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.

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.

Less Restaurant Consumers in 2008

After the stock market tanked in October, 2008, Colorado Springs restaurants were ghost towns for awhile.  We stopped eating out as much, which is better for our waistlines anyway, and apparently a lot of other people decided also that eating at home saved money.  I’m sure it was a very scary time for restaurant owners as they tried to keep their employees working with virtually empty dining rooms.  The good news was that when you went out to eat, you were seated right away, but at a huge cost to the local economy. 

Do You Think Service Has Improved?

Now, it is June, 2010, and when we do go out to eat we see more people in the restaurants, but I don’t think it’s at the same level it was during the summer of 2008.  I know we personally have cut down on how often we eat out and we made that decision first in an effort to eat healthier and also to save more money as we build our assets to get to retirement.  The thing we have noticed is that restaurants also seem to be appreciating their clientele more.  Service is much better in general than it was 2 years ago.  I don’t think we are the only ones not eating out as often so restaurants are competing for less customers.  If we get bad service we will think twice about going back.  If we get great service, we notice, and appreciate the effort of the servers and the training they are obviously getting to help them serve customers better.

Let’s Keep Good Service Going

When the economy is roaring, all boats float.  But when times get tough, you get to see who is left standing - those who understand what business is about and understand the value of their customers.  We aren’t past seeing changes yet.  In the long run, everyone will have a new perspective of what is important in life and I think we’ll be better for it.  Restaurants are not the only businesses affected by less business.  The real estate industry has definitely lost a lot of jobs.  We are seeing tightening across most industry segments.  As things improve and people “go back to normal”, I don’t think normal will be the same as it was 3 years ago.  We can all hope the lessons of providing good service continue to be kept top of mind.

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!

Distressed Property Sales Statistics

Depending on the season, anywhere from 15-35% of residential real estate sales in the Pikes Peak Region are distressed properties (short sales and foreclosures) in the past few years.  We have a relatively stable market compared to Nevada, Arizona, Florida, and California.  The number of mortgages that are underwater in California varies with the city, but many California communities are finding they have an unusually high number of homeowners who owe more than they can sell their home for.

The Top Three

The cities and states with extremely high rates of underwater mortgages are also the markets where huge unsustainable appreciation rates were the norm during the height of the market.  These appreciation rates were exceeding 30% a year in many cities.  Three statistics I thought were the scariest for homeowners were Las Vegas (70% underwater), Phoenix (58%), and Florida (48%).  It will take many years for these locations to dig out from under their real estate problems.  As long as rates stay low, buyers will come, but the condo markets will continue to be in distress due to tightening financing requirements for these properties.  Las Vegas and Florida have a lot of condos that were built with speculation in mind.

Strategic Defaults

A consequence of all this misery is that some homeowners are making strategic defaults - a fluff term that means walking away from your home and sending the keys to the bank.  Many homeowners in these greatly distressed markets don’t see any way out.  They would rather trash their credit than pour more money into these properties or wait for the turn around.  Statistics show that homeowners most likely to default on their loan are those that have a loan to value ratio of 125% or greater.  Other sellers with an underwater loan are seeing an opportunity to rent out these properties to people who would rather rent than buy or who aren’t in a position to buy, let them pay the mortgage, and wait for things to improve.  And the third group doesn’t need to move, like their homes, and are content to just wait it out and live their lives.

Just food for thought.  What do you think will happen in the next 5 years in your community?

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.

Active, Pending, and Sold Since January 1, 2010

Since the $8000 first time homebuyer and $6500 move up buyer tax credits expire after 04/30/10, I thought it would be interesting to see what the effect of the home buyer credits have been on our local market this year.  By analyzing the numbers now, I can do another analysis at the end of summer and see what the real impact has been.  Many of the residential properties closing between now and the end of June undoubtedly are affected by the tax credits.

Since January 1, 2010

There are currently 6027 residential properties for sale in the Pikes Peak MLS.  Since January 1, 2010 2682 have sold and 2174 are pending.  Of the properties pending 328 or 15% are tagged as short sales.  What is more interesting is the distribution of activity in different price ranges in 2010.

Sales and Pending Sales in 2010

The statistics related to different price ranges is very interesting.  Of the 6027 active properties today, 19% are priced $400,000 or higher.  That equals 1165 homes.  Of those, 159 are priced at $1Million or more.  Between $300-400K, there are 883 homes or 15%, between $200-300K, there are 1672 homes or 28%, and below $200,000 there are 2307 homes or 38% of the homes available for sale.

