Brian L. A. 's Blog

Fast Military Family Relocations & Deployments

Wed, 13 Aug 2008 16:19:26 -0500

I recently received the following question from a Military Wife needing to relocate her family before her huspand is deployed.

"My husband and I need to find a house and move within two weeks. IS THIS EVEN POSSIBLE? He's in the army, and wants to move our family - across the country - before his next deployment."

The following is my response:

Hi Kristen :o)

As an Army Veteran myself I specialize in helping members of our military relocate. I can tell you that ANYTHING is possible depending on how flexible your family can be with financing choices and properties. Since you didn't specify that you need to use VA financing I am assuming that you are also open to federally insured FHA loans which can often close much quicker than a VA guaranteed loan, and can also be less expensive with regards to costs because there is no required VA Funding Fee.

Through the use of the latest state of the art technologies, I have helped several members of our Armed Forces and their families relocate WHILE deployed and I would probably recommend this avenue for your family rather than putting yourselves through the severe stress that attempting to complete a real estate purchase transaction so quickly would cause.

I have many references from current and former Military Service Members and their families, including one family I just assisted to relocate from Ft. Leavenworth WHILE he was Deployed in Iraq. In fact they chose their new home before they ever moved to Colorado Springs.

I also have 2 sharp local lenders I can refer you to who are very familiar with the needs of military relocations and all the local issues that can effect a successful loan process.

You can read my testimonials here http://www.brianwess.com/clienttestimonials and I would be happy to put you in touch with the folks I mentioned above for a personal reference. These folks can also put you in touch with the local military community support assets for relocating military families.

Please let me know if I can do anything to assist you and your family have as simple and stress free a relocation as possible as you support one of our troops serving our country.

Brian L. A. Wess
CRS, GRI, ABR, ASR, e-PRO
Realtor®, Broker Associate
Residential & Investment Specialist
Pat Newell & Associates, Inc - Metro Brokers
Colorado Springs, CO
Direct: 719-528-6672
Web: www.BrianWess.com
Your Real Estate Gladiator!^TM

The Last Minute Credit Check and Your Home Loan

Mon, 04 Aug 2008 14:43:40 -0500

As a Home Loan Applicant...Did You Know?
The mortgage lender may run a second credit report just prior to closing.
Red flags that appear in this credit report can disqualify you for the mortgage loan at the last minute.
This often means that you will also loose your earnest money for failing to perform as contracted.

Your actions after receiving lender approval for a mortgage loan can disqualify you for the loan. A mortgage loan is conditionally approved, with the lender reserving the right to re-verify credit, income, assets and employment at anytime. The lender may cancel the loan if there are any adverse changes to your qualification status.

Debt-to-Income Ratio
Your debt-to-income ratio is your gross monthly income divided by the amount you spend on debt. Debt items include mortgage payments (including principal, interest, insurance, tax), car payments, credit card payments, student loans, child support payments, etc.

The lender considers debt-to-income ratio when approving you for a mortgage loan. Only 28 percent of your income can be used for your mortgage payment, which includes taxes and insurance; and 36 percent for the mortgage payment plus the rest of your debt. Anything you do to negatively affect your debt-to-income ratio may change an "approval" to a "disqualification."

Avoid Red Flags
A red flag is any inquiry made regarding your credit worthiness. If you decide to purchase a big ticket item - like a car, boat or furniture - prior to closing, you're at risk of having a red flag show up on your credit report.

Keep Your Money Where It Is
The balances of your liquid assets are considered when approving you for a mortgage loan. These liquid assets may include checking accounts, savings accounts, certificates of deposit, money market accounts, retirement accounts, stock and mutual funds.

Avoid changes to the balances of these accounts. Do not close accounts. Do not change banks. A large withdrawal or deposit to any of these accounts will trigger a red flag for your mortgage lender. If a red flag is triggered, you may be asked to produce a paper trail tracking large withdrawals and/or deposits.

Employment Status
For most employees a change of jobs to one of equal or higher pay will not trigger a red flag. However, sales people should not change jobs prior to closing on their mortgage loan.

Salaried Employees
If your income is strictly salary than you should not have a problem changing to another job of equal or greater income. If, however, your income includes salary and bonuses, commissions and/or overtime, you should not change jobs prior to closing.

Hourly Employees
If your income is based solely on a 40-hour work week without overtime, than changing to a job with equal or greater hourly pay should not be a problem. However, if your income is dependent upon overtime pay, do not change jobs prior to closing.

Commissioned Employees
If your income is from commission or a substantial portion of your income is from commission, then you should not change jobs prior to closing. Typically, mortgage lenders average your commissions over the last two year period to determine income. Changing employers eliminates the two-year commission history and places uncertainty on your income status.

Talk to Your Loan Originator
Do not make any changes to your financial and employment status without first talking to your loan originator.

Can I do a Short Sale?

Mon, 04 Aug 2008 13:28:22 -0500

I recently received the following question from a home owner in financial distress:

"How do I do a short sell on my own house without having someone else do it? I dont want a middle man or women to make money from something maybe I could do myself?

Here is my response:

Hi Kathy :o)

I wish I could count the number of times I have heard someone ask a similar question concerning real estate transactions. Fortunately, I CAN count the number of folks I have successfully worked with after they expended a great deal of their own time and money attempting to sell their home or negotiating a short sale with their lender by themselves.

My Grandfather always used to say, "You don't know what you don't know until you get taught a lesson." This is true of many things and especially of real estate. Unfortunately for the less than 5% of people who have been able to sell their properties themselves, the lesson in real estate usually costs them a great deal not only in their time and effort, but also in lost equity. According to recent surveys, properties sold by a Realtor sold for 16% more money than properties sold For Sale By Owner.

A short sale negotiation is an exceptionally complex process with many pitfalls and ramifications for you not to mention that banks are overwhelmed currently with the number of foreclosures and requests for work throughs. Simply the amount of time involved in negotiating short sales with lenders makes it virtually prohibitive for anyone who is employed.

There is nothing to prevent you from attempting to negotiate a short sale with the leinholder(s) on your property except the time it takes to do one and the instutional barriers that are inherent and unique to each lender.

Knowing what I know, my first instinct is to advise you that this is not something you want to try yourself unless you have many free hours and days available to you for what is likely to be a long and frustrating education into the process.

The best advice anyone could give you would be not to try it without some kind of professional assistance.

However, if you choose not to use a Realtor who is EXPERIENCED in short sale negotiation, then you should at the very least consult an attorney who specializes in real estate and is familiar with short sale negotiation and prepare yourself to spend hours and weeks on hold on the telephone and faxing in paperwork to the lender.

You will also want to make sure to consult with a tax advisor regarding any possible tax ramifications.

Homes Selling for less than bought in 2007

Mon, 04 Aug 2008 13:07:57 -0500

I recently received the following question from a home owner in Colorado Springs.

