Every two weeks, local Realtor Harry Salzman sends an update to his mailing list on how the local real estate market is performing.
Regular readers of the Business Journal probably recall some of Salzman’s missives appearing as guest columns, because they often provide information and statistics that the masses of non-Realtors haven’t seen.
Salzman’s latest piece came Monday, and it was more newsworthy than usual. Our space for guest columns was committed, so it seemed appropriate to share our subsequent conversation here.
The latest quarterly figures from the National Association of Realtors compared statistics from 176 market areas. As Salzman noted, Colorado Springs had not kept pace with the typical numbers showing strongly positive trends across the country. We were progressing, but more slowly than many wanted to see.
For the second quarter of 2015, though, that changed. “Significantly,” Salzman said for emphasis.
Local median sales prices, he reported, jumped by 10 percent from the previous quarter to $244,800. For comparison, the average for all 176 market areas combined was an 8.2 percent increase to a national median price of $229,400.
As Salzman put it, drawing on his 40-plus years of working in real estate: “I actually can’t remember when our statistics were that much better than the average median sales price nationally. So this is exciting news for us all.”
Here’s more: In 2012, that median sales number for Colorado Springs was $201,600, rising to $216,800 in 2013 and $222,300 in 2014. Now, $244,800.
You may be wondering, as I was, how that 10 percent gain stacks up. Here are the percentage gains of 20 other markets, most of fairly comparable size:
Ann Arbor, Mich., 3.7 percent; Baton Rouge, La., 7.4; Boise, Idaho, 8.9; Fort Myers, Fla., 9.1; Charleston, S.C., 4.6; Chattanooga, Tenn., 8.3; Wichita, Kan., 6.4; Dayton, Ohio, 3.5; Grand Rapids, Mich., 9.3; Hartford, Conn., 1.6; Lansing, Mich., 11.1; Lincoln, Neb., 0.5; Little Rock, Ark., 2.9; Madison, Wis., 5.6; Oklahoma City, 7.0; Omaha, Neb., 8.4; Sacramento, Calif., 7.4; Salt Lake City, 8.2; Worcester, Mass., 3.4; Albuquerque, N.M., 3.0.
You’ll notice that the sample group covers most regions, which further validates our percentage increase.
Granted, some larger areas have continued to set the national pace, and they should come as no surprise: Denver, 14.7 percent; Dallas-Fort Worth, 12.6; Nashville, Tenn., 12.8; Reno, Nev., 16.0; several coastal Florida markets, 17-20 percent; and some in North Carolina led by Raleigh-Cary, 17.2; Durham, 14.7; and Greensboro-High Point, 16.3.
The third quarter should be equally telling. Salzman, associated with ERA Shields, echoes many peers saying, “My personal experience in recent months has been that fewer homes on the market has resulted in quicker sales and a very high sales-to-list-price ratio … It’s no longer a buyer’s market.”
“I actually can’t remember when our statistics were that much better than the average median sales price nationally.”
He made another point: The city has nearly 130,000 single-family homes, and their value just went up 10 percent. Also, amid news that more new homes are being built here than at any time since 2007, we learned this week (story on page 1) of 475 new homes to be built north of the Air Force Academy and west of Interstate 25, the first 268 coming soon.
At the same time, Denver’s surge might be calming. One Realtor acquaintance, trying to sell a much-updated home in the desirable Highlands Ranch, listed it at $525,000, which in May or June would have instigated a frenzied bidding war. Instead, the house attracted minimal interest before selling for less than $500,000, a clear indication that Denver’s third quarter might reflect a slowdown beyond the usual end-of-summer trend.
Salzman shared one more development that could appeal to CSBJ readers. He said the biggest banks (Chase, Bank of America and Wells Fargo) have been making it easier to obtain “jumbo” loans, mortgages of more than $417,000 in many areas including Colorado Springs, up to $625,500 in the high-end markets.
Because those large banks usually keep those loans instead of selling them, they can soften the criteria. As Salzman put it, “These financial institutions have lowered the FICO credit score requirements to as low as a minimum of 680 for as little as 15 percent down payment, depending on the lender … As soon as these terms were made public, I notified several clients who had been looking at other financing for their ‘jumbo’ loans. Chase offered at least one of them a 30-year, fixed-rate loan for 3.75 percent.”
For someone like Salzman, a relocation specialist here for decades with a keen sense of which numbers matter and which ones don’t, this is all encouraging. It’s also a key ingredient in appealing to businesses that might move here.
And with more builders adding to the supply, that keeps the outlook positive into next year.