August 15, 2016

HARRY’S BI-WEEKLY UPDATE

          A Current Look at the Colorado Springs Residential real estate Market

As part of my Personal Service, it is my desire to share current real estate issues that will help to make you a more successful and profitable buyer or seller.

OUR LOCAL STATS REALLY SHINE IN THE HOTTEST SUMMER FOR RESIDENTIAL real estate IN TEN YEARS 

As most of you are aware, I publish quarterly statistics from the National Association of Realtors® that track the Median Sales Prices of all single family home sales closed that were listed on MLS nationally, and specifically list the top 178 Metropolitan areas, of which Colorado Springs is one.

I’m trilled to report that the survey, which was released last week for the second quarter 2016 shows Colorado Springs with a 5.9% appreciation in home values from the same quarter last year.    When you consider that for the entire U.S.A., the appreciation was 4.9%--that translates into a full percentage point higher—or literally—Colorado Springs is showing a 20% higher home value appreciation than the country at large and is among the top 75 markets in appreciation.

That’s not just good news, but GREAT news for all the local buyers and sellers and certainly explains why the spring buying and selling frenzy is continuing into fall.  I can’t remember ever being quite as busy as I have been this summer.  It certainly makes sense when you consider that interest rates are flat and continue to be historically low, while rental rates are skyrocketing.  This translates into many folks coming into the market for the first time while competing with those looking for investment properties. 

To view the survey in its entirety, please chick here.

Several weeks ago—before this survey was released—Tatiana Bailey, PhD, Director of the Economic Forum at UCCS, asked for my estimate on where home values might be in terms of appreciation by year end.  I told her 6.0%.  Well, I didn’t have a crystal ball, but it sure looks like I’m right on target at the moment and hopefully we will end up even higher than that if things keep going like they have. 

As a reminder to you—since a number of the economic experts, such as Tatiana, ask my opinion on matters concerning Residential real estate—you can feel very comfortable that when you are working with me you not only get my special brand of customer service, but also a professional, knowledgeable approach to buying and selling based on my 44 plus years in the local market.

When you want my opinion on all of your options—buying, selling or investing--even if you are simply starting your decision process, please give me a call at 598-3200 or email me at Harry@HarrySalzman.com and let’s find the best way to help you take advantage of this “hot” time in Residential real estate.

 

AND NOW SOME DETAILS FROM THE SURVEY

Realtor.org, 8.10.16 ,RISMedia, 8.11.16

Homes for sale in July are moving two percent more quickly than last year as prices continue to hit new record highs, confirming a record-breaking summer and the hottest July in a decade. 

“The best spring in a decade has transitioned into the decade’s hottest summer,” says Jonathan Smoke, chief economist of realtor.com. “Pent-up demand left over from two years of tight supply against the backdrop of mortgage rates near three year lows have encouraged buyer activity at a time when sales usually begin to decline. While prices are higher as a result of the strong demand and limited supply, the lower mortgage rates are neutralizing the impact on purchasing power.”

Lawrence Yun, NAR chief economist, says a faster pace of home sales amidst languishing inventory levels pushed home prices higher in most metro areas during the second quarter.  “Steadily improving local job markets and mortgages rates teetering close to all–time lows brought buyers out in force in many large and middle-tier cities,” he said.  “However, with homebuilding activity still failing to keep up with demand and not enough current homeowners putting their home up for sale, prices continued their strong ascent—and in many markets at a rate well above income growth.”

“Many listings in a majority of markets—and especially those in lower price ranges—had multiple offers and went under contract quickly because of severely inadequate supply.  This in turn dented affordability and without a doubt priced out a segment of buyers attempting to seek relief from fast-growing rents,” Yun added.

I’ve experienced this myself in recent months with a number of my clients.  As I’ve said time and again—when you find what you are looking for—there’s no time to delay.  Multiple offers are apparently not going away—and “the early bird gets the worm” so to speak.