"I bought a new Pulte townhome in Feb 2007. Since then the builder has dropped prices about $30k. I seriously need to move but now I am really upside down. What are my options?"

Here is my response:

Hi Mandy :o)

I am very sorry to hear about your situation and I know such uncertainty creates a lot of stress, but you should know that you are not alone. The current market correction is making it very difficult for sellers who have purchased their homes in the last 3 or so years to sell now because, in most instances, they have 97% to 100% financing and any appreciation they would have experienced has been eaten up by the downward market pressure on prices.

However, you need to remember that existing properties are often more attractive to buyers because they already have many items that the builder either didn't include or offer as an incentive. These can include, Additional Finished Areas, Decks, Landscaping, Sprinkler systems, A/C, window coverings and other interior or exterior amenities...so all is not lost.

If you absolutely have no other option than to sell now as you indicated, you have a few options available to you:

1. There may be a possibility, albeit small from what you said about the builders prices, that your property might be able to sell on the market for at or near what you paid. You first need to consult with a Realtor professional, who has experience and education in property valuation or a licensed appraiser to give you a very tight analysis of what the approximate current market value of your property is. A Comparative Market Analysis (CMA) form a Realtor and/or an appraisal are in reality just educated snapshot in time guesses of what your property should be worth, so it's very important that you use an experienced Licensed Appraiser or a Realtor with extensive continuing education that has included how to properly perform a tight CMA.

If your property is indeed worth less in the current market than it would take to pay off your loan and you do not have the financial wherewithal to make up the difference, you can:

1. Ask the Realtor you choose to work with how much the going rental rates are in the area of the property to see if it's possible for you to rent it out at a rate that will allow you to make the loan payment each month. If you can verify for a lender that you are receiving a steady income from a property that you have converted to an investment rental, it is still possible for you to qualify for a loan on another property to use as your primary residence wherever you relocate to. A word of caution, you should go over your loan agreement with your current lender to make sure that there is no language in the agreement that would prevent you from renting the property out to others. You should also have a Realtor professional perform and investment analysis of your property to ensure that you can at least break even by renting the property out. While it is possible to do, I don't recommend to any investor placing yourself in a negative cash flow position with regard to the debt service on an investment property, unless they have a strong income stream from other sources and can afford to use any loss on a particular property as a write off or carry over on their taxes. If this is the case for you, then I highly recommend that you consult a Tax and/or a Financial Advisor to make certain that you have the proper advice and counsel. I would also recommend that if you are relocating out of town or the state that you use a professional property manager to manage your rental property. It's very worth the usually minimal 10% of the monthly rent in order to make sure the property is protected and well maintained by the tenants and that any maintenance, code enforcement, law enforcement or other issues can be addressed in a timely manner.

2. You can attempt to negotiate a short sale with the lender or lenders who hold your home loan(s). A Short Sale is generally described as a negotiated settlement with a loan holder for less than the amount due on the loan. This is usually more common if the loan is delinquent, in foreclosure, or less commonly, if you have been attempting to sell the property on the market for a long period of time and the offer you receive will not cover the full amount of the loan. Negotiating short sales is a very complex and time consuming process, so if this is an option you wish to explore I would highly recommend you have professional assistance from a Realtor with a good deal of verifiable experience successfully working short sales and a strong short sale negotiator on his team. I happen to have one of the best.

There are definitely some options open to you and some things you may be able to do to get out of this situation, so don't give up hope and make sure you talk to someone with the proven experience and education to properly counsel you. If you like I will be happy to sit down and discuss your options further.

"Normal" Home Price Adjustments

Mon, 04 Aug 2008 12:52:15 -0500

I recently received the following question from a home owner attempting to sell his own property For Sale By Owner (FSBO) without professional assistance.

"What is the "normal" time period to make a price reduction on a home for sale? My condo has been up for sale almost 30 days. I've had tons of traffic and my flyers seem to be disappearing daily. Feedback received is that our condo is beautiful, looks brand new, shows like a model, but buyers are putting bids in on cheaper condos. Condos in my neighborhood are going from $140k - $250k. We are listed at $156k. We are offering 3% buyer agent commission, so we are a bit flexible with the price, we just need someone to put the offer in to negotiate."

Here is my response

Hi KC :o)

Your question highlights just one of the multitude of reasons it's important to use a Realtor professional when selling your property. All real estate is local and can be so local as to differ from neighborhood to neighborhood, so there really is no "Normal" unless you are speaking with a specialist in your market.

Unfortunately, as a FSBO you are already placing yourself at a significant marketing disadvantage since according to a 2006 survey of buyers and sellers properties sold by a Realtor sold 16% HIGHER than properties sold FSBO. Since most markets average 5% to 7% for listing fees, a FSBO is leaving 9% to 11% of their equity on the table.

The general rule of thumb on pricing is if you haven't received significant showings, and what is "significant" also varies by your market area and current market conditions, within a 30 day time period, then something isn't right about your listing. That something can be any number of things (price, the way it's being marketed, etc.) There is an old saying in real estate "Price Fixes Everything"...so it just depends on how flexible you are on price.

If you have had a significant number of showings and are getting good general feedback but no offers, then it is usually safe to assume that your price is not attractive. Realtor professionals know which questions to ask when soliciting feedback to help you develop the best strategy.

An important thing to remember is that you don't want to over price your property for the market simply because it may be a buyers market and you think you will receive offers lower than your asking price. First off, if your property is priced right for the current market from the beginning, you may not receive offers significantly less than the asking price. Secondly, statistics continually demonstrate that the longer a property stays on the market, the less it will sell for vs what it might have sold for if it had been priced right from the beginning. This is one of the reasons that properties I market for sale sell about 30% faster than the market average and within 99% of their asking prices.

You would be best served to find a Realtor who is a specialist in your market...preferably a Certified Residential Specialist (CRS). The CRS, also known as the PhD of real estate, is the highest designation awarded to professional residential Realtors and though less than 4% of the over 1.3 million Realtors qualify to receive the CRS, they do more than 25% of all the residential sales in the country each year.

Who is the Best Realtor or Real Estate Company in Colorado Springs?

Fri, 01 Aug 2008 17:04:17 -0500

I recently received the following question from a home seller in Colorado Springs:

"Who would you say is the best realtor company in Colorado Springs, Co?"

Here is my response:

Hi Alice :o)

This is a very tempting question to ask someone in the real estate profession, because it begs them to respond "I am I am!"

Let me first say that I have worked with many Realtors in the Colorado Springs area who are professional and knowledgable. Unfortunately, I have also seen some who do not fit that profile.

As is so often the case, "Best" is pretty subjective, however I believe most people agree that biggest is not necessarily the Best. Rather you would want to look for who is recognized for the Superior Knowledge and Customer Service they offer and what kind of meaningful evidence can they provide to back it up? (i.e. - Customer Testimonials, Sold transactions prices, Average sales vs asking price).

For example, Wal Mart is the worlds biggest retailer, but I am sure that most will agree that while they provide good prices, their individual customer service and product knowledge is not the best.

