for their decisions, but I am here to say a big “Thank You” to all of the workers, young and old, who have gone back to work to help continue making our city and our country whole again.

It’s not simply the “essential” workers such as doctors, nurses, fire, police and others who deserve our thanks.

All workers are “essential” in my book, and I want to send a big shout out to all those toiling away in restaurants, shopping stores, manual labor, and so much more.  You are the ones who make a difference every day in the lives of so many and you do so anonymously and with grace.  

I want to make sure you know your labor is not in vain by any means, and I for one, am very grateful.

 

COLORADO SPRINGS IS RATED # 6 AMONG BEST PLACES TO LIVE AND IS AN EMERGING housing market

USNews&World Report,7.21.21, The Wall Street Journal, 7.21.21

In the most recent annual analysis from U.S. News & World Report, Colorado Spring came in number 6 out of 150 major U.S. cities surveyed.  

According to the report, in order to make the top of the list, a place had to have good value, be a desirable place to live, have a strong job market and a high quality of life.

Three other Colorado cities also made the list with Boulder at number 1, Denver at number 14 and Fort Collins at number 17. 

In similar news, The Wall Street Journal reported about their joint study with Realtor.com where metro areas were ranked according to real-estate market data and economic health.  In that study only two Colorado cities were ranked in the top 50—Colorado Springs at number 16, and Boulder at number 46.

This study showed that the housing boom and appeal of remote workers has driven buyers away from big cities to more affordable areas with appealing lifestyle amenities. Areas with higher property taxes have fallen in the rankings over the past couple of years.

While home prices in all markets have risen steadily in the past several years, homes in these emerging markets are considerably more affordable and folks are finding they can get more for their money in relocating there.

And home buyers remain unfazed by longer commutes these days as well.   If they are able to purchase a home in an area they love and at a better price than in a bigger city, they are willing to make the commute, especially if they are afforded the opportunity of working from home at least part time.

Recently, I have had a number of relocation inquiries and it’s been difficult for these families to find a home as quickly as they might need one.  The low availability of existing homes for sales, coupled with the long wait for newly constructed homes is creating difficulty not only for the one being located but for the company who needs them here now as well.

This again goes back to the significant lack of labor.  Besides the shortage of material, there is a lack of those who can move the material from point “a” to point “b” and those needed to help in construction, electrical work, plumbing work and so much more.  

That is precisely why I thank and commend those who are doing their share rather than doing nothing.

 

MEDIAN U.S. HOME PRICES HIT A NEW HIGH IN JUNE

The Wall Street Journal, 7.22.21

According to the National Association of Realtors, June sales of existing homes rose 22.9% from a year earlier.  The median home price in the country rose to $363,300 in June, up 23.4% from a year earlier. 

The housing market boom is easing slightly as rising prices are prompting more homeowners to list their homes for sale.  Lawrence Yun, chief economist for NAR, said that homes sold in June received an average of four offers, down from five the previous month.

But the number of homes for sale remains far lower than normal, and robust demand due to the continued ultra-low mortgage interest rates is expected to continue pushing home prices higher.

At the moment, demand is trumping everything, and higher inventory isn’t going to take the brakes off price increases any time soon.

If you’ve even considered a move, now is the time to get started.  Prices aren’t going down any time soon and mortgage rates essentially have nowhere to go but up, so today is the best time to start.  It shouldn’t take long to sell your present home and it will likely go for far more than you might imagine.  It WILL take longer to find your next home, so that also needs to be a consideration from the start.

The best move you can make is to call me at 593.1000 or email me at Harry@HarrySalzman.com to get any and all of your Residential real estate questions answered.  I look forward to speaking with you.

 

U.S. HOUSING STARTS ARE RISING, HOWEVER BUILDING PERMITS ARE TUMBLING

Reuters, 7.21.21

Homebuilding across the county increased more than expected in June but permits for future homes fell to an 8-month low, likely due to the uncertainty caused by expensive building materials as well as shortages of labor and land.

A report from the Commerce Department last week suggested a severe shortage of houses, which has boosted prices and sparked bidding wars across the country. With demand driven by low mortgage rates and a desire for more spacious accommodations during the pandemic, this could persist for a while.  

Though lumber prices are coming down from record highs, builders are paying more for steel, concrete and lighting and lots more and are grappling with shortages of appliances like refrigerators.  

There have been reports of multi month delays in the delivery of windows, heating units, and appliances which have delayed the delivery of homes and forced builders to cap activity.  Many builders continue to point to a shortage of available workers as a separate challenge.

 

 

MORTGAGE RATES NOSE-DIVE AS REFINANCE FEE IS ENDED

Yahoo.com, 7.25.21

It’s difficult to believe but mortgage rates this week dropped back to within shouting distance of their recent record lows.

When 30-year fixed rates spiked during the spring, there were predictions that the economy’s recovery from the pandemic could push rates as high as 4% this year.  But at the moment, they are deep beneath 3% once again and offering hefty savings to both homebuyers and refinancing homeowners.  

The government’s announcement that the end is coming for a widely loathed fee has contributed to rate drops, though another reason is that the recovery is looking like less of a sure bet.

Recent drops in rates have been tied, in part, to the economic uncertainty created by rising COVID infections.

“Concerns about the Delta variant, and the overall trajectory of the pandemic, are undoubtedly affecting economic growth,” say Sam Khater, Freddie Mac’s chief economist.  “Declining rates provide yet another opportunity for homeowners to save money on their monthly mortgage payment through a refinance.”

The average rate on 15-year fixed-rate mortgages also dipped, falling from 2.22% to 2.12%.  A year ago, 15-year fixed loans had an average rate of 2.545.

Fifteen-year mortgages are a popular choice among refinancing homeowners, with the Mortgage Bankers Association estimating that 15-year fixed-rate loans account for approximately 20% of all refis in the U.S.

The Federal Housing Finance Agency is scrapping is 0.5% fee on refinances which is making refi loans cheaper.  That surcharge has cost the typical borrower an extra $1400, according to mortgage bankers.

FHFA oversees both Freddie Mac and Fannie Mae, two government sponsored enterprises that buy most mortgage loans from lenders.  The agency introduced the fee last year because it said that Freddie and Fannie needed the revenue because they were facing billions in losses related to the pandemic.

Since lenders passed the additional cost on to consumers, the fee “artificially increased the average mortgage rate,” says Zillow economist Matthew Speakman.  Banks are now lowering their rates ahead of the surcharge’s official end on August 1.

If you’re a homeowner who has been putting off on refinancing, it’s probably time to stop procrastinating.  

These low rates, like most things in life, aren’t a guarantee and they most certainly be around forever.

 

WHAT DO EXPERTS SEE ON THE HORIZON FOR THE SECOND HALF OF THE YEAR?

KeepingCurrentMatters, 6.30.21

 

• Mortgage Rates Will Likely Increase, but Remain Low

 

• Home Appreciation Will Continue, but Price Growth Will Likely Slow

 

• Inventory Remains a Challenge, but There’s Reason to Be Optimistic

 

 

Bottom Line?  Looking at the forecast for prices, interest rates, inventory and home sales, experts remain optimistic about what’s on the horizon for the second half of 2021. 

 

I strongly predict that the Colorado Springs home price forecast will be much higher than that of the national forecast for 2021 shown above.

 

Contact me sooner than later so can discuss how to navigate the market together in the coming months.  

 

July 9, 2021

 

HARRY’S BI-WEEKLY UPDATE

A Current Look at the Colorado Springs Residential real estate Market

As part of my Special Brand of Customer 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.

 

 

JUST WHEN I THINK HOME PRICES WILL BEGIN TO LEVEL OFF, I FIND THERE’S NO END IN SIGHT

As you will see in the statistics below, the median price for existing single-family homes in El Paso County exceeded $500,000 for the first time.  That’s a BIG WOW…and this isn’t just a local thing—home prices all across America are trending up—but a bit faster in places like Colorado Springs where so many are wanting to relocate.

I will tell you the same thing I’ve been saying for some time now and even more so recently—it’s time to STOP looking at the PRICE of a home and START looking more closely at the MONTHLY PAYMENT. 

Interest rates were lowered again this past week and are still historically low.  What that means is that even though homes are costing considerably more than they did even several months ago, your monthly payment is more than likely in a range that’s affordable for you.  And that’s especially true if you have been renting because rental rates are at an all-time high.

Those of you who are wanting to sell and trade up are even in better shape because in this Seller’s Market you are likely to get more than you might imagine for your present home.  That means your home equity is considerably higher than you think—providing you more of a down payment for your next home.  

It really is simply a matter of working with a knowledgeable, seasoned real estate professional like me who can help you figure it all out prior to beginning the new home search. This cannot be over-emphasized. 

I can help you take your wants, needs and most importantly, budget, and correlate it to the best answers for your individual situation.  No two clients are alike, just like no two homes are exactly alike.  It’s important for me to get to know you and your family so I can help determine the best direction for you.  

The recent pandemic has created a lot of new wants and needs for many of us.  Some, like my family, have done a lot of home renovation to meet that criterion.  Others have begun to work with me to find a new living situation that already has the necessary changes.  And, still others have asked me to go to a new home builder with them to help them get what they want in new home construction as well as the best financing for their particular situation.

These are all areas where I excel and I am truly at my happiest when I can help folks find not only a place to call home, but know I’ve assisted them in obtaining what is often the most valuable asset for their family.  

If you’ve even considered a move, now is the time to get started.  Prices aren’t going down any time soon and mortgage rates essentially have nowhere to go but up, so today is the best time to start.  It shouldn’t take long to sell your present home and it will likely go for far more than you might imagine.  However, finding a replacement will likely take some time so it’s best to start in that direction first.  

