Real Estate Information

July 7, 2014

 

HARRY’S BI-WEEKLY UPDATE

                       A Current Look at the Colorado Springs Residential real estate Market

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

               

HARRY’S JOKE OF THE DAY…(So funny I had to put it first!)

                                             

 

THANK YOU…THANK YOU…THANK YOU

On Thursday, June 26^th, Salzman real estate Services was honored as one of the top three Residential Real Estate companies by the Colorado Springs Business Journal’s “Best of Business” poll. 

While it’s always nice to be publically recognized for the work we do, the most important honor to us is the vote of confidence given by you, our clients, who have used us multiple times for your residential needs and have referred family members and co-workers. 

We take great pride in our special brand of customer service and want you to know we don’t take your loyalty lightly.  We look at each and every client individually and work to find the best fit for the needs, wants and budget of every family.  We understand how these can change over the years and we offer advice to help you make certain that the decisions you make today are the right ones for your current situation. 

So, again…let me thank you for your continued patronage.  It’s all the reward we need.

 

GARDEN OF THE GODS TOPS LIST OF UNITED STATES PARKS

Those of us who live here know just how fabulous Garden of the Gods Park is, but now it’s official.  The online travel site TripAdvisor recently ranked it Number One in the country, ahead of New York’s Central Park and Chicago’s Millennium Park.

In world park rankings, Garden of the Gods Park is number 2, right behind Stanley Park in Vancouver, Canada.

This is definitely something for us to celebrate, as TripAdvisor is a major internet site that helps tourists decide where to visit.  Garden of the Gods already gets approximately two million visitors each year and this can be an economic driver in a city that depends a lot on tourism.

 

JUNE LOCAL STATISTICS ARE VERY POSITIVE

Statistics provided by the Pikes Peak REALTORS Service Corp, or its PPMLS

These local stats include “all homes”—both resale and new homes built through June 30, 2014 as compared to June 30, 2013.

• The number of single family/patio homes sold is 8.0% greater than a year ago.
• New listings were 8.8% more than a year ago.
• The average sales price is 4.6% more than a year ago.
• The median sales price is 5.3% more than a year ago.

A market appreciation of 4.6% or 5.3% is very comfortable and as I illustrated on my 40^th anniversary in the business a couple of years ago—the long term appreciation over that 40 year period was equal to 5.3% per year.  We are right on target according to these newly released statistics.

This appreciation in investment numbers certainly justifies buying a home in today’s market.  Coupled with the “cheap” interest rates of today (the 30-year fixed rate is around 4.0%) and the reasonable number of current listings, there are choices available for most all price ranges. 

Putting it in “my” language:

Good choices available in most price ranges

+ Current Stable Appreciation

+ Cheap Interest Rates___________

= A great quality of life for you and your family !

 

In comparing June 2014 to June 2013 in PPAR:                     

                        Single Family/Patio Homes:

• New Listings are 1,816 Up 8.8%
• Number of Sales are 1,192, Up 8.0%
• Average Sales Price is $267,379 Up 4.6%
• Median Sales Price is $237,000, Up 5.3%
• Total Active Listings are 4,233, Up 9.4%

                        Condo/Townhomes:

• New Listings are 204, Up 4.1%
• Number of Sales are 146, Down 2.0%
• Average Sales Price is $173,657, Up 6.7%
• Median Sales Price is $155,050, Up 10.8%
• Total Active Listings are 429, Up 0.7%
•  

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

                                                Median Sales Price               Average Sales Price

Black Forest                             $453,500                              $423,767

Briargate                                   $305,000                              $313,264                    

Central                                      $163,950                              $183,843

East                                           $178,320                               $189,366

Fountain Valley:                       $183,250                              $185,465

Manitou Springs:                     $348,750                              $384,375

Marksheffel:                             $254,950                              $287,449

Northeast:                                 $215,700                              $237,203

Northgate:                                $380,000                              $420,224

Northwest:                                $312,500                              $342,059

Old Colorado City:                  $225,950                               $222,536

Powers:                                     $226,000                              $227,042

Southwest:                               $355,000                               $422,303

Tri-Lakes:                                 $387,000                              $411,905

West:                                         $215,000                              $224,756

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

Click here to see the full 10-page report and see how your neighborhood is doing.  If you have any questions concerning the report please call me for further explanation.

 

LOCAL JOBS & UNEMPLOYMENT NUMBERS ARE BEST IN MORE THAN FIVE YEARS

The Gazette, 7.1.14

Things are continuing to look up in more areas than home sales.  The Colorado Springs jobless rate of 7.2 percent in May was the lowest since December 2008 and is down from 7.4 percent in April and 8.1 percent in May 2013, according to the latest data from the U.S. Bureau of Statistics.

In the fourth consecutive month of employment increases, the number of local residents holding jobs in May was the highest level since January 2009, and up about 400 since April 2014.

 

DOWNSIZE SOONER, NOT LATER

The Wall Street Journal, Encore Column

While your home may be your biggest asset, in most cases it’s also your biggest expense.  Oftentimes, when it’s time for retirement planning, a house isn’t on the top of the list of changes to consider.

There are lots of reasons.  Emotionally it may be hard to let go of a family home filled with memories.  Moving is a hassle and a smaller home is not always financially the best move.  

However, for many retirees, it can pay to downsize sooner than later.  Some issues to consider:

• Lifestyle changes such as moving to an adult community.
• Moving prior to illness or death of a spouse can ensure that the surviving spouse or children do not have to contend with emptying and selling a big home.
• Trading a multi-story home for a single level one.
• “If it makes sense, don’t wait”, suggest Steven Sass, an associate director at the Boston College Center for Retirement Research.

Sometimes the reluctance stems from knowing that you might be trading a home with a paid-off mortgage for a rental or a condo with association or maintenance fees.  According to Lawrence Glazer, a financial planner at Mayflower Advisors in Boston, that can be a mirage.  “In a home, the expenses are hidden,” he says.  “It’s maintenance, a roof, a boiler, heating and landscaping.”

Mr. Glazer urges his clients to think twice about holding on to a home so that children and grandchildren can come back to visit.  “Rather than clinging onto a three-bedroom and paying for the maintenance and heating, it’s cheaper to put them up in a hotel room,” he says.

When you trade for the more visible costs of a rental or condo you are aware of your fixed costs and this can help with your financial planning, according to David Schwartz, chief executive at advisory firm FCE Group in Great Neck, NY.  It doesn’t take a major downsizing to reduce costs, either.  With rising property taxes, often simply moving out of a great school district and into a mediocre one can help reduce those taxes. 

According to Mr. Glazer, another important thing to consider is the ability to make the move while you are physically and mentally able.  Moving can be exhausting at any age, and the older we are the harder it becomes.  “Once you’re over 80, more things happen where you don’t have 100 control, and it’s harder for those people to move,” says Mr. Schwartz.  If you wait until you are unable to make the move yourself, it often falls to children or other caregivers to take care of and ultimately sell the house, he says.

This is a question I am often asked and when I read this column I was reminded again of these thoughts and suggestions.  Hope this helps you or someone you know who is considering downsizing. 

Since every downsizing or relocating situation is different, I’m here to help with various options that make the best sense for each individual client.  Just give me a call at 598.3200 or email me at Harry@HarrySalzman.com today and we can discuss the best options for you or a family member.

 

SHOULD PARENTS HELP ADULT CHILDEN BUY A HOME?

9News.com 6.29.14

“There is a renting stigma that exists out there,” said Paul Golden, spokesman for the National Endowment for Financial Education.  “You’re paying somebody else’s mortgage and you’re throwing money away.”

That being said, when an adult child doesn’t have enough money to put down on a house, parents might want to weigh their options carefully about whether to step in and help.

There are many things to consider, among them:

• Do you have enough money or are you sacrificing your own financial independence for your adult child’s financial independence?
• Are you jeopardizing your retirement finances?
• Even if you can afford it, most experts say it’s probably better character building to let your children do it on their own.
• Self-sufficiency sometimes means that your children need to learn from their own “School of Hard Knocks” a little bit.

For parents that do choose to help, here’s a bit of advice:

• A couple can gift up to $28,000 per child.  And if it’s a married child, they can gift up to $48,000 a year without any reporting by the IRS.
• More importantly, check with you tax advisor to see what’s the best situation for you, tax-wise.

While owning a home is an amazing first step to financial independence, make sure you have all the facts before deciding whether it’s a good move to help your adult children in making that move. 

 

SKY SOX TICKETS AVAILABLE

Just a reminder that I have 4 front row seats to all Sky Sox games available to you on a first-come-first-served basis.  Just give me a call and I’ll be happy to put the tickets aside for you.

 

 

                                                            

June 23, 2014

 

HARRY’S BI-WEEKLY UPDATE

                             A Current Look at the Colorado Springs Residential real estate Market

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

                                                            

REALTORS LOOKING FOR 4% MEDIAN HOME PRICE RISE

Housingwire.com 6.12.14

Despite negative reports to the contrary, the latest survey of the National Association of Realtors (NAR) in their confidence index shows that Realtors expect home prices to continue to appreciate over the next year, with a median price increase of 4%. 

This index reflects the responses of more than 3,000 NAR members and while some states are forecasted for higher median increases, those are states that suffered the most during the housing crisis. 

All in all, good news… as Realtors can help play an important role in helping protect your investment.

 

FORECLOSURES CAN AFFECT YOUR HEALTH

MarketWatch, The Wall Street Journal 6.14

I’m sure you can imagine that having a home foreclosed on would be difficult, but you might not be aware that simply living next to or near a foreclosed home can also affect you in ways you never dreamed of.

A new study found that the foreclosure next door can elevate your blood pressure.  According to a researcher at the Harvard Center for Population and Development Studies, each additional foreclosure within 100 meters (328 feet) of an individual’s home corresponds with an increase of 1.17 millimeters of mercury in systolic blood pressure. 

One in three American adults already has high blood pressure—a reading over 140/90 mmHg.  This additional increase doesn’t push homeowners into hypertension territory; however, it is worrisome and reveals larger public-health implications, according to the study.

It was also found that stress from these nearby foreclosures affected the study participants’ health in other ways, such as in increase in alcohol consumption and nominal weight gain. 

The study looked at bank-owned foreclosures, which are often left vacant and unkempt, in the year leading up to the examinations of participants.  The 100-meter radius covers roughly two properties on either side of the home, as well as properties directly behind and across the street.

This is just another reason to use a competent Realtor when looking to Buy.  A good Realtor will check out any foreclosure activity in neighborhoods you are considering.  Just another part of our job—making sure you won’t be facing any health-related problems due to foreclosures in the vicinity of your new home!

 

‘BOOMERANG’ BUYERS GET A SECOND CHANCE, BUT NOT GREATLY AFFECTING MARKET AT PRESENT

RealtorMag 6.16.14

A government program launched last summer by the FHA is helping former homeowners to step back into home ownership in a little as a year after a foreclosure or short sale.  The FHA’s Back to Work Program allows them to qualify for low interest rates with a minimum of 3.5% down payment. 

Applicants much show that the main culprit behind losing their home was that they lost at least 20 percent of their household income for at least six months.  They also much show they’ve worked to repair their credit for at least a year.

Since approximately 7.2 million homes were lost to foreclosure or short sale since the housing crash began, many of these former homeowners have been forced into renting as they rebuild their credit.  And, while opportunities to apply for a home loan are increasing, some of these former homeowners are hesitant to stop back in, according to housing analysts.

“Based on the fact that the home ownership rate isn’t rising again and demand for single-family rentals is historically high, the comeback Buyer is not a significant phenomenon in the market,” says Mark Fleming, chief economist at CoreLogic.  “Given the duration of the recovery, its’ likely that many of the initially foreclosed borrowers have repaired their credit and are now creditworthy, but the scale at which they will enter the market is not sufficient to significantly influence demand.”

 

MILLENNIALS ARE BUYING AND SELLING HOMES

Keeping current matters, 6.18.14

Millennials are a much higher percentage of the overall housing market than the public may realize, according to a recent study by the NAR entitled Home Buyer and Seller Generational Trends.

Contrary to what many believe, Millennials make up the largest percentage of all Buyers and a substantial percentage of all sellers.

Below is a chart illustrating results of the survey.

 

                           BUYERS

        

 

                         SELLERS

         

 

MAY SCORECARD SHOWS PROGRESS IN EQUITY AND HOME SALES

DSNews, 6.18.14

The U.S. Department of Housing and Urban Development and the U.S. Department of the Treasury recently released the May edition of the Obama Administration’s Housing Scorecard.  The report showed progress, noting growth in key indicators such as increasing equity and a rebound in the sales of new and existing homes.

Homeowner equity was up nearly $795 billion in Q1 2014, totally more than $108 trillion, according to the Federal Reserve.  May’s figure was the highest level since the second quarter of 2007 and equity has continued to rise since the beginning of 2012, up 73 percent through the first quarter of 2014.

HUD assistant secretary, Katherine O’Regan said that “May’s Housing Scorecard shows that the housing market recovery is picking up after the harsh winter months.  More homeowners have positive equity, foreclosures continue their downward trend and sales of new and existing homes are rebounding.  Whiles these are all good signs, it’s clear that we must remain committed to helping homeowners as they recover from the worst recession since the Great Depression.”

