Real Estate Information

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

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

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

John Paulson 9/27/2010

WOW! That’s a powerful statement.

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

Who is John Paulson?

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

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

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

What did other financial players think of his statement?

The Wall Street Journal agrees with Paulson:

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

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

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

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

Bottom Line

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

……AND ANOTHER THING

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

1.     You can get a good deal

2.     Mortgages are cheap

3.     You can save on taxes

4.     It will be yours

5.     You’ll get a better home

6.     It offers some inflation protection

7.     It’s risk capital

8.     It’s forced savings

9.     There is a lot to choose from

10.  Sooner or later, the market will clear

AND FINALLY…

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

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

THE SOUTHERN COLORADO ECONOMIC FORUM IN A NUTSHELL

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

LATEST STATISTICS

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

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

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

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

JOKE OF THE WEEK

October 4, 2010 

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

LET'S TALK ABOUT SHORT SALES -

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

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

So, what's the problem?

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

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

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

Call us.

LATEST STATISTICS

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

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

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

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

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

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

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

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

Call us.

THE 2010 SOUTHERN COLORADO ECONOMIC FORUM WAS EXCITING

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

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

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

Things are definitely looking up !!!

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

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

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

JOKE OF THE WEEK

Heaven is a place where:

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

Hell is a place where:

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

September 27, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Other forecasts from the report include: 

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

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

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

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

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

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

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

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

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

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

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

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

BITS AND PIECES

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

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

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

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

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

LATEST STATISTICS

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

LAST CALL FOR THE SOUTHERN COLORADO ECONOMIC FORUM

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

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

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

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

JOKE OF THE WEEK

Let's talk about economists

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

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

Q: What do economists and computers have in common?

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

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

A: He forgot to seasonally adjust his pool.

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

A: Seven, plus or minus ten.

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

A: The economist is the one with the calculator.

Q: Why did God create economists?

A: In order to make weather forecasters look good.

Two economists meet on the street.

One inquires, "How's your wife?"

The other responds, "Relative to what?"

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

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

Q: Why was astrology invented?

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

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

Sept. 20, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

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

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

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

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

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

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

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

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

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

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

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

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

FORBES MAGAZINE SAYS COLORADO SPRINGS MARKET LOOKS GOOOOD

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

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

How do you like them apples??

SOUTHERN COLORADO ECONOMIC FORUM COMING SOON

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

LATEST STATISTICS

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

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

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

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

JOKE OF THE WEEK

September 13, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

LET'S TALK TURKEY ABOUT THE CURRENT real estate MARKET

It's easy for us to get so involved in presenting all of the details of our local real estate market  that we forget to put the facts and trends into a context that is easily absorbed. In other words, sometimes we make it so complicated that it's difficult for our readers to "see the forest for the trees".

So, even though Thanksgiving is still a couple of months away, maybe it's time for us to "talk turkey" about the current real estate market and lay out the options that face potential Buyers and Sellers.

Question: Is this a good time to sell?  

Answer : No.

The inventory of available homes for sale far outdistances the demand. And that inventory is growing as banks dump their foreclosed properties on the market. Government attempts to help people avoid foreclosure have not worked. (The Home Affordable Modification Program was supposed to help 3-4 million people. So far, less than 500,000 have applied.). Demand plunged this summer after the Tax credit expired and unsold homes are still piling up. Some experts are estimating that distressed homes could account for half of the market by year-end.

Adding to the problem of oversupply is the pesky problem of unemployment. When people don't have jobs, they don't buy homes. Unfortunately, the programs that have been introduced by the government don't seem to address the real problems of real people. As an example, we have a friend who has been unemployed for 16 months, after being "downsized" by a Fortune 500 company. During this period of unemployment, this individual continued to make regular house payments. When she applied for assistance under the Home Affordable Modification Program, she was told she didn't qualify for assistance because she had made all of her house payments. She would have to be 2 months behind in her payments, before the government could consider her request.

"But, we are being transferred and we have to get rid of this house". Well, if this were five years ago, we would point out that selling your home would depend on upgrading the exterior, repainting, staging, landscaping, etc., etc., etc.. Today, however, the cold, hard fact is that selling your home will depend primarily on aggressive pricing.   

So, where does that leave people who want to sell, but who don't want to "give their house away" by reducing their asking price?  The suggestion we have been making to credit-worthy people who can afford to buy another house is not to sell, but to rent out their present homes until the market can absorb the present glut of distressed properties. Even thought there is a shortage of Buyers out there, there are also growing numbers of potential renters. Almost everyone who has lost a house to foreclosure has now become a renter.

These new renters are quality people who are used to taking care of their homes and who are looking for high-quality places to raise their families. Considering the current low-interest rates, the benefits of home ownership, including income-tax tax-deductions, the pool of potential renters and the looming inflation, the present real estate crisis could turn out to be a blessing in disguise for would-be Sellers who decide to turn their homes into rental properties.

Question: Is this a good time to buy?

Answer: Yes ! Yes ! Yes !

For all of the reasons listed above, this is a great time to buy real estate, either for a personal residence, or as a rental. Inventories are high and interest rates are now starting to creep up (The Wall Street Journal reported on Monday, September 13, 2010, that Fannie Mae and Freddie Mac are now charging over 4%, wholesale. That's an increase of over ¼% from recent days).

Finally, to put all of this into historical perspective, let's compare our present market with what was going on in real estate in 1982.

1982 rates - 18%.    Appreciation rates - 10-12% annually.

Net cost of home ownership - negative 8%

2010 rates -  4.25%. Appreciation rates ­­-   5% annually.      

Net cost of home ownership - positive .75%

So, as you can see, although our present market looks grim, the cost of home ownership is actually way down from 1982 levels. And, in fact, Colorado Springs is currently doing much better than most other parts of the country. Our local Sellers are getting an average of 96.4% of their listed price, whereas, in many of major metropolitan areas of the country, Sellers are only getting 30%-55% of their listed prices. That's a good sign that our local market is starting to stabilize.

The bottom line is that, rather than being concerned about "Inflation" and "Deflation", perhaps it's time for you to concentrate on "Meflation", or, to put it another way, "What opportunities does our present real estate market offer to Me and to My retirement portfolio.

Give us a call and let's discuss it.

WRAP-UP

The Wall Street Journal (Monday, Sept. 13, 2010) contained a very succinct prescription for our present economy.

