Real Estate Information

November 22, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET 

SHOULD YOU BUY YOUR DREAM HOUSE NOW?  THE NEW YORK TIMES SAYS, “YES”

The New York Times recently published an article about our present real estate market and what it should be telling prospective Buyers. Some of the more persuasive arguments cited for buying a house now were:

• Your home provides you with a return on your investment in the form of “net imputed rent from owner-occupied housing”. i.e. You live in the house and so it provides you with a real flow of valuable services. This represents about a 6% return on your investment, after maintenance and repair and it is constant over time in real terms.
• Your home will provide you with capital gains when you sell it, if it appreciates during the time you own it (and, at today’s reduced prices, it’s an excellent bet it will appreciate in the years ahead).
• You can deduct the interest you pay on the mortgage
• There is a huge inventory of homes-for-sale on the market. This results in lower prices and more choices for Buyers.
• Home prices are down by 30% on average from the peak

In real numbers, this means that four years ago, a $300,000 home with a mortgage rate of 6.6% would have cost you $1,533 a month. Today, that same home would be available for $213.000, would have a mortgage interest rate of 4.2% and would cost you approximately $833 a month.

The Census Bureau and other demographers project that the number of American households will increase by 1 to 1.5 million each year. With new construction lagging, we should soon be experiencing a tightening market with low vacancy, as has occurred in every housing cycle since WWII.

It’s true that the performance of the housing market drives the economy and the performance of the economy drives the housing market…but housing has perhaps never been a better bargain. Sooner or later, Buyers will regain faith, inventories will shrink to reasonable levels, prices and interest rates will rise and we’ll even start building again, and the price of the home you buy today will rise accordingly.

The American dream is not dead – it’s just taking a well-deserved rest.   

9 TIPS FOR PROSPECTIVE BUYERS

Here are 9 steps that you can take to make your dream home a reality!

1. Know how much you can afford. You may already know how much monthly payment you can support (experts recommend no more than 1/3 your monthly income), but the buying process will also include upfront costs, such as a downpayment and closing costs.

2. Downpayment options. Do you qualify for downpayment assistance programs? Will you be able to get an FHA loan and pay 3.5 percent down? Do you have a relative that would like to make a downpayment gift? Many financial experts recommend a downpayment of 20 percent, so be sure to explore your options!

3. Check Credit Report. Your credit report says a lot about you. Lenders use it to evaluate your risk potential and to inform themselves on how responsible of a borrower you are. They use this report and subsequent score to figure your interest rate. The more stellar your report, the better your score and thus lower your rate. Be sure to check your report for accuracy, and report any errors to the credit reporting agencies.

4. Get Prequalified. It's time to talk to a lender! Pre-qualification will give you a ballpark figure of how much the bank would be willing to lend you. Are you looking for a $100,000 house or a $300,000?

5. Get Preapproved. This is the official letter from the lender that says they will be willing to lend you money. Many sellers look for buyers who are preapproved.

6. Affordability. The bank may tell you that you can afford a home worth $300,000. This does not mean you want to borrow to your max. A more modest home may fit better in your financial plans.

7. Housing Criteria. You have a budget, now develop a list of what you need and want. This can include anything from "must have 3 bedrooms" to "hardwoods" or "granite".

8. Neighborhood choice. Location strongly affects prices. A 3,000 square foot home in Briargate costs a fraction of one in the Broadmoor area. Decide what neighborhoods and areas are the best fit for you. This will help narrow your home search. See the latest neighborhood statistics, below.

9. Call us !!!  We can help you navigate the entire process from searching, putting in offers, to where to hire an inspector or general contractors.

real estate PRICES SEEM TO HAVE BOTTOMED – BUYERS AND SELLERS TAKE NOTE

For the fourth consecutive month, price reductions increased for homes currently listed in the United States, according to Trulia.com. These reductions amount to more than $30.7 billion nationwide and are now at an all-time high of 27 percent. In a press release, Trulia.com. concludes that “Beginning in June 2010, there has been a continual and dramatic increase in price reductions in many cities. Comparatively speaking, we've found that seasonal considerations combined with a lack of urgency on the part of would-be buyers and continued job market doldrums nationwide have led to more significant reductions during this time period than during the same time frame in 2009," said Tara-Nicholle Nelson, consumer educator.

As a result of the latest reductions, Sellers have gotten much more aggressive in their pricing. "We would normally expect to see a seasonal uptick in price reductions between June and November, as motivated sellers whose homes are still on the market after the summer selling-season aggressively cut prices in an effort to get their homes sold before the holidays. This is like Christmas coming early for buyers who are hoping to capitalize on a bargain-buy before the year's end.” said Tara-Nicholle.

But many experts predict that prices and mortgage interest rates will now begin to rise. So, before the window closes, it's important to remember that if you're an ill-prepared buyer, you could lose the deal of a lifetime and the home you really want.

Here are a few tips to keep that “perfect new home” from slipping away:

• Even if you're just browsing, get your pre-qualification for your loan. You might think, you're not really ready to buy but let's go shopping any way. Know your price point. Understand how much home you can afford and browse in that market range.
• Since the mortgage crisis, getting loans and buying a home has gotten more complex and can take even longer than before. That shouldn't discourage you but rather encourage you to get everything in order to make the close of escrow simpler.
• Act now. Timing the market and waiting to see if you can get the absolute rock bottom interest rate might cause you to lose the home you love. Certainly negotiating is always part of a real estate transaction, but just keep in mind that if you're not careful you could time yourself out of the home you really want. Work with your Realtor on this.
• If you're in a situation where the purchase of your new home is dependent upon the sale of your current home, then you must stay on top of your home sale. Sometimes buyers get so busy shopping for their next home that they end up leaving their current listed home a mess. This turns off potential buyers; it happens all the time. So, keep a close eye on how appealing your present home is to a buyer, as you shop for your new dream home.

Bottom line: Unless you’re an experienced juggler, you will need the services of an experienced Realtor to guide you through the maze of selling your present home, obtaining financing, and locating and purchasing your new home. Call us !!!

UNDERWATER? MAYBE WALKING AWAY ISN’T THE BEST SOLUTION

Mortgages are "underwater" or "upside down" when the property experiences “negative equity” i.e. the mortgage is larger than the current value of the property. Negative equity is caused by a decline in property value, an increase in mortgage debt or, most likely, both. However, homeowners who are "underwater" with their home loan and are considering walking away from the debt, could still be gasping for relief years down the road.

There are occasions when walking away from your home -- and down the road to foreclosure -- is your only option, but seldom is it the best alternative. The consensus among experts is to consider the alternatives before abandoning your home, talk with your lender and seek counseling from a U.S. Department of Housing and Urban Affairs (HUD) certified counselor.

Before walking away, some of the other options that should be considered are:

• Refinancing, turning in your existing mortgage for a new one, is perhaps the toughest option to accomplish. A refinance requires meeting stiff underwriting requirements -- an excellent credit report, a high credit score of 720 or more, documented career level income and little debt, for starters. Federal programs, including the Federal Housing Administration's refinance effort, can be a good bet for those who haven't yet faced hardship and can qualify for a new loan.

• A mortgage modification reworks the terms of existing loans to get the payment down to a more affordable level. To add greater affordability, lenders lower the interest rate, lengthen the term of the loan or reduce the principal -- or do some combination of all three. Modifications can be used by qualified home owners who aren't yet struggling as well as those who are in a pinch.

• Short sales. Modifications and short sales can impact your credit, but not necessarily with the force of a foreclosure.

Bottom line, exploring all the options is a better first step than walking away. Call us.

TOP 5 STAGING TIPS FOR SELLERS

Staging is a way for your home to stand out from the competition. It's a way for a buyer to see the true potential of your home. Many real estate agents work with professional stagers. But if you don't have the money to spend for professional help, then consider these five tips to stage your own home.

1. Curb Appeal: A first impression happens only once! Prune overgrown plants and remove unnecessary clutter from your yard. For a finishing touch, consider painting your front door an attention grabbing color, like dark blue, red, or green.
2. Remove Clutter: Knickknacks, doodads, and bric-a-brac must go. When you put your home on the market, a showing could be scheduled at any point. So, for now, take a box and go from room to room collecting the extra "stuff." These baubles distract homeowners from seeing the actual room and space.
3. Edit: It's not just clutter that needs removed from counters and shelves. Editing is a way of making your rooms look bigger. In staging you need only have the bare essentials of furniture. Remove heavy pieces that make rooms look smaller. If you can, put these items into storage. As a very last resort, you can put them in the garage and cover them with a tarp.
4. Main Functions: This means that a dining room should be staged as a dining room, not a sewing room or office. A patio is a place to relax with nature, not a catch-all for outdoor items, toys, and grills.
5. Ambiance: You want to create an atmosphere that is welcoming and makes the buyer feel at home, something of paramount importance in staging. This means the home should be smell clean, be light and airy, and be a comfortable temperature. To accomplish these tasks, you can bake cookies just prior to a showing to fill the air with yummy goodness. If you are a smoker or have pets you may need to take more drastic measures, such as repainting walls or cleaning carpets and furniture. To liven-up your home, replace old and burnt out light bulbs, and have heavy curtains open or removed. If you are showing during the winter months, be sure to leave the heater set to a comfortable temperature. The same goes for the A/C during the heat of summer.

Use these simple tips to get your home ship shape for your sale!

