March 21, 2011

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

THE ANSWER IS "JOBS, JOBS, JOBS"

.THE QUESTION IS WHICH CANDIDATES WILL HELP CREATE THEM

The March 15, 2011 issue of the Gazette reported that Colorado Springs ranked second-worst in the nation for its rising unemployment rate last year, according to the Brookings Institution's Quarterly MetroMonitor report. The only city with a worse job performance last year was Las Vegas.

The good news was that Colorado Springs economic output appears to be rebounding strongly from the recession. The bad news is that we are just not creating any jobs in the process.

How are new jobs created? Well, the process must start with a business-friendly environment and that's a function of the business philosophy of the governing body .in our case, the city council and the mayor.

That's why it's so important that we elect a business-friendly Mayor and Council in the upcoming elections.

For that reason, we felt compelled to advise our readers of the recommendations of the business leaders in our community relating to the upcoming elections. The Pikes Peak Association of Realtors, The Chamber of Commerce and the Homebuilders Association all agree that our community deserves visionary leadership for the future and they have recommended the following candidates for your consideration:

• Steve Bach, Mayor
• Lisa Czelatdko, City Council District 3
• Jan Martin, City Council at Large
• Tim Leigh, City Council At Large
• Merv Bennett, City Council At Large

The Pikes Peak Association of Realtors is also recommending

• Angela Dougan, City Council District 2
• Brandy Williams, City Council At Large

We live in the greatest city in the U.S. Let's keep it that way by creating jobs for our young people, so they don't have to move away to make a living.

GOOD NEWS !!!  Big industrial deal in Springs

The Gazette, March, 2011 -- Midnight Sun Capital LLC, in a venture with two Native American Alaskan investment groups, paid $11.175 million for a T-Mobile call center in Colorado Springs, the largest industrial building transaction so far this year in the Pikes Peak region.

The 69,287-square-foot building at 556 Chapel Hills Drive was sold to 556 Chapel Hills LLC, the entity created by Colorado Springs-based Midnight Sun to buy it.

Midnight Sun is a  private equity company headed by Colorado Springs attorney and native Hawaiian, Louie V. Larimer. Larimer is the president and CEO.

The T- Mobile building purchase was a collaborative venture between Larimer and two Alaska Native American corporations -  Cal Corp. and the Aleut Corp. Brady O'Donnell of Johnson Capital brokered the financing, which was provided by Wells Fargo.

The group's acquisition strategy is focused on investing in core Class A income-producing properties.

Founded in 2009, during its first year, Midnight Sun Capital's portfolio accumulated $10 million in assets.  It plans call for an additional $15 million to $20 million in property acquisitions annually through 2012.

MORTGAGE RATES FALL AS INVESTORS REACT TO THE CRISIS IN JAPAN

Mortgage rates fell as investors wary of the crisis in Japan sought out U.S. bonds, which lowered yields, according to Freddie Mac's weekly survey of mortgage rates.

Mortgage rates generally track yields, which move inversely to Treasury prices. Rates had climbed early this year, hitting the highest level since April last month after slumping most of last year as Treasurys declined amid economic uncertainty.

"With the crisis in Japan, investors rushed to buy the security of U.S. Treasury bonds, which lowered its yields and other interest rates as well," said Freddie Chief Economist Frank Nothaft.

The 30-year fixed-rate mortgage averaged 4.76% in the week ended Thursday, down from the prior week's 4.88% average and from 4.96% a year earlier. Rates on 15-year fixed-rate mortgages fell to 3.97% from 4.15% in the previous week and 4.33% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.57%, down from the prior week's 3.73% and 4.09% a year earlier. One-year Treasury-indexed ARMs fell to 3.17% from 3.21% and 4.12%, respectively.

To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point and the others required an average 0.6 point.

Call us to get the latest rate information available.

COLORADO SPRINGS FORECLOSURE FILINGS FALL BY 23.4%

.AND FORECLOSURE SALES FALL BY 37.4%

Colorado statewide foreclosures in February fell by 18 percent from a year earlier, according to the most recent RealtyTrac report.

Even better, our local new filings (288) fell 23.4% from a year earlier and sales of foreclosed properties in February (142) dropped 37.4% from February, 2010. These declines in both foreclosure filings and foreclosure sales are good indicators that our local market is stabilizing.

In fact, the Mortgage Bankers Association shows Colorado faring much better than the overall nation, in terms of delinquent loans, an early indicator of foreclosures. The MBA's National Delinquency Survey shows only 5.9 percent of mortgage loans in Colorado were past due in the fourth quarter of 2010, compared with an 8.9 percent rate nationally. The MBA report showed that Colorado had the eighth-lowest rate of loan delinquency in the fourth quarter and ranked 10th for the lowest rate of serious delinquency, which the MBA defines as loans 90 days or more past due and loans in foreclosure.

The bottom line is that foreclosures are quickly becoming less of a factor in our local market.

