The Hammond Real Estate Report

The Colorado Springs real estate market, along with the rest of the state, continues to face the fallout from the subprime mortgage crisis. According to a March 17, 2010 article in the Denver Business Journal, “Both real estate foreclosure filings and sales in Colorado rose in February year over year, largely because a moratorium on foreclosures no longer is in place this year, according to a report Wednesday by the Colorado Division of Housing.” The piece continued to note that “Foreclosure filings increased 6.5 percent in February to 3,042 last month from 2,856 in February of last year. But they were down nearly 14 percent from 3,535 in February 2008. Foreclosure filings are the initial documents, filed with county public trustee’s offices, that are used to start the foreclosure process. That process ends with the sale of a property at auction, unless debt related to the property is repaid.”

One particular segment of Colorado Springs real estate for sale, commercial real estate, is in an especially tight spot, according to a March 13, 2010 article in the Colorado Springs Gazette. The piece found that “As dissimilar as they are, a small shopping center in unincorporated Falcon, an apartment complex on Colorado Springs’ southeast side and a mini-warehouse storage facility near Peterson Air Force Base have something in common: They all fell into foreclosure last year – signs of a distressed local commercial real estate market that experts fear will worsen in 2010.”

One bright spot for Colorado Springs homes for sale was noted by a March 1, 2010 article also in the Colorado Springs Gazette, which noted that “The pace of homebuilding jumped last month to its highest level in nearly two years, while foreclosure filings might be stabilizing, according to a pair of reports released Monday.” The piece, composed by Rich Laden, continued to say that “Single-family homebuilding permits totaled 166 in February in Colorado Springs and El Paso County, a more than threefold increase from 53 permits during the same month a year ago, a Pikes Peak Regional Building Department Report said.”

When the economy is booming, people are generally happier with their work and overall purchasing power.  They go out to buy things, they dine out and they make big investments such as buying real estate properties.  Similarly, when the economy experiences setbacks like the recession we are experiencing today, people have a greater feeling of needing to save.  They feel that they have to tighten their belts and not spend as much.  As a result, the economy goes further down.  People are not as enthusiastic about buying houses or properties.  With regards to selling, individuals find that they have to sell their houses to pay for mortgage, because they are relocated due to employment changes or some find that they would be able to save more if they lived with relatives.

From this instance alone, one can see that although the number of buyers goes down, the number of sellers remain the same or even go up.  As such, prices begin to drop and depreciation of properties takes place.  People should take advantage of this slow period, however.  After such a time the economy would surely kick off again and start to improve.  For this reason, people are still encouraged to make real estate investments even at this condition of the economy.

The key to making a good deal is to make a great offer.  When you have chosen the house you want to purchase, you can now start negotiating with the seller by writing him or her your first offer.  Usually sellers make the price known to potential buyers.  Do not be afraid to offer something that is lower than this.  After all, the seller has already considered having offers that are lower but still reasonable.  According to real estate experts, determining the proper amount that one should offer is a three step process.

The first step is to consider similar properties in the market and how much they are selling.  This is called comparable sales.  In the location where the property you are eyeing is located, consider what the going rate for houses is.  At least have an idea of the price range.  Compare the prices of homes within the same size, number of bedrooms, bathrooms, floors, garage space and total area that you are planning to purchase.  You may also refer to actual documents and databases listing the prices of similar properties.  Three main sources can be accessed by a certified real estate agent.  However, the public is generally restricted to it.  Nevertheless, there are public records and multiply house listings that can easily be accessed by the public.  You can make use of this.

The next step is to look at the house itself.  Does it need repairs?  Are you going to have renovations made?  Also take into consideration the condition of the seller?  Is she or he in a hurry to sell the property?  Is it in a mortgage under a bank?  As a third and final step, adjust the price you have come up with and analyze if this is indeed ‘fair’ for the seller.

It is not very hard to strike a good deal.  Just remember to be fair with the seller as well.  Talk to him or her about your concerns and even your budget and you could actually get that property you want.