"The fastest cure for housing would be job creation because it would boost demand for homes while putting delinquent borrowers back on solid footing."

SALES TAX COLLECTIONS CONTINUE TO RISE

Sales tax collections in Colorado Springs rose 1.7% form August 2009. That represents the 10^th month iin a row that collections have risen. Our year-to-date rise over 2009 is 5.82%. These figures indicate that out local citizens are spending money and that is the key to returning to normalcy. Very few cities in the nation are showing that kind of increase.

BITS AND PIECES

FHA Debuts New Plan for Underwater Owners

The latest government program to help underwater borrowers debuted Tuesday.

Under the plan, FHA permits lenders to choose which borrowers will participate from among their clientele. The idea is that there are some borrowers that banks and investors want to get rid of because they are likely to default anyway.

To qualify, a borrower must be current on their mortgage and owe at least 15% more than their home's current value. Lenders must agree to forgive at least 10% of the debt.

The government estimates that between 500,000 and 1.5 million borrowers will be helped, but analysts at Barclays Capital say they doubt whether the program will reach 300,000 borrowers.

FDIC Head calls for Tighter Lending Standards

Banks seeking government guarantees for mortgage debt should be required to hold borrowers to tight and consistent standards, Federal Deposit Insurance Corp. Chair Sheila Bair said in a CNBC interview.

Bair said standards should include "very robust" income documentation, proof of a borrowers ability to repay standard loans and a significant down payment.

"Clearly, there is a strong correlation between the amount of skin in the game a borrower puts in up front and how that loan performs", Bair said. "Do you put 20% down? You're committed to that house. You walk away from that house, you're going to lose a lot of the money that you put up front".

Recipients of First Tax Credit to Begin Payback

Borrowers who took advantage of the original 2008 home buyer tax credit must begin paying the credit back this year. The Inspector General for Tax Administration (TIGTA) says 950,000 owe money.

The required payments are amortized over 15 years - $500 per year. If the property is sold, the credit must be paid at closing.

The TIGTA says the IRS has the incorrect purchase date in its database for some taxpayers who took the original credit. These people may never be identified as owing money, it admits.

Southern Colorado Economic Forum scheduled for October 1

Don't forget to register for the Southern Colorado Economic Forum which will take place on October 1, 2010. This event will present a comprehensive review of all aspects of our local economy and will include presentations from some of the most informed experts in our community.

LATEST STATISTICS

Please click here to see the latest Sales and Listing Statistics for the pPikes 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 very successful real estate Broker had a meeting with his new son-in-law. "I love my daughter, and now I welcome you into the family," said the man. "To show you how much we care for you, I'm making you a 50-50 partner in my Real Estate office. All you have to do is go to the office every day and learn the business."

The son-in-law interrupted, "I hate the office. I can't stand Agents."

"I see," replied the father-in-law. "Well, then you'll work in the office and take charge of some the paperwork."

"I hate paperwork," said the son-on-law. "I can't stand being stuck behind a desk all day."

"Wait a minute," said the father-in-law. "I just made you half-owner of my real estate office, but you don't like the office and won't work in an office. What am I going to do with you?"

"Easy," said the young man. "Buy me out."

September 7, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

THE FORUM PUBLISHES THE LATEST "QUE" - AND WE'RE LOOKING GOOD !!

The Southern Colorado Economic Forum of the University of Colorado at Colorado Springs has just released the latest Quarterly Updates and Estimates on the El Paso County economy. .and the outlook for our area is encouraging.

Compared to the national averages, we look very good. For example, the National Association of Realtors reports that, as of July, 31, 2010, the national average price of a home showed an increase of 2.3% over July, 2009. On the other hand, the El Paso County figures for the same period show an increase of 5.9%. That's more than double the national average price increase.

A new feature of the QUE involves "Housing Affordability in the Region". This section of the report shows how an imbalance in supply and demand for single-family housing affects our local-market prices. (See page 7 of the report).

The QUE also contains a word of encouragement for prospective Homebuyers. Don't feel bad if you missed out on the now-expired federal tax credit for Homebuyers. With the low interest rates now available (currently 4.25%), you will more than make up for the lost tax credit in just 4-5 years.

For a complete copy of the QUE report, click here

Also, please note: The SCEF will present the Fourteenth Annual 2010 - 2011 Southern Colorado Economic Forum on Friday, October 1, 2010, 7:00am - 11:30am at the Antlers Hilton Hotel in Colorado Springs. This year's Business Symposium panel will discuss, "Innovation and the Future of the Pikes Peak Region".

We encourage our readers to make reservations to attend, as quickly as possible. All recent Forums have been "sold-out" events.

For complete information about this exciting event,CLICK HERE 

SALZMAN real estate SERVICES SPONSORS MME BUSINESS PANEL

We are honored to be the sponsor of the September 10, 2010 meeting of the Middle Market Entrepreneurs of the Peak Venture Group. The topic of this meeting, "Using the Open Innovation Engine to Propel Growth" will feature a panel consisting of Patrick Bultema, CEO of CodeBaby, Merideth Vaughn, President  of Vladimir Jones, John Street CEO of MS Biotech and Michael Larson, PhD, UCCS, El Pomar Chair of Engineering and Innovation. The event will be moderated by David Lee, Co-Chair of What IF! Festival of Innovation and Imagination and President of Strategic Perspectives, LLC.

The Middle Market Entrepreneur group contributes to the success of mid-size companies by engaging their executives in an exchange of relevant ideas. One of the reasons we were offered the opportunity to sponsor this event was our trademarked slogan, "The Power of relocation Innovation", which emphasizes our company's focus on Innovation as the key to future business success.

We will summarize the ideas discussed at this exciting MME meeting in future issues of our enewsletter.

HOW WILL OUR ELECTED OFFICIALS SOLVE THE UPCOMING BUDGET CRISIS??

As we approach another round of elections, we are reminded that the choices we make at the ballot box could either help us recover from the ongoing economic slump, or, could come back to haunt us. Using our local real estate market as just one indicator of the problems that our political leaders will face, let's examine the problem of upcoming budget shortfalls.

Here is an example of just one home which will show a reduction of approximately 20% in assessed value in 2011. This house, in 2010, was assessed by the county for $550,000. Just last week, that same house was listed for sale for $449,000. (Within one week, however, our competitive market forced the Owner to further reduce the asking price to $424,900).

