Feb.14, 2011

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET 

HOUSING AFFORDABILITY IN COLORADO SPRINGS IS GREAT !!!!

In 2010, home prices for lower-priced homes in Colorado Springs appreciated, but the prices for higher-priced homes remained fairly steady. The good news is that, according to the recently-released NAR report on nationwide residential sales for 2010, Colorado Springs real estate is appreciating faster than the national average.

In the fourth quarter of 2010, the median existing single-family home price rose in 78 out of 152 metropolitan statistical areas. Lawrence Yun, NAR Chief Economist, is encouraged by the trend. “Home sales clearly recovered in the latter part of 2010 and are helping to absorb the inventory, including many distressed properties. Even with foreclosures continuing to enter the inventory pipeline, they’ve been selling well and housing supplies have trended down”, he said. “A recovery to normalcy requires steady trimming of the inventories”. Yun also noted that housing growth and jobs growth feed on each other. When one goes up, so does the other.

To be specific, the report shows that, out of the 152 major metropolitan areas included in the survey, our city showed a significant increase in median home prices. …better than almost any other city in the U.S.

Here are some impressive figures:

             Colorado Springs median home price in 2009 was $189,800

            Colorado Springs median home price in 2010 was $199,600

            The national  median home price in 2010 was $170,600

Translation: Our home prices appreciated more than the national average and, in 2010, they went up 5.2%. That’s outstanding. If you would like to see the complete report, CLICK HERE.

To bring these numbers down to our local market, if you’re a Buyer or a Seller, you should be aware that, in 2010, 82% of Colorado Springs home sales involved homes priced under $299,000. That’s a significant figure.

For Sellers, it means that, if your home is priced over $299,000, you are facing a slow market. There are few Buyers out there, but there are thousands of Sellers in your price range and they are all trying to attract the attention of those few Buyers. Concentrate on making your home outshine your competition and be ready to aggressively negotiate your price.

If your home is priced under $299,000, be aware that there are lots of Buyers out there, but you have lots of competition for their attention. Today’s “savvy” Buyers are looking for “deals”. Again, make your home as attractive as possible and be ready to negotiate your price.

For Buyers, the bottom line is – It’s your market. Even with the recent rise in interest rates, you can make some great deals, regardless of the price range.

Even with the recent rise in interest rates to over 5%, there are wonderful deals still available out there. You should think about buying an investment property.

Call us.

SPEAKING OF OUR LOCAL real estate MARKET, LAWRENCE YUN, CHIEF ECONOMIST OF THE NATIONAL ASSOCIATION OF REALTORS WILL DO JUST THAT

On Wednesday, Feb. 16, 2011, the Chief Economist of the National Association of Realtors will speak at the Crowne Plaza Hotel in Colorado Springs, from 9am to 11am and we will be there. Mr. Yun appears frequently on financial news shows and at real estate conferences. USA Today recently listed him among the top 10 economic forecasters.

Mr. Yun will undoubtedly address the outstanding performance of our local real estate market over the past year. We will give you a report on his presentation in next week’s enewsletter.

AS RATES RISE, SHOULD THE GOVERNMENT GET OUT OF THE MORTGAGE-BACKING BUSINESS ?

WSJ Fri. Feb 11, 2011 – Rates rise above 5% for the first time since last spring. The latest rate for 30-year, fixed-rate mortgages is 5.05%.

This rate increase reflects positive news: Rates are rising because there are signs that the recovery is strengthening. As the economy gains steam, investors demand higher rates to compensate for an expected uptick in inflation. And, if the economy can generate stronger job and wage growth, higher rates may not be a problem for housing. By at least one measure, housing affordability has returned to its levels before the housing boom collapsed. The run-up has been unusually swift. The national average mortgage rate has jumped to more than 5% from a record low of 4.17% in just three months, according to Freddie Mac data. The rise should kick people who have been sitting on the fence into some immediate action.

In response to these developments, on Feb. 11, 2011, the administration unveiled a plan to wind down mortgage giants Fannie Mae and Freddie Mac. This would result in higher borrowing costs and more limited access to home loans for consumers.

Treasury Secretary Timothy Geitner stated that establishing a new system could take five to seven years. “This is a plan for fundamental reform of the housing market”, Geitner said.

The government took over Fannie Mae and Freddie Mac 2 ½ years ago. So far taxpayers are on the hook for $134 billion, and the bailout is likely to be the most expensive legacy from the 2008 financial crisis. Last year, the two agencies accounted for nine in ten new loans.

The political debate regarding the phase-out of Fannie Mae and Freddie Mac has generated three main options for what would replace the two programs: 

1. The first option would place the vast majority of the mortgage market in the hands of the private sector, with no government backing.
2. The second option would also place the mortgage market in the hands of the private sector, but with limited government backstop.
3. The third option would be to create new, privately-owned companies to buy mortgages from banks and sell them as securities.

The discussions that these options will generate will help the administration build consensus around one option and may help build the case for some kind of continued government backstop for mortgages.

The proposed administration plan also calls for:

• Gradual increases in minimum down payments to 10%
• Mortgage-guarantee maximums would reduce to $625,500 from $729,750
• Banks would be required to hold more capital and establish more conservative underwriting standards that require homeowners to hold more equity in their homes
• Reduce the role of FHA and increase fees.

The bottom line for the public is that Washington seems to agree the present system doesn’t work very well and it is willing to discuss establishing a new system that would protect the homebuyer, the taxpayers and the economy from another mortgage crisis.

HOLD ON, PARDNER ! MAYBE THE GOVERNMENT SHOULDN’T GET OUT OF THE MORTGAGE-BACKING BUSINESS. …AN OPPOSING VIEW

On Feb. 9, 2011, in the NAR blog, “Voices of real estate”, Ron Phipps, 2011 NAR President, posted the following comments:

“Later this week, the Treasury Department will issue a report recommending changes to the structure of Fannie Mae and Freddie Mac.  This is the latest development in a years-long debate over what the government’s role in housing should be.

As REALTORS®, we know better than anyone else just how vital housing is to families and to our nation.

Fact:  For every additional 1,000 home sales, about 500 jobs are added to the economy.  Those are real jobs that give our families, friends and neighbors a chance to work.

Fact:  Every home purchase pumps $60,000 into the economy.

Fact:  Housing accounts for more than 15 percent of the national gross domestic product.

Fact:  Home owners pay 80 to 90 percent of ALL federal income taxes.

We need to change the dialog.   Critics say housing is a drain on federal resources.  We know better.  Housing is the engine that drives our national economy. Eight of the last ten recessions have ended as a result of robust housing markets.  The other two ended as a result of war spending.  The choice is easy.  America needs a healthy housing market to thrive. 

In the days ahead, NAR will be reaching out to Congress and the White House to emphasize the clear connection between housing, jobs and the economy.  Rather than limit support for housing, and the availability of credit, NAR is calling on Congress and the White House to advance policies that will move the housing market back to a healthy 5.5 million sales, where it SHOULD be. 

We will be asking lawmakers to:

• Preserve the mortgage interest deduction at current levels.
• Move the credit pendulum to equilibrium, defined by a median credit score of 720.
• Maintain government backing in the mortgage market as part of GSE Reform.

These three steps would help bring the housing market back to a normal level, possibly generating an additional 1 million home sales and 500,000 jobs.   

As the voice for real estate, we hope that Congress and White House gets the message:  Real Estate is all about jobs.”

Signed,

Ron Phillips, NAR 2011 President

O.K., readers. What do you think??

MORTGAGE –SHMORTGAGE ….SOME PEOPLE ARE PAYING CASH !!

The Wall Street Journal (Tues. Feb. 8, 2011) reports on an interesting phenomenon that is occurring in real estate markets around the country ….the rise of all-cash deals. In some of the country’s most troubled housing markets, cash-buyers are accounting for more than half of the transactions. (In 2006, all-cash deals represented only 13% of sales).

Obviously, Investors with cash are seeing great opportunities to acquire income properties at low prices. They are figuring that they can refinance later, when the market improves.

For some time now, this “Buy low and Rent” opportunity is something we have been urging our clients to consider. With the rise in foreclosures, the pool of new renters has expanded and occupancy rates have risen.

Call us.

GOOD NEWS – LOCAL SALES TAX COLLECTIONS ARE UP AGAIN !!!