HOUSING STARTS AND PERMITS STALL IN FEBRUARY

RISMEDIA, March 19, 2011-Nationwide housing starts and issuance of permits for new housing construction both posted disappointing declines in February 2011 as concerns about a growing number of factors caused builders to pull back on production of new homes, according to newly released figures from the U.S. Commerce Department. Total housing starts declined 22.5% from January to a seasonally adjusted annual rate of 479,000 units, the second-slowest pace on record. Equally disconcerting, total permit issuance for new homes fell 8.2% to a record low pace of 517,000 units in February.

National declines in permit issuance were also widespread in February. The single-family sector posted a 9.3% drop to 382,000 units while the multifamily sector posted a 4.9% drop to 135,000 units, and regional declines amounted to 27.8% in the Northeast, 5.4% in the Midwest, 1.4% in the South and 13.6% in the West.

Locally, Single-family homebuilding permits totaled 65 in February, a 60.8% drop from the 166 permits issued during February of 2010. This was the lowest number of permits issued for any month since February 2009, when 53 were issued.

In spite of these discouraging statistics, however, NAHB Chairman Bob Nielsen, is quoted as saying, "Builders are cautiously looking forward to the spring home buying season in hopes that improving economic conditions will help bring more buyers to the table, even though the same factors that have been weighing down the market are still very much in play.

FIRST-TIME HOMEBUYERS PREPARE FOR BEST BUYER'S MARKET IN RECENT HISTORY

RISMEDIA, March 18, 2011-While affordable housing prices, ample inventories, and historically low interest rates signal 'buyer's market' for investors or move-up buyers in many U.S. markets, inexperienced first-time buyers may wonder if the time is right to make a move into real estate.

To help first-time buyers know if they're ready to look for the home of their dreams as we head into this year's home-buying season, here's a 'reality checklist' designed to help them decide if the time is right.

Get your financial house in order
Make sure your credit is in good shape and repair any damage previously done. Know your credit score: thirty-five percent (35%) of successful buyers recently reported they didn't know their credit score when they went house shopping, according to a national survey fielded for MortgageMatch.com. Having enough money set aside for a down payment is a key component to making sure you are ready to purchase a home. Also, it's important to not put all of your money in the down payment as other fees or unexpected expenses often arise after closing.

Don't fall in love with a house you can't buy
Find out how much you can afford: establishing your purchase power upfront, including how much money will be required for a down payment and closing costs, is a must for first-time buyers.

Learn the lingo
Since first-time buyers are new to the market and will finance a significant portion of their purchase, it's important to get familiar with the processes and terminology associated with home-buying. Here are a few key terms from MortgageMatch.com to add to your vocabulary:

• Bait rate: Misleading mortgages with low rate promises and no contingencies generally for those with extraordinary credit. Rates are based on: credit, debt-to-income and loan-to-value ratios, the size and type of loan, property location and the day you lock your rate, etc. The loan isn't locked until the application is accepted. By then, it may be too late to find a better rate from another lender.
• Basis point: A term used in the mortgage industry which simply means 1/100th of 1%.
• Closing costs: The fees required to process and close your loan. They're a cash obligation running from 3-5% of the purchase price. Motivated sellers might pay a portion of these costs.
• GFE: The Good Faith Estimate (GFE) is a document explaining all costs involved in getting a loan.

While national rates on 30-year-fixed-rates mortgages have risen slightly this year, they are still at historic lows not seen since 1980, according to Freddie Mac. If you want to land the best mortgage that fits your needs, start early and give us a call. We can make the process smoother and easier to understand.

If now isn't the right time, prepare for your future purchase
If now isn't the right time to buy a home, make a plan with a target date for when you expect to be ready. Improving your credit, paying down debt, stabilizing your work history and calculating exactly how much you can afford, are the best ways to prepare for your future home purchase. It's also important to refrain from making any new large purchases or applying for new credit.

Call us, if you would like to discuss any of the details regarding your home purchase.

HOWEVER, THERE SOME NEW RULES FOR FIRST-TIME HOMEBUYERS

Wall Street Journal  Mar, 20, 2011

Without a house to sell, first-time home buyers have had a field day in the depressed housing market. That is, until recently. New rules, regulations and policies have changed the landscape, making buying that new home harder and more expensive.

Not long ago, first-time buyers accounted for 40% of home sales. Now they're down to 29% and falling, experts say, as first-time buyers confront a steady accumulation of rising fees, costs, and rates. This month, fees on most new mortgages will rise by up to 0.50%. In April, fees on small-down-payment mortgages, a first-time buyer favorite, will spike. Meanwhile, more lenders are requiring larger down payments, and new proposals from the Obama administration call for mortgages to become more expensive and limited in size.

But taken in total, all this reform means the window of opportunity for first-time buyers may be closing. Still, home prices have bottomed out, mortgages are still cheap and interest rates are still low.

So, if you are considering buying your first home, here are some new rules for first-time home buyers.

New rule: Put more money down.

Not because you'll have to -- it's still possible to make a down payment of less than 5% -- but because you want to. Insurance fees on the government-insured mortgages that require just 3.5% down have doubled in seven months, to up to 1.15% (as of April). On a 30-year, $300,000 mortgage, a buyer would pay $30,000 more in fees than if he had signed up for the mortgage in September. Also, between new lender requirements and cash-flush buyers, down payments have been rising since the last half of 2010 and now average 34% of the purchase price, according to the latest data by mortgage-data firm CoreLogic.

