I’ve mentioned before that I see trends.  I think it is because I look for trends.  Everything we know points us to conclusions that are colored by what we believe.  Yesterday I read an article and thought, “well, duh!”.  Everything said was something that I had already identified and knew to be true.  The article just seems a little late to the party or am I prescient?  Certainly other people must see what I’m seeing.  If you read the popular press it keeps pointing out statistics that seem to show that the economy and real estate markets are improving.  From my perspective, we had an artificial blip produced by the tax credits and we have borrowed buyers from the future.  I don’t see new jobs being created and am not sure where they will come from, but perhaps China loosening their currency will help with exports.  Or perhaps it will help with cost of goods manufactured in the US so that they are more competitively priced so that we Americans will buy goods manufactured in the US.  That would help create jobs here at home.  Luckily for us all, nothing stands still and things will improve, but until people feel secure and feel they have options, the economy will be at a standstill.  The news isn’t all bad because the DJIA is still hovering around 10,000 and that indicates people are feeling more comfortable financially than they were a few years ago.  Let’s hope we can keep improving on that comfort level to the benefit of all Americans.

Oh yes, the article I read is right here for you to read too.  Enjoy!

Summertime and Showings Are Increasing

On Friday I gave you the new Monday market report early so that you could catch up on your web browsing over the weekend.  At that time our company, RE/MAX Properties, Inc (the company with the greatest market share by far in Colorado Springs) showing activity for active listings was down 48% from the best week of the year so far, April 5-11, 2010.  The number of listings was up 7% between April and the week of May 31-June 6, 2010.  The good news is now that graduations, early summer weddings, and the hub-bub that surrounds kids getting out of school here in the West has passed, people are interested in looking at houses once again.  Listings are still increasing (10% increase from the first full week of April), but showing activity has increased 41% in the past week from the week before.  Our company showing activity is down 26% from early April, but we are still hoping for steady sales through the next few months before the high real estate season in Colorado Springs winds down.

Bill to Extend Closing Schedule for Tax Credit Qualifiers

One bright spot is that a bipartisan bill is in Congress to extend the closing deadline for home buyers who have been under contract as of April 30, 2010 to September 30, 2010 rather than June 30, 2010.  This bill is intended to keep the tens of thousands of short sale purchases that were contracted for in play as banks attempt to approve short sales and give buyers enough time to close on those homes.  Without the extension many of the purchasers of these homes could change their minds without the benefit of one of the two tax credits offered this year.  Getting these homes closed could make the difference in how many more homes go into foreclosure between now and the end of the year.  It’s better for those homes to sell at a short sale price rather than an almost assuredly lower price if they go on the market as a bank foreclosure at a later date.

More next Monday!  Get the latest real estate market news here each week.

Great coffee, pastries, and free wifi

This week’s restaurant review is a day late (sorry folks), but it’s a goodie.  I spent some time this morning at La Baguette having coffee and a croissant as I read more of Dave Ramsey’s The Total Money Makeover (I’m preparing a special new book review series for readers, so stay tuned).  I love the new look the Chestnut Street location has been given.  Very fun.  I didn’t need wifi this morning, but some days I do and I noticed when I was at the downtown location this week that they now have free wifi for their customers.  And the food is yummy, too!  I love the apple croissants and when it comes to lunch, they have the best French onion soup in town.  You can take home a fresh baked loaf of bread or rolls and other pastries and surprise everyone in your household with a special treat.  The website only gives 2 locations but you can also find a third restaurant at 1420 Kelly Johnson Blvd, west of Academy near Chapel Hills Mall.  I frequent all three locations.  Tip:  try the creme carmel dessert if you like custard or flan.  Delicioso!

Other free wifi restaurants

But that’s not all!  A long time local favorite coffee house that offers free wifi is Pikes Perk.  They also have multiple locations in Colorado Springs plus an airport coffee shop.  I go to the one on N Academy most often.  It’s a great place to meet friends or clients.  I do!

My final suggestion for great coffee and free wifi is Panera which has been reviewed on this blog.  This is the only one of the three that has locations outside of Colorado Springs and Colorado, so if you want a consistent experience when you are traveling, give them a try.  Good place for coffee, pastries, and also for lunch as they have an extensive sandwich, salad, and soup menu.

I hope to cross paths with you at one of these local restaurants.  Stop and say hi if you see me there!

Real Estate Market Statistics

A new feature on this blog is something you can look for on Mondays.  I’m posting it early this time, so that I can get the new statistics from May 31, 2010 to you to review as you browse the web on your computer this weekend.