HUD cited figures from CoreLogic which found that the number of underwater borrowers dropped 48 percent, lifting more then 5.8 million homeowners above water from 2012 to the first quarter of 2014.  But despite first quarter gains of 300,000 homeowners who returned to positions of positive equity, approximately 12.7 percent of residential properties with a mortgage are still underwater.

New home sales were up 6.4 percent in April and foreclosure starts continued on a downward slope and are the lowest since December 2005.

Existing home sales also rose but are still below the pace of a year earlier, according to the report

 

SALZMAN real estate SERVICES TO BE HONORED ON THURSDAY

The Colorado Springs Business Journal is holding it’s annual “Best of Business” Awards this Thursday, June 26^th and I’m happy to tell you that we have been informed that we are one of three finalists for “Best Residential real estate Company” in Colorado Springs.  We understand that more then 25,000 votes have been cast and this is indeed an honor.

While we will be happy to accept this award, what’s more rewarding to us is the fact that we wouldn’t be in this position without you, our readers and clients.  Your loyalty and patronage means more to us than we can say.  Our biggest reward is knowing that we have done all we can to provide our clients with the best, most thorough and as stress-free as possible home buying or selling experience.

Our special brand of customer service is something we provide each and every client and we appreciate all the referrals and repeat clients.  Each transaction is tailored to the needs, wants, and budget of individual clients and we do the homework to make your homeownership dreams come true. 

If you or any family member, friend or co-worker is thinking of Buying or Selling, please call me at 598.3200 or email me at Harry@HarrySalzman.com and let us provide you or them with some of our award-winning service.

 

HARRY’S JOKE OF THE DAY 

 

 

 

 

June 9, 2014

 

HARRY’S BI-WEEKLY UPDATE

A Current Look at the Colorado Springs Residential real estate Market

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

                                             

JUST SOME PERSONAL THOUGHTS….

When you buy a home you are purchasing much more than what is represented on MLS.   This purchase in most cases is representing a “new LIFE” for you and your family.  That’s why I ask so many questions when I talk to my clients.  I am aware that my input and advice will be vitally important in the “life” of my clients for many years to come. 

With more than 40 years in the local real estate arena, I am aware of ALL the neighborhoods in the Pikes Peak area and what they have to offer.  My suggestions will depend on whether there are young children in the family or if it’s an “empty nest”, school districts, proximity to parks and playgrounds, high traffic or not, a number of foreclosures in the neighborhood….these factors all come into play when I make suggestions to my clients. 

I cannot re-emphasize enough the importance of dealing with a reputable real estate Broker when you begin the search for one of the biggest and probably most important financial decision of your life. 

Your future happiness is in the hands of your Realtor.  I take that responsibility very seriously because I know how important it is to match a family with the right home and right mortgage for them.  I give each and every client the personal customer service for which I’ve become known.  You can rest assured that when you call me, or refer someone you know to me, that I will do the homework necessary to make the homeownership process a happy one and as stress-free as possible.

Recent market conditions have been terrific for my clients and also for me personally.  Between April 30 and May 31, 2014 I have had 12 closings for single family clients on nine different properties.  On three of those closings, I represented both the Seller and the Buyer which I do for about 20% of my listings.  And this does not included closings for relocation clients outside of Colorado, so May was a very good month all around.

This represents an ALL TIME HIGH for me on monthly single family personal production in Colorado Springs and what can I say but….THANK YOU….THANK YOU….THANK YOU.  Your continued trust in me is the best reward of all.

 

                                        

NOW THE HOUSING NEWS….SOME GOOD, SOME NOT AS MUCH, BUT WITH THE RIGHT REALTOR YOU SHOULD BE JUST FINE IN EITHER CASE

In reading these full reports you will see that local prices were somewhat flat for the month of May; however, that’s not necessarily a bad thing.  Home prices here are VERY reasonable compared to many other areas of the country.  The fact that they are not rising significantly at the present time works to our advantage.  That means if you recently bought a home it is holding its value and should continue to increase in value, but at a slower rate than in the past few years.  Prices will hopefully stay very stable so that we won’t have the unrealistic “run-up” that occurred in the recent past.

Interest rates are almost “cheap”.  Current rates (which are subject to change hourly and/or daily) include 30-year fixed conventional rates at about 4.12%; 15-year fixed conventional rates at about 3.25% and 10-year fixed conventional at around 3.0%.  This is “new purchase” money only, but if you are in the market, now is a great time for the best mortgage rate.  If it makes financial sense, that 10-year fixed conventional is downright “cheap”.  FHA/VA mortgage rates at press time were 3.75% for a 30-year loan and 3.00% for a 15-year loan.  Again, “cheap” money. 

Another thing to keep in mind when reading the following reports is that fewer people are qualifying for mortgage loans due to the Dodd-Frank Bill that took effect on January 10, 2014.  This has been affecting residential sales nationwide and hopefully we will see some lessening of restrictions by mortgage lenders as they have been suggesting recently.

 

MAY LOCAL STATISTICS BASICALLY FLAT

Statistics provided by the Pikes Peak REALTORS Service Corp, or its PPMLS

These local stats include “all homes”—both resale and new homes built through May 31, 2014 as compared to May 31, 2013.

• The number of single family/patio homes sold is only .9% fewer than a year ago.
• New listings were 10.1% more than a year ago.
• The average sales price is 2.6% less than a year ago.
• The median sales price is about the same—.5% more than a year ago.

And now a look at the actual numbers.  To read the complete 10-page report, click here.  If you have any questions, as always, I’d be happy to answer them for you.

In comparing May 2014 to May 2013 in PPAR:                       

                        Single Family/Patio Homes:

• New Listings are 1,887 Up 10.1%
• Number of Sales are 1,124, Up 0.9%
• Average Sales Price is $243,230, Down 2.6%
• Median Sales Price is $216,250, Up 0.5%
• Total Active Listings are 4,009, Up 10.0%

                        Condo/Townhomes:

• New Listings are 210, Up 9.9%
• Number of Sales are 144, Up 33.3%
• Average Sales Price is $174,152, Down 11.1%
• Median Sales Price is $150,000, Up 12.0%
• Total Active Listings are 425, Up 0.2%

 

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

                                                Median Sales Price             Average Sales Price

Black Forest                            $330,000                              $342,382

Briargate                                  $311,885                              $326,668                    

Central                                      $164,500                              $176,220

East                                           $182,500                              $185,471

Fountain Valley:                      $200,000                              $198,293

Manitou Springs:                    $359,900                              $367,877

Marksheffel:                             $258,900                              $264,531

Northeast:                                $210,000                               $232,517

Northgate:                                $350,000                              $386,422

Northwest:                               $285,000                               $321,576

Old Colorado City:                  $177,500                               $197,714

Powers:                                    $217,000                               $224,429

Southwest:                              $318,750                               $335,565

Tri-Lakes:                                $340,000                                $395,771

West:                                        $235,000                               $294,882

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

 

QUARTERLY UPDATES AND ESTIMATES

College of Business and Administration, UCCS, Fred Crowley, Senior Economist

This report provides statistics for El Paso County in the areas of the Economy, Single and Multi-family Housing, MLS Activity, Foreclosures, Multi-family Market, Colorado Springs Airport Trends, Employment Trends and Wages, Sales Taxes and New Car Registrations.  To read the 9-page report in its entirely, please click here.

Some highlights include:

• Six of the Business Conditions Index’s ten components are lower than last year, however…
• Employment levels are higher than all recent benchmark periods.
• Real income has improved slightly.
• El Paso County needs to have a new spark to build on unique, sustainable, core, comparative advantages to drive it out of its economic malaise.
• Single-family permit activity slowed noticeably after February 2013, but 2013 turned out to be a strong year.  The trend this year indicates that 2014 permit activity may decline 5% below last year.
• Multi-family housing rose, driven by low vacancies, rising rents and a possible shortage of new multi-family housing.  The trend for 2014 is not clear at present.
• In MLS activity the trend in home sales continues to improve.
• Foreclosures were below the projected range.
• Enplanements at the Colorado Springs Airport continued their downward trend but new flights from Allegiant Airlines might be a start at stabilizing passenger activity at the airport.
• Sales taxes increased, with the largest percentage coming from hotels, building materials, furniture, appliance and electronics, utilities and medical marijuana.
• New vehicle registrations increased 15.4% in 2013 and sales of new cars are expected to continue at a brisk pace for the next 12-18 months.

 

HOME PRICE GROWTH SLOWS IN MANY METRO AREAS DURING FIRST QUARTER

National Association of Realtors, 6.2.14

In the most recent quarterly report from the National Association of Realtors (NAR) a strong year-over-year growth continued in most metropolitan areas, although the increases were somewhat smaller than in recent times.

The median existing single-family home price increased in 74 percent of the measured markets, with 125 out of 170 metropolitan statistical areas showing gains based on closings in the first quarter compared with the first quarter of 2013.  In thirty-seven areas, 22 percent had double-digit increases, and 45 areas recorded lower median prices.

In the fourth quarter of 2013, price increases were recorded in 73 percent of metro areas from a year earlier, with 26 percent rising at double-digit rates, but 89 percent of markets were showing year-over-year gains in the first quarter of 2013.

Lawrence Yun, NAR chief economist, said the price trend is favorable.  “The cooling rate of price growth is needed to preserve favorable housing affordability conditions in the future, but we will need more new-home construction to fully alleviate the inventory shortages in much of the country,” he said.  “Limited inventory is creating unsustainable and unhealthy price growth in some large markets, notably on the West Coast.”

The five most expensive housing markets in the first quarter were San Jose, CA metro area, San Francisco, Honolulu, Anaheim-Santa Ana, CA and San Diego.

The five lowest-cost metro areas were Youngstown-Warren-Boardman, Ohio, Decatur, IL Toldedo, Ohio, Rockford, IL and Cumberland, MD.

According to the report, Colorado Springs showed a negative growth in Median Sales Price year-over-year of -1.4%.  While this is not a positive, having a good Realtor can turn it into one for you as long as you price your property realistically and do what is considered necessary to prepare your property for listing.  These things will help make certain that your home is one that is actively looked at by prospective Buyers.

To see the 3-page report comparing all 170 metro areas in the survey, please click here.

 

GOOD NEWS FOR SELLERS

RISMedia 6.5.14

Despite weak demand and an infusion of new listings over the past two months, listings are selling nearly as fast as a year ago and prices are still rising.  

NAR reported that, with little inventory relative to demand, in April properties sold faster for the fifth straight month.

So, again, let me remind you.  If you have realistic expectations and price your home accordingly, it’s more than likely going to sell FAST. 

 

WHAT’S THE REAL REASON PEOPLE MOVED LAST YEAR?

HousingWire, 6.7.14, REALTORMag, 6.8.14

According to the U.S. Census Bureau, the Number One reason that 36 million people (aged one year and older) moved from 2012 to 2013 was because of the desire for a new home.  Family.  Work.  School.  Friends.  All of these were also cited when a new report put real numbers and reasons behind the question.

Forty-eight percent of those who moved last year cited housing as the main reason that contributed to their decision to move, followed by 30.3 percent who cited family.  19.4 percent said employment and 2.3 percent said “other”.

“Picking one reason can be difficult as moves are often motivated by many different, and oftentimes competing, factors,” says David Ihrke, a demographer for the Census Bureau and the report’s author.  “For instance, if one’s primary reason for moving is to be closer to work or having an easier commute, they may have to sacrifice other preferences.  This could include forgoing cheaper housing options or settling for a different neighborhood.  If they mainly want cheaper housing, they may have to deal with a longer commute.”

Key findings in the report include that males were more inclined to move for job-related reasons than females. In addition, married respondents were the least likely to move for family-related reasons.

The following chart illustrates all the reasons listed in the report.

Source:  U.S. Census Bureau

 

ADVICE FROM BANKERS TO POTENTIAL HOMEBUYERS

HousingWire 6.3.14

Found the perfect home?  Now it’s time to look at getting a mortgage!  Not the right order, according to the Independent Community Bankers of America (ICBA).

One of the biggest obstacles facing prospective homebuyers is obtaining credit.  And for first-time buyers, there are many obstacles that may prevent them from owing their little piece of the American dream.

According to John Buhrmaster, ICBA chairman, “with new mortgage rules and regulations in place, community bankers are available to help potential homebuyers by providing accurate and well-informed information.  Community bankers across the country can help their neighbors in the local community find mortgages that fit their financial needs, budgets and lifestyles.”

The ICBA suggests prospective Buyers do the following to make the home buying process a little easier for themselves:

1. Earn and spend

Know your monthly income and budget, including how much you spend on rent, utilities, entertainment, clothing, food and transportation.

2. Talk about it 

Discuss your finances with a planner at a bank before you begin looking for a home.  It is important to stay within your means when purchasing a home.

3. Have a paper trail

Gather and organize paperwork and documents.  Items you should have readily available include paycheck stubs, W2 forms, tax returns and bank and investment statements for the last two years.

4. What’s your FICO?

Check your credit report so you are aware of what your current credit score is before applying for a loan.  Credit reporting agencies must give you one free report annually.

5. Bad FICO?  Fix it

Maxing out credit cards or falling behind on other loan payments could create issues when applying for a mortgage. Keep tabs on your spending habits before applying for a mortgage, and don’t go on a spending spree afterwards either.

6. 30-year fixed?  Really?

Work with a banker to figure out how much you can borrow and which mortgage product is right for you.  Your local community banker can explain available mortgage options—including rate adjustments, fees and other loan features—so you are prepared for the loan closing and not surprised down the road.

