HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET

THE LATEST STATISTICS ON HOME SALES ARE ENCOURAGING

This past week, the National Association of Realtors published their quarterly report on “Median Sales Prices of Existing, Single-Family Homes for Metropolitan Areas”. This report looks at every multiple-listing sale within 152 major metropolitan areas, or, in this case, 5.14 million sales (annually adjusted). These figures show that the Colorado Springs real estate market has outperformed most of the other markets in the country.

The bottom line is that the “Relative Strength” of the Colorado Springs housing economy looks great !!!

Some of the highlights of the report were:

·         Colorado Springs 1st Quarter 2010 vs. 2009 = +2.7%

·         91 out of 152 national areas showed higher 1st quarter median sales prices in 2010 vs. 2009

·         29 markets had double-digit increases, 3 were unchanged, while 58 had price declines

·         In the 4th quarter of 2009, 67 metro areas reported gains, while, in the 3rd quarter of 2009, only 30 showed gains

·         Distressed homes (which are discounted by 15%) accounted for 36% of total sales

·         National 1st quarter sales in 2010 were 11.4% over 2009

These figures confirm the fact that many recent Homebuyers were motivated to take advantage of the recently-expired federal tax credit and decided to get off the fence, not only here, but nationwide.

As Lawrence Yun, Chief Economist for NAR recently pointed out,” We have been seeing this flattening of home prices in all areas lately. The tax credit was very effective in drawing down excess inventory, with about 1 million additional sales resulting directly from the stimulus”.   

These numbers demonstrate that the entire nation is seeing this recovery. And, the current prospects for our local investors look even better. Our local sales in April were up 11.9% over 2009. Our average sales prices were up 4.7%. Our median sales prices were up 4.2% and our Active listings were up 2.8% over 2009…. So, what does this mean to you, a Colorado Springs Homeowner, a current or prospective investor , or someone just sitting on the fence? It means that we have more opportunities for you right here in Colorado Springs than they have in any other part of the country.

As we shared with you in previous issues, a monthly comparison of April 30, 2010 compared to April 30, 2009 shows:

·         Local sales are up 11.9%

·         Average sale prices are up 4.7%

·         Median sale prices are up 4.2%

·         Active listings are up 2.8%

With low, 30 year-fixed rates still available (4.875% for owner-occupied, 5.25% – 5.5 % for non-owner occupied) and the ability to reduce these rates even further for 15 year mortgages (typically, .25% - .375% lower), it’s a great time to buy. Give us a call.

COLORADO HAS CALIFORNIA WORRIED

The following article by Jan Norman. staff small-business columnist, was published in the Orange County Register on May 13th, 2010.

“An average of 15 to 20 companies move from other states to Colorado Springs every year and 30% are from Southern California, said Dave White, executive vice president of marketing for the Colorado Springs Regional Economic Development Corp. “ 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.

I called White because my recent update of California companies leaving the Golden State included half a dozen that landed in Colorado Springs. Readers demanded to know why, and rightly so.

It was a softball question that White teed it up and crushed it.

‘Every state in America is focusing on California,’ he said. ‘It’s low hanging fruit’ for those assigned to develop their local economies and add jobs.

Remember, he promotes Colorado Springs for a living but, he’s a Southern California transplant and professes to love California and Disneyland. But business is business.

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)

‘My wife and I laugh that the only thing cheaper in California is the citrus,’ White said.

Colorado Springs comes looking for companies to lure away from the beaches and sun and Disneyland, he admitted.

‘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.’

And the city is getting ready for another California campaign, but White wouldn’t disclose details. (Nevada is preparing another campaign too, but that’s another story.)

Unlike Virginia and Texas, which have been running television commercials in Southern California, and Nevada, which regularly runs newspaper ads and billboards, Colorado Springs tends to send direct mail to company owners.

‘They did fly a plane over Los Angeles on Valentine’s Day pulling a banner that said ‘Colorado Loves LA,’ but that was Metro Denver and the state, not us,’ White said.

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.

Does Arnold do that?” (End of article)

Well we’re sorry, California, but, as you pointed out in your article, business is business. But, you still have Disneyland.

Unfortunately, California is a living example of the fact that you can’t get more eggs by killing the chicken.