"After all...when selling a house what matters more...How Many homes the Realtor Sells or HOW MUCH the Realtor sells YOUR home for?" ^TM ©

I could tell you that my company, Pat Newell & Associates, Inc. - Metro Brokers was VOTED "Best Realty Company in Colorado Springs 2007 - Silver Award" by the readers of the Colorado Springs Independent News, coming in between 2 huge national franchises, or that I was VOTED "Best Realtor in Colorado Springs 2006 - Gold Award" by the readers of the Colorado Springs Independent News, but you would still need to know that, because we are a small independent company, these awards were not voted on by our own associates, but by past clients and friends who know the high level of customer service and knowledge we give.

As you are looking for a company to help you sell your property, it's important to remember in a challenging market such as now, those that work the smartest in marketing your property for you are going to be most successful. Even for Realtors who work with "teams", the individual Realtors education, knowledge and experience is what's most important to a successful transaction.

There are a number of ways to find a competent Realtor, but if you want the best for you and your property...Interview.

When looking for a Realtor Professional you should first look for a Realtor who first and foremost treats their profession as a profession and then interview a some using the following questions to see who you feel most comfortable having represent you.

1. Are they a Full Time, Full Service Realtor? (This eliminates those who see real estate as a "Hobby" or "extra income" and is a wide definition as to what constitutes "Full Service")

2. How long have they been practicing real estate? (Too long and they may be out of touch with current practices and marketing trends. Too little and they may not have the experience to avoid the multitude of transaction pitfalls or negotiation faux pas)

3. Have they continued their real estate education beyond just getting their real estate license and when was their last continuing education class? (for example: the CRS *Certified Residential Specialist* designation is considered the PhD of real estate and is the highest designation recognizing education and performance that a Residential Realtor can receive. While only about 4% of the over 1.3 Million Realtors qualify for the CRS Designation, they do about 25% of all the business in the United States each year.)

4. When were their last 5 listing transactions and what was the result for their seller clients? (Do they have more experience working with buyers or sellers and how much did they get for the seller asking price vs. sold price)

5. Ask about their methodology for doing a CMA (Comparative Market Analysis) to help you price your home correctly for the market. (How do they determine what's a good comparable and can they back it up with market facts specific to your area? Are they giving a price estimate that might be too high just to get your listing only to have to ask you to lower that price several times after wasting your time with your property just sitting stale on the market.)

6. How will they communicate with you about your property? (are they Internet Savvy or e-PRO Technology Certified, do they use tools to keep you up to date on what's going on with your property, how will they provide showing feedback)

7. What tools do they use to market your property? (Do they invest in their business by using tools and technologies to get your property in front of as many potential buyers as possible or do they just rely on the MLS and a few pictures. How do they keep up with the ever changing market. Are they on the cutting edge or still just using newspapers and magazines)

8. Ask if you can call any of their past clients about your service to see what they have to say. If they don't have several to refer you to...that can be an indication of their past service or lack there of.

There are literally thousands of Realtors in the Colorado Springs area who will be happy to take your listing, but you need to carefully examine how they do business and their past success at selling properties as a gauge of how they will market your property.

Is this a good time to buy in Colorado Springs?

Fri, 01 Aug 2008 16:22:12 -0500

I recently received this question from a home buyer in Colorado Springs

We have a contract to buy in Co Springs, but mortgage companies are telling us it's a declining market We will need to sell in summer of 2011, is this a good time to buy?? We're paying about $93/finished sq ft and on a 1/4 acre

Here is my response:

Hi Becky :o)

Real Estate is Local...so local as to differ from neighborhood to neighborhood. Some neighborhoods in Colorado Springs are experiencing modestly declining prices while some are stable and a few of the most desirable areas have even increased.

Unlike some markets across the United States, Southern California, Las Vegas and Southern Florida to name a few, the 2005 study of home prices found the Colorado Springs market prices not to be much over inflated so when the current downturn began there wasn't much value to be lost.

The Colorado Springs market is currently showing stability with about as many homes coming on the market as are sold each month and while this leaves the market in an oversupply, buyers market position, the market remains healthy.

We are seeing signs that the market has stabilized and will begin it's recovery in early 2009 once the uncertainties from the Presidential Election and the current reorganizations in the lending industry all shake out.

So, based on historic real estate appreciation trends, if you purchase now; in a stable or appreciating area of Colorado Springs; and buy at the right price for the current market based on a solid market analysis and uninfluenced appraisal; you should be in an ok equity position to sell in late 2011 and at least break even after costs. Of course this is barring any local or national economic catastrophe that would make all this moot.

Realtor Commissions and Retainers

Fri, 01 Aug 2008 16:15:57 -0500

I recently received the following question from someone looking to purchase a home in Colorado Springs

"Do buyer's agents in Colo Sprgs charge a retainer upfront for looking at $120,000 price range for a home?"

Here is my response

It's important to make certain distinctions before answering your question. The first thing anyone holding a real estate license in the State of Colorado is required to do upon having their first significant contact with you is provide a copy of the Real Estate Commission approved Definitions of Working Relationships Form (Available Online Here http://www.dora.state.co.us/Real-estate/contracts/2005Contra... )

In Colorado, until you have a written agreement with the Realtor or licensee you are working with, they operate as a Transaction Broker by Default. This means that they cannot advise or advocate for your best interests as either a Buyer Agent or Seller Agent would, but simply act as an intermediary.

With that said, while no one Realtor can speak for the business practices of another and approximately 95 to 98 percent of all residential real estate transactions take place through the local MLS.

In Colorado, a Realtor or anyone with a real estate license (and yes there is a big difference) may be paid in a number of ways as long as both parties agree: by a percent of commission based on the gross sales price of the property purchased, by an hourly rate set by the practitioner, and by a nonrefundable retainer fee that may or may not be credited against any other fees payable to the practitioner.

Retainer fees for Realtors exist for the same reasons that Attorneys charge them, so that some someone cannot take advantage of the Realtors advice, time, education and expertise without having to compensate the Realtor for them.

In general, especially in today's lending market, an experienced Realtor will ask if you have been prequalified for financing BEFORE beginning your property search. This is an advisable step for both parties for a number of reasons. It saves the buyer from looking at properties that may be beyond their abilities to finance and thus prevents them from becoming disenchanted with properties of lesser price that may serve their needs just as well. It also saves the Realtor from expending valuable time and gas showing the client properties for which they are not able to qualify. It also allows for an offer to be acted upon quickly once an acceptable property is identified as almost all sellers are requesting some form of verification from the buyer that they are able to perform on a contract prior to accepting an offer to save them valuable time should they buyer not be able to perform. It also allows the lender to prepare certain aspects and documentation of the loan package in advance which can be crucial in the current market as many lenders are taking 2 and even 3 weeks to get a file out of underwriting.