7. Rates.  Rates.  Rates.

Learn what current mortgage rates are.  This will greatly impact your monthly payment.  A banker can explain this to you well before you set your sights on the perfect place.

8. You may get help

Check with your state, city and county government agencies for special first-time-homebuyer loan or grant programs available to assist with down payment and closing costs.

Just one more reason to work with a reputable real estate Broker.  One of the services I provide my clients is my relationship with a number of mortgage lenders and make certain that they get pre-approved prior to starting the home buying process.  This is a very important step that can save you time and money, not to mention heartache if you find the property you want is not the one that fits your budget.  My investment banking background is very helpful when it comes to finding the right mortgage for my clients.  If you are in the market, or know someone who is, please call me at 598.3200 or email me at Harry@HarrySalzman.com and let’s get the conversation started. 

 

SKY SOX TICKETS AVAILABLE

Just a reminder that I have 4 front row seats to all Sky Sox games available to you on a first-come-first-served basis.  Just give me a call and I’ll be happy to put the tickets aside for you.

 

HARRY’S JOKE OF THE DAY 

 

 

 

 

                                                           

May 27, 2014

 

HARRY’S BI-WEEKLY UPDATE

                        A Current Look at the Colorado Springs Residential real estate Market

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

 

                             

EVERY DAY IS MEMORIAL DAY…..

While the “official” observance was yesterday, I believe that every day is Memorial Day in the hearts and minds of those of us who understand its true significance.   My father and father-in-law both served with the members of the Greatest Generation and were among the lucky ones to come back and relate their experiences.  So many others, then and now, were not so fortunate and we owe them a tremendous debt of gratitude for the sacrifices they made in order for us to live in peace.  Those who gave their lives for our country are the true heroes amongst us.

 

THE TIME TO BUY IS NOW

Lots of reasons to BUY NOW and I’d like to share some of them with you. Total home ownership is right around 64.7% compared to 69.1% seven years ago.  Some of this can be attributed to foreclosures from the housing meltdown and some to the new mortgage loan regulations.  Whatever the reason, the situation is creating an increase in renters.  If you are wanting to sell and trade up, you might want to consider keeping your present home as a rental.  With historically cheap mortgage money and long term appreciation better than you could get elsewhere, this is an option worth considering if it makes financial sense to you personally.

Eric Belsky, Managing Director of the Joint Center of Housing Studies at Harvard University, revealed five financial reasons people should consider buying a home in his paper on homeownership entitled: “The Dream Lives On: the Future of Homeownership in America.”

1. Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money.  As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor.  Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity.  With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2. You’re paying for housing whether you own or rent.

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3. Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4. There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income.  On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5. Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom line?  Not only does homeownership makes sense for many Americans for social and family reasons, it makes sense financially.

 

HOUSING RECOVERY REGAINS SOME STEAM BUT REMAINS WEAKEST LINK IN ECONOMIC RECOVERY

The Wall Street Journal, 5.23.14, USAToday, 5.23.14, The Gazette, 5.24.14, inman.com, 5.21.14

The housing recovery regained momentum for the first time this year during the critical Spring selling season.  Sales of existing homes rose 1.3% in April to a seasonally adjusted annual rate of 4.56 million, according to the National Association of Realtors.  It was, however, 6.8% lower than the year ago level.

This comes after a particularly harsh winter nationwide and “we think the recent slump in home sales may now be in the past”, said Daniel Silver, economist at J.P. Morgan Chase.  The coming months are crucial for the U.S. housing market because families prefer to move to a new home in a new school district by the end of summer, among other reasons. 

On the positive side, the supply of homes in April increased from March while price gains eased—two trends that could help pull more Buyers into the market and boost sales further if they continue.

Lawrence Yun, chief economist of NAR expected the improvement.  “Some growth was inevitable after sub-par housing activity in the first quarter, but improved inventory is expanding choices and sales should generally trend upward from this point.”

“We’ll continue to see a balancing act between housing inventory and price growth, which remains stronger than normal simply because there have not been enough Sellers in many areas.  More inventory and increased new-home construction will help to foster healthy market conditions,” Yun said.

NAR President Steve Brown said that there was some heating of the market last moth.  “The typical time on market shrunk in April, with four out of 10 homes selling in less than a month,” he said. 

“Homes that show well and are properly priced tend to sell the fastest.  More housing inventory gives Buyers better choices, and takes the pressure off the buying process, which is a welcome sign, especially for first-time Buyers.”

Properties sold faster for the fourth straight month in April, reflecting the prolonged lag in inventory relative to demand.  The median time on market for all homes was 48 days in April, down from 55 days in March.  It was 43 days on market in April 2013.

Fannie Mae Chief Economist Doug Duncan thinks that improving financial and labor market conditions should also contribute to a rebound, with economic growth in April, May and June accelerating to an annual rate of 3 percent. 

The outlook for housing “remains more worrisome with existing-home sales, new-home sales, housing starts and multifamily housing all experiencing year-over-year declines despite improving consumer attitudes,” Duncan said.  “However, we anticipate a modest uptick in housing activity as the Spring and Summer selling and buying seasons get under way.”

Fannie Mae economists say that “given the current regulatory landscape, we believe rising employment and income are more likely to bolster housing demand rather than easing credit conditions.”

In March, existing homes were selling at the slowest pace (4.59 million units a year) since July 2012, and were down 6.6 percent from a year ago for the first quarter as a whole.

One bright spot, however, is the growing number of consumers surveyed by Fannie Mae who say it’s a good time to sell a home.  “As consumers become more confident in the selling environment and more supply enters the market, it will help to boost turnover,” Fannie Mae economists said.  “Leading indicators of home sales point to cautious optimism in the near-term outlook.”

Fed Chair Janet Yellen appeared before Congress several weeks ago and said that the recent housing slowdown “could prove more protracted” than expected.  While neither Yellen nor other surveyed economists expect a housing rebound that began in 2011 to reverse course, they say the turnaround will be more gradual, crimping economic gains in 2014. 

 

THE MAIN CULPRITS BEHIND THE HOUSING SLOWDOWN…AND A POSSIBLE SOLUTION FOR FIRST TIME BUYERS

RealtorMag 5.22.14, NAR, 5.22.14

Rising mortgage rates are the main culprit for the weakening in home resales this year and they could further dampen existing home sales, according to a new paper published by John Krainer, an economist at the Federal Reserve Bank of San Francisco.  He also cited other factors such as the fragile economic recovery and the retreating of investors who have slowed their market share as home prices rise. 

Fed Chair Janet Yellen cited “very slow household formation” as young adults saddled with student debt continue to live with their parents.  “My expectation is that as the job market strengthens…we’ll see household formation pick up, but it’s hard to know here what exactly the new normal is,” she said.

New mortgage lending regulations which took effect on January 10, 2014 have also made it difficult for many, especially first time homebuyers, to obtain mortgages. 

The FHA has recently announced a plan to expand access to mortgage credit for underserved borrowers according to Department of Housing and Urban Development Secretary Shaun Donovan. 

Donovan said that the FHA will launch a housing counseling program later this year.  The four-year, two-phase pilot program, called Homeowners Armed With Knowledge (HAWK) will offer a 50 basis point reduction in the upfront mortgage insurance premium and a 10 basis point reduction in the annual premium at the time of loan origination to first time home buyers who complete the program.  Loans that remain in good standing will also receive reductions, which could add up to thousands of dollars in savings for homebuyers over the life of their loan. 

 

5 REASONS TO HIRE A real estate PROFESSIONAL

keepingcurrentmatters, 5.20.14

Whether you are Buying or Selling a home, you need an experienced real estate Professional in your corner.  I’ve been telling you this for a long time, but today’s new rules and regulations makes For Sale By Owner (FSBO) more confusing and difficult than ever.

The reasons have not changed, but they have been strengthened in recent months as the market recovers.

1. What do you do with the paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing.  A true real estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream home, now what?

There are over 230 possible actions that need to take place during every successful real estate transaction.  Don’t you want someone who has been there before, who knows what these actions are, to make sure that you acquire your dream?

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home.  However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a real estate Professional. From the Buyer (who wants the best deal possible) to the home inspections companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to during the process.

4. What is the home you’re buying/selling really worth?

Not only is it important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market, but you also need someone who is not emotionally connected to your home, to give you the truth as to your home’s value.

According to the NAR, “the typical FSBO home sold for $184,000 compared to $230.000 among agent-assisted home sales.”

Get the most out of your transactions by hiring a professional.

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the Internet about home sales, prices, mortgage rates: how do you know what’s going on specifically in your area?  Who do you turn to, to tell you how to competitively price your home correctly at the beginning of the selling process?  How do you know what to offer on your dream home without paying too much or offending the seller with a low-ball offer?

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman”—Dave Ramsey

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one.  You need some one who is going to tell you the truth, not just what they think you want to hear.

Bottom Line?

You wouldn’t try to replace the electrical wiring in your home unless you were an electrician nor install new sinks or toilets unless you were a plumber.  Why would you want to make one of the most important financial decisions of your life with hiring a professional? 

Fortunately, if you’re reading this, you already know that answer.  You have me.  With my investment banking background and 40 plus years as a top producer in the local real estate arena, I’ve got you covered.  Whether you’re Buying, Selling or looking for Investment Income, I’ve got the pulse on the market and help make your dreams a reality.  Just give me a call today at 598.3200 or email me at Harry@HarrySalzman.com and let’s get the conversation started.

 

HARRY’S JOKE OF THE DAY 

 

 

 

 

May 12, 2014

HARRY’S BI-WEEKLY UPDATE

                         A Current Look at the Colorado Springs Residential real estate Market

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

               

                                       

 

LOTS OF HOUSING NEWS THIS MONTH

DSNews 5.2.14 and various other publications

As I’m sure you have seen, there’s lots of talk about the housing market in the news lately.  Some good, some not so much, but the one thing everyone seems to agree on is that as one of life’s biggest financial investments, homeownership is the way to go.  Home prices are increasing—not quite as fast as during the last couple of years—but they are still providing equity and helping those with homes that were at one time under-water. 

According to Zillow, “among positive factors for the short-term for housing are ongoing historically low interest rates.  For example, data from the Federal Housing Finance Agency (FHFA) indicate that the average contract interest rate on conventional mortgages was 4.21 percent in March.  This is higher than rates experienced for the first half of 2013 but remains low by historical standards.  On the other hand, affordability has been challenged by rising home prices.  The FHFA Housing Price Index has risen by 15 points over the last 25 months.”

Also from Zillow, a recent break-even horizon analysis came to an interesting conclusion:

• In half the U.S. metro areas, buying a home is a better financial decision than renting for buyers intending to stay in their home at least two years.

This is based on all costs associated with buying vs. renting, including upfront payments, closing costs, anticipated monthly rent and mortgage payments, taxes, utilities, maintenance and renovation costs.

“Rents keep rising, and mortgage interest rates remain very low, which is helping to skew the rent vs. buy decision toward buying for those who can afford it.  Many renters may ask themselves why renew a lease, when you can break even on the same home in less time in many areas,” said Zillow Chief Economist Dr. Stan Humphries.

On the other hand, “some renters still have to overcome significant hurdles before they can pull the trigger on homeownership.  For those renters who can’t qualify for a mortgage, or aren’t able to save enough for a down payment on a house, renting can be a more flexible, and often far less frustrating option,” Humphries added.

Some of the hurdles faced by first time homeowners have to do with the new regulations from the Dodd-Frank legislations that took effect on January 10, 2014.  It is the first of two rules that were intended to protect consumers by strengthening underwriting standards, but some are arguing that the rules will raise costs and reduce access for consumers (see a real-life incident concerning lenders further down).

If you’re a regular reader of my eNewsletter, you know where I stand.  I’ve been telling my readers for the last couple of years that the time to Sell and Trade Up or Down or Buy for the first time or Investment purposes is NOW.  Mortgages, while now hampered by new regulations, still afford low interest rates.  These are predicted to go up before year-end so that’s something to consider. 

Also, while your present home is continuing to increase in equity, so is the new home you might be looking to purchase.  By securing the lowest interest rate possible at least you can help keep your monthly payment lower. 

There’s a lot going on, both locally and nationally, and if you are wondering how this might translate to your personal situation or that of a family member—give me a call at 598.3200 or email me at Harry@HarrySalzman.com and lets see how we might put the current housing market situation to work for you. 

With my unique background in Investment Banking and more than 40 years in the local real estate market, I do the homework and provide all my clients with personal service tailored to their individual needs, wants and budget.  This includes working with qualified mortgage lenders who understand the new regulations and can help get your home to closing. 

 

APRIL LOCAL STATISTICS BEAT MANY OTHER HOUSING MARKETS

Statistics provided by the Pikes Peak REALTORS Service Corp, or its PPMLS

The Listing and Sales Summary from PPAR was released last week.  In case you’re wondering, February and March were never published so I could not share them with you, but apparently the new MLS system is now up and operating correctly so I should be able to continue sharing these statistics with you on a monthly basis again.

While local single family and patio home sales overall have declined 1.1 percent from a year ago April, there were several factors that most likely contributed to this.  One of the coldest winters in years kept many potential buyers at home rather than out looking at homes.  And many homeowners were still wondering whether to wait for prices to rise more or for interest rates to fall again.  We now know that interest rates, while still low, ARE rising and will continue to do so and that will more than likely help increase sales during the Spring Buying season. 