ALSO ....SUCCESSFUL SELLERS AVOID THE FOLLOWING DEAL-KILLERS

At last count, nationwide, new home sales were down more than 12 percent and resale home sales down even more -- 27 percent. Yet many Sellers are still making some classic mistakes as they try to market their homes. To help you avoid these “deal-killers”, here are some mistakes that Sellers make:

• Pricing too high. A high listing price will cause some buyers to lose interest sight-unseen. It may also lead other buyers to expect more than what you have to offer. Overpriced homes tend to take an unusually long time to sell, ultimately selling at a lower price. Your Realtor can help you set a realistic listing price.

• Mistaking refinance appraisals for the market value. Lenders often estimate the value of homes at a higher level than it's actually worth to encourage refinancing. Ask your real estate agent for the most recent information regarding property sales (similar to yours) in your community.

• Forgetting to "showcase your home." When selling your home, make it look as pleasant and move-in-ready as possible. Make necessary repairs. Clean. De-clutter. (See the staging tips, above)

• Using the "hard sell" while showing. Don't try haggling or forcefully selling with prospects. Allow your Realtor to do the selling.

• Trying to sell to "looky-loos." A prospective buyer who shows up because they saw a for sale sign likely isn't interested in your property. Buyers who don't come through a real estate agent are, typically, six to nine months away from buying. They just want to see what's available. Chances are, they still have to sell their house, haven't been to a lender and may not be able to afford a home yet. Your real estate agent can distinguish real potential buyers from lookers because they will take the time to determine a prospective buyer's savings, credit rating, and purchasing power.

• Being ignorant of your rights and responsibilities. Understand the details of the sales contract. They are legally binding documents that can be complex and confusing. Know your responsibilities before signing the contract. Can the property be sold "as is"? How will deed restrictions and local zoning laws affect your transaction? There's much more to know. This is an area where your Realtor can really help explain the complexities of real estate Law to you.

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.

November 15, 2010 

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

DOES HOME OWNERSHIP STILL MAKE SENSE ?

On November 9, 2010, Realty Times, a respected national source for information about the current real estate market, published an article titled, “Value in Homeownership”, based on  the recently released 2010 National Association of REALTORS® Profile of Home Buyers and Sellers survey. The article made several good points which are pertinent to our local market. Here are some comments that our readers might find interesting.

Is there value in owning a home? The NAR survey shows us that today’s homeowners are living in their homes longer, and after several years of price declines, are now seeing a rise in home equity gains.

Early in this decade many buyers jumped on the investment bandwagon. They bought and sold quickly, walking away with inflated profits. But as the real estate bubble burst, many speculators found they had bought at the top of the market and so, as prices fell, foreclosure rates skyrocketed. Historically, however, homeownership is a good, long-term investment, and one that brings many rewards.

NAR President Vicki Cox Golder explains, "Sellers who purchased at the top of the market and had to sell in a short time frame were hurt by the price correction, but the vast majority who were able to stay for a normal period of home ownership generally built enough equity to make a trade-up purchase. Despite swings in the housing market in recent years, the fact is most long-term owners have seen healthy gains in the value of their property. This underscores two simple facts – home ownership encourages stability, and the longer you own, the better your investment. Many of the house ‘flippings’ and quick gains which occurred during the boom period were abnormal, driven by risky, easy-money financing that should never have been allowed in the market."

"The primary exception to the disappointing ‘house-flipping’ trend was in the case of experienced investors, many of whom paid cash and who are making renovations or improvements after a careful study of properties, neighborhoods and market demand," Golder said. These savvy buyers are still making money.

However, even in its current slow state, the real estate market is far from dead. Surveys show that Americans are still buying homes, primarily because of the desire to own a home, the desire for a larger home, a change in family situation, to take advantage of the home buyer tax credit, to make a job-related move, or to take advantage of the current over-supply of affordable homes.

And today, homeowners are staying put longer. A typical seller has been in their home for 8 years, and the survey shows that first-time buyers are planning to stay for 10 years, and repeat buyers for 15 years.

Even with the recent decline in home prices, the typical homeowner who purchased a home eight years ago has experienced a median equity gain of $33,000, a 24 percent increase, while Homeowners who have been in their homes for 11 to 15 years have seen a median gain of 40 percent. So, considering these facts, it’s easy to see why the decision to buy a home for the long-term is once-again coming into favor with the public.

The bottom line is that the decision to buy or sell a home should be, as always, based upon a knowledgeable study of the local market, specific neighborhoods, current inventory, available mortgage rates, and pertinent market trends. If you are considering buying or selling your home, we stand ready to provide you with this kind of expertise. Call us.

SELLERS ….IT’S TIME TO DECK THE HALLS …BUT NOT TOO MUCH

Traditionally, the last several months of the year are pretty slow for real estate sales. However, there still are prospective Buyers out there so, Sellers, if your house is on the market, you should try to make it as attractive to them as possible. Give yourself a competitive edge. While your competition is busy going over the meadow and through the woods to Grandmother’s house, you can spend your time gift-wrapping your house in a big Christmas bow and getting it ready to sell.

November and December might discourage some prospective Buyers, but don’t give up. Many real estate experts note that if you have buyers dropping by your open house or making an appointment to view your home during the holiday season, there’s a good chance they’re serious buyers.

So, while this time of year often brings out all the holiday decorations, there is such a thing as too much holiday cheer. Remember that not all buyers celebrate the same holidays.

A good rule of thumb is to keep decor simple and subtle. If you celebrate Christmas, go ahead and put up a tree, but don’t put one up in every room. …and maybe leave Santa off the roof, this year. Make it easy for Buyers to imagine their own holiday celebrations and their own lives in your home.

Outside, settle for a nice holiday wreath and some subtle seasonal decor. Keep in mind that curb appeal is what gets buyers in the door.

Stash the gifts and just bring them out on the day you celebrate. Presents under the tree take up precious floor space and they are a distraction. Keep them out of sight, together with the family pictures, to stage your house properly.

Another nice touch is to spruce up the mantle. However, keep family and/or pets’ names off the stockings. Again, you’re trying to encourage the Buyer to imagine what the home will look like when it is “their” home.

So, with these tips in mind, have yourself a merry little Christmas.

THINGS ARE LOOKING UP

We just received a nice note from Robert August, President of S. ROBERT AUGUST & COMPANY, INC., in Centennial, Colorado. Bob is a long-time friend and an expert in housing trends. Below, we are including some encouraging information from him about our national and local and national real estate market (together with some of our own comments).

As we know, the housing recovery is dependent upon job creation and while the 317,800 jobs created in the 12 months ending September may not sound exciting, it sounds pretty impressive when you compare it with September of 2009 with 5,604,400 jobs lost over the previous year. 

Nationally, 30 states showed positive growth for over the past year.  Texas added 166,600 jobs, just shy of the next 6 top job growth states combined.  The state of California continues to lead the country in job losses (62,100) but has certainly shown improvement over the past year.

The District of Columbia added 22,500 jobs which would make it the number 10 state in job growth (if it were a state) and when added to Maryland and Virginia the job growth total for the region balloons to a healthy 76,500 jobs in the past year.  Furthermore, the Washington, DC metro area easily leads the nation in job creation with 56,100.

Hmmm …Washington seems to be doing quite well.

Bottom line: The economy, including job growth and housing, continues to improve; the problem is the improvement has been so gradual that it doesn’t feel like it.  We are moving, however, toward equilibrium in the marketplace, and as the foreclosure mess is wound down the housing industry should benefit from years of pent-up demand.

To see the complete charts on permits, click here

To see the complete chart on jobs, click here

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

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET 

GOOD NEWS !!! U.S. EMPLOYMENT REPORT SHOWS JOB CREATION IMPROVING - THAT'S GREAT FOR real estate

From IHS Global Insight

October's employment report was the best for months, as payrolls rose 151,000 and prior months were revised up. But the unemployment rate remained stuck at 9.6%.

The October payroll report was much better than expected, with 151,000 jobs added, a longer workweek, and positive revisions (totaling 110,000) to previous months. Private payrolls rose 159,000, and we now have four months in a row of private employment gains of more than 100,000—for the first time in this recovery. The new jobs were overwhelmingly in the private service sector, the economy's primary jobs engine. The jobs weren't enough to lower the unemployment rate, though, which remained stuck at 9.6%.

Government jobs did not move the headline number much this month. There were 8,000 federal government jobs lost in total, of which 5,000 were temporary Census workers (that leaves only 1,000 temporary Census workers still in place). State and local governments lost another 7,000 jobs (the smallest decline since April).

Manufacturing did not contribute to the jobs improvement. Manufacturing payrolls fell 7,000, their third consecutive monthly decline.

Construction helped a little, with 5,000 jobs added in October and only 8,000 lost in September (originally a 21,000 loss). There were 6,000 jobs lost in residential construction, but 6,000 gained in nonresidential construction and 4,000 added in heavy and civil engineering.

The key improvement was in private services, where 154,000 jobs were added this month, the best gain since April, and up from 111,000 in September. The sectors that did much better this month were retail trade (up 28,000, instead of up 12,000 in September), business services (up 46,000, instead of up 19,000), and education (up 19,000, instead of down 12,000). Health services added 24,000, the same as in September. Food services and drinking places added 24,000 jobs, their third straight strong month, suggesting that there has been some loosening in consumer wallets for eating out.

