Real Estate Information

March 5, 2018

 

HARRY’S BI-WEEKLY UPDATE

          A Current Look at the Colorado Springs Residential real estate Market

As part of my Personal Service, it is my desire to share current real estate issues that will help to make you a more successful and profitable buyer or seller.

MEDIAN HOME PRICES ARE WAAYYY UP FOR ANOTHER MONTH…NOW HAVE GOT YOUR ATTENTION? 

It’s been such a busy week I’m not sure where to begin so I’ll start with Saturday morning.  I listed a home at 10 a.m. and it was on PPAR MLS by 11 a.m.  Within four hours I already had three offers and I cannot even make contact with the seller sometime today.  There were 13 showings in six hours and I’m guessing there will be offers from most of them also.  Sounds like I’m heading into a bidding war for my sellers.  Welcome to 2018 Residential real estate in Colorado Springs.

I have never witnessed a market like we are currently experiencing and the end just isn’t in sight.  In fact, if we had more homes for sale we’d be even seeing more growth.  Yes, folks, this continues to be a Sellers Market and will continue to be until we have more homes available for sale.

Just to give you an example from my company alone in comparing last week to the same week one year ago:

ERA Shields Active Listing Inventory:

2017:  104

2018:   97

 

ERA Shields Total Showings:

2017:   171

2018:   380

 

Showings Per Listing Year Over Year:

2017:  1.64

2018:  3.92

What this means is that “Showings Per Listing” are up 139% year over year.  Just think about that.  If you have been considering a move---NOW is the best time to insure maximum exposure to potential buyers. 

Besides the lack of listings, we are dealing with escalating mortgage interest rates, renters wanting to become first time or once-again homeowners, and prices rising faster than I can ever remember.  With the “traditional” spring buying season just about to begin, folks will be looking for trade up homes or for homes in new neighborhoods or new school districts.  Disappointment is becoming a bit of the norm I’m afraid.  There just aren’t as many homes to choose from and when you do find one, you have little or no time to make a decision. 

That’s why you need to do as much homework as possible BEFORE you begin the search.  You must decide what you want, need and can afford long before you start looking.  And if you are looking at new construction, which is becoming more of an option for many of my clients, then you most likely are looking at “getting in line” there too. 

Prices of new construction keep going up—not arbitrarily—but due to the rising cost of labor, lumber, copper and other uncontrollable factors.  The fires and hurricanes in other parts of the country may not have affected us directly, but we ARE experiencing the effects nonetheless in the new housing arena.

Lots to consider?  I am available to help you in determining any and all of these things. Having someone like me on your team makes the entire home buying and selling experience one that will be as stress-free as possible, which is no easy feat in today’s market.

If you’ve been sitting on the fence about selling to trade up or to purchase for the first time or investment purposes, it’s no longer prudent to wait.  However, I want to again remind you that if you’re looking to sell, it’s important to know where you will live next since your present home will likely sell much faster than you might have anticipated. 

Simply give me a call today at 593.1000 or email me at Harry@HarrySalzman.com and let me put my special brand of customer service to work for you.

 

And now for a few statistics…

Homes are selling at 99.8% of listing price with the average days on the market at a low 38.  This continues to be great news for both buyers and sellers, despite the fact that interest rates are rising.  However, as I just mentioned, it does foster the necessity for fast decisions, so “a word to the wise”…

As you will see in the Cumulative Year to Date Summary, total sales numbers in Single Family/Patio Homes and Condo/Townhomes are up 3.3% and 9.2% respectively for year-over-year.  This number would have been much higher had there been more homes for sale. 

The Monthly Summary shows that compared to a year ago, total active listings are down 8.4% for Single Family/Patio Homes and down 48.4% for Condo/Townhomes, continuing a downward trend that tends to favor sellers.  New listings are down 3.1% for Single Family/Patio Homes and down 17.1% for Condo/Townhomes.  The reality is that total active listings are at a record low and are a factor in the median price escalation. 

For more details, please see the following article.

 

FEBRUARY 2018 WAS ANOTHER OUTSTANDING MONTH IN LOCAL RESIDENTIAL real estate

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

Here are some highlights from the February 2018 PPAR report.  A look at the Median Sales Prices should put a big smile on many of your faces!  Please click here to view the detailed 15-page report, including charts. If you have any questions, just give me a call.

In comparing February 2018 to February 2017 for All Homes in PPAR:

                       

                        Single Family/Patio Homes:

• New Listings are 1,233, Down 3.1%
• Number of Sales are 946 Up 18.3%
• Average Sales Price is $331,104, Up 9.9%
• Median Sales Price is $292,470, Up 14.7 %
• Total Active Listings are 1,342, Down 8.4%
• Months Supply is 1.3

 

                        Condo/Townhomes:

• New Listings are 145, Down 17.1%
• Number of Sales are 140, Up 11.1%
• Average Sales Price is $211,001, Up 15.8%
• Median Sales Price is $204,750, Up 13.8%
• Total Active Listings are 63, Down 48.4%
• Months Supply is 0.5

 

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

                                                Median Sales Price             Median Sales Price

                                                  February 2018                       February 2017

Black Forest                            $514,950                              $489,950                      

Briargate                                  $377,450                              $388,225           

Central                                     $230,000                              $180,000

East                                          $250,000                              $230,000

Fountain Valley:                      $265,000                              $230,000

Manitou Springs:                    $419,000                              $185,990

Marksheffel:                            $310,989                              $261,407

Northeast:                                $295,000                              $259,500

Northgate:                                $446,900                              $440,000       

Northwest:                               $392,500                              $395,000           

Old Colorado City:                  $270,000                              $236,500

Powers:                                   $284,450                              $254,900

Southwest:                              $403,600                              $246,000

Tri-Lakes:                                $470,000                              $485,000

West:                                        $325,000                              $250,000

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

 

DASHBOARD FROM UCCS ECONOMIC FORUM

Please click here for a look at the detailed charts from the UCCS Economic Forum updated on February 21, 2018.  These show economic trends for the country as well as for El Paso County and cover such areas as housing, cost of living, consumer sentiment, job market and more.

If you have any questions, just give me a holler.

 

February 19, 2018

HARRY’S BI-WEEKLY UPDATE

         A Current Look at the Colorado Springs Residential real estate Market

As part of my Unique Brand of 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.

THERE’S NO “NEW NORMAL” WHEN IT COMES TO RESIDENTIAL real estate ANYMORE…THE TIMES THEY ARE A-CHANGING

Every time I think things are going to stabilize for a bit I’m finding there’s something else either new or changing on the close horizon. 

I’ve always advised that it’s in your best interest to deal with a seasoned, knowledgeable real estate professional in all your transactions and now I’m telling you it’s essential.  When you work with me you’ve got my 45 plus years worth of experience, along with my background in investment banking, on your side and believe me when I tell you—you’re going to need every bit of it in order to close on a deal in today’s residential real estate market.

With a record low inventory in the Pikes Peak area, there are fewer options in most price ranges, especially for those listed between $250,000-350,000.  If you are looking, or thinking of looking, you can’t afford to wait.  Property values here are currently going up at about 1 percent a month and interest rates will continue to rise.  When you find a property that fits your wants, needs and budget you need to act quickly.  In fact, you’re going to need to make your first offer your best one—and oftentimes that means paying more than list price.  And even so, there’s no guarantee that the seller will accept it.  Bidding wars are becoming the norm and all-cash offers are taking precedence over others. 

My clients keep asking if I think prices are going to drop soon and I’m saying it’s not likely in the Colorado Springs area.  The last time prices dropped dramatically began around ten years ago, and that was mainly due to the sub-par mortgage situations that created so many foreclosures nationally.  That type of financing is no longer a concern and even when prices dropped back then, Colorado Springs fared much better than most of the rest of the country as we had far fewer foreclosures. 

When you add that to the fact that Colorado Springs is in the 2018 top ten lists of “hottest real estate market”, “best place to live” and more—it’s less likely that we will see price drops anytime soon.  These are also some reasons why we’ve seen such price increases of late. 

In the newly published NAR “Median Sales Price of Existing Single-Family Homes for Metropolitan Areas”, which ranks the top 177 metropolitan statistical areas (MSAs), the Median Sales Price for Colorado Springs was more than double that of the national average. 

Our median sales price increase year over year for the fourth quarter 2017 was 10.8% versus the national average of 5.3%.  This is a fairly good indicator that things are not going to change any time soon.  To view the report of all 177 MSAs, and see how we compare to other cities, please click here.

I wish I could report otherwise, but this is “life in the fast lane” for residential real estate.  Once we make an offer, both you and I need to be available to get it done as best we can.  I hate to see my clients disappointed but it’s happening more and more lately in this type of market.  That’s why you need to be open to neighborhoods you might not have looked at before or consider new construction as an option.  I’ve assisted a number of clients in new construction purchases lately but a consideration there is the time frame in getting the home built.  If you need to move immediately, new construction is probably not for you.  What I’m saying is that you need to consider everything BEFORE beginning your search.