Many local Realtors feel that this year will be even better than last in terms of total sales, and if my recent experience in the Spring Sales frenzy is any indication, I’m in agreement with them. 

In a similar vein, local homebuilding starts were behind 2013 for the beginning of this year, and more than likely this was due to reasons similar to those stated above.

In spite of the above, some highlights comparing April 2014 to April 2013 still show that the housing market is in good shape:

• The number of single family/patio homes sold is only 1.1% fewer than a year ago.
• New listings were are about the same—only a 0.4% decline over a year ago.
• The average sales price is 2.5% higher than a year ago.
• The median sales price is about the same—only 0.7% less than a year ago.

And now a look at the stats.  To read the complete 10-page report, click here.  If you have any questions, as always, I’d be happy to answer them for you.

In comparing April 2014 to April 2013 in PPAR:                 

                        Single Family/Patio Homes:

• New Listings are 1719 Down 0.4%
• Number of Sales are 922, Down 1.1%
• Average Sales Price is $241,004, Up 2.5%
• Median Sales Price is $213,500, Down 0.7%
• Total Active Listings are 3,691, Up 9.3%

                        Condo/Townhomes:

• New Listings are 197, Down 7.5%
• Number of Sales are 94, Down 24.2%
• Average Sales Price is $153,657, Up 1.3%
• Median Sales Price is $136,500, Down 0.2%
• Total Active Listings are 385, Down 3.0%

 

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

                                                Median Sales Price               Average Sales Price

Black Forest                             $356,500                             $355,605

Briargate                                   $290,000                             $304,887                    

Central                                      $175,000                              $193,195

East                                           $165,500                              $170,135

Fountain Valley:                       $199,250                              $194,602

Manitou Springs:                     $290,000                              $265,000

Marksheffel:                             $239,900                              $247,314

Northeast:                                 $211,000                              $224,065

Northgate:                                $370,750                               $360,201

Northwest:                                $324,960                              $349,732

Old Colorado City:                  $195,500                               $205,882

Powers:                                     $210,000                              $209,269

Southwest:                               $230,000                               $294,834

Tri-Lakes:                                 $420,000                              $438,344

West:                                         $207,450                              $292,648

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

 

I CAN’T SAY IT ENOUGH…PLEASE USE A REPUTABLE real estate BROKER AND MORTGAGE LENDER

Today’s real estate transactions are more complicated than ever before and the importance of using a reputable, licensed Real Estate Broker cannot be overly emphasized.  A reputable broker does the homework for you.

We all know what we “think” our home is worth and to us it may be.  However, if you want to take advantage of today’s market, it’s important to know what it’s worth in relation to many factors, including local comparables, current interior and exterior conditions of the home and what it’s going to take to present the home in its best light. 

Oftentimes you need to be creative and innovative in order to get your home to closing.

That’s where I come in.  Part of my excellent customer service is helping you do all of the above and more. If you listen to my advice on what I believe to be your best options, you will be way ahead of the game.  This includes my relationship with mortgage lenders that can help make the difference of getting a loan to closing…or not.

A recent example:

As the listing Broker on a home, my Seller was presented with an offer from a “pre-approved” Buyer that was accepted.  However, the loan officer did not fully understand the new Qualified Mortgage (QM) qualifications and the Buyer was disqualified almost a month later.

The downside of the lender’s decision was not good news for my Seller.  At the time of the acceptance, the listed home was currently rented on a month-to-month basis.  Once the acceptance was signed, the Seller gave notice to the tenant, who vacated the home at the end of that month so that the Buyer could take possession after closing.  THAT DID NOT HAPPEN because the closing didn’t take place due to the mortgage lender’s late reversed decision.

However, the Buyer really wanted to purchase this home and I had a discussion with the Buyer’s Broker about how she might better select another lender more familiar with the QM rules.  Extensions of dates are short for “loan extensions”; however, following my advice, with a new, more informed lender, the Buyer was able to secure a mortgage within two weeks.  Extra timely service from an appraiser who went to the home yesterday, on Mother’s Day, will allow the closing to take place within a few days. 

Experienced Brokers understand the new lending regulations and I cannot emphasize that importance here.  If the Broker does not get their client to a credentialed and competent mortgage originator, the result can create problems on both sides of the sale, or at best, delay the closing date.

Enough said.

 

NOW FOR NATIONAL NEWS…

Some positive, some not, and some contradictory… but all interesting enough to share with you.

 

USAToday, 4.30.14:

5 Reasons Why the Housing Recovery is Stalling:

• Home Prices have risen more than 20% in the past two years, driven by the strong ’12 and ’13 real estate market.  They’re still about 20% below their 2006 peaks in many places.
• Higher Mortgage Rates, which rose almost a full percentage point last spring and summer.  They’re now higher than a year ago, but remain near historic lows.
• There’s a Low Supply of Homes for sale, which is contributing to higher prices.  That’s holding back some Buyers who can’t find homes at prices they want to pay.
• A new generation of potential first-time home Buyers is shouldering MORE STUDENT LOAN DEBT than any previous generation, making it hard for them to qualify for mortgages with today’s tougher lending standards.
• High unemployment, A SLOW HIRING PACE and modest economic growth are holding back the creation of new households and keeping people from Buying and Selling homes as they move for new jobs.

​​

Bloomberg Businessweek, 5.5.14:

The Housing Rebound Stalls

• After a decade of boom-bust-boom, the U.S. housing market is going downhill just when many economists thought it would be heading upward.
• Nationally, applications for mortgages are down 21 percent from this time last year, indicating fading demand during what is typically the busiest season for deals.
• Housing woes are slowing the economic recovery as residental investment, including construction, accounted for 3.1 percent of gross domestic product in the fourth quarter, which is less than half the peak contribution of 6.6 percent in 2006.  This was according to an April 28 report by Capital Economics. 
• According to Mark Palim, VP for applied economic and housing at Fannie Mae, “Now that national drivers are less significant to the market, you’re seeing reemergence of local economic factors.”
• The National Association of Realtors’ Housing Affordability Index, which compares household incomes with home prices and mortgage rates, fell 16 percent in the 12 months through February.  Lawrence Yun, chief economist for NAR said that “prices have climbed so fast in the past two years that Buyers have sticker shock.”  He projects sales will decline 2 percent nationally this year.  “Housing is a victim of its own success,” he says.  “It’s just that the fast price growth is not healthy.”
• Signs of a Slowdown: (change from a year earlier)

1. March existing home sales:  -7.5%
2. February new home sales:  -14.5%
3. Mortgage applications for the week ended April 25:  -21%

 

DSNews, 5.8.14, RealtorMag, 5.8.14:

Fannie Mae says Americans are Optimistic About housing market

In it’s April National Housing Survey, Fannie Mae said that with concerns about employment easing, Americans are increasingly optimistic about the housing market.  This optimism may foreshadow an upswing in housing activity through the summer months.

Survey results released last Wednesday show that 42 percent of Americans believe now is a good time to Sell a home.  And 69 percent believe it’s a good time to Buy one.  This is the third straight month that the percentage of respondents saying it’s a good time to Sell has increased. 

Half the respondents to the survey believe home prices will increase in the next 12 months, while 52 percent said they expect mortgage prices to go up in the same time period.

The encouraging thing is that fewer people are concerned about losing their jobs, which, according to Fannie, may encourage potential homebuyers to enter the market.  And 90 percent said their income is either more stable or has improved in the past year.  This was tempered by rising expenses, with 39 percent saying their household expenses are “significantly higher” than 12 months ago.

Doug Duncan, senior VP and chief economist at Fannie Mae said “Concern about job loss among employed consumers has hit a record survey low” and that consumer attitudes are at the most favorable level Fannie has seen in the survey’s four-year history and “consumer confidence is moving in a positive direction.”

 

The Wall Street Journal, 5.4.14:

Home Ownership Falls to Lowest Level Since ‘90s

A recent Census release shows that despite two years of recovery in the housing market, there are still fewer homeowners than before the recession. 

Some 64.8% of American families--74.4 million households—owned the homes they lived in during the first quarter of this year, down from 65.2% at the end of 2013 according to the U.S. Census Bureau.  That was the lowest level since 1995 and a significant drop from 2006, when a peak of 76.5 million households, or 68.9% were owners.

Reasons for the steady decline were familiar.  With the housing bubble burst, many Americans lost their homes to foreclosure when prices fell and exotic mortgages took their toll.  Job loss triggered a second wave of foreclosures.

A positive sign in the data, however, indicates that more young people are moving out of their parents’ homes and into rentals—a first step toward homeownership and an eventual recovery in the ownership rate.

 

SKY SOX TICKETS AVAILABLE

Just a reminder that I have 4 front row seats to all Sky Sox games available to you on a first-come-first-served basis.  Just give me a call and I’ll be happy to put the tickets aside for you.

 

HARRY’S JOKE OF THE DAY 

 

 

 

April 28, 2014

HARRY’S BI-WEEKLY UPDATE

                                 A Current Look at the Colorado Springs Residential real estate Market

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

             

                        

 

 

POLL:  AMERICANS PREFER real estate OVER STOCKS, GOLD

Realtor.Mag 4.21.14, Gallop.com/poll 4.17.14, Economists’ Outlook/Blog 4.17.14

Gallup’s April 3-6 Economy and Personal Finances Poll asked Americans to choose the best option for long-term investments:  real estate, Stocks and Mutual Funds, Gold, Savings Accounts and CDs or Bonds.

Results indicated that more Americans (30%) now consider real estate to be their best option for long-term investments.  In a 2011 poll, Americans choose Gold at the time when it was at its highest market price and real estate and Stock values were lower than they are today.  In the recent poll, Gold and Stocks were both named as the best long-term investment by 24% of those surveyed.

Bonds have been the least favorite choice for as long as Gallup has been asking the question and Savings Account and CDs were more popular in the past.  Before 2008, prior to Gold being a poll option and at a time when real estate and the Stock Market were tanking, Savings Accounts were the most popular long-term investment among Americans.

This year, with the housing market improving across the U.S. and home prices recently rising after a steep drop in 2007, almost one-third of Americans chose real estate over other options.  In 2002 during the real estate boom that preceded the mortgage crisis and prior to Gold being offered as an option, half of Americans said Real Estate was the best investment choice.

With Stock values improving in recent years, aided particularly by the bull market in 2013, the 24% of Americans who regard Stocks at the best option is also higher now, up from 19% in 2012.  “Still, Americans are modestly more likely to say real estate is the better investment today, perhaps because of the recent volatility in the Stock Market.”

It’s interesting to note that lower-income Americans are the only sub-group to favor Gold.  Those living in households with less than $30,000 in annual income, favor Gold over real estate by 3 percentage points, with Real Estate as their second most popular choice. 

Upper-income Americans are the least likely to name Gold, at just 18%.  They favor real estate (38%) and Stocks/Mutual Funds (30%), possibly because of their experience with these types of investments. 

And, as might be expected, thirty-four percent of Stock Investors are more likely to favor Stocks as opposed to the 13% of Americans that don’t own stock.

Young Americans (18-29) are about evenly split—with about one-quarter each saying real estate, Stocks, Gold and Savings Accounts are their best choice for long-term investments.  However, the 23% who said Savings Accounts is much higher than the percentage who gave this answer in older ager groups.

These differences could possibly be due to actual home ownership experience and familiarity with the real estate purchasing process.  Also, these individuals have largely become financially independent during the years of volatile housing and stock market returns so Savings Accounts may seem the best option for their age and experience.

Implications?  “With housing prices improving across the country, Americans are regaining faith that real estate is the best choice for long-term investments.  But home ownership is also associated with views of Real Estate as an attractive Investment opportunity.

Likewise, Stock values have been improving and Americans are more likely now than in the recent years to say Stocks are the best investment, though more still choose real estate.”

Those of you who have been reading my eNewsletter for awhile know where I stand on this issue.  I personally put my money where my mouth is and have consistently beat the Stock Market in terms of long-term gains. 

Economist and Yale professor, Robert Shiller, told CNBC last week that even though the housing market is showing some signs of slowing, the recovery still remains strong.

“There is a certain, substantial amount of momentum in the housing market—much more so than in the stock market,” he says.  “I think this boom we saw in the last year and a half in home prices has something to do with quantitative easing and the record-low mortgage rates.”

While there are certain signs of easing with mortgage rates predicted to rise and building permits softening, Shiller says he doesn’t see these factors derailing the housing recover.  In fact, Shiller, who co-founded the Case-Shiller Home Price Index, says the futures market is predicting 25 percent higher home prices in 2018.  “That seems like a possibility,” he told CNBC.

A recent post in the Economists’ Outlook/Blog stated that the real estate industry has a significant role in the U.S. Economy.  Historically, real estate and related industries have accounted for roughly 18% of GDP.  Record low mortgage rates and improved prices have boosted consumer confidence and spending on housing and relate goods and services—another possible reason for the Gallup poll’s results.

All of this---high consumer confidence, home prices on the rise, low available inventory and mortgage interest rates still historically low--- point to now being a great time to sell and trade up or look for buy for the first time or for investment property. 

If you, a family member or co-worker are in the market or starting to consider options, give me a call at 598-.3200 or email me at Harry@HarrySalzman.com and let’s see how I can help you make your dream a reality.

 

AND NOW A THING OR TWO ABOUT REALITY

With Spring Buying and Selling in full swing, I illustrated in my last eNewsletter how I handled three very different situations and turned them into a “win” for my clients.  If you missed this, you can check it out on my website Blog.  I’d like to share with you another example from this past week.