In only two instances in my years as a Realtor, have I asked a client for a retainer fee that would be credited against my commission as a demonstration of their good faith and security for the time I spend on their behalf in assisting and advising them. In both instances these clients were persons looking to have me teach them how to invest in real estate and to help them purchase properties for investment. In both cases the clients agreed to the retainers because, while all buyers involve a good deal of advice and education, persons wanting to be real estate investors usually require a great deal more time, advice and education to be successful than does the normal buyer transaction.

Relocating to Colorado Springs

Fri, 01 Aug 2008 15:53:49 -0500

I recently received this question from a home buyer who may be relocating to Colorado Springs

We are looking at a possible job relocation to Colorado Springs within few months. How has the housing market held up (good incentives on builders, resales, etc?) and what are some good communities. We have three children ranging from 4 to 13 so looking for a 3K square foot home. Thx, Paul

Here is my response

Hi Paul :o)

While the Colorado Springs market has fared much better than the markets in Southern California, Florida, Las Vegas, etc...according to my CRS Realtor Friends in those markets and my own experiences here...the market in the Springs area is still solidly buyer friendly.

We have seen modest decreases in resale pricing in most areas of the metro area. Based on an analysis of the information from the Pikes Peak REALTOR Services Corp, who handles the local Multiple Listing Service (MLS) for the Pikes Peak Association of Realtors, the number of available properties on the market has been decreasing steadily over the last few months from the levels they were at the same time last year and while sales are still lower than same time last year, they have increased over the last few months as smart buyers have taken advantage of the market.

The information indicates that we are beginning to see stability in the market and, with Colorado Springs being a very active real estate market due to the large military presence, I would predict...barring any unforseen catastrophe...that this stability will last into early 2009. After that we should begin to see market conditions begin to swing back as we receive a large influx of Military transfers from Texas and as the uncertainty in the mortgage markets finishes its shake out.

Most builders in the Springs area, though there have been 1 or 2 who failed to read the tea leaves properly and had too many spec or standing inventory homes, have not adjusted their prices significantly, though almost all have been offering very attractive incentives. Unlike an existing home seller, builders offer incentives in order to entice buyers without drastically dropping prices. They do this, among other reasons, to help keep the assessment levels in a phase or subdivision relatively close for comparable properties.

As far as areas of the Springs to consider, that's really dependent on what you are looking for and how much you are able to afford. Though I am still organizing some of it, you can find information on the areas of Colorado Springs on my website at http://www.brianwess.com/Neighborhoods as well as school district and school performance information at http://www.brianwess.com/SchoolsInfo .

Something to consider if you may be moving again in the future is resale values and there are a few areas of the Springs that historically performed well in this category. Generally the northern parts of town have had the best historical appreciation and retention of value.

"Based on information from the Pikes Peak REALTOR Services Corp. ("RSC"), for the period 1 April 08 through 31 May 08 and compared with same times in 2007. RSC and Brian Wess do not guarantee or is in any way responsible for its accuracy. Data maintained by RSC may not reflect all real estate activity in the market.

The Colorado Springs Real Estate Sales Market

Fri, 01 Aug 2008 15:48:44 -0500

I recently received the following question from a home seller in Colorado Springs.

"Got a house for sale in 80920 - but the market is very slow. Any one else having luck? Any suggestions?"

Here is my response

Hi Golfer

Even during the current market correction, many of the properties I have marketed have sold in less than 30 to 45 days and several have sold in less than 2 weeks, so it is still possible to do with the right strategy.

As many of my colleagues have mentioned, pricing right is critical to moving a property which is why it's extremely important that the Realtor Professional you choose to work with has had some continuing education on how to do a property price analysis.

Also vital to selling a property is marketing strategy. Gone are the days that just putting a sign in the yard and throwing the property on the MLS with one or two pictures will get the attention of buyers. According to recent national surveys of home buyers, close to 80% of all home buyers begin their search online and the vast majority of those will not even look at a property listing unless it has numerous pictures and a Virtual Tour. Your property must also be marketed to all the numerous online outlets that consumers will come across...Trulia being only one. Additionally, many people still drive neighborhoods to decide where they want to live. Do you have a marketing strategy that sets your property apart and goes beyond just stuffing a flyer in a brochure box?

With regard to the market, I hate to say it, but with the exception of some folks who are having mortgage difficulties and having to deal with foreclosures or negotiate short sales, the market in the Colorado Springs area isn't that bad. I am actually experiencing my busiest year yet as savvy buyers are looking to take advantage of the market correction and invest their money in real estate.

The market is a good deal slower than it has been in the past 10 to 15 years, but most of those years were years of record sales. Much of the local market pessimism has been generated by the national media focusing on market nationally that are having the worst time of it right now (Florida, Las Vegas, Parts of California and some others). You don't hear about the solid markets in Texas for instance and you have to remember that about 94% of all Americans with a mortgage are still paying on time. Also, you must remember that Colorado Springs has several things that make it a comparatively unique market and these have served to lessen the effects of the recent correction. Locally in June, sales were up over 3% from May at just under 1,000 properties sold and just under 4,900 properties sold in 2008 to date.*

*Based on information from the Pikes Peak REALTOR® Services Corp. ("RSC"). RSC does not guarantee or is in any way responsible for its accuracy. Data maintained by RSC may not reflect all real estate activity in the market.

Selling One and Buying Another

Fri, 01 Aug 2008 15:44:39 -0500

I recently received the following question from someone selling their home and looking to purchase another in Colorado Springs

"We want to purchase a particular bank owned home, but need to sell our home first since they don't take contingincies on bank owned homes, how do we not miss out on the one we want to purchase? do we need to have a contract on our home to move forward on the bank owned

Here is my response

Hi Sue :o)

You are correct that normally banks do not accept a contingency that requires the buyer be able to sell their current property first. This is even more true in the current market with the banks having so many foreclosed and repo properties to deal with and with times on the market to sell properties being longer.

I have some great information on precisely this subject on my website at http://www.brianwess.com/SellingOne,BuyingAnother

In your situation, if you are really intent on purchasing the bank owned property, you may want to explore using a bridge loan. You can read about them here: http://www.brianwess.com/NeedaBridgeLoan

If you would like I can also refer you to some professional local lenders who can discuss bridge loans, how the work and their requirements with you.

Listed home with Minimal Traffic and No Offers

Thu, 31 Jul 2008 18:15:50 -0500

I recently received the following question from a web site visitor in the Colorado Springs Area.

My parents have a home listed in the 80132 area and are priced at 175 per sq foot. Ive noticed the avg to be at 150ish. The home has been upgraded in the last year kitchen and bathrooms paint carpet thus the reason for the ppsf. The traffic has been minimal with no offers any suggestions. Thanks

Here is my response

Hi Helena :o)

Pricing a property correctly for the market, along with how aggressively it is marketed by the Realtor Professional, is critical in getting it to sell for the best price and in the shortest amount of time. Many sellers often opt to go with whoever tells them the highest selling price for their home, but it does the seller no good...nor the agent selling the property...if the property is over priced and ends up sitting on the market through numerous price reductions. This only gives buyers a bad impression of the property.