Within business services, the majority of the jobs added were temporary (35,000). But it is worth noting that the vast majority of jobs added this month were permanent hires.

The unemployment rate was steady at 9.6%. Household employment actually fell by 330,000, while the labor force fell by 254,000. It is pointless to try to interpret month-to-month movements in household employment (it is far more volatile than the payroll employment measure). But it is worth noting that the labor-force participation rate fell from 64.7% to 64.5%, its lowest level in this cycle, and implying that the improvement in jobs has been insufficient to attract potential workers back into the labor force.

The most comprehensive measure of underemployment (U-6)—which includes workers who would like a job but are not currently looking, plus those working part time who would rather work full time—edged down from 17.1% to 17.0%.

The payrolls report suggests that the economy has entered the fourth quarter with more momentum, so that GDP growth will beat the 1.5–2.0% pace seen in the second and third quarters. Rising employment, hours, and wages all give a welcome boost to consumer spending power as the holiday season approaches.

One upbeat employment report does not change the picture that this will be a slow, drawn-out recovery. And there were strong private employment gains back in March and April that did not continue. But today's news does further reduce the likelihood of the dreaded "double-dip" downturn, and as that risk is seen to recede, businesses and households may become more confident to hire and spend.

The report comes just two days after the Federal Reserve launched its new program of quantitative easing (QE2). If the Fed had seen this report before its decision, it probably would have moved ahead anyway, since the labor market remains too weak and the rate of inflation too low to meet the Fed's dual mandate of high employment and price stability. But it would have allayed some of the Fed's fears of the downside risks.

AND ..AS ICING ON THE CAKE….OUR NEW GOVERNOR IS ALSO FOCUSING ON JOB GROWTH

A good sign that our new Governor, John Hickenlooper, understands and agrees with the need for new jobs in our state, was the tone of his first speech as Governor. He spoke for 30 minutes to 300 civic leaders in Colorado Springs at the 13^th annual Mayor’s Breakfast at the Fine Arts Center. First of all, he emphasized the need for setting aside the traditional barriers between Denver and Colorado Springs and between our two political parties and promised that he will work to heal the political rift that has developed between our two cities. The very fact that he scheduled his first speech in Colorado Springs is a hopeful sign that he is serious about this commitment. Secondly, he spoke about the fact that our state must be managed as a business, rather than as a governmental entity.

Governor Hickenlooper emphasized that, “There is no hidden money” in the state budget and said improving Colorado’s business climate is the only way the state will overcome continued budget shortfalls that have hamstrung programs. He said he wants to launch a “bottom-up” economic development plan for the state by having all 64 counties create their own plans which would then form the backbone of the state’s plan. This is a dramatic improvement over the traditional process in which the state develops an economic development plan and then sends it down to the counties.

Governor Hickenlooper pledged to back military growth in El Paso County, to cut red tape and streamline state government. He said, “I think state government has to be smaller with fewer employees”.

He also emphasized that the key to business growth will be marketing the state.

The Governor’s speech was interrupted by 3 standing ovations, and was followed by very positive comments by attendees. “He sounded more like a successful businessman, rather than an elected bureaucrat” said one attendee.

As a matter of fact, our Governor Hickenlooper now sounds a lot like Rick Perry, the Governor of Texas, who managed to attract 90% of all new non-governmental jobs created in the U.S. in 2009, to Texas. How he accomplished this, while managing to keep existing businesses in his state, is outlined in his new book, “Fed Up”, the blueprint of how a state can succeed, in spite of Washington.

We are very encouraged by our new governor’s words and we hope he can deliver on this dramatic new approach to running our state.

SOME OTHER POSITIVE INDICATORS

On November 6, 2010, the Wall Street Journal noted the new 151,000 October jobs cited above. This represents the largest number of new private-sector jobs since April, which produced 159,000 jobs. WSJ also reported that the price of Treasuries fell. In addition, on Friday, Nov. 5, the stock market closed at a 2-year high. WSJ noted that these three indicators point to an improvement in the economy. 

Traditionally, the stock market leads the business cycle by 2 quarters, so, we should look for positive signs of business and job growth by the end of this coming June. Combine all of these factors with the recent rise in interest rates and it’s obvious that, if you are considering the purchase of a residence or an investment property, now is the time to buy. Call us.

LATEST LOCAL STATISTICS ALSO SHOW ENCOURAGING TRENDS

Click here for the latest Sales and Listing statistics for the Pikes Peak area. As you can see in the monthly PPAR statistics, in October, 2010, there were 631 sales in the Pikes Peak area, a decline of 18.4% from Oct. 2009. Total annual year-to-date sales for 2010 were 7005 as compared with 7328 in 2009. These declines can be attributed to the expiration of the Income Tax Credit for home purchasers, which expired in June.

What is very interesting about this month’s statistics is that, in spite of the declining number of sales, prices actually increased in 2010. (Average price in 2010 was $240,326 vs $213,352 in 2009, for an increase of 12.6%. Median price for sold homes in 2010 was $200,000 vs $187,995 in 2009 for an increase of 6.4%). These increases represent the twelfth straight month of sales price increases, a very good sign for the local real estate market (and a very unusual increase, compared to most other communities in the country).

The decline in the number of listings can probably be attributed to Homeowners who have removed their homes from the market until activity increases.

Note that the ratio of average selling price to listing price was 97.4%, a reflection of the fact that successful Sellers are being very realistic in establishing their asking prices. Those Sellers who are overpricing their homes are not selling in today’s tight market. You will note that the data breaks down the local area into separate neighborhoods, so you can see exactly how your home fits into the big picture.

One sad note in the data shows 3966 foreclosures so far in 2010. While this number is lower than 2009 (4540), it is still the third highest number of foreclosures since 1981. We all hope this number declines in 2011.

Bottom line: Home prices, large inventory, low mortgage rates, looming inflation and common sense all lead to one conclusion ….The time to buy your new home or investment property is now !!! Call us

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

November 1, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

NEWS FROM THE relocation WORLD

Last week, in Seattle, we attended the Annual relocation Symposium of Worldwide ERC and the Relocation Directors’ Council. This informative meeting was attended by over 1600 people in the relocation industry and service providers from 47 countries. It was a great opportunity to hear how the recession is affecting employee relocation and to get a clear view of how employers are planning their relocations in the near-future. We were proud to be the only representative from Southern Colorado at the Symposium.

A major concern voiced by all of the employers at the meeting was that the cost of employee relocation was rising faster than they could budget for. Their major concern was to keep the employee ‘whole’, while keeping their costs within control. As we discussed in a previous eNewsletter, if a company transfers a current employee who owns a home, the average cost to the employer is $90,017. A new-hire homeowner transfer will cost the company $66,610. A current-employee renter transfer will cost the company $20,750 and a new-hire renter transfer will cost the company $17,877.

As employers are forced to cut relocation costs, some of the cost-cutting solutions they have been forced to implement range from: cancelling some of the more traditional relocation benefits such as paying closing costs on the new home and/or paying some points toward the interest rate, or, in some cases even paying nothing for relocation.

One message that relocating employers are now sending to Realtors is that they will be better utilizing the services of local Realtors in the “target” market for more accurate advice.

It’s important to realize that relocations are one of the most influential segments of the real estate industry and they represent a fairly accurate indicator of where the Real Estate market is going.

Some of the more significant issues covered at the symposium were:

•  Unless you are a Senior V.P, or the CEO of the company, based upon current equity, your “upside-down” home will probably not be subsidized by the relocating company
• Because of the increasing need for “Specialized Talent” individuals, there will probably be a rise in relocations for people in these growing fields
• Today’s Transferees feel they should be compensated for what they think their house is worth, but appraisers are using short-sale and foreclosure prices as comparables, thus reducing the market value of their homes. Educating these employees about the realities of the current market will be a challenge for employers and will require input from Realtors in the “target” location.
• Because of the frustrations and delays involved with short-sale home purchases, and the resulting reduction in employee productivity during this stressful process, one large, public utility on the West Coast will not assist transferees with short-sale purchases.
• Companies are now offering more information about the differences in local economies to their prospective Transferees, so as to reduce “surprises”. They also offer counseling regarding the effects that foreclosure and/or short-sale will have on the employee’s financial status.
• Some employers are encouraging Transferees to rent, rather than purchase, when they arrive at their new location…even offering bonuses and/or subsidies, or even ‘lump-sum’ benefits to Transferees who agree to hold on to their old house and rent, rather than buy in their new location. These employers feel this will allow the market to recover, thus allowing the Transferee to realize a better selling price for the home he/she is leaving behind. Many of these employers are offering to pay the Transferees’ property-management costs during this recovery period. The commonly quoted time-limit for these inducements seemed to be three years, indicating that industries appear to be predicting a recovery within the next three years.

As a result of these changes in companies’ relocation reimbursement policies, the percentage of Transferees who rent, rather than buy has increased from 30%, just a few years ago, to almost 70%, today.

All of these factors reinforce the arguments for buying investment properties now. These new arrivals are high-quality renters who are receiving rental assistance money from their employers for the next two to three years. Add to them the unfortunate families who have recently lost their homes to foreclosure or short-sale and we see that the pool of prospective renters is larger than ever before. When you consider the low-interest rates now available (but, scheduled to go up soon), and the current low prices for available houses, investment property looks as good as gold for the next several years.