Meanwhile, the best move you can make right now is to call me at 593.1000 or email me at Harry@HarrySalzman.com to get any and all of your questions answered.  I look forward to speaking with you and helping to make all your Residential real estate dreams come true.

 

JUNE 2021

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

Here are some highlights from the June 2021 PPAR report.  Remember that the new format of this report no longer provides monthly statistics for each individual neighborhood.  However, if you are interested in what’s happening in your neighborhood, I can provide you with this information through other means.

In El Paso County, the average days on the market for single family/patio homes was a very low 7.  For condo/townhomes it was 6.  

Also in El Paso County, the sales price/list price for single family/patio homes was 104.9% and for condo/townhomes it was 104.1%.  

Please click here to view the detailed 10-page report, including charts.  If you have any questions about the report or to find out how it relates to your individual situation, just give me a call.

 

In comparing June 2021 to June 2020 for All Homes in PPAR:

 

You might take note that the median sales price for existing Single-Family/Patio Homes jumped above the $500,000 mark for the first time!         

                        

                     Single Family/Patio Homes:

 

·       New Listings were 2,078, Up 2.9%

·       Number of Sales were 1,816, Up 7.8%

·       Average Sales Price was $502,961, Up 25.1%

·       Median Sales Price was $450,000, Up 25.0%

·       Total Active Listings are 777, Down 47.5%

·       Months Supply is 0.4, Down 6.1%

 

Condo/Townhomes:

 

·       New Listings were 269, Up 19.0% 

·       Number of Sales were 222, Down 7.1%

·       Average Sales Price was $331,299, Up 27.8%

·       Median Sales Price was $320,000, Up 32.6 %

·       Total Active Listings are 62, Down 53.7%

·       Months Supply is 0.3, Up 7.6%

 

Now a look at more statistics…

 

JUNE 2021 MONTHLY INDICATORS AND LOCAL MARKET UPDATE ILLUSTRATE OUR LOCAL TRENDS IN DETAIL

Colorado Association of REALTORS^{® ,} Pikes Peak REALTORS Service Corp, or it’s PPMLS

Providing greater detail than the above report, this contains information on both El Paso and Teller counties for Residential real estate 

The “Activity Snapshot” for all residential properties in El Paso and Teller counties shows the Year to Date one-year change:

 

• Sold Listings for All Properties were Up 6.8%

 

• Median Sales Price for All Properties was Up 24.3%

 

• Active Listings on All Properties were Down 52.1%

 

You can click here to read the 16-page Monthly Indicators or click here to get specific information on the geographical area of your choice from the 18-page Local Market Update.  I recommend that you check out your own area or one that you are considering, to get a good idea of the local pulse.  As an example, here is a detailed report on the Colorado Springs area in general:

 

 

LOCAL HOMEBUILDING BOUNCES BACK

The Gazette, 7.3.21

After a slow May, new home construction in the Colorado Springs area has picked up pace, due in part to strong demand.

There were 382 permits issued last month by the Pikes Peak Regional Building Department, a 9.5% increase over the same month last year.  This number refers to single-family detached homes, not townhomes or condos.

Demand is strong for a number of reasons.  As you read earlier, there were only 777 existing single-family homes for sale at the end of June.  When you add in the bidding wars, sales over asking price and more, at times it makes more sense for a family to look at new home construction.  It also affords them the opportunity to know approximately when the new home will be ready so they can sell their existing home at the opportune time.  In some cases, when my clients have wanted to sell their home earlier, they have been able to ask the buyer for a rent-back situation until their new home is ready.

No matter how it is structured, I can help you in both situations.  Being a real estate professional in the local arena for 48+ years has afforded me a good working relationship with a number of local builders and I have assisted clients in home and site selection as well as helped them secure the mortgage best suited for their needs.  

In fact, some of my investment buyers have recently been purchasing newly constructed homes to lease.  They have found with the favorable interest rates and higher monthly rental pricing, along with the knowledge that the home will not need any repairs for quite some time, it’s a win-win for them.  Especially since the type of renter for those homes will likely be one that is more long-term and either doesn’t want to own a home or cannot qualify for their own mortgage for some reason.

If new home construction is in your future, give me a call and let’s see how we can make that work for you.

 

WHAT TO EXPECT AS APPRAISAL GAPS GROW

Keeping Current Matters, 6.29.21

Today’s low inventory and high demand are driving up home prices.  As many as 54% of homes are getting offers over the listing price, based on the latest Realtors Confidence Index from The National Association of Realtors (NAR). 

According to CoreLogic, 19% of homes had their appraised value come in below the contract price in April 2021.  That’s almost double the percentage in each of the two previous Aprils.

The chart below uses the latest insights from the NAR Index to show how often an issue with an appraisal slowed or stalled the momentum of a home sale in May of this year compared to May of last year:

 

If an appraisal comes in below the contract price, the buyer’s lender won’t loan them more than the house’s appraised value.  Therefore, there will be a “gap” between the amount of loan the buyer can secure and the contract price of the home.

In situations such as that both the buyer and seller have a vested interest in making sure the sale moves forward with little or no delay.  The seller will want to make sure the deal closes, and the buyer won’t want to risk losing the home.  That’s why it’s common for sellers to ask the buyer to make up the difference themselves in today’s competitive market.

Bottom Line:  Whether you are buying or selling, I will be there with you through the entire process and will be there to help you navigate through the unexpected, including potential “appraisal gaps".

 

UCCS ECONOMIC FORUM UPDATE

College of Business, UCCS, updated 6.25.21

As always, I’ve included the most recent economic update from the UCCS Economic Forum.  It provides data concerning all aspects of the economy, on both the National and Colorado Springs levels.  

I’ve reproduced just one of the charts below.  You can click here to read the entire report and if you have any questions, please give me a call.

June 28, 2021

 

HARRY’S BI-WEEKLY UPDATE

A Current Look at the Colorado Springs Residential real estate Market

As part of my Special Brand of Customer 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.

 

 

INNOVATION IS THE BUZZWORD OF THE MOMENT…AND LIKELY FOR THE FUTURE AS WELL

There’s just no avoiding it anymore, and if you’ve kept up with my eNewsletter columns you know I’ve been especially fortunate in finding new and innovative ways to help my clients realize their Residential real estate wants, needs and dreams.

I can’t overemphasize the importance of working with a seasoned, knowledgeable and innovative real estate professional in any situation, but most especially in today’s seller’s marketplace.  My 48+ years in the local Residential Real Estate arena coupled with my investment banking background gives me an edge that is particularly important in today’s buying and selling wars.  I’ve been through most every type of “cycle” and earned my nickname of “Mr. Negotiator” through years of practice.  

Buying a new home, which is often a family’s largest asset, should be a wonderful experience and I’ve always tried to keep the process as stress-free as possible for my clients.  I wish I could say that the past couple of years have been that way, but unfortunately that’s not the case.  Bidding wars and other new and innovative tactics have made the whole process much more difficult on the buyers, yet I still do everything possible to alleviate the day-to-day stress.

A big part of my job is working with clients and their family members to make certain we’ve got as much information as possible right at the beginning of the search.  When we’ve figured out a strategy it’s much easier to make the quick decisions that are necessary in today’s market.  

Every family situation is different and there’s no easy “no size fits all” in Residential real estate.  Home size, location, family size and wants, needs and budget all come into play and have to be considered right from the start.  

I like to spend time getting to know my clients so that I can best represent them and make certain they are getting the most for their money.  It can get a bit frantic in these bidding wars and I’ve learned that at times, walking away is a “win” when it’s not in a buyer’s best interest to “win the bid, but lose the war” so to speak.  

Interest rates are still historically low, rental rates are historically high, and folks are ready to move based on what they now realize they want in a home after being quarantined for so long.

When you add all that to the fact that median home prices all across the U.S. are at an all-time high and inventory is at an all-time low, well, you get the picture.  

Even folks looking for new construction are finding that with increased demand at the same moment building materials are at an all-time high, they not only cannot get a definite move-in date, but the builder also cannot give them an exact price for the new home.  

Yes, it’s crazy times in Residential real estate and not likely to change any time soon. 

A recent Wall Street Journal article in the “Future of Everything” section was entitled “Built-To-Rent Suburbs Are Poised to Spread Across the U.S.”.  The gist of the article was that current “economic forces and generational preferences are leading to a new kind of housing: subdivisions designed for renters and managed like apartment buildings”.  This is another innovative way that investors and builders are coming together to provide homes rather than apartments in a community type of setting.  This is a new concept, and I don’t know how it will play out, but it just goes to show that folks are thinking of new ways to provide housing to those who either can’t or don’t want to buy, but still want to live in a house, rather than an apartment.

I’m hopeful that more folks will start putting their homes on the market in order to trade up or move to a new neighborhood and that will at least help us get back to a bit more normalcy.

If you’ve even considered a move, now is the time to get started.  Prices aren’t going down any time soon and mortgage rates essentially have nowhere to go but up, so today is the best time to start.  It shouldn’t take long to sell your present home and it will likely go for far more than you might imagine.  It WILL take longer to find your next home, so that also needs to be a consideration from the start.

The best move you can make is to call me at 593.1000 or email me at Harry@HarrySalzman.com to get any and all of your Residential real estate questions answered.  I look forward to speaking with you.

 

OWNING A HOME HAS DISTINCT ADVANTAGES OVER RENTING--Infographic

KeepingCurrent Matters, 6.18.21

Highlights:

• When you rent, you build your landlord’s wealth, your monthly payment depends on ever-rising rents, and you don’t benefit from home price appreciation

 

• On the other hand, when you own your home, you build you own wealth, your monthly payment is locked in, and you benefit directly from home price appreciation

 

• If you’re feeling the challenges of a competitive market, remember that homeownership is a long-term game.  Persevering today will lead to financial rewards in the future.