Pending sales with a $300,000 or higher list price are 18% of the pending sales or 389 homes.  Between $200-300K are 23% or 507 pending sales, and the remaining 59% of pending sales are priced below $200,000.  I would say from this that the first time homebuyer credit is definitely having an effect on which homes are selling.  This affects the median sales price as well since a much greater volume of lower priced homes are selling.  It will be interesting to see if the median price increases as the tax credits go away.  Right now demand is high below $200,000 and it is helping to stabilize prices at this level.  As the tax credits go away we will see if that demand continues to keep prices stabilized.

The High End of the Market

So higher priced homes ($300K and above) account for 34% of the market but only 18% of pendings and 16% of sales so far in 2010.  The mid-range of $200-300K accounts for 28% of the available homes, 23% of pending sales, and 24% of sold properties in 2010.  The curve is very much skewed to the lower end of the spectrum as 59% of available homes are priced below $200,000 as are 38% of pending sales and 60% of sales so far in 2010.  The properties included are single family homes, patio homes, townhomes, and condos.

For homes priced at $1Million or more, 7 have sold in 2010; 9 are pending, and 159 are available.  It will take a long time for that part of the market to recover.  With 34% of the market but a much lower percentage of sold properties, sellers in the $300,000 price range and above are going to have to have their homes be very competitively priced and in excellent condition to acquire a sale in their peer group.  For buyers with extra cash, wonderful homes can be purchased at prices that wouldn’t have even been dreamed about 3 years ago.  Stay tuned for our follow-up report in August as the high selling season winds to a close for 2010 and we prepare for the more sluggish autumn sales months.

I love the food at great deli’s.  Being in Colorado, this isn’t exactly Grand Central Station where you get to eat at the epitomy of New York delis, but we do have a few good ones.  Today my friend, Bev, and I ate lunch at Broadway Deli.  It’s a fun little place with great food and it is in the North Academy corridor - easy to get to for a quick lunch if you work on the north side of town or are visiting the Air Force Academy.  They have daily specials and serve breakfast all day.  We were told a new menu is coming soon.  They have dishes you can’t find everywhere, like hot corned beef and rice pudding.  They’ll even heat the rice pudding for you. :-)  So for a taste of New York in Colorado Springs, try Broadway Deli, 7170 N Academy Blvd.

I just couldn’t wait until next week to tell you about another great Colorado Springs restaurant - The Margarita at Pine Creek.  I love this place!  It is so unique and the food is wonderful.  Visit in the summer months and eat on the lovely outdoor patio.  But the inside has a great ambience as well.  It feels like you are eating at an old hacienda.  One of my clients said it made her feel like she was back in the German countryside.  Margarita at Pine Creek offers a nice multi-course soup and salad lunch along with specials of the day.  The evening menu always changes.  They are closed on Mondays, but have a nice brunch on Sundays.  This is a great place to take out of town guests or to try if you ARE an out of town visitor.  You will want to come back often.  Patti is the owner.  If she is there, tell her I said hi.  Do not confuse this restaurant with Three Margaritas.  We’ll review them at a later date.

I recently included Paravicini’s Italian Bistro located in Old Colorado City in my restaurant posts.  I found out by receiving their enewsletter that they are included in a progressive dinner being sponsored by several very nice restaurants in Old Colorado City on March 23, 2010.  That’s tonight!  If you want to see if there’s still room and get more details, call Paravicini’s at 719 471-8200.  The other restaurants participating are Gertrude’s, Pizzeria Rustica, and Jake and Telly’s.  The only one of the 4 restaurants I haven’t tried yet is Jake and Telly’s, but it is a local favorite.  The food at all 3 of the other restaurants is delicious.  Gertrude’s menu includes some very nice vegetarian dishes for those of you looking for a vegetarian restaurant in the Pikes Peak Region.  What a lovely way to spend an evening!  Attending offers an opportunity to do a little walking around the area.  In case you are not familiar with Old Colorado City, it is one of my favorite haunts in the Pikes Peak Region.  Lots of fun shops, good restaurants, and an amazing view of Pikes Peak.  Territory Days is coming up Memorial weekend and there are always other events throughout the year.  The lights at Christmastime are really beautiful.