That’s where my special brand of customer service is a blessing.  I can help you determine the best choices based on your individual situation and we can proceed from there.  As dismal as all of this might seem, I can always find a silver lining for you if it’s at all possible. 

So there you go.  My advice?  If you are even thinking of making a move, call me yesterday. I don’t say that factiously—you don’t have a minute to waste.  Just give me a call at 593.1000 or email me at Harry@HarrySalzman.com today and let’s get the ball rolling to make your residential real estate dreams come true.

Note to potential investors:  With increasing home values and interest rates, some potential buyers are going to find it difficult to qualify and will be looking for places to rent.  While you might pay more in terms of price and interest rates, this will be offset with the increased rental prices.

 

JANUARY 2018 LOCAL MARKET UPDATE AND MONTHLY INDICATORS ILLUSTRATE OUR CONTINUING UPWARD TREND IN GREATER DETAIL

Pikes Peak REALTORS^® Services Corp.,

These reports contain much greater detail than the first of the month reports I share and cover ALL residential areas in the Pikes Peak Region.

The local median sales price increase year-over-year in all properties was a whopping 12.1%. The shortage of listings is helping to drive up prices and as I just mentioned, if there were more listings, more people would be moving—either selling to trade up or buying for the first time and for investment purposes.

In the recently published January 2018 Monthly Indicators and Local Market Update for El Paso and Teller Counties, new listings year-over-year were up 6.5% for the single-family/patio homes and down 9.9% for condo/townhomes. 

     The “Activity Snapshot” shows the one-year change:

• Sold Listings for All Properties was up 1.1%
• Median Sales Price for All Properties was up 12.1%
• Active Listings on All Properties was down 24.8%.

You can click here to read the 16-page Monthly Indicators or click here to get specific information on the neighborhood of your choice from the 34-page Local Market Update. I recommend that you check out your own neighborhood, or one that you are considering, to get a good idea of the local pulse. I have reprinted just one neighborhood, Northwest, below to show you the type of information available for all local areas.

For questions about any of these reports or just to find out how I can put my special brand of customer service to work for you, please give me a call.

 

WHEN A PICTURE SPEAKS LOUDER THAN WORDS:

Rismedia, 2.17.18

As I’ve been saying it would for some time now….the average 30-year fixed mortgage rate is rising swiftly, at 4.38 percent this past week, according to Freddie Mac’s recently released Primary Mortgage Market Survey.  The average 30-year fixed mortgage was 4.32 percent the week before.

Concurrently, the average 15-year fixed mortgage rate was 3.84 percent last week, up from 3.77 percent the week prior.  The five-year Treasury-indexed hybrid adjustable mortgage rate was 3.63 percent, up from 3.57 percent the week before.

According to Len Kiefer, deputy chief economist at Freddie Mac, “Wednesday’s Consumer Price Index report showed higher-than-expected inflation; headline consumer price inflation was 2.1 percent year-over-year in January—two-tenths of a percentage point higher than the consensus forecast.”

“Inflation measures were broad-based, cementing expectations that the Federal Reserve will go forward with monetary tightening later this year.  Following this news, the 10-year Treasury reached its highest level since January 2014, climbing above 2.90 percent.  Mortgage rates have also surged.  After jumping 10 basis points last week, the 30-year fixed-rate mortgage rose six basis points—it’s highest level since April 2014,” he added.

Lenders are more recently starting to tailor mortgage loans to the individual borrowers, which is certainly going to help with the rates rising so quickly.  There are a number of options available and I can help direct you to a lender that will work with your particular needs and budget.

Once again though…now is NOT the time to wait.  What was historically down is on its way up and you don’t want to be priced out of the home you want due to higher mortgage interest rates.

 

BIDDING WARS PUT ON AUTOPILOT

The Wall Street Journal, 2.16.18

In heated bidding wars, there is a weapon that may help ensure victory:  an escalation clause. 

It’s an addendum to a real estate contract, typically when the offer is made, in which the prospective buyer says, “I will pay X dollars for this house, but if another buyer submits a verifiable bid that’s higher, I will raise my offer in increments of Y dollars to a maximum price of Z.”

These clauses are particularly useful in today’s competitive market where we are seeing multiple bids.  If a bidding war erupts on a home, the escalation clause will automatically raise the buyer’s offer on the house by the predetermined increment, up to the maximum amount the buyer authorizes. 

This eliminates the back and forth of offer and counteroffer and helps the buyer avoid paying too much for a house by getting caught up in the frenzy of a bidding war.  But they can also be risky for buyers who use them.

“A buyer can think of an escalation clause as a ‘have your cake and eat it too’ clause,” say David Reiss, a Brooklyn Law School professional who specializes in real estate.  “But in real estate, as with cake, it is hard to have it all.”

One concern is that the buyer is tipping his hand to the seller by using an escalation clause, Prof. Reiss says. By indicating the maximum amount he will pay for the house the buyer is revealing the fact that he is willing to pay more. 

Here are some things to consider if you’re thinking of using an escalation clause:

 

• Be aware of the mortgage.  If an escalation clause is invoked, buyers may need additional cash on hand for a larger down payment.  The escalated price can also affect the type of mortgages available to the buyer—as well as the appraisal, which may not match the escalated price.  It would be advisable to have a higher pre-approved amount from the lender prior to using an escalation clause.

 

• Feel out the seller first.  Some agents and sellers do not think escalation clauses are fair and they may react unfavorably to one.  It helps to know their position before blindly using this strategy or the seller may not consider your offer. 

 

• Get it in writing.  Buyers should specify the type of documentation the seller must provide before the escalation clause kicks in.  For example, the escalation clause could specify that the seller must provide a copy of the highest offer received.

 

NO NEED TO PANIC OVER STOCK MARKET MAYHEM

RealtorMag, 2.6.18

The housing market won’t be deeply affected by the sharp decline in stocks over the last week because underlying economic fundamentals remain strong, says Lawrence Yun, chief economist for the National Association of Realtors (NAR).  Jobs are being created, workers are seeing wage gains and there’s no recession on the horizon.  Those data trends don’t support the theory that the stock market dip indicates a larger underlying problem with the economy, says Yun.

At present, the effect of the dive in stocks in mainly psychological.  But if it becomes a prolonged slowdown it could cut into the buying power of households who have exposure to stocks—and many do, primarily through 401(k) and other investment accounts.  It could also lead to job and wage cutbacks, but Yun says it’s premature to draw any conclusions.

 

February 5, 2018

HARRY’S BI-WEEKLY UPDATE

          A Current Look at the Colorado Springs Residential real estate Market

As part of my Personal Service, it is my desire to share current real estate issues that will help to make you a more successful and profitable buyer or seller.

LOTS OF CHANGES IN THE ECONOMY THIS PAST WEEK…BUT LOCAL real estate JUST KEEPS ON TRUCKIN’…WITH MEDIAN HOME PRICES AT RECORD HIGHS

At the risk of sounding redundant, I can’t believe the pace at which we are experiencing so many changes locally.  In my almost 46 years in local residential real estate, I’ve never seen anything like what we now experiencing.  The PPAR statistics in the next article will show you just how much growth we’ve seen over the past year.

In January 2018, Colorado Springs was once again named one of the “Top Performing Markets”, coming in at Number 4 according to realtor.com.  This is no surprise to those of us here in residential real estate.  And it’s evident to most buyers and sellers in this market too.

The days of the spring “buying season” are gone, along with the relative “bargains” one might find by looking for a new home in early January or February.  “Buying Season” is now a yearlong event and bargains are no longer on the table for the most part. 

I’ve been predicting for more than a year that the mortgage interest rates were not going to stay historically low forever and in the past week we’ve seen them increase by 3/8-1/2 percent.  FHA/VA rates for a 30-year-fixed mortgage went from 3 ¾% to between 4% and 4 1/8 % and Conventional loans from 4% to 4 3/8-1/2% in the last week.  The Federal Reserve has indicated there will be 3 or 4 more rate increase this year, so expect mortgage interest rates to follow suit. 

I tell you this so you are not caught off guard, but I also want to emphasize that with median home prices rising so quickly, equity is building much faster than it has in the past, so your home investment today should offset the marginally rising prices.  Even at 5%, interest rates on a 30-year-fixed rate mortgage are still much lower than in the not so distant past.

Let me take a moment to tell you why it’s more crucial than ever to work with a real estate professional like myself, one who has many years of experience and has worked with clients through all the ups and downs of market trends.  It’s essential to work with someone who understands the economic cycles and can help you navigate more easily through the necessary steps to insure you are getting the most for your hard-earned dollars.  My investment background gives me a step-up but more importantly, my almost 46 years in this market can help make the difference between a successful home-buying and selling process or not.