Pricing solely by square foot, unless you are speaking of commercial property, has pretty much gone the way of the Do Do. It is vital that when you are being advised how to price your property that recently sold properties of comparable style and build be of first consideration as well as the properties that are currently for sale that you will be competing against. Remodeling, done correctly, can increase a homes value and according recent national surveys of cost vs. value returns on remodeling Kitchen and Bath remodels have the highest percentage of return, but NONE return above 80 to 85% of what you paid into them.

You must have a solid strategy in place before you "go to market". With over 6500 properties on the market in the Colorado Springs/Pikes Peak Region and days on the market in most areas averaging around 4 months, we are solidly in a buyers market. Additionally, the average sales price and median sales price of homes sold in the area has dropped over $10,000 in the last year or so. This means that more expensive properties are not selling as much or as quickly as lesser expensive properties.

Some sellers believe that they should price their property above what they want to get for the property in a buyers market because they buyers will always want to negotiate down. This is a good idea in theory, but in practice it is devastating to getting a property sold and in almost every instance will end up costing the seller more money that if the property had been priced right to begin with.

When a property is priced above it's competition, many buyers may skip it because they assume it's priced too high unless an excellent argument is made through marketing (numerous pictures and descriptions and a virtual tour) that it deserves to be priced as such. Remember...the property still has to appraise. Often in cases where properties are over priced, the longer it remains on the market, the more buyers assume that there is something wrong with it. This can, and in my experience usually does, include the assumption that it is over priced. The seller usually ends up having to accept a lower price just to get the property sold because of how long it languishes on the market.

If your parents don't have to sell now then they should wait. If they have to sell now, then it is of utmost importance that the property be priced right for the market.

Real Estate Investing in Colorado Springs

Thu, 31 Jul 2008 18:10:29 -0500

I recently received the following question from someone looking to purchase real estate as an investment.

With house prices looking more reasonable we are considering buying a second home to use as a rental/investment property. What about renting a vacation home in Manitou or Green Mt. Falls vs. a standard rental in Colorado Springs?

Here is my response:

Hi Lisa :o)

Most of the experienced investors I work with are also taking advantage of the current market correction to expand their rental portfolios, so you should be congratulated on being very savvy.

Rental Rates in the Manitou Springs and Green Mountain Falls areas are slightly higher than the Colorado Springs area because they are considered campy and unique, and because they are small towns that have limited availability. I would advise you to be wary about attempting to rent any home in those areas as a vacation rental however as these areas do not fit the traditional vacation rental profile.

With the infusion of troops that are beginning to be moved to Ft. Carson, a standard rental home with convenient access to Fort Carson & Peterson AFB would be the safest investment. It is also very important that you do a detailed investment analysis of the property and area it is located. By crunching the numbers properly you can reduce your risk and be more assured of being able to rent the property for a comparatively reasonable rate in that area as well as ensuring that the property will cash flow above your debt service.

You should also be careful to consider rehabilitation costs, if necessary and the type of financing you plan to use. If you need to have the property financed, most lenders charge somewhat higher interest rates for non owner occupied and/or 2nd homes, but you can help to mitigate this and some other costs if you have funds to use as a down payment that will lower the Loan to Value ratio to 80% or less.

My Home is Worth Less Now than when I Purchased in 2007

Thu, 31 Jul 2008 18:03:48 -0500

I recently received the following question from a home owner in Colorado Springs.

"I bought a new Pulte townhome in Feb 2007. Since then the builder has dropped prices about $30k. I seriously need to move but now I am really upside down. What can I do?"

Here is my response:

Hi Mandy :o)

I am very sorry to hear about your situation and I know such uncertainty creates a lot of stress, but you should know that you are not alone. The current market correction is making it very difficult for sellers who have purchased their homes in the last 3 or so years to sell now because, in most instances, they have 97% to 100% financing and any appreciation they would have experienced has been eaten up by the downward market pressure on prices.

However, you need to remember that existing properties are often more attractive to buyers because they already have many items that the builder either didn't include or offer as an incentive. These can include, Additional Finished Areas, Decks, Landscaping, Sprinkler systems, A/C, window coverings and other interior or exterior amenities...so all is not lost.

If you absolutely have no other option than to sell now as you indicated, you have a few options available to you:

1. There may be a possibility, albeit small from what you said about the builders prices, that your property might be able to sell on the market for at or near what you paid. You first need to consult with a Realtor professional, who has experience and education in property valuation or a licensed appraiser to give you a very tight analysis of what the approximate current market value of your property is. A Comparative Market Analysis (CMA) form a Realtor and/or an appraisal are in reality just educated snapshot in time guesses of what your property should be worth, so it's very important that you use an experienced Licensed Appraiser or a Realtor with extensive continuing education that has included how to properly perform a tight CMA.

If your property is indeed worth less in the current market than it would take to pay off your loan and you do not have the financial wherewithal to make up the difference, you can:

1. Ask the Realtor you choose to work with how much the going rental rates are in the area of the property to see if it's possible for you to rent it out at a rate that will allow you to make the loan payment each month. If you can verify for a lender that you are receiving a steady income from a property that you have converted to an investment rental, it is still possible for you to qualify for a loan on another property to use as your primary residence wherever you relocate to. A word of caution, you should go over your loan agreement with your current lender to make sure that there is no language in the agreement that would prevent you from renting the property out to others. You should also have a Realtor professional perform and investment analysis of your property to ensure that you can at least break even by renting the property out. While it is possible to do, I don't recommend to any investor placing yourself in a negative cash flow position with regard to the debt service on an investment property, unless they have a strong income stream from other sources and can afford to use any loss on a particular property as a write off or carry over on their taxes. If this is the case for you, then I highly recommend that you consult a Tax and/or a Financial Advisor to make certain that you have the proper advice and counsel. I would also recommend that if you are relocating out of town or the state that you use a professional property manager to manage your rental property. It's very worth the usually minimal 10% of the monthly rent in order to make sure the property is protected and well maintained by the tenants and that any maintenance, code enforcement, law enforcement or other issues can be addressed in a timely manner.

2. You can attempt to negotiate a short sale with the lender or lenders who hold your home loan(s). A Short Sale is generally described as a negotiated settlement with a loan holder for less than the amount due on the loan. This is usually more common if the loan is delinquent, in foreclosure, or less commonly, if you have been attempting to sell the property on the market for a long period of time and the offer you receive will not cover the full amount of the loan. Negotiating short sales is a very complex and time consuming process, so if this is an option you wish to explore I would highly recommend you have professional assistance from a Realtor with a good deal of verifiable experience successfully working short sales and a strong short sale negotiator on his team. I happen to have one of the best.

There are definitely some options open to you and some things you may be able to do to get out of this situation, so don't give up hope and make sure you talk to someone with the proven experience and education to properly counsel you.

