Colorado Springs Properties: The Feds to the Rescue

Here they come to save the day!!!

Stocks traded much higher today on news that Citigroup will be the next big bank being bailed out by the US Government. The plan includes guaranteeing up to $306 Billion worth of bad mortgage-related loans and investments against losses and injecting another $20 billion in capital from the $700 Billion TARP bailout program. In return, the government gets $7 Billion in preferred shares paying an 8% dividend and stock warrants for 254 Million common shares at a strike price of $10.61. Citigroup must also modify their distressed mortgages to help borrowers avoid foreclosure and are barred from paying more than one cent per share in quarterly dividends for three years. The government is at least starting to learn from their earlier mistakes by placing restrictions on Citigroup’s executive compensation and bonuses. This is an enormous financial commitment by the US Government, but over time this deal could be a profitable one for taxpayers.

Also helping Stocks move higher today, was the talks of a larger than expected stimulus plan by the Obama administration, which could top $1 Trillion. There was another dismal Existing Home Sales report, which failed to provide any boost for bond prices as traders were expecting another bad report.

With all of the action in the stock market lately, surprisingly the bond market has had little reaction. Since November 5th it has just hovered right around the floor of support at the 200 day moving average. Today was not much different with it ending 25bp lower at the last few minutes of trading. Most lenders have been adjusting their rates by only .125% over the last week. So we will remain in a float pattern for now as I am still expecting rates to fall lower over the next couple of weeks. Stay tuned for more as the market changes.

FDIC plan could help 1.5 million keep homes:

WASHINGTON - Publicly breaking with the Bush administration's official stance, the Federal Deposit Insurance Corp. proposed Friday to use $24 billion in government funding to help 1.5 million American households avoid foreclosure. See full story.

Colorado Springs Properties: Economic Week In Review

Economic Highlights for the Week Ending November 21, 2008

MONDAY, November 17th
Disrupted credit flows continue to play havoc with the markets and economy. The Fed stands ready to take additional steps if necessary to relieve market strains and economic challenges. A half-point rate cut is widely expected at the next FOMC meeting, December 16, though its effectiveness is reduced by the Fed's measures to pump liquidity into the banking system.
TUESDAY, November 18th
The NAHB housing market index fell to a reading of 9 in November from a level of 14 in October. Needless to say, the single digit level of the index is an unprecedented low for homebuilder confidence. Exceptionally weak homebuilder sentiment related to due to a weak economy and tight credit suggest that housing market conditions have further to fall before reaching the nadir.
The NAR reported that the median existing home price fell 2.5% from Q2 to Q3 in the second largest quarterly decline since the downturn started. Median prices are 8.9% below their level one year ago and off 12.9% from their 2005 peak. CA, AZ, NV and FL again were the states reporting the largest price declines.
The producer price index fell 2.8% in October in its biggest monthly decline on record. The drop was led by a 12.8% decline in energy prices last month. Excluding food and energy prices, the core PPI was up 0.4% in October and 4.4% over the last year. Earlier price pressures, working through the pipeline, are pushing the core rate higher but they are dissipating fast which will lead to more moderate core PPI gains.
WEDNESDAY, November 19th
The consumer price index fell 1.0% in October after a flat September. The CPI is up 3.7% over the last year but down 4.4% in the last three months as a result of falling prices for energy, housing, transportation and apparel. Excluding food and energy, the core CPI declined 0.1% on the month but id up 2.2% on the year. Weakened economic conditions are exerting significant downward pressure on prices.
The MBA mortgage applications index fell 6.2% to 398.6% for the week ending November 14. Total mortgage applications are now 41.5% below their year ago level and continue to trend lower. A 12.6% decline in purchase applications caused the overall, weekly decline. Refinance applications actually increased 2.6% on a downtick in rates last week.
New residential construction starts fell again in October as weakened fundamentals continue to disrupt the housing market. Housing starts declined 4.5% last month to an annual rate of 791,000 units. This was the lowest level of new home construction starts since January 1991. Total housing starts have fallen 28.0% over the past year and are now 65.2% below their January 2006 peak.
THURSDAY, November 20th
Jobless claims jumped 27k to 542k for the week ending November 15. This is a new cyclical peak in unemployment claims and their highest level since July 1992. Large increases in jobless claims over the last two weeks indicate rapidly deteriorating labor market conditions with a faster pace of layoffs and extremely weak hiring.
Mortgage rates eased further for the third consecutive week amid signs of much lower inflation and weak economic activity. 30-year fixed rate mortgages averaged 6.04% this week compared to 6.14% last week according to Freddie Mac's mortgage market survey.
FRIDAY, November 21st

Stock Market Close for the Week
Index Latest A Week Ago Change
DJIA 8046.42 8497.31 -450.89 or -5.30%
NASDAQ 1384.35 1516.85 -132.50 or -8.73%