Between the increasing interest rates and lack of available listings, it’s no longer prudent to wait if you’ve been sitting on the fence about selling to trade up or to purchase for the first time or investment purposes.  It’s still quite the “seller’s market”.  However, I want to again remind you that if you’re looking to sell, it’s important to know where you will live next since your present home will likely sell much faster than you might have anticipated. 

And for you investors out there, this is an excellent time for you as well.  Increasing interest rates and home prices will make it more difficult for some first time buyers to get into home ownership, so rental properties will be in demand. 

I am available to help you in determining any and all of these things. Having someone like me on your team makes the entire home buying and selling experience one that will be as stress-free as possible.  Simply give me a call today at 593.1000 or email me at Harry@HarrySalzman.com and let me put my special brand of customer service to work for you.

And now for a few statistics…

Homes are selling at 99.4% of listing price with the average days on the market at a low 36.  This continues to be great news for both buyers and sellers, despite the fact that interest rates have started to rise.

As you will see in the Cumulative Year to Date Summary, total sales numbers in Single Family/Patio Homes and Condo/Townhomes are up 3.3% and 9.2% respectively for year-over-year.  This number would have been much higher had there been more homes for sale. 

The Monthly Summary shows that compared to a year ago, total active listings are down 7.1% for Single Family/Patio Homes and down 31.1% for Condo/Townhomes, continuing a downward trend that tends to favor sellers.  New listings are up 20.1% for Single Family/Patio Homes and down 7.1% for Condo/Townhomes.  The reality is that total active listings are at a record low and are a factor in the median price escalation. 

For more details, please see the following article.

 

JANUARY 2018 WAS ANOTHER OUTSTANDING MONTH IN LOCAL RESIDENTIAL real estate

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

Here are some highlights from the January 2018 PPAR report.  A look at the Median Sales Prices should put a big smile on many of your faces!  Please click here to view the detailed 15-page report, including charts. If you have any questions, just give me a call.

In comparing January 2018 to January 2017 for All Homes in PPAR:                     

                        Single Family/Patio Homes:

• New Listings are 1,163, Up 20.1%
• Number of Sales are 938 Up 3.3%
• Average Sales Price is $332,834, Up 11.4%
• Median Sales Price is $295,000, Up 11.3 %
• Total Active Listings are 1,236, Down 7.1%
• Months Supply is 1.3

                        Condo/Townhomes:

• New Listings are 170, Down 7.1%
• Number of Sales are 142, Up 9.2%
• Average Sales Price is $218,832 Up 10.1%
• Median Sales Price is $196,750 Up 10.8%
• Total Active Listings are 84, Down 31.1%
• Months Supply is 0.6

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

 

                                                Median Sales Price             Median Sales Price

                                                  January 2018                          January 2017

Black Forest                            $514,950                              $470,000                       

Briargate                                  $379,950                             $389,900          

Central                                      $240,000                              $200,000

East                                          $256,000                              $229,000

Fountain Valley:                      $255,000                              $239,000

Manitou Springs:                    $245,000                              $368,000

Marksheffel:                            $306,250                             $302,500

Northeast:                                $293,000                              $251,000

Northgate:                                $447,500                              $443,686          

Northwest:                               $368,000                              $326,818           

Old Colorado City:                  $310,000                              $229,000

Powers:                                    $295,000                              $269,900

Southwest:                              $324,000                              $345,000

Tri-Lakes:                                $485,000                              $437,225

West:                                        $271,750                              $232,500

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

 

MILLENNIALS STARTING TO FIGURE HEAVILY IN MANY AREAS—MOST ESPECIALLY IN COLORADO SPRINGS

The Wall Street Journal, 1.31.18, The Gazette,2.4.18

The U.S. homeownership rate rose in 2017 for the first time in 13 years, driven by young buyers who overcame rising prices, tight supply and strict lending conditions to purchase their first home.  The homeownership rate rose to 64.2% from 63.7% a year earlier.

This annual increase marks a crucial turning point because it comes after the federal government reined in the “bubble-era” policies that encouraged banks to ease lending standards to boost homeownership.

Susan Wachter, a professor of real estate and Finance at the Wharton School at the University of Pennsylvania said, “This is market, market and market…There’s no government incentive program in sight that is having this effect.  This is back to basics.”

And what’s driving this?  In one word:  Millennials.  The more than 75 million people born between 1981 and 1997 are the largest home-buying generation since the baby boomers and they are favoring ownership over renting.  They are getting married, starting families and wanting to start building equity for the future.  Owning a home can help them in the equity building and in financial planning for their futures. 

And for Colorado Springs?  Millennials are moving to Colorado Springs at a higher rate than anywhere else in the country, according to a study recently released by the Brookings Institution’s Metropolitan Policy Program.

Our millennial population increased by 14.7% from 2010 to 2015, with San Antonio placing second at 14.4% and Denver third at 12.8%.

In 2015, Colorado Springs’ population featured the sixth-highest proportion of millennials—26.4%.  The nation’s 100 largest metropolitan areas were the cities used in these studies.

According to William H. Frey, senior fellow at Brookings and the report’s author, “Millennials are already making an indelible impact on the nation, as the most diverse—and now largest—adult generation.  As the bridge between a whiter, older America and the multi-hued country we are becoming, millennials will pave the way for generations behind them as workers, consumers and leaders in business and government in their acceptance by and participation in tomorrow’s more racially diverse nation.”

 

ASSESSING THE STATE OF THE HOUSING UNION

Rismedia.com, 1.28.18

In 2018, the challenge for the housing industry will be balancing bursting demand with the severe shortage of supply, according to realtor.com’s State of the Housing Union, released in-step with the U.S. State of the Union last week.  As with last year, first-time buyers will have the hardest time, with so little in their price point.

“The macro-factors that have defined real estate in recent years—strong demand and weak supply—continue to set the tone for the industry,” said Joseph Kirchner, senior economist for realtor.com.

The issues include builders who have been burdened by construction costs and lack of labor, and have concentrated on higher-priced homes.

“Builders will need to focus more on homes geared for moderate incomes, partner with government on initiative to transform distressed urban neighborhoods and overcome labor shortages through a combination of workforce development training and pressure to ease artificial restrictions on the supply of labor,” Kirchner says.

The shortage of inventory made prices rise, but sales struggle in 2017, according to data from realtor.com.  Nationally, appreciation was at an average of 5.8%, while pre-owned sales eked out a 1.1 percent gain.  Comparing Blue and Red States:

 

A significant factor here is tax reform.  In 2017, 2.5 percent of blue state mortgages were over $750,000—the limit on the mortgage interest deduction (MID) under the Tax Cuts and Jobs Act, which will apply to loans obtained on or after December 15, 2017.  Only 0.4 percent of red state mortgages were over the threshold.

“The new tax law that caps the mortgage interest deduction and the deductibility of state and local taxes can be expected to impact the upper-end market in 2018—precisely how and the extent of which remain to be seen,” say Kirchner.

 

HOME PRICES:  WHAT GOES UP ISN’T COMING DOWN SOON

Themreport, 1.23.18

According to the Winter 2018 edition of The Housing and Mortgage Market Review, released by Arch Mortgage Insurance Company, if current analyses are any indication, home prices in the nation aren’t heading south anytime soon.  Among the assessments, U.S. housing prices will keep climbing by 2 to 6 percent yearly, especially in the entry-level space.

“With interest rates and home prices both on the rise, first-time homebuyers—largely millennials—may want to consider making the jump from renting to owning sooner rather than later,” said Dr. Ralph G. DeFranco, Global Chief Economist, Mortgage Services, Arch Capital Services, Inc.  “Our research shows few signs of a housing bubble because the typical warning signs aren’t present.  Overall, the shortage of housing paired with a robust job market should keep the housing market strong and growing, short of an unexpected event and despite the contrary pressures that may be created by the tax bill.”

“The Estimated Fundamental Home Value Index spots housing bubbles by evaluating home prices across 50 states and 401 metro areas and “suggests that the average probability of home price declines in America’s 401 largest cities remains unusually low, at 5%.” 

Note to those of you thinking you might buy when prices go down---don’t be counting on that—there are no signs that we will see this happen in the forecasted future.

 

BUYING IN A SELLER’S MARKET:  WHO’S THE WINNER?

Rismedia.com, 10.17.17

I came across this information in October and it’s just as applicable today as it was then, so wanted to share it with you. Many of this is what I’ve been telling you for some time now.

These are some things that are especially good to know in a “Seller’s Market” like we’re presently experiencing:

• Time is valuable.  Buyers have fewer options today and this means more competition because there aren’t as many homes to look at in their price points.  Buyers need to know what they want, need and can afford.  If you know you absolutely need three bedrooms, you’ll need to ignore looking at that two bedroom house or risk losing out on better opportunities.

You also need to be prepared to make offers quickly.  Buyers without a preapproval will not be considered and will likely miss out on highest and best deadlines by the time they obtain one.  On the other hand, sellers will have an easier time selling their home.  If in good condition, their home will likely be the cream of the crop during these low-inventory times.