I had a home listed and a “rookie” Broker called with an offer.  The Broker wanted to use a “friend of a friend” to provide the mortgage lending to the client and while it was represented as “pre-approved”, the mortgage broker ultimately declined to finance the home.

The Buyer, while a client of the “rookie” Broker, was frustrated and called me, the Listing Broker and indicated that he wanted to come discuss the situation with me as he really wanted the listed home.  His Broker knew that he was coming to see me.  The Buyer needed an extension in order to find financing and I told him that the only way I would consider this was if he used a reputable, professional mortgage broker.  He asked me for recommendations and I offered some and—happy ending—it took some work, but he was able to get the financing and purchase the home he wanted.

Why do I tell you these “war” stories?  To help illustrate a very important point.  It is crucial, especially in today ‘s world of Qualified Mortgages (QMs) that you use an educated and experienced real estate Broker who understands what it’s going to take to get to closing and can help you get there.   In the illustrated case, errors in the inspection notice and the poor choice of lender ended up taking several weeks and resulted in a declined mortgage approval.  When he asked for my help, the Buyer got loan approval and closed within days.

Quite often, time is of the essence whether you are a Buyer or a Seller.  That’s where an experienced and knowledgeable Broker is of prime importance.  It can make the difference of you getting what you want or not.   And this is where my 40 plus years of experience comes into play.  Not only do I do the “homework” for you in advance of a Listing or a Sale, my Investment Banking background affords me the opportunity to find lending opportunities that may not available to others.  I do my best to help my clients get the best price—whether Buying or Selling.  When they listen to my suggestions, whether to do with home pricing and improvements or in making an offer and obtaining financing, most often it’s a ‘Win”. 

 

LOCAL QUARTERLY STATISTICS NOW AVAILABLE

Statistics provided by the Pikes Peak REALTORS Service Corp, or its PPMLS

I just received the Quarterly Indicators from the Pikes Peak REALTORS Services, Corp and as always, want to share them with you immediately.  As you know, we have not been able to provide monthly statistics for February and March due to changes in the MLS reporting that recently took place.  I’m not certain if this is a permanent change or not, but at least I can provide you with a quarterly overview of the local market and here it is.

You can read the 34 page report in its entirety to see the trends and check how your individual neighborhood is doing by clicking here.  Some highlights include:

An Activity Snapshot of All Residential real estate activity in El Paso and Teller Counties, comprised of single-family properties, patio homes, townhomes and condominiums—the one-year change:

• Properties Sold                     Down 9.8%
• Median Sales Price               Up 2.6%
• Active Listings                       Up 17.7%

Single-Family Market Overview (% change from First Quarter 2013 to First Quarter 2014):

• New Listings                         Down 0.5%
• Pending Sales                       Down 17.5%
• Sold Listings                         Down 10.2%
• Median Sales Price               Up 2.4%
• Average Sales Price             Up 2.5%
• % of List Price Received     Up 0.2%
• Days on Market                     Up 20.7%
• Affordability Index                Down 8.0%
• Active Listings                      Up 18.0%
• Months Supply                      Up 8.9%

Townhouse-Condo Market Overview (% change from First Quarter 2013 to First Quarter 2014):

• New Listings                         Down 9.0%
• Pending Sales                       Down 22.0%
• Sold Listings                         Down 6.2%
• Median Sales Price              Down 2.0%
• Average Sales Price             Up 6.5%
• % of List Price Received     Down 0.5%
• Days on Market                     Up 16.0%
• Affordability Index                Down 4.1%
• Active Listings                      Up 14.9%
• Months Supply                      Down 6.4%

There are several things that hampered the housing market in the first Quarter.

• One of the worst first quarters weather-wise in many years, hampering new home starts and preventing many homes from being seen or listed.
• New Mortgage Regulations went into effect on January 10, 2014, which forced many lenders to review and redo their application and/or approval process.

During the Spring refresh, Seller activity will be on the watch list since low inventory has been a national issue, as well as here locally.  Hopefully lenders are better able to deal with the new regulations and Brokers are able to direct their clients to the “right” lenders in order to get them pre-qualified, rather than simply pre-approved (which doesn’t translate to actual approvals as many Brokers are learning). 

Freddie Mac’s outlook for April is giving “mixed signals”.  It’s U.S. Economic and housing market Outlook for April notes that new home construction will increase by 18 percent, while home appreciation will moderate to an annual growth of 5 percent for 2014. 

Frank Nothaft, Freddie Mac VP and chief economist said, “We’re getting mixed signals as we start the Spring home buying season.  Tight inventory may pose significant challenge for home buyers in many markets across the country, which may result in higher home prices and sales being lower than expected.” 

He added, “This is good news for those markets that have room to run on the house price appreciation front, but it’s also going to increase the affordability pinch in many markets, especially along the country’s east and west coasts.  Two indicators that are supporting local housing activity are rising consumer confidence and declining unemployment rates.”

And even though consumer confidence has waned slightly due to an increase in interest rates, Freddie Mac found that confidence is tracking higher and noted, “March was at the highest level since January 2008.”

Speaking for myself, the Spring frenzy has started early and is moving ahead full-steam.  I’m finding that most all of my clients are able to Buy and Sell confidently and quickly when they take my advice to heart.  I know the local market and how to navigate my way through it without many unforeseen obstacles.  It’s very important to me to develop lifetime relationships with my clients and that’s why I take such pride in my “repeat customers.”  Whether it’s time to upsize, downsize, or simply Buy for Investment purposes, I strive to give the best customer service in the real estate market and have thousands of sales contracts closed to back this up.  So while the Spring market is underway, if you are wondering if now is the right time for you or your family, why not call me and let me help you in making this very important financial decision?

 

THREE REASONS TO SELL YOUR HOME THIS SPRING

Keeping Current Matters, 4.14

If you are hesitant about putting your home on the market here are several reasons to sell your present home sooner rather than later.

1. Demand is About to Skyrocket

The housing market is hottest from April through June and the most serious Buyers are well aware of this and start early in order to beat the heavy competition.  Many Buyers postponed their search due to severe weather this Winter and are eager to begin their search.  Sellers in markets where seasonal weather is never an issue must realize that Buyers relocating to their region will increase dramatically this Spring as these purchasers finally decide to escape the freezing temperatures of the Winters in the North.  Colorado Springs is one city where temperatures are more moderate than most other cold weather areas.  Also, Buyers with children are looking now in order to be settled prior to the new school year.

These Buyers are ready, willing and able to buy…and want to do so NOW.

2. There is Less Competition—For Now

Housing supply most always grows from the Spring through early Summer.  Add that to the fact that there is a growing desire for many homeowners to move, as they were unable to sell over the last few years because of negative equity situations.   Homeowners have seen a return to positive equity as prices increased over the last eighteen months and many of these homes will come on the market in the near future.

The choices Buyers have will continue to increase over the next few months.  Don’t wait until all the other potential Sellers put their homes up for sale.

3. There Will Never Be A Better Time to Move Up

If you are planning to move up to a larger, more expensive home, consider doing it NOW.  Prices are projected appreciate by approximately 4% this year and 8% by the end of 2015.  Moving to a higher priced home will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.  You can also lock-in your 30-year housing expense with an interest rate of about 4.5% right now.  Freddie Mac projects rates to be 5.1% by this time next year and 5.7% by the fourth quarter of 2015.

Moving up to a new home will be less expensive this Spring than later this year or next year.

So, there you have it.  I’ve been trying to provide you with the best scenarios so that you don’t get left out if you’re wanting to Sell and Trade Up. Whether it’s to a larger home or simply to a new neighborhood, now is the best time to start your search.  Call me and let’s get the conversation started to see if Spring Selling (and Buying) can work for you.

 

COST V. PRICE EXPLAINED

Keeping Current Matters 4.14

If you’re on the fence, just another thing to consider.

Freddie Mac’s most recent Economic Commentary and Projections Table predicts that the 30-year fixed mortgage rate will be 5.7% by the end of next year.

What does this mean to you?  Here is a snapshot of what impact these projected changes would have on the mortgage payment of a home selling for approximately $250,000 today:

Date                           Mortgage                 Interest Rate*                  P&I**

 

Today                          $250,000                     4.41%                            $1,253.38

 

End of 2015                $270,000                     5.7%                               $1,567.08

 

DIFFERENCE IN MONTHLY PAYMENT:  $313.70

*Average Commitment per Freddie Mac     **Principal and Interest Payment

 

SKY SOX BASEBALL TICKETS AVAILABLE

As most of you know by now, I have four fabulous season tickets to the Colorado Springs Sky Sox.  These are available at no charge to you, but on a first-come, first-served basis.  The Sky Sox have started out this year with a bang and you won’t want to miss out watching them from my front row dugout seats.  If you’re interested, please call me at 598.3200 and if available, I’ll be happy to give the tickets to you.

 

HARRY’S JOKE OF THE DAY (talk to me and your future will be aligned with mine!)

 

           

 

 

 

 

 

                                                            

April 14, 2014

 

HARRY’S BI-WEEKLY UPDATE

A Current Look at the Colorado Springs Residential real estate Market

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

             

                                                                               

HAPPY HOLIDAYS TO ALL WHO CELEBRATE

I’d like to take a moment to reflect on the significance of the two religious holidays that are happening this week.  Both remind us of the importance of FREEDOM, one of the basic principles upon which our great country was founded. 

It is my hope that everyone can appreciate the value of freedom and start working together and not against each other. Appreciation of our differences simply requires more understanding of what makes each of us unique. As this holiday season approaches...I wish you all peace and the freedom to be who you are and to have the freedom to practice whatever it is that makes you--you.

 

IS A HOUSING BUBBLE HERE ONCE AGAIN?

DSNews 4.1.14

When year over year price increases continue on a double-digit course despite recent slowdowns, the question of a housing “bubble” comes again to the forefront and it’s a question I’ve recently been asked by clients.

According to Jed Kolko, Trulia chief economist, the answer is both yes and no!  Kolko estimates that national home prices are still around 5 percent undervalued when examining long-term fundamentals like historical prices, incomes and rents.  While ongoing improvements in prices have brought the market close to a tipping point, he notes that it’s still a far cry from the 39 percent overvaluation in the first quarter of 2006.

“Even though recent double-digit price gains look unsustainable, current national price levels are not cause for alarm,” Kolko said in a blog post.  “Sharp price gains, like we’ve had in 2012 and 2013 are not the sign of a bubble unless price levels look high relative to fundamentals.”

He further added that “the slowdown in price gains make it less likely that we’re headed for another bubble.”

 

WHAT A GOOD real estate BROKER BRINGS TO THE TABLE

You want to sell your home and wonder why you need a reputable real estate Agent to help with this transaction?  I’m here to tell you how and why this can make a difference between heartbreak and success. 

When we need advice in a legal, medical, accounting or whatever situation, we go to the best lawyer, doctor, accountant, etc. that we can find.  Their professional help can save us time and money.  Oftentimes, we seek a second opinion and then make informed decisions based on the professional knowledge we received.

Well, your personal real estate situation is no different.  You need to seek the same level of professionalism in your Realtor that you would in any other professional.

Even forgetting the fact that there are so many “i’s” to dot and “t’s” to cross in negotiating your way through the real estate wars today, a reputable Real Estate Agent can make certain that you’ve done all you can to get your home in the best shape prior to listing.

One of the most important things to consider is pricing.  We all want to get the most money possible for our homes and oftentimes what we think our home is worth is not necessarily what the market will realistically sustain. 

Fixing up your home to put its best foot forward is important to do prior to listing.  The better your home shows, the better competitive advantage and the quicker it will sell. 

Let me share with you three recent success stories from the past three weeks.  All three home Sellers and their properties are in different price ranges and had different Buyer profiles but each Seller took the time to listen to my advice and went under contract in record time.

The listing prices of the three homes were $224,900, $400,000 and $659,900 and all three coincidentally were in the northwest area of Colorado Springs.

• Each of the three Sellers considered my thoughts as to who they might be looking for as Buyers of their respective homes. 
• Each Seller hired the appropriate “fix up” contractor for their price range.  Not all “fix up” contractors are best for all price ranges so knowing who to hire is important.
• All three homes had interior and exterior issues and I was able to help each Seller determine how much they needed to spend in order to receive a quick and reasonable sale.
• Each Seller took my suggestion for the listing price.  I provided each with market value analysis and comparables which they looked at and analyzed to come up with a price. 

One home was on the market 10 days, one for 4 days and one was on the market for less than 24 hours!

That, my friends, is why it’s important to list your home with a reputable real estate Agent.  The type of customer service I provide to each and every one of you is based on more than 40 years in the local Real Estate arena, along with my Investment Banking background.  I do the homework for you and try to make the process as stress-free as possible. 

While I’m talking about Selling a home here, as you know, I put the same detail and work into helping Buyers and Investors find what they want, too.  If you are in the market for any real estate transaction, call me today at 598.3200 or email me at Harry@HarrySalzman.com and let me show you how I can put my considerable knowledge to work for you.

 

COST OF LIVING IN COLORADO SPRINGS REMAINS BELOW NATIONAL AVERAGE

The Gazette

The cost of living in Colorado Springs just keeps getting better.  According to a survey from the Council for Community and Economic Research, last year it was 3.9 percent below the national average, which was slightly better than in 2012 when we were 3.7 percent below. 