 

U.S. HOUSING DEFICIT IS PUT AT 5.5 MILLION 

The Wall Street Journal, 6.17.21

Some more statistics to show why it’s especially tough to buy a home at present:

 

• Construction of new housing in the past 20 years fell 5.5 million units short of long-term historical levels, according to a report by the National Association of Realtors (NAR).

 

• The recent annual rise in the median existing-home price has been 19%. 

 

• In May, U.S. homes posted their biggest annual increase in more than two decades when the median national home price topped $350,000 for the first time.  In Colorado Springs, the median single-family home price was $432,095 in May.

 

• U.S. homes sales soared last year at their fastest pace in 14 years, when low interest rates and the rise of remote work during the pandemic sent buyers scrambling to find larger living spaces.

 

• The lack of homes for sale relative to demand and record housing prices have slowed the pace of home sales in recent months, but on a historic basis, the market remains red hot and analysts say demand from millennials entering their prime homebuying years is expected to fuel demand for years to come.

 

• More than 90% of home builders surveyed by NAR in May reported shortages of appliances and framing lumber.

 

As of this week, I’ve read that price of lumber and some other building material is finally going down but is still higher than in the recent past due to the great demand from builders and others.  Until demand stabilizes, I’m afraid we are in for continued unprecedented times.

So once again, if you’ve been considering a move, NOW is the time to get started.  It will take some time and perseverance, but prices aren’t going to get better, and interest rates are certainly not guaranteed to stay this low forever.  

June 4, 2021

 

HARRY’S BI-WEEKLY UPDATE

A Current Look at the Colorado Springs Residential real estate Market

As part of my Special Brand of Customer 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.

 

I’VE BEEN SAYING THIS FOR MORE YEARS THAN MANY OF YOU HAVE BEEN ALIVE…

…and here you go.  For the eighth year in a row, Americans have chosen real estate as “The Best Investment” as reported by Gallop.  And this year, at 41%, real estate earned the highest percentage in the history of the survey!

 

The only drawback in the last couple of years is that supply has most definitely been greatly overtaken by demand and that’s made it difficult for folks to find a new home, most especially first-time buyers.

The historically low interest rates helped ramp up sales and then the pandemic hit, creating a different kind of scenario.  A number of folks decided to stay put and renovate their existing homes.  And with the ease of home delivery of groceries, meals and other necessities, more older folks decided they would be happy to “age in place”.  A lot of others found new wants and needs for their living situations during that same time and started their new home search as early as they were able.  

And then…once more…demand overtook supply, prices of lumber, copper, aluminum and other home materials went through the roof and even the possibility of new home construction became one that would force a much longer than normal wait time, and even without a guaranteed price at that.

When you add that to the fact that apartment rental rates in Colorado Springs are at an all-time high, with the average exceeding $1,300 for the first time, it’s no wonder folks are doing whatever possible to become homeowners or to buy for investment purposes.  

In fact, investment buyers, including those purchasing second homes, accounted for 17% of national homes sales in April 2021, up from 10% a year earlier, according to the National Association of Realtors (NAR).

Job recovery here in the Springs is rebounding faster than the nation and even the state of Colorado.  Through last month, the area has added back all but 4,000 of the 38,700 jobs lost in March and April 2020 and has added 8,800 jobs in the first four months of this year—an average of 2,200 a month.  When you consider that lots of folks are relocating here either to fill some of these openings or because they can work from home and would rather live here, well, you get the picture.  They need a place to call home and are joining all the other folks who are actively looking for a home here.

And according to a senior economist at realtor.com, of the sales in the 250 largest metro areas, Colorado Springs is number 3 in fastest home sales, selling in an average of 12 days!

See where this is headed?  I have been saying for as long as I can remember that if you’ve even considered a move, yesterday would have been a preferable time to start, and many of you heeded my words.  It wasn’t always your first choice, and it most certainly wasn’t as easy and stressless an experience as I like for my clients, but in most cases, we got it done!  After all, they don’t call me Mr. Negotiator for nothing.  

However, as the months go on with so few available homes for sale, it’s a challenge for even a seasoned, knowledgeable real estate professional like me.  But those of you who know me at all know that where there’s a will, I’ll find a way. 

And to quote my friend Robert August who wrote me after my last eNewsletter said:

 

“Another reason not to tarry, when you’ve got Harry…

 

…and to quote The Talmud: “If not now, when?”

 

I couldn’t have said it better myself.  Thanks, Robert!

If you’ve even considered a move, now is the time to get started.  Prices aren’t going down any time soon and mortgage rates essentially have nowhere to go but up, so today is the best time to start.  It shouldn’t take long to sell your present home and it will likely go for far more than you might imagine.  However, finding a replacement will likely take some time so it’s best to start in that direction first.  

Meanwhile, the best move you can make is to call me at 593.1000 or email me at Harry@HarrySalzman.com to get any and all of your questions answered.  I look forward to speaking with you and helping to make all your Residential real estate dreams come true.

 

MAY 2021

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

Here are some highlights from the May 2021 PPAR report.  Remember that the new format of this report no longer provides monthly statistics for each individual neighborhood.  However, if you are interested in what’s happening in your neighborhood, I can provide you with this information through other means.

In El Paso County, the average days on the market for single family/patio homes was a very low 8.  For condo/townhomes it was 4.  

Also in El Paso County, the sales price/list price for single family/patio homes was 103.5% and for condo/townhomes it was 104.3%.  

It’s noteworthy that in May of 2020, we couldn’t show homes due to the pandemic so it is no surprise that the number sales in comparing this year to last would be up considerably.  The numbers aren’t indicative of more available homes or more home sales.

Please click here to view the detailed 10-page report, including charts.  If you have any questions about the report or to find out how it relates to your individual situation, just give me a call.

 

In comparing May 2021 to May 2020 for All Homes in PPAR:

                             (A Big WOW is all I can add here!)

 

                       Single Family/Patio Homes:

·       New Listings were 1,876, Down 3.6%

·       Number of Sales were 1,553, Up 37.2%

·       Average Sales Price was $489,376, Up 24.4%

·       Median Sales Price was $432,095, Up 23.5%

·       Total Active Listings are 582, Down 62.4%

·       Months Supply is 0.4, Down 1.7%

 

Condo/Townhomes:

·       New Listings were 206, Down 18.6% 

·       Number of Sales were 220, Up 46.7%

·       Average Sales Price was $318,936, Up 24.2%

·       Median Sales Price was $310,500, Up 23.9%

·       Total Active Listings are 66, Down 61.8%

·       Months Supply is 0.3, Down 1.3%

 

Now a look at more statistics…

MAY 2021 MONTHLY INDICATORS AND LOCAL MARKET UPDATE ILLUSTRATE OUR LOCAL TRENDS IN DETAIL

Colorado Association of REALTORS^{® ,} Pikes Peak REALTORS Service Corp, or it’s PPMLS

Providing greater detail than the above report, this contains information on both El Paso and Teller counties for Residential real estate 

The “Activity Snapshot” for all residential properties in El Paso and Teller counties shows the Year to Date one-year change:

 

• Sold Listings for All Properties were Up 37.0%

 

• Median Sales Price for All Properties was Up 22.6%

 

• Active Listings on All Properties were Down 61.3%

 

You can click here to read the 16-page Monthly Indicators or click here to get specific information on the geographical area of your choice from the 18-page Local Market Update.  I recommend that you check out your own area or one that you are considering, to get a good idea of the local pulse.  As an example, here is a detailed report on the Colorado Springs area in general:

 

COLORADO SPRINGS IS #22 OUT OF 100 METRO AREAS IN HOME PRICE INCREASES

Federal Housing Finance Agency, 5.25.21

In their recently released report, the Federal Housing Finance Agency (FHFA) listed Colorado Springs at number 22 out of 100 top measured metro areas in home price increases over the past year.

As you will see in the chart below, home prices in Colorado Springs rose 15.6% over the past year and rose 3.6% in the last quarter.  That’s in comparison to the U.S. as a whole, where prices rose 12.6% over the past year and rose 3.5% over the last quarter.  The combined Denver/Aurora/Lakewood area came in at number 42.

Here is a look at the Colorado Springs data from 2007 to Quarter 1 2021:

 

A RECORD NUMBER OF HOMES ARE SELLING ABOVE LIST PRICE

Realtor mag, 6.1.21

More than half of homes—51%--are selling for more than the asking price—a record high, according to new research from real estate brokerage Redfin.  A year ago, 26% of homes were selling above asking price.

This again is indicative of the fact that many more people want homes than there are homes for sale.  More home buyers are waiving appraisals so that the sale doesn’t fall through.  In April, 19% of homes had their appraised value come in below the contract price, according to data from CoreLogic.  Over the two previous years, 8% of homes were appraised for lower than the contract price.

“The frequency of buyers being willing to pay more than the market data supports is increasing,” said Shawn Telford, chief appraiser at CoreLogic.

Meanwhile, 24% of homeowners surveyed by realtor.com say they expect to get more than their asking price when they sell, and 29% of sellers plan to ask for more than what they think their home is worth as  well.

 

UCCS ECONOMIC FORUM UPDATE

College of Business, UCCS, 4.30,21

As always, I’ve included the most recent economic update from the UCCS Economic Forum.  It provides data concerning all aspects of the economy, on both the National and Colorado Springs levels.  

You can click here to read the report which was published last week in its entirety and if you have any questions, please give me a call.