 

• Offers are aggressive.  In a seller’s market, buyers will often have to deal with multiple-offer situations.  If they don’t bring their best offer to the table, they will most likely lose out.  Sellers can also prioritize stronger terms.  They may decide to go with a lower offer if the buyer can close faster or is putting more money down.

A combination of the highest purchase price with a 20 percent down payment and a reliable lender is usually the winner.  Of course, you can’t forget that cash is king.  An all-cash offer will likely trump any others on the table.

 

• Negotiations are a game changer.  Unfortunately, buyers may lose some negotiating power in a seller’s market.  Unless the seller is incredibly motivated to get rid of their property, they may take advantage by refusing to take care of some inspection items.  Buyers should be wary of asking for too much, as even big-ticket items may not be taken care of.  Unless something is a safety or health hazard, it shouldn’t even be brought up.

Sellers may also decide to be more selective about what they are leaving with the house.  They may decide not to include appliances such as a refrigerator, dishwasher or washer and dryer.

Even small things like tone in a negotiation email should be taken into consideration.  Alienating the sellers this early in the game can force them to go with a backup offer.

 

• real estate agents are essential.  Even though a seller’s market clearly tips the scale in one direction, buyers are more likely to lose out if they are not working with an experienced, knowledgeable real estate agent.  Likewise, sellers may not even be aware of their advantage without the help of a real estate professional.  Agents will advocate for their clients—whether they are buyers or sellers—by helping them get as much as possible during sale price and inspection negotiations.

Things that might not seem significant—such as getting all of the paperwork submitted correctly, sending emails to the opposing agent and doing due diligence on the property—can make a huge difference in a seller’s market.

 

DASHBOARD FROM UCCS ECONOMIC FORUM

Please click here for a look at the detailed charts from the UCCS Economic Forum updated on January 23, 2018.  These show economic trends for the country as well as for El Paso County and cover such areas as housing, cost of living, consumer sentiment, job market and more.

If you have any questions, please give me a call.

January 22, 2018

HARRY’S BI-WEEKLY UPDATE

          A Current Look at the Colorado Springs Residential real estate Market

As part of my Unique Brand of 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.

THE YEAR IS STARTING MUCH AS LAST ONE ENDED FOR RESIDENTIAL real estate…

Lots of good news still coming our way—the one-year change in the median sales price of all properties sold in El Paso and Teller Counties was +10.4%.  A number of companies and their employees, as well as those simply wanting to relocate here, are eyeing Colorado Springs due to all the reasons we who live here experience—wonderful weather, exceptional work-life balance, relatively low cost of living, inclusion in many “top 10” lists of best places to live and not nearly the traffic problems of Denver or other larger cities--and so much more. 

However, things would be far better if there were more homes to sell.  Home prices are continuing to rise but listings are still at an all time low for the Pikes Peak region and most of the USA. That is contributing to the frenzy that’s still affecting many homebuyers.

It’s taking most folks longer than usual to find a home for a number of reasons.  With so few listings, we are continuing to see multiple offers, all-cash offers, and very quick turnaround times.  Low interest rates have afforded buyers to look at higher priced homes and renters are looking to buy due to high rental rates nationwide.  This is making things a little more difficult for buyers, sellers and real estate agents alike. 

I recently read that nearly one quarter of 2017 U.S. home sales were above the asking price:

• On average, homes that sold above their list price went for $7,000 over the asking price
• The share of U.S. home sales that were above the listed price increased from 17.8 percent in 2012 to 24.1 percent in 2017
• The typical price increase for homes that sold above the listed price was 3.1 percent

I’ve seen this with most of the bidding wars lately—folks are just worried that they won’t get into homes before interest rates increase or home prices go even higher.

Those who are wanting to sell and trade up are waiting to find their new home prior to listing their present one because it’s very likely that the present one will sell quickly and they could be “homeless” if they don’t know where they might go.

Folks relocating here or purchasing for the first time are seeing fewer homes that fit their needs, wants and budget due to the shortage of available existing homes.  And the ones who are seeking new construction are finding that lots are selling quickly and prices are starting to escalate due to shortages of building materials, likely caused by the rebuilding going on due to the fires in California and the hurricanes on the east coast and Texas.  This is bound to affect new home building across the country for some time to come.

That being said--there are still home options available in most price ranges and in most neighborhoods.  It may take a bit longer to find what you want, or you may turn to new construction as an option, but you will find the perfect home for you. 

If you are thinking of selling to trade up, buying for the first time or for investment purposes, just give me a call at 593.1000 or email me at Harry@HarrySalzman.com and let me help make all your residential real estate dreams come true.

 

DECEMBER 2017 LOCAL MARKET UPDATE AND MONTHLY INDICATORS ILLUSTRATE OUR CONTINUING UPWARD TREND IN GREATER DETAIL

Pikes Peak REALTORS^® Services Corp.,

These reports contain much greater detail than the first of the month reports I share and cover ALL residential areas in the Pikes Peak Region.

The local median sales price increase year-over-year in all properties was 10.4%, a good sign that our housing market is still continuing to appreciate.  The shortage of listings is helping to drive up prices and as I just mentioned, if there were more listings, more people would be moving—either selling to trade up or buying for the first time and for investment purposes.

In the recently published December 2017 Monthly Indicators and Local Market Update for El Paso and Teller Counties, new listings year-over-year were up 3.9% for the single-family/patio homes and up 17.0% for condo/townhomes. 

The slight uptick in listings is great news and possibly due to sellers realizing that it’s a great time to put their home on the market.  Doing so earlier than the “traditional” spring selling season gives them a head start—especially since the number of listings is so low.  Again, let me remind you that if selling to trade up is in the cards for you, be aware of how quickly your present home will likely sell. 

     The “Activity Snapshot” shows the one-year change:

• Sold Listings for All Properties was down 3.2%
• Median Sales Price for All Properties was up 10.4%
• Active Listings on All Properties was down 24.6%.

You can click here to read the 16-page Monthly Indicators or click here to get specific information on the neighborhood of your choice from the 34-page Local Market Update. I recommend that you check out your own neighborhood, or one that you are considering, to get a good idea of the local pulse. I have reprinted just one neighborhood, Northgate, below to show you the type of information available for all local areas.

Despite escalating home prices, interest rates are remaining historically low for the time being.  That won’t always be the case as they are already starting to rise, so “sooner than later” should be your motto if a real estate move is in your immediate future.  

For questions about any of these reports or just to find out how I can put my special brand of customer service to work for you, please give me a call.

 

TAX REFORM IMPACT AND PRICE OUTLOOK

Nar.realtor, 1.15.18

The new tax law is already in effect and the National Association of Realtors (NAR) has come out with their estimate of how home prices will trend in 2018.  The new tax law reduces the limit on deductible mortgage debt and limits the deductibility of the real estate tax up to $10,000.  These provisions are expected to have an impact on the housing market, and possibly negatively in the states with very high home prices.

The good news for us is that NAR is projecting Colorado to be number one in experiencing the strongest prices gains in 2018—approximately 5.9%, compared to a one to three percent gain nationally in 2018.

That’s just one more list we are on top of, and certainly one that should bring a smile to all your faces.

 

INTEREST RATES AND DOWN PAYMENTS

Rismedia, 1.3.18, The Wall Street Journal, 1.19.18

As mentioned earlier, interest rates are starting to inch up.  The average 30-year fixed mortgage rate changed to 4.04 percent this past week, up from 3.99 percent the week prior.  This is the first time the rate has risen above 4 percent since last May. 

Lawrence Yun, chief economist and senior vice president of research at NAR, is forecasting at least three more short-term rate increases this year.  He expects 30-year fixed rate mortgages to rise to 4.5% by the fourth quarter of 2018—and 4.8% by the end of 2019.

Down payment decisions are now a bigger factor than usual for several reasons.  Low inventory nationally is pressuring some folks to make a bigger down payment to gain a competitive edge, but the possibility of rate increases and the new tax regulations may also affect how much buyers put down. 

In addition to this, jumbo loan limits on mortgages purchased by Fannie Mae and Freddie Mac have increased.  For 2018, in most of the U.S., mortgages of up to $453,100 are eligible for purchase by Fannie and Freddie, up from $424,100 in 2017.  In high cost areas such as San Francisco and New York, the conforming loan limit is now $679,650, up from $636,150 in 2017.  Therefore, a loan that may have been termed a “jumbo” last year may now be conforming—a matter that may affect mortgage rates and terms.

This can be a bit much to take in and that’s why you have me as your realtor.  My investment banking background and knowledge of the current mortgage market gives me and my clients a distinct edge when it comes to finding the best financing for specific needs and budgets. 

For a better understanding of what all this might mean to you personally, let’s get together and talk about it.  I can be reached at 593.1000 and will gladly explain it to you.

 

COST V. VALUE:  THE HOME IMPROVEMENT PROJECTS WITH THE HIGHEST ROI IN 2018

The average return on investment (ROI) for home improvement projects dipped across the board with “upscale” projects taking the biggest hit, according to Remodeling Magazine’s newly released “Cost vs. Value Report for 2018”. 

