Colorado House Buyer

While the economy has created a ‘buyers’ real estate market with home values plummeting and Colorado Springs foreclosures soaring, who’s buying up the properties that are for sale? While first time home buyers are on the decline and previous buyers are being turned down because of tight credit conditions, Pink Realty agents are seeing that those with cash are the ones bringing the deals to the table. And today, it’s typically the investors that have the cash! Per Lawrence Yun, Chief Economist for the National Associate of Realtors (NAR), “Increases in all-cash transactions, the investor market share and distressed home sales all go hand-in-hand. With tight credit standards, it’s not surprising to see so much activity where cash is king and investors are taking advantage of conditions to purchase undervalued homes.”

On February 23, 2011, Jon Prior of the NAR summarized the housing sales for January 2011. All-cash sales increased to 32% of all sales in January, which was up from 29% in December 2010. Additionally, it was investors that grabbed more of the market share by accounting for 23% of all buyers in January, up from 20% in December 2010 and up 17% from one year ago.

While many investor home purchases will result in a traditional fix and flip sale, the current rental market and trends are also providing a great profit opportunity for investors. The demand for rentals in Colorado Springs is on the rise because more people are being turned down for home loans and more people are being displaced because of foreclosure or selling their home on a short sale. Colorado Springs has become a hot rental area because of the number of military personnel in the city, but also because the economy and housing market has caused so many homeowners to lose their homes to foreclosure or because they had to sell their home as a short sale. All these people are in need of housing and looking for rentals. This demand has resulted in less than 1% vacancy in Colorado Springs. Traditionally in Colorado Springs, the 3 bedroom home was always the highest in demand and considered the ’sweet spot’ in the rental market. The 3 bedroom homes were always rented, never vacant and there were never enough of them to meet the demand for them. The larger homes that were for rent were not in demand and stayed vacant.
However, today the demand for 4 and 5 bedrooms homes is increasing. As more and more middle class families are displaced, the need for the larger rentals increases. These larger rentals also bring a nice price point to the balance sheet. The current rental rate for a 3 bedroom single family home is $1140 per month and the 4 and 5 bedrooms are $1374 and $1789 respectively.

Call Pink Realty today at 719-393-7465 (Pink) to talk to an agent and see what great deal is out there waiting for you!

There is no doubt the opportunity for investors to ’snag the keepers’ is now.

While wholesaling and fix and flips bring fast and big profits, more investors are adding the right ‘keepers’ to their portfolio mix as rentals for additional long-term passive income. With the market trend shifting toward larger rentals, investors should also note that the larger homes with higher mortgages tend to get discounted more by the lenders when working a short sale. Many of these higher end homes are simply in need of paint and carpet. We have seen nice homes in the Stetson Hills area that needed as little as paint, carpet and linoleum flooring, but the homeowners couldn’t sell to a retail buyer because the buyers wanted a completely fixed home. Investors can buy homes for sale Colorado Springs for around $125K and get them turned into great rentals for about $10K. Cash flow on these short sales or bank owned properties would be very high.

If you call a Pink Realty agent, we would be happy to scour the market for you and find you a great property that will meet your needs.

Are you an investor who wants the upside of an investment property and today’s really cheap prices and huge cash flows but don’t want to at it alone?

The owners of Pink Realty are active, experienced investors and are always looking for partners on deals. Just give is a call at 719-393-7465 (Pink) and ask to talk to Russ or Monica about partnering on deals. We would be happy to talk to you. Just tell us what you want to bring to the table and we will see how we can work together.

• Do you qualify for the loan to buy the house? A common strategy investors are using now is to buy houses with cash, remodel the houses and then refinance the property with zero money out of pocket. We have investor friendly lenders ready to do these types of loans.

• Maybe you have a small amount of cash available and we can short a 2nd loan and bring the 1st mortgage current on a good property.

• Maybe you have a larger amount of cash available making 1% at the bank or in an IRA and you want to do something more productive with it but don’t know exactly how. We can find a really cheap house that we can buy, fix up, and rent.

Another category that Colorado Springs has been made mentioned in many times, is one of the best areas to purchase a home in the recovering housing market.