New rule: Brace for competition.

Following the housing downturn, desperate Sellers were often eager to accept an offer - any offer. But now, first-time Buyers looking for discounted prices may be disappointed. Over the past few months, investors, international buyers, and downsizing retirees have made a noticeable impact on the market, because they're paying with cash. In January, about 32% of purchases were made with all cash, up from 26% a year ago, according to the NAR. Sellers are often more inclined to accept these offers since they don't need to wait for a lender to approve financing.

and ..Don't limit your home search

Many prospective home buyers believe if they want to get the deal of a lifetime in this market they need to focus on distressed properties, such as foreclosures or short sales, in which the lender accepts less than the mortgage amount. But, eliminating market-rate homes from your search - those sold by willing Sellers to willing buyers - isn't the wisest move.

If you are considering a short sale, the bank will probably respond very slowly. In some cases, it may not respond at all. With short sales, if you are in a hurry, you are probably going to be disappointed.

Also, there is a common misperception that distressed properties are always screaming deals. But, sometimes they are not. Frequently, a Buyer can get a better deal on a market-rate home. Distressed properties account for roughly a third of the inventory right now. Therefore, if you decide you only want to look at distressed properties, you are limiting yourself to a third of the market. And that's crazy.  That means you are ignoring two thirds of the market.

What you should be saying is that I want a house that fits my budget, fulfills my lifestyle needs and is a good value.  That way it doesn't matter whether it is a so-called "distressed" home or a home sold by an individual owner.

VACANT DWELLINGS REQUIRE A DIFFERENT KIND OF INSURANCE POLICY

RISMEDIA, March 19, 2011

More and more houses sit unoccupied these days, left behind by their owners in this still-tough economic climate. In 2010's fourth quarter, the Census Bureau reports 12.1% of all U.S. residences, or 18,394,000 homes, were vacant.

But even properties that aren't distressed may take a long time to sell after the owners move on. All of which makes a difference in the kind of insurance coverage such unattended houses require-coverage that isn't offered in the standard homeowners' policy.

Vacant Home Insurance Now, which offers policies in several states, says up to 80% of homeowners do not know that "the provisions of their existing homeowners' insurance policy would essentially end coverage, exposing them to catastrophic loss."

Insurers discontinue coverage on a home if it becomes unoccupied for over 30 days and no new residents have moved in. Some insurers will grant a policyholder a vacancy permit, providing it is requested before the 30 days expire. This permit continues to provide coverage against some of the standard homeowners' perils, such as fire and wind, but does not protect the house against perils such as theft, glass breakage, or water damage.

Coverage provided by a vacancy permit varies from insurance company to insurance company and from city to city, so policyholders should check with their agent or the firm's representative. Some Insurers view a vacant property as a higher liability because often no one is regularly checking it.

A vacant condo is another story, Since the master insurance policy covers such a large part of the condo, including the wall, exterior and roof, a vacant condo is probably going to put a homeowner at significantly less risk.

A homeowner needs to have a specific plan in place to have the dwelling checked periodically by someone..a neighbor or relative, as well as the agent.

We have been advising our clients about the need for 'vacancy insurance' for many years, so, call us to discuss this issue, if you have any concerns about your vacant home.

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 please contact us. 

LATEST STATISTICS

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

JOKES OF THE WEEK

Because these are very short jokes, we decided to give you two, for the price of one, this week.

Unemployment Line

Manny and Fred lived in Brooklyn and worked together. Both were laid off, so they went to the unemployment office. When asked his occupation, Manny answered, "Panty Stitcher. I sew elastic onto ladies' cotton panties."

The clerk looked up Panty Stitcher. Finding it classified as "unskilled labor," she gave him $300 a week unemployment pay.

Fred was asked his occupation. "Diesel Fitter," he replied. Since diesel fitter was a skilled job, the clerk gave Fred $600 a week.

When Manny found out he was furious. He stormed back into the office to find out why his friend and coworker was collecting double his pay.

The clerk explained, "Panty stitchers are unskilled and diesel fitters are skilled labor"

"What skill?!" yelled Manny. "I sew the elastic on the panties, Fred puts them over his head and says: 'Yeah, diesel fitter.'"

Birthday Lake Crossing

Turning 21, a boy from Duluth Minnesota named Lars had heard stories of an amazing family tradition. It seems that his father, grandfather and great grand- father, on their 21^st Birthday, had all been able to walk to the boat club across the lake for their first legal drink.

So when Lars' 21st Birthday came around, he and his pal Sven took a boat out to the middle of the lake. Lars stepped out of the boat and nearly drowned. Sven managed to pull him to safety. Furious and confused, Lars went to see his grandmother.

"Grandma," he asked, "it's my 21st birthday, so why can't I walk across the lake like my father, his father, and his father before him?"

Granny looked into Lars' eyes and said, "Because your father, grandfather and great-grandfather were born in January; you were born in July!"