As far as we were concerned, one of the most encouraging things to come out of the symposium was that attendees from all over the world felt that 2011 was going to be a better year.

WHAT IS TEXAS DOING RIGHT ??

A startling fact that was discussed at the relocation Symposium was that, in 2009, 90% of the non-governmental jobs created in the US were created in Texas. The attendees from Texas stated that this amazing economic boom was created by a cooperative venture by the Governor of Texas and the cities of Dallas, Austin and San Antonio working together to make Texas a “business-friendly” place to relocate. That, plus a low tax rate and no income taxes created a magnet for anyone who wanted to start or relocate a business.

Hmmm. Perhaps it’s true that a rising tide does raise all boats. Perhaps the whole economy of Colorado would benefit if we became more competitive in attracting new businesses. By offering more tax incentives and more aggressive incentives for businesses to relocate to Colorado, perhaps we could become known as a “business-friendly’ state. …Why not?

THE BAD NEWS IS – RATES ARE STARTING TO GO UP  - BUT NOT VERY FAST

How low can mortgage rates go?  Many of the ‘heavy-hitters’ in the mortgage industry were at the recent relocation Symposium and their shared opinion was that mortgage rates have hit bottom. The average 30-year, fixed-rate home-mortgage rate is expected to rise in our current quarter. By the end of 2010, the Mortgage Bankers Association predicts an average of 4.4% on a 30-year loan, increasing to 4.7% in the first quarter of 2011. In about a year from now, they expect the rate to rise to 5.1%. Now, while that is higher than our current rate of 4 1/8%, it’s still a very good deal.  

THE GOOD NEWS IS FORECLOSURES ARE DOWN

On October 31, The Gazette published the September economic indicators for Colorado Springs. The initial claims for unemployment were down 21.5%. Taxable retail sale were up 8.4%.Hotel occupancy was up to 72.6% and foreclosure filings were down 16.8%. On the down side, the unemployment rate was up to 8.7%. Single-family home permits were down 16.5% and auto registrations were down 11.9%.

All of our down-side numbers were the result of a lack of jobs and that’s a problem that doesn’t seem to have a ‘magic bullet’ solution. It’s going to be a couple of years before we see a turnaround in that segment of our economy.

Another troubling economic factor is the high inventory of unsold homes. With some lenders halting the disposal of foreclosed and short-sale properties and with many Realtors not even showing them anymore because of the unreasonable delays in obtaining acceptance for offers, the inventory of available homes grows and prices keep going down accordingly. That makes for good deals for Buyers, but a bad deal for Sellers. Furthermore, it aggravates the ‘upside-down’ home-value problem that triggers even more foreclosures.

If you have any questions about the value of your present home, call us. We keep close watch on property values in all neighborhoods in this area.

LATEST STATISTICS

Click here to see all of 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

October 25, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

LOW INTEREST U.S. TREASURY MORTGAGE LOANS NOW AVAILABLE  

ONLY IN EL PASO COUNTY

El Paso County’s Economic Development department plans to convert $25 million in taxable mortgage bonds it issued in December to tax-exempt status, which will lower mortgage interest rates for new participants in a U.S.Treasury initiative. Converting the housing revenue bonds will lower prospective homebuyers’ interest rates to 3.99% for a 30-year, fixed-rate FHA or VA loan, according to Karen Monroe of Colorado Capital Bank.

As an alternative, Buyers will be able to obtain a loan at a 4.5% interest rate and receive a grant in the amount of 3% of the loan for closing costs.

This program has already helped 100 local low and middle-income homebuyers and financing is still available for about 150 more prospective homebuyers.

Participants in this program must be either first-time homebuyers – someone who has not owned a home in the past three years – or a qualified military veteran or a buyer who purchases a property in one of the targeted, low-income area of the region.

To be eligible, Families of one or two people cannot earn more than $71,000 annually; the maximum family income for three or more people is $81,650 and the maximum purchase price of the home is $283,000.

Call us to discuss the local areas that qualify and the local lenders who are participating in this program.

Finally, a word of congratulations to our local leaders for their vision in getting El Paso County signed up for this program. We are one of only 47 local jurisdictions in the nation and the only one in Colorado that takes part in this program.

COLORADO REALTORS AGREE – FORECLOSURES ARE A MESS

At the Annual Colorado Association of Realtors Convention which was held last week at the Broadmoor, the main topic of conversation was foreclosures and the problems they are creating. On both the national and local level, Realtors agree that the current avalanche of foreclosures has had the greatest effect on property values of any other issue in history.

As we have detailed in previous issues, slow response from lenders to offers for foreclosed and short-sale properties has been a major factor in creating the ‘logjam’ in foreclosures and the bad news is that new foreclosures are being added to the inventory faster than old foreclosures are being sold. Thus, as inventories increase, home prices continue to slide.

Because of the slow response from lenders, many Realtors are now refusing to show foreclosed properties. This is a natural response, when we consider that Realtors have a fiduciary responsibility to their clients and cannot, in good faith, waste a prospective Buyer’s time by showing properties that cannot be closed in a reasonable length of time. There are too many horror stories about Buyers that were ‘hung-out to dry’ when they couldn’t get timely responses to their offers and who had to move their families into motels as they awaited lender approval.

Some of the other unfortunate results of our current foreclosure ‘logjam’ are:

•  Interest rates and closing costs will undoubtedly go up to cover the added costs of handling foreclosures
• The resulting cost increases at lenders will be passed along to Buyers in the form of various new ‘fees’.
• Title Insurance will become more expensive as title companies raise rates to compensate for the added legal exposure they face because of increased risk and liens against foreclosed properties

All of the Realtors with whom we spoke are hoping that governmental pressure on lenders to expedite the foreclosure process will help resolve the current mess.

CSU IS BRINGING LOCAL FOCUS TO NATIONAL real estate STATISTICS

At the recent Colorado Realtors Convention, Professor John Gerhard and Dr. Sriram Villupuram from the Everitt real estate Center of Colorado State University explained how they were working to translate some of the national Real Estate indexes into a more localized, Colorado focus. They are converting such popular indexes as Case-Schiller, S&P, CoreLogic, Zillow and Trulia into localized indexes, concentrating on the Colorado RE market. Their work will assist us in giving our clients a more comprehensive view of the market and what they might expect when they buy or sell a home. To see more about this valuable new resource, click on www.realestate.colostate.edu.

In their presentation, the speakers also emphasized something that all good Realtors know, namely, that real estate values depend upon ‘location, location, location’ and so do real estate statistics. Within any region, the RE statistics for a state, a city and for individual neighborhoods can vary greatly. That’s why we feature a link to the complete Pikes Peak Association of Realtor monthly statistics in our weekly enewsletters. Click here to see the most recent statistics for all of our local neighborhoods. If you have any questions about these numbers, call us.   

THE FIRST-TIME HOMEBUYERS’ TAX CREDIT WORKED … BUT NOW COMES THE DOWNSIDE

The federal fist-time tax credit expired in June and, while it was in effect, produced a significant rise in home sales. It motivated a lot of ‘fence-sitters’ to make their move and buy a home. That’s the good news. However, since the tax-credit expired in June, an examination of home sales since June indicates that there aren’t many Buyers left in the market. Sales have really dropped off, with the result that prices have fallen and inventories have increased.

Using the PPAR report of Sales for 2010, we see that between June and September, our local median price dropped from $205,000 to $195,000 (That’s a drop of $10,000, or 4.9%) and our average price dropped from $237,318 to $230,419 (That’s a drop of $6,899, or 2.9%) since the expiration of the tax credit. Click here to see the exact numbers for your neighborhood.

These figures tell us a couple of things:

1. The tax credit did its job. It motivated first-time Buyers to buy a home.
2. Sales of available homes have fallen off since the tax-credit expired
3. Sellers have had to reduce their asking prices to compete for the Buyers that are left.
4. New Sellers are now pricing their homes more realistically
5. Because the ‘slow season’ for real estate sales is coming up in December, there will be even more pressure on Sellers to reduce their prices, if they want to make a sale.

The bottom line is: Right now, Price is King. Therefore, Sellers, call us and let us help you set the right listing price for your home. Buyers, call us and let us help you find the best deals.

Now is the time to utilize the services of a Realtor who knows how to price properly in your neighborhood, who can negotiate on your behalf, who can find the most cost-effective and cooperative lenders and who can handle all of your relocation needs.

Call us.

THE GOOD NEWS IS:  EXISTING HOME SALES IN SEPTEMBER WERE UP 10%

Published October 25, 2010 | Reuters

On Monday, the National Association of Realtors said September home sales increased 10% from August, rising for a second straight month, to an annual rate of 4.53 million units. Analysts polled by Reuters had expected existing home sales to increase by only 4% in August.

Sales of previously owned U.S. homes also rose more than expected in September, NAR reported, indicating the housing market was stabilizing at weaker levels.

LATEST STATISTICS

Click here to see the most recent Sales and Listing Statistics for the Pikes Peak region.

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

Oct.18, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

HOW WILL THE UPCOMING CHANGES IN TAX LAW AFFECT YOU ?