What's a reasonable offer for property in Colorado Springs?

Thu, 31 Jul 2008 17:55:39 -0500

I recently received a question from a home buyer asking about Making a reasonable offer for a property in Colorado Springs? The Questions was:

"We are moving to Colorado Springs and would really like to buy an older home for our first home. Perferably in OCC or CEN. We are planning a house hunting trip for Aug. However so many of the homeshave been on the market for months. Some of the prices have dropped, not all though. How do we make an offer on a home that has been on the market for so long?"

Here is my response.

Hi Susie :o)

You want to handle this in pretty much the same manner that you would normally handle purchasing any residential property offered for resale. Your Realtor Professional should perform a very tight market valuation of the property through a Comparative Market Analysis (CMA) so that you, with your Buyer Agents assistance, can determine what you feel is a reasonable price for the property. Because of this it is very important that you choose a Realtor Professional to work with who has the verifiable experience, continuing real estate education, and knowledge to properly guide you.

Many of the properties in OCC (Old Colorado City) are Victorian Era and Painted Lady's, and many are also known to have settling and structural issues that vary from minor to severe, so having a Realtor familiar with that area and a team of experts they can refer you to for professional advice is also very important.

In addition to a multitude of other things, one of the important functions a Realtor Professional serves is to act as a buffer...a dispassionate advisor and advocate for their clients interest. Property sellers very often become emotionally attached to their properties, especially if they have lived there for a long time or have put a large amount of effort into home maintainence and/or improvements. A professional Realtor will help to place things into perspective for their client and keep the negotiations as dispassionate as possible by reminding the seller that their property is no longer their home...it's an investment. For 96% of Americans, it's their most important investment.

It's all about educated negotiation and as such, it's very important that the Realtor Professional you deal with is educated about the market, but also educates you. When boiled down to the simplest terms...a piece of property is worth what a buyer is willing to pay a willing seller...and this becomes especially important in a buyer's market. A good listing agent will not allow the seller to be "insulted" by an offer and should always advise the seller to counter ANY offer they are not willing to accept.

Colorado Springs Home Selling and The Current Market

Wed, 16 Jul 2008 16:34:13 -0500

Even during the current market correction, many of the properties I have marketed have sold in less than 30 to 45 days and several have sold in less than 2 weeks, so it is still possible to do with the right strategy.

Pricing right is critical to moving a property which is why it's extremely important that the Realtor Professional you choose to work with has had continuing education on how to do a property price analysis and understand appraisal methods.

Also vital to selling a property is marketing strategy. Gone are the days that just putting a sign in the yard and throwing the property on the MLS with one or two pictures will get the attention of buyers. According to recent national surveys of home buyers, close to 80% of all home buyers begin their search online and the vast majority of those will not even look at a property listing unless it has numerous pictures and a Virtual Tour. Your property must also be marketed to all the numerous online outlets that consumers will come across...Trulia being only one. Additionally, many people still drive neighborhoods to decide where they want to live. Do you have a marketing strategy that sets your property apart and goes beyond just stuffing a flyer in a brochure box?

With regard to the market, I hate to say it, but with the exception of some folks who are having mortgage difficulties and having to deal with foreclosures or negotiate short sales, the market in the Colorado Springs area isn't that bad. I am actually experiencing my busiest year yet as savvy buyers are looking to take advantage of the market correction and invest their money in real estate.

The market is a good deal slower than it has been in the past 10 to 15 years, but most of those years were years of record sales. Much of the local market pessimism has been generated by the national media focusing on market nationally that are having the worst time of it right now (Florida, Las Vegas, Parts of California and some others). You don't hear about the solid markets in Texas for instance and you have to remember that about 94% of all Americans with a mortgage are still paying on time. Also, you must remember that Colorado Springs has several things that make it a comparatively unique market and these have served to lessen the effects of the recent correction. Locally in June, sales were up over 3% from May at just under 1,000 properties sold and just under 4,900 properties sold in 2008 to date.*

*Based on information from the Pikes Peak REALTOR® Services Corp. ("RSC"). RSC does not guarantee or is in any way responsible for its accuracy. Data maintained by RSC may not reflect all real estate activity in the market.

Renovating the FHA 203(k) Way

Fri, 11 Jul 2008 15:17:29 -0500

With so many home foreclosures and short sales on the market that are in need of "TLC" or a "Handyman's Touch" and with 100% financing virtually gone the way of the Do Do, many first time and lower income home buyers who want to take advantage of the buyer's market by investing in a home are wondering how to get into an inexpensive property where they can build some equity and not have a lot of out of pocket rehab and renovation expenses.

The answer is the FHA (Federal Housing Administration) Section 203(k) Program. The qualifications, eligibilities and process can be complex, so it is important to have a savvy Realtor and Lender who are very familiar with the program to assist the home buyer through the process.

Most mortgage financing plans provide only permanent type financing where the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate security for the loan amount. However, when a property is in need of rehabilitation, this means that a lender typically requires the improvements to be finished before a long-term mortgage loan is made. This often serves as an impossible roadblock for first time and low income home buyers who otherwise are willing to rehabilitate or renovate a property in need.

This is where the U.S. Department of Housing and Urban Development's (HUD) FHA 203(k) Program comes in. When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually first has to obtain financing to purchase the property; additional financing to do the rehabilitation construction; and then a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing for the acquisition and construction loans, if they can even qualify to get them, involve relatively high interest rates and short amortization periods.

The Section 203(k) program was specifically designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed or adjustable rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the rehabilitation/renovation work completed, taking into account the cost of the work. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established. At this point the lender has a fully-insured mortgage loan.

The 203(k) program is very flexible and does not only apply to first time and lower income home buyers as it can even be used to rehabilitate or move one- to four-family dwellings that have been completed for at least one year.

In the past, not many Realtors were even aware of the program and few FHA Qualified Lenders would work with 203k loans because it meant a good deal more work on their parts. However, with the recent shifts in the lending markets and the number of properties, first time and lower income home buyers that could benefit from the program, forward thinking Realtors and lenders will respond to the need.

Return of Renter's Deposits - Know Your Rights

Fri, 07 Dec 2007 04:38:50 -0600

Notice: Unless they are an Attorney, Colorado Real Estate License holders are prohibited from giving legal advice and are required to recommend that you seek legal or tax advice from attorneys or other qualified advisors. The following is provided for informational purposes only and should not be substituted for legal advice from attorneys or other qualified advisors.

With the increase in foreclosures over the past year and a half or so, I have been receiving more and more questions from renters. The number one of these has been along the same lines as this one that I recently received from Alison:

"I have not received my deposit back from a house I rented in Colorado Springs. I have called and faxed with questions regarding the return of my deposit by at the end of 60 days I have heard nothing and not received my money. I left the property in fantastic condition. What now???"

Because I believe it's important that people know their rights and are treated fairly, while I am not a lawyer and cannot give legal advice, I can show people where to find information to assist them and tell how I handled a similar situation back in the days when I was a renter.