May 17, 2021

 

HARRY’S BI-WEEKLY UPDATE

A Current Look at the Colorado Springs Residential real estate Market

As part of my Special Brand of Customer 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.

 

 

NOT YOUR NORMAL SPRING BUYING SEASON…

If you’ve been reading this eNewsletter for the past year or more you certainly will understand when I say once again that the typical “spring buying season” in Residential real estate is no more.  I can’t speak for future years, but for now everything is different.

With folks venturing out more, they are starting to look for the wants and needs they discovered were lacking in their present homes during the last year when they were forced to remain indoors.  Bigger and more elaborate kitchens, home offices, outdoor entertaining areas and more have become prevalent in the search for new homes. 

Even a big snowstorm hasn’t kept buyers from wanting to see homes because they are hoping others might not be out and that would give them an advantage!  I’ve seen so many different scenarios I can’t begin to list them here.  

Buyers are trying everything possible to present offers that sellers will notice and hopefully accept.  And the stress and disappointments are like nothing I’ve witnessed before.  

And that’s where I come in.

A big part of my job is working with my clients to make certain we’ve got as much information as possible right at the beginning of the search.  When we’ve figured out a strategy it’s much easier to make the quick decisions that are necessary in today’s market.  

Every family situation is different and there’s no easy “no size fits all” in Residential real estate.  Home size, location, family size and wants, needs and budget all come into play and have to be considered right from the start.  

I like to spend time getting to know my clients so that I can best represent them and make certain they are getting the most for their money.  It can get a bit frantic in these bidding wars and I’ve learned that at times, walking away is a “win” when it’s not in a buyer’s best interest to “win the bid, but lose the war” so to speak.  

My 48 years in the local Residential real estate arena have taken me through many different cycles and I’ve learned the ins and outs of making sure my clients are protected and happy with the eventual outcome of their home search.  It may be YOUR first rodeo, but it’s obviously not mine.  I know how to keep the stress levels at an even keel if at all possible and they certainly don’t call me “Mr. Negotiator” for nothing.  

If you’ve even considered a move, now is the time to get started.  Prices aren’t going down any time soon and mortgage rates essentially have nowhere to go but up, so today is the best time to start.  It shouldn’t take long to sell your present home and it will likely go for far more than you might imagine.  It WILL take longer to find your next home, so that also needs to be a consideration from the start.

The best move you can make is to call me at 593.1000 or email me at Harry@HarrySalzman.com to get any and all of your Residential real estate questions answered.  I look forward to speaking with you.

 

3 GRAPHS THAT SHOW WHY YOU SHOULD SELL YOUR HOUSE NOW

Keeping Current Matters, 5.17.21

As I’m sure you’ve heard more than once from others, and numerous times from me, 2021 is the year of the seller when it comes to Residential real estate.  

If you’ve been thinking of moving in order to better suit your changing needs and wants, now is the perfect time to do so.  Historically low interest rates are certainly in your favor, and high buyer demand at present presents you with the leverage to negotiate the best contract terms on the sale of your current home.  

Here’s what is driving the sellers’ advantage and why there is so much opportunity for homeowners who are ready to move this season.

1. Historically Low Inventory

The National Association of Realtors (NAR) explains it this way: “Total housing inventory at the end of March amounted to 1.07 million units, up 3.9% from February’s inventory…Unsold inventory sits at a 2.1-month supply at the current sales pace, marginally up from February’s 2.0-month supply and down from the 3.3-month supply recorded in March 2020.”

Even with the slight rise in number of homes for sale this spring, inventory remains close to an all-time low:

 

High buyer interest has created a major imbalance between supply and demand, but as the slight uptick in inventory shows, sellers are beginning to reenter the market.  Selling your home now enables you to take advantage of buyer demand before more listings come on the market later this year.

 

2. Frequent Bidding Wars

As I’ve been telling you for some time now, bidding wars are becoming the norm as a result of the supply and demand imbalance.  NAR reports that the average number of bids received on the most recently closed sales is 4.8 offers.  This number has doubled since the first quarter of 2020:

 

Buyers facing tough competition when searching for a home are more likely to be flexible and generous in their negotiations.  This gives the seller the chance to choose the best buyer for their needs and be selective about things like time to closing, contingencies, renovations and more.  Working with a seasoned professional like me who is a “certified negotiator” gives you even more leverage in navigating the bidding wars.

 

3. Days on the Market

Today’s sellers aren’t waiting very long to find a buyer for their house either, NAR reports: “Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020.  83% of the homes sold in March 2021 were on the market for less than a month”:

 

Lawrence Yun, NAR’s chief economist explains, “The sales for March would have been measurably higher had there been more inventory…Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising.”

 

Bottom Line?  If you’ve even been thinking about moving, you can see that it’s a great time to sell your present home.  Call me and let’s figure out the best way for you to make your current Residential real estate dreams come true.

 

COLORADO SPRINGS IS NUMBER 30 IN TOP METRO AREA PRICE INCREASE

NAR, 5.11.21, The Wall Street Journal, 5.12.21

Home prices across the country rose just about everywhere during the first quarter of 2021 and this rapid price appreciation shows little sign of fading anytime soon due to the lack of homes for sale and robust demand.  Nationwide, the median existing-home sales price rose 16.2% in the first quarter to $319,200—a record high in data going back to 1989.

For 182 of the 182 Metropolitan Statistical Areas (MSAs) tracked by NAR, the median sales price for existing single-family homes was higher in the first quarter compared to a year ago.  In 89% of those metro areas, median prices rose by more than 10% from a year earlier.  And the average national monthly mortgage payment rose to $1,067 from $995 a year ago.

“Significant price increases throughout the country simply illustrate strong demand and record-low housing supply,” said Lawrence Yun.  “The record-high home prices are happening across nearly all markets, big and small, even in those metros that have long been considered off-the-radar in prior years for many home seekers.”

Another factor coming into play is the fact that length of time U.S. homeowners are staying put has been steadily rising, some of which is due to concerns about letting potential buyers into their homes during a pandemic.  

A number of buyers are being kept out of the current market, most especially first-time buyers and those with limited budgets who are losing out to all-cash buyers.  According to Yun, “The sudden price appreciation is impacting affordability, especially among first-time buyers.  With low inventory already impacting the market, added skyrocketing costs have left many families facing the reality of being priced out entirely.”

The following chart shows the median sale price of existing single-family homes in the U.S.:

 

Colorado Springs was ranked at number 30 this quarter with median sales price increases year-over-year at 14.3%.  

To see the entire 182 MSAs in alphabetical order please click here.  To see them in order of percentage of median price increase click here.

 

RECORD HIGH COSTS OF BUILDING MATERIALS CONTINUE TO THREATEN HOUSING AFFORDABILITY

NAHBNow, 5.14.21

It’s not just lumber anymore.  The rapidly rising prices for other necessary building materials are causing widespread concerns throughout the housing industry.

While lumber prices, up more than 300% from April 2020, have been dominating the headlines for the past year, the prices for materials like steel, concrete and gypsum products all are climbing at a record pace.

“Steel mill products price volatility is greater than it has been at any time since The Great Recession,” said National Association of Home Builders’ (NAHB) Senior Economist David Logan.  “Over the past three months, prices have climbed 22%.  Perhaps more concerning than rising prices is that the pace of price changes has quickened each of the past nine months,” he added.  

“[Rising materials prices] are significantly driving up prices for single-family homes and apartments,” wrote NAHB Chief Economist Robert Dietz in his bi-weekly newsletter.  “Combined with expectations of rising interest rates, these higher prices place additional pressure on housing affordability, which continued to decline in the first quarter,” he added.

If you are considering new construction the earlier you start the better.  The lack of available homes for sale is not just an “existing home” thing.  Builders cannot keep up with the current demand and with material prices rising daily, prices on those homes are rising quickly as well.  Delivery times are much longer than even in the most recent past and interest rates are not guaranteed to stay this low.  Please call me sooner than later if this is an option you’re considering and let’s see how we can make it work for you.

 

THE MOST COMMON REASON ACTIVE BUYERS CAN’T CLOSE THE DEAL

NAHBNow, 5.11.21

A recent post in the Eye on Housing blog showed that 64% of buyers who were actively engaged in the process of finding a home in the first quarter of 2021 have spent upwards of three months searching for a home without success. 

The most common reason they have come up empty-handed is not because they can’t find a home at an affordable price (32%) but because they continue to lose out in bidding wars (45%), according to survey results from NAHB’s most recent Housing Trends Report.  

This is flipped from a year ago when 40% cited unaffordable prices and only 23% because of offers by other buyers.

 

 

When asked what they are most likely to do next if still unable to find a home in the next few months, 50% of active buyers who have searched for three-plus months will continue looking for the “right” home in the same location—about the same percentage as a year earlier.  On the other hand, 42% say they will expand their search area, an increase from the 34% willing to take that step a year earlier.

And 25% of active buyers will give up until next year or later, up from 16% a year earlier.  

 

I point all of this out for several reasons.  The first is so that your expectations are in line with the Residential real estate landscape of today’s market.  And the second is to reiterate the importance of using a seasoned professional like myself in your active search.  I can’t promise you will get your first, or sometimes even your second choice, but I can promise that I will do my very best to make the entire process one that adds as little stress as humanly possible.  

 

TIPS FOR BUYERS IN LOW-INVENTORY MARKETS

The Wall Street Journal, 5.4.21

Here are a few excellent tips that I’ve employed in recent times that can help make your offer one that stands out:

 

1. Be Flexible on Timing:  Sellers sometimes choose the bidder who is the most flexible on timing.  If the sellers want to stay in the house longer for whatever reason, they may choose the buyer who will let them do that, even if it’s not the highest offer.

