January 31, 2011

HARRY'S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET

COLORADO SPRINGS BEATS THE NATIONAL SALES FIGURES AGAIN

The latest Standard & Poor's Case-Shiller Home Price Index shows that, in the top 20 U.S. cities surveyed, real estate prices fell 1.6% in 2010.

Added to that, the Wall Street Journal (Mon. Jan. 31, 2011) announced, "Home Prices Sink Further". The article points out that, in the WSJ quarterly survey of the major metropolitan areas of the country, 2010 home prices declined in every one of the 28 areas covered by their survey.

However, we just received a copy of the latest report from the Southern Colorado Economic Council from Fred Crowley, the chief economist for the SCEC, and the report clearly shows that, during 2010, Colorado Springs median and average home prices both rose. In other words, we are better off than any of the top 48 metropolitan areas in the country. How do you like them apples??

We hate to make the other major metropolitan areas in the U.S. feel bad, but we cannot overlook this opportunity to point out that we live in the best place in the USA. Our economy is better than any of the cities in both of the surveys cited above.

Apparently, the theme song for Colorado Springs should be,"O Lord, It's hard to be humble, when you're perfect in every way".

To see the complete SCEC report and to learn how well our local economy is doing, Click here.  

 

..PLUS THE FACT THAT IT'S STILL CHEAPER TO LIVE HERE !!!

The Gazette also reported that our local cost of living is still below the national average. (Jan. 29, 2011). Even though gas prices nudged our local cost of living up .5% in 2010, we are still 7.2% below the national average cost of living. Now, if we all go out and buy electric cars, we will really beat the national average. .(but who can afford a 40 mile extension cord?)

 

HERE'S WHAT THE EXPERTS ARE SAYING ABOUT OUR LOCAL ECONOMY

On January 27, 2011, we attended the presentation, "Navigating in the New Economic Reality", sponsored by Vectra Bank. The featured speaker was Dr. Tom Zwirlein from UCCS. The speaker presented a local business forecast for the coming year and featured some very interesting data about our local economy. Here are some of the points discussed:

  • There will be a rise of approximately 1 ½% in interest rates in 2011.
  • Colorado Homeownership will fall by approximately 2-3% in 2011. Obviously, this means that some home occupancy will shift from ownership to rental status. This is good news for owners of rental property. (Our present vacancy rate is around 3%. That's very low).
  • The Housing Affordability Index will be approximately the same as it was in 2009-2010.
  • Local foreclosures are projected to be 4200 in 2011 (vs. 5470 in 2009 and 4828 in 2010). Good !!! The trend is down !!
  • The number of residential sales has remained fairly constant for the past three years (2008 - 8339, 2009 - 8346, 2010 - 8222).
  • Our local unemployment rate is projected to drop from 8.4% to 7.9% in 2011.
  • Our local population is forecast to grow by1.5% in 2011.
  • Personal income and retail sales are both forecast to rise modestly in 2011, but single-family housing permits are predicted to decline.

All of these factors point to the fact that rental property will be a great investment in 2011, especially if you buy before interest rates rise any further.

Call us.

 

TIMES A WASTIN' - BETTER CALL US RIGHT NOW

As we have been predicting, mortgage interest rates are continuing to edge up. The Wall Street Journal reports that rates are "edging closer to 5%".

With local home prices and interest rates both on the rise, you shouldn't postpone buying that new home or investment property any longer.

 

HOW WILL THE NEW 3.8% TAX ON real estate AFFECT YOU ?

We have been getting lots of phone calls asking us about "the new 3.8% tax on real estate". The good news is that it probably won't affect most of our readers.

As of January 1, 2013, there will be an additional tax of 3.8% on some income from interest, dividends, rents (less expenses) and capital gains (less expenses).

The new tax will apply to: 

  • Individuals with Adjusted Gross Incomes (AGI) above $200,000
  • Couples filing a joint return with more than $250,000 AGI
  • Capital gains from sale of a principal residence
  • Capital gains from sale of a non-real estate asset
  • Capital gains from interest and dividends: Securities
  • Rental Income, including REI investment income
  • Rental Income as sole source of earnings - real estate trade or business
  • Sale of a second home with no rental use (or no more than 14 days rental)
  • Sale of an inherited investment property (Residential or commercial)
  • Purchase and sale of Investment Property (residential or commercial)

You may want to discuss with your tax advisor how this new law might affect your taxes.

For your information, the National Association of Realtors has prepared a brochure outlining the details of this new law and citing several specific examples. For a copy of the brochure and to see a complete explanation of the law, Click here.  

 

IF YOU'RE A LANDLORD, HERE'S YET ANOTHER  NEW REQUIREMENT FROM THE GOVERNMENT !!!

If you're the owner of even a single unit of rental property, starting this year, you must start tracking all vendors doing at least $600 worth of work for you and send them an IRS Form 1099 at the end of the year

The IRS has not yet worked out the details of this new requirement, so we cannot yet clarify what it means for you but, you should start keeping track of your vendors, so you don't get blindsided at the end of the year. Better talk to your bookkeeper about this new law. 

Hey, what's the problem? You've got plenty of time on your hands.

 

LATEST STATISTICS

To see the latest Sales and Listing statistics for the Pikes Peak region, Click here.

 

THIRTEEN THINGS YOUR BURGLAR WON'T TELL YOU

Security consultant Chris McGoey interviewed 105 burglars for his book about protecting yourself and your home from being burgled. Click here to review some of his tips on protecting yourself.

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

Last week, because we assumed our readers were so involved with the NFL playoffs, the State of the Union address and the fact that the world is falling apart, we thought we could dispense with the Joke of the Week and nobody would notice. However, after publication, we received several complaints about the omission. So, now that we have been properly chastised, we will include two jokes; one for this week and one for the missing joke from last week.  

JOKE #1

Two women were walking through the woods when a frog called out to them and said: "Help me, ladies! I am a real estate broker who, through a curse, has been transformed into a frog. If one of you will kiss me, I'll be returned to my former state!"

One woman took out her purse, grabbed the frog, and stuffed it inside her handbag. The other woman said, "Didn't you hear him? If you kiss him, he'll turn into a real estate broker!"

The second woman replied, "Sure, but these days a talking frog is worth more than a real estate broker!"

JOKE #2

The following complaints were actually received by property managers from their renters:

 

"The toilet is blocked and we cannot bathe the children until it is cleared. "

"This is to let you know that there is a smell coming from the man next door. "

"The toilet seat is cracked: where do I stand? "

"I am writing on behalf of my sink, which is running away from the wall. "

"I request your permission to remove my drawers in the kitchen. "

"Our lavatory seat is broken in half and is now in three pieces. "

"Will you please send someone to mend our cracked sidewalk? Yesterday my wife tripped on it and is now pregnant."

"Our kitchen floor is very damp, we have two children and would like a third, so will you please send someone to do something about it. "

"Would you please send a man to repair my downspout? I am an old-age pensioner and need it straight away. "

"Could you please send someone to fix our bath tap? My wife got her toe stuck in it and it is very uncomfortable for us. "

"When the workmen were here, they put their tools in my wife's new drawers and made a mess. Please send men with clean tools to finish the job and keep my wife happy."

By the way, the playoffs and the State of the Union address are both over, but the world is still a mess. Sorry about that.