The two reports you will receive are actually links to the RE/MAX Properties, Inc company blog (for which I am a featured blogger) because the raw data and charts are posted there for you.  I will give my interpretation of what I’m seeing so you will know when I think the market really is turning up and that better times are ahead for sellers.  For you buyers, that means you will want to know when prices are starting to go up.  Increases in prices are going to have a dramatic effect on the amount of home you can purchase for the money available to you and consequently affects your payment and down payment requirements.  Interest rates are not the only variable when you are trying to decide when the time is right to purchase a home or sell and move-up (or downsize).

Days Supply and Target Market Analysis

The two reports you will see are the RE/MAX Properties Days Supply and Target Market Analysis.  The Target Market Analysis is weekly information on changes in the number of listings and showings generated through RE/MAX Properties, Inc.  Since we have the largest market share in the Pikes Peak Region, our numbers reflect the market as a whole very well.  The second report you will find monthly is Days Supply.  This is a chart of different areas and price ranges and the changes in the rate of sales over the previous 4 months.  It reflects one point in time and shows you the number of homes that are on the market and have sold during the period.  From those numbers are calculated the number of days it would take to sell all homes currently available as if nothing new were coming on the market.  A negative number is an improvement and for May 31st, that number overall is -16.52%.  In the same period (07/01/09-10/31/09) prior to the last $8000 tax credit expiring (which it never really did) that number was -9.98%.  So we saw more than a 65% improvement with the latest tax credits than we did last year.  But remember, we have borrowed buyers from the future so that they could take advantage of the tax credit and I expect to see less improvement in coming months.  Our showing activity has decreased 48% since the top of the market the first week of April and listing activity has increased 7% since then.  Sellers need to be realistic in this market if you want to sell at all.  Those first to the party with the best price and condition will win because it will still be a buyers market for the foreseeable future.

Remember Mondays for new information

So check back here weekly for new Target Market Analysis information and monthly for the latest Days Supply numbers.  We want you to be on top of the market so that you can be an educated consumer when it comes to real estate.  We’re here when you need us.  We’ll put a light on the market for you.

I try not to indulge in pizza very often because it just screams calories, but when I do I want a good one.  So we try different pizza places to see whose pizzas rise to the top.  So far my favorite overall pizza place is Borriello Brothers.  They have 8 different locations around town and you get to enjoy a fun atmosphere while chowing down on a pizza that definitely is a value for the price.  And it tastes scrumptious!

For a more uptown environment and a crispy pizza with fresh fresh fresh ingredients, give Piazza in Rockrimmon a try.  They have a great lunch special that includes a personal pizza and salad.  Nice spot to take clients when you want good food and a quiet place to talk.

Buon appetito!

Recent Statistics of Interest in Foreclosed Properties

According to a recent Harris poll, less buyers are interested in purchasing foreclosure or short sale properties.  And when they are interested, a whopping 36% have unrealistic expectations that bank owned properties will sell for a discount of 50% or more off the price of a non-foreclosure property.  For more details, here is the link to the article.

Walking Away

In the article, new statistics are also provided concerning what percent of the population would consider walking away from an underwater mortgage.  This topic seems to keep showing up in the press.  The good news is 59% of respondents would not walk away from their homes.  One percent would make walking away their first option.  In other posts on this blog, we’ve learned that those whose loan to value ratio exceeds 125% are the most likely to walk away.  This one percent may already be there and see no other option out of their situation.

Freddie Mac and Short Sales

If you have a VA loan, you have a relationship with Freddie Mac.  As one of the former quasi-government agencies and now owned by the federal government after the mortgage industry blew up in 2008, Freddie Mac is the go-to insurer of VA loans.  Consequently, they are very concerned about fraud when lenders who are originating VA loans approve short sales for borrowers.  The attached link is directed towards these lenders, but consumers can learn from this post.  Note the Fraud Prevention Red Flags.  Remember my earlier post about borrowers paying off their credit cards and letting their mortgage go?  This idea belongs in the Land of Unintended Consequences.  If you need the advice of someone who has experience with and ongoing education about short sales, please contact me.  My team of CDPE trained Realtors® stay on top of what is going on with this segment of the market.  We are here to help!

This week I saw an article about a new Panera Bread restaurant in Clayton, MO.  There are no prices - just suggestions.  According to the article, this restaurant operates as a non-profit and patrons can pay as little or as much as they want for their meal.  I have always liked Panera Bread.  They have a deli format plus a bread counter where you can purchase breads and pastries to go.  There are 5 locations throughout Colorado Springs.  I frequent the two on the north side of town on North Academy and at Shops at Briargate.  Both these locations are always busy.  Since free wifi is available, it is a great place to meet clients or just enjoy working away from the office while you get something good to eat.  They have delicious soups, sandwiches, and other offerings.  The specialty coffees are yummy.  Give Panera a try!