In recent weeks, we have heard local business leaders, clients and friends express questions and concerns about how the upcoming changes in tax laws will affect them. In many cases, they indicated they were postponing buying decisions until they were more certain of their tax liability under the new laws. We thought the following article from Kiplinger might help clarify some of the uncertainty: 

HERE’S WHAT KIPLINGER SAYS:

Six Months to Go Until ... The Largest Tax Hikes in History

Source: Kiplinger Tax Letter - Death Panels and Taxes (The Healthcare Chimera)  Published: Aug 22, 2010. Author: Joan Pryde, Senior Tax Editor for the Kiplinger Letters

 In just six months, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2011:  

First Wave: Expiration of 2001 and 2003 Tax Relief

In 2001 and 2003, the Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011:

Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:  

- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%

Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut.

The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.

Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.

Second Wave: Obamacare

There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:

The “Medicine Cabinet Tax” Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).

The “Special Needs Kids Tax” This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States , and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington , D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education.

The HSA Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.

Third Wave: The Alternative Minimum Tax and Employer Tax Hikes

When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired. The major items include:

The AMT will ensnare over 28 million families, up from 4 million last year. According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.

Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.”

Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.

Tax Benefits for Education and Teaching Reduced. The deduction for tuition and fees will not be available. Tax credits for education will be limited. Teachers will no longer be able to deduct classroom expenses. Coverdell Education Savings Accounts will be cut. Employer-provided educational assistance is curtailed. The student loan interest deduction will be disallowed for hundreds of thousands of families.

Charitable Contributions from IRAs no longer allowed. Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual “required minimum distribution.” This ability will no longer be there.  

Health insurance is INCOME on your W2's...... One of the surprises we'll find come next year, is what follows - - a little "surprise" that 99% of us had no idea was included in the "new and improved" healthcare legislation . . . the dupes, er, dopes, who backed this administration will be astonished! Starting in 2011, (next year folks), your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter if that's a private concern or governmental body of some sort. If you're retired? So what; your gross will go up by the amount of insurance you get.

You will be required to pay taxes on a large sum of money that you have never seen. Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt. That's what you'll pay next year. For many, it also puts you into a new higher bracket so it's even worse.

This is how the government is going to buy insurance for the15% that don't have insurance and it's only part of the tax increases. Not believing this??? Here is a research of the summaries.....

On page 25 of 29: TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET PROVISIONS-(sec. 9001, as modified by sec. 10901) Sec.9002 "requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employee’s gross income."

There now. Don’t you feel better?

SPRINGS AREA FINANCIAL INSTITUTION DEPOSITS JUMP 6.2%

The Gazette, October 12, 2010 4:54 PM

Colorado Springs consumers boosted savings sharply in the 12 months ended June 30 as deposits in area financial institutions grew by the greatest percentage in four years, according to the latest reports from federal regulators.

Deposits in area bank and credit union branches jumped 6.2 percent from a year earlier to $8.9 billion as of June 30, compared with 5.7 percent growth in the previous year, recently released reports from the FDIC and the National Credit Union Association said. Area bank deposits grew by 7.4 percent to $6.15 billion, while area credit union deposits were up 4.1 percent to $2.76 billion during the same period.

More than one-fourth of the area’s deposit increase was generated by a single bank. Deposits held by Colorado Capital Bank’s downtown Colorado Springs branch surged more than fivefold during the 12-month period to $174.4 million mostly because an unidentified trust company deposited more than $100 million at the branch, said John Davis the bank’s CEO. The branch also has been successful in attracting business and nonprofit deposits, he said.

Fred Crowley senior economist for the Southern Colorado Economic Forum said the area’s financial institutions benefitted both from consumers saving more of their income as well as the return of thousands of soldiers to Fort Carson from Afghanistan and Iraq. He also pointed to other economic indicators that reflected an improving Colorado Springs economy, including rising sales tax collections and new vehicle registrations.

“This is another indicator of a recovering local economy, although the recovery has tended to lag in recent months because there is nothing moving it forward right now. That probably won’t show up in the deposit numbers until next year,” Crowley said.

32% OF U.S.BUSINESSES PLAN TO HIRE ADDITIONAL STAFF IN 2011

RISMEDIA, October 13, 2010--Businesses across the globe are now looking to hire new staff, in one of the first signs that global economic recovery and growth is on a sustainable upward trajectory. This is the key finding of the bi-annual Regus Business Tracker survey that interviews more than 10,000 businesses around the world.

The fact that companies are looking to hire additional staff will be regarded as a significant indicator that the mindset of organizations has shifted toward investment in growth through human capital. Regus, a global provider of flexible workplace solutions, found that more than a third of companies surveyed said they intend to increase headcount. U.S. business was close to the global average with almost a third (32 percent net) of companies preparing to add new staff in 2011.

These findings are particularly significant, coming in the wake of recent observations from the International Monetary Fund (IMF) and International Labour Organization (ILO) that global unemployment has reached record proportions in the last three years (up to 210 million since 2007). These organizations have warned about potential problems for national economies if this trend continues. Unemployment reduces national taxation income and increases public spending. The findings of the Regus Business Tracker provide important evidence that the world unemployment situation may be set to ease in 2011.

The survey canvassed the opinions of more than 10,000 senior business people in 78 countries asking them about their current revenue performance, their profitability, their projected future revenues and their wider expectations of national economic growth. These indicators form the basis for the report's Business Optimism Index, which unusually reflects actual performance as well as near-term outlook. Globally, this edition of the index revealed a far more positive outlook, with a greater proportion of optimist countries than six months ago. For the U.S. in particular, the global index revealed a bullish rating of 87, up seven points on six months ago.

Sande Golgart, regional vice president for Regus, comments: "In spite of this optimism, our research also highlights that 41 percent of companies are still looking to reduce their overhead, through means other than reducing staff. This reveals an attitude of cautious optimism. As companies look to find economies in their own operations, we are likely to see more and more organizations offering flexible working practices to their existing or prospective employees in a bid to achieve a better work-life balance and run a leaner organization."

NEW ASSISTANCE FOR SMALL BUSINESSES 
 

KRCO Tax Alert: The Small Business Jobs Act of 2010. Daily real estate News. October 12, 2010  

On September 27, 2010 President Obama signed The Small Business Jobs Act of 2010, creating a $30 billion fund to provide capital to community banks to encourage lending to small businesses. The legislation (SBJA) also includes $12 billion in tax relief for small businesses and incentives to encourage investment in them. In addition, there are benefits for larger businesses as well as for the self-employed and individual taxpayers. If any of the following areas apply to your business, you should consult your tax advisor for more details:  

• Increased exclusion on small business stock gains
• Increased and expanded Sec. 179 expensing
• Extended bonus depreciation
• Extended carryback of general business credit
• Reduced recognition period for S corporation built-in gains tax 
• New breaks for the self-employed and individuals

Catch the breaks

Any number of the tax relief provisions listed here could apply to your situation; plus, there are others we didn’t have room to cover. To learn more about how SBJA may affect you or your business, please call (719) 630-1186.

FORECLOSURE LOGJAM THREATENS FANNIE, FREDDIE

Fannie Mae and Freddie Mae will force lenders to pay for any losses that the GSEs incur due to a breakdown in the foreclosure process. Fannie and Freddie, the mortgage giants, could lose billions of dollars in a prolonged delay because they would be unable to sell properties that have slipped into foreclosure, explains George Mason University real estate professor Anthony Sanders. Source: Washington Post, (10/12/2010).

One of the biggest reasons for the logjam is because Realtors and Buyers are no longer willing to wait for the lengthy acceptance process.  As a result, Realtors are increasingly not showing foreclosures.   Furthermore, foreclosures are no longer the “best deal in the marketplace.”  Many individual Sellers are now pricing their properties to compete with foreclosures anyway.  And, to add to the problem, some banks are not being as aggressive as they should be on list price.

Perhaps most importantly, as a result of the lawsuits filed by various states regarding “digital signers”, a new set of rules for foreclosures has been issued by the federal government.  As a result of these new rules, Buyers can expect even more delays in the acceptance process for foreclosure offers. 

The bottom line is that, unless a Buyer is willing to put up with unreasonable delays from out of town Lenders, it is probably not the time to put in an offer for a foreclosure.  In our current experience with foreclosures, it is obvious that Lenders do not respect the phrase which appears in every sales contract; “Time Is Of The Essence.”

We will keep you advised on this issue as new information comes in.

 HERE’S SOME REALLY GOOD NEWS

The Gazette advises us that, for the second year in a row, Forbes has ranked Colorado as the fourth best state for business and careers. Utah tops the annual list, followed by Virginia and North Carolina. Utah’s economy has expanded 3.5 percent annually over the past five years.

Forbes’ “Our Best States” ranking measures six key categories for businesses: costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life. Business costs, which include labor, energy and taxes, are weighted the most heavily.

Colorado ranked first among the states for labor supply, sixth for economic climate and growth prospects, ninth for quality of life, 15th for regulatory environment and 33rd for business costs.

“Today’s ranking by Forbes shows that our strategies and investments in emerging and innovative industries like clean energy, health care, aerospace, biosciences and technology are working,” Gov. Bill Ritter said in a news release.

For the full list, go to www.forbes.com.

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

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

IF THIS GUY SAYS IT’S TIME TO BUY A HOME, BUY A HOME!

“If you don’t own a home, buy one. If you own one home, buy another one. And, if you own two homes, buy a third and send your relatives the money to buy one.”

John Paulson 9/27/2010

WOW! That’s a powerful statement.

