All posts by Rob Thompson

Food for thought, From the inbox

Can I Move in Before Closing?

Great question! In Colorado Springs, it’s not the norm to move in or take possession of the property prior to closing. It does happen but it’s not the norm.

Why is that?

There are a few primary reasons:

  1. The transaction might not close. There’s a greater than zero chance a given transaction will not close. If the home sale were not to close and the seller has allowed a buyer to occupy a property, things can get messy.
  2. The seller is at risk of increased liability. If something happens to or around the home, it’s likely the seller’s insurance policy which will have to cover it.
  3. Home improvements can cause issues. If a seller allows a buyer to move in ahead of closing and the buyer starts making improvements and the property doesn’t close, who bears the cost of those improvements?

These are a few reasons it’s not likely and often not recommended for sellers to allow buyers to move in or occupy a property before closing.

If you are looking to buy or sell residential real estate in Colorado Springs, please give me – Rob Thompson, Realtor® – a call at 719-440-6626!

Colorado Springs, Economy, Food for thought

Survivorship Bias in the Housing Market

In the real estate industry, agents and lenders speak often of average days on the market, closed to list price ratios and other metrics.

There’s something we need to really consider to gain perspective on the overall market conditions, though. That concept is survivorship bias.

This form of bias results when one mistakes one part of the data for all the data. In the case of housing, if I share the following stats with you:

The closed to original list price ratio for the last 30 days for Single Family Homes in El Paso County is 98.56%.

I am sharing that homes are selling for 2.52% below their list price on average in the last 30 days.

Contrast that with this same time last year, in which homes were selling for a median of 98.51%

One might infer from this that the market hasn’t shifted much.

However, the homes that did not sell in the last 30 days increased by a factor of over 70%.

Looking only at one set of the data – the homes that sold – would blind an observer to the fact that quite a few more homes have fallen out of the market in these last 30 days.

Here’s a bit more technical analysis via my GrokTheMarket blog.

Solar

Top 10 FAQ about solar

  1. What is solar energy, and how does it work?
    • Answer: Solar energy is harnessed from the sun’s rays using photovoltaic (PV) cells in solar panels. These cells convert sunlight into electricity.
  2. What are the benefits of switching to solar power?
    • Answer: Solar power is clean, renewable, and can reduce electricity bills, increase property value, and lower your carbon footprint.
  3. How much do solar panels cost, and is there financial assistance available?
    • Answer: Solar panel costs vary, but many incentives, like tax credits and rebates, can help offset the initial investment.
  4. How long does a solar panel system last, and what’s the maintenance like?
    • Answer: Solar panels have a lifespan of 25-30 years, with minimal maintenance. Regular cleaning and occasional inspections are usually all that’s needed.
  5. What size solar system do I need for my home?
    • Answer: The size of the system depends on your energy needs and location. A solar installer can assess your requirements and recommend an appropriate size.
  6. Do I need battery storage with my solar panels?
    • Answer: Battery storage, like Tesla Powerwall, can store excess energy for use during cloudy days or power outages, but it’s not always necessary.
  7. Can I sell excess energy back to the grid?
    • Answer: Yes, in many areas, you can sell excess energy back to the grid, earning credits on your utility bill through a process called net metering.
  8. Will solar panels work during cloudy or rainy days?
    • Answer: Solar panels can generate electricity in cloudy conditions, although their efficiency is lower than on sunny days.
  9. Are there any government incentives or tax credits for going solar?
    • Answer: Yes, there are federal and state incentives, such as the Federal Investment Tax Credit (ITC), that can significantly reduce the cost of solar installation.
  10. Is solar energy environmentally friendly and sustainable?
    • Answer: Yes, solar energy is a clean and sustainable power source that reduces greenhouse gas emissions and helps combat climate change.
Home Inspections, Homeowner's Insurance

What is a sewer scope and why do you want it?

A sewer scope is when an inspector or plumber sends a video camera down your sewer line. This is done either through a clean out access point in the sewer line or in some cases the toilet access point.

The inspector / plumber usually records this and they are looking for roots, intrusions, blockages or cracks or ruptures in the sewer line. These can cause backups in the sewer line and leads to very costly repairs.

If you are buying a house, you want one of these done because homeowner’s insurance may not cover the repair to the line. It also may not cover damages to the home from the backup of sewage, etc.

The TLDR; get the line scoped to avoid several thousands or more in repair and damages down the road.

Economy, Mortgages

Why does it matter if the Fed raises rates?

Good question.

When you take out a mortgage to buy a house, you are essentially borrowing a large sum of money from a bank or other financial institution, which you agree to pay back over a long period of time with interest. The interest rate on your mortgage is the cost of borrowing that money, and it determines how much you will ultimately pay for your home.

Photo by Precondo CA on Unsplash

The Federal Reserve is the central bank of the United States, and one of its main responsibilities is to set monetary policy in order to keep the economy stable and healthy. One way that the Fed does this is by setting the federal funds rate, which is the interest rate that banks charge each other for overnight loans.

When the Fed raises the federal funds rate, it makes it more expensive for banks to borrow money, which in turn makes it more expensive for you to borrow money to buy a house. This is because banks pass on the higher costs to their customers in the form of higher interest rates on loans, including mortgages. As a result, when the Fed raises interest rates, it can make it more difficult and expensive for people to buy homes, which can slow down the housing market and the overall economy.

On the other hand, when the Fed lowers the federal funds rate, it makes it cheaper for banks to borrow money, which can lead to lower interest rates on loans, including mortgages. This can make it easier and more affordable for people to buy homes, which can stimulate the housing market and the overall economy.

In summary, the Fed’s decisions about interest rates can have a big impact on the housing market and the overall economy, as they affect the cost of borrowing money to buy a home.

If you are looking to buy or sale a home in the Colorado Springs area, please give me a call at 7194406626.

Colorado Springs, Economy, State of The Market

July 2021 End of Month Stats

We are closing out July 2021 w/an average closed price of $476K, an average of 7 days on the market and an average closed to list price of 104.03%. Conventional loans have dominated the market this month. Meridian Ranch continues to dominate as the top subarea for volume of sales.

Colorado Springs, Economy

July 2020 / July 2021 Zip Code Sum of Sales

Doing a little explorative data analysis. Here are the July 2020 and July 2021 sum of sales by zip code. The dot sizing reflects the sum gradient (larger dots = more sales $).

Data extrapolated from the PPAR MLS 28 July 21.
Colorado Springs, Mortgages, State of The Market

CoS: State of the Market / Terms of Sale

Conventional is dominating the market in volume of sales month to date, accounting for 46% of sales. Here is the distribution of those sales (and cash, VA and FHA) across the market for the month in $50K incremements.

Colorado, Colorado Springs, Economy, Front Range, Home Values, Real Estate Investing

CoS: Top 10 zips

80831 is leading the list of top 10 zip codes by volume of sales month to date in the area, selling for 3.75% more than list on average. 80918 is leading the pack in terms of closed to list price ratio, selling for 5.53% over list on average.

These stats are part of a custom built platform I have built to deliver relevant hyper local stats to my clients. Please let me know if I can help you!

Rob Thompson, Realtor®, The Agency — 7194406626