In 2011, for tax purposes, the county will re-assess the value of all homes within the county, and property taxes will reflect that new assessment. At that point, this house will go from a taxable basis of $550,000 to a basis of $429,000 or less, depending upon the final sales price, a reduction of approximately 20%. This type of reduction, if widespread, could foretell a substantial reduction in market value and, therefore, to tax revenues to the county, within the space of just one year.

What will our elected decision-makers do to make up for this loss of income? Cut services?   Increase taxes?  Lure new businesses to our area in order to generate more tax income? How will our state and county budgets be adjusted?

Maybe we should ask all candidates what solutions they have in mind, before we cast our votes.

LATEST STATISTICS

This past week, the Pikes Peak Association of Realtors reported Listing and Sales activity for August, 2010. Some of the highlights in our monthly report were:

•  Number of sales - 688 (a decrease of 22.8% from August, 2009)
• Average sales price was $246,072 (an increase of 10.6% from August, 2009)
• Median sales price was $205,000 (an increase of 4.8% from August, 2009)
• Total inventory for sale was 5839 units (an increase of 15.9% from August, 2009)
• Average time on the market was 89 days (which, considering the market, is normal)
• Ratio of average sales price to listing price was 96.4%. This figure is significant, in that it demonstrates that Sellers who actually got to the closing table, had to compromise their listing prices downward to reflect the current market. We recognize that this is a painful reality. We understand that "My house is worth more than that", but, regardless of what Jimminy Cricket said, wishing will not make it so.

The bottom line is that, although there are Buyers out there, they are few and far between and they are looking at price, above all other considerations. The Sellers who recognize that fact are the ones who are closing.

To see a copy of the complete PPAR report, click here.

6 REASONS TO REDUCE YOUR HOME PRICE

The National Association of Realtors asks prospective Sellers to consider the following six reasons to reduce your asking price.

1.  You're drawing few lookers. If other houses in your area are drawing more attention than yours is, it may be a sign that potential Buyers consider it overpriced.
2. You're drawing lots of lookers but have no offers. That should tell you something. 
3. Your home has been on the market longer than similar homes. If the average number of days that it takes to sell a home in your market is 30, and your home has been on the market for 45 days, your price may be affecting Buyer interest. 
4. You have a deadline. If you must sell soon because of a job offer or transfer, it may be necessary to drop your price to generate Buyer interest. Remember, it's not how much money you need that determines the sale price of your home, it's how much money a Buyer is willing to spend. 
5. You can't make upgrades. If you can't afford to paint the walls, clean the carpets, etc., you will have to recognize that Buyers expct to pay less for a home that doesn't show as well as others.
6. The competition has changed. Check out the competition. Review the selling price of comparables. The market can change in a hurry.

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

The dream of the older generation was to pay off a mortgage. The dream of today's young families is to get one.

If you think no one cares you're alive, miss a couple of house payments.

My buyers went through debt consolidation. Now they have only one bill they won't pay.

If you want to know exactly where the property line is, just watch the neighbor cut the grass.

This country is great. It's the only place where you can borrow money for a down payment, get a 1st and 2nd mortgage and call yourself a homeowner.

The trouble with owning a home is that no matter where you sit, you're looking at something you should be doing.

August 30, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

THE BIG PICTURE

First time buyers deserted the market in July, according to the latest Campbell/Inside Mortgage Finance Monthly Survey of real estate Market Conditions. In March and April, First-Time Buyers accounted for 48.2% of all Homebuyers, whereas in July, they accounted for only 39.1%, the lowest level in at least a year.

Thomas Popik, the research director for Campbell Surveys said that " We expect a further decline in first-time Buyers, perhaps as low as 30-35% by the fall months. The end of the tax credit for first-time Homebuyers clearly had an effect". Interestingly, first-time Homebuyers made up a healthy 46.4% of short sale purchasers last month.

The most frustrating aspect of short sales continues to be the timeframes required between offers and acceptance. Even though lenders have somewhat reduced the time required for acceptance (One major financial institution proudly announced that their timetable is now down to 4 months for approvals - down from 11-12 months), the process still takes too long. Prospective Buyers often tend to get frustrated with the delay and choose to buy elsewhere. This is obviously the reason that, as of July, foreclosed properties (REOs) averaged more offers than short sale properties.

VOICEAMERICA IS CALLING AGAIN

Speaking of short sales, we have been invited back to speak about this topic and about foreclosures on VoiceAmerica. The Host/Interviewer will again be Deborah Hoskins, JD, CFP, on her show, "The Wise and The Wary". The topic will be "The Realtor's Role in Assisting Clients with Foreclosures and Short Sales". Tune in on October 13, 2010 and listen to what promises to be an interesting show. We will give more details as we get closer to the air date. In the meantime, you can learn more about VoiceAmerica by clicking on this link.

WHERE ARE THE BUYERS??

In July, existing-home sales were sharply lower, but median home prices continued to rise, according to the National Association of Realtors. Sales showed a drop of 27% to the lowest figure in 15 years and represented the largest monthly drop on record, dating back to 1968.

On the other hand, mortgage interest rates also continued to drop. Last week, there were times when we could obtain 30 year, fixed-rate home mortgages for as low as 4.0%.

So, why aren't more people buying homes? One of the big reasons is that there aren't many Buyers out there right now and, the ones that eventually will buy are holding back, thinking that the market hasn't bottomed out yet. That looks like a risky gamble in today's market as statistics indicate median home prices are on the rise.

Unfortunately, inventories are also growing. One reason for that fact is that prospective buyers and realtors are both growing leery of dealing with short sale properties, because of the length of time required to obtain final approval from lenders. This problem has gotten so bad that many Realtors will not even show short sale properties. The result is that, as these properties are dumped into the market by lenders, they simply sit there and, along with new foreclosures, increase the size of the inventory of available homes. This creates even more pressure to lower prices. Conservative estimates indicate that these properties account for 20%-30% of the market.

The bottom line for Buyers is that, with large inventories of homes for sale (which pushes prices down), and with low mortgage rates (which pushes costs down) and with looming federal increases in fees on the horizon, there will probably never be a better time to buy. 

Call us.

WHERE WOULD YOU RATHER BE ??

The late comedian/actor W.C. Fields was famous for hating Philadelphia, PA. (probably because of the bad reviews he received there). His dislike for "The City of Brotherly Love" was so intense, that he selected the following epitaph for his tombstone. "All things considered, I'd rather be here than in Philadelphia".