 

2. Don’t Wait:  In a low-inventory market, buyers need to act quickly.  That means when a new house comes on the market, drop everything to go see it.  You can’t wait for the weekend.

 

3. Get Creative:  This means you need someone like me who knows where to look for homes that are about to come on the market as well as finding a way to write a contract that gets a second look.

 

4. Work With a Local Lender:  Getting pre-approved and not just pre-qualified is paramount in today’s bidding war environment.  And the strength and reputation of a local lender can go a long way in helping to win that war.

 

5. Pay With Cash, if Possible:  Cash buyers are far more likely to win a bidding war than those who plan to finance their purchase because a deal can close more quickly and easily without the involvement of a bank.

 

6. Consider Waiving Contingencies:  While most real estate agents don’t recommend waiving an appraisal contingency, mortgage contingency or your right to a home inspection, in many markets the practice is now widespread as buyers compete to make their offers the most attractive.

 

7. Consider an Escalation Clause:  A number of my clients have been including these clauses, which stipulate that the bidder will top any other offer up to a certain threshold.

 

HARRY’S THOUGHT OF THE DAY: 

May 6, 2021

 

HARRY’S BI-WEEKLY UPDATE

A Current Look at the Colorado Springs Residential real estate Market

As part of my Special Brand of Customer 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.

 

 

WE INTERRUPT OUR REGULAR COLUMN FOR A WORD FROM THE EDITOR (aka WIFE)…

This was too cute a story not to share with Harry’s friends, clients and readers.

The Salzman household, like so many others during the past year or so, has been busy cleaning closets, the basement and just about everywhere else in preparation for some remodeling.  In doing so, we have come across many years’ worth of memorabilia.  When I walked into the office one day, I saw a box that had the above pictured banner sitting on top.  

I could easily ascertain from the year on it that Harry must have been all of nine years old when he won this “award” so I of course wanted the back story.  And this is what he told me:

“You know, when I was young, I knew that in order to be successful in life no one was able or going to hand anything to me on a silver platter.  I was aware quite early that any success I achieved would have to be through my own doing since my parents were not in a position to help financially. I knew that I wanted to be the first in my family to graduate college and I knew I wanted to be the best at whatever I chose to do.

When I was in the Cub Scouts, we supported the Boy Scouts in their annual revenue drive.  We were asked to sell raffle tickets in order to raise money and earn badges.  I was determined to be the best at that.  

I figured out that if I went door-to-door there would be a possibility that no one would be home, and I’d be wasting time. So, I asked my mother if I could skip school one day and go with her to her office building in downtown Phoenix and that way I could go from office to office and hit up everyone who worked in that big building.  She agreed and it was a great success.  

But of course, me being me, I couldn’t rest there.  The following Saturday I asked my mother to drop me off downtown at Walgreens, which at that time had a soda fountain in the store.  I sat at the counter and every time someone came in to eat or purchase a drink, I asked them to buy a raffle ticket from me.

And that’s how I won the “1956 Boy Scout Exposition Champ Salesman” award!”

I have known Harry since he was 13 so didn’t know him at the time he won this, but his answer did not surprise me.  He is one of the hardest working people I have ever known and has been since we first met. He was always striving to be the best and wouldn’t ever settle for less.  I could tell you many more stories of how impressed I was with his tenacity and imagination when it came to sales and you’d love them all, but it would take days.  His ingenuity, his devotion to perfection, his art of negotiation and so much more were prevalent way back then, and he continues to amaze me daily with his “ideas” of how he can do more for his clients.  

Those of you who I have not met are probably thinking, “well, of course she’s saying that because she’s his wife!”  But I’m guessing even if you don’t know me, you probably do know Harry well enough to know that his special brand of customer service is just an ingrained part of him…and now you know it went back to when he was only nine years old.

And if you haven’t yet experienced working with Harry, all I tell you is that he’s been preparing to work hard for you since 1956.  That’s better than money in the bank…but with Harry you’ll get more of that as well.

Thank you for indulging me this story…I knew it wasn’t one Harry would share himself.

 

AND NOW BACK TO OUR REGULARLY SCHEDULED COLUMN…

What can I tell you that you haven’t heard from me over the last several months?  Home values and prices are still going through the roof and interest rates are continuing to remain historically low.  And, unfortunately, there are still very few homes available for resale.  

With apartment rents continuing to rise and interest rates so low, folks are wanting to get into home ownership, many for the first time.  The shortage of available homes for sale, along with higher prices and stricter loan qualifications, especially for first-time buyers, continue to make it difficult to find a home.

Bidding wars with very creative offers are making things even hard for buyers.  Sellers, on the other hand, are oftentimes shocked at what they can get for their present home.  However, finding the next one is presenting challenges that even a few years ago might have been hard to imagine.  

New construction, an option many of my clients have considered in recent days, is booming, but there is a shortage there as well.  More and more homes are being built but builders are finding it difficult to keep up with the demand.  This is especially true in recent times when the cost of construction, including lumber, cement, aluminum, copper and more is going up almost daily.  Home builders are trying new ways to compensate for that, which I will explain later in this eNewsletter.

The Residential real estate market today, and most especially here in Colorado Springs, is not for the timid or uninformed buyer.  It’s more essential than ever to be working with a professional, seasoned broker who knows how to navigate these new waters.

Fortunately for you…you’ve got me.  And they don’t call me “Mr. Negotiator” for nothing.  I’ve been working in the local arena for 48 years this month and have seen most all cycles.  This one is tough for sure, but when you have me on your side you’ve won at least one of the battles.  And for the other battles--you’ve got me fighting them for you. 

If you’ve even considered a move, now is the time to get started.  Prices aren’t going down any time soon and mortgage rates essentially have nowhere to go but up, so today is the best time to start.  It shouldn’t take long to sell your present home and it will likely go for far more than you might imagine.  However, finding a replacement could take some time so it’s best to start in that direction first.  

The best move you can make is to call me at 593.1000 or email me at Harry@HarrySalzman.com to get any and all of your Residential real estate questions answered.  I look forward to speaking with you.

 

APRIL 2021

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

Here are some highlights from the April 2021 PPAR report.  Remember that the new format of this report no longer provides monthly statistics for each individual neighborhood.  However, if you are interested in what’s happening in your neighborhood, I can provide you with this information through other means.

In El Paso County, the average days on the market for single family/patio homes was a very low 9.  For condo/townhomes it was also 9.  

Also in El Paso County, the sales price/list price for single family/patio homes was 104.2% and for condo/townhomes it was 104.1%.  

It’s noteworthy that in April of 2020, we couldn’t show homes due to the pandemic so it is no surprise that the number of listings and sales in comparing this year to last would be up considerably.  The numbers aren’t indicative of more available homes or more home sales.

Please click here to view the detailed 10-page report, including charts.  If you have any questions about the report or to find out how it relates to your individual situation, just give me a call.

In comparing April 2021 to April 2020 for All Homes in PPAR:

                        

                        Single Family/Patio Homes:

·       New Listings were 1,879, Up 28.9%

·       Number of Sales were 1,489, Up 22.1%

·       Average Sales Price was $481,857, Up 21.8%

·       Median Sales Price was $425,000, Up 18.1%

·       Total Active Listings are 557, Down 64.9%

·       Months Supply is 0.4, Down 2.9%

 

Condo/Townhomes:

·       New Listings were 217, Up 11.3% 

·       Number of Sales were 221 Up 27.7%

·       Average Sales Price was $324,193, Up 20.6%

·       Median Sales Price was $305,000, Up 19.7%

·       Total Active Listings are 75, Down 62.5%

·       Months Supply is 0.3, Down 2.3%

 

Now a look at more statistics…

 

APRIL 2021 MONTHLY INDICATORS AND LOCAL MARKET UPDATE ILLUSTRATE OUR LOCAL TRENDS IN DETAIL

Colorado Association of REALTORS^{® ,} Pikes Peak REALTORS Service Corp, or it’s PPMLS

Providing greater detail than the above report, this contains information on both El Paso and Teller counties for Residential real estate 

The “Activity Snapshot” for all residential properties in El Paso and Teller counties shows the Year to Date one-year change:

 

• Sold Listings for All Properties were Up 21.3%

 

• Median Sales Price for All Properties was Up 19.7%

 

• Active Listings on All Properties were Down 56.3%

 

Also in El Paso County, the sales price/list price for single family/patio homes was 104.2% and for condo/townhomes it was 104.1%.  

 

You can click here to read the 16-page Monthly Indicators or click here to get specific information on the geographical area of your choice from the 18-page Local Market Update.  I recommend that you check out your own area or one that you are considering, to get a good idea of the local pulse.  As an example, here is a detailed report on the Colorado Springs area in general:

 

PREVIOUSLY OWNED U.S. HOMES ARE NOW MORE EXPENSIVE THAN NEW ONES

Bloomberg News, 5.1.21

It’s now cheaper to buy a new home than a previously owned one for the first time in more than 15 years.

With price increases in the broader market due to the lack of available listings both locally and nationwide, the premium for newly built homes vanished last month, erasing the discount traditionally associated with older properties.

Nationally, the median sales price of a previously owned single-family home rose to $334,500 in March, the latest National Association of Realtors data show.  Meanwhile, new properties sold for a median of $330,800 according to a government report, marking a reversal in the differential for the first time since June 2005.

Prices can vary widely each month depending on the composition of properties sold and increased on a year-over-year basis—but the gains were much larger for older homes.  This is due to the lack of available existing homes for sale—with only 900,000 existing homes for sale nationally—down more than 30% from one year ago.  

On the other hand, the number of new homes sold and awaiting start of construction climbed to the highest level since September 2006. 