The report which measures the average cost of 21 popular remodeling projects and their average resale value one year later, found that garage door replacement has the highest ROI at 98.3% (up from 85% year-over-year).  Backyard patio jobs garner the lowest ROI, at 47.6% (down from 54.9% year-over-year).

Craig Webb, the magazine’s editor-in-chief and manager of this report, said the reason for the sweeping decrease in ROI isn’t immediately obvious, but notes that it’s likely related to the strength of the housing market currently.

“It’s not clear if…nationwide affordability concerns are leading (real estate) pros to question the value of renovations that would make a house even more expensive at resale,” says Webb.

However, since the report was generated prior to the country being struck with several natural disasters, including massive forest fires and hurricanes, there is a silver lining here.  Since those occurrences, building supplies and the price of skilled labor has increased, but that’s expected to change over the course of 2018.  As a result, you should expect to see the ROI of most of these projects level out by year-end.

Despite these events, some longtime trends continued through the new year.  Remodeling is still far more cost-effective than replacement, but according to real estate pros, replacing is still the way to go.  This year, there’s a 20-point difference in ROI:  76.1% for replacement jobs, versus 56% for remodeling.

Nationally, when it comes to renovation ROI, curb appeal still wins out. 

Here are the top five projects with the greatest ROI in the report’s “midrange” cost category:

Manufactured Stone Veneer  (97.1% ROI)

Entry Door Replacement (Steel)  (91.3% ROI)

Deck Addition (Wood)  (82.8% ROI)

Minor Kitchen Remodel  (81.1% ROI)

Siding Replacement   (76.7% ROI)

 

The top five projects with the greatest ROI in the report’s ‘upscale” cost category are:

Garage Door Replacement    (98.3% ROI)

Window Replacement (Vinyl)   (74.3% ROI)

Window Replacement (Wood)  (69.5% ROI)

Grand Entrance (Fiberglass)    (67.6% ROI)

Bathroom Remodel  (56.2% ROI)

 

Nationally, and on the complete other end of the spectrum—here are the five projects with the lowest ROI in the “midrange” cost category:

Backyard Patio  (47.6% ROI)

Master Suite Addition  (56.6% ROI)

Major Kitchen Remodel  (59% ROI)

Bathroom Addition  (59.9% ROI)

Deck Addition (Composite)  (63.6% ROI)

 

The five projects with the lowest ROI in the “upscale” cost category are:

Master Suite Addition  (48.3% ROI)

Major Kitchen Remodel  (53.5% ROI)

Bathroom Addition   (54.6% ROI)

Bathroom Remodel   (56.2% ROI)

Grand Entrance  (Fiberglass)  (67.6% ROI)

The 2018 Cost vs. Value Report compares, across 149 markets, the average cost of 21 popular remodeling projects with their average value at resale one year later.  Average resale value is calculated based on estimates provided by real estate professionals. 

Once again, any questions?  You know where to find me.

 

 

 

 

 

January 9, 2018

 

HARRY’S BI-WEEKLY UPDATE

          A Current Look at the Colorado Springs Residential real estate Market

As part of my Personal Service, it is my desire to share current real estate issues that will help to make you a more successful and profitable buyer or seller.

Here’s wishing you and yours a healthy, Happy New Year and a hope that all your residential real estate dreams come true.

2018 is starting off the same way 2017 ended for me—it’s been busier than I can ever remember at this time of year.  While that’s great news for Colorado Springs, it is making my job and those of my buyers a bit harder as there are so few available homes on the market.

This trend is continuing to put a lot of pressure on both buyers and sellers in terms of decision-making, but NOW is still a great time to buy AND sell.

Realtor.com has predicted that Colorado Springs will continue to be one of the nation’s hottest housing markets in 2018—making the top 10 for another year.  This is likely the result of our excellent work/life balance, lower cost of living than in many other areas of the country and robust economy.  These are the same factors that are keeping our inventories so low and causing multiple offers, etc.  People simply want to live here for a multitude of reasons.

The December 2017 report from PPAR shows that homes are selling at 99.6% of listing price and a very low average of 31 days on the market. And even more amazing is that the median sales price of Single Family/Patio homes has increased by 11.8% year over year and is up 8.0% for Condo/Townhomes.

With homes selling within days of being listed and sometimes sooner than that, if you are planning to sell your home, you need to know where you are planning to go next because the short turnaround times don’t give you a lot of leeway to decide after the sale.  It’s best to find your next home prior to listing your present one at this time.

As much as I hate for my clients to face disappointment per a possibility of multiple offers, it’s now a regular thing.  That’s why you need to keep an open mind to look at properties in areas where you might have not considered in order to find what you want, need and can afford.  Even when it comes to purchasing a newly constructed home, I’m seeing lot choices going quickly and with multiple offers, so making an informed decision is essential no matter what you are seeking.

Homeownership rates are continuing to rise in this tight market as more people are finding a way to purchase a home despite all of the above-mentioned obstacles.  This can be partially attributed to the high rental rates but most likely because prices are quickly escalating and interest rates are sure to follow.  Folks just don’t want to be left out if at all possible.

Despite all this, there are still homes available in most neighborhoods and in most price ranges.  If you are in the market—either as a first-time buyer, as a trade-up buyer or for investment purposes, please give me a call sooner than later.  I can be reached at 593.1000 or by email at Harry@HarrySalzman.com .

For more details on the local December 2017 PPAR reports, please see the next article.

 

SALES AND PRICES KEEP ESCALATING DESPITE LOW INVENTORY

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

You will see in the Cumulative Year to Date Summary that total sales numbers year-over-year in Single Family/Patio Homes are up 6.7% and 11.2% for Condo/Townhomes.

Year-over-year, new listings are up 2.9% for Single Family/Patio Homes and up 4.7% for Condo/Townhomes. It appears that those who have been thinking of listing their home are beginning to realize that it is certainly going to get a lot more attention in this type of sales environment.  Just remember if you are considering listing your home that it’s likely to sell fast, so once again…you need to be prepared for that inevitability.

Here are some highlights from the December 2017 PPAR report.  Please click here to view the detailed 15-page report, including charts. If you have any questions, just give me a call.

In comparing December 2017 to December 2016 in PPAR:                      

                        Single Family/Patio Homes:

• New Listings are 846, Up 10.9%
• Number of Sales are 1,206, Down 2.4%
• Average Sales Price is $323,149, Up 12.5%
• Median Sales Price is $285,000, Up 11.8%
• Total Active Listings are 1,350, Down 12.1%
• Months Supply is 1.1

                        Condo/Townhomes:

• New Listings are 131, Up 26.0%
• Number of Sales are 160, Up 0.6%
• Average Sales Price is $195,356, Up 2.5%
• Median Sales Price is $191,200, Up 8.0%
• Total Active Listings are 80 Down 42.9%
• Months Supply is 0.5

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

                                                Median Sales Price             Median Sales Price

                                                  December 2017                      December 2016

Black Forest                            $432,000                              $455,000                     

Briargate                                  $381,000                              $350,000           

Central                                     $231,000                              $208,950

East                                          $243,500                              $225,000

Fountain Valley:                      $261,500                              $224,300

Manitou Springs:                    $350,000                              $370,500

Marksheffel:                             $341,500                             $311.000

Northeast:                                $285,000                              $250,000

Northgate:                                $415,000                              $442,927           

Northwest:                               $425,000                              $335,000          

Old Colorado City:                  $230,000                              $236,500

Powers:                                    $280,000                              $249,900

Southwest:                              $355,000                              $262,500

Tri-Lakes:                                 $454,500                              $445,000

West:                                        $282,400                              $250,000

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

 

HARRY’S ANNUAL PRESENTATION TO THE COLORADO SPRINGS CITY COUNCIL

As many of you are aware, I make a presentation to the Colorado Springs City Council each year detailing the residential real estate events of the past year and give my thoughts as to where I believe we are going in the year ahead.

I represent the Pikes Peak Realtors Association (PPAR) when doing so and love having the opportunity to address our local government with not only the concerns of PPAR but also those of you, my clients, who are constantly providing me with ideas and suggestions on what you would like to see in your neighborhoods and the city in general. 

You can click here to see a copy of the slides I presented.  I believe you will find the information contained in them quite enlightening and it will help you understand why owning real estate is a fabulous opportunity for the growth of personal wealth. 

If you have any questions, I would be happy to discuss any and all of this with you.  Just give me a call at 593.1000.

 

 

December 6, 2017

HARRY’S BI-WEEKLY UPDATE

           A Current Look at the Colorado Springs Residential real estate Market

As part of my Unique Brand of 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.

ALMOST GOODBYE TO 2017…

IT’S BEEN A WILD RIDE AND IT APPEARS THAT 2018 WILL BE MORE OF THE SAME

As this year comes to a close, I must say that I cannot ever remember the local residential real estate market to be quite like it’s been in 2017.