Now, we don't share W.C. Field's dislike for Philadelphia, but the latest economic data about Colorado Springs leads us to feel that, "All things considered, we'd rather be here than anywhere else".

In a speech on August 25^th, Fred Crowley, PhD, chief economist for the Southern Colorado Economic Forum gave us a preview of the report on our local economy which he and Tom Zwirlein, PhD,, will present at the upcoming Southern Colorado Economic Forum. In a nutshell, Fred's summary of our local economy is that, "We've fared so much better than the national market that it's absolutely mind-boggling".

To cite a few of the encouraging facts from their upcoming presentation: 

• Our year-to-Date residential home sales are up 8%, compared with a 22% decline nationally
• Our average home price has increased 3% and the median price is up 5%
• Our foreclosures are 14%-15% lower than one year ago
• Our new car registrations have nearly doubled from June-July 2009
• The Business Condition Index for El Paso County is up in 6 of the 10 indicators

(The BCI is a measure of 10 economic indicators, including emplanements, city sales and use tax collections, local employment rate, etc.)

• Our BCI bottomed out in February, 2010 and has increased 20% since then
• Our initial unemployment claims are down 27.3%
• Taxable retail sales are up 8%

To hear more about this very interesting report and to attend great seminars by other national experts, we encourage you to attend the upcoming 2010-2011 Southern Colorado Economic Forum, on October 1, 2010, at the Antlers Hotel in downtown Colorado Springs. To register, visit the Southern Colorado Economic Forum website. This annual event has become a sellout, so put it on your calendar, today.

NEW FEDERAL REGULATIONS WILL MEAN HIGHER COSTS FOR HOMEBUYERS

Although there are no specific Rules and Regulations currently available from the 2300-page Dodd-Frank Financial Overhaul, we do know that there will be new fees created for federally-insured mortgage borrowers. (i.e. Fannie Mae, Freddie Mac, FHA and VA mortgages account for about 90% of all new home loans). We do know that, beginning in October, 2010, FHA will raise their annual insurance premiums to as high as .9% of the loan amount (up from .55%). At the same time, the up-front premiums due at closing will drop to 1% from the current 2.25%.

The Dodd-Frank recommendations are intended to increase the reserves of Fannie Mae and Freddie Mac, so that these agencies do not repeat their near-collapse caused by the recent housing crisis. Whatever final regulations are adopted, we can be sure that they will make it cost more to buy your new home after October 1, 2010.

This is just one more reason to buy today!! Call us  

TIDBITS FROM HERE AND THERE

The following two items from Daily real estate News, August 30, 2010, caught our attention.

5 Reasons Homeownership Trumps Renting

The seemingly endless run of bad housing news is discouraging some potential home buyers from considering a purchase. But the truth is that the advantages of homeownership have very little to do with investment gains. The best things about owning a home have a lot more to do with personal comfort and satisfaction. Here are five of them:

Be your own landlord. The bank can only kick you out if you don't pay; a landlord can be much less dependable - deciding to sell the property or choosing to live there themselves.

Paying the principal is forced savings. Yes, it's possible that home prices will fall further. It is also possible that your 401(k) will lose value. But over the long haul, both are likely to enjoy modest gains in value.

Fixed-rate mortgages never rise - and eventually you pay them off. With mortgage rates at record lows, people who buy now are locking in real bargains.

Good schools. Family-sized rentals are harder to come by in areas with excellent public schools.

Spacious properties in pleasant neighborhoods. Sizable homes in attractive communities are almost always owned - not rented.

Administration Undecided about Another Tax Credit

Housing and Urban Development Secretary Shaun Donovan said Sunday on CNN's "State of the Union" that the administration would "do everything we can" to stabilize the U.S. housing market.

Whether it will resurrect the first-time home buyer tax credit is up in the air. Donovan said that the drop in home sales in July was worse than the administration expected.

Donovan also said that the Federal Housing Administration will launch an emergency loan program to help unemployed borrowers stay in their homes and a program to help underwater borrowers refinance.

LATEST STATISTICS

To see the most recent Sales and Listing statistics from the Pikes Peak area, Click here

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

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

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

JOKE OF THE WEEK

A small-business operator, a tax accountant and a government economist apply for the same job.

The interviewer calls in the small business operator and asks "What do two plus two equal?" The small business operator replies "Four." The interviewer asks "Four, exactly?" The small business operator looks at the interviewer incredulously and says "Yes, four, exactly."

Then the interviewer calls in the tax accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."

Then the interviewer calls in the government economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says, "What do you want it to equal"?

August 23, 2010

 HARRY'S WEEKLY UPDATE

TODAY'S LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

THE ECONOMY IS SHOWING VARYING SIGNS, ACCORDING TO NAR

The following excerpts are taken from an August 18, 2010 article by Lawrence Yun, chief economist for the National Association of Realtors:

"These past few months saw a "pause" in housing market activity following the rush of Buyers to qualify for the tax credit. This pause was anticipated and is still occurring. Whatever current or former Fed chairmen say, most observers and analysts of the housing market say the same thing: IT DEPENDS ON JOBS.

Gross Domestic Product (GDP), which measures total production in the economy, decelerated to 2.4% in the second quarter after growing 3.7% and 5% in the prior two quarters. Let's review what we know of each of the GDP components in real dollars above inflation:

• Consumer spending has been rising at a 2% rate, rather than a 4% growth rate prior to the recession.
• State and local government spending has been falling by 2% because of the need to balance their budgets.
• Federal government spending has been increasing by 6%-7% in the past two years.
• real estate construction spending has not experienced any meaningful growth lately.
• For a variety of reasons, do not expect any help to GDP growth from foreign trade.
• Business spending remains 23% below its peak. Businesses are not spending as they should

One thing is clear. Slow business spending will mean slow economic expansion and a slow pace of job creation. (Editors note: The government's response to all of these factors reminds me of the old cartoon's title, "The beatings will stop when productivity improves")

For home sales, the only hope to restart any momentum in the absence of robust job growth is low mortgage rates. Thankfully, we still have that.

Despite the low interest rates (which should encourage and abet borrowing), consumer prices could stop decelerating and start to move up. If that happens, watch out for what happen to interest rates.