 

WITH LUMBER PRICES BREAKING NEW RECORDS, BUILDERS ARE OFFSETTING THOSE COSTS WITH ESCALATION CLAUSES

Realtor Mag, 4.23.21, NAHB 4.23.21, The Wall Street Journal, 5.3.21

While the escalating lumber prices are generating fabulous profits for sawmill owners, home buyers, renters and do-it-yourselfers are footing the bill.

Lumber and plywood are flying off the hardware store shelves and being bid up by home builders as prices are reaching record numbers.  On-the-spot prices for two-by-fours and other wood products have also jumped to fresh highs.

When the economy was shut down last year to slow the spread of the coronavirus, sawmills sent workers home and curtailed production.  By April 2020, 40% of North America’s sawmill capacity was shut down.  While U.S. wood product output returned to pre-pandemic levels in December, production remains about 16% lower than the 2006 peak, which is the last time so many houses were being built.

And these price increases are being passed on to consumers.  It’s not only new homes and renovations that are costing more due to lumber prices.  

New apartments being built to help with the lack of available housing for sale are charging higher rents due to the increased building costs.  

While home builders are doing their best to obtain lumber price guarantees from suppliers, they can only get them for around two months at max, and reorders are continuing to cost more.

To offset this and protect themselves from ongoing price increases in the lumber market, more home builders are adding escalation clauses to their sales or construction contracts.

According to the most recent National Association of Homebuilders and Wells Fargo housing market Index survey, 47% of builders said they were “including price escalation clauses in their sales contracts”.  Another 10% are including shared price clauses in their contracts, which are similar to price escalation clauses in that they tie the final house price to the price of building materials.  Paul Emrath, NAHB’s vice president for survey and housing policy research explained, “The difference is that, in the typical shared price clause, the home builder agrees to absorb part of the material price increase, with the home buyer covering the rest”.

 

APARTMENT RENTS RISE WITH PERKS AND DISCOUNTS FADING

The Wall Street Journal, 4.24,21

Americans are now paying more for rent again, ending a period during the pandemic when they enjoyed flat or falling rental prices.

The record low inventory of homes for sale is fueling the rental market and landlords and apartment buildings are able to increase prices nationwide.  

Rising rents add to the mounting evidence that the economy is rapidly gaining strength and analysts are forecasting that the U.S. economy could grow around 7% in 2021, which would be one of its strongest years in decades.

real estate investors believe the rental market is primed for another period of price growth, comparable to the years that followed the financial crisis, when effective rents outpaced inflation.  According to Matthew Lawton, an executive in the capital-markets division at brokerage JLL, “In some markets like Nashville and Denver, they increased more than 10% for multiple years”.

As more people are priced out of the for-sale market during the hottest home sales market in 15 years, they will search for rental properties.  

I’ve got a number of clients who are constantly on the lookout for investment properties, and while they may cost more to buy these days, the monthly rental price they can get for these homes more than compensates for the cost of the home over the long run.

If buying for investment purposes is something you have considered, please give me a call and let’s discuss whether it might be an option for you.  Of course, I recommend that you first talk with your tax and wealth advisors to see if it that’s something viable for your individual financial situation.  

 

UCCS ECONOMIC FORUM UPDATE

College of Business, UCCS, 4.30,21

As always, I’ve included the most recent economic update from the UCCS Economic Forum.  It provides data concerning all aspects of the economy, on both the National and Colorado Springs levels.  

You can click here to read the report in its entirety and if you have any questions, please give me a call.

April 26, 2021

 

HARRY’S BI-WEEKLY UPDATE

A Current Look at the Colorado Springs Residential real estate Market

As part of my Special Brand of Customer 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.

 

 

“NEW NORMAL” IN RESIDENTIAL real estate KEEPS EVERYONE ON THEIR TOES…

Just when I begin to think that things in residential real estate couldn’t get crazier…they do.  The current lack of existing homes for sale and the wait list for new construction are hard enough for buyers to comprehend but now more than ever before the “offers” on existing homes need to be especially creative and more comprehensive.

And this isn’t just a Colorado Springs “thing”.  All across the country buyers are encountering not only rising prices and lack of homes for sale, but those who do make the winning bids are those who have real estate professionals on their side who understand exactly what it’s going to take to make certain their client’s offer even gets considered.  Fortunately for you, you’ve got me on your side.  With my 48 years in the local market along with my certification in negotiation and up-to-the-minute knowledge of all things residential real estate, I have a distinct advantage over most.

However, that still doesn’t always allow my clients to get their first “pick” these days.  One of the new additions to contracts that was recently created by The Frascona Law Firm is an “appraisal gap” clause in which the buyers indicate the minimum accepted appraisal they agree to accept in order to make an offer on the home.  What that means is twofold:  the buyer agrees to purchase the home as long as it appraises up to the amount to which they agree to in the contract and that if the appraisal comes in under the offer price, the buyer will increase the size of the down payment in order to offset any decline in the amount of the new mortgage loan caused by the appraised value being less than the purchase price.

This is not a requirement in the purchase contract, it is an additional “provision”; however, without that provision it is not likely that the buyer will get the home they want in today’s highly competitive market.

You might wonder what’s behind this new normal and it’s coming from all directions at present.  The shortage of existing homes for sale is being created by folks deciding to renovate their current home, baby boomers choosing to “age in place”, and folks just simply living in their homes so much longer than in the past.  This has caused the median price of existing homes to reach a 15-year high across the country with prices in March increasing 17.2% over the previous March.  This marks the biggest price increase in National Association of Realtors (NAR) data going back to 1999.  

At present, the U.S. home shortage is nearing 4 million units.  That represents a 52% rise in the nation’s home shortage compared to 2018 and underscores the severity of the deficit.  

With loan rates dropping again this past week to 2.97% for a 30-year fixed-rate mortgage, there are still many potential buyers who are vying for the few existing homes for sale.  For something that should be an exciting prospect, especially one involving one of the largest investments a family might make, the stress involved is certainly not fun.  I’ve always taken pride in trying to keep the stress levels of my clients to a minimum during the buying and selling process, and lately it’s not an easy thing to do.   

In recent months I’ve directed a number of my clients to newly constructed homes when it became apparent that their needs, wants and budget requirements would be better satisfied in that type of situation.  However, now even new home construction availability is considerably tighter than in the recent past and with the rapidly increasing prices of lumber, concrete, copper, aluminum and more—new home prices are going up much faster than ever.

I wish I could paint a prettier picture of the current state of the market, but it’s only fair to tell it like it is. Those of you who know me well understand that in my constant state of “positivity”, I have always done whatever possible to turn a negative into a positive.  Where there’s a will, I do my utmost best to find a way.

If you’ve even considered a move, now is the time to get started.  Prices aren’t going down any time soon and mortgage rates essentially have nowhere to go but up, so today is the best time to start.  It shouldn’t take long to sell your present home and it will likely go for far more than you might imagine.  However, finding a replacement could take some time so it’s best to start in that direction first.  

The best move you can make is to call me at 593.1000 or email me at Harry@HarrySalzman.com to get any and all of your residential real estate questions answered.  I look forward to speaking with you.

 

BUYERS ARE UNDETERRED BY HOME PRICES

RealtorMag, 4.22.22, The Gazette, 4.25.21, Colorado Springs Business Journal, 4.12.21

Even with the existing-home prices surging to a record high in March and sales easing 3.7% nationally compared to February, it wasn’t due to any let-up in buyer demand, but can be blamed on the ongoing housing shortages from a lack of homes for sale.  Sales year-over-year, however, are still up 12.3% according to NAR.

“The sales for March would be been measurably higher, had there been more inventory,” according to Lawrence Yun, NAR’s chief economist.  

Properties typically sold in 18 days—a record low, NAR reported.  “Without an increase in supply, the society wealth division will widen with homeowners enjoying sizable equity gains while renters will struggle to become homeowners”, said Yun.  

With NAR making it a priority to be at the forefront of the anticipated economic revival, “We will continue pushing for an increase in housing construction and inventory, with the goal of helping qualified buyers and countless families achieve the American Dream of homeownership”, said Charlie Oppler, NAR president.  

In Colorado Springs, many homebuyers aren’t holding off on their purchases of new homes.  Through the first quarter of 2021, building permits pulled for the construction of single-family homes in El Paso County were nearly one-third higher than the same period last year, according to reports by the Pikes Peak Regional Building Department.

Despite local resale inventories plunging to their lowest level in at least 25 years, demand remains strong.  Rental rates are rising, mortgage rates are historically low, and folks are wanting to buy homes before they get priced out of the market.  This is all fueling that “new normal” I mentioned earlier.  

The increase in building materials is not simply affecting homebuilders.  Commercial real estate such as apartment buildings and storefronts are feeling the burn as well and those costs are being passed along in the form of higher rental and consumer prices.  That’s causing renters to want to become homeowners sooner than they might have and also driving up the number of those looking for investment property homes for rentals. 

It’s a never-ending merry-go-round at the moment and folks just want to get on before they can no longer afford the ride.

Another thing to add to the equation is that property values in El Paso County get reassessed every two years and guess what?  It’s that time now.  Property values have taken a huge leap since the last reappraisal period and could impact tax bills, which mail on April 30, 2021, accordingly.  

So once more…you get the gist…if you’re ready to at least talk about the possibilities that exist for your individual situation, I’m ready to help.  Just don’t wait too long as it will most definitely cost you.

 

93% OF AMERICANS BELIEVE A HOME IS A BETTER INVESTMENT THAN STOCKS

Keeping Current Matters, 4.14.21

A recent survey of Consumer Finances released by the Federal Reserve, reveals the net worth of homeowners is forty times greater than that of renters.  In case you ever wondered if homeownership is a good investment that study clearly answers your question with a huge YES.