Yes, most homes are continuing to sell as soon as they are listed and in the lower price ranges we are still seeing multiple offers and bidding wars.  The shortage of available homes and still historically low interest rates are the driving forces behind this surge.  With Colorado Springs making the “Top 10” lists for so many things, I don’t expect this frenzy to stop anytime soon. 

In fact, Realtor.com predicts that Colorado Springs, already on track to break home sales records for 2017, will continue to be one of the nation’s hottest markets in 2018—coming in at number 8.

Our local job growth, thriving economy and relative low cost of living, coupled with high marks on the “best place to live and play” index is also contributing to the increased median home prices.

Sales of newly built homes are continuing to rise, driven in part by demand for entry-level homes.  This supports the longer-term positive trend in the market and is helping boost the homeownership numbers.  Folks are realizing that rental rates are escalating with no real benefit to anyone but the one who owns the home and/or apartment.  It is proving much cheaper to own than rent and people are finding a way to do that if at all possible.  There are more ways than you might imagine for getting into a starter home, or to sell and trade up.  If this is something you are thinking of, please give me a call and let me help make that a reality. 

The Wall Street Journal reported last Friday that the U.S. economy is headed into the final stretch of 2017 powered by one of the sturdiest periods of growth in it’s nine-year expansion. The article cited new home sales rising in October to a 10-year high and contracts signed for existing homes rebounded strongly in October after several months of declines.  Consumer confidence has also risen for five straight months to a 17-year high, according to the Conference Board.

All in all, it’s been a great year for all local homeowners and I’d like to thank you for the confidence you’ve continued to place in me when it comes to helping make your residential real estate dreams come true.  It has been my pleasure this year, as always, to provide my “special brand of customer service” to suit your individual needs, wants and budget and I look forward to assisting you, your family members or co-workers again in the coming year.

 

WOW…WOW…AND ANOTHER WOW.

The most recent report from PPAR came out on yesterday afternoon  and shows that  homes are selling at 99.5% of listing price and a very low average of 33 days on the market. And even more amazing is that the average sales price of Single Family/Patio homes has increased by 10.1% year over year and is up 13.0% for Condo/Townhomes.  This trend is continuing to put a lot of pressure on both buyers and sellers in terms of decision-making, but NOW is still a great time to buy AND sell.

With homes still selling within days of being listed, if you are planning to sell your home, you need to know where you are planning to go next because the short turnaround times don’t give you a lot of leeway to decide after the sale.  It’s best to find your next home prior to listing your present one at this time.

As much as I hate for my clients to face disappointment per a possibility of multiple offers, it’s becoming a regular thing.  That’s why you need to keep an open mind to look at properties in areas where you might have not considered in order to find what you want, need and can afford.  Even when it comes to purchasing a newly constructed home, I’m seeing lot choices going quickly and with multiple offers, so making an informed decision is essential no matter what you are seeking.

Homeownership rates are continuing to rise in this tight market as more people are finding a way to purchase a home despite all of the above-mentioned obstacles.  This can be partially attributed to the high rental rates but most likely because prices are quickly escalating and interest rates are sure to follow.  Folks just don’t want to be left out if at all possible.

Despite all this, there are still homes available in most neighborhoods and in most price ranges.  If you are in the market—either as a first-time buyer, as a trade-up buyer or for investment purposes, please give me a call sooner than later.  I can be reached at 593.1000 or by email at Harry@HarrySalzman.com .

For more details on the local November 2017 PPAR reports, please see the next article.

 

SALES AND PRICES KEEP ESCALATING DESPITE LOW INVENTORY

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

You will see in the Cumulative Year to Date Summary that total sales numbers year-over-year in Single Family/Patio Homes are up 4.9% and down 8.2% for Condo/Townhomes.  You will also see that the median home price in all listed neighborhoods increased in value year-over-year.  This is not always the case, but it’s apparent that our hot real estate market is affecting most all of our neighborhoods in a positive way.

Year-over-year, new listings are up 8.9% for Single Family/Patio Homes and down 0.6% for Condo/Townhomes. It appears that those who have been thinking of listing their home are beginning to realize that it is certainly going to get a lot more attention in this type of sales environment.  Just remember if you are considering listing your home that it’s likely to sell fast, so once again…you need to be prepared for that inevitability.

Here are some highlights from the November 2017 PPAR report. Please click here to view the detailed 15-page report, including charts.

In comparing November 2017 to November 2016 in PPAR:

                     Single Family/Patio Homes:

• New Listings are 1,080, Up 8.9%
• Number of Sales are 1,255, Up 4.9%
• Average Sales Price is $317,368 Up 10.1%
• Median Sales Price is $280,000 Up 9.1%
• Total Active Listings are 1,643, Down 15.0%
• Months Supply is 1.3, down 3.0

 

                        Condo/Townhomes:

• New Listings are 162, Down 0.6%
• Number of Sales are 167, Down 8.2%
• Average Sales Price is $205,174, Up 13.0%
• Median Sales Price is $187,000, Up 12.6%
• Total Active Listings are 100, Down 43.8%
• Months Supply is 0.6, down 5.3

 

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

                                                Median Sales Price             Median Sales Price

                                                  November 2017                     November 2016

Black Forest                            $470,500                              $424,500                     

Briargate                                  $369,500                              $353,250           

Central                                     $234,750                              $212,500

East                                          $244,000                              $220,000

Fountain Valley:                      $247,000                              $234,450

Manitou Springs:                    $365,900                              $322,000

Marksheffel:                             $331,539                             $259,900

Northeast:                                $271,400                              $260,000

Northgate:                                $430,042                              $400,000           

Northwest:                               $389,950                              $388,000           

Old Colorado City:                  $289,000                              $233,750

Powers:                                    $275,000                              $243,750

Southwest:                               $302,000                              $265,500

Tri-Lakes:                                 $455,000                              $446,750

West:                                        $240,000                              $213,900

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

If you have any questions about these reports and how they might relate to you and your future housing plans, please give me a call at 593.1000.

 

SOME FORECASTS FOR 2018…

Rismedia.com, 11.29.17, The Wall Street Journal, 12.1.17

In a recent study by the National Association of Realtors (NAR), Colorado Springs is once more listed as one of the cities where considerable price and sales gain will be seen.

By the way, given the November PPAR statistics I just shared with you and their year-over-year comparisons, I believe our local market will out perform the national predictions shown here.  Furthermore, the housing appreciation in Colorado Springs should more than likely be two times greater than the 3.2% national forecasted home value indicated below.

The following inforgraphic from realtor.com will show you some of their predictions for the coming year:

Realtor.com anticipates that mortgage rates will continue to grow along with home prices, averaging 4.6 percent and possibly reaching 5 percent by year-end.  Interestingly though, more first-time homebuyers were able to get an FHA mortgage this year than last, despite a slight uptick in rates. 

One caveat is tax reform.  These forecasts were made prior to the House bill passing and the Senate bill being voted on; as such, realtor.com cautions that certain cuts--among others, the mortgage interest deduction and the state and local tax deduction--could lead to less in the way of prices and sales.

 

5 HOUSING TRENDS TO WATCH FOR IN 2018

Realtormag, 11.29.17

According to realtor.com’s 2018 National Housing Forecast, home shoppers may have it a bit easier in 2018 because inventory constraints of for-sale homes and rising prices may finally start to ease.

“Next year will set the stage for a significant inflection point in the housing shortage,” says Javier Vivas, director of economic research for realtor.com.  “Inventory increases will be felt in higher priced segments after spring home buying season, which we expect to take hold and begin to provide relief for buyers and drive sales growth in 2019 and beyond.”

But again, the big wild card for 2018 will be any impact from the proposed tax reform legislation, which is currently being debated by Congress, realtor.com adds.

Here is an abbreviated closer look at realtor.com’s five housing prediction trends for 2018:

1. Inventory to start increasing:  Positive year-over-year inventory growth by the fall of 2018—which will be the first time since 2015, the majority of which will be in the mid-to-upper-tier price points, which includes homes priced above $350,000.  On the other hand, recovery in the starter home market will likely linger since levels are “significantly depleted by first-time buyers”.

 

2. Price appreciation to slow:  Home buyers will likely see home prices moderate in the new year.  The majority of the slowing price appreciation will be centered in the higher-priced ranges as more inventory becomes available.  Entry level homes will likely continue to see price gains due to a larger potential buyer pool as well as a more limited number of homes for sale in this price range.

 

3. Millennials to gain market share:  The largest cohort of millennials are expected to turn 30 in 2020.  “Millennials are a driving force in today’s housing market,” says Vivas.  “They already dominate lower price home mortgages and are getting close to overtaking older generations for mid-and upper-tier mortgages.  While financially secure in general, their debt to income ratios have started to increase as they compete for higher priced homes.”

 

4. The South to lead in sales growth:  Realtor.com forecasts that Southern cities will top national averages in home sales growth in 2018. 