The Gazette reports (Friday, Feb. 11, 2011) that Colorado Springs sales tax collections in January rose 2.77%. It was the 15^th consecutive month of year-over-year gains. Sales tax collections ended 2010 up 6.07 percent over the year before.

According to Fred Crowley, Chief Economist for the Southern Colorado Economic Forum, this rise in collections is one sign that people are feeling more comfortable with their job status. He also stated, ““Since use tax collections and sales of business equipment are strong, it is clear that businesses are investing in equipment, rather than people”.

The bottom line is that our local economy is recovering from the recession, but slowly.

As we have said so often in previous eNewsletters, our full recovery will depend upon jobs, jobs, jobs, so be sure to vote in the upcoming city elections. Jobs depend upon leadership and leadership starts at the top.

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

LATEST STATISTICS

Click here for the latest Sales and Listing statistics for the Pikes Peak area

JOKE OF THE WEEK

For those of you who remember Henny Youngman, here’s a few of his one-liners that still ring true:

• real estate people always try to put the best light on everything. One of them tried to sell me a “Robin Hood” house. I asked him what that was and he said, ”It has a Little John”.
• But, I do have to admit my house is in a very lovely area. It’s two feet from the water ….in any direction.
• I’ll say one thing for the recession. It’s bringing the generations together. Junior still won’t get a haircut,  …and now I can’t afford one.
• And a recession brings out the compassion and the deep human feelings within us all. For instance, I now do something with my old clothes that I never did before …I wear them.
• But, my brother says there’s no recession, if you have the right business in the right place. He owns a carwash in Capistrano.
• Trying to make a profit today is like being a pickpocket in a nudist colony.
• I’ll tell you how bad things are getting. Bankruptcy court just applied for an unlisted number.

 And of course, we couldn’t leave out Henny’s classic line

•  Now, take my wife ….Please   (Just kidding, Dear.)

February 7, 2011

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

SELLERS – TAKE A LOOK AT YOUR COMPETITION

The Pikes Peak Association of Realtors just released a new monthly report which shows the “Active Listings for Single Family/Patio Homes”, as well as the “Sold Listings” for the previous month and the “Sold Listings” for the same month last year. The data should interest anyone who is trying to sell their home. Using the data reported, if you are currently listing your home for $299,000, let’s see what the numbers tell us: 

• There are currently 2,537 homes listed at, or below your listed price.
• Last month, there were 340 sales of homes listed at, or below your listed price. This means that only 13.4% of the homes listed in this price range sold in January.
• The good news is that, in January, sales of homes in your price range, or below, accounted for 83% of all sales, so the Buyers who are interested in your price range are out there. The trick is to get them to look at and buy your home, rather than the other 2,536 comparable homes which are competing for their attention.

If you are a Seller, these numbers tell us that you should not expect a quick, easy sale of your home. Rather, be prepared to negotiate, plan on an aggressive, competitive marketing campaign and don’t expect overnight results. Furthermore, if your home is listed for $300,000 or higher, keep in mind that only 17% of the potential Buyers out there might be interested in your home. Last month, for example, there were only 72 sales of homes over $300,000.

To see the complete report on Active and Sold listings, CLICK HERE.

As always, many of the determining factors that influence prospective Buyers are location, location, location, as well as the condition of the home, neighborhood, proximity to schools, etc., and we would have to visit with you to give you more specific recommendations about your listing, so, call us. We will be happy to help you design and implement an effective campaign to sell your home in this competitive market.

BUYERS – TAKE A LOOK AT THE POSSIBILITIES

The PPAR report listed above will also help Buyers make better purchasing decisions. It’s obvious that our current inventory of available homes is so large and our current sales are so slow that there is a large window for negotiation that is now open for Buyers. Let us help you make the best decision possible about your next home, or investment property. The opportunity to acquire investment real estate has never been better. Low prices, low interest rates, high occupancy rates, rising rents and a large pool of eager sellers all add up to the opportunity of a lifetime for smart Buyers.

One fact that prospective Buyers should keep in mind is that closing costs are negotiable. In an interview, Barry Zigas, director of housing policy at the Consumer Federation of America points out:

“There’s a lot of room for negotiating in the costs of closing and consumers should examine every charge and not hesitate to challenge them and try to bring them down. Closing costs can run anywhere from 3-6% of the price of the property. For example, in 2010, for a $200,000 home, the average closing costs were $3,741, an increase of nearly 37%, according to Bankrate.com.

Simply ask the lender which fees are negotiable and which fees are fixed. Ask, “Who is getting this fee and why am I being asked to pay it?”

As a matter of fact, this is an area where a good Realtor can save you a lot of money. As we cited in one of our previous enewsletters, we recently saved a Buyer approximately $2,500 in closing fees by simply switching to a more “customer-friendly” lender.

Call us and let’s discuss your ideas.   

A NEW MAYOR, A NEW COUNCIL, A NEW BEGINNING

For the first time in history, the citizens of Colorado Springs will have the opportunity to elect a city mayor. Until now, the mayor has been appointed by the City Council.

So that voters might get better acquainted with the candidates for the mayoral position, a moderated forum has been scheduled on March 1, 2011, 5:15pm at the Fine Arts Center. The forum will feature six mayoral candidates and will be moderated by Pam Shockley-Zalabak, Chancellor, UCCS. We urge all interested parties to attend this forum, to insure that we end up with the candidate who is most qualified to lead our city into the future.

To register for this event and to learn more about it, CLICK HERE.

See you there.

20^TH ANNUAL ECONOMIC FORECAST BREAKFAST

On Feb. 3, we attended the annual Economic Forecast Breakfast, sponsored by the Institute of real estate Management. The 5 presentations covered all aspects of our local real estate market and were very informative, but we thought the presentation on residential real estate might be the one that would be of specific interest to our readers.

Basically, residential sales in 2010 were down from 2009. Sales in the first half of 2010 looked fairly good, as a result of the federal tax credit for first-time Buyers. Sales in the second half of 2010 were slightly down, but selling prices were up.

The average number of “days on the market” for a $250,000 home went from 88 days during the first half of the year to 104 days in the second half.

New Listings in 2010 went from 18,561 in 2009 to 19,203.

Using historical demand as the measure, the inventory of homes under $250,000 would supply the market for 6 months (compared with 4 months one year ago). $350,000-$400,000 inventory is 8.5 months. $600,000-$700,000 inventory is 23.3 months. Homes over $1,000,000 had only 25 sales in the last half of 2010.

Comparing 2010 to 2006, we see sales down 32%. but rents were up 55%. Investors, take note.!!!

The brightest stars in the numbers were rentals. Average monthly rental went from $989 a month in 2006, to $1109 in 2010. That’s one part of the economy that has shown a profit in recent years.

We’re recovering, but slowly.

Jobs are still the key to recovery !! Let’s hope our new Mayor and City Council have that at the top of their priority list.

LATEST STATISTICS

Click here for the latest Sales and Listing statistics for the Pikes Peak Region.

DAMN THE TORPEDOES, BUT DON’T DAM THE ICE

On Feb. 3, 2011, the Wall StreetJournal featured an article about the potential damage to local homes as a result of “ice dams”. Our recent cold snaps have aggravated the problem and we thought our readers might want to be aware of this problem.

Ice dams form when an under-insulated home’s heat escapes through the attic, warms the roof and melts snow. As water runs down the roof, it can refreeze into an icy dam along the overhang, which is cooler. If the dam gets big enough, it can then block water from running off the roof and force it back up under the shingles, triggering leaks and other damage. Icicles are one symptom of dams forming.

If you have ever had your roof replaced as a result of hail damage, you probably know that the insurance inspector who comes to inspect the roofer’s work will check to see that the roofer has installed an extra layer of protection under the bottom three or four feet of shingles, to prevent water from coming back up under the shingles. If you don’t know whether your home has this protective layer under the shingles, you might want to check it out yourself, or have someone check it out for you.

COMING SOON ……..

On Feb. 10, 2011, the National Association of Realtors will be releasing their report of home sales in all of the top 153 U.S. markets. We look forward to including that report in the next issue of our newsletter and we think you will be surprised and gratified to see how well Colorado Springs is doing, compared with the rest of the country.