 

LOCAL RENTERS ARE BEING SQUEEZED IN SEVERAL DIRECTIONS

With local rental rates rising even faster than the rest of the country, renters are being forced to consider new options.  Rental properties are in short supply here at present and investors are picking up many of the homes that might have been affordable for first time buyers.  When homes in the lower price ranges come on the market they have multiple offers immediately. 

There is currently a 51-year low of homeownership—62.9% of Americans own their own home. 

My advice?  Well, if you’re a first-time buyer, there are many new options available to you, from lower down payments to lower interest rates, and—starting in January 2017—a new incentive for first time Colorado buyers, explained further in the next article.

If you are an investor, or considering that route, now is a great time to buy.  I’ve found that folks do not even have to list their homes for rent—there is a waiting list for most rentals that come on the market.  I’ve been busy looking for investment homes lately for a number of my clients.  With homes appreciating at this pace and a shortage of rental properties, the timing is couldn’t be better.  If you’ve considered adding investment properties to your financial portfolio, don’t wait much longer.  I’ve had considerable experience in this arena and will be happy to discuss whether this might be an option.  Just give me a call and let’s see if this is a good direction for you.

 

HB 1467—FIRST-TIME HOMEBUYER SAVINGS ACT TAX DEDUCTION STARTING IN JANUARY 2017

Colorado Association of Realtors® Legislative Review 2016

A “First-time Homebuyer Savings Account” (FHSA) will allow any Coloradan to set aside up to $50,000 toward the cost of purchasing a new home.  The earnings on those funds—interest and capital gains—are free from Colorado state taxes forever.  FHSAs will be a great way for future homeowners to start saving early for the costs of buying a home. 

These accounts will be easy to set up—and you can either open a new one or transfer money from an existing savings account to a FHSA.  The qualifying beneficiary of the account can be a child, or grandchild, or the account holder may designate himself or herself as the qualified beneficiary.  The qualifying beneficiary of the account must have never owned a single-family, owner-occupied residence (including condo, manufactured home or mobile home) or must have been off of the title for such a residence for at least three years due to dissolution of marriage.

This is fabulous news for renters and for parents and grandparents who wish to help family members in buying a first home. 

I’ll provide more information as it is released, but I wanted to give you a “heads-up” that something great is about to begin for first-time buyers.

 

THE IMPACT YOUR INTEREST RATE MAKES  (INFOGRAPHIC)

KeepingCurrent Matters, 8.5.16

Some Highlights:

  • Interest rates have come a long way in the last 30 years.
  • The interest rate you secure directly impacts your monthly payment and the amount of house that you can afford if you plan to stay within a certain budget.
  • Interest rates are at their lowest in years… RIGHT NOW!
  • If buying your first home, or moving up to the home of your dreams is in your future, now may be the time to act!

 

MASTER BATHROOMS:  THE MOST LUXURIOUS SPOT IN THE HOME?

RealtorMag 7.20.16

The American Institute of Architects’ spending projections for 2016 shows that a growing number of homeowners are opting for more luxurious bathrooms over sprucing up other rooms in the house—even kitchens.

“The master bedroom is becoming a real point of focus, and since it’s one of the most used rooms in the house, it’s an opportunity to make a statement.” Beth Fisher, senior management director of marketing for the Corcoran Sunshine Marketing Group, reported.

Architects surveyed by the American Institute of Architects say 29 percent of their clients are asking for a bigger bathroom, an increase from 25 percent a year ago.  “We’re seeing master bathrooms and master bedrooms being almost the same size,” says Allison Greenfield, partner at Lionheart Capitol in Miami.

How much owners stand to get back on these ultra-luxury bathroom redos in still in question.  Remodeling Magazine’s Cost vs. Value report shows that upscale bathroom remodeling recouped only 56 percent of its cost at resale time.  However, to a number of owners, that’s not the driver behind these remodels.  Those owners simply want a quiet sanctuary shut off from a 24/7 smartphone-dominated world, noted MarketWatch.