Jan. 10, 2011

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

HOW ARE WE DOING ?

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

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

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

Things are definitely looking up.

THE MORTGAGE INTEREST DEDUCTION IS BEING CHALLENGED !!!

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

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

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

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

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

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

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

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

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

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

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

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

THE REALITIES OF FORECLOSURE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sounds like a good idea. Call us.

JOKE OF THE WEEK

SOME THOUGHTS ABOUT OUR RECENT FOOTBALL SEASON

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

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

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

A, The Denver Broncos

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

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

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

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

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

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

"159", said Slim.

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

"What an exciting opportunity!", said Slim.

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

"141", said Billy-Bob.

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

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

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

"Duh. Huh?" said Bubba.

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

October 25, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

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

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

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

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

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

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

Play ball !!!   Batter up !!! 

WANT TO BEAT THE STOCK MARKET?  .BUY A HOUSE

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

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

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

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

WHAT DO THE EXPERTS SAY ABOUT real estate IN 2011?

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

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

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

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

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

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

LATEST STATISTICS

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

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

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

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

JOKE OF THE WEEK

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

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

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

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

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

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

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

December 27, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

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

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

Happy Holidays and Best Wishes for 2011.

5 Reasons to Buy a Home in 2011

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

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

HERE’S A POEM ABOUT THIS REALTOR’S

NEW- YEAR’S DREAM-VISITOR

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

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

The signs were all planted on front lawns with care,

In hopes that some Buyer might look for them there

While Sellers were nestled all snug in their beds;

With visions of quick-sales abuzz in their heads;

I was here with my laptop and Blackberry, too;

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

When out on the lawn there arose such a clatter,

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

Away to the window I flew like a flash,

Tore open the shutters and threw up the sash.

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

Gave a lustre of midday to objects below,

When what to my wondering eyes did appear,

But a miniature sleigh and eight tiny rein-deer,

With a little old driver so lively and spry,

I knew in a moment he intended to buy.

More rapid than eagles his coursers they came,

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

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

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

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

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

As leaves that before the wild hurricane fly,

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

So up to the housetop the coursers they flew

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

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

The prancing and pawing of each little hoof.

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

Down the chimney my Prospect came with a bound.

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

And his clothes were all tarnished with ashes and soot;

A bundle of loan approvals he carried on his back,

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

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

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

His droll little mouth was drawn up like a bow,

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

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

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

He had a broad face and a little round belly

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

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

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

A wink of his eye and a twist of his head

Soon gave me to know I had nothing to dread;

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

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

And laying his finger aside of his nose,

And giving a nod, up the chimney he rose;

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

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

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

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

Now, have a good night!”

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

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

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

LATEST STATISTICS

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

Dec. 20, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

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

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

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

Single Worker - $50,000 Income, No Children              

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

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

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

Senior Retired Couple - $100,000 Income

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

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

BUT WAIT, THERE’S MORE …

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

Payroll tax rates

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

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

Long-term capital gains rates

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

Qualified dividend tax rates

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

Increased exclusion on small business stock gains

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

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

Itemized deduction and personal exemption phaseouts

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

Deduction for state and local sales taxes

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

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

Dependent care credit

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

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

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

AND, IN ADDITION ….

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

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

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

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

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

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

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

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

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

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

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

MORTGAGE RATES AND HOME PRICES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

LATEST STATISTICS

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

JOKE OF THE WEEK

December 13, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

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

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

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

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

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

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

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

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

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

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

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

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

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

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

HERE’S SOME REASSURANCE FOR HESITANT PROSPECTIVE HOMEBUYERS –

THE JOB-LOSS PROTECTION PROGRAM 

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

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

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

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

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

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

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

JOKE OF THE WEEK

 STATISTICS 

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

December 6, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET 

WHAT ARE OUR LATEST MORTGAGE INTEREST RATES ?

Effective Monday, December 6, the interest rates in the El Paso County 2009A bond program for new loan reservations are: 4.25% “Non-Assisted” Loans without DPA and 4.75% “Assisted” Loans with 3% DPA Grant

Conventional 30 year fixed rate with no origination fee or points are at 4.625% and VA & FHA 30 year fixed 0+0 are at 4.5%

As we have been warning our readers, rates continue to climb.  If you are considering buying a new home or an investment property, be aware that values have leveled out and increased rates will mean less home for the dollar. With QE2 on the governments agenda to help out the stock market, it appears highly probable that these rates, if not higher, may become the norm.

MAJORITY OF AMERICANS SAY: BUYING A HOME IS A GOOD DECISION

Despite the continuing challenges facing the U.S., nearly eight out of 10 respondents believe buying a home is a good financial decision, according to NAR's eighth annual Housing Opportunity Pulse Survey.