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ..And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK

TOP TEN ECONOMIST VALENTINES

10. YOU RAISE MY INTEREST RATE THIRTY BASIS POINTS WITHOUT A CORRESPONDING DROP OFF IN CONSUMER ENTHUSIASM
9. DESPITE A DECADE OF INFLATION, I STILL DIG YOUR SUPPLY CURVE
8. WHAT DO YOU SAY WE RE-MEASURE OUR CROSS-ELASTICITY
7. YOU BRING THE BUTTER, I'LL BRING THE GUN
6. LET'S RAISE HOUSING STARTS TOGETHER
5. FURTHER STIMULUS COULD RESULT IN UNCONTROLLED EXPANSION
4. TELL ME WHETHER MY EXPECTATIONS ARE RATIONAL
3. LET'S ASSUME A RITZY HOTEL ROOM AND A BOTTLE OF DOM
2. YOU STOKE THE ANIMAL SPIRITS OF MY MARKET
1. A LOAF OF BREAD, A JUG OF WINE, AND THOU BESIDE ME WATCHING RUKEYSER

January 31, 2011

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

COLORADO SPRINGS BEATS THE NATIONAL SALES FIGURES AGAIN

The latest Standard & Poor's Case-Shiller Home Price Index shows that, in the top 20 U.S. cities surveyed, real estate prices fell 1.6% in 2010.

Added to that, the Wall Street Journal (Mon. Jan. 31, 2011) announced, "Home Prices Sink Further". The article points out that, in the WSJ quarterly survey of the major metropolitan areas of the country, 2010 home prices declined in every one of the 28 areas covered by their survey.

However, we just received a copy of the latest report from the Southern Colorado Economic Council from Fred Crowley, the chief economist for the SCEC, and the report clearly shows that, during 2010, Colorado Springs median and average home prices both rose. In other words, we are better off than any of the top 48 metropolitan areas in the country. How do you like them apples??

We hate to make the other major metropolitan areas in the U.S. feel bad, but we cannot overlook this opportunity to point out that we live in the best place in the USA. Our economy is better than any of the cities in both of the surveys cited above.

Apparently, the theme song for Colorado Springs should be,"O Lord, It's hard to be humble, when you're perfect in every way".

To see the complete SCEC report and to learn how well our local economy is doing, Click here.  

..PLUS THE FACT THAT IT'S STILL CHEAPER TO LIVE HERE !!!

The Gazette also reported that our local cost of living is still below the national average. (Jan. 29, 2011). Even though gas prices nudged our local cost of living up .5% in 2010, we are still 7.2% below the national average cost of living. Now, if we all go out and buy electric cars, we will really beat the national average. .(but who can afford a 40 mile extension cord?)

HERE'S WHAT THE EXPERTS ARE SAYING ABOUT OUR LOCAL ECONOMY

On January 27, 2011, we attended the presentation, "Navigating in the New Economic Reality", sponsored by Vectra Bank. The featured speaker was Dr. Tom Zwirlein from UCCS. The speaker presented a local business forecast for the coming year and featured some very interesting data about our local economy. Here are some of the points discussed:

• There will be a rise of approximately 1 ½% in interest rates in 2011.
• Colorado Homeownership will fall by approximately 2-3% in 2011. Obviously, this means that some home occupancy will shift from ownership to rental status. This is good news for owners of rental property. (Our present vacancy rate is around 3%. That's very low).
• The Housing Affordability Index will be approximately the same as it was in 2009-2010.
• Local foreclosures are projected to be 4200 in 2011 (vs. 5470 in 2009 and 4828 in 2010). Good !!! The trend is down !!
• The number of residential sales has remained fairly constant for the past three years (2008 - 8339, 2009 - 8346, 2010 - 8222).
• Our local unemployment rate is projected to drop from 8.4% to 7.9% in 2011.
• Our local population is forecast to grow by1.5% in 2011.
• Personal income and retail sales are both forecast to rise modestly in 2011, but single-family housing permits are predicted to decline.

All of these factors point to the fact that rental property will be a great investment in 2011, especially if you buy before interest rates rise any further.

Call us.

TIMES A WASTIN' - BETTER CALL US RIGHT NOW

As we have been predicting, mortgage interest rates are continuing to edge up. The Wall Street Journal reports that rates are "edging closer to 5%".

With local home prices and interest rates both on the rise, you shouldn't postpone buying that new home or investment property any longer.

HOW WILL THE NEW 3.8% TAX ON real estate AFFECT YOU ?

We have been getting lots of phone calls asking us about "the new 3.8% tax on real estate". The good news is that it probably won't affect most of our readers.

As of January 1, 2013, there will be an additional tax of 3.8% on some income from interest, dividends, rents (less expenses) and capital gains (less expenses).

The new tax will apply to: 

• Individuals with Adjusted Gross Incomes (AGI) above $200,000
• Couples filing a joint return with more than $250,000 AGI
• Capital gains from sale of a principal residence
• Capital gains from sale of a non-real estate asset
• Capital gains from interest and dividends: Securities
• Rental Income, including REI investment income
• Rental Income as sole source of earnings - real estate trade or business
• Sale of a second home with no rental use (or no more than 14 days rental)
• Sale of an inherited investment property (Residential or commercial)
• Purchase and sale of Investment Property (residential or commercial)

You may want to discuss with your tax advisor how this new law might affect your taxes.

For your information, the National Association of Realtors has prepared a brochure outlining the details of this new law and citing several specific examples. For a copy of the brochure and to see a complete explanation of the law, Click here.  

IF YOU'RE A LANDLORD, HERE'S YET ANOTHER  NEW REQUIREMENT FROM THE GOVERNMENT !!!

If you're the owner of even a single unit of rental property, starting this year, you must start tracking all vendors doing at least $600 worth of work for you and send them an IRS Form 1099 at the end of the year

The IRS has not yet worked out the details of this new requirement, so we cannot yet clarify what it means for you but, you should start keeping track of your vendors, so you don't get blindsided at the end of the year. Better talk to your bookkeeper about this new law. 

Hey, what's the problem? You've got plenty of time on your hands.

LATEST STATISTICS

To see the latest Sales and Listing statistics for the Pikes Peak region, Click here.

THIRTEEN THINGS YOUR BURGLAR WON'T TELL YOU

Security consultant Chris McGoey interviewed 105 burglars for his book about protecting yourself and your home from being burgled. Click here to review some of his tips on protecting yourself.

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ..And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK

Last week, because we assumed our readers were so involved with the NFL playoffs, the State of the Union address and the fact that the world is falling apart, we thought we could dispense with the Joke of the Week and nobody would notice. However, after publication, we received several complaints about the omission. So, now that we have been properly chastised, we will include two jokes; one for this week and one for the missing joke from last week.  

JOKE #1

Two women were walking through the woods when a frog called out to them and said: "Help me, ladies! I am a real estate broker who, through a curse, has been transformed into a frog. If one of you will kiss me, I'll be returned to my former state!"

One woman took out her purse, grabbed the frog, and stuffed it inside her handbag. The other woman said, "Didn't you hear him? If you kiss him, he'll turn into a real estate broker!"

The second woman replied, "Sure, but these days a talking frog is worth more than a real estate broker!"

JOKE #2

The following complaints were actually received by property managers from their renters:

"The toilet is blocked and we cannot bathe the children until it is cleared. "

"This is to let you know that there is a smell coming from the man next door. "

"The toilet seat is cracked: where do I stand? "

"I am writing on behalf of my sink, which is running away from the wall. "

"I request your permission to remove my drawers in the kitchen. "

"Our lavatory seat is broken in half and is now in three pieces. "

"Will you please send someone to mend our cracked sidewalk? Yesterday my wife tripped on it and is now pregnant."

"Our kitchen floor is very damp, we have two children and would like a third, so will you please send someone to do something about it. "

"Would you please send a man to repair my downspout? I am an old-age pensioner and need it straight away. "

"Could you please send someone to fix our bath tap? My wife got her toe stuck in it and it is very uncomfortable for us. "

"When the workmen were here, they put their tools in my wife's new drawers and made a mess. Please send men with clean tools to finish the job and keep my wife happy."

By the way, the playoffs and the State of the Union address are both over, but the world is still a mess. Sorry about that.

January 17, 2011 

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

EDC TO UNVEIL PLAN TO KEEP COMPANIES IN COLORADO SPRINGS

This coming Thursday, we will be attending a luncheon sponsored by the Economic Development Corp. at which Mike Kazmierski, the head of EDC will unveil a plan to boost our local economy. The plan involves attracting new business to Colorado Springs by means of a city-sponsored Venture Capital project. One of the requirements of the program will be that the assisted businesses agree to stay in Colorado Springs.

