October 25, 2010

HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

 

LOW INTEREST U.S. TREASURY MORTGAGE LOANS NOW AVAILABLE  

ONLY IN EL PASO COUNTY

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

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

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

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

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

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

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

 

COLORADO REALTORS AGREE – FORECLOSURES ARE A MESS

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

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

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

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

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

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

 

CSU IS BRINGING LOCAL FOCUS TO NATIONAL real estate STATISTICS

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

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

 

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

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

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

These figures tell us a couple of things:

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

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

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

Call us.

 

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

Published October 25, 2010 | Reuters

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

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

 

LATEST STATISTICS

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

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

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

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

 

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