The survey, which measures how affordable housing issues affect consumers, also found job security concerns to be the highest in eight years of sampling, with 70 percent of Americans saying that job layoffs and unemployment are a big problem in their area; eight in 10 cite these issues as a barrier to homeownership. The telephone survey of 1,209 urban and suburban adults in the top 25 metropolitan statistical areas was conducted for NAR by American Strategies and Myers Research & Strategic Services for NAR's Housing Opportunity Program.

Some key results:

• Americans continue to believe that buying a home is a good financial decision (77 percent believe strongly or not so strongly, 68 percent strongly so).
• More than two-thirds of respondents (68 percent) say that now is a good time to buy a home.
• Job insecurity and the lack of jobs continue to be the primary obstacle to home ownership and market recovery.
• Respondents see the recession and job losses as the main reasons for the foreclosure problem, a shift from last year when they were more likely to blame homeowners who bought homes they could not afford.
• A majority of renters say that owning a home at some point in the future is either one of their highest priorities (39 percent) or a moderate priority (24 percent). Just 21 percent of renters say that owning a home is not a priority at all.
• Frustration with banks is up: now a majority worry that banks have made it too hard to qualify for a home mortgage loan.
• 51 percent of respondents say foreclosures remain a big or moderate problem in their area. While there has been a significant drop in the percentage of those surveyed who say foreclosures have increased, 51 percent say that the rate of foreclosures is about the same as it was last year.
• Most of those surveyed say that it is harder to sell a home in their neighborhood than it was a year ago.
• Looking forward, 70 percent expect real estate sales in their neighborhood to remain about the same over the next few months. A nearly identical number (69 percent), also expect home values to remain the same.
• Nearly one-quarter (23 percent) are now very concerned about the number of homes and condos for sale in their area—a number that is up 7 points from last year.
• Most respondents are more concerned about the drop in home values than they are about home costs being too high. Still, cost remains the significant barrier to many who would otherwise like to buy a home.

ONE INTERESTING REASON FOR THE HOUSING GLUT: Fewer New Households

According to RISMEDIA (December 4, 2010) and the Census Bureau, U.S. household formations are at their lowest since 1947. And that's helping to keep the supply of unsold homes at near-record levels nationwide, even though relatively few houses are being added to the inventory.

Between March 2009 and March 2010, the number of households rose just 357,000, according to the census data. In the previous 12 months, the number increased only 398,000, the third-smallest increase on record since World War II. (Between 2002 and 2007, before the economy started on its downward trajectory, household formations averaged 1.3 million a year, U.S. census data show.)

In a well-functioning economy, household formations "would be closer to 1.25 million," said Mark Zandi, chief economist of Moody's Analytics in West Chester, Pa.

"The drop in household formations is the consequence of the consumer fear of what's happening with the economy and with the job market," said Lucien Salvant, a spokesman for the National Association of Realtors.

"When people are afraid of losing their jobs or not being able to get into the job market, they are not thinking about buying a home," Salvant said. "Many opt to stay at home with parents, or to share rentals with friends."

The nation's gross vacancy rate — the proportion of housing units that are vacant — stood at 14.5 percent at the end of the second quarter of 2010, census data show. During normal times, builders need to add about 1.7 million houses a year to meet underlying demand stemming from, among other things, the need for replacement homes and the desire for second homes, as well as conversions from nonresidential to residential uses and increases in the number of households.

For example, about 250,000 new homes are needed per year to replace houses that are destroyed by fires and natural disasters or that wear out from neglect or old age. Demand for second homes combined with other miscellaneous factors accounts for 50,000 to 100,000 new houses a year.

Household growth typically requires 1.3 million to 1.4 million units.

"The sharp drop in household formation largely explains why the housing glut remains stubbornly high, despite the plunge in housing starts in recent years," said housing economist Patrick Newport, of IHS Global Insight in Lexington, Mass.

Two major sources of household formation — immigration and marriage — remain well below the averages of recent years.

The National Center for Health Statistics reports that the number of marriages per thousand population fell from 8.2 in 2000 to 6.8 in 2009. Divorces per thousand population fell from 4.0 in 2000 to 3.4 in 2009.

There are no hard data on "doubling up" — young people sharing rentals or moving in with their parents in a tight job market — though anecdotal evidence indicates the latter has become more commonplace in recent years.

Another big factor in the decline in households is the decline in immigration. During the late 1990s and in the first years of this decade, the housing industry banked on immigration for a good part of its growth.