The holiday shortened week is packed with economic data and monthly Treasury auctions. New and existing home sales and personal income and outlays highlight. The markets will likely be more tuned into the announcement of Obama’s economic team, Monday and other financial and credit market news.
Key Interest Rates Latest 6 Mos Ago 1 Yr Ago
Prime Rate 4.00 5.00 7.50
Fed Discount 1.25 2.25 5.00
Fed Funds 1.00 1.96 4.51
11th District COF 2.769 3.280 4.383
10-Year Note 3.20 3.84 4.04
30-Year Treasury Bond 3.69 4.57 4.46
30-Yr Fixed (FHLMC) 6.04 5.98 6.20
15-Yr Fixed (FHLMC) 5.73 5.55 5.83
1-Yr Adj (FHLMC) 5.29 5.24 5.42
6-Mo Libor (FNMA) 3.12125 2.96500 4.80625

Sources: IBC' s Money Fund Report; Bank Rate Monitor; Federal Home Loan Bank of San Francisco

Colorado Springs Properties Home Prices: Now for the Good News

Colorado Springs: #6 on Smart Money Magazines 25 Cities Ready to Rebound!
When the headlines about the housing market are apocalyptic, the last thing a homeowner wants to do is sell. But a funny thing happened to Jeff and Jennifer Boyd when they put their three-bedroom house in Philadelphia’s Graduate Hospital district on the market this summer: They turned a profit. Just 45 days after the listing went up, a buyer snapped up the property for $555,000—$29,000 more than the Boyds paid in 2006. “We were pretty hesitant, knowing what the market is like,” says Jeff. “But a few weeks later, it was gone.”
Here’s a surefire way to start an argument: Suggest that the housing market has reached bottom. To be sure, the near-term outlook is still grim, and nobody is forecasting a rapid nationwide rebound. But there are signs that the overbuilding and speculative pricing that inflated the bubble are working their way through the system. In October 2005, near the peak of the boom, the median sales price for a U.S. home reached 7.3 times per capita income; by this May it had fallen to 5.7, in line with historical norms. Nationally, the rate of decline in sales is slowing, and in some regions sales numbers have actually perked up. “The indicators are starting to look better,” says Adam York, an economic analyst with Wachovia.
Why the disconnect? For starters, the national sales figures that get so much attention—and remain depressing—are brought down by boom-and-bust markets like Las Vegas, Miami and Phoenix. David Berson, chief economist with mortgage insurance firm The PMI Group, says that if hard-hit states like California, Arizona, Nevada and Florida are taken out of the statistical mix, the picture is much more promising. According to PMI’s “risk index,” which estimates the odds of prices falling in a given market, at least 65 percent of the nation’s 386 metro areas have less than a 10 percent chance of seeing lower prices two years from now. What’s more, the government’s sweeping bailout of the financial sector could boost the housing market by making borrowing easier for buyers.
We dug into those numbers as well as other forecasts and analysis to determine which markets are in the best shape for a rebound? We also talked with housing experts to learn which kinds of neighborhoods and suburbs are thriving. Our search led us to 25 metropolitan areas that look particularly promising, and there are more than a few surprises. Here, we profile seven of the best-looking markets; for the full list of 25, see November’s issue of SmartMoney magazine.
Denver was #9 on the list of 25 cities ready to rebound.

Information obtained from SmartMoney Magazine by Brad Reagan and Elizabeth O'Brien

Veterans Day

What a great day to remember our rich heritage.

Veterans Day is an annual American holiday honoring military veterans. Both a federal holiday and a state holiday in all states, it is usually observed on November 11. However, if it occurs on a Sunday then the following Monday is designated for holiday leave, and if it occurs Saturday then either Saturday or Friday may be so designated. It is also celebrated as Armistice Day or Remembrance Day in other parts of the world, falling on November 11, the anniversary of the signing of the Armistice that ended World War I. (Major hostilities of World War I were formally ended at the 11th hour of the 11th day of the 11th month of 1918 with the German signing of the Armistice.)
The holiday is commonly printed as Veteran's Day or Veterans' Day in calendars and advertisements. While these spellings are grammatically acceptable, the United States government has declared that the attributive (no apostrophe) rather than the possessive case is the official spelling.