Speaking of chickens, we’re not trying to be Chicken Little, dashing around screaming, “The Sky is falling, the Sky is falling”, but we thought that any of our readers who own a house, or are trying to buy or sell a house would be interested in the following article.

A LICENSE REQUIRED FOR YOUR HOUSE ???

If you think the housing market is depressed now, wait until you read the Cap and Trade Bill (H.R. 2454) that has passed the House of Representatives and is now being considered by the Senate. The Bill requires that, beginning one year after enactment of the Cap and Trade Act, you won't be able to sell your home unless you obtain a federal license and retrofit your home to comply with the energy and water efficiency standards of H.R. 2454. This will represent one of the largest tax increases any of us has ever experienced.

The Congressional Budget Office estimates that in just a few years the average cost to every family of four will be $6,800 per year. No one is excluded. 

But wait. This awful bill has many more surprises in it. Probably the worst one is this: A year from now you won't be able to sell a home without the permission of the EPA Administrator. Even pre-fabricated homes ("mobile homes") and commercial buildings are included.

To obtain this permission, you will have to have the energy efficiency of your home measured. (Sect. 202 - Building Retrofit Program). After the government notifies you what your retrofit energy efficiency requirement is, you will be required to make specified modifications to your home under the retrofit provisions of the Act. (Note also that the EPA administrator can set higher standards at any time, even above the automatic energy efficiency increases which are already built into the Act.)

After the initial inspection and retrofit, you will have to get your home measured again and get a license (called a "label" in the Act) which must be posted on your property to show what your efficiency rating is; sort of like the Energy Star efficiency rating label on your refrigerator or air conditioner. If you don't get a high enough rating, you will not be allowed to sell.

Keep in mind that the requirements in the bill have been set low initially so the bill would be able to get through Congress. After passage, however, the Administrator is permitted to set higher standards every year.

The Act also allows the government to give homeowners who meet certain energy efficiency levels a grant of several thousand dollars to comply with the retrofit program requirements. As always, the government will determine who qualifies to receive these grants. Based upon the exemptions allowed in other such government programs, we can expect these grants to be awarded only to those who “don’t have an income of more than $50K per year", or "whose home selling price is not more than $125K". Thus, low income Homeowners will get a tax refund to offset the cost of this new program and, when this happens, the $6,800 estimated cost to the average taxpayer will go even higher, in order to “bail out” those who qualify for the exemption.

Sect. 204 - Building Energy Performance Labeling Program establishes a labeling program that will identify the achieved energy efficiency performance for "at least 90 percent of the residential market within 5 years after the date of the enactment of this Act." The EPA administrator will get $50M each year to enforce the labeling program and the Secretary of the Department of Energy will get an additional $20M each year to help the EPA.

Homeowners will be required to post the BEPL label in a conspicuous location in the home and will not be allowed to sell their home without having this label. And, as with all licensing programs, the Homeowner will probably be required to obtain a new label on a regular basis, possibly every year.

 The government estimates the cost of measuring the energy efficiency of your home should only cost about $200 each time. (When the California auto smog inspections first started, they were projected to  cost only $15. The current price for that program’s inspection and certificate is $50, a 333% increase).

This bill is an absolute type of a “taking away” of private property rights of every homeowner in the U.S. We believe that any type of implementation of this bill will dramatically decrease a Homeowner’s ownership rights. We have been vested with as Americans.

Will this bill help get America back on track? Well, as we pointed out, above, you can’t get more eggs by killing the chicken.

We recommend you call or contact your friends in Washington to vote against this bill.

CHECK OUT the following relating to this new, proposed law; 

HR2454 American Clean Energy & Security Act:   http://www.govtrack.us/congress/bill.xpd?bill=h111-2454

San Francisco Examiner OpEd, May 16, 2010
http://www.sfexaminer.com/opinion/columns/oped_contributors/Cap-and-trade-is-a-license-to-cheat-and-steal-45371937.html

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 38 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 pollster was working outside the United Nations building in New York. He approached three men: a Texan, a Californian and a New Yorker. "Excuse me." he said. "I would like to ask your opinion on the current meat shortage." The Texan replied, "Excuse me, but what is a shortage?" The Californian asked, "Excuse me, but what is meat?" The New Yorker replied, "What is 'Excuse me'?"