Between 1990 and 2000, the U.S. population grew by nearly 33 million, with almost half of that gain attributable to immigration, according to data provided in 2003 by James Johnson Jr., a professor at the Kenan-Flagler Business School at the University of North Carolina-Chapel Hill.

In the 1990s, census data show, immigrants accounted for 250,000 household formations a year. Immigrants typically rent for their first few years in this country, housing economists say. Then, after becoming established, they become a major factor in the for-sale marketplace.

Newport believes that a drop in immigration might have played a greater role early in the recession than it did later on. In 2009, census data show, households headed by the native-born under age 35 fell by 338,000, indicating that doubling up was the larger contributor.

The number of households headed by those ages 15 to 24 fell 124,000 (students moving back in with parents), while households with six or more people rose 355,000, an 8 percent increase.

A common misconception, Newport said, is that foreclosures account for the oversupply of houses.

"A foreclosure or a bank taking possession of a home," he said, "does not by itself add to the housing glut. If a household vacates a home and moves into a rental unit, the housing supply is unchanged. Supply increases, however, if one household moves in with another, or if its members become homeless”, Newport said.

The moral of the story is: Don’t just move in with your patents …Do the patriotic thing. Get married and buy a house !!

COLORADO SPRINGS HOME SALES PRICES ROSE IN 2010 ..AND THAT’S BETTER THAN MOST AREAS IN THE COUNTRY

The most recent NAR report on median sales prices of existing single-family homes for metropolitan areas shows Colorado Springs prices were up 3.2% over 2009, as opposed to the national prices which were down .2% from last year. These figures emphasize that we are outperforming most other metropolitan areas of the country. (To see the complete report, click here)

In a nutshell, our local market is still very slow, with only 600 sales in November, but the outlook for Buyers looks great. Large inventories (Yes, foreclosures are still adding to the inventory), low interest rates (not as low as last month, but still a bargain), low prices and eager Sellers all add up to a wonderful opportunity for both Homebuyers and Investors. ..And, there is a growing pool of renters out there that should keep our vacancy rates low, for the foreseeable future.  

Call us and let’s discuss how these factors fit into your investment strategy.

THE ‘FIRST-TIME DEFAULTER’: the Newest Customer Segment for Banks  

Over the last two years, a new customer segment—the "first-time defaulter" (FTD)—has emerged and is presenting a new challenge for banks, according to a new survey examining the future of consumer lending by the Deloitte Center for Financial Services.

According to Deloitte's survey, 11 percent of bank customers surveyed have been hit with a negative credit experience for the first time in their lives during the past two years. Overall, 22 percent of consumers have experienced a serious negative credit situation since the peak of the crisis in September 2008, including events such as delinquency, foreclosure, bankruptcy and charge-offs.

"This is a significant new customer segment that banks should be aware of," said Andrew Freeman, executive director of the Deloitte Center for Financial Services, Deloitte LLP. "Our research shows just how sizeable the first-time defaulter group has become."

More than half of FTDs (58 percent) have been contacted by a collection agency, and 43 percent have been delinquent in their medical bills.

According to the survey, these events could be costly for financial institutions, as poor interactions and unmet customer expectations may cause the first-time defaulters to look elsewhere: 63 percent of respondents say they are not at all likely to borrow from their current institution in the future based on the lender's efforts to help resolve their issues.

"Today, retail banks are rethinking their broader lending strategies and practices," said Freeman. "As part of this reassessment, lenders are likely to be paying careful attention to how they serve this new segment. When implementing strategies to re-engage with these customers, financial institutions may want to recognize that once many of these individuals are able to regain their economic footing, they may become profitable again."

Other findings of the survey, from the full base of respondents, include:

• Almost two-thirds of consumers (65 percent) say they have the same level of satisfaction relative to two years ago with their bank.
• At the same time, most respondents have seen little change in the lending process overall, although 16 percent said they have seen higher fees associated with loans and credit.
• Only 28 percent believe the Dodd-Frank Act and other new regulations will have immediate benefits for consumers. Furthermore, a significant proportion of consumers expect higher fees, higher rates, more paperwork and fewer offers from lenders in the next 12 months.
• More than half of those surveyed (52 percent) would prefer to use a single bank for all their financial services needs. But, with consumers' interest in obtaining loan products from their primary bank surprisingly low, the survey findings indicate that banks' cross-selling efforts will likely require some fresh, creative efforts.

Unfortunately, this is just one more problem they have to face in today’s competitive market.

CHIEF ECONOMIST FOR NAR TO SPEAK IN COLORADO SPRINGS

Lawrence Yun, Chief Economist for the National Association of Realtors, will speak at the Crowne Plaza Hotel, in Colorado Springs on Wednesday, February 16, 2011, 9am-11am. Attendance will be by registration only and will be limited to 300. Registration for the event will begin at 8:30am.