The Federal Reserve Bank of New York noted that 93% of Americans believe buying a home is definitely or probably a better investment than buying stocks.  Here is how the results break down:

 

Bottom line?  

This data shows just how strongly Americans believe in homeownership as an investment and that belief is warranted.  The Liberty Street Economics Blog put it best by saying: 

Housing represents the largest asset owned by most households and is a major means of wealth accumulation, particularly for the middle class.”

April 8, 2021

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.

 

GREAT NEWS FOR CURRENT HOMEOWNERS AND SELLERS…A MIXED BAG FOR BUYERS…AND TOUGH NEWS FOR FIRST-TIME BUYERS

It’s been another wild month in residential real estate.  Homes are appreciating at their fastest rate in 15 years. The shortage of available homes for sale locally, as well as nationally, is creating the best seller’s market in recent years but with that comes a tough time for buyers and most especially first-time buyers.  

A recent article in The Wall Street Journal mentioned that currently there are far more licensed Realtors than there are homes for sale!  That alone tells you that if you’re in the market you need a seasoned real estate professional like me more than ever before since expert negotiation and contract writing skills are an absolute necessity.

There are numerous reasons for the continued increase in home appreciation and the lack of available homes for sale is most likely the number one.  Other reasons include the still historically low interest rates and the current pandemic which has created a number of issues—such as folks not wanting to open their homes for showings yet wanting new homes that meet the wants and needs they discovered lacking in their current homes.

Folks are staying in their homes much longer than in the recent past with homeownership now averaging over 13 years vs. just 7 ½ years a few years ago.  Some older homeowners are choosing to “age in place” rather than downsize or move to a senior living type of environment.

Lower interest rates have let current homeowners refinance their existing mortgage, giving them more disposable income.  

Others are remodeling to meet their current needs which means they intend to stay put for a longer period of time.

However, there is still a group of folks that are ready to move today.  Some of their reasons include the following:

• A decrease in family size—kids have gone off to college, married, or moved into their own homes
• Some older homeowners want to move near family, sometimes to a different city or state
• Corporate relocation
• The need for a larger home due to a growing family
• Wanting to sell and trade up to a larger or nicer home or a different part of town
• Wanting to take advantage of today’s historically low mortgage interest rates

New home construction has become a great option in today’s environment, however the cost of homebuilding materials such as lumber, aluminum, cement and copper have driven up the cost of those homes as well.  

Mortgage loan qualification is getting tighter as well, which is beginning to hurt first-time buyers harder than most.  That creates a need for rental homes and an opportunity for investment buyers.  My investment buyers are constantly on the lookout to add to their portfolios and have even purchased newly built homes in order to attract higher-end and possibly longer-term renters.

As you can see, there are all kinds of things going on.  That’s why you need someone with significant experience who can help you wade through the current residential real estate waters in order to find what you might want, need and can afford for your individual family situation.

Lucky for you—you’ve got ME.  My 48 years in the local residential real estate arena, combined with my Investment Banking background and certification in Negotiation make me especially valuable to assist you with all your residential real estate needs.

If you’ve considered a move, your present home is most likely worth more than you might imagine, and you can use that equity toward a new home.  And with the current low mortgage interest rates, you could possibly make that move without adding too much more to your monthly output.  

However, you might not know about your actual equity and other possibilities unless you ask.

And that starts with a simple phone call to 593.1000 or an email to Harry@HarrySalzman.com to get the ball rolling.  Please call me even if you are considering a move…because you won’t know until you talk it through and see it on paper if this is the right time or right decision for you.

I look forward to speaking with you soon.

 

And now for statistics…

 

MARCH 2021

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

Here are some highlights from the March 2021 PPAR report.  Remember that the new format of this report no longer provides monthly statistics for each individual neighborhood.  However, if you are interested in what’s happening in your neighborhood, I can provide you with this information through other means.

In El Paso County, the average days on the market for single family/patio homes was a very low 10.  For condo/townhomes it was 8.  

Also in El Paso County, the sales price/list price for single family/patio homes was 103.4% and for condo/townhomes it was 103.0%.  

Please click here to view the detailed 10-page report, including charts.  If you have any questions about the report or to find out how it relates to your individual situation, just give me a call.

In comparing March 2021 to March 2020 for All Homes in PPAR:

                        

                        Single Family/Patio Homes:

·       New Listings were 1,620, Down 11.0%

·       Number of Sales were 1,342, Up 5.7%

·       Average Sales Price was $472,931, Up 21.0%

·       Median Sales Price was $410,000, Up 16.3%

·       Total Active Listings are 462, Down 65.2%

·       Months Supply is 0.3, Down 11.5%

 

Condo/Townhomes:

·       New Listings were 254, Up 2% 

·       Number of Sales were 210, Up 14.1%

·       Average Sales Price was $326,829, Up 25.1%

·       Median Sales Price was $303,145, Up 18.7%

·       Total Active Listings are 93, Down 38.8%

·       Months Supply is 0.4, Down 2.7%

Now a look at more statistics…

 

MARCH 2021 MONTHLY INDICATORS AND LOCAL MARKET UPDATE ILLUSTRATE OUR LOCAL TRENDS IN DETAIL

Colorado Association of REALTORS^{® ,} Pikes Peak REALTORS Service Corp, or it’s PPMLS

Providing greater detail than the above report, this contains information on both El Paso and Teller counties for Residential real estate 

The “Activity Snapshot” for all residential properties in El Paso and Teller counties shows the Year to Date one-year change:

• Sold Listings for All Properties were Up 5.3%
• Median Sales Price for All Properties was Up 16.7%
• Active Listings on All Properties were Down 63.4%

You can click here to read the 16-page Monthly Indicators or click here to get specific information on the geographical area of your choice from the 18-page Local Market Update. I recommend that you check out your own area or one that you are considering, to get a good idea of the local pulse. As an example, here is a detailed report on the Colorado Springs area:

  

 

I was thinking about these statistics and decided to call Steve Schleiker, El Paso County Assessor to ask a few questions.  This is what I found out:

 

• In 2020, the total number of Single Family/Patio Home sales was 18,747.
• As of the end of 2020, the total number of Single Family/Patio Homes in El Paso County was 208,615. 
• Therefore, only 8.98% of the total homes in El Paso County were sold in 2020. 
• When compared to the typical average of 15-20% sold, it helped make better sense of all of the above statistics!   

 

RECORD HOME PRICES KEEP MOUNTING

The Gazette, 3.7.21

I’m reprinting a copy of an article Rich Laden wrote for yesterday’s Gazette where he quoted me on the current state of our residential real estate market that I thought you might enjoy.

COLORADO SPRINGS HOUSING AFFORDABILITY RANKS 58^TH AMONG TOP 100

The Colorado Springs Business Journal, 3.30.21

While our housing market is booming, homes in Colorado Springs are still more affordable than in many other U.S. cities, according to the April installment of the RealtyHop housing affordability index.

The Springs market was ranked 58^th in the index, which ranks home affordability for the average family in the 100 most populous U.S. cities.  

Cities were ranked from least affordable (Los Angeles, CA at #1) to most affordable (Detroit, MI at #100).  Colorado Springs ranks a bit below the middle.

Colorado Springs climbed five places in the rankings—in February the city placed 63^rd—which indicates that the average home was slightly less affordable in March than the month previous.

Both Denver (at #37) and Aurora (at #47) were ranked as less affordable than the Springs.

  

PACE OF LOCAL HOMEBUILDING

The Gazette, 4.3.21

As you can see below, local homebuilding is doing its best to keep up with the demand…

 

AND TO ILLUSTRATE WHAT’S GOING ON ALL OVER THE COUNTRY…

The Wall Street Journal, 3.31.21

 

MORTGAGE LENDERS TIGHTENING STANDARDS

The Wall Street Journal, 4.2.21

While the mortgage market is humming, getting approved for a home loan is as difficult as it’s been in years.

According to the Mortgage Bankers Association (MBA), mortgage credit availability, a measure of lenders’ willingness to issue mortgages, is near its lowest level since 2014.

While more home loans are being made than almost ever before, they are almost all going exclusively to borrowers with pristine credit histories and considerable down payments.

Borrowers whose qualifications fall just outside the stellar category are finding fewer lenders willing to approve their application.  This segment would have qualified for a home loan a year ago and are now out of luck, being deemed too much of a credit risk.

The availability of mortgage loans fell as much as 35% year over year in 2020, when lenders wanted to protect themselves from making loans to borrowers who might lose jobs during the pandemic.  While MBA’s mortgage credit index has drifted higher since last fall, it remained about 31% lower in February than the same time last year.

Since strict lending requirements play an important role in keeping the housing market healthy, making sure borrowers can afford mortgage payments is key to limiting defaults.  Ultraliberal lending policies along with loan approvals for people with spotty income histories or lots of debt, helped spark the 2008-09 financial crisis and lenders are not wanting a repeat performance.

With so few available homes for sale, lenders can be choosy about who they lend to and that is unlikely to change until the housing supply increases and demand is lower.

Still, credit requirements should loosen slightly this year as interest rates rise, drying up refinancings, according to Mike Fratantoini, the MBA’s chief economist.

“Since lenders aren’t being flooded with calls to refinance, more of their resources can be used to reach out to first-time buyers for purchases,” he added.

 

UCCS ECONOMIC FORUM DASHBOARD (and more!)

UCCS College of Business, updated 3.26.21

I just received the most recent economic report from the UCCS Economic Forum.  It presents both the big picture of the US as well as our local economic trends, along with charts and graphs.  Please click here to see the 9-page report and if you have any questions, please give me a call.