The EDC will be developing this plan with UCCS Professor Thomas Duening, who is already laying the groundwork for what would be the city's first VC fund.

We are very excited to see this type of innovative planning introduced in our city and we will keep you advised of the details in future newsletters.

THE ECONOMY IS LEADING HOUSING BACK FROM THE BOTTOM

Last Friday, in his testimony to the Senate Budget Committee, Federal Reserve Chairman Ben Bernanke expressed more optimism about the economy. He predicted a "moderately stronger" overall pace for the economy in 2011, noting that the Fed has seen "increased evidence that a self-sustaining recovery" is occurring.

As evidence of this recovery, the Gazette reported that, on Friday, U.S. stocks reached their highest closing levels in 2 ½ years. The Dow Jones industrial average rose 55.48 points, its highest close since June 28, 2008. The good news is that the stack market has traditionally led the economy by two quarters, so, this present rise in the stock market is a good indication that the second half of 2011 will be booming.

Evidence is mounting that this economic recovery is already beginning to boost the housing market. Large price declines have made housing more affordable than at any point in the last decade and new housing construction has fallen to the lowest levels in more than 40 years. Both of these factors will help boost existing-home sales, absorb available inventory and put upward pressure on home prices.

Locally, the average sale price for Colorado Springs homes in 2010 was up 4.4%, even after including foreclosures in the mix. This increase in selling prices came as many other U.S. cities continued to show declines.

Unfortunately, foreclosures will continue to affect our local housing market in 2011. Last year, there were 4828 foreclosures in Colorado Springs, which was an 11.7% decline from 2009, but indications are that we will see another 4000 local foreclosures in 2011. Keep in mind, however, that as many as half of these foreclosures will never reach the market, because of refinancing, assistance programs, etc.

As always, however, our continued economic growth will be dependent upon JOBS, JOBS, JOBS. That's why we are so excited about the EDC plan which we discussed, above, and by the tone of our new Governor as he discusses his plans for attracting new businesses and new jobs to our state. It sounds like our state is on the right track.

ALL MORTGAGE COMPANIES ARE NOT CREATED EQUAL - THE SAME CAN BE SAID OF REALTORS !!!

Last week, we had the opportunity to help both a Buyer and a Seller save about $2000.

We were contacted by a Buyer's agent who had made arrangements with a local Lender to buy one of our listings. When we reviewed the paperwork, we discovered that the Lender had tacked on several fees and charges that would have cost both the Seller and the Buyer approximately $2000 in unnecessary costs for the $185,000 sale. Furthermore, the Lender was reluctant to sign a disclosure statement which was published in the listing.

On our recommendation, the Buyer's agent switched to one of our preferred Lenders and thus saved both parties from making a very expensive mistake.

The moral of the story: 

1. Not all Lenders are equal. Dealing with an experienced Realtor, one who has long-term, professional relationships with conscientious, ethical Lenders, can save you time, trouble and money.
2. Not all Realtors are equal. Our 38 years of experience in the local community, combined with our extensive knowledge of finance enabled us to provide this client with information and assistance that saved them thousands of dollars in unnecessary costs. Our experience, knowledge and close-working network of professionals, including lenders, appraisers, inspectors, stagers, builders, etc. can help make your real estate transaction as smooth and as professional as possible. The transaction we just described is an example of how we look out for our clients.

Give us a call.

WHY BUY NOW? MORTGAGE RATES ARE DOWN AND YOUR RENTERS ARE WAITING

Should you buy that new home or investment property now?  Well, if you're looking for a good deal, you should consider it. According to the Wall Street Journal (January 14, 2011), mortgage rates have actually declined for the second consecutive week. The average 30-year fixed-rate mortgage fell to 4.71% in the week ending Thursday, reaching a four week low, according to Freddie Mac.

This surprising, but probably temporary, reduction in rates may be your last chance to cash in on the ridiculously-low rates which are now available.

Another good reason to buy investment property right now is the dramatic rise in the number of potential renters. The predicted 4000 local families which will probably lose their homes to foreclosure in 2011 will soon be in the market for high-quality rentals. Therefore we will need between 2000-3000 additional rental units to service this need. This will be a great opportunity for residential real estate investors. These unlucky people who may have been forced into foreclosure because of lost jobs are otherwise-reliable families who are used to taking care of their homes and expect the best for their families. These displaced homeowners have already reduced the vacancy rate in Colorado Springs to below 6% (Before the recession, our vacancy rate was running around 10%). Investors report that these new renters are trouble free, pay on time and take good care of their rentals.    

Call us to discuss this great opportunity.

LATEST STATISTICS

Click here to see the latest Sales and Listing statistics for the Pikes Peak area.

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 38 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ..And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK

A young Realtor had just started his own real estate office. He rented a beautiful office and had it furnished with antiques.

Sitting there, he saw a man come into the outer office. Wishing to appear the hot shot, the broker picked up the phone and started to pretend he had a big deal working.

He threw huge figures around and made giant commitments. Finally he hung up and asked the visitor, "Can I help you?"

The man said, "Yeah, I've come to activate your phone lines."

Jan. 10, 2011

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

HOW ARE WE DOING ?

How is real estate doing now, compared with last month? How did we do in 2010, compared with 2009? How is the Pikes Peak area doing compared with the rest of the country? Well, the two links, below will allow you to examine the sales numbers for 2010 and will demonstrate that our median and average prices are up!!! That’s great news.

But the most encouraging statistics involve appreciation. In their survey of the largest U.S. metropolitan, NAR reports a national decline of .2% in home prices. Our local market, on the other hand, shows an increase of 4.4% in home prices. That’s a great indication that the Colorado Springs market has bottomed out and is on the way back up.

Click here for the latest monthly Sales and Listing statistics for the Pikes Peak area and Click here for the Annual statistics.

Things are definitely looking up.

THE MORTGAGE INTEREST DEDUCTION IS BEING CHALLENGED !!!

There has been much discussion in Washington lately about eliminating the deduction for mortgage interest (MID).  The National Commission on Fiscal Responsibility and Reform has suggested that this deduction should be eliminated. We think this move would be disastrous to our economy.

Changing the mortgage interest deduction (MID) will have a long-range ripple effect on everyone, including the nation's 75 million homeowners,with the most immediate impact on the 47 million homeowners who currently take the deduction.

For financially-strapped taxpayers, the ability to deduct the interest paid on a mortgage can mean significant savings at tax time. In 2008, the mortgage interest deduction represented roughly $11,593 for the average taxpayer who had a mortgage. Assuming a marginal tax rate of 25 percent (tax bracket), that mortgage interest deduction translates into an actual savings of $2,898 for the average taxpayer, according to analysis by the National Association of REALTORS® (NAR).

As a specific example, a family who bought a home last year with a $200,000, 30-year, fixed-rate mortgage, assuming an interest rate of 5 percent, could save nearly $3,500 in federal taxes when they file next year. That’s real money they can use to pay down other debts, save for their children’s college education, or put away for retirement.

Diminishing this vital public investment in our housing economy will put downward pressure on prices at a time when the housing market cannot take that kind of hit. Any reduction in the mortgage interest deduction will put us in a broader economic recession, according to NAR Chief Economist Lawrence Yun. He has projected that home values could fall 15 percent nationwide as buyers discount the value of the MID in their purchase offers

The tax deductibility of interest paid on mortgages is a powerful incentive for homeownership and has been one of the simplest provisions in the federal tax code for more than 80 years. In a new survey of nearly 3,000 homeowners and renters commissioned by NAR and conducted online in October 2010, nearly three-fourths of homeowners and two-thirds of renters said the mortgage interest deduction was extremely or very important to them.

Let’s not forget that Homeownership also provides real financial benefit to families as a vehicle for personal savings, wealth creation and of financial advancement. Millions of middle-class homeowners and those that aspire to be homeowners rely on the MID to make homeownership affordable.

And homeownership also benefits communities. People who own their homes vote more, volunteer more and participate more in community initiatives, providing resources and stability to neighborhoods across America.