Dr. Yun creates NAR’s forecasts and participates in many economic forecasting panels, including Blue Chip and Harvard University Industrial Economist Council. USA Today recently listed him among the top 10 economic forecasters in the country.

The registration fee for this event is $10. Be sure to register ASAP, to insure getting a seat to hear this outstanding speaker.

The Sponsor of this outstanding presentation is Land Title Guarantee Company.

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 monthly Sales and Listing statistics for the Pikes Peak area.

CHRISTMAS JOKE OF THE WEEK

Q: Where do polar bears vote?
A: The North Poll.

Q: How does Al Gore's household keep Christmas politically correct?
A: On Christmas morning, they give the presents TO the tree.

Q: What do you call a cat on the beach at Christmas time?
A: Sandy Claus!

Q: How do sheep in Mexico say Merry Christmas?
A: Fleece Navidad!

Q: What nationality is Santa Claus?
A: North Polish.

Q: What do you call a bunch of grandmasters of chess bragging about their games in a hotel lobby?
A: Chess nuts boasting in an open foyer!

Q: What goes Ho, Ho, Swoosh, Ho, Ho, Swoosh?
A: Santa caught in a revolving door!

Q: What do you call people who are afraid of Santa Claus?
A: Claustrophobic.

Q: How come you never hear anything about the 10th reindeer "Olive" ?
A: Yeah, you know, "Olive the other reindeer, used to laugh and call him names"

Q: Why is Christmas just like a day at the office?
A: You do all the work and the fat guy with the suit gets all the credit.

Q: What's a good holiday tip?
A: Never catch snowflakes with your tongue until all the birds have gone south for the winter.

Q: Why did they have to cancel the Nativity pageant in Washington, this year?

A: Because they couldn’t find three Wise Men or a Virgin.

November 29, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

real estate INVESTMENTS LOOK GOOD, BUT OUR AREA STILL NEEDS JOBS TO STABILIZE THE ECONOMY

The National Association of Business Economics' latest report voices concern about federal debt, unemployment, and business regulation, causing experts to forecast only moderate growth in 2011.

The NABE also reports that "consumer spending is expected to remain modest throughout the forecast horizon due to weak job gains, persistently high unemployment, and negligible growth in household net worth."

On the bright side -- the chances of the economy slipping back into recession are considered low.

The housing market, however, continues to struggle. The National Association of Realtors reports that existing home sales fell in October after two months of gains.

Lawrence Yun, NAR chief economist, said the recent sales pattern can be expected to continue, but may improve come Springtime. "The housing market is experiencing an uneven recovery, and a temporary foreclosure stoppage in some states is likely to have held back a number of completed sales. Still, sales activity is clearly off the bottom and is attempting to settle into normal sustainable levels."

The third quarter also saw an increase in the depreciation of home values, this according to Zillow.com. Their experts report that we have seen 51 consecutive months of declines, with values now 25% below their peak. This decline in home values is comparable to the decline seen between 1928 and the end of 1933, when values fell 25.9%, at the height of the Great Depression. In addition, foreclosure liquidations rose again, to a new peak for the third quarter. More than 1.17 out of every 1,000 homes was liquidated in September.

With a more positive view, however, Frank Nothaft, vice-president and chief economist at Freddie Mac, stated, “For the first time during the housing downturn, the overall delinquency rate is lower than it was a year earlier”.The Mortgage Bankers Association also reported that the mortgage delinquency rate in the U.S. declined last quarter "amid hints of improvement in the job market." Michael Fratantoni, the MBA's vice president of research and economics reported that "although the employment report for October was relatively positive, the job market had improved only marginally through the third quarter." Therefore, the delinquency rate may have declined, but it remains high.

The National Association of Realtors echoes this sentiment, releasing a statement earlier this month noting that the housing market recovery depends on jobs, as well as access to credit.

Locally, the unemployment rate for the Colorado Springs area is now over 8% and job uncertainty is a persistent problem. According to a recent article in the Gazette, “The 8.9 percent unemployment rate in Colorado Springs is the highest since June 2009 and the 27,336 area residents unsuccessfully looking for work represented the third highest total on record, according to the Colorado Department of Labor and Employment."

Emphasizing the dependence of the housing market on jobs, NAR Chief Economist Lawrence Yun stated, "Modest changes in mortgage rates are less important to a housing market recovery than the number of people who are able to obtain mortgages,”

Or, to put it simply, unemployed people don’t buy houses.