The outlook for the economy remains unusually uncertain. However, if business spending comes back where it should be, then GDP could easily grow at a 5% rate. That would correspond to very healthy job gains of possibly 3 million in a single year. As we know, people with jobs, buy homes. That would, indeed, be a good sign for housing.

HOUSING PRICES ARE A DIRECT REFLECTION OF THE AVAILABILITY OF JOBS

One of the most difficult tasks that Realtors face today is telling prospective Sellers what their homes are worth in today's market. Most people are not aware of how drastically the economic downturn has affected the market value of their homes, until they decide to put them on the market. When we show them what the local market says their home is worth, they go through the classic steps of grief, i.e. disbelief, anger, negotiation and resignation.

But, keep in mind that "All real estate is local"  and, in some parts of the country, Real Estate values have held up quite well. What's the difference between the "Winners" and the "Losers"? In every case, the thing that makes the difference between sinking and rising Real Estate values is the local job market. Where there are opportunities for good, primary jobs, real estate values are up. Where there is a shortage of good, primary job opportunities, as there is now in Colorado Springs, home values have been strongly affected.

The fact is that real estate values, as well as all other aspects of any economy depend upon the health of the local job market. (In a healthy economy, Real Estate represents approximately 6% of the total economy.)

So, what can a community do to create more job opportunities? To seek an answer to that question, let's look at what some other creative groups have done to create jobs in their cities.

First, let's look at Huntsville, Alabama, a city that has shown remarkable economic growth in recent years. As the August 20, 2010 issue of the Colorado Springs Business Journal points out, the boom in Huntsville was the result of a coordinated effort by local government, jobs-creation groups, influential political allies, a long-standing commitment to building a diverse economy, generous local government incentives and a university that makes technology innovation a top priority. All of the efforts of all of these various groups were spearheaded and overseen by a single economic development force, namely, the Huntsville/Madison County Chamber of Commerce.

Bottom line: They created jobs. Huntsville, Alabama was just named by The Wall Street Journal (Aug. 21, 2010), as one of the best cities in the U.S. for real estate investment. Their housing prices are up. Their unemployment rate is 7% (vs. 8.9% in Colorado Springs and 9.5% nationally). Businesses are hiring and available retail and office space is at a premium.

Another dramatic example of jobs creation was the work done by Jodi Rell, Republican Governor of Connecticut. In a traditionally Democratic state, she organized all levels of state and federal government, together with commercial business leaders, into a dynamic marketing effort to persuade Starwood Hotels to relocate their headquarters from New York into Connecticut. Under her leadership, a new office park was created, anchored by Starwood, with over 800 new, high-level jobs, paying an average of $115,000 annually. Obviously, this type of job spins off many other service-type jobs within the park.

In every other example of successful jobs creation that we have investigated, there is one common denominator. The successful efforts all required strong, local political leadership .Leaders with a vision, with leadership and organizational skills, with the ability to work with local businesses and with a willingness to develop incentives that could attract new businesses into the area.  

Bottom line? The direction of our local economy, our quality of life and the market value of our homes will depend largely upon how many new jobs our elected leadership can create in Colorado Springs. So, we strongly suggest that, in the upcoming elections in April, we should ask every candidate for office, "What is your plan for creating new jobs in Colorado Springs?"  

FROM HERE AND THERE

Realtor Magazine gave us three interesting items, this week:

Americans still want to own a home

More than 72% of American adults say that home ownership is a part of their personal American dream, down from 77% six months ago, according to a survey from Trulia.com

About 23% said their attitude toward home ownership has grown more positive in the last six months, while 19% say theu feel more negatively.

Among those adults who are renting a home, 27% say they never intend to buy.

Of the renters who do plan to purchase eventually, 68% said it would be more than two years before they do.

The factors that would encourage them to buy now are:

• Able to save a down payment, 47%
• Land a new job, 28%
• Interest rates stay low or fall lower, 27%
• Some other factor that persuades them that buying makes financial sense, 24%
• Get a raise. 23%
• Local real estate market stabilizes. 9%

Three reasons to buy a home now

Stocks are up 50% from the March 2009 bottom. Some commodities have risen dramatically. The only asset class left in the cellar is real estate, says Michael Murphy, editor of the New World investor stock newsletter.

As a result, Murphy is advising investors to buy now for these three reasons:

1. Desperate sellers: Both home owners and lenders are eager to unload a flood of foreclosed and underwater properties. Buyers with the patience to push through these complex deals can save a bundle.
2. Little competition: Because most people don't have what it takes to negotiate their way through the short sales and REOs, patient investors are winners.
3. Low rates: Mortgage rates are at their lowest level in 40 years. If you believe inflation is inevitable, lock in now.

LATEST STATISTICS

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

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

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

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

JOKE OF THE WEEK

So, this Realtor dies and goes to Heaven (OK, OK, It's just a joke, for goodness sakes). When he finishes the Grand Tour, he says, "Hey, St Peter, you have a great place here. We could really double your investment if we just built a few condos, did some strategic re-zoning, dedicated a couple of parks and marketed the whole development properly. What do you say?"

St. Peter says, "That sounds like a great idea, but we can't do it".

The Realtor says, "What do you mean, you can't do it. It's a slam dunk. Everybody's home values would go up and we'd all be on Easy Street.

St. Peter says, "You don't understand. It's a financing problem. We don't have any lenders up here".

Just then, there's a knock on the pearly gates. When St. Peter opens the door, the devil is standing there, looking embarrassed. He says, "Is it too late for me to change my mind? I think I would like to come back to Heaven".

St. Peter asks, "Why the change of heart?"

The devil replies, "I don't have anywhere else to live. My banker just foreclosed on Hell and evicted me".

August 16, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

INTERNET RADIO IS ALIVE AND DOING VERY WELL !!!

We received a lot of positive feedback from our 50-minute interview on www.VoiceAmerica.com. On the show, Deborah Hoskins, JD, CFP, the host of "The Wise and The Wary", asked me about some innovative, aggressive and creative marketing ideas for closing real estate deals in today's market.

The VoiceAmerica Talk Radio Network is the single largest producer of original Internet talk radio programming in the world. If you didn't hear the live interview and would like to hear it, please click here.  

Give us a call and let us know how you liked the interview.

