RealtyTime: Why Rates Remain Deliciously Low

From the article: “The benchmark 30-year fixed-rate mortgage (FRM) averaged 3.80 percent with an average 0.6 point for the week. Compare that to a year ago when the average 30-year fixed rate mortgage was 4.37 percent.” 

That’s close to what my mortgage rate was 3.5 years ago! 

From Bankrate.com, check out this chart that plots the last 3 years of fixed rate mortgages.  


From the inbox: What’s up with the rental market here? And what’s the MLS?

Good question!  The first answer is that we have an intense rental market here with an app. 96% occupancy rate.  That’s been sustained, too, for a couple of years.  If anything, it’s getting harder to find affordable housing in the rental market in Colorado Springs.  I am tracking around 220 requests for single family housing in the sub $1100 price range.  There are 28 homes at the time of this writing in the Multiple Listing System(MLS), not filtered for bedrooms or pets or available date. The “why” of this has to do with supply, demand and the local economy.  

Second, the MLS is the local database of agent and property manager listed homes.  It is not the sole source of rental properties in town but is the best product we as Realtors have.  Daily via Facebook in Colorado Springs Rentals, I provide a list of the most commonly requested configuration of homes. 

If you’re looking for housing in Colorado Springs, we’d be honored to earn your business.  Call Rob or Drew at 719-440-6626 or email robthompsonrealtor@gmail.com!  

From the inbox: what is a short sale?

Good question!  A short sale is where a seller has listed their home for less than the mortgage value of the property.  For example, say the market value on a home is $150K but the seller owes $170K.  The seller must sale, though.  One option is to list as a short sale, wherein the seller seeks the permission of their lender to sell the home at a loss.  There are some consequences and risks to both sides (on the buyer side, the risk is primarily investment of time).   Always consult a tax or legal professional as needed; this post is not legal advice.

Here is a list of current short sale properties in the MLS for the Colorado Springs area:

http://ppmls.mlsmatrix.com/Matrix/Public/Portal.aspx?ID=332969905

Interested and/or want to know more?  Call Rob at 719-440-6626 or email robthompsonrealtor@gmail.com!

From the inbox: why is the rent still so darn high (in Colorado Springs)?

That’s a good question and opinions will vary.  The short answer: supply and demand.

The longer answer: we have a limited supply of rental homes and an app. 94-96% occupancy rate (recent anecdotal statements indicate it may be even higher). As a result, landlords can charge more for their properties.  But even this is as incomplete answer — it’s also a function of the economics of the purchase.

Say a landlord is looking at purchasing a home for app. $135K as an investment property (single family home).  This is a 3 bedroom home that will rent on average for $1106.  However,  the investor must put around 20% down due to the home not being owner occupied ($27,000).

Assuming $1100 a year for homeowner’s insurance and $650 for taxes, the mortgage payment on this home will be $717.38 (using the interest rate that I just recently closed an investment on).  If the home rents for $1106, the spread month to month for the investor is $388.62.  This doesn’t account for property management (10% or $71.74 a month) or maintenance (1% over a 10 year span) — call it $1350 for this home in a hypothetical year (or $112.50 a month).   Thus, the $388.62 margin is reduced to $204.38.

That’s the anatomy of a basic deal for an investor owned home and I hope illustrates part of the core reason behind pricing…and this was a $135K home.  The margins change as the price goes up without breaking the next rent price point (e.g., a $145K home won’t necessarily rent for more than an $135K home).

Looking to buy or sell in Colorado, I’d be honored to earn your business!  Call Rob @ 719-440-6626

**This is not financial advice, just a practical analysis of a purchase.

From the inbox: what’s the inspection objection?

Good question!  In Colorado (all others, please check with your local Realtor in the group!), the Contract to Buy and Sell Real Estate allows for a buyer to have the opportunity to have a property inspected after the home has gone under contract.

The inspector produces a report for you the buyer (that’s YOUR report and your inspection!).   Your agent will then draft an “Inspection Objection” for you; this document is a request to the seller to repair any items on the form.   The seller will respond with an “Inspection Resolution,” which is their statement of what they will fix from that list.

This is in Colorado ONLY.  This isn’t legal advice and please consult your local professionals for specific state guidance.

Looking for a home in Colorado?  We can help!

Rob – 719-440-6626

Colorado Springs Realtor

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