And, just to clear the record, let’s look at a common misperception that the mortgage interest deduction benefits primarily the wealthy, as argued in the Washington Post’s January 1 editorial, “Trim the Excessive Tax Subsidy for real estate.” In fact, the MID actually benefits primarily middle- and lower income families. Sixty five percent of families who claim the MID earn less than $100,000 per year, and 91 percent who claim the benefit earn less than $200,000 per year. As a percentage of income, the biggest MID beneficiaries are younger middle-class families.

Homeownership has been a boon to our nation - one that policymakers have long supported. Historically, the real estate industry has generated between 15 and 18 percent of the gross domestic product Eliminating or diminishing the mortgage interest deduction, as recently proposed by the National Commission on Fiscal Responsibility and Reform, is a policy mistake that would stop the housing recovery in its tracks, undermine a cornerstone of our economy and chill consumer behavior for years to come.

As we face up to our mounting deficit, we have to be careful not to stifle markets that generate significant economic activity and have a positive impact on the revenue side of the equation. Let’s not mess with Homeownership - that crucial element in our economic recovery.

Please, Washington, let’s not tamper with the deduction for mortgage interest.

THE REALITIES OF FORECLOSURE

Unfortunately, foreclosures are still growing but most homeowners don’t understand the realities of exactly what the decision to walk away from their mortgages will mean to their finances and to their futures.

So, before you decide to go through foreclosure, you should consider a couple of other options:

• Short sale:  Both you and your lender must agree to a short sale. ..i.e. selling your home at a moderate loss, avoiding foreclosure and its associated fees and, hopefully, salvaging your credit report
• Talking with your lender: Most banks don’t want you to foreclose, as it would mean they take a loss. So, they may be able to offer you programs, refinancing, or counseling that that might help you avoid losing your home.
• Selling if you are not underwater: If you don’t owe more than you can sell for, then now is the time to call a Realtor. Downsizing or even renting are better options than ruining your credit for the next seven years.

If none of these options work for you, then be aware of some of the myths that surround the foreclosure process. To shed light on what a foreclosure will mean to a homeowner, Freddie Mac offers "Top Foreclosure Myths" and the truth behind those false beliefs. For example:

• Myth: You should stop paying your mortgage so you can leverage assistance with your mortgage payments.

The approach, called a "strategic default," can become a tactical trap.

It isn't necessary to default on your mortgage payments in order to qualify for help.

If you are struggling to stay current on your mortgage, you may be eligible for a loan modification or other assistance program.

You signed a contract that binds you to making regular mortgage payments. If you don't make your payments, you will be exposed to foreclosure, subsequent black marks on your credit report and years of financial recovery.

If you can financially afford to make your mortgage payments, even if you've been declined a mortgage modification , short sale or other work out, do so to maintain your credit standing.

If you need help, contact us. We will be happy to discuss your situation and your options.

• Myth: After a foreclosure, you'll never get another mortgage.

Well, sure. You blew it. Perhaps you borrowed more than you could afford or your ability to pay for what you thought you could afford went away. You may not qualify for a home for as long as seven years, but that's not "never."

Work to create a spending and savings plan that will rebuild your credit. Get approved counseling that will reveal your effort to recover.

• Myth: Workout options are over once you get a foreclosure notice.

Lenders would prefer that you keep your mortgage and continue to make payments because they lose money when they foreclose on you. Even if foreclosure proceedings have begun, it's not too late to be considered for a workout or other alternative.

• Myth: You need to leave your home as soon as you're notified that your property is in foreclosure.

A notice of foreclosure is the first step in the foreclosure process. There are procedural and legal guidelines and applicable state and federal laws that servicers and lenders must follow in every foreclosure. Foreclosures take months to complete.

• Myth: If you're late on your monthly payments, you'll lose your house.

You will if you stick your head in the sand. If you have a financial hardship and fall behind, it's possible to keep your house and get back on track if you tell someone who is able to help. Contact your lender to discuss your options.  

• Myth: All the offers for help are probably all scams.

Scam artists do often target homeowners who are struggling to meet their mortgage commitment or who are anxious to sell their home.

Deal with your lender first, rather than an outside party. If you do deal with an outside firm avoid those that ask for a fee in advance to work with your lender to modify, refinance, or reinstate your mortgage. Ignore guarantees from outside firms that claim they can stop a foreclosure or modify your loan.

Legitimate offers will have specific information identifying your current mortgage, including the loan number of your mortgage. Shy from offers that come from a company other than your current lender or an authorized agent of your lender.

• Myth: Give up if your lender is not responding to your inquiries.

Never give up. Lenders are deluged. It may take longer than you'd like to reach your lender, which is why you should contact your lender at the first sign of trouble. The process of obtaining a loan modification or other foreclosure alternative may require diligence in the form of multiple calls and multiple submissions of documents between you and your lender. The process isn't perfect, the procedures continue to change.

If you’re facing foreclosure, remember, it’s not the end of the world; it’s just a new page in the story of your life. Don’t forget, Abraham Lincoln was defeated in his first five attempts to be elected to public office.

The moral of the story: Hang in there …and don’t go to the theater.

WANT TO MAKE MONEY LIKE WARREN BUFFETT ? BUY A SECOND HOME

In the Winter Edition of Bottom Line, the author discusses how Warren Buffett takes advantage of the opportunities that a “down market” offers. One of the tips Mr. Buffett lists is to take advantage of the current slowdown in the real estate market by buying a second home.

As Mr. Buffett points out, “Over the long term, the American economy is strong and resilient, which causes stocks (and real estate values) to go up”.

Sounds like a good idea. Call us.

JOKE OF THE WEEK

SOME THOUGHTS ABOUT OUR RECENT FOOTBALL SEASON

Mike Singletary is reported to be moving to Denver. He says he wants to get as far away from football as he can.

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On the latest Wheaties box, General Mills is running a contest where you can win tickets to the Super Bowl next year. The fine print states the odds of going to the Super Bowl are about 460,000 to 1. Funny, that’s about the same odds as for the Broncos going.

--------------------------------------------------------------- 

Q. What do you call 50 people sitting around a TV watching the Super Bowl?

A, The Denver Broncos

Q. Where do the Broncos go in case of a tornado?

A. Mile-High Stadium. They never get a touchdown  there.

Q. How many Broncos does it take to change a flat?

A. Only one, unless it's a blowout -- then the whole team shows up.

-----------------------------------------------------------------

Three guys from Colorado died and went to heaven. At the pearly gates, they were met by St. Peter, who explained that although it was late and God had retired for the evening, he had asked Albert Einstein to show them around so they wouldn't get bored before they met God in the morning.

After Einstein had introduced himself to Slim, he asked, "By the way, Slim, what was your IQ when you were alive?"

"159", said Slim.

"Great!", said Einstein. We'll discuss my general theory of relativity and maybe a little unified field theory as I show you around."

"What an exciting opportunity!", said Slim.

Einstein then introduced himself to Billy-Bob, and when he was done he said, "Tell me, Billy-Bob, what was your IQ when you were alive?"

"141", said Billy-Bob.

"Good," said Einstein. "If you'd like, we can discuss a little mathematics and philosophy as I point out the heavenly sights."

"Nothing I'd like better!" was Billy-Bob's reply.

After Einstein had introduced himself to Bubba, he asked, "What was your IQ when you were alive, Bubba?"

"Duh. Huh?" said Bubba.

Punching him on the arm, Einstein said, "Hey, Bubba - How 'bout them Broncos?

October 25, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

HEY, COLORADO SPRINGS ..IT'S 2011 ....IT'S A NEW BALLGAME .BATTER UP !!!

As we begin 2011, we citizens of Colorado Springs have a great opportunity to start a whole new ballgame. Elections for the new city council come up on April 5th and we will also have the opportunity, for the first time, to vote for a full-time mayor. This election represents a whole new beginning for our city.

This new beginning comes at a time when everyone agrees that jobs will be the key to our future success as a city. Jobs will generate economic growth, rebuild the housing market, stimulate spending, promote a healthy economy, increase our tax revenues and boost everyone's morale. Unfortunately, in 2011, there will be many other cities competing with us for the attention of job-generating new businesses.

With that in mind, we would like to encourage our readers to take an increased interest in our upcoming elections. Be sure to ask all candidates for office about their specific plans for attracting new businesses to our city. This is our chance to find out exactly what each candidate plans to do to increase employment opportunities in the Pikes Peak area. Yes, yes, we know that every candidate loves the flag and Mom's apple pie, but, how do they plan to beat our competition in this fight for jobs. What innovative plans do the candidates have for "selling" our city, promoting our unique lifestyle and beauty, bringing our budget problems to an end, improving services, enhancing our national image, encouraging growth, etc., etc., etc.