LATEST LOCAL STATISTICS

The latest statistics from the Pikes Peak Association of Realtors confirm that the federal tax credit for Homebuyers was an inducement for some prospective Homebuyers to make their move by April 30, 2010, in order to qualify for the tax credit. Unfortunately, however, while the tax credit did create some Buyers and persuaded other prospective Buyers to buy in the Spring, rather than in the Summer, the bottom line was that the buying "spree" died along with the tax credit. As a result, July sales were slightly down.

As the July statistics also show, total residential sales in July, 2010 decreased to 713, a decrease of 21.9% from June, 2010 and a decrease of 24.6% from July, 2009.

The good news is that, although the median sales price in July, 2010 ($237,029) remained basically the same as June, 2010, it did show an increase of 5.1% over July, 2009.

Note that the total active listings amounted to 5955, which is .6% above June, 2010, and 16% above July, 2009.   

All of these figures demonstrate that we are in a Buyers' market. Prospective Buyers have their choice of houses at very competitive prices and Sellers are really in a squeeze. They must be willing to spend whatever is necessary to make their homes visually attractive and must be willing to price aggressively, to make their homes economically attractive.

The result of this "squeeze" on Sellers is that we meet prospective Sellers every day who are holding their homes off the market "until the market improves". Normally, that decision makes sense. However, considering the current large inventory of available homes (which will delay any significant increase in home prices in the immediate future) and the availability of extremely low interest rates (which will not last forever), we are encouraging prospective Buyers to consider listing their homes at a competitive price RIGHT NOW.

Consider these scenarios:

• Seller #1 has to reduce his selling price, in order to make the sale. He then becomes a prospective Buyer. Thus, the money he "loses" when he sells, he makes up for by buying his next home at the low prices and low interest rates that are now available. He has, essentially, taken money out of one pocket and put it back into another

.and he ends up with very low mortgage payments for the next 30 years.

• Seller #2 holds his home off the market until the market "comes back". When prices eventually go up, he will get a higher price for his house, but will pay more for his next house when he buys. The money he has "made" by waiting, he "loses" when he buys his next home. He has simply put money into one pocket and taken it out of another.

.and he ends up with higher mortgage payments for the next 30 years.  

 Bottom line ?  Let us help you sell your home right now. Call us.

COLORADO SPRINGS SALES TAX COLLECTIONS MAINTAIN UPWARD SWING

Sales tax collections in July rose 8% from July 2009, according to the Gazette (August 11, 2010). That makes 9 months in a row that sales tax collections have increased, compared to a year earlier. Much of the increase was because of the increase in auto sales. (Just one more reason we should thank our returning troops).

Fred Crowley, Chief Economist at the University of Colorado at Colorado Springs, explained, "We're at that re-buying stage right now. It's a classic inventory-recovery, post-recession period"

WHAT DOES THE NATIONAL MARKET LOOK LIKE?

On August 11, 2010, the National Association of Realtors released its quarterly performance report on the 155 largest metropolitan statistical areas in the nation (MSAs). The survey includes all MLS sales. The report shows that, compared with the same period in 2009, the second quarter of 2010 showed higher median prices for existing family homes in 100 of the 155 MSAs.

(Note: "Median Price" represents the exact middle of the price range i.e. half of the homes sold for more and half sold for less than the median price). The median price is considered to be the most accurate housing price index.

At the end of June, the national median price for existing, single-family homes was $176,900, up 1.5% from the same period one year ago. In Colorado Springs, however, the median price went up 4.1%. That's almost three times more than the national median price increase. Hooray for us !!

In spite of that piece of good news, it's still apparent that sales are lagging both nationally and locally and Realtors nationwide report that the federal tax credit was just a temporary fix for the problem.  

LET US "TAKE YOU OUT TO THE BALLGAME"

We are one of the original supporters of the Colorado Springs Sky Sox, the AAA Affiliate of the Colorado Rockies Baseball Club. So, as part of the Sky Sox Sponsor-Appreciation Nights, we have been given 50 free tickets to the Sky Sox games on Tuesday, August 24 (featuring the always-popular $2 Coors and $2 parking), Wednesday, August 25 (featuring the annual Bark in the Park. All dogs admitted free) and Thursday, August 26 (with live entertainment and Wing Fest 2010. Sample the Best Wings in Colorado Springs for free). Game times are 6:05pm. These are reserved-seat tickets and we will give them out to our enewsletter subscribers on a first-come, first-served basis (Maximum 4 tickets per person).

If you would like to see some exciting baseball, just drop by our office and pick up your free tickets. .and we won't even ask you to buy us some peanuts and CrackerJacks.  

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. 

QUESTION OF THE WEEK

Please choose whichever one of the following statements makes more sense to you:

a. The government will give $3 billion to unemployed homeowners who are delinquent in their mortgage payments, so they can delay eventual foreclosure.

Or

b. The government will spend $3 billion to assist small businesses which will hire unemployed homeowners, thus helping them catch up on their delinquent mortgage payments.

Maybe it's just us, but it seems to be an example of the ancient saying, "Give a man a fish and he will eat for a day, but, teach a man to fish and he will be able to feed himself for the rest of his life".

Duh !!!

JOKE OF THE WEEK

Short real estate Jokes

My buyer told me that he lived in the same house for 10 years. When I checked, I found out he'd still be there today if the Governor hadn't pardoned him.

The sellers told me their house was near the water. It was in the basement.

How much are they asking for your rent now? Oh, about twice a day.

I have a temporary mortgage. What do you mean temporary? Until they foreclose.

Realtor: first you folks tell me what you can afford, then we'll have a good laugh and go on from there.

The dream of the older generation was to pay off a mortgage. The dream of today's young families is to get one.

There is no longer a need for the neutron bomb. We already have something that destroys people and leaves buildings intact. It's called a mortgage.

If you think no one cares you're alive, miss a couple of house payments.

My buyers went through debt consolidation. Now they have only one bill they won't pay.

I listed a maintenance free house. In the last 25 years there hasn't been any maintenance.

Did you hear about Robin Hood's house? It has a little John.

If you want to know exactly where the property line is, just watch the neighbor cut the grass.

Houses today don't have enough closet space. Sure they do. They're just called guest bedrooms.

"A lot of homes have been spoiled by inferior desecrators".--Frank Lloyd Wright

The house is only 5 minutes from shopping . . .if you've got an airplane.

This country is great. It's the only place where you can borrow money for a down payment, get a 1st and 2nd mortgage.. and call yourself a homeowner.

A man's home is his castle. That's how it seems when he pays taxes on it.