Mollica’s - Italian Deli and much more

I love Mollica’s!  I have been eating there for over 20 years and I am never disappointed.  Dom Mollica was the principal at Eagleview Middle School in District 20 and opened his family restaurant while still working at D20.  It’s a place I take clients for a quick lunch.  It’s a place I stop at when I’m out and about and get hungry for their huge Italian salad or a grinder made with homemade sausage.  The deli case is packed with delicious choices of meats and cheeses and they have fresh made meals in the refrigerator display that you can pick up and take home for dinner.

New Broadmoor Towne Center Location

Mollica’s recently opened a second location in the Broadmoor area.  I haven’t tried it yet, but I’m sure it’s just as good as their original location on Garden of the Gods Road.  Go early for lunch.  The original location is always busy since it is a local favorite.

Personal Finance Blogs and Saving

I took some time yesterday to look at a few personal finance blogs.  My daughter has been telling me about those that she follows, so I checked one out.  That blog is The Simple Dollar.  The author has a “picked myself up from financial ruin and improved my life” theme and he appears to post good common sense - which as you recall, is not so common anymore.  Reading his blog made my always synergizing brain start pumping out ideas for posts.  The real life of someone else is always a touch stone for others, whether they shake their heads in disbelief or nod because they relate.  The particular post I found interesting concerned snowflaking as a method to reduce debt or increase savings.  It is all about forming positive long term habits.

My Method for Saving While Still Having Fun

I always encouraged my daughters to save.  And those lessons carry forward because they are both still savers and investors.  That doesn’t mean they don’t have fun and spend money.  It just means they are intentional about their spending.  Being frivolous was not a way of life in our household.  It is something you do once in awhile to have a fun moment that you remember with glee.

So what is the savings lesson?  When I was a financial advisor I taught that there are 3 types of saving - one for short term or emergency needs, one for midterm needs (3 - 10 years) and one for long term needs (10 years or further away).  I am no longer an advisor and this column is not intended as professional advice.  I just know a lot about it and like to share ideas that can be helpful.  It is always important to have money tucked away in very safe accounts to meet those short term needs.  If your car breaks down or you have to go to the dentist, or some other non-negotiable event occurs, you need to be able to pay for it without racking up debt on your credit cards.  This money can’t be risked.  General guidelines will tell you to have 3-6 months worth of living expenses.  I say work towards a year’s worth of cash, especially with the employment situation the country is in right now.  Wouldn’t you like to NOT have to worry about where your money would come from for a year if you had no income coming in?  If you are retiring, it is good to have 2-3 years of income in cash just in case the market does what it did in 2008 and you will have some time for your longer term investments to try to recover.

Mid Term Savings and Long Term Savings

What things would you save for that might be out as far as 10 years?  How about paying cash for a new car or at least putting down a large down payment so you can pay it off in 2-3 years?  How about a real estate investment that you would like for an income stream from rentals or a lake house to use on weekends?  How old are your children?  Will they be going to college within 10 years?  Wouldn’t it be nice to have a cushion to help with those expenses?  I’m sure you can think of other desires you have for the next 10 years.  For retirees, these investments should include your less volative investments that provide income or future appreciation that you can tap into 5-10 years down the road.  Investments that won’t be needed for 10 years or more can be positioned to generate higher returns but they also typically incur greater risk.  Many people who are retiring soon think they need to get rid of all risk in their investments.  But the bigger risk is inflation.  Ask yourself this question - are you going to USE all your money within the next 10 years?  I didn’t think so.  So think differently about risk and read some good books on the topic.  You can start with titles in my Recommended Reading List on this site.

Saving for Fun

Well this is all well and good, but we did mention fun at the beginning of this post.  I’d like to share a story about my youngest daughter’s savings habits when she was still in elementary school.  She was perusing her savings one day and I stopped to chat with her about how she was doing.  She was a very wise child and said “Mom, I have 3 jars of money.  The first is for fun cheap stuff, like candy.  The second is for things that cost more, like a video game.  And the third jar is for the money I’m saving for something special I might want that is more expensive.”  I thought that was a pretty good plan for an elementary age saver.  She had already decided that some money wasn’t to be touched unless it went towards a specific financial goal.  We eventually put her “more expensive” jar of money into a money market account and she left home with it intact when she went to college.  And 8 years later I would bet she still has most, if not all of it.  That’s the way long term money is supposed to be handled - as if it doesn’t even exist.  And she still had the freedom to spend her short term (candy) and mid term (video game) money because she made a plan.

So make a plan.  Check out some good personal finance blogs (The Simple Dollar) has links on the home page to Blogs I Read), read some good books from the library, and keep coming back here for more insights to help you create wealth and breathe a sigh of calm because you are putting away 3 types of money.  You can afford a fun reward to celebrate all your efforts.  If you need to tackle debt first, read some of Dave Ramsey’s books to get you started.  Create good habits to replace the old bad habits.  Now, go out a buy yourself a little treat because a fun reward doesn’t have to be expensive.