The candidates we end up choosing should be the ones who have some innovative solutions for winning this fight for jobs.

It may be a little early for traditional Spring training to begin, but, in the case of our city's upcoming elections, it's not too early to start planning for the first game of the season.

Play ball !!!   Batter up !!! 

WANT TO BEAT THE STOCK MARKET?  .BUY A HOUSE

We frequently hear from people who express reluctance to buy a new home right now. Considering the turmoil that the real estate market is currently going through, they are not sure that owning a home would be a good business decision.

Well, let's look at the historical facts about home ownership in Colorado Springs over the past ten years. In December of 2000, the median sales price of homes in Colorado Springs was $145,000. At the end of December 2010, the median sales price was $198,000. That difference of $53,000 represents a gain of 3.66% per year, over each of the past ten years. In addition to this increase in market value, the Homeowner also benefited from such factors as an increase in equity, significant tax benefits, etc.

If, instead of buying a house ten years ago, the investor had bought stocks, the Dow Jones Industrial average shows that, over the past ten years, his/her investment would have shown a total increase of 1.06% ..that's not per year, that's total increase.

Bottom line: Over the long haul, buying a home is a much better investment that investing in the stock market. Furthermore, with the still-low interest rates that are now available, there is even more reason to buy now. (And, if you are concerned about job security, please call us about our Job-Loss Protection Program)

WHAT DO THE EXPERTS SAY ABOUT real estate IN 2011?

In an interview on December 30, 2010, Lawrence Yun, Chief Economist for the National Association of Realtors, made the following predictions about the real estate market in 2011:

"Steady improvements in the economy are helping bring buyers into the market, but further gains are needed to reach normal levels of sales activity.

"If we add 2 million jobs as expected in 2011, and mortgage rates rise only moderately, we should see existing-home sales rise to a higher, sustainable volume.

"All the indicator trends are pointing to a gradual housing recovery. Home price prospects will vary depending largely upon local job market conditions. The national median home price, however, is expected to remain stable even with a continuing flow of distressed properties coming onto the market, as long as there is a steady demand of financially healthy home buyers.

"As we gradually work off the excess housing inventory, supply levels will eventually come more in-line with historic averages, and could allow home prices to rise modestly in the range of 2-3% in 2011.

As we said in our first article, Jobs will determine the speed with which we recover from the recession.

LATEST STATISTICS

Click here to see the latest Sales and Listing statistics for the Pikes Peak area

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ..And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK

A balloonist is blown off course and is forced to land. He is in a field close to a road, but has no idea where he is. He sees a car coming along the road and hails it.

The driver gets out and the balloonist says, "Howdy! Can you tell me where I am?"

"Yes, of course," says the driver. "You have just landed in your balloon, and with this wind you have obviously been blown off course. You are in the top field on John Dawson's farm, 12 miles from Albury. John will be plowing the field next week and sowing wheat. There is a bull in the field. It is behind you and about to attack you."

At that moment, the bull reaches the balloonist and tosses him over the fence.

Luckily, the balloonist is unhurt. He gets up, dusts himself off and says to the motorist, "I see you're an appraiser for a bank"

"Good grief," says the other man, "you're right! How did you know that?"

"I'm a Realtor and I work with bank appraisers all the time." says the balloonist. "The information you gave me was detailed, precise, and accurate. Most of it was useless, and it arrived far too late to be of any help."

December 27, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

HAPPY NEW YEAR FROM ALL OF US AT SALZMAN real estate SERVICES !!!

We know you all are busy enjoying the Holiday season and don’t want to be bothered with some boring facts about the real estate market, so, we’ll limit ourselves to just a short list of reasons why you should consider buying a home in 2011 and a holiday poem, for your enjoyment.

Happy Holidays and Best Wishes for 2011.

5 Reasons to Buy a Home in 2011

Michele Lerner, author of “Homebuying: Tough Times, First Time, Any Time”, offers reasons why real estate is likely to improve in 2011. Here are five reasons she thinks consumers should consider a home purchase next year:

• Mortgage rates will stay low. Even with rates climbing — maybe to as high as 6 percent by 2012 — they are still well below where they have been historically.
• Tax cuts could help. Extending the tax cuts will encourage a more rapid recovery for the economy.
• Americans want to be home owners. A recent Fannie Mae survey showed that Americans still believe a home is a safe and desirable investment.
• Builders are about to begin building. Home builders have been sitting on the sidelines. This year, they think pent-up demand will create an appetite for new homes.
• Homes are shrinking. Homes are getting smaller, which has made them more affordable.
  
  Source: Investopedia, Michele Lerner (12/24/2010)

HERE’S A POEM ABOUT THIS REALTOR’S

NEW- YEAR’S DREAM-VISITOR

'Twas the night before New Year’s, and I don’t want to grouse

But not a listing was selling, not even one house.

The signs were all planted on front lawns with care,

In hopes that some Buyer might look for them there

While Sellers were nestled all snug in their beds;

With visions of quick-sales abuzz in their heads;

I was here with my laptop and Blackberry, too;

Just burning the night-oil, with nary a clue.

When out on the lawn there arose such a clatter,

I sprang from my bed to see what was the matter.

Away to the window I flew like a flash,

Tore open the shutters and threw up the sash.

The moon on the breast of the new-fallen snow,

Gave a lustre of midday to objects below,

When what to my wondering eyes did appear,

But a miniature sleigh and eight tiny rein-deer,

With a little old driver so lively and spry,

I knew in a moment he intended to buy.

More rapid than eagles his coursers they came,

And he whistled, and shouted, and called them by name:

"Now, Fannie! now, Freddie! now Prancer and Vixen!

On, Comet! on, Cupid! on, Donder and Blixen!

To the top of the porch! to the top of the wall!

Now dash away! dash away! dash away all!"

As leaves that before the wild hurricane fly,

When they meet with an obstacle, mount to the sky;

So up to the housetop the coursers they flew

With the sleigh full of earnest money, and down-payments, too-

And then, in a twinkling, I heard on the roof

The prancing and pawing of each little hoof.

As I drew in my head, and was turning around,

Down the chimney my Prospect came with a bound.

He was dressed all in fur, from his head to his foot,

And his clothes were all tarnished with ashes and soot;

A bundle of loan approvals he carried on his back,

And I knew he would buy, I was on the right track.

His eyes—how they twinkled! his dimples, how merry!

His cheeks were like roses, his nose like a cherry!

His droll little mouth was drawn up like a bow,

And the beard on his chin was as white as the snow;

The stump of a pipe he held tight in his teeth,

And the smoke, it encircled his head like a wreath;

He had a broad face and a little round belly

That shook when he laughed, like a bowl full of jelly.

He was chubby and plump, a right jolly old elf,

And I laughed when I saw him, in spite of myself;

A wink of his eye and a twist of his head

Soon gave me to know I had nothing to dread;

He spoke not a word, but went straight to his work.

He filled out an offer; then turned with a jerk,

And laying his finger aside of his nose,

And giving a nod, up the chimney he rose;

He sprang to his sleigh, to his team gave a whistle,

And away they all flew like the down of a thistle.

But I heard him exclaim, ere he drove out of sight—

“Here’s your first sale of 2011, Harry !!!

Now, have a good night!”

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

LATEST STATISTICS

Click here for the latest Sales and Listing statistics for the Pikes Peak area

Dec. 20, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

THE NEW TAX LAW GIVES TAXPAYERS AND THE ECONOMY A SIGNIFICANT BREAK

The recently-passed extension of the “Bush Tax Cuts” will give most taxpayers a significant break on their income taxes for the next two years. Because of the 2001 tax act sunset, ordinary income tax rates were scheduled to increase for 2011. After a lot of bickering about “The Rich”, Congress finally decided that the 2010 Tax Relief act would extend the lower rates to all brackets for two years.

Now, leaving aside the details, let’s compare how much taxes were scheduled to have been paid vs how much will be paid under this new extension and see what effect this new tax bill will have on some typical taxpayers:

Single Worker - $50,000 Income, No Children              

Tax would have been  $10,680     Tax will now be $9,075

Married Couple - $150,000 Income, 2 Children in college

Tax would have been $34,753      Tax will now be $23,170

Senior Retired Couple - $100,000 Income

Tax would have been  $13,762      Tax will now be $8,590

Obviously, this tax relief will take some financial pressure off a lot of taxpayers and will allow them to spend more money in the economy, thus stimulating small businesses, new hires, consumer spending and economic activity in general. Hmmm, wait a minute. Isn't that what we call a “stimulus”?  Golly, why didn’t we think of that sooner?       