The trouble with owning a home is that no matter where you sit, you're looking at something you should be doing.

This house has an all-electric home. Everything in it is charged.

My buyers want a new home on the outskirts---of their income, that is.

By the time you pay for a home in the suburbs, it isn't.

August 10, 2010

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

VOICEAMERICA IS CALLING

No matter where you are in the nation, if you listen to VoiceAmerica.com this Wednesday at 2pm MST, you can hear my interview with Deborah L. Hoskins, JD, CFP. Deborah is host of the show, "The Wise and The Wary". She has been an attorney for 26 years, specializing in estate planning, disability planning and elder law. In addition to her duties as Talkshow host, she is a public speaker and writer on elder law issues and financial planning for women and retirees.

Deborah's press release describes our upcoming interview as follows:

"How to Close a real estate Deal

In today's real estate market, traditional Realtor strategies simply aren't good enough. You need the right people and the right tools to get you to the closing table. Your agent needs to be creative and aggressive, and needs to have the expertise to negotiate the best deal for you. Listen in as Deb interviews Harry Salzman, CRS, CRP, a national expert on innovative negotiation strategies for the real estate market, as he explains common seller mistakes and suggests effective remedies. "

VoiceAmerica is the single largest producer of original Internet talk radio programming in the world. Since 1999, the VoiceAmerica Talk Radio Network has been streaming live Internet talk radio programs, featuring more than 200 hosts broadcasting on seven genre-based channels:

• VoiceAmericaT Variety Channel,
• VoiceAmericaT Health & Wellness Channel,
• VoiceAmericaT Business Channel,
• VoiceAmerica Sports,
• 7th Wave Network,
• The Green Talk Network
• Power Up Motorsports Channel.

We are honored to have been asked to address Deborah's listeners. Give us a call and let us know how you liked the interview.

COLORADO SPRINGS RANKS HIGH IN SURPLUS OF HIGHLY SKILLED WORKERS IN RELATION TO DEMAND

Colorado Springs MSA ranked 51 of 366 metros in surplus of highly skilled workers relative to demand according to Chmura Economics & Analytics. More Information

CALIFORNIA COMPANIES RELOCATING TO COLORADO SPRINGS

Why are California companies fleeing to Colorado? Joseph Vranich, The Business relocation Coach, says high taxes, undue regulation, excessive fines and fees, high workers' comp costs, a legal environment stacked against businesses, and lengthy permitting requirements are why companies are relocating out of California.  More Information


Did You Know:  

• Colorado ranked 3rd best state in the country for doing business, according to CNBC. (07/10). They cite the strength, health and diversity of the state's economy More Information
• Colorado Springs ranked 7th "Best Mid-Size City" by Portfolio.com. The study was ranked on healthy economies, moderate living costs, light traffic and strong educational systems. Portfolio.com compared 109 medium-sized markets with populations between 250,000 and 750,000. More Information
• Colorado continues to have the lowest percentage of obese adults at 18.9 percent according to Trust for America's Health. More Information
• Colorado Springs ranked 19th "Best City for Families" according to Parenting.com. Cities were ranked based on health, safety, education, economy and recreation.
  More Information
• Colorado Springs has 5 high schools listed on Newsweek's annual America's Best High Schools list. The ranking is based on how hard their staffs work to challenge students with advanced-placement courses and tests.
  More Information
• Colorado Springs was listed in RelocateAmerica.com's "Top 100 Places to Live in America for 2010". The list focused on communities poised for recovery and future growth. The editorial team discovered communities with strong local leadership, employment opportunities, thriving community commitment, improving real estate markets, growing green initiatives, plentiful recreational options and an overall high quality of life. More Information

NOTICE TO ABSENTEE HOMEOWNERS - VACANT HOMES POSE INSURANCE RISKS

RISMEDIA, August 4, 2010--As the U.S. housing market struggles to rebound, many homeowners are stuck with hard-to-sell properties longer than expected. Some frustrated home sellers who must relocate for a new job opportunity, want to downsize or simply want to buy a new place have left homes empty. Vacant or unoccupied homes can leave the homeowner exposed to loss and liability that may not be covered by their insurance, according to the National Association of Insurance Commissioners (NAIC).

The Pending Home Sales Index, released today by the National Association of Realtors, dropped 2.6 percent to 75.7 based on contracts signed in June from 77.7 in May, and is 18.6 percent below June 2009 - another sign of the stagnant housing market.

"In many cases, people who have been trying to sell their homes for awhile have moved forward with their plans regardless, leaving a vacant home on the market," said NAIC President and West Virginia Insurance Commissioner Jane L. Cline. "Having an unoccupied home can create several insurance implications that typically are not covered under a standard homeowners policy."

The Added Risks of Vacant Homes

Homeowners policies are meant to insure homes that are occupied, so they generally include exclusions for neglect or property abandonment on a home left vacant or unoccupied for a specified number of consecutive days.

In insurance terms, a vacant home is one the resident has moved out of and taken his/her belongings with him/her. An unoccupied home is one where the resident is not staying at the home, but the furniture and other belongings remain.

Because vacant and unoccupied homes pose a higher risk for damage than occupied homes, insurance companies insure these properties differently and usually at a higher price. These risks include:

-- Break-ins: When a home has been unoccupied for awhile, it can show signs that nobody is around - unkempt lawn, full mailbox, no lights on - that can tip off burglars to an easy target.

-- No emergency response: Without anyone home to call 911 or respond to emergencies, a manageable problem - such as a small electrical fire - can turn into a much larger, more costly disaster.

-- Property liability: There is no one present to prevent others from entering the property or to supervise activity, which could increase the likeliness of an accident on the premises or property damage when the owner is not there.

Keeping A Vacant Home Properly Insured

The definition of vacancy and unoccupancy can vary from policy to policy. Some insurers may not pay claims if a home is vacant for 60 days or more. Some policies might automatically shift to a different amount of coverage (e.g. liability insurance only) after a specific number of days unoccupied.

Many homeowners policies have a "vacancy clause" that can be triggered if the homeowner is gone for an extended period of time. If this happens, the homeowner could violate the terms of their contract and some or all of their coverage may not apply in the event of a loss.

"Before you decide to leave a home vacant or unoccupied for a long period of time, talk to your insurance agent or company to learn how they define vacancy and unoccupancy, and whether the company will pay claims if a house is unoccupied," said Cline. "Be honest about your situation, because while an extra policy might cost more, it could save you money down the road should there be an accident or damage to the home."