The index for 2013 didn’t change much because half of the six components were lower and the other three were higher from a year earlier when compared with the national average.  Components measuring grocery items, transportation and miscellaneous goods and services were lower, while those measuring housing, utilities and health care were higher.

While the index does not measure inflation, it compares prices in more than 300 metro areas for 57 goods and services used or purchased by households where middle managers live.  It’s purpose is to help managers compare living costs when considering a move to another city.

 

A MILLION REASONS…OR POSSIBLY JUST A FEW HUNDRED THOUSAND…TO BUY LOCALLY

The Gazette

A report by Trulia, Inc. of the nation’s 100 largest metro areas ranked Colorado Springs seventh in terms of offering the most house for a $1 million price tag. 

You could fit four million-dollar homes from New York inside a million dollar property in Colorado Springs!  In the New York/New Jersey area a million dollars will get you just 1,489 square feet—the smallest in this survey.

While this is great news for Buyers interested in properties of this size and price range, what it means to the rest of us is that no matter what the price—homes in Colorado Springs are a relative bargain based on size in compared to many other metro areas.

 

DODD-FRANK REGULATIONS POSING A “SERIOUS CHALLENGE”

DSnews 4.9.14

Bankers are worried about lending and that fear is affecting who can qualify for mortgage loans based on the latest version of the Dodd-Frank mortgage regulations.

According to the results of the latest annual real estate Lending Survey by the American Bankers Association, loan officers are clearly showing signs of caution.  More than 80 percent of bankers surveyed believe that tightened Dodd-Frank rules will restrict credit, thereby narrowing the pool of candidates able to secure mortgages.

Regulation Z, which was implemented in January, prohibits lenders from making a higher-priced mortgage loan without regard to the consumer’s ability to repay.  This change led lenders to alter who they saw as viable mortgage loan candidates as they figure out how to do business within the confines of tighter controls.

Robert Davis, EVP of the American Bankers Association said, “The new mortgage rules are a serious challenge, especially in the near term, for mortgage lending.  The problem will last at least as long as bankers calibrate their compliance systems, and perhaps much longer.”

There are some Mortgage Winners and Losers because of this new regulation:

Mortgage Winners:

• Homeowners with solid income, lots of home equity, and excellent credit.  If you want to borrow much less than your home is worth and have great credit and plenty of income to pay your monthly bills, you’ll easily meet the new standards.
• First-time homebuyers.  Most FHA and many low downpayment loans will meet the new safe loan standards.  Those with marginal credit or other impairments that raise questions about their ability to repay a mortgage will likely face the same hurdles they faced before the rule.
• Homeowners whose lenders don’t treat them right.  If your servicer loses your payment, doesn’t answer when you write to ask questions, or forces you to buy expensive insurance you don’t need, things are looking up.  The new mortgage rules set standards for posting payments and answering your questions promptly, and stop mortgage lenders from forcing you to buy insurance you don’t need.
• Homeowners who don’t like to shop around.  In the past, lenders paid loan officers a bonus for pushing customers into higher-interest loans.  Now, lenders can’t do that anymore.  Plus, lenders who charge you more than 1.5% above the going interest rate will lose protection from lawsuits.

When you’re shopping, ask if you’re getting a “qualified mortgage”—that’s the official name for a loan that meets the new guidelines.  You’ll know that your loan is amongst the safest for you and within 1.5% of the rate most people with good credit are paying.

Added protections and tighter lending policies are presenting potential hardships for some people.  The new rule could restrict lending by at least 10% and higher in some regions, which can create difficulties in our economic recovery says Jeff Kibbey, primary legal counsel for Century Mortgage Company.

The future of homeownership depends on greater access to credit.  “Over the past 8 years, homeownership in the U.S. has decreased while many in the growing population have turned to renting instead of buying a home,” said NAR’s chief economist, Lawrence Yun.  “We need to ensure that good, creditworthy renters can someday have the appropriate access to credit so they can build equity through homeownership.”

Mortgage Losers:

• Minorities and modest-income Americans.  Credit continues to be so tight that responsible Buyers are having trouble attaining homeownership, Yun said.  Homeownership among African-Americans has fallen to just above 43%, down from just under 50% in 2004 and African-American net worth has been cut in half due to higher unemployment and the foreclosure crisis.
• Owners and buyers of higher-priced homes in high-cost areas.  If you’re Buying or Selling a higher-cost home, finding a mortgage can by costly if the home’s value is more than the FHA or Fannie Mae and Freddie Mac loan limits of $271,050 (FHA) to $414,000 (Fannie/Freddie) in lower-cost areas and $625,500 (for both) in the highest-cost areas.

If your mortgage is for more than the limits, you (or your home’s Buyers) will need a jumbo loan, which usually means a FICO mortgage credit score of 720 or better and putting as much as 20% down or buying private mortgage insurance.

More people than ever could be in this situation:  Buyers in more than 300 counties face FHA loan-limit reductions greater than 10% and in some markets, the biggest FHA loan size will be cut in half, Yun said.

• Middle-Income Americans who fall outside the new guidelines.  First-time homebuyers trying to purchase a $350,000 house aren’t going to have a lot of loan options if they can’t get an FHA or Fannie/Freddie guaranteed loan,predicts Bankrate.com senior financial analyst Greg McBride.

Those with bigger bank accounts, say a homebuyer purchasing a $900,000 home, won’t have the same difficulties.  That richer borrower is an appealing customer for related financial products so a bank is more likely to give him a loan that falls outside the new guidelines to land him as a customer.

• Single homebuyers.  Dual-income households tend to have higher credit scores because they have a second paycheck to fall back on in a financial crisis.  Restrictive mortgage lending standards favor higher credit scores.
• Mortgage borrowers with fluctuating income who have had a bad year, or two, including business owners, commissioned salespeople, or executives who didn’t get that big bonus.  There’s a new emphasis on ability to repay and that starts with proving you have steady income.
• Mortgage borrowers with lots of debt.  If your car payments, student loans, or other installment debt take up more then 43% of your income, and can’t qualify for an FHA or GSE loan, you won’t meet the new lending standards, so you may have a hard time finding a mortgage.

What does all this mean to you?  Well, it’s not getting any easier to obtain a mortgage, however; having me in your corner with my connections to qualified mortgage lenders, it’s easier to find out exactly what it’s going to take to make that homeownership dream a reality.  No matter which category you fall into, give me a call and let’s see how we can help you navigate through the mortgage lending wars and obtain a qualified mortgage.

 

ON A GOOD NOTE…LOWER MORTGAGE RATES HELP SPRING BUYING

DSNews 4.11.14

With the prime Buying season in full swing, a bit of good news for consumers is that mortgage rates fell a bit last week, according to reports from Freddie Mac and Bankrate.com.

In its weekly Primary Mortgage Market Survey, Freddie Mac reported the 30-year fixed-rate mortgage (FRM) averaging a rate of 4.34% for the week ending April 10, a decline from 4.41% the previous week. 

The 15-year FRM last week averaged 3.38%, down nearly a tenth of a percentage point from early April. 

So while home prices are continuing their upward trend which may cause a bit of “sticker shock” to Buyers, this decline in mortgage interest rates helps ease the shock a bit.  As always, though, if you are looking to Sell and Trade Up or Buy for first time or Investment purposes, NOW is a very good time.  Prices are not coming down, inventories are not growing and mortgages are certain to go up, so don’t sit on the fence if you are wanting to get what you are looking for in the real estate market.

 

HARRY’S PHILOSOPHY OF THE DAY

 

 

 

 

 

March 31, 2014

 

HARRY’S BI-WEEKLY UPDATE

                            A Current Look at the Colorado Springs Residential real estate Market

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

                                           

SPRING HAS SPRUNG...SORT OF

More like a trampoline than straight up, but Spring is certainly trying its best to arrive.  However, the Spring real estate Buying and Selling season started early this year for my clients.  I’m not certain if it’s due to light inventory, rising home values or fear of increased mortgage interest rates but we’ve seen a sort of frenzy in the last month that appears to be fueled by at least some of these reasons.

Spring is the traditional selling seasons for lots of reasons, prime among them the fact that families like to relocate after the finish of a current school year and prior to the start of a new one.  I’m finding that many of my Buyers and Sellers are among that group and lower inventories are pushing them to start a bit earlier this year. 

Some things I’ve recently read:

“We had ongoing unusual weather disruptions across much of the country last month, along with the continuing frictions of constrained inventory, restrictive mortgage lending standards, and housing affordability less favorable than a year ago,” says Lawrence Yun, NAR’s chief economist.  “Some transactions are simply being delayed, so there should be some improvement in the months ahead.  With an expected pickup in job creation, home sales should trend up modestly over the course of the year.”

Housing starts were mostly flat in February, due in part to inclement weather.  However, according to Doug Duncan, Fannie Mae’s chief economist, the housing market is expected to show a relatively strong performance beginning with this Spring season.

Inventories of homes for sale have increased 10 percent year-over-year which signals Seller optimism according to realtor.com’s latest National Housing Trend Report, which tracks 146 markets. 

Colorado Springs is number 72 in the cities tracked by this report—almost dead center.  Some important things to remember include the fact that our home prices did not fall as sharply or as low as many other cities so we did not have as much equity to recover.  We also did not have the large number of foreclosures that many other cities experienced. 

The good news for us from that report is that the median home price in the Colorado Springs area is up 6.7 percent year over year and 2.2 percent month over month (yes, even with bad weather!)  Our local inventory is down 12.4 percent year over year and 15.9 percent month over month.  The median age of inventory is 89 days, up 17.1 percent year over year, but down 6.3 percent month over month.

Some important things to consider if you’ve wanted to Buy or Sell or simply on the fence:

• Start early and be sure to interview “competent” lenders and get a “pre-approval” letter.  That “lender approval letter” should be included with the offer to purchase a home.  A recent listing of mine had an offer that included such an unprofessional “pre-qualified” letter from the lender that after I explained it to my client, the offer was rejected.
• Be realistic in pricing your home.  This will help it sell faster and avoid back and forth counter offers. 
• Be open to buying in neighborhoods you might not have considered.  With low inventory, sometimes it pays to look in areas you had not previously considered.  You never know what you might find there.
• Mortgage rates are going up.   It’s going to happen, so if you’re thinking about it, now’s the time to save on your house payment.  Also—be prepared to provide more documentation to your mortgage lender than in the past due to the new regulations that went into effect in January.
• Local inventory is lower and the “best” priced homes go quickly depending on price range and location.  You might sell your home quickly and if you are looking to Trade Up, know what you want, need and can afford so that you can find your next home while there are more choices available.

Home Buying and Selling is not quite as simple as it once was, and that’s where it’s extremely important that you choose a competent real estate Agent to help you navigate through the home Buying and Selling “wars”.

If you’re reading this, you’re one of the lucky ones because you’ve got ME.  With my investment banking background and forty plus years in the local real estate arena, I’ve got the credentials and experience to help you make the right decision for your family.  Whether you want to downsize or upsize or simply move to a new neighborhood, I’ve got the knowledge to provide expert advice that will make the process as stress-free as possible.  Call me today at 598.3200 or email me at Harry@HarrySalzman.com and let’s talk.  Spring is here and it’s best to get ahead of the “frenzy” if you can.

 

SOUTHERN COLORADO ECONOMIC FORUM’S QUARTERLY UPDATES & ESTIMATES

Southern Colorado Economic Forum February 2014

The latest update on the El Paso County Economy, including housing trends, was published on March 27, 2014 and you can click here to read the 10-page report in full.  Here are some of the highlights I thought you would find interesting:

• Single-family permit activity, while slower than February 2013, was still strong--up approximately 21.4% (475 units).  The year 2014 is expected to have a more modest gain of about 10 percent.
• The trend in home sales continues its upward trend and through December 2013 there were 1,648 (18.2%) more homes sold than in 2012.  While not setting records, this is a considerable gain over the weak sales trends of the previous five years.  Rising mortgage rates, low job growth and declining real income in El Paso County will be the challenge for 2014 homes sales to grow more than 5-10 percent.
• The home supply grew by 3.3 percent while sales increased 18.3 percent, suggesting that demand exceeded supply.  The net effect was average prices increased by 7.1 percent in 2013.
• Foreclosures were well below the Forum’s projections and additional declines are expected in 2014.

The next several sections of the report include:

• Colorado Springs Airport Trends
• Colorado Springs Sales Taxes
• New Car Registration Trends
• Employment Trends and Wages
• Personal Thoughts about our Employment Base

It is with pleasure that Salzman real estate Services, a supporter since the Southern Colorado Economic Forum was created by the UCCS College of Business in 1996, is able to share these types of statistics and forecasts with you as soon as they become available, each and every quarter.  I would be happy to answer any questions you might have concerning the detailed reports and how they might affect you personally or any question you might have concerning Real Estate in general.

 

BUYING V. RENTING?

Keeping Current Matters 3.23.14 

A report released by Trulia last week explained that homeownership remains cheaper than renting in all of the 100 largest metro areas by an average of 38%.

Other interesting findings:

• Even though prices increased sharply in many markets over the past year, low mortgage rates have kept homeownership from becoming more expensive than renting.
• Some markets might tip in favor of renting this year as prices continue to rise faster than rents and if—as most economists expect—mortgage rates rise, due both to the strengthening economy and Fed tapering.
• Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying—and rates haven’t been that high since 1989.