Economic Highlights for the Week Ending November 7, 2008
MONDAY, November 3rd
The ISM manufacturing index fell to 38.9% in October from 43.5% in September. This is the lowest index level since September 1982! Apparently, manufacturing activity has fallen even further from already weak levels. The index reading suggests recession in both the sector and the economy. Credit flows to business will need to be restored before a turnaround can take place in manufacturing conditions.
Construction spending fell 0.3% in September less than an expected decline of 0.8%. Residential construction spending resumed its downward trek, tumbling 1.3% in September after gaining 1.9% in August in its first increase since March 2007. Though not as weak as expected in the last two months, construction spending will likely falter going forward due to severely weak economic conditions.
TUESDAY, November 4th
Motor vehicle sales plunged 15.5% in October to an annual rate of 10.6 million, the lowest level since February 1983! Expectations were for a much smaller decline to an annual pace of 12.0 million vehicles. Total vehicle sales have dropped 34.2% over the past year as a result of frozen credit markets, deteriorating economic conditions and accumulating job losses. With financing hard to secure and incomes and jobs uncertain, vehicle sales will remain exceptionally weak for the foreseeable future.
WEDNESDAY, November 5th
The ISM non-manufacturing index plunged to 44.4% in October from 50.2% in September. The larger than expected decline in the index indicates activity in the services, construction and government sectors of the economy contracted sharply last month, reflecting the intensifying turmoil in credit and financial markets.
The MBA mortgage applications index dropped 20.3% to 379.9% for the week ending October 31. This is the lowest level of the index since December 2000. The sharp decline in applications activity last week was probably related to the jump in mortgage interest rates. The purchase index tumbled 13.9% last week as the refinance index sank 27.8%. Total application volume is now 43.3% below its year ago level.
THURSDAY, November 6th
Productivity grew at a 1.1% rate in the third quarter, better than an expected 0.8% gain. Productivity remains quite solid given the economic downturn. Apparently, businesses are trimming workforces in response to weaker demand which keeps output levels aloft. Unit labor cost jumped 3.6% last quarter amid rising price pressures elsewhere. Weak labor market conditions are expected to reduce any wage pressures going forward.
Jobless claims fell 4k to 481k for the week ending November 1. The level of claims remains elevated indicating more job cuts and less hiring. Labor market conditions are clearly in recession as is the broader economy. It could get worse before it gets better with tomorrow's employment report showing more severe payroll losses in October than the 200k expected.
Mortgage rates declined this week as weaker economic data weighed on yields in the bond market. 30-year fixed rate mortgages averaged 6.20% this week compared to 6.46% last week according to Freddie Mac's mortgage market survey. Increased Fed rate cut expectations are also placing downward pressure on yields, thus mortgage rates.
FRIDAY, November 7th
Payroll employment declined by 240k in October compared to expected job losses of 200k. The outsized decline, the largest since 2001 provides more evidence of deepening weakness in the broader economy. The economy has shed 1.2 million jobs since the beginning of the year. Job declines were broad based as the unemployment rate rose to 6.5% from 6.1% in the prior month.

Stock Market Close for the Week
Index Latest A Week Ago Change
DJIA 8943.89 9325.01 -381.12 or -4.09%
NASDAQ 1647.40 1720.95 -73.55 or -4.27%

The holiday-shortened week presents all of the economic data in the last two days. Except for retail sales and import prices, most of the data is second tier and expected to show protracted weakness. The Treasury's $55 billion quarterly refunding will probably draw more attention, because these three auctions portend of many larger sized auctions to come as the government seeks to finance bailout and stimulus packages.
Key Interest Rates Latest 6 Mos Ago 1 Yr Ago
Prime Rate 4.00 5.00 7.50
Fed Discount 1.25 2.25 5.00
Fed Funds 1.00 1.94 4.33
11th District COF 2.769 3.280 4.383
10-Year Note 3.79 3.85 4.32
30-Year Treasury Bond 4.27 4.57 4.65
30-Yr Fixed (FHLMC) 6.20 6.05 6.24
15-Yr Fixed (FHLMC) 5.88 5.60 5.90
1-Yr Adj (FHLMC) 5.25 5.29 5.50
6-Mo Libor (FNMA) 3.12125 2.96500 4.80625

Sources: IBC' s Money Fund Report; Bank Rate Monitor; Federal Home Loan Bank of San Francisco

Upward pressure on interest rates
Downward pressure on interest rates
No pressure to change interest rates
News worthy

Home Market Report Pine Creek

Pine Creek Home Market Report
Pine Creek is located in the north section of Colorado Springs. Zip code 80920.
Pine Creek is in the District 20 school district.

Homes in Pine Creek are close to:

October Home Activity in Pine Creek

  • Homes Sold in October: 3
  • Average Listing Price: $450,000
  • Average Days on the Market: 154

Current Information as of 11/7/08:

  • Active Listings: 57
  • Under Contract and Pending: 9

This Pine Creek Real Estate report contains information from the following subareas: Pine Creek, Pine Creek Estates and Pine Creek West. It includes Single Family Homes, Patio Homes and Townhomes.

This information was obtained from the Pikes Peak Multiple Listing Service and is deemed reliable and not guaranteed.