Many insurance companies offer an endorsement that will provide coverage for a dwelling that is unoccupied for an extended period of time. Vacancy policies can also be purchased for different term lengths to cover a few months to a year, depending on the need.

The cost of vacancy coverage depends on the company and state in which the property is located, but costs usually are higher than a typical homeowners policy due to the overall increase in risk.

Better talk with your insurance agent today !!!

STRATEGIES FOR A SIDEWAYS MARKET

If you're not sure this is the time to buy, consider the following:

Mortgage interest rates are at an all-time record low. (This past week, we found 30-year, fixed rate mortgages for 4.25% - 4.375%, without loan origination fees or discount points).

The good news is that foreclosures are down, down, down. New foreclosure filings in Colorado are at their lowest point in over a year. (2010 second quarter filings were down 15.7% from 2009. Locally, El Paso County filings were down 12.5%.)

Bloomberg News reports that service industries expanded faster than forecasted in July, and might even increase employment in the second half of 2010. They report, "Record low mortgage rates may prevent housing from slumping much more. July's rebound in stock prices, the biggest in a year, will probably help underpin consumer confidence".

The Non-Manufacturing Employment Gauge of The Institute for Supply Management (ISM), climbed to the highest level since the recession began in December, 2007. The survey covers such services as utilities, retailing, health care, housing and finance.

Locally, single-family homebuilding permits for the first seven months of 2010 were 43% over the same period in 2009.

All of these factors indicate a great opportunity for Buyers to make their move. Call us.

THINKING OF SELLING YOUR HOME?

In "The Old Days", Sellers could list their house at their "hoped-for" price, engage in some price dickering with the prospective Buyer, offer some minor price reductions for deferred maintenance issues, and then close the deal. However, in today's competitive market, Sellers should be aware that their house must be aggressively priced right from the start, or, they won't even see any prospective Buyers. That's why it's important to engage the services of an experienced Realtor for advice about a proper listing price. There are also incentives that your Realtor can explain to you that will serve as an inducement for prospective Buyers. Call us.

Furthermore, considering that many of the homes on today's market are in "like-new" condition, it is extremely important that, in order to be competitive, the Seller's house must be in terrific condition. Make those needed repairs before you list.

Finally, be sure to discuss the house's appearance with your Realtor. You may have to do some landscaping and painting on the outside and some 'staging' on the inside. Gone are the days when Buyers would overlook overgrown yards, peeling paint, toys on the floor, family pictures on the wall and rooms full of moving boxes.

However, the 'up' side of this market for Sellers is that, although you might have to take less for your home than you wished, your replacement home will cost much less than it would have three years ago and your new mortgage will be a big improvement over your present mortgage.

It's a whole new ball game out there and we can help you win it. 

WHAT IS YOUR WASHING MACHINE SAYING TO YOU?

How's this for a novel idea to improve customer service? On August 4, 2010, Sears announced Kenmore Connect, a technology developed with LG Electronics to speed up appliance repairs. The way it works is that the owner of the ailing Kenmore appliance calls customer service and holds his cellphone up to the machine. The company representative identifies the problem by reviewing screens of data generated by the washing machine via a toll-free phone line.

This new technology is expected to streamline repair service to customers, and the savings to Sears could be staggering. Kenmore presently maintains the nation's largest repair fleet of more than 10,000 trucks and handles 12 million service calls annually. This new program will be able to identify problems that could be resolved with a minor adjustment, thus eliminating the need for a visit from the repairman. (This type of problem accounts for about 60% of present repair calls) Betsy Owens, Vice-President of Kenmore, estimates that Kenmore could eventually reduce its truck runs by half.

Kenmore Connect will come with appliances priced from $799 to $1,499.

By the way, we can guarantee you that, if your home has one of these appliances, it will make it much easier for us to sell.

2010 PARADE OF HOMES IS NOW OPEN 

LATEST STATISTICS

At press time, the statistics for July were not yet available, but, Click here to see the real estate sales and listing statistics for the Pikes Peak area for June, 2010.

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

Part of rebuilding New Orleans caused residents often to be challenged with the task of tracing home titles back potentially hundreds of years. With a community rich with history stretching back over two centuries, houses have been passed along through generations of family, sometimes making it quite difficult to establish ownership. Here's a great letter an attorney wrote to the FHA on behalf of a client: 

You have to love this lawyer........

A New Orleans lawyer sought an FHA loan for a client. He was told the loan would be granted if he could prove satisfactory title to a parcel of property being offered as collateral. The title to the property dated back to 1803, which took the lawyer three months to track down. After sending the information to the FHA, he received the following reply.

(Actual reply from FHA):

"Upon review of your letter adjoining your client's loan application, we note that the request is supported by an Abstract of Title. While we compliment the able manner in which you have prepared and presented the application, we must point out that you have only cleared title to the proposed collateral property back to 1803. Before final approval can be accorded, it will be necessary to clear the title back to its origin." 

Annoyed, the lawyer responded as follows: 
(Actual response):

"Your letter regarding title in Case No.189156 has been received. I note that you wish to have title extended further than the 206 years covered by the present application. I was unaware that any educated person in this country, particularly those working in the property area, would not know that Louisiana was purchased by the United States from France in 1803, the year of origin identified in our application. For the edification of uninformed FHA bureaucrats, the title to the land prior to U.S. ownership was obtained from France, which had acquired it by Right of Conquest from Spain.

The land came into the possession of Spain by Right of Discovery made in the year 1492 by a sea captain named Christopher Columbus, who had been granted the privilege of seeking a new route to India by the Spanish monarch, Queen Isabella. The good Queen Isabella, being a pious woman and almost as careful about titles as the FHA, took the precaution of securing the blessing of the Pope before she sold her jewels to finance Columbus 's expedition. 

Now the Pope, as I'm sure you may know, is the emissary of Jesus Christ, the Son of God, and God, it is commonly accepted, created this world. Therefore, I believe it is safe to presume that God also made that part of the world called Louisiana. God, therefore, would be the owner of origin and His origins date back to before the beginning of time, the world as we know it, and the FHA. I hope you find God's original claim to be satisfactory. Now, may we have our damn loan?"

The loan was immediately approved.

(These are the same geniuses charged with the Government mortgage bailout.)