 

5. Tax reform wild card:  Tax reform could dampen 2018 sales and price forecasts, realtor.com reports.  “While the ultimate impact of tax reform will depend on the details of the plan that is finally adopted, both versions include provisions that are likely to decrease incentives for mobility and reduce ownership tax benefits,” realtor.com reports.  “On the flip side, some taxpayers, including renters, are likely to see tax cuts.  While more disposable income for buyers is positive for housing, the loss of tax benefits for owners could lead to fewer sales and impact prices negatively over time with the largest impact on markets with higher prices and incomes.”

 

AND THE GOOD NEWS JUST KEEPS ON COMING…

A big plus for those seeking jumbo conventional and VA loans—beginning next month (January 2018) the jumbo/conforming limits will increase considerably.  This chart below illustrates the new limits, which are increasing for only the second time in 11 years.  The first increase came last year.

 

UPDATE FROM THE UCCS ECONOMIC FORUM (11.30.17)

UCCS Economic Forum, College of Business

As always, I am providing you a look at the report I receive from the UCCS Economic Forum, which will give you not only the “Big Picture” of the U.S. Economy, but also how things are shaping up locally. 

To view the report, please click here.  If you have any questions, please give me a holler. 

 

 

 

 

November 20, 2017

 

HARRY’S THANKSGIVING GREETING

 

 

When I give Thanks, I always start with YOU.

 It has been my lifelong joy to play such an important part in helping you find the residence of your dreams and I thank each and every one of you for that privilege.  It’s one I never take for granted and I truly enjoy providing my special brand of customer service to fit each and every individual situation.

 

I wish you all a Happy, Safe and Plentiful Thanksgiving.

 

November 6, 2017

HARRY’S BI-WEEKLY UPDATE

         A Current Look at the Colorado Springs Residential real estate Market

As part of my Unique Brand of 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.

SOME THINGS TO CELEBRATE AND SOME TO CONSIDER…

With Veterans Day this week, I want to send a big thank you for all my friends, clients and eNewsletter readers who served in the Armed Forces for this great country of ours. 

Living in Colorado Springs, with the Air Force Academy literally in my backyard and several other military bases located here, I can’t help but be reminded daily of how grateful I am for the men and women who have served and continue to serve.  It is because of them that I can go to sleep at night knowing they are on constant watch and alert for events such as the recent terror attack in New York City. 

I have nothing but the utmost respect and gratitude for all Veterans and want to give them a BIG SHOUT OUT here.

And kudos for Colorado Springs...  Realtor.com analyzed 32,000 Zip codes based on factors like the time it takes properties to sell and how frequently homes are viewed in each ZIP code and coming in at number 7 on the list of Hottest Zip codes is our Zip code 80922.

Now something to ponder…the proposed TAX REFORM BILL recently sent to Congress. 

As most of you know, I refrain from political rhetoric in this eNewletter and will continue to do so.  However, when something is proposed that will affect all homeowners I feel it is my responsibility to share it with you.  There are several proposals in this bill that will directly affect those of you who presently own and homes and those of you who are considering a first time purchase. 

One of the issues is the proposed reduction of mortgage interest deduction over $500,000 and property taxes.  These deductions are essential to many American homeowners. 

Another issue that indirectly affects homeowners and potential homeowners is the proposed elimination of both medical cost and student loan interest deductions. It is already difficult enough for graduates to purchase a home due to the high student loan debt.  If they cannot deduct the interest paid on those loans it will certainly add to the difficulty in affordability for those folks. 

What can you do?  Please write your Congressmen and let them know this is NOT acceptable.  If enough of us take a stand it will force them to see that these issues are of great importance.

Thank you.  And now I’m off my soapbox.

 

STATISTICS AND GOOD NEWS FOR LOCAL RESIDENTIAL real estate

The most recent report from PPAR came out on November 3^rd and shows that  homes are selling at 99.5% of listing price and a very low average of 28 days on the market. This trend is continuing to put a lot of pressure on both buyers and sellers in terms of decision-making.

With homes still selling within days of being listed, if you are planning to sell your home, you need to know where you are planning to go next because the short turnaround times don’t give you a lot of leeway to decide after the sale.  It’s best to find your next home prior to listing your present one at this time.

Let me remind you again that the hard reality today is:  If you are buying, you need to know in advance exactly what you want because most often you don’t get the luxury of “thinking about it” for even a few hours.  If you don’t make an offer—one that’s going to get noticed—someone else will. 

As much as I hate for my clients to face disappointment per a possibility of multiple offers, it’s becoming a regular thing.  That’s why you need to keep an open mind to look at properties in areas where you might have not considered in order to find what you want, need and can afford.  Even when it comes to purchasing a newly constructed home, I’m finding that lots are going quickly and with multiple offers, so making an informed decision is essential no matter what you are seeking.

Homeownership rates are continuing to rise in this tight market as more folks are finding a way to purchase a home despite all of the above-mentioned obstacles.  This can be partially attributed to the high rental rates but most likely because prices are quickly escalating and interest rates are sure to follow.  Folks just don’t want to be left out if at all possible.

Despite all this, there are still homes available in most neighborhoods and in most price ranges.  If you are in the market—either as a first-time buyer, as a trade-up buyer or for investment purposes, please give me a call sooner than later.  I can be reached at 593.1000 or by email at Harry@HarrySalzman.com .

For more details on the local October 2017 PPAR reports, please see the next article.

 

SALES AND PRICES KEEP ESCALATING DESPITE LOW INVENTORY

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

You will see in the Cumulative Year to Date Summary that total sales numbers year-over-year in Single Family/Patio Homes are up 13.0% and up 15.3% for Condo/Townhomes.

Year-over-year, new listings are up 8.4% for Single Family/Patio Homes and up 14.9% for Condo/Townhomes. It appears that those who have been thinking of listing their home, are beginning to realize that it is certainly going to get a lot more attention in this type of sales environment.  Just remember if you are considering listing your home that it’s likely to sell fast, so once again…you need to be prepared for that inevitability.

Here are some highlights from the October 2017 PPAR report. Please click here to view the detailed 15-page report, including charts.

In comparing October 2017 to October 2016 in PPAR:

                Single Family/Patio Homes:

• New Listings are 1,320, Up 8.4%
• Number of Sales are 1,431, Up 13.0%
• Average Sales Price is $317,112, Up 7.9%
• Median Sales Price is $280,538, Up 9.7%
• Total Active Listings are 1,939, Down 12.9%
• Months Supply is 1.8, down 1.0

                        Condo/Townhomes:

• New Listings are 185, Up 14.9%
• Number of Sales are 211, Up 15.3%
• Average Sales Price is $199,881, Up 6.7%
• Median Sales Price is $195,000, Up 12.7%
• Total Active Listings are 119, Down 40.5%
• Months Supply is 0.6, down 2.6

 

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

                                                Median Sales Price             Median Sales Price

                                                  October 2017                        October 2016

Black Forest                            $510,000                              $502,500                    

Briargate                                  $369,500                              $352,000           

Central                                     $239,000                              $204,000

East                                          $239,925                              $215,000

Fountain Valley:                      $260,000                              $224,500

Manitou Springs:                    $383,000                              $270,250

Marksheffel:                             $321,955                             $271,450

Northeast:                                $284,500                              $255,000

Northgate:                                $449,900                              $418,857           

Northwest:                               $413,500                              $338,850           

Old Colorado City:                  $266,200                              $219,450

Powers:                                    $275,000                              $255,000

Southwest:                              $331,000                              $345,000

Tri-Lakes:                                 $441,000                              $464,669

West:                                        $267,500                              $257,900

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

If you have any questions about these reports and how they might relate to you and your future housing plans, please give me a call at 593.1000.

 

METRO HOME PRICES MAINTAIN FAST GROWTH AND COLORADO SPRINGS IS 40% ABOVE THE NATIONAL AVERAGE

Low inventories are continuing to contribute to the escalating prices nationwide. In the just published third quarter list from NAR, the Median Sales Price of Existing Single-Family Homes for 177 U.S. Metropolitan Statistical Areas (MSAs) increased 5.3% year-over-year. 

The good news for those of us in Colorado Springs is that our median sales price year-over-year was 7.3%--40% higher than the national average.

According to Lawrence Yun, this could have been even better had there been more homes for sale.  “The stock market’s climb to new record highs, the continued stretch of outstanding job growth and mortgage rates under 4 percent kept homebuyers demand at a very robust level throughout the summer,” he said.  “Unfortunately, the pace of new listings was unable to replace what was quickly sold.  Home shoppers had little to choose from, and many had to outbid others in order to close on a home.  The end result was a slowdown in sales from earlier in the year, steadfast price growth and weakening affordability conditions.”

He added that “affordability pressures are frustratingly occurring in places where jobs are plentiful and incomes are rising.  Without significant boost in new and existing inventory to alleviate price growth, job creation could slow in high cost areas in upcoming years if residents begin exiling to more affordable parts of the country.”