There is no question that John Paulson is a bull when it comes to residential real estate right now. Should we care what Mr. Paulson thinks? Should we listen to him? The answer to both questions is a resounding ‘YES’. Here are several reasons why.

Who is John Paulson?

Paulson is the person who made a fortune betting that the subprime mortgage mess would cause the real estate market to collapse. He understands how the housing market works and knows when to buy and when to sell. What do others think of Paulson?

According to Forbes, John Paulson is: “a multibillionaire hedge fund operator and the investment genius who made a killing going short subprime mortgages a few years ago.”

According to the Wall Street Journal, Paulson is: “a hedge fund tycoon who made his name, and a fortune, betting against subprime mortgages when no one else even knew what they were”.

What did other financial players think of his statement?

The Wall Street Journal agrees with Paulson:

“Ignore the critics. The odds have to be on his side…It isn’t just that home prices have fallen a long way. It’s also that, if you can get a mortgage, you are basically taking a reverse bet on the bond market. You could be a long-term borrower at fixed rates, instead of a long-term lender. Right now you can borrow for 30 years at around 4.3%. After the mortgage tax deduction, for some people the net effective interest rate is nearer to 3%. That’s going to prove an awesome deal if we see inflation again.”

And Forbes said: “As this is the best time in 50 years to buy homes, Paulson advised his listeners to take 30 year mortgages to buy a home as “your debt and interest payments get locked in at record lows, while the price of your home will rise.”

Are others also saying now is the time to buy? There is a growing number of people saying that NOW is the time to buy, including:

• The Wall Street Journal
• Professor Karl Case, founder of the Case Shiller House Pricing Index
• The wealthiest families in the country and
• 70% of everyone else in America

Bottom Line

Thinking of buying a home? Are you taking advice from a friend or family member telling you that now is not the time? It may be time to listen to people who better understand the opportunities that exist in real estate today.

……AND ANOTHER THING

In September, the Wall Street Journal commented, “Sure, there’s more pain to come in the housing market. But when Time magazine starts running covers that declare, “Owning a home may no longer make economic sense”, it’s time to say; Enough is Enough.”  WSJ went on to post ten reasons to buy a home today.

1.     You can get a good deal

2.     Mortgages are cheap

3.     You can save on taxes

4.     It will be yours

5.     You’ll get a better home

6.     It offers some inflation protection

7.     It’s risk capital

8.     It’s forced savings

9.     There is a lot to choose from

10.  Sooner or later, the market will clear

AND FINALLY…

The government is now printing money as fast as it can, so it’s obvious that inflation will soon begin to dramatically reduce the purchasing power of the dollar (In fact, the Fed has actually announced that they plan to use inflation as part of their recovery planning). For that reason alone, it’s obvious that everyone, especially those on fixed incomes, will be in real trouble if they don’t protect their purchasing power by investing in something that will grow in value, to offset inflation. (That’s why we are seeing all of the ads for gold on TV.)  A house offers that same type of protection.

Don’t let the purchasing power of your money go down the drain.  Call me.

THE SOUTHERN COLORADO ECONOMIC FORUM IN A NUTSHELL

The recent, annual Southern Colorado Economic Forum brought together local experts from the public, private, and academic sectors to report on our economy. Thought of by many as our region’s economic “State of the Union,” the Forum offered the community an annual snapshot of local economic activity and provided forecasts to help businesses plan for the upcoming year.

This valuable research about where our community has been and where we are headed is made possible through a cooperative effort between UCCS and local business sponsors. This long-standing partnership between the academic and business communities has produced timely, accurate, and objective economic data to guide local businesses for nearly a decade.

Featured at this year’s forum on Oct.1, were Tom Zwirlein, Professor of Finance at UCCS and founder of the Forum and Fred Crowley, Senior Economist for the Forum. Both speakers could hardly contain their enthusiasm as they reviewed the data that formed the basis for their forecast for the regional economy in 2011.

“The flavor of the Fourteenth Annual Southern Colorado Economic Forum is a lot more optimistic than the last couple of years,” Crowley said.

“Yeah, but remember we’re coming off historic lows,” Zwirlein added. “Anything is an improvement.”

Their presentation analyzed everything from unemployment rates, personal income, population, retail trade and construction activity as part of the event that drew more than 500 Colorado Springs business leaders to the Forum on Oct. 1. The forum offered a glimpse into the future, one that has proven accurate, though not always popular.

Joining Crowley and Zwirlein was Gary Schlossberg, a senior economist with Wells Fargo Capital Management who provided a national and international outlook. A panel discussion featured Norman Bellingham, chief operating officer, U.S. Olympic Committee, Tom Duening, El Pomar Chair of Business and Entrepreneurship, and Elliot Pulham, chief executive officer, U.S. Space Foundation. Steve Helbing, regional president, Wells Fargo, moderated the panel.

“There are clearly lots of indicators that southern Colorado is turning a corner, A 22 percent increase coming off a year when you saw a 15 percent drop isn’t quite as impressive as you might want to believe,” Crowley said. “But for those who anticipated a V-type recovery, that’s probably not going to happen. It’s going to be, as we have predicted, a long, bottom-feeding recovery.”

Officially, the U.S. economy was in recession from Dec. 2007 to June 2009. For Colorado Springs, the lowest point was Feb. 2009 with modest increases in major indicators for the past several months, Crowley said. Buffering the Colorado Springs economy was the strong local presence of the military. But even the military’s presence cannot balance a 55 percent loss in manufacturing jobs that occurred over the past decade. Many of the job losses occurred in complex electronics manufacturing. Nationally, manufacturing jobs are down 31 percent during the same period.

A complete copy of all of the charts and analysis presented at the Forum is available from the Colorado Springs Business Journal. http://csbj.com/2009/10/30/southern-colorado-economic-forum-report-available/

JUST LIKE THE REST OF THE NATION, OUR LOCAL ECONOMY WILL DEPEND UPON JOBS

As was expected, the Forum emphasized that the speed of our local economic recovery will depend largely upon JOBS. For that reason, it was encouraging to hear the presentation that explained how Colorado Springs is approaching the challenge of attracting new employers to our region. As Dave White, executive vice president of marketing for the Colorado Springs Regional Economic Development Corp. recently explained in an interview, “An average of 15 to 20 companies move from other states to Colorado Springs every year and 30% are from Southern California. Approximately 60 Southern California companies are currently looking at Colorado Springs for a possible relocation”, he added.

A couple of the most recent California catches are Billet Racing Products that moved from Laguna Niguel in September, and Corinthian Colleges in Santa Ana that just opened an enrollment center in Colorado Springs that will employ 600.

“Every state in America is focusing on attracting businesses from California,” Dave said.

Here are some of his favorite selling points for California firms to move to Colorado Springs :

• California’s top income tax is 10.55%; Colorado’s is 4.63%
• California’s top corporate income tax is 8.84%; Colorado’s is 4.63%  based only on sales within Colorado
• Colorado’s worker’s compensation insurance costs 25% what California businesses pay
• Colorado Spring Utilities’ electricity rate is 4.5 cents per kilowatt hour; Southern California Edison’s is 10 cents
• Colorado Spring’s property tax rate is 0.4% to 0.5% of real value depending on location; Orange County’s is 1% (or more for Mello Roos fees, for example)

 ‘We do have a campaign. We think Colorado Springs is a good match for companies seeking to relocate. We can’t compete with southern states that throw millions of dollars in incentives and tax breaks at big projects. Our sweet spot is small to mid-sized companies where the owner moves with the company. They’re driven as much by lifestyle as by incentives.’

Colorado does offer incentives to relocating companies, but they don’t receive them until they create new jobs, White said. For example:

• The state and city may give as much as $5,000 per job plus tax credits.
• The city might rebate the property tax up to $800 per job.
• The legislature just passed an additional $2,500 per job credit against the corporate income tax.

‘We also have asked private entities to provide incentives,’ he added. ‘A country club might waive the membership fee, or the health clubs might give six months free membership. We have a pass to various tourist sites. We don’t have the beaches but we do have Pikes Peak.’

“And when business executives come to check out the town, the governor, mayor and civic and business leaders show up to greet them”, White added.

ARE YOU AN EMPLOYER ABOUT TO RELOCATE AN EMPLOYEE – OR – ARE YOU PLANNING TO MOVE TO A NEW JOB? HERE ARE SOME STARTLING FACTS !!!

In the September issue of Mobility Magazine, the monthly publication of Worldwide ERC, the organization for relocation specialists, there was a detailed analysis of the trends and costs to a company of relocating employees. In general, the volume of employee-transfers by companies shows a recession-caused decline similar to other, similar industries, but the numbers also show a comparably-modest increase this year. However, one of the statistics that might shock the reader involves the average costs related to relocating employees.

The Mobility data chart shows that, if a company transfers a current employee who owns a home, the average cost to the employer will be $90,017. A new-hire homeowner transfer will cost the company $66,610. A current-employee renter transfer will cost the company $20,750 to relocate and a new-hire renter will cost the company $17,877.

There are several significant aspects to these numbers. First of all, it is obvious that smart employers must take into account the homeowner status of any prospective transferee when making decisions related to relocation.  Secondly, most transferees are not aware of these costs and will undoubtedly be surprised by how much their transfer will cost them or their employer.