BUT WAIT, THERE’S MORE …

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, also extends and expands a wide variety of valuable tax breaks, most notably a payroll tax reduction for 2011.

Payroll tax rates

For 2011 only, the 2010 Tax Relief act reduces the employee portion of the Social Security tax on earned income from 6.2% to 4.2%. The self-employed pay both the employee and employer portions of Social Security tax, and the Tax Relief act also reduces their rate by two percentage points for 2011, from 12.4% to 10.4%.

As of this writing, the maximum taxable wage base for Social Security taxes hasn’t been established for 2011. But for 2010, it’s $106,800, and with inflation low it likely won’t increase much for 2011. So the maximum tax savings from this break will likely be between $2,100 and $2,200.

Long-term capital gains rates

Under the 2001 tax act, the 15% long-term capital gains rate was scheduled to increase to 20% in 2011. The 2010 Tax Relief act extends the 15% rate through 2012.

Qualified dividend tax rates

The 2010 Tax Relief act extends taxation of qualified dividends at the 15% long-term capital gains tax rate through 2012 (0% for those in the bottom two brackets). Without Congressional action, dividends would have gone back to being taxed at ordinary income rates in 2011, with a top rate as high as 39.6%.

Increased exclusion on small business stock gains

To make investing in certain small businesses more attractive, the Small Business Jobs Act of 2010 (SBJA), signed into law in September, temporarily increased the qualified small business (QSB) stock gain exclusion to 100% for stock acquired after Sept. 27, 2010, and before Jan. 1, 2011, that’s held for at least five years. Additionally, the SBJA eliminated the alternative minimum tax (AMT) preference item on such gain, making it tax free for AMT purposes as well.

The 2010 Tax Relief act, however, extends the acquisition deadline for 100% gain exclusion and elimination of the AMT preference item to Dec. 31, 2011.

Itemized deduction and personal exemption phaseouts

The 2001 tax act reduced the adjusted gross income (AGI)-based reductions on itemized deductions and personal exemptions for 2006 through 2009 and eliminated them for 2010. The 2010 Tax Relief act extends this elimination through 2012.

Deduction for state and local sales taxes

For the last several years, taxpayers have been allowed to take an itemized deduction for state and local sales taxes in lieu of state and local income taxes. This break can be valuable to those residing in states with no or low income tax rates or who purchase major items, such as a car or boat. But this break expired after 2009.

Now the 2010 Tax Relief act has extended it for 2010 and 2011 (but not for 2012).

Dependent care credit

The 2001 tax act increased the maximum amount of eligible expenses for the dependent care credit from $2,400 to $3,000 for one qualifying dependent and from $4,800 to $6,000 for more than one qualifying dependent through 2010. The 2010 Tax Relief act extends these higher limits through 2012.

The maximum credit is generally 20% of eligible expenses, which is $600 for one dependent and $1,200 for more than one dependent. There’s no upper AGI limit for claiming the credit, but taxpayers with AGIs of $43,000 or less are eligible for a larger maximum credit.

For 2010 and 2011, the Tax Relief act also allows you to offset your AMT liability with certain nonrefundable personal credits (such as the dependent care credit and certain energy-related credits) for which you’re otherwise eligible.

AND, IN ADDITION ….

• If you have loved ones in the middle or lower tax brackets, they may benefit from extensions of breaks that you won’t qualify for, such as various education- and child-related credits and deductions.

• If you’re interested in reducing energy consumption, you may want to take advantage of extensions of various energy-related breaks.

• If you’re currently unemployed, you may benefit from the act’s extension of unemployment benefits.

Considering all of these significant changes, we think you had better check with your tax advisor about how these changes will affect your tax liability. After all, we want you to be comfortable with your finances when it comes time for you to buy your new house from us.

MORTGAGE RATES JUMP ….WILL HOME PRICES FALL ???

Borrowing money to buy a house just got more expensive. The average rate on a 30-year mortgage rose to 4.83%, Freddie Mac said Thursday. That's an increase of about two-thirds of a percentage point in five weeks.

The rate increase means monthly payments on new mortgages will jump. Five weeks ago, a buyer with a 30-year loan would have had mortgage payments of $487 a month. Now it's $526. That's an 8% price difference – more than enough to give most shoppers pause.

Will costlier mortgages push already wobbly home prices lower? History offers some answers.

The recent rise in rates isn't nearly the sharpest in Freddie Mac's history. Between June of 1979 and April of 1980, 30-year mortgage rates rose 5%. And, our recent 8% increase in monthly payments over five weeks has nothing on the record five-week jump of 21% in 1980. In that single five-week period, monthly payments per $100,000 soared from $1.109 to $1,347.

The effect on house prices? They rose more than 15% from 1979 to 1981.

Bottom Line: Better buy now !!! Call us !!!

MORTGAGE RATES AND HOME PRICES

Inflation, to be sure, offset all of the increase and more. Subtract it, and house prices declined 9% over those two years. The nominal price increase, however, suggests that a whopper of a rate increase failed to trigger a selloff.

In 1987, following only a moderate uptick in inflation, the Fed gradual raised the core interest rate from 6% to 6.75% in late April and early May. The 30-year mortgage rate took a wilder rise, spiking nearly one and a half percentage points to 10.47% over five weeks ended May 1. Monthly payments rose 13%, to about $913 per $100,000 borrowed.

House prices soared 9% that year. Inflation averaged just 3.6%.

Mortgage payments rose nearly 11% over five weeks ending Aug. 8, 2003, to $621.58 per $100,000 borrowed. The increase signaled a broad economic recovery; growth in gross domestic product accelerated from 1.8% in 2002 to 3.6% in 2004. Immediately following the 2003 mortgage rate rise, prices shot 42% higher after inflation over three years.

It's unlikely that the recent mortgage rate increase foretells a rally of anywhere near that magnitude, but homeowners shouldn't assume that higher rates worsen the outlook for house prices. Current mortgage rates, after all, are still extraordinarily low. The 4.17% rate recorded five weeks ago is the lowest since at least 1970, when Freddie Mac was created. The average rate over the past four decades was close to 9%.

That's not to say that house prices won't dip for other reasons. Even before the recent rate increase, the Case-Shiller index of house prices fell 2% in the third quarter following a 4.7% rise in the second quarter.

Jobs, incomes and economic growth will likely decide what happens next, not a change in the 30-year mortgage rate.

The down-side, however, is that rising rates could still squeeze some housing markets because first-time home buyers may find that they’re not able to qualify for as large a loan as they could just four weeks ago. That could put pressure on home sellers to reduce prices.

Higher rates are also certain to push others completely out of the market. Analysts at Credit Suisse estimate that the recent rise in rates has the same effect as a 7% increase in home prices for prospective buyers. Assuming a 10% down payment, with rates at 4.5%, a buyer typically needs income of $84,000, to qualify for a $400,000, 30-year fixed-rate loan. At a 5.5% rate, the income requirement rises to $92,000. A general rule of thumb holds that every one-percentage-point increase in rates effectively raises home prices for buyers by roughly 10%.

Bottom line:  Rising rates certainly doesn’t make it any easier for homeowners to sell.  But how much will it hurt? Economists say the impact might not be all that bad if rates are rising, because the economy is growing. As one economist said, “For the housing market, low rates in a crummy economy are worse than higher rates in an improving economy,”

THE “QUE” SAYS WE’RE DOING BETTER AND 2011 LOOKS GOOD

The Southern Colorado Economic Forum *(SCEF) publishes the QUE, a quarterly report on the El Paso County economy. The Forum is part of the College of Business outreach to the Colorado Springs Community.

Here are several interesting facts that are contained in the latest issue of the QUE.

Fred Crowley, Chief Economist of the Forum, reports that our local Business Conditions Index (BCI) stands at 77.32. This is 12.6 percent higher than its low of 68.67 in February 2009. The current BCI lagged the anticipated levels for the third quarter by approximately 5 percent. This reflects the sideways trend in the national economy during the same period. While disappointing, this is not believed to be a precursor to a double dip recession.