 

I CAN’T OVEREMPHASIZE THE “VALUE OF SOUND ADVICE” …

As we navigate through unprecedented times, the importance of having someone like me who can help you make objective decisions is invaluable.  My extensive knowledge of many sectors of the Colorado Springs economy provides valuable assistance to my clients.

I’ve been here for every kind of residential real estate cycle imaginable and work with you to establish your personal home ownership goals.  Your goals become mine and it is my greatest privilege to assist you in making one of the largest investments of your life. 

March 22, 2021

 

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.

 

OF COURSE THERE ARE…AND…I’VE GOT THE ANSWERS…

In recent days I’ve discovered that my clients and potential clients have far more questions about home buying and selling than even in the most recent past.  A lot of this is due to information overload from television commercials and internet searches, as well as “mis-information” from various sources.

Is now the time to buy?  Or is it the time to sell?  What about the high home prices?  Is new construction the best option for my needs?  Where are the best schools and recreation areas for my family?  How can I take advantage of the historically low interest rates?  Maybe I should consider a rental property for investment purposes?  Can I really keep my monthly payment lower than I imagine it might be?

And the list goes on.

My answers always begin with two important facts.  The first is that any answer to those questions needs to be personalized for each and every client.  After all, every family has its own individual needs, wants and budget and “one size fits all” just doesn’t cut it when it comes to one of the largest assets you will ever own.   As you might imagine, a home often represents about 90% of the total wealth of a household, so a home purchase decision is of considerable importance.

The second fact, which I cannot over-emphasize, is the importance of using a professional, knowledgeable and seasoned real estate professional like myself in trying to navigate today’s buying and selling market.  I’ve been in the local residential real estate arena going on 48 years now and have witnessed every type of market imaginable.  With my investment banking background and certification in negotiation, I do my best to make the entire process as stress free as possible.

That may seem like a given but believe me, in a market with so few available existing homes for sale it’s more prudent than ever to have a pro on your team.  Existing homes for sale are scarce and are selling as fast as they get listed—more often than not from 2 to 10% over the listing price and with bidding wars. 

Even newly constructed home buyers need assistance in order to get help with elevation and site selection, as well as direction to the financing that is the best fit for their particular situation.    

My long-time experience certainly gives you, my clients and readers, an advantage over many and my special brand of customer service is hard to beat. If it appears that something is not in your best interest, I will tell you that.  Oftentimes a “no” can be a win in the long run.  I’m in this for long-time relationships and will give you my honest opinion always.  It has been my greatest joy to be able to assist children and even grandchildren of previous clients who remember me from when I helped their parents buy or sell a home where they once lived.

If you’ve considered a move--even relocating to another city for a job transfer or to be near family members--or have any questions concerning residential real estate, there’s no better time than now to start the process.

I don’t always have all the answers, but lucky for you, I’m fortunate to know where to get them and sometimes that’s a true “win” for all.  

So, there you go.  You’ve got questions?  I’ve got answers. 

It all starts with a call to 593.1000 or email me at  Harry@HarrySalzman.com . The sooner you ask, the sooner you’ll know, and I think you’ll be happy at what we can accomplish together.  With today’s low interest rates, you might just find that you can easily afford more home than you would expect, and without increasing your monthly output by too much.  No one knows how long these rates will hold as they are beginning to inch up, but at present they are around 3% for a 30-year fixed-rate and 2 3/8% for a 15-year fixed-rate.  When we do the math, you will likely be pleasantly surprised at what you can afford at these rates.

I look forward to talking with you soon.

 

The Wall Street Journal printed three articles this past week that I found to be so pertinent to  many questions I’ve been asked that I thought I would quote from them here:

 

THIS HOUSING BOOM IS DIFFERENT 

The Wall Street Journal, 3.16.21

Today’s residential real estate boom is on its biggest tear since 2006, which was just before the housing bubble burst and set off a global recession.  However, in nearly every meaningful way, today’s market is the inverse of the previous boom.

In today’s market, mortgages are stricter, down payments are higher, and a tight supply is supporting price appreciation.  It’s far more stable than the last housing boom, and poses fewer systemic risks, economists say.  The one downside is that there are more barriers for entry, and it’s more difficult for buyers who aren’t already homeowners to make that first purchase.  

The recent pandemic helped ignite the current boom as a number of urbanites looked to leave crowded cities for cheaper cities or for more space in the suburbs while working from home.  Once the lockdowns began lifting last year, home sales took off and last June sales nationally surged 21% over the prior month, the biggest monthly increase on record going back to 1968.  That milestone lasted only one month, when July sales rose almost 25% from June.

Some of those who bought last year would likely have bought in the next few years anyway but accelerated their plans due to Covid-19.  That could possibly slow down the demand going forward. 

Economists also caution that the shortage of available homes for sale could limit the number of sales this year.  Homebuying demand is so high at present that many new homebuilders are limiting the number of homes they sell at a time to ensure they don’t sell more than they can build.  The rising cost of materials such as lumber, aluminum and copper are also creating higher prices on new homes being built.

However, market watchers are saying that a number of longer-term trends are at play that should keep the housing market hot, or at least steady, even after the pandemic related demand fades.

Millennials, the largest living adult generation, are entering their prime homebuying years and are putting down payments on homes.  Simultaneously, the market is critically undersupplied and new home construction has not kept up with the demand.  Homeowners are also holding on to their houses longer and buyers are competing fiercely for a limited number of homes.

Also different from the boom of 2006 is that mortgage lenders are maintaining tight standards and buyers are drawn to the market by the historically low interest rates, not by easy access to credit.  Rising home values also mean that even if homeowners can’t afford their mortgage payments, they can likely sell their homes for a profit rather than face foreclosure.  

Today’s biggest winners are those who already own their homes, who gained a collective $1.5 trillion in equity in 2020 from a year earlier, according to CoreLogic.  They have also saved money by refinancing their mortgages at record low rates and have started renovation projects or bought second homes.

These same folks are the ones who have plenty of equity to use toward new homes that have the living requirements many found lacking in their present homes during the lockdown.  

Put all together, these longer-term trends are at play and should keep the housing market hot for some time to come.

 

COMMODITIES BOOM HITS HOME / RISING COSTS ADD TO HOME PRICES

The Wall Street Journal, 3.17.21 & The Wall Street Journal, 3.18.21

Just when rock-bottom mortgage rates have made owning a home more affordable, the price of building materials have gone sky-high.

Lumber, one of the biggest costs in home-building after land and labor, has never been more expensive and is more than twice the typical price for this time of year.  Crude oil, a starting point for paint, drain pipe, roof shingles, and flooring, has shot up more than 80% since October.  Copper, which carries water and electricity throughout houses, costs about a third more than it did in the Fall.  

Prices for granite, insulation, concrete blocks and common brick have all pushed to records in 2021, according to the Bureau of Labor Statistic’s producer-price index, which measures the change that producers receive for their output.  Drywall and ceramic tiles are short of records but have also climbed.

What does all this mean?  For one, homebuilders were not prepared when buyers began looking in earnest last April.  With sawmills and factories shut down like most other workplaces, oil wells shut in and refineries idled, suppliers never had a chance to catch up. 

At present, building permits for residential construction are being issued at their highest rate since 2006 and the newest round of stimulus checks are arriving just in time for spring, when Americans tend to house hunt.  

The National Association of Home Builders says that rising lumber prices have added $24,000 to the cost of building the average single-family home and about $9,000 per apartment.  

What this translates to you is that if you’re in the market for new construction you may have to get in line and expect to pay more than you thought.  However, the sooner you begin the search the better off you will be since it’s likely that prices are only going one way for quite some time—and that way is UP.  

If new construction is something you have even considered, call me yesterday.  I can assist in all facets of it, and the time to begin is today!

 

FIRST-TIMERS OFTEN SHOCKED AT HOW MUCH HOME THEY CAN AFFORD

RealtorMag.com, 2.22.21

Many first-time homebuyers are finding that with assistance from parents and personal savings they are able to stretch their housing budget more than they thought possible, according to a recent survey from realtor.com.  More than two-thirds of respondents say they are surprised at what they can afford; 47% say their budget is larger than they thought it would be.

“The dramatic decline of mortgage rates in 2020 was a pleasant surprise for many buyers,” says George Ratiu, senior economist at realtor.com.  “For first-time buyers, the drop in the 30-year mortgage rate from 3.65% in March 2020 to a record low of 2.65% in January has provided unexpected leverage.  Lower rates allowed many buyers to stretch and buy more expensive homes while keeping their monthly budget the same.”

With a housing shortage nationwide, many first-time buyers are still having to compromise on recent purchases and nearly half of the survey respondents say they have been outbid on homes they wanted to purchase.  

However, first-time buyers are also saving for a home faster than they expected.  Half of the respondents say they were able to save for a home in less than three years by putting aside a portion of their paycheck each month, cutting out discretionary spending, and saving lump-sum payments like tax returns.  Also, many are getting help with down payments from their families or friends.  

Considering how high rental rates have gotten, if there is a way, first-time buyers will not only be saving on rental payments but will be building equity of their own.  

 

AND A THOUGHT FROM ELLIOT EISENBERG, THE BOWTIE ECONOMIST:

Domicile Deficit

“Existing inventory of residential homes is currently just 1.04 million units, or 1.9 months of supply, both record lows.  It is partly due to insufficient homebuilding over the past decade, Boomers aging in place, Covid-19 preventing sellers from listing, huge demand by buyers to escape dense cities and decamp to suburbia and more space, low interest rates, forbearance plans, and the seven million single-family homes that have become rentals.”