October 24, 2011

HARRY’S WEEKLY UPDATE
A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTIAL real estate MARKET


AT LAST !!! A GOVERNMENT PROGRAM TO HELP THE GOOD GUYS

The Wall Street Journal (Monday, Oct. 24, 2011), as well as Fox News and MSNBC describe an upcoming  major overhaul of an under-used mortgage-refinance program designed to help millions of Americans whose home values have tumbled. Federal regulators plan to announce the program today, in an effort to revive the stagnant housing market caused by a surfeit of homeowners who have been unable to re-finance their ‘underwater’ homes.

The overhaul will, among other things, let borrowers who have good credit and who have kept up their mortgage payments, refinance regardless of how far their homes have fallen in value.

The plan would streamline the refinance process by eliminating appraisals and extensive underwriting requirements for most borrowers, as long as the homeowners are current on their mortgage payments.

Fannie Mae and Freddie Mac have also agreed to waive some fees which have made refinancing less attractive to many homeowners.

Officials at FHA, which regulates Fannie and Freddie, estimate that the plan will enable between 800,000 and 1,000,000 more borrowers to refinance at lower rates and thus, be able to continue to pay their mortgages.

CoreLogic, a company that tracks 85% of all mortgages, estimates that 20 million borrowers with equity in their homes could cut the interest rates on their homes by more than one percentage point, if they could refinance. That’s about a quarter of all the homeowners in the country.

Pricing details won’t be published until mid-November, and lenders could begin financing loans under the re-tooled program as soon as December 1, according to federal officials.

Bottom Line: If you bought your present home with a loan amount of $250,000 and an interest rate of 6.5%, this new program would allow you to re-finance to a rate of 4% and thus lower your monthly mortgage payment by approximately $520 per month. …Even if your home is currently ‘under water’.

If your present mortgage rate is 5.5%, your re-financed 4% loan would save you approximately $312 per month.

This new money in your pocket should now enable you to pay for Junior’s college, or, if you wish to upgrade to a better home and cash in on the current opportunities in the housing market, you could:
1. Re-finance your current home.
2. Rent it out (it’s a hot rental market right now), and
3. Buy that better residence at a very low price and a historically-low interest rate.  

Call us at 598-3200, or 800-677-MOVE (6683) to discuss what this new opportunity could mean to you

…… It’s nice to see the good guys win, for a change !!!


DOES RENTING OUT YOUR PRESENT HOME MAKE GOOD SENSE?

Daily real estate News (Tuesday, October 18, 2011) Identifies the rental market as housing’s bright spot.

“With rental demand rising and apartment economics improving, the multifamily sector is a positive signal for the U.S. housing industry,” writes Frank Nothaft, Freddie Mac’s Chief Economist, in the October 2011 U.S. Economic and housing market Outlook.
 
An increase of 1.4 million households moved into rental housing in the year ending June 2011--a 4 percent rise in the number of tenant households in one year alone, the Census Bureau reports. Meanwhile, the home ownership rate dropped about 1.5 percent over the past year.

Rents are rising at a 5.17 percent annual rate — up from last year’s 4.72 percent rate. If rents continue to grow at their current pace, they won’t be too far behind the record-high reached in 2000 of 6.18 percent, according to Axiometrics Inc.

The rental market has added about 1.4 million new renters this year, some of whom were former home owners who faced foreclosure or a short sale. Renters are increasingly showing an appetite for single-family homes owned by investors
.
As such, the number of investors in the market is growing. Investors make up anywhere between 20 and 40 percent of monthly existing home sales, according to home-sale data. With home prices and interest rates low, more aspiring investors are jumping in. Nearly 60 percent of investors in a recent survey by Realtor.com considered themselves newcomers to real estate investing.

The increase in rental demand is due partially to some households who may have faced a short sale or foreclosure of a home they owned. However, most of the rental demand is coming from young and newly formed households, who are postponing home ownership. The home ownership rate for household heads under 30 years of age has fallen the sharpest in recent years.

As demand increases, vacancy rates are dropping and rents are rising.

Keep in mind that rents are a steady return on your investment through the years, leaving you with an attractive asset when prices improve. And they will. The best profits in real estate accrue to long-term investors who take a long-term view.

Call us at 598-3200, or 800-677-MOVE (6683) to discuss this great opportunity


RIDING THE INVESTOR WAVE
By Lawrence Yun, NAR Chief Economist
 
Interest rates continue at historic lows. Home prices in many markets are more affordable than ever. Indeed, housing affordability conditions are among the best they have ever been.

Especially for investors with cash, the situation is providing them with a golden opportunity. The investor share of home purchases has been creeping up. Investors accounted for 18 percent of home purchase activity in July; the share reached 22 percent in August. (The first-time homebuyer share fell after the homebuyer tax credit expired last year, and investors stepped in to fill much of the gap).

A significant share of investors is purchasing properties via all-cash transactions. All-cash purchases represented 30 percent of all home sales transactions across the country and accounted for over half of the sales in hard-hit regions like Las Vegas and Miami.

At the same time, higher rents are also attracting investors to the market and the attractive rates of return from rising rental income is a strong lure.

Rents rose at a better than 3 percent annualized rate in the third quarter of 2011, according to government data, and private data sources suggest even faster rent growth. If annual rent gains remain near 3.5 percent, rents will double in 20 years. If the rents rise 5 percent a year, rents will have doubled in 14 years.

In addition to strong returns on rental property, investors can anticipate solid home price appreciation over the long haul.

Given that the housing bubble has virtually deflated, the future path for home prices path should follow the future path for rent growth. That means home prices could also double in 14 to 20 years, though it is unclear as to when home prices will begin to catch up with rents. But long-term investors are sure to catch some if not most of the upward ride.

Call us at 598-3200, or 800-677-MOVE (6683) to discuss this great opportunity.


LOCAL HOMEBUILDERS PICK UP PACE IN SEPTEMBER

Local Homebuilders started projects in September at the fastest pace in 17 months, a hopeful sign for the economy.

Single-family building permits in Colorado Springs totaled 124 in September, a 53.1% increase over the same month last year.

It was the third year-over-year gain in permits during the past four months.

Looks like we're on track for a modest recovery this year.

 

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 39 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 podcast for this month …

 

LATEST SALES AND LISTING STATISTICS

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

 

JOKE OF THE WEEK

Joke #1

Bronco’s Coach Fox has a new plan for insuring a victory every Sunday.

He will let Tim Tebow take a nap before every game and then, right before the game begins, he will wake Tim up and whisper in his ear, “Tim, wake up. There’s only five minutes left to play before the game ends.”


Joke #2

We think we used this joke before, but it is still appropriate

The dream of the older generation was to pay off a mortgage. The dream of today's young families is to get one.
 
If you think no one cares you're alive, just miss a couple of house payments.

My buyers went through debt consolidation. Now they have only one bill they can’t pay.

If you want to know exactly where the property line is, just watch the neighbor cut the grass.

This country is great. It's the only place where you can borrow money for a down payment, get a 1st and 2nd mortgage and call yourself a homeowner.

The trouble with owning a home is that no matter where you sit, you're looking at something you should be doing.