What’s this mean to you?  Buying a home NOW makes sense.  If you rent, your housing expense will only continue to rise (good news for Investment Buyers, though).  Locking in a mortgage rate at today’s prices will save you money as rates are not going to get any lower. 

It’s tougher for first time buyers in today’s market, but it’s NOT impossible.  Give me a call and let’s see what we can do to help make homeownership a reality.

 

3 MAJOR THINGS YOU NEED TO KNOW ABOUT THE 2014 NATIONAL housing market

HousingWire 3.23.14

Veteran housing economist, David Berson, gave his opinion on the near-term future of the housing markets:

Number 1:  2014 should prove to be the strongest year for housing activity since before the Great Recession:

• 2014 should be the year when activity reaches the highest level since 2006/2007.
• An improved job market, with employment growth accelerating and unemployment rates declining is propelling this market.
• People buy homes when their job and income prospects improve—even if it’s more expensive to do so—rather than buy when it is inexpensive to do so but they’re worried about keeping jobs.

Number 2:  Demographics should start to favor housing activity:

• The demographic most affecting the housing market is household formations.  These formations are affected by the job market as people “double up” when worried about the job and income-earning prospects.   Since the Great Recession, many young adults are still living with their parents.
• With the increasing job market, there is a pent-up demand for households.  Both parents and those young adults living at home look forward to seeing themselves in their own households.
• There is a current shortage of about three million households and beginning in 2014 the pace of household formations should accelerate to above-trend pace for several years, pushing up housing demand.

Number 3:  Mortgage availability shouldn’t worsen and may improve.

• While mortgage credit isn’t as easy to get as it was during the housing boom, mortgage availability has increased slightly in comparison to recent years.
• The government or government-sponsored share of mortgage lending has climbed to more than 90 percent in recent years and while that in an untenable situation in the long run, it is unlikely to change much this year.
• Qualified Mortgage lending rules from the Consumer Financial Protection Bureau exempt home mortgages that qualify for purchase or securitization from Fannie and Freddie.  As a result, mortgage lenders won’t have to tighten their mortgage-underwriting requirements in response to QM as long as they sell their loans to the GSEs.

Just some things to consider when deciding whether 2014 is the right time for you to Sell and Trade Up or Buy for the first time or for Investment purposes.  There’s a lot of information coming from a lot of different sources, but most of them are saying that this year is still a great time to jump in the real estate market.

 

FANNIE MAE AND FREDDIE MAC ARE WINDING DOWN

RisMedia 3.20.14

As I’m sure many of you are aware, there is a bipartisan proposal that seeks to wind down mortgage giants Fannie Mae and Freddie Mac and completely overhaul the nation’s mortgage system. 

According to Don Frommeyer, President of NAMB (The Association of Mortgage Professionals), “A change in the mortgage system will be a welcomed change across the board as long as this function does not increase the cost to the consumer.  In the past 5 years, the cost to the consumer has increased largely due to the changes that have been made in the mortgage market.  We need to help consumers going forward.”

“With the proposed changes, Fannie and Freddie would be replaced with a federally insured mortgage system.  Investors will pay a fee to ensure insurance for mortgage securities they buy and potential homeowners will have the assurance that their mortgages are backed by strong capitol,” Frommeyer added.

The bill, proposed by Senators Tim Johnson and Mike Crapo, is still a long ways off from being passed or implemented but many feel this is necessary to prevent another housing crisis or mortgage fiasco. 

I’ll keep you abreast of this proposed legislation and the implications it could have on you.

 

COLORADO SPRINGS WATER EFFECIENCY REBATES AVAILABLE

I received an email from Frank Kinder, Sr. Water Conservation Specialist for Colorado Springs Utilities who wanted me to remind our local readers that they can save water indoors by installing  WaterSense approved toilets and can get rebates of $75 for up to 4 fixtures per home.  They will even recycle the old fixtures for you.

CSU also offers irrigation rebates for controllers, heads and nozzles.  So if you’re ready to remodel or just want to save some cash, check with CSU to see how you can “make every drop count.”

 

HARRY’S PHILOSOPHY OF THE DAY

ONE CHOICE

You’re always One Choice away from changing your life

One…

One tree can start a forest,

One smile can start a friendship,

One hand can life a soul,

One word can frame the goal,

One candle can wipe out darkness,

One laugh can conquer gloom,

One hope can raise our spirits.

And...one choice can change your life.

Think about that.  One choice, just one, can change

your life forever.  Simply put, your life today is what

your choices have made it, but with new choices, you

can change directions this very moment.

Something to think about as you begin a new week.

 

 

 

 

 

 

 

March 17, 2014

HARRY’S BI-WEEKLY UPDATE

                                 A Current Look at the Colorado Springs Residential real estate Market

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

             

                                              

 

YOU DON’T NEED LUCK WITH ME AS YOUR REALTOR

Buying and Selling real estate can sometimes be a matter of luck.  Finding the right property, setting the right price and navigating your way through all the paperwork required just to get a property listed can be tricky. That doesn’t even take into consideration obtaining the best mortgage lender for your needs and getting to closing. 

On St. Patrick’s Day, let me assure you of one important thing—you don’t need any more luck--you’re already multiple steps ahead of the game because you have me as your advocate when it comes to all your real estate needs. 

With my Investment Banking background and 40+ years in the local real estate arena, I will always provide each and every one of you with the quality customer service for which I’ve become known. No matter whether you are Selling and Trading Up, Buying for the first time or for Investment purposes, I will always take the time to help you decide what’s best for your individual needs, wants and budget. 

So while you MAY need luck when it comes to winning the Powerball or Lottery, when it comes to one of the biggest financial decisions you’ll ever make—you’ve got all the luck you need because you have me.

 

FEBRUARY LOCAL STATISTICS STILL UNAVAILABLE

As I mentioned in my last eNewsletter, the local PPAR statistics for February were delayed due to a new MLS reporting system. Thanks for your inquiries—it’s nice to see this interest from my readers.  The stats are still unpublished and I will get them to you as soon as they are available to me.

 

A FEW OF MY THOUGHTS ABOUT “TIME”

I often get asked about the “right” time to deal with real estate and my standard answer is that there is NO standard answer.  When it comes to “time” it’s strictly an individualized thing.  So, I put together a list of things that you might want to consider and/or ask yourself when thinking about “time” when it comes to real estate.

• Is it “time” to take the new found equity in your current home and use it to trade up or move to a new neighborhood?
• Is it a good “time” to Buy but retain your current home as a Rental?
• Is it “time” to trade up for personal and family reasons to the home of your dreams while the mortgage rates are still relatively low?
• Is it “time” to change homes due to personal lifestyle changes, such as moving to a single story home from a multi-story, or downsizing or upsizing due to decreased or increased family size?

These are questions only you can answer.  Remember—there’s no right time or right answer—and there are always many questions when it comes to real estate investments.  That’s where I come in.  Once you’ve found out if it’s the right “time” for you, I can help make your answers a reality.  Sometimes it’s simply a matter of finding out whether or not it’s financially a good “time” for you.  Those are areas of my expertise and I’m simply a phone call or email away and will always have the “time” for you.

 

AMERICANS MORE CONFIDENT ABOUT BUYING

Keeping Current Matters

According to the Fannie Mae January 2014 National Housing Survey, two categories reported all-time survey highs:

• 52% of respondents thought it would be easy for them to get a home mortgage today
• 70% of respondents said they would buy if they were going to move

Doug Duncan, senior vice president and chief economist at Fannie Mae explained what this could mean to the real estate market moving forward:

“A majority of consumers now believe that it is getting easier to get a mortgage.  For the first time in the National Housing Survey’s three-and-a-half-year history, the share of respondents who said it is easy to get a mortgage surpassed the 50-percent mark.   The gradual upward trend in this indicator during the last few months bodes well for the housing recovery and may be contributing to this month’s (February’s) increase in consumers’ intention to buy rather than rent their next home.  The dip in overall home price expectations, though notable, is consistent with our view of moderating home price gains this year from a robust pace last year, while positive trends in perceptions about the economy and personal finances over the next year support our view of stronger growth in the broader economy.”

Consumer confidence at this point is good news considering the increasing home and mortgage interest rate pricing.  Hopefully this trend will continue in February’s stats as higher interest rates and new mortgage regulations start kicking in. 

The bottom line is still the same.  If you are looking to Sell and Trade Up or Buy for the first time or Investment purposes….don’t wait around for better prices.  While home values will rise slower than in the past few years, they WILL continue to rise and mortgage rates will definitely rise.  So while your present home continues to increase in equity, so will the next home you might want and with higher interest rates….you’re going to pay more.  And with inventory down, it’s best to start your search now so that you are not disappointed with availability in the neighborhood or price range you want. 

If you or any family member, friend or co-worker has been waiting for the “right” time, why not call me at 598.3200 or email me @ Harry@HarrySalzman.com and let’s see if it’s worth waiting or if it’s time to start the ball rolling.

 

HOUSING PREFERENCES DRIVEN BY GENERATIONAL DIFFERENCES

RealtorMag 3.12.14, RisMedia, 3.14.14

A 2014 NAR Home Buyer and Seller Generational Trend study indicates that younger home Buyers tend to view their home as a strong investment while older Buyers tend to view their homes as a match to their lifestyle. 

The survey provided an in-depth look at the generational differences of recent home Buyers and Sellers.

According to the survey, the largest group of recent Buyers is millennials, those under the age of 34, who comprised 31% of recent home purchases.  Gen X Buyers, born between 1965 and 1979, accounted for 30% of recent purchases and younger boomers, born between 1955 and 1964, accounted for 16%.

“Given that millennials are the largest generation in history after the baby boomers, it means there is a potential for strong underlying demand,” says Lawrence Yun, NAR’s chief economist.  “Moreover, their aspiration and the long-term investment aspect to owning a home remain solid among young people.  However, the challenges of tight credit, limited inventory, eroding affordability, and high debt loads have limited the capacity of young people to own.”

The NAR study showed the median age of millennial home Buyers as 29 and the median income as $73,600.  The typical purchase was an 1,800 square foot home costing around $180,000.

Gen X Buyers, in comparison, had a median age of 40 and a median income of $98,200 while their typical purchase was a 2,130 square foot home costing $250,000.

Multi-generational households, those consisting of adult siblings, adult children, parents and/or grandparents, represented 14% of all home purchases.  These households were largely concentrated among middle age Buyers, with 22% of Younger Boomers identified as a multi-generational household.

Reasons for multi-generational households included:

• Adult children moving back home
• Cost Savings
• Health or care-taking of aging parents
• Spending more time with aging parents

Other findings from the study include:

• 87% of Buyers age 33 and younger consider their home purchase a good financial investment compared to 74% of buyers 68 and older
• Millennials were more likely to buy in an urban or central city than older boomers
• Younger Buyers tended to place higher importance on commuting costs than older generations.  Older generations tended to place more emphasis on energy efficiency, landscaping, and community features
• Millennials plan to stay in the home for 10 years while the baby boom generation plan to stay for 20 years
• Younger Buyers tend to move to larger, higher-prices homes, but “there is a clear trend of downsizing to smaller homes among both younger and older baby boomers and the Silent Generation (those born between 1925 and 1945)”
• 79% of Older Boomers purchased an existing home, compared with 87% of Millennials

Prior to purchasing, 62% of Millennials rented an apartment or house and 20% lived with their parents, relatives or friends.  Younger Boomers and earlier generations mostly owned their previous residence, with older Buyers much more likely to have been homeowners.

As you can see, folks of all ages are now attempting to become homeowners.  With the current obstacles of low inventory, higher prices and mortgage interest rates, along with the new lending regulations, it’s going to get tougher for some to achieve their homeownership goals.  That’s why it is more important than ever to use a qualified real estate Agent for assistance. 

As YOUR Agent, I’m your “go-to” guy.  I do the homework to help make the process as stress- free as possible for first time Buyers as well as those wanting to Sell and trade up or Buy for Investment purposes.  Call me today and let me help you determine the best possible scenario for you.

For those looking to Buy for investment, as you can see, the need for rentals is going to grow along with the higher pricing on homes and interest rates.   In many cases, if it’s financially feasible and you are looking to Sell and trade up, you might consider keeping your current residence as a rental.  These are just some of the options we can discuss when you contact me.

 

FLOOD INSURANCE AFFORDABILITY BILL WILL HELP

NAR President Steve Brown issued the following statement on March 13:

“Realtors applaud the U.S. Senate for passing the Homeowner Flood Insurance Affordability Act, H.R. 3370, to curb flood insurance hikes for homes and commercial properties.

We appreciate the Senate’s swift action on the legislation, which is a responsible and balanced solution to the skyrocketing flood insurance premiums affecting residential and commercial properties that were unintentionally triggered by the Biggert-Waters reforms to the National Flood Insurance Program.”

He went on the praise the bill for the relief it will bring to businesses and homeowners nationwide who have experienced financial hardship due to extreme premium increases. 

Hopefully this Bill will help all of you who found yourselves with higher flood insurance premiums due to the floods of recent times, nationally and most especially here in the Colorado Springs area.