When I bought my house and moved out of my apartment that I had been living in for 5 years, I left it in perfect condition very similar to how Alison describes in her situation. The new complex landlord, who was the primary reason I as a bachelor decided to stop being a renter and invest my money in a house rather than continue to make money for someone else, tried to keep my security deposit for "cleaning the property". Unfortunately for him at that time I was an experienced renter. When I moved out I made sure to make a detailed walk through video of the condition I left the property in.

Knowing my rights as a Colorado renter, I wrote a certified, return receipt letter to the landlord and notified him that I had such video evidence. I also notified him that because there were no damages to the property other than normal wear and tear, if he failed to return the security deposit to me in full within 14 days of the date of the letter I would take him to small claims court where I would be eligible for a judgment of up to 3 times the security deposit PLUS attorneys fees and legal costs.

Needless to say, I received the full amount of my security deposit in a check the following week.

While our justice system does not require that you have one, I always recommend that a person seek the assistance of an attorney experienced in the field in question to assist them with legal advice and representation.

Just as someone who attempts to navigate all the complexities and pitfalls involved in a real estate transaction by themselves, the old legal adage remains true, "He who represents himself has a fool for a client and a fool for a lawyer".

Always remember... you don't know what you don't know, and what you don't know can hurt you or at the very least be a very costly educational experience.

The following paragraph is from the Colorado Department of Housing's Web site http://www.dola.state.co.us/cdh/researchers/documents/Advances/tenant-l.htm

Return of the Deposit - When a tenant leaves a rental unit, the landlord has 30 days (unless stipulated differently in the lease) to return the security deposit or send a written list of damages and the amount of money owed for repairs to the tenant. The above must be sent to the tenant's last known address. If a security deposit is wrongly withheld, the tenant could receive a judgment of three times of the amount wrongfully withheld, and court costs and attorney's fees. A tenant may utilize small claims court for this purpose.

Home Prices See Increases in Mountain States Despite Media "Gloom & Doom"

Fri, 07 Dec 2007 04:34:56 -0600

In yet another demonstration that ALL REAL ESTATE IS LOCAL and if it bleeds it leads, Freddie Mac announced that its Conventional Mortgage Home Price Index (CMHPI) Classic Series registered a 1.3 percent drop in national home values during the third quarter of 2007.

However, the very same report states that the West South Central states led growth in home values with an annualized appreciation rate of 4.8 percent during the third quarter, followed by the East South Central states, which showed a smaller gain of 3.4 percent. The Mountain states came next, with a growth rate of 1.9 percent.

On the other hand, the Middle Atlantic states experienced a negative price growth of 0.5 percent. Homes in the West North Central region saw a decline in average values of 1.2 percent, followed by a 2.3 percent decline in the South Atlantic regions and a drop of 3.4 percent in both the New England and East North Central states. States in the Pacific region saw home values slip 3.5 percent based on the CMHPI-Classic Series.

The CMHPI Classic Series includes data from both home purchase transactions and mortgage refinancings based on appraisals. Based on the CMHPI-Classic Series,

The CMHPI Purchase-Only measure found prices falling in seven of nine regions and in 25 states during the third quarter. The Pacific region fell the most at a 5.8 percent annualized rate. In contrast, a robust energy industry in the oil-patch states fueled a 4.9 percent annualized gain in house prices in the West South Central region," added Amy Crews Cutts, Freddie Mac's Deputy Chief Economist.

So the trend of declines on both coasts continues while the trend of stable or increasing property values in the middle of the country also continues despite all the gloom and doom that the press likes to shovel out.

Housing Market Remains Healthy In Pikes Peak Region

Mon, 27 Aug 2007 19:39:33 -0500

Most of my clients have heard me say it many times...real estate is a local phenomena and what may be true in one market is usually not true in another. Despite all the gloom and doom from some of those in the media and elsewhere, more than halfway through 2007 the current real estate market correction has not brought the slash & burn market devastation to the Colorado Springs and Pikes Peak Region that many had predicted. In fact, 2007 looks to be on its way to being among the top years in the Pikes Peak Region.

Many of you will remember one of my newsletters from last year when I spoke about the national housing market study that evaluated how much markets across the United States were over or undervalued. In that newsletter I addressed the "bubble theory" and the fact that unlike areas of the country like Naples, Florida; Las Vegas; and most of California, the Colorado Springs market was neither over or under value and that indicated not only a very healthy housing market in the Pikes Peak Region, but also that there was no bubble here to pop.

While there has been a significant slowing of sales to more pre mid to late 1990's historical levels and the pool of qualified buyers has been substantially shrunk due to the current chaos in the lending industry, people are still getting loans and both the median and average sales prices of existing homes have continued to increase...albeit at a slower pace.

While there was a decrease in single family home sales in July 07 of 14.9% over July 06 and 14.3% for the period of January to July 07 over the same period last year, that is actually a drastic improvement from the 29% to 35% decreases in the number of sales we were seeing in the late winter and early spring of this year. While the number of competing single family properties in July 07 was 18% higher than July 06 at over 7000 on the market, the average sales price has actually increased 2.2% to $274,308 and the median sales price has increased 1.1% to $227,000. Existing homes have actually seen an even larger increase in the average sales price in July 07 of 3% (to $258,432) over July of 06 and year to date of 4.2% over the same time period last year.

As I predicted, this trend strongly indicates that while the rapid home appreciation rates we have seen over the past several years have slowed substantially, home prices remain fairly stable in the Pikes Peak Region. I see this as an "equity correction" where sellers may not be getting the large equity run ups that the seller's market of the last 10 or so years was allowing them, but, unless they purchased in the last couple years and are trying to sell now with no improvement investments, they are still getting some equity out of the property or at the worst breaking even. This "cooling" is a very healthy trend in a real estate market and helps to keep home pricing in line with incomes.

Townhomes and condos have seen a similar trend with the number of sales down 11.9% over July 06 and 10.9% year to date over Jan - July 06, but builders and owners alike seem to have taken the trend in stride since the number of competing listings on the market has actually also decreased slightly by 0.3% remaining around 2,000. Bucking tradition, The average townhome and condo prices have increased 2.9% ($180,236) over July of last year and 6.5% ($173,256) year to date, while the median has also increased 3.9% ($159,975) in July 07 vs. July 06. The interesting trend in townhomes and condos is that, unlike the single family home market, the new build townhomes and condos are not only getting an increasing portion of the market, but they are seeing much better appreciations than existing properties are currently. For the period of Jan - July 07 all townhomes and condos sales saw an increase of 6.5% in the average sales price while existing townhomes and condos saw only an increase of 3.7% over the same period last year. This would indicate that the new build luxury townhome market is having a fairly significant impact on the current townhome market.

Existing single family homes are faring better than new builds by continuing to hold the largest and steadiest portion of the market, but the opposite seems to be true of the townhome and condo market with figures indicating that new built townhomes and condos have increased their share of the sales in the market as well as their price point.

