HARRY'S BI-WEEKLY UPDATE
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September 23, 2013
HARRY’S BI-WEEKLY UPDATE A Current Look at the Colorado Springs Residential real estate Market
SOUTHERN COLORADO ECONOMIC FORUM IS THIS WEEK… THERE’S STILL TIME TO REGISTER BEFORE IT’S SOLD OUT.
This Thursday, September 26th is the Southern Colorado Economic Forum, a meeting that each year addresses issues that affect the local economy such as employment, real estate trends and local dependence on the military. This year, however, UCCS finance professor and forum director Tom Zwirlein is putting the emphasis on “infrastructure”. With all the catastrophic fires, floods, and the aftermath of such, it’s time to talk about upgrading our the infrastructure of the City, which in turn he feels “will help create new jobs and will be a key factor in economic development”.
For anyone in business, thinking of starting a business or simply interested in what’s in store for the city of Colorado Springs, this is one Forum you won’t want to miss.
The meeting runs from 7:00 a.m. to 11:30 a.m., including breakfast, a keynote address by Jim Paulsen, Ph.D., Chief Investment Strategist of Wells Capital Management, Forum Results covering the Economic Conditions in the Pikes Peak Region and Outlook for the Next 12 Months presented by Fred Crowley, Ph.D., and Tom Zwirlein, Ph.D., UCCS College of Business and Administration, and a Business Symposium to discuss “Working Together to Resolve Regional Issues”.
As always, I am pleased to be the only Residential real estate Company sponsor of this event and I take great pride in the wonderful leadership involved in this organization that has continued to provide us all with pertinent information to help make our jobs and life a little bit easier to understand.
For more information and/or to register online, please go to: www.SouthernColoradoEconomicForum.com .
IN THE NATIONAL NEWS THIS WEEK National Association of Realtors, realtor.org, 9.19.13
I’ve always liked to share the National statistics with our readers for several reasons—first because a good number of our readers either reside in cities other than Colorado Springs or are interested in relocating outside our area and secondly because as is often the case—Colorado Springs statistics are better than those on a national level!
This was the case again in August. Local statistics provided in our last eNewsletter showed the local Median Sales Price in August 2013 to be $220,000, up 4.5%, compared year-over-year. The national Median existing-home price for all housing types in August was $212,000. So, while you may be seeing that local sales are slowing a little, you can see that our prices continue to rise, even faster than those nationally.
“Existing-home sales increased in August and reached the highest level in six-and-a-half years, while the median prices shows nine consecutive months of double-digit year-over-year increases, according to the National Association of Realtors.
Lawrence Yun, chief economist, said the market may be experiencing a temporary peak. ‘Rising mortgage interest rates pushed more buyers to close deals, but monthly sales are likely to be uneven in the months ahead from several market frictions,’ he said. ‘Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn’t as favorable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase.’
NAR President, Gary Thomas, said rising home values will encourage more people to sell. ‘As the equity position of most homeowners continues to improve, some who have been on the sidelines will list their home for sale,’ he said. ‘Most of those owners also will be buying another home, but higher levels of new home construction going into 2014, combined with some reduction in demand from less favorable affordability conditions, will help to moderate price growth to more sustainable levels.’”
According to the “Economists’ Outlook/ Blog”,of the NAR, in the Markets with the Largest Change in Homeownership Rate 2004 vs. 2nd Quarter 2013, Colorado placed 5th with a -6.3% in homeownership. Yes, folks, that’s a negative 6.3%! The Blog went on to say, “in a moderate surprise, Colorado experienced some of the largest declines.” It also indicated that “the national homeownership rate peaked at 69% in 2004, but fell four percentage points to 65% in the 2nd quarter of 2013.
What does this mean to those of you who live here? Well, bottom line:
So, yes, the time is ripe if you are looking for investment property. I will be happy to assist you in your search for the right property so call me today at 598.3200 or email me @ Harry@HarrySalzman.com.
HIGHER PRICES AND RISING MORTGAGE RATES CURB DEMAND Wall Street Journal, 9.16.13, HousingWire, 9.12.13, RealtorMag, 9.12.13 & 9.16.13
After this year-long rally, the U.S. housing market is beginning to show signs of cooling off due to higher prices and interest rates, however; many Realtors are still reporting multiple offers and sales over the listing price.
Homeowners are still motivated by rising prices, and “people buying houses are citing future price increases as one of the ‘key factors’ motivating them to buy. The most recent survey by the Real-Estate company Redfin found that almost one third of Buyers are motivated by rising prices.”
And as home equity levels continue to rise, the trade-up Buyer is reentering the market. These folks have larger down payments for new homes and have waited some time for the opportunity to make this move up.
Rising mortgage rates are also playing a hand in driving the higher demand because move-up Buyers are wanting to take advantage of the still historically low rates. “According to Real Trac data, more move-up Buyers are in a better position to move because 40% of all homeowners have at least 20% or more of equity in their homes now.”
The August report of the Obama Housing Scorecard showed that “home prices continue to make strong gains while the number of underwater homes has dropped by 42% since the beginning of 2012.”
A slowdown in sales is common this time of year after a busy Spring/Summer season, and “some observers in the industry are welcoming a housing slowdown. They believe recent double-digit price gains are not sustainable and that a pullback will make the recovery move at a healthier pace.”
MORTGAGE WORRIES SPUR HOME BUYING Wall Street Journal, the Gazette, multiple issues of both
I know what I just reported about a possible slowdown, but this past week all I read in the news was the fact that increased mortgage rate fears are definitely going to drive up home sales. With talk of federal officials preparing to reduce the maximum size of home-mortgage loans eligible for Fannie Mae and Freddie Mac, Buyers and Sellers are starting to understand that if they’ve been on the fence, the time is now.
The proposed move is sure to face opposition from Congress and the real estate industry, but the move is “designed to wean the mortgage market off government support and allow the market for non-government-guaranteed mortgages to take a bigger role.”
At this point, no one knows what’s going to happen, but one thing we know for certain. Mortgage rates will not stay at these historic lows forever. If you are in the market to Sell and trade-up, relocate to a different neighborhood due to any number of factors, or if you simply are looking for investment properties, give me a call. My investment banking background, along with my 40+ years in the local real estate market make me uniquely qualified to help you and your family determine what’s in your best interest.
PHILOSOPHY OF THE DAY FEATURED LISTING
Harry A. Salzman. CRS, CRP, CNE email: Harry@HarrySalzman.com Serving: Colorado Springs, Monument. Air Force Academy, Fountain,
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