 

MORTGAGE RATES BUMPED UP LAST WEEK

For the week ending last Friday, Freddie Mac reports the following national mortgage rate averages:

• 30-year fixed-rate mortgages:  averaged 4.37%, with an average 0.6, rising from last week’s 4.28% average.  A year ago at this time, 30-year rates averaged 3.63%.
• 15-year fixed-rate mortgages:  averaged 3.38%, with an average 0.6 point, increasing from last week’s 3.3.2% average.  Last year at this time, 15-year rates averaged 2.79%.
• 5-year hybrid adjustable-rate mortgages:  averaged 3.09%, with an average 04 point, inching up from last week’s 3.03% average.  A year ago a this time, 5=year ARMs averaged 2.61%.
• 1-year ARMs:  averaged 2.48%, with an average 0.4 point, dropping from last week’s 2.52% average.  A year ago, 1-year ARMs averaged 2.64%.

So, with Spring buying already underway, it appears that increasing mortgage rates will be there to greet you.  It’s not likely to get better, and most economists are predicting at least 5% on 30-year fixed rate mortgages before the end of 2014.  If you’ve been waiting for the right time to Buy…it’s here. 

 

SOME INTERESTING FACTORS IN relocation

Mobility, March 2014

Several hundred relocation and human resource professionals were asked and answered:

“If you were being transferred, what would you consider the most important factor before accepting the new job assignment?

• 38% -- My spouse’s/family’s happiness while on assignment     
• 22% -- Pay raise/new responsibilities
• 22% -- Potential for career advancement
• 13% -- Location
•   5% -- Length of assignment

As a relocation specialist, a good part of my job entails helping make the move as easy as possible for the whole family, not just the person being relocated for job purposes.  This might mean a neighborhood that’s family friendly or a school district known for the specific needs or talents of the students in the family.  I pride myself on knowing that my success in working to make the whole family happy will make the job transfer a happy one for everyone involved.   And as we all know, a happy family situation makes for a happy employee. 

 

HARRY’S JOKE OF THE DAY (can you tell I just got back from Colorado Rockies Spring Training in Scottsdale, AZ?)

 

 

March 4, 2014

 

HARRY’S BI-WEEKLY UPDATE

                                 A Current Look at the Colorado Springs Residential real estate Market

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

             

                                             

SPRING IS IN THE AIR

It’s that time of year.  Colorado is still getting snow interspersed with some lovely temperate days and the Rockies are down in Scottsdale, AZ for Spring Training.  Always faithful and eternally hopeful, I look forward to another great baseball season with both the Colorado Springs Sky Sox and the Colorado Rockies.  Here’s to Baseball 2014, no matter whom you’re routing for.  May the best team win and may Derek Jeter have a fabulous final year with the Yankees.  He’ll be an inspiration to upcoming players for years to come. 

 

FEBRUARY STATS NOT YET AVAILABLE

After waiting an extra day to publish this in order to include local monthly statistics, I just found out that due to the new MLS reporting system they will not be available for a while.  As soon as they are available to me I will send them out to you—hopefully by the next eNewsletter.

 

NEW HOME CRUNCH SHOWS SIGNS OF EASING

Wall Street Journal 2.27.14

After a 14 year low in early 2013, bank lending for land development and construction appears to be heading up, a sign that the supply for new homes will ease in the coming months.

This will hopefully put a downward pressure on new home prices which have been rising rapidly over the last two years and weighing in on the housing recovery.  While the outstanding balance on land acquisition, development and construction rose only slightly in the fourth quarter of last year, “economists note that if the overall balance is growing it means that originations of new homes are rising even faster.” 

According to David Crowe, chief economist for the National Association of Home Builders, “While this is an encouraging signal, we still have a long way to go to get back to a normal flow of credit to builders.”

The rising prices are great news for Sellers, but the tight supply of homes has priced many would-be Buyers out of the market, depending on their price range or neighborhood. Once the added financing yields more housing supply, it will also benefit first-time buyers who have been looking for a new home. 

In the Pikes Peak area, there are still affordable homes available for most Buyers, but it’s best to move quickly if you’ve been considering a move in order to get more of what you want at a more affordable price and interest rate.

 

GDP REVISION PUT DAMPER ON EARLY 2014 GROWTH HOPE

Wall Street Journal, 3.1.14

Last Friday the Commerce Department reported that the gross domestic product (GDP), the broadest measure of goods and services produced across the economy, grew at a seasonally adjusted rate of 2.4% in the final quarter of 2013, down from an initial reading of 3.2%. 

It is assumed that the lower rate was in response to consumer and business constraint due to the economy’s momentum slipping, bad weather across the U.S. and overseas volatility.  These factors will more than likely diminish hopes for an early 2014 breakout in growth.

“Other recent economic gauges, alongside the downgraded GDP growth, have flashed warning signs.  Measure of consumer spending, job creation, factory output and the housing market have come in well below expectations.”

It should be noted that existing home prices continue to grow while sales continue to slow down.  Lawrence Yun, NAR chief economist said unusual weather is playing a big role.  “Disruptive and prolonged winter weather patterns across the county are impacting a wide range of economic activity and housing is no exception,” he said.  “Some housing activity will be delayed until spring.  At the same time, we can’t ignore the ongoing headwinds of tight credit, limited inventory, higher prices and higher mortgage interest rates.  These issues will hinder home sales activity until the positive factors of job growth and new supply from higher housing starts begin to make an impact.”

While this is a national measure, some of the same issues have plagued the local housing market—namely bad weather and in our case, Sellers sitting on the fence in hopes of higher prices on their homes. 

Just a reminder—while home prices will continue to rise, thus providing more home equity for homeowners, if you are looking for to Sell and Trade Up or to Buy for the first time or investment purposes—the home you are looking for will also be increasing in price.  And with mortgage rates due to rise slowly, but steadily, this year—now is a better time than later if you are sitting on the fence. 

Something to consider—with more people being put in a position to rent rather than buy at present—you might want to think about keeping your present home as an investment and leasing it out while moving on to your next home.  These are issues I can discuss with you to help you determine if this is the right direction for your personal financial goals.

If you’re wanting to Sell, I’d again like to remind you of the importance in making certain you price your home right, get it good condition, and be realistic in your expectations.  All these factors will make it much easier to make certain that your home is the one that gets to closing.

If you are sitting on the fence or just beginning to think about a move, why not give me a call and let me help you determine what’s in your best interest?  Sometimes it’s good to wait, and sometimes not, but if you’re in the market or about to be, I am here to help you make an informed decision.  Just give me a call at 598-3200 or email me at Harry@HarrySalzman.com and let’s start the conversation rolling.

 

LOCAL FORECAST IS BRIGHT

The Gazette, 2.27.14, Colorado Springs Business Journal, 2.28.14

Great news was delivered at the Vectra Bank Economic Forecast Update I attended last week.

According to the presentation by a University of Colorado economics and finance professor, job growth in Colorado this year will be the strongest since 2000 and will be especially strong in Southern Colorado.

Rich Wobbekind, executive director of the school’s Business Research Division, indicated that Colorado is expected to rank in the top six states in job growth, with a rate of more then 2 percent this year.

And next year he said Colorado will rank in the top three with a job growth of nearly 3 percent.  The strongest growth will come in construction and technology, he said. 

“I expect stronger growth this year in Colorado Springs as the state continues to recover, especially along the Front Range, and I expect that growth will be much more pervasive and moving south,” Wobbekind said.

“Regionally, with ongoing net migration, Colorado is ‘probably the strongest-growing state in the West’ and one of the fastest-growing states in the country, with 83 percent of the population in 12 Front Range counties, including El Paso County.”

Wobbekind also said he expects the GDP to grow by 3 to 3.5 percent this year.

“Stability in the federal budget will be helpful to the Colorado Springs economy, which will reduce uncertainty, because it depends so heavily on defense spending,” he said.  But he added that cuts to the Army are coming that could affect the area.

Local foreclosure sales have “gone down significantly year over year” as I’ve pointed out many times and considering we’ve had fewer filings than many areas, this is one more positive for the Pikes Peak area. 

Wobbekind said the slower job growth in our area has been linked to military and federal government spending which has declined in the past two years.  His forecast indicates the economy growing at a rate of 3 to 3.5 percent this year and will produce an average of 200,000 jobs a month, with unemployment falling below 6 percent by year-end. 

Recent college graduates and those over 55 have had difficulty in finding jobs so consumer confidence remains somewhat weak and considerably below pre-recession levels.  However, according to Wobbekind, “it is not unusual for the recovery to gain strength in the sixth or seventh year after a recession” so the positive outlook for Colorado Springs is right on track.

 

REALTORS OPPOSE TAX PLAN TO LIMIT MORTGAGE INTEREST DEDUCTION

National Association of Realtors, 2.27.14

Last Wednesday the following statement was issued by NAR:

“NAR supports reforms that promote economic growth, but we strongly oppose severely altering the rules that govern ownership and investment in real estate.  Real Estate powers almost one-fifth of the U.S. economy, employes more than 17 million Americans, and contributes a quarter of all federal and state tax revenue and as much as 70 percent of local taxes.

“We are extremely disappointed with several of the provisions contained in U.S. House Ways and Means Chairman Dave Camp’s tax reform draft released today (2.26.14), namely proposed limits on the mortgage interest deduction and capital gains, and the repeal of deductions for state and local property taxes.”

These proposed changes to the taxation of real estate will impact every single American, either directly or indirectly.  If this passes, it will take away an essential reason many Americans choose to own their own home—namely tax deductions that make home ownership possible and affordable for many. 

You might want to take time to write your Representatives and let them know you are opposed to any bill that will impact or limit your mortgage, capital gains and state and local property tax deductions.

NAR intends to carefully analyze the details of the Chairman’s plan in order to educate the public and Congress on long term implications and I will keep you abreast of news as it becomes available to me.

 

HOT HOME PRICES DUE TO COOL DOWN

Wall Street Journal, 2.26.14, RealtorMag, & RISMedia, multiple dates, Kiplinger Letter

Even though home prices rose to their largest annual gain since 2005, signs keep pointing to a leveling off this year.  Rising home prices are good for consumers who were once under water and now can see some home equity.  However, higher prices along with rising interest rates are reducing affordability, which has curbed sales. 

The most significant reason stated was interest rates which are predicted to rise to 5% or more for 30-year fixed-rate loans by year-end.

Another factor will be more homes going up for sale as price hikes have pulled homeowners out from mortgages that are underwater, making them more willing to sell.  This will loosen inventory a bit.

The Kiplinger Letter recently forecasted a modest 4 to 4.5 percent gain in home values for 2014 vs. an 11 percent gain in 2013. 

“More moderate growth this year is not necessarily bad news, it signals a more sustainable, long-term growth trajectory that will help quell fears that another bubble is arising,” says Gillian White, Kiplinger Letter’s associate editor.  “Rising rates will also be helpful in some cases, cooling overly hot markets, where cheap rates and high demand sparked outsized price hikes.”

 

HOW THE QUALIFIED MORTGATE (QM) IS IMPACTING LENDING SO FAR

RealtorMag, 2.18.14

A recent NAR survey of a sample of lenders to determine the effect of the QM lending rules showed the following:

• 55 percent of survey respondents say the QM rule would impact 2.6 percent to 20 percent of the mortgage originations.
• 60 percent of lenders indicate they were most concerned about the impact of the 3 percent cap on points and fees.
• 45 percent of lenders say they would not originate non-QM mortgages, while a majority said they would defer to investors’ preferences on how to treat non-QM loans.
• About a fifth of lenders surveyed say they did not know whether they would charge non-QM borrowers higher rates.  However, the most frequently cited change for prime and near-prime borrowers was a rise of 50 to 75 basis points and 150 basic points for subprime.

According to Ken Fears, manager of Regional Economics and Housing Finance Policy for NAR’s Economists’ Outlook Blog, “Consumers should expect to have to document their income, employment and resources.  If someone has a high debt-to-income ratio, the FHA, as well as Fannie Mae and Freddie Mac, will be more lenient than private financers.”

 

GOOD NEWS FOR “BOOMERANG BUYERS”

RealtorMag, 2.26.14

Former homeowners who lost their homes to a short sale or foreclosure are now re-entering the housing market.  After spending a few years rebuilding credit, they are ready to begin again.

At three years past the peak of the foreclosures, it’s the time when most people would qualify for another loan according to Daren Blomquist, spokesman for Realty Trac.  “The market really needs these boomerang borrowers to maintain the current recovery,” he added. 

Some boomerang borrowers may find they need to put as much as 20% down in order to qualify, while others are finding opportunities to put down as little as 3.5 or 5 percent. 

While wait times for loan qualification may vary for former homeowners, the typical wait times are:

• Seven year wait for homeowners with a previous foreclosure before they can qualify for a new mortgage through mortgage giants Fannie Mae and Freddie Mac.  If the foreclosure was included in a bankruptcy, the borrower has to wait only four years.
• Two year wait for homeowners who underwent a short sale before they are eligible for another Freddie Mac and Fannie Mae loan.
• Three year wait for homeowners seeking an FHA loan after a foreclosure or short sale.  Some homeowners who underwent a foreclosure because of at least a 20 percent cut in their pay may be able to qualify for a new mortgage after just a year through FHAs Back to Work program.

If you, a family member, co-worker or friend was in the unfortunate situation of having to give up their home, now might be the time for getting back in the game.  Please call me and let’s see whether or not the time is right to again qualify while mortgage rates are still considerably low and homes are still affordable for most income brackets.  I will do my part to help Boomerang Borrowers to once again fulfill the “American Dream” of home ownership.

 

HARRY’S THOUGHT OF THE DAY  (hint, hint—send me your referrals, please)