Fort Carson Troop Infusion Delayed

Sat, 30 Jun 2007 14:24:50 -0500

We had a well known saying when I was serving in the Army, "Hurry Up and Wait!." Unfortunately this old adage still seems to be alive, well, and accurate.

After much fanfare and preparation by Fort Carson and the local community, the Pentagon has told Ft. Carson and the Colorado Springs community that the number of troops coming, the current number is about 8,000 to 10,000 expected with about 5,000 Spouses and 9,000 children, with the 4th Infantry Divisions return to Fort Carson from Texas probably won't happen till about 2010. This has been pushed back almost 3 years from last years estimates of late 2007.

This information is a double edged sword to our communities heavily military invested economy. In one case, it gives our community more time to generate the millions of dollars of public funding for new schools and highway projects that have yet to appear as well as complete, or in many cases begin, these much needed projects.

On the other hand, the local economy has suffered greatly at the hands of our undiversified local economic structure. Aside from Tourism, which is unreliable as the result of increasing gas pressures or the occurrence of events such as September 11, 2001 demonstrate, the local economy has been almost completely reliant on military investment since the technological downturn that has continued since late 1999 or early 2000. Now with Intel becoming the latest to add it's name to the already long list of tech related companies bailing from or drastically reducing its Colorado Springs area operations one may ask what are we to do to ensure a healthy and diverse local economy that has the ability to easily weather storms or inconsistencies in one sector or another?

Many disagree on the answer, however at least a more urgent and vigorous debate on the issue has begun.

SHORT SIGHTEDNESS ON VETERANS RALLY LEADS TO 'CRIPPLE'ING LOSS

Thu, 21 Jun 2007 15:09:08 -0500

No one can say Cripple Creek's loss isn't Winter Park's gain...and the saddest part is that Cripple Creek did it to themselves.

Much like the short sighted and unfriendly way that Colorado Springs damaged its reputation by its treatment of motorcycle enthusiasts in recent years, causing several events to avoid Colorado Springs and being labeled by bikers nationally as one of the most motorcycle unfriendly cities in America (Colorado Springs Business Journal)...despite the Tejon Street Bike Fest held the last 7 years (June 24, 2007)...After 14 years of being the home to the "Oldest Veterans Ride and Rally in the West" and "Colorado's Largest Procession of Motorcycles", the Cripple Creek City Council chose to not make a committment to the Salute to American Veterans Rally in 2007. The message from Cripple Creek to Veteran's and Motorcyclists...we'll take your money, but we don't want you around.

So, the Salute to American Veterans Rally, along with its thousands of motorcyclists...and accompanying revenues, is moving to Winter Park, Colorado who enthusiastically embraced the opportunity. According to Catherine Ross, Executive Director of the Winter Park - Fraser Valley Chamber of Commerce, "We are very happy to be the new home of the Salute to American Veterans Rally. This event is unique and we are honored that we are going to be a part of it." Ross went even further "We are committed to keeping this great event going strong. Motorcyclists are an audience we're going after - they're really pleasant guests, and we love the idea that the rally is honoring veterans." (Apex Sports News Spring 2007)

Need we say more? Cripple Creek lost sight of what the weekend in August is all about...veterans, who happen to ride motorcycles, gathering to honor veterans. With over 25,000 registered motorcycles in El Paso County and some of the best motorcycling vistas & weather in the country, that kind of short sightedness can only serve to harm the local economy which is and has been in despirate need of diversification for years.

Colorado Springs Real Estate Market Watch

Sat, 02 Jun 2007 02:05:56 -0500

According to recent statistics, the buyer's market in Colorado Springs continued through the end of April. The total number of listings on the market was up to over 8000 single-family homes, condos and town homes available on the market. There was an increase of over 26% more homes listed for sale in April over April 2006. At the same time sales of single-family homes have dropped over 15% in April and sales of condos and town homes dropped over 21% to about 900 and 126 in April respectively.

For April, the average sales price for single-family home in the Pikes Peak region was around $252,000, up from $244,000 in April 2006. That represents a 3.6% increase over the same month last year. The median sales price, which is the point at which 50% of the sales are above than 50% of the sales are below, rose 56% from the $202,000 to $213,000 over the same month last year.

For the period of January through April the Colorado Springs and Pikes Peak region has seen an increase of 3.8% in the total number of single-family listings available on the market while seeing a decrease of over 11% in the number of sales. However, the average sales price for sale family home has remained relatively stable showing a small 2.2% increase from approximately $248,000 to approximately $254,000 over the same period last year.

Sales prices for condos and town homes in the Pikes Peak region, however, didn't fare as well as their single-family counterparts in April. The average sales price of condo or townhome remained almost flat in April at approximately $161,000 and the median sales price actually showed a slight decrease of 1.7% to $147,000 in April from approximately $150,000 in April 2006.

For the period of January through April, condos and town homes showed an increase of 5.3% in the number of listings available on the market, to approximately 1,148, while showing a decrease of 6.2%, to approximately 481, in the number sales in the market over the same period last year. Despite this, the average sales price for condos and town homes has increased 10.3%, from $153,000 to approximately $168,700, over the same period last year.

The scandal in the subprime lending industry as made it very difficult for buyers with marginal credit to get qualified for loans, thus exacerbating the current real estate market correction. However, statistics that support my opinion that this is just a healthy market correction and not a "bubble" are that, while there have been large increases in the number of available properties on the market, sales prices for single-family homes in the Pikes Peak region have remained fairly stable while condo and town home prices have actually shown a healthy increase.

The current correction began in late spring 2006 when we began to see large monthly increases in the amount of available properties on the market and a slowing of sales. Most agree that April 2007 was one of the worst months all around that we've seen a very long time. Based on the indicators that I've seen, I suspect that May 2007 will show as being a healthier month and may indicate the beginning of a trend of slower but sustained real estate market performance in the Pikes Peak region.

For buyers this is a very good time to buy a property as interest rates have remained at historic lows and current market inventories are very high leading to a great deal of market competition.

For sellers the market has become a challenge that requires a great deal of knowledge and marketing experience combined with technological tools to stage their home effectively on the market and put their home in front of as many buyers as possible...especially since buyers now have much more to choose from and can afford to be much more selective.

For smart investors the current market can represent an opportunity to invest wisely in real estate. While fix and flips are not unheard of, for the last 18 months I have been recommending my investors begin to look at properties they can fix and hold as long term rentals, say for at least 4 to 5 years. The amount of competition between properties, now combined with the difficulty in getting buyers qualified for home loans thanks to the subprime lending scandal and small appreciations, has made fix and flips a poor investment choice in the current market. Rentals however have shown steady performance and may be increasing as the result of the influx of military families due to the current realignment taking place at Fort Carson. We can expect that, as this influx continues, existing home sales in the $200,000 and under market as well as rentals in the $1000 per month or less range will show an increase over the coming year.