This is exactly why so many are looking to buy in the Pikes Peak area.  Denver home prices are beginning to drive folks further south when looking for a home, which, while helping keep our home prices on the upswing, is also contributing to the low inventory. 

For a look at the entire list of 177 MSAs, please click here.

 

HOME PRICES SEEM TO BE UNSTOPPABLE.  WILL THEY STAY THAT WAY?

Rismedia, 11.1.17

According to S&P Down Jones Indices Chairman of the Index Committee and Managing Director, David M. Blitzer, “Home prices appear to be unstoppable.  Most prices across the rest of the economy are barely moving compared to housing.  Over the last year the consumer price index rose 2.2 percent, driven largely by energy costs.  Aside from oil, the only other major item with price gains close to housing was hospital services, which were up 4.6 percent.  Wages climbed 3.6 percent in the year to August.”

Blitzer said that the ongoing rise in home prices raise questions of why prices are climbing and whether they will continue to outpace most of the economy.  “Currently, low mortgage rates, combined with an improving economy, are supporting home prices.  Low interest rates raise the value of both real and financial long-lived assets,” he added.

“The price gains are not simply a rebound from the financial crisis,” he says.  “Nationally and in nine of the 20 cities in the recent S&P Corelogic Case-Shiller Indices Report, home prices have reached all time highs; however, home prices will not rise forever.  Measures of affordability are beginning to slide, indicating that the pool of buyers is shrinking.  The Federal Reserve is pushing short-term interest rates upward and mortgage rates are likely to follow over time, removing a key factor supporting rising home prices.”

Bottom line?  NOW is the time to make your move if you’ve been waiting.  Prices will continue to rise and interest rates are sure to do likewise.  If you’ve even been thinking about purchasing residential real estate, either to sell and trade up or for a first time purchase, wait no longer.  Give me a call at 593.1000 and let’s see how we can make this a reality for you.

 

TODAY’S BUYERS AND SELLERS—INFOGRAPHICS YOU MIGHT FIND INTERESTING

NAR, 10.30.17

 

 

 

UPDATE FROM THE UCCS ECONOMIC FORUM (10.20.17)

UCCS Economic Forum, College of Business

As always, I am providing you a look at the report I receive from the UCCS Economic Forum, which will give you not only the “Big Picture” of the U.S. Economy, but also how things are shaping up locally. 

To view the report, please click here.  If you have any questions, please give me a holler.

 

October 18, 2017

 

HARRY’S BI-WEEKLY UPDATE

                        A Current Look at the Colorado Springs Residential real estate Market

As part of my Unique Brand of Personal Service, it is my desire to share current real estate issues that will help to make you a more successful and profitable buyer or seller.

 

THIS IS A BIT LATE BECAUSE…

I was hoping to include the comprehensive neighborhood reports are usually in the 2^nd eNewletter of the month, but they have not been produced by PPAR as of this morning and I did not want to delay sending this.

Any one of you who would like a copy of the detailed report, or simply the page covering your individual neighborhood, please send me an email and I will have it sent to you directly.

Business is still going at a record pace and there doesn’t seem to be any rhyme or reason as to a particular “buying season” anymore.  Starter homes are continuing to receive multiple offers, some over listing price and they are on the market for a very short time—sometimes just hours. 

This can be discouraging to first time buyers and others who want to sell and trade up but there are lots of ways to help improve your chances and working with me is number one on that list. 

I have seen it all in my 45+ years in the local residential real estate arena and know the ins and outs of the business.  I can help from beginning to end—from finding properties that meet your individual needs, wants and budget to recommending lenders to obtain pre-approvals and then writing an offer that will most certainly get noticed, if not accepted the first time.  

If you, a family member or co-worker need help in making your residential real estate dreams come true, my special brand of customer service is simply a phone call or email away.  I can be reached at 593.100 or at Harry@HarrySalzman.com .

 

MILLENNIALS’ NEW WEAPON IN BIDDING WARS:  A PARENT’S HOME EQUITY

The Wall Street Journal, 10.10.17

Parents are refinancing their own homes to help their children compete as all-cash buyers in hot housing markets. When the purchase closes, the children pay the parents back.

This has been referred to as the mortgage merry-go-round:  Parents refinance their own home to fund the full cost of their son or daughter’s home.  This allows the child to compete as a “desirable all-cash buyer” in areas such as Colorado Springs where bidding wars are common and we find that many sellers today often prefer cash transactions because they can close quickly without making a deal contingent on financing.  Then, when the purchase closes, the new home is refinanced by the child and the parents are paid back.

This strategy is also indicative of how hard it is for most millennials to get into their “starter home”, where competition is the fiercest.  Even those with high paying jobs and large down payments are losing out, most especially in hot real estate markets such as ours.

Certainly, this will not work for everyone.  Parents must have enough equity in their homes to make it worthwhile, and the same goes for the child’s new home.  And both parties must be willing to take on the added hassle and cost of two loans.  Additionally, mixing family and money can be tricky—especially when large sums and people’s homes are involved.

Here are a couple more things to keep in mind:

1. Loan Options.  Parents have several options for using the equity in their homes, including a cash-out refinance, which allows the borrowers to refinance an exiting mortgage plus an additional amount and take the difference out in cash; a home-equity loan, which is a loan against the value of a home, including a second mortgage; or a HELOC, which works like a credit card, allowing homeowners to qualify ahead of time and withdraw funds when the child is ready to close.

 

2. Finance Fail.  The biggest risk, however, is that the children will not qualify for a loan—or one as big as expected—especially if they pay above the asking price or the market cools before obtaining the loan.  To avoid this, let the lender know your plans ahead of time and if possible, use one loan officer for both transactions.  Also, some lenders want buyers to live in a home for at least 3 to 6 months prior to refinancing.  An alternative here would be a “delayed-financing mortgage”, which allows a buyer to purchase the home in cash and refinance the day after closing for up to 80% of the value of the home.

 

3. Think Like a Lender.  Parents should do the same kind of due diligence as a lender, including vetting children’s finances.  It might be best to work with a lawyer to draw up a family loan agreement setting out repayment terms and other stipulations.  For example, parents may want to ask for 5% of the eventual sale price.  Buyers may also want to get a home inspection.

 

4. Consider the Costs.  A purchase mortgage or a refinance would typically cost about 2% of the loan value.  Most closing costs would apply to two loans instead of one.  And while repayment penalties are rare on primary-residence homes, they may apply to investment properties.

 

5. Tax Tips.  Gifts of more than $14,000 per person per year are subject to federal gift taxes for the giver, which could apply to both parents and children.  Both parties should consult a tax professional to determine how this type of transaction could affect them.

 

DOWN PAYMENT MYTHS DEBUNKED:  An Infographic:

 

THE COST OF WAITING TO BUY

Keeping current matters, 9.29.17

I get asked this question a lot:  “Should I buy now or wait?” and my answer is always the same.  It all depends on your individual circumstances.  That said, in general, and most especially in today’s escalating market prices with the good possibility of mortgage interest rates rising in the near future, there’s no better time to buy than NOW.

Here is an illustrations explaining why:

 

Some Highlights:

• The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices and interest rates were to increase over a period of time.
• Freddie Mac predicts interest rates to rise to 4.4% by next year.
• CoreLogic predicts home prices to appreciate by 5.0% over the next 12 months.
• If you are ready and willing to buy your dream home, find out if you are able to.

So, if you are ready, willing and even thinking about buying a new home—whether to sell and trade up or buy for the first time or for investment purposes, please give me a call sooner than later and let’s see how we can make this a reality for you and your family.  I can be reached at 593.1000 or by email at Harry@HarrySalzman.com.

 

AND FINALLY, A LITTLE BIT OF BRAGGING…

As most of you know, I was in Chicago for an International relocation Conference the last week of September.  The Pikes Peak Association of Realtors (PPAR) held a formal dinner on September 29^th, which I was unable to attend.  To my great surprise and with much gratitude, I found out that I was awarded the “Extra Mile Award” at that dinner.

According to PPAR, this award was presented for:

“Excellence and service to the real estate industry.  Harry Salzman has served as a member of the Government Affairs Committee (of PPAR) for over 20 years.  As part of the association’s advocacy efforts he has represented PPAR in city and county with his famous statistical and economic outlook, making him and PPAR the go to source for housing statistics in the region.  In addition to his advocacy efforts, Harry has been a valuable member of PPAR’s investment task force.”

I have been doing what I do for more than 45 years in the local real estate arena and know that my clients enjoy getting my special brand of customer service.  Knowing that people trust me enough to allow me to play a big part in their family’s biggest financial investment and that I can help them make their residential real estate dreams come true is a reward in itself.  To be able to do the work I love is also a reward in itself.  This special award from PPAR and being recognized by my local peers is the “icing on the cake” and is special to me and I wanted to share it with you—because, let’s face it, without all of you, an award like this would not have been possible.