Despite these quarter-to-quarter observations, the longer term pattern suggests the local economy is growing, albeit at a rather snaillike pace. The Forum believes growth will become more apparent in the 4th quarter of 2010. The BCI is expected to be in the low to mid 80’s through the first quarter of 2011.

With reference to the local housing market, despite an expected decline, single-family building permit activity has held up well. October 2010 surpassed October 2009 by 7 units.

Another factor pointing towards an improved real estate market is the decline in the number of active listings in the region. Currently, there are 5,124 active listings. This is approximately 464 fewer than there were in October over the last several years. The decline in the supply of homes for sale is expected to lead to a more stable housing market.

Last quarter, the QUE reported the rising trend in housing prices. The average price of an MLS facilitated home sale in October 2010 was 12.64 percent higher than the average price in October 2009. Sustainable price increases will depend on job/income growth, low interest rates and some semblance of a balance in the supply and demand for housing.

Further increases in housing prices are anticipated as the economy continues to recover, employment increases, foreclosures decrease and interest rates remain near record low levels. An improving local economy, rising home prices and low interest rates are expected to reduce foreclosures by 600-700 in 2010.

In general, increasing retail sales could be a harbinger for solid economic activity in the first quarter of 2011 and reduced unemployment in coming year.

All of these comments, plus many more, are contained in the latest edition of the QUE. The QUE is available free via an electronic subscription. If you would like a subscription, send an e-mail to fcrowley@uccs.edu and have the word SUBSCRIBE as the subject. To see a complete copy of the latest QUE, please click here.

*The Southern Colorado Economic Forum gathers, analyzes and disseminates information relevant to the economic health of the region. Through its efforts, the Forum has gathered a number of unique data sets. The Forum and its staff are available for fee-for-service work to analyze business situations, develop forecasts, conduct and analyze surveys and develop solutions to other business problems you may have. Examples of prior work include Small Area Forecast for the Pikes Peak Area Council of Governments, Colorado Springs Airport Passenger Survey, exit survey for La-Z-Boy, a Community Audit for the Pikes Peak Workforce Center and the Data Mining Project for the Colorado Workforce Centers. If you would like additional information about how the Forum can assist you, contact Fred Crowley at (719) 255-3531 or e-mail at fcrowley@uccs.edu.

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

LATEST STATISTICS

Click here for the latest Sales and Listing statistics for the Pikes Peak area

JOKE OF THE WEEK

December 13, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

FOR TOO MANY, THE real estate MARKET HAS BEEN "GROUNDHOG DAY          

If you saw the movie, “Groundhog Day”, you’ll remember that it told the story of a not-so-smart follow who had to repeat living the same day, over and over, until he got it right. By the end of the movie, by trial and error, he had all the right answers and was making all the right choices.

Well, for the past several years, since the bottom fell out of the real estate market, it seems that many people have been living their own version of Groundhog Day. Buyers, Sellers, Investors and Realtors have begun each day by having the media inform them that “The Recession is Over”, and “We’ve Bottomed Out”, only to be told by the media later in the day that “Foreclosures are up”, “More Homeowners are Upside-Down”, and “The sky is falling”.

So, where are we now, really?  Have we reached the point where the market has stabilized enough that you can make some good choices, or, are you still in the middle of Groundhog Day?  For our part, we are convinced that there is now enough stability in our local market that Buyers and Sellers can make some wise, informed decisions and profit accordingly.

With this in mind, we thought that it might be helpful to our readers if we reviewed some current facts and some recent comments by industry experts, so that prospective Buyers, Sellers and Investors might get a better idea of where they stand.   

Here are some facts and comments about our current real estate market:

• OUR LOCAL MARKET IS BETTER THAN MOST - Remember that “All real estate is Local” and in almost every national survey, Colorado Springs comes out in the top ten cities for recovery, standard of living, opportunity for growth, etc.  Regardless of how bleak things might look in Phoenix or Las Vegas, our local market shows every sign of being poised for a rebound from the housing slump. All we need for that to happen is more jobs !!! and our new Governor has pledged to place that goal at the top of his priorities.   
• OUR LOCAL ECONOMY IS GROWING – Again in November, sales tax collections climbed. November collections were $8.94 million, for an increase of 6%. This is the 13^th straight month of year-over-year growth. This means that people are spending again and that’s great news for our local economy. 
• FALLING HOME PRICES - Nationally, price-cutting continues. The share of homes for sale that experienced at least one price reduction in November jumped 24.1 percent compared to the same month last year, (ZipRealty). As of Dec. 1, sellers had cut asking prices on 48.4% of all listings. Out of 26 national markets, 19 saw double-digit jumps in the number of discounted homes. However, Readers, please take note: In October and November, Denver (and the state of Colorado in general) had the smallest share of discounted listings, at 34.2 percent.

Now, finally, many national housing experts are saying that, "Prices seem to be stabilizing as sellers have finally figured out that they have to adjust prices to meet the market.

•  LOCAL MARKET VALUES – Our local average sales price grew from $214,062 in November of 2009 to $233,286 in November of 2010, an increase of 9%.  Median sales price grew from $187,950 in November of 2009 to $198,000 in November of 2010, for an increase of 5.3%. We’re now going in the right direction.
•  INVENTORY - Inventory typically goes down month-to-month in November, when many people decide to wait until after the holidays to sell, and November’s inventory was down 3.8 percent from October. On a year-over-year basis, however, inventory continued to trend up: In 2010, it rose 11.6%, to 629,086 properties.
•  FORECLOSURES - There are currently upwards of 11 million distressed properties on the market, including short sales and foreclosures.  Dale Stinton, CEO of The National Association of REALTORS® (Dec.12, 2010) summed up the problem when he stated,”2010 was all about the distressed market—We need to start clearing out that system before the market sees real recovery or any return to normal,”  The bottom line is that these foreclosures will slow our eventual recovery, but, for now, will make for low prices for some fortunate Buyers.
•  INTEREST RATES – The good news is that Interest rates are still a real bargain. The bad news is that they have gone up. According to the Gazette (Dec, 11, 2010), “Rising government borrowing costs have driven mortgage rates to their highest level in six months, challenging the still-shaky housing market and the Federal Reserve’s efforts to boost the U.S. economy.” 

This week, according to the Gazette, the rate for a 30 year, fixed-rate mortgage averaged 4.61%, up from 4.46% a week ago and the highest level since June 24, 2010. “This rate increase has been so sudden and so sharp that it’s almost too late for many borrowers to refinance”, said Kevin Cavin, mortgage strategist for Sterne Agee in Chicago.

 This upward trend in mortgage interest rates will likely continue and should remind us that, if you are going to buy or sell a home, there will probably not be a better time to do it than right now.  Remember,  ...“He who hesitates is lost”.

• GROWING LOCAL HOUSING NEEDS - Every year, a tremendous amount of new homeowner needs are added to the market by virtue of the population growing and reaching adulthood. There is somewhere in the neighborhood of half a million to a million new households that need shelter every year.  In Colorado Springs, in addition to this “normal” increase in demand, we are fortunate enough to benefit from the influx of troops to Fort Carson.  Many of these incoming troops enter the housing market, and they attract additional outside service companies.

THE MORAL OF THE STORY FOR SELLERS – There are still Buyers out there, but the houses that are selling are the ones that are priced right.

THE MORAL OF THE STORY FOR BUYERS – The house you postpone buying today, will cost you more tomorrow.

HERE’S SOME REASSURANCE FOR HESITANT PROSPECTIVE HOMEBUYERS –

THE JOB-LOSS PROTECTION PROGRAM 

Job-Insecurity is one reason why some prospective Buyers are reluctant to buy their new home. It’s an understandable concern, and it’s the reason why Salzman real estate Services introduced and offers the Job-Loss Protection Program.

This program, which is available only from Salzman real estate Services, will pay the Homeowner up to $1,800 per month for up to 6 months, during the 24 month coverage term of the policy, if the Homeowner becomes unemployed after 60 days of closing.

This innovative protection plan is paid for by the Seller and is, therefore, a benefit to the Seller (by making his/her listing more attractive) and to the Buyer (by removing “Employment Anxiety”).

If this Plan is of interest to you, please give us a call, to learn more about it.

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

JOKE OF THE WEEK

 STATISTICS 

Click here for the latest Sales and Listing statistics for the Pikes Peak area.