But perhaps the most important lesson to be learned from these numbers is that moving a household from one city to another is not simply a matter of hiring a moving van. Professional relocation specialists can help reduce costs to employers and to individuals is such areas as temporary housing, vehicle rentals, moving van costs, pet housing, sale of housing on one end and locating and purchasing of housing on the other end of the move, providing reliable, reputable service-providers in the new city, etc., etc., etc..

We’ve been specializing in relocation for 37 years. If you are about to be transferred, call us.

LATEST STATISTICS

Click here for 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

October 4, 2010 

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

LET'S TALK ABOUT SHORT SALES -

A term that has become very familiar to anyone involved with real estate in today's market is "short sale". This process allows a homeowner to sell his/her house for less than his/her mortgage balance, if the mortgage-holder (lender) approves the deal. The benefits of a short sale are that it allows the lender to avoid the lengthy and expensive process of foreclosure. It allows the homeowner to avoid the financial and credit-related problems arising from foreclosure. And, finally, it offers buyers the opportunity to acquire bargain-priced properties.

So far this year, 12% of home sales nationally have been short sales. Locally, in August, 6.4% of our home sales were short-sales. To help put this figure into perspective, consider that in August of 2007, just before the national recession hit, short sales made up just 1.8% of our local sales. 

So, what's the problem?

In today's market, the bottleneck in this whole short-sale process has been the banks. For whatever reason, banks have taken so long to respond to prospective buyers' offers for short-sale properties that many prospective buyers get tired of waiting for approval from the lender and just give up and walk away from the deal.

Banks cite a lack of personnel as the main reason for this excessive delay in responding to short-sale offers. However, Congress does not view that as a valid excuse for the delays and has introduced a bill (H.R. 6133, "Prompt Decision for Qualification of Short Sale Act of 2010") that would require lenders to respond to consumer short-sale requests within 45 days. We fully support this effort and hope that it will eliminate the bottleneck that currently frustrates all parties involved in the short-sale process.

This is the problem that we discussed in our interview with The Gazette last Sunday. As we pointed out in that interview, there are some short sale great deals out there, but, in order for you to take advantage of them, you will need the assistance of a knowledgeable Realtor. ..a Realtor who knows how to work with local and national lenders and who can negotiate effectively on your behalf. And, you will also need the patience to work with your Realtor to push the offer through the maze of short-sale obstacles to a successful closing.

Call us.

LATEST STATISTICS

The latest Pikes Peak Association of Realtors Sales and Listing report for the month of September shows total monthly residential sales of 603. The average sales price was $230,419 and the median sales price was $195,000.

Total sales for January through September were 6,371. The average sales price was $227,467 and the average number of days on the market was 89.

The monthly statistics show that the number of sales this September was down 26.7% compared with last year. Sales were down 12.4% this August compared with last year, but the average sale price this September was $230,419, which represents a sale price increase of 4.3% over last year. (Click here to see the complete PPAR monthly report)

Bottom line: So far this year, the number of sales is down, but prices have risen 4.3%.

Normally, a "Reasonably balance" of sales vs homes for sale consists of a 3-4 month inventory. Using current sales history, we now have a 10 month inventory of homes for sale.

So, if you are an investor, or a prospective investor, consider all of these facts: There is an oversupply of homes for sale. Prices seem to have bottomed-out and are on the rise. Interest rates are still at record lows. (Today, we can arrange for a 30 year, fixed-rate mortgage at 4.75%). You can "buy cheap", right now.

If you are a seller, or, if you would like to sell your home but have been scared off by the very competitive market, consider this: You can probably refinance your present home at a lower rate. You can purchase a new home at a low price and at a great interest rate and keep your present home as a rental property. You can then ride out the present slump in prices and wait until the market goes back up to sell your present home (or, keep it as a rental. Either way, you win).

If you are uneasy about owning rental property, consider this. Leaving aside details such as population growth, today there are as many families in homes as there were five years ago. The difference is that five years ago, perhaps 30% of those families were renters and 70% were homeowners. Today, the percentage of renters is rising.. Because of foreclosures and short sales, more families are either renting or looking for rentals. They could be your first renters in your new rental property. How does this tie in with your retirement plans?

Call us.

THE 2010 SOUTHERN COLORADO ECONOMIC FORUM WAS EXCITING

As always, the SCEF was a "sold-out" success. Leaders from the local and national business communities joined with UCCS and with local "Think Tank" experts to present a detailed picture of where our local economy is and where it is going. The topics discussed were encouraging for our local businesses and forecast a healthy recovery over the next few years.

To quote from the Forum Report's Business Conditions Index, "As of June 2010, the BCI is up approximately 19.1% from its low. The local economy is exhibiting traditional recovery patterns in most BCI components. Foreclosures peaked, building permits are increasing, manufacturing activity is increasing and new car sales are increasing. Much of this is reflected in the almost 30% improvement in consumer sentiment since February 2009".

In future Weekly Updates, we will report in more detail about the presentations at the Forum  In the meantime, we offer our thanks to all of the people who presented the Forum and who are working so hard to improve the economy and the quality of life in Southern Colorado.

Things are definitely looking up !!!

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

Heaven is a place where:

• The lovers are Italian
• The cooks are French
• The mechanics are German
• The police are English
• The government is run by the Swiss

Hell is a place where:

• The lovers are Swiss
• The cooks are English
• The mechanics are French
• The police are German
• The government is run by the Italians

September 27, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

IT'S STILL A BUYERS MARKET - BUT YOU HAVE TO HAVE PATIENCE

The Colorado Springs Business Journal (Sept. 24, 2010) reports that it's still a Buyers' market, but Buyers will need plenty of patience, a willingness to compromise and, more than ever, good credit. They may also be surprised to find that Sellers are unwilling to budge too far from their asking prices.

As one Realtor put it, "Buyers come into this market looking for blood in the water. They expect to get fabulous homes for huge discounts". And, for many Buyers, this is still possible, but they might have to recalibrate their expectations. In many cases, however, Sellers have already discounted their original asking price two or three times by the time a Buyer comes along. That means there is not as much room to negotiate down.

There are also other sorts of complications that can sour the deal. For example, one prospective Buyer made a full-price offer on a short sale, only to be turned down by the bank because they said the Seller had "priced the property too low". This Buyer then made an offer on another short sale property, but had to wait three months before the lender approved the offer. Such delays are common in today's market.

Another Buyer, who had to wait three months for a response from a lender, complained, "The lenders are just not motivated. They don't want to negotiate with you"

Still another problem that prospective Buyers might encounter is reluctance on the part of the owner of a short sale property to make repairs on the property prior to closing.

All of these problems being true, however, it is still possible to get some great deals, especially at the top end of the market. It is estimated that, in some areas of Colorado Springs, higher-priced homes will probably sell for around 30% less than their listed prices.

But, if you are a Seller, the outlook is not really that bleak. Remember that the "loss" you take on your present home when you sell, will be offset by the "deal" you get on the purchase of your replacement home.

Finally, a note of caution to both Buyers and Sellers. Interest rates are going up and it looks like prices may not go down much further, so, unless you pay all cash for your next home, higher interest rates and inflation could eat up any savings you might make by gambling on a further decline in prices.

Bottom line: Better make your move now. Call us !!!

SPEAKING OF WHICH ----H.R.6133 MAY SPEED UP THE LENDING PROCESS

On September 15, 2010, U.S. Representatives Robert Andrews (D-NJ) and Tom Rooney (R-FL) introduced H.R.6133, "Prompt Decision for Qualification of Short Sale Act of 2010". The bill would require lenders to respond to consumer short sale requests within 45 days.

If this bill passes, it would be a tremendous boost to the housing market, since short sale properties represent between 20% -30% of inventory in many parts of the country. The unnecessary lender-delays in processing offers for short-sale properties have turned many prospective Buyers away from the market. In fact, in many cases, lenders have not even responded to their offers. 

This bill has the potential to increase market demand, stabilize prices and, unfortunately, put pressure on lenders to increase mortgage rates. So, call me to discuss your options.

The introduction of this bill is noteworthy in several respects. First of all, it is a sensible solution to a real problem that real people are having. Secondly, it shows that Democrats and Republicans can actually work together. Finally, it's a bill that won't cost us anything.

Maybe the world isn't actually coming to an end, after all.

HAVE EXISTING-HOME SALES - AND PRICES - HIT BOTTOM?

According to a report by economists at mortgage insurers, The PMI Group, existing-home sales will show "some modest gains" in August, September and even October.

After hitting a low for the first half of July, purchase mortgage applications have edged up slightly, the report noted, citing statistics gathered by the Mortgage Bankers Association. (Because it takes time to approve a loan and close a home sale, loan applications submitted in August might not show up in statistics on existing-home sales until October, or maybe as late as 2012, if HR 6133 doesn't pass)).

Another leading indicator, the National Association of Realtors' pending sales index, shows that the number of homebuyers who have entered into purchase contracts was up 5.2% in July.

"This is consistent with the increase in the MBA's purchase applications, and the two of them together strongly suggest that sales have bottomed out, at least for now", PMI economists said.

The housing market index published by the National Association of Homebuilders slid in August, but that's probably an indication that a rebound in new-home sales will lag sales of existing homes, the report said, with Buyers likely to bargain-hunt for distressed properties.

"The leading indicators for housing demand suggest that the drop in home sales is probably over and that some modest gains may be in store for the period (August through October)", the report said.  "Beyond that, the underlying determinants of housing demand will have to strengthen in order for more home sales to rise appreciably. Those factors include job growth, affordability, demographics and consumer sentiment".

Other forecasts from the report include: 

• Unemployment will surge to 9.8% in the fourth quarter of 2010, before gradually falling to 8% in 2012
• Economic growth is unlikely to accelerate until mid-2011
• Affordability is close to record highs, which should drive housing demand
• Consumers might delay home purchases, in the hope that prices will continue to fall
• Because nearly one in four homeowners have mortgages which put them "upside down", these homeowners will not be inclined to buy their next house in the near future.
• In the second half of 2011, there should be a pickup in job gains and stronger household formation and thus, a stronger, but historically modest, rise in home sales
• Existing-home sales should rebound from a projected 4.96 million this year to 5.5 million in 2011 and 5.67 million in 2012
• New-home sales are expected to total 342,000 this year, 485,000 next year and 590,000 in 2012

Bottom line: We are lucky to be living in a city which has relatively low unemployment, a large segment of Department of Defense spending and which is a popular target for retirees and businesses fleeing the high taxes in other parts of the country. In fact, most of our local problems could be cured simply by CREATING MORE JOBS.  More about that, later.

DID YOU KNOW THAT IT COSTS YOU $100 A WEEK TO LOOK AT PIKES PEAK?

Years ago, we used to joke about the fact that Colorado Springs paid lower wages than did other parts of the country, but that people still wanted to come here to live. We used to say that "It costs everybody $100 a week to look at the Peak".

Well, The Gazette just reported (Sept. 27, 2010) that things haven't changed much. In a recent Denver Post study of unemployment insurance claims in Colorado, of the 12 industries that added the most jobs, eight paid below the average annual wage of $46,813 for private-sector workers in the state.

"We have seen an across-the-board drop in wages", said Alexandra Hall, the state's chief labor economist.

Telemarketing centers generated the most new jobs in Colorado for the past two years (4,650 jobs). The average annual wage was $28,609, or, 61% of the state's average last year.

Firms that care for elderly and disabled added 2,381 net new jobs. The average annual wage was $18,023.

General hospitals were the third-largest source of jobs, adding 1,948 new positions, with an average annual wage of $52,150.

Discount and warehouse stores added 1,935 new positions and paid an average annual wage of $23,834

Economists disagree on whether the growth of lower-paying jobs reflects caution by employers after the recession or a more fundamental loss of income for US workers.

But we know the answer, don't we?. It's the "Look at that view" fee that we all pay, every time we look at Pikes Peak..(but, it's worth it.)

BITS AND PIECES

The Recession Is Officially Over:  On Monday, Sept 20, 2010, the National Bureau of Economic Research announced the recession that began in December 2007 officially ended roughly 18 months later in June 2009. This announcement is significant for several reasons

1. We completely missed the celebration and the parade.
2. If these same people will now be providing me with my healthcare, I just hope I never need an emergency appendectomy. First of all, they won't know what an appendix looks like and secondly, they'll have to dig me up to perform the operation.

SAY WHAT?:  The Fed announced this week that it is "prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate."  Translation:

• "We are going to provide more liquidity by printing more money"
• If history is any guide, this excess liquidity will artificially prop up asset prices and ultimately lead to substantial inflation. 

On the other hand, maybe the world is actually coming to an end. !!

LATEST STATISTICS

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

LAST CALL FOR THE SOUTHERN COLORADO ECONOMIC FORUM

This Friday is the day !!!  If you've ever wondered what our local economic future looks like, don't miss attending the Southern Colorado Economic Forum on October 1, 2010. Make your reservations now, for this "sell-out" event. 

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

Let's talk about economists

An economist is a trained professional paid to guess wrong about the economy. An econometrician is a trained professional paid to use computers to guess wrong about the economy.

Three economists went out hunting, and came across a large deer. The first economist fired, but missed, by a foot to the left. The second economist fired, but also missed, by a foot to the right. The third economist didn't fire, but shouted in triumph, "We got it! We got it!"

Q: What do economists and computers have in common?

A: You need to punch information into both of them.

Q: Did you hear of the economist who dove into his swimming pool and broke his neck?

A: He forgot to seasonally adjust his pool.

Q: How many economists does it take to change a light bulb?

A: Seven, plus or minus ten.

Q: What's the difference between an economist and a befuddled old man with Alzheimer's?

A: The economist is the one with the calculator.

Q: Why did God create economists?

A: In order to make weather forecasters look good.

Two economists meet on the street.

One inquires, "How's your wife?"

The other responds, "Relative to what?"

But, don't forget, economists have forecasted nine out of the last five recessions.

When an economist says the evidence is "mixed," he or she means that theory says one thing and data says the opposite.

Q: Why was astrology invented?

A: So that economics could be called an accurate science.

"ACCEPTABLE" LEVEL OF UNEMPLOYMENT: An "acceptable" level of unemployment means that the government economist to whom it is acceptable still has a job.

Sept. 20, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

ATTENTION BUYERS ! YOU DON'T HAVE TO BUY A FORECLOSURE TO GET FORECLOSURE PRICES

We frequently receive calls from prospective buyers and investors who are interested in purchasing foreclosed properties. They have heard that there are some really good deals available on foreclosed properties and they want to take advantage of the current low prices. Are they on the right track??

Well, the truth is that both home prices and mortgage rates are very low right now and we encourage everyone to buy now, before rates go any higher, but, we also point out two often-overlooked facts. First, if you want to move into your new home in the near future, foreclosures might not be the answer. The unfortunate fact is that lenders have a habit of unnecessarily delaying acceptance of offers for these properties, resulting in delays of as much as six months. Obviously, if you are sitting there with a moving van full of furniture, such a delay is unacceptable.

Why do banks take months to accept offers for foreclosures? Who knows? Perhaps it's because the clerks handling such offers are afraid to make decisions. Perhaps lenders are fearful of flooding the market with foreclosed properties and thus forcing prices even lower. Perhaps it's because banks feel prices will go back up in the near future and they will get a better offer next month (This is really wishful thinking. Most experts agree that home price recovery will take two or three years). Whatever the reason for banks' slow response time, it's a national problem and many prospective buyers have become discouraged and cancelled their offers, as a result.

Is there any way around this slow-response time from lenders? It depends upon the lender. A couple of months ago, we presented a lender with an offer, supported by a recent appraisal, but received no response. Finally, last week, we intimated to the slow-moving clerk who was handling the property that we were going to buy stock in her corporation and, at the upcoming stockholders' meeting, we intended to bring her lack of response to the attention of the officers of the corporation. .Within 24 hours, we had an acceptance of our client's offer. Obviously, this solution won't work with every lender .(and we sure don't want to end up with stock in a bunch of unresponsive banks).

The second fact that prospective buyers often overlook is that, as a result of lenders flooding the market with low-priced foreclosures, prices on all properties on the market have been dragged down in order to stay competitive with foreclosure prices. Thus, buyers can get the benefit of foreclosure prices, even for properties which are not foreclosures.

Bottom line: Prices for available homes are very low, but home-mortgage rates are starting to rise and inflation is looming . Now is the time to buy. Call us.   

CALLING ALL DOCTORS ! YOUR PRESCRIPTION FOR A HOME LOAN IS READY

We recently were approached by a lender who will provide very liberal terms on home loans for professionals (Doctors, Lawyers, CPAs, Some business owners, etc.). This lender's market research tells them that professionals earn more income, have good payment history, know when to capitalize on the real estate and investment market and can even provide deposits. In fact, because of the stability of their target market, this lender does not even consider outstanding student loans in the qualification process.

One of our past clients, a doctor, contacted us last week about "trading-up" for a larger home to better accommodate his growing family. Based upon present market conditions, he is now considering turning his present home into a rental property and taking out a new loan on a larger house (at an interest rate that will be lower than he is paying for his present home). He was very excited to hear about this lender's "professional" loan. As an example of the type of loan this lender is willing to make to making to professionals, consider these terms:

Loan amount - $600,000 - $700,000, 30-year, fixed-rate of 5.25%, no money down, no origination fee, no discount points, additional .25% off interest rate when borrower takes out one of the lender's  credit cards,

If you fall into this category of borrowers, give us a call. We'll write you a prescription.

FORBES MAGAZINE SAYS COLORADO SPRINGS MARKET LOOKS GOOOOD

Forbes Magazine turned to real estate research firm Local Market Monitor to figure out which U.S. markets have the greatest likelihood of home-price appreciation. Because we offer a mix of jobs weighted toward growth industries, Colorado Springs came in as the 6^th-best city for investors in the U.S. market. (Denver-Aurora-Broomfield came in at # 8).

Two years ago, Forbes ranked Colorado Springs as #7 in its Top 10 list of cities where home prices were expected to increase. In 2009, Colorado Springs ranked 10^th on Forbes' Best Places for Business and Careers list. And, this year, Forbes ranked the Springs as the nation's sixth-most wired city for broadband connections.

How do you like them apples??

SOUTHERN COLORADO ECONOMIC FORUM COMING SOON

On a related topic, if you've ever wondered what our local economic future looks like, don't miss attending the Southern Colorado Economic Forum on October 1, 2010. Make your reservations now, for this "sell-out" event. 

LATEST STATISTICS

To see the latest sales and Listing statistics for the Pikes Peak area, click here

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