Positive rankings such as these make Colorado Springs an ideal place to live for many people. Due to factors such as tax rates, average home cost, home appreciation and other positive factors that affect the quality of life and cost of living in the City, the high rankings are valid.

However, even with such rave reviews, some people are beginning to cast doubt on the market’s long term viability due to the fact that the data is not holding up to expectations. For example, AOL Real Estate (March 31, 2011) has stated that Colorado Springs houses now reached 150,894 that have depreciated by 4.7% over the previous year. The most up to date reports have found that over 4,300 homes are up for sale in the City and the trend from May 2010 to now is only climbing upwards.

Colorado Spring’s 2011 real estate market has been seriously affected by the deficiency as it relates to a Federal New Homebuyers Tax Credit. Since the federal tax credit was extended until April 2010, it resulted in an influx of activity during the typical inactive months of January to March. The imminent result is an identified “double dip” in the 2011 real estate market. This of course will lead to a year by year comparison that is not truly tell-tale.

Even with this crisis happening, Colorado Springs, when compared to other parts of the country, is doing well. Forbes magazine recently named it number 6 out of 10 for “America’s Best Housing Markets for Investors”. So, if you are thinking about selling or investing, you can still have an air of optimistic expectation due to the positive indicator for long-term home prices.

This list put together by Forbes is based on market study by a real estate research firm. It was calculated on the community’s home prices during the economic crisis and it factored in issues such as employment growth and population. It was forecasted that the area’s prices would stay flat over the upcoming years but that home values would eventually rise due to a recent enlargement in population.

While real estate owners should feel pride about this ranking, the fact remains that it may or may not give life to home buying again. While nothing is assured, it must help somehow by having positive exposure in a nationally acclaimed magazine. Also, the Colorado Springs real estate market is influenced by other factors such as good schools, breathtaking surroundings and quality of life. These factors alone are great enough to make people want to live in the Springs.

Colorado Springs has been fortunate in that it has not witnessed the big swings that other markets have had. Colorado Springs has been lucky enough to have a slow, stable and strong growth in its housing market. In fact, Colorado Springs has had an average growth rate of 7% since 1992 and has not had the massive declines that other parts of the country have experienced.

However, there is a down side to the housing market in Colorado Springs. Property owners have been looking for brokerage options in selling their homes. The frequency of homes in the Colorado Springs area being bought and sold is exponentially more significant compared to the national average. This is due to the fact that there are many military related jobs as well as a mobile workforce associated with companies such as HP and Boeing. Since homeowners aren’t usually a fixture to the years of appreciation that properties accumulate, the high brokerage commissions are severely felt. Sellers therefore believe that their only alternative is to skip agent fees altogether by putting their property up as For Sale by Owner. However, there are other alternatives available, one of which is to utilize a flat fee listing on the Multi Listing Service (MLS).

Often times, listings are sold by buyers’ agents who sometimes work with a listing agent. Whether the listing agent sells directly to the buyer or works with the buyers’ agent, the commission rate is typically the same. Even when the buyer did not have an agent, the seller may not see any savings.

A MLS listing allows the seller to see some profit as the agreement with the listing agent is to list the property for a small, flat fee. The seller is responsible for showing the property and handles negotiations with the agent as the middleman. If the buyer’s agent is responsible for the sale, only the buyer’s agent is paid but the listing agent is not paid at closing. If a seller finds some aspects of selling a house difficult, a MLS broker can agree to take on additional functions for more money at closing but this is usually less than 1%.

Other than savings on commission payments, a huge benefit to using MLS for selling property in Colorado Springs is the effective exposure. Buyers and their agents can find data with MLS feeds and internet sites. A for sale sign is never sufficient in pulling in interested house hunters, especially, given the fact that many of them are not residents of Colorado Springs.

The MLS for Colorado Springs outreaches to neighboring areas such as Woodland Park, Falcon and others. Sellers are finding that the flat fee MLS listings offer is effective in selling anything from an urban to suburban property and a single family home to a condominium. No matter the type of property, the fact that a seller can save money by avoiding those steep commissions as well as gaining exposure to buyers, makes this alternative the best to hiring a broker. It is expected that more and more sellers will use this medium in the future.