boulder real estate market conditions - november 2013

Market Research: Boulderan analysis of real estate market conditions in

Boulder, Colorado

November, 2013

Sponsored by:

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HouseEinstein.com ph: 303 746 6896 3

Legal

This presentation was prepared exclusively for the benefit and use of the Realty Unique clients to assist their study of real estate market conditions. This presentation is for discussion purposes only and is incomplete without an in-person, oral presentation by Realty Unique. This presentation reflects opinions of prevailing market conditions on this date, which are subject to change. Realty Unique recommends careful and complete due diligence before buying or selling real estate or other investments. The following presentation is not to be construed as legal, tax, or investment advice. Realty Unique will not be held liable for investment decisions derived from this presentation. Previous market performance is not a guarantee of future results and there is financial risk associated with buying or selling property. Consult with your financial, legal, and real estate advisers before making an investment decision. The data in this presentation was obtained by private and public sources, without independent verification.

“You can’t make a smart real estate decision without knowing the facts about market conditions.”

-Osman Parvez, FounderRealty Unique, LLC

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About

Osman Parvez: Osman’s professional experience includes investment analysis, real estate development, and investment banking. Prior to Realty Unique, he served as an Equities Research Associate for Kaufman Brothers, Research Director for Windwalker Real Estate, Associate Director for Capital Markets at Republic Financial, and co-founder of Silver Fern Homes. Outside of real estate and investing, he loves being in the wilderness and has research experience studying the impacts of climate change. Osman holds an MBA in finance, a B.S. in Biology, and is a Certified Negotiation Expert (CNE).

Email: [email protected] ph: 303.746.6896

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Market ConditionsRegional Overview

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Regional Summary

• The inventory shortage continues. Among regional markets, the City of Boulder experienced the largest drop last month (compared to a year ago).

• Experts say that five to six months of inventory is a healthy balance between supply and demand. Most of our local markets have two to three months… extremely low inventory levels.

• Absorption was highest in Louisville and Lafayette during October. Properties in the mountain and plains experienced the lowest level.

Inventory OctoberYoY

% ChgMoM

% ChangeBoulder 187 (33.2)% (17.6)%Boulder AD 160 (30.7)% (9.1)%Erie 102 (7.3)% (14.3)%Lafayette 72 (6.5)% 1.4 %Longmont 276 (6.8)% (6.8)%Louisville 42 (17.6)% (2.3)%Superior 25 (16.7)% (21.9)%Mountains 225 (17.9)% (22.1)%Plains 184 (26.1)% (8.5)%

Sold Volume OctoberYoY

% ChgMoM

% ChangeBoulder 68 30.8 % 13.3 %Boulder AD 40 (11.1)% (28.6)%Erie 35 29.6 % 45.8 %Lafayette 28 7.7 % 12.0 %Longmont 88 8.6 % (13.7)%Louisville 20 (4.8)% 0.0 %Superior 11 10.0 % 10.0 %Mountains 27 (20.6)% 50.0 %Plains 23 (32.4)% 0.0 %

Absorption(Sold/ Inv**) October

YoY % Chg

MoM % Change

Boulder 30.0% 78.0 % 32.3 %Boulder AD 22.7% 35.4 % (22.1)%Erie 29.4% 29.6 % 47.1 %Lafayette 39.4% 25.9 % 16.7 %Longmont 29.7% 20.8 % (9.1)%Louisville 46.5% 17.4 % 30.2 %Superior 34.4% 44.4 % 13.4 %Mountains 9.3% (9.9)% 76.0 %Plains 11.4% (2.1)% 5.5 %

Months of Inventory (Implied)Based On -> October Prev. Month 3 Mo. AvgBoulder 2.8 3.8 3.1Boulder AD 4.0 3.1 2.8Erie 2.9 5.0 3.7Lafayette 2.6 2.8 2.6Longmont 3.1 2.9 2.9Louisville 2.1 2.2 2.0Superior 2.3 3.2 2.5

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City of BoulderSingle Family Houses

(detached dwellings)

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Inventory

• Only 187 homes were on the market last month.

• Inventory was 33% below last October and 54% lower than the long term average.

• Although selection is low, attractive homes can still be found in inventory. Showings should be set as soon as possible and buyers need to be prepared to make fast decisions.

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Sales Volume

• 68 homes closed last month, the most closings during October since 2006.

• This represents a 31% increase in sales volume compared with last year and 20% higher than the long term average for October.

• Closings typically occur 30-45 days after an offer is accepted. Last month’s historic flooding likely pushed some closings into October.

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Absorption

Note: Absorption is the percentage of inventory sold in a given period of time.

• Absorption last month reached 30%, the highest October since at least 2004. Again, this was likely driven by the flood.

• In this market, attractive properties are available for only a few days. Buyers, work with your agent to see property and educate yourself as early as possible. Even if you don’t write an offer, it will increase your confidence in making offers in the future. Expect multiple bids.

• Sellers can continue to safely test the market with slightly higher prices than the most recent sales. Contracts can and should be structured for expected low appraisals. See your agent for more details.

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Days to Offer

• This chart shows average days to offer for deals that closed during the month.

• This year has tracked well below the long term average and dipped as low as 18 during July.

• Deals that closed during October averaged only 38 days on market before receiving an acceptable offer, or 47% below the long term average for the month.

• Although the 4th quarter is typically a slow time for Boulder real estate, this year is different. Buyers should be prepared to act quickly when new listings appear. Sellers should structure their listings and negotiate accordingly.

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Estate Sale Bargain Bin

4385 Chippewa Drive

Key Statistics: 3 Bed, 2 Bath1,630 SQFT

Sold: 10/8/13

True Days on Market: 57

Sold: $505,000

% of Original Asking : 87.8%

This one needed a ton of work, but it

was priced accordingly. The first

contract fell apart (likely inspection

related) and the second buyer got it

for a bargain. A great price for this

neighborhood.

Gone in 60 seconds

2875 Kenyon Circle


Sold: 10/31/13


Sold: $600,000

% of Original Asking : 100%

Just spectacular; the best schools,

close to the Rec Center, and great

neighborhood. This one had lots of

nice updates and a functional layout,

plus a reasonable size lot on quiet

street. No surprise, it went under

contract almost immediately.

Man Cave, Included

2040 Walnut Street


Sold: 10/22/13

True Days On Market: 51

Sold: $1,020,600


Nice house but the location is

cloistered next to noisy apartment

buildings. It’s an updated historic

home with a carriage house

converted for alternate uses. On the

market two weeks before receiving

an acceptable offer.

Notable House Sales (Click Picture For Detail)

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City of BoulderTown Homes and Condos

(attached dwellings)

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Inventory