MORTGAGE RATES STARTING TO RISE FROM AN ALL-TIME LOW

As we have been warning, 30 year fixed mortgage rates are now settling at levels significantly higher than all time lows set just weeks ago. Conforming 30 year fixed mortgage rates today are at 4.4% for well-qualified borrowers who pay a standard origination fee (points) of .07 to 1%. Current 15 year fixed mortgage rates today are at 3.77%.

FHA mortgage rates, which are driven by the same mortgage-backed securities prices as conforming fixed mortgage rates, are also up about a quarter percent higher than they were two weeks ago and are nearly identical to conforming mortgage rates today. Jumbo mortgage rates have avoided the spike that has hit conforming and FHA interest rates. Current 30 year fixed jumbo mortgage rates remain at a record low 4.875%.

It doesn’t look like rates will go back down. Call us to find out the best available current rates.

STARTING TO GET CABIN-FEVER?  – NOW MIGHT BE A GOOD TIME TO BUY A VACATION RENTAL

Right now, the languishing housing market offers some lingering upsides for those who have a pot of investment dollars to burn. Home prices are low, financing is cheap, inventories are bulging and vacation rentals represent a great opportunity to grab a piece of the American Dream as a solid, long-term investment.

"Vacation homes are almost always a good investment," says vacation rental guru Christine Karpinski, director of Owner Community for HomeAway.com, the global leader in vacation rentals, hosting some 540,000 vacation rental listings.

"First, if you're looking for a good long-term investment, real estate tends to be a good bet. Second, vacation properties have the ability to pay for themselves, and owners often earn a profit in rental income. Third, the investment comes with the desirable perk of having a place at the beach or in the mountains to call your own," says Karpinski, a vacation rental owner herself.

Here's why you might want to move on that vacation rental now.

Prices are as low as they are going to go.

Property prices are as low as they've been in ten years. Procrastination won't keep them low. Analysts say the housing market is scraping bottom and poised to move up.

Interest rates are likewise as low as they are likely to go.

Rates on non-owner occupied properties are only about a half a percentage point higher than residential rates-- with a virtually mandated 20 to 30 percent down payment.

Markets are flush with inventory.

The slow economy and even slower housing market has left vacation markets brimming with buying opportunities, from sellers looking to move on or up, to foreclosures that warrant careful scrutiny. “And as market demand has surged, organizations like HomeAway.com have sprung up on the Internet to help connect potential renters with your vacation rental" Karpinski said.

Buy now, beat the 2011 peak season rush.

Buy now and you've got plenty of time to prepare yourself and your property for the peak rental season. Rental fees generated during the twelve weeks between Memorial Day and Labor Day can pay your mortgage for an entire year. Most inquiries come in between January and March.

However, before you let yourself fall in love with a property, make sure it is legal to rent it out as a vacation home. “Some areas and homeowners' associations do not allow short-term rentals," Karpinski warns.

SOME HOLIDAY SAFETY TIPS TO PROTECT YOUR HOME

The Holiday season is upon us, and for most it is a time full of joy, fellowship, and family. But the unexpected can and does happen. So, from stopping theft to preventing fires, here are a few tips from the experts that can help keep your family safe this time of year.

• Fire safety comes with the territory of the holidays. Trees and lighting can both be dangerous if not done correctly.
• When selecting a real tree, be sure to buy one that is fresh. This means you should look for a fragrant tree that is a rich, deep green color. Also, the trunk should still be sticky with sap. Old trees are dry and brittle, and thus can be very flammable.
• To keep your tree fresh throughout December, be sure to keep it immersed in water at all times. If needles start to fall off, give it more water!
• For those with artificial trees, don't use electrical lights on metallic trees! And be sure to always turn your lights off you go to bed or leave the house.
• Another fire hazard are those beautiful, twinkling lights. Every year's decorating should begin with checking light strands for cut or frayed wires.
• Also, be sure that lights are used as marked. Indoor lights are for use inside only. Outdoor lights are kept outside.
• Next, don't overload your outlets. Three sets of lights to an extension cord is plenty!
• Another looming threat during the holidays is home burglary. Thieves prey on those that travel during this season.
• To prevent thieves from targeting your home, you need to make your schedule unpredictable. That means keep your routine varied. Come home randomly for lunch one day a week. Leave for work at different times.
• And to give the appearance that someone is always home, leave on a TV or use lights that are on timers.
• Never post on social media that you'll be out of town or away from your house for extended periods of time.
• And as added measures of security, consider installing an alarm system, or having a house-sitter stay at your home or check on it periodically during your vacation.

Use these tips to have a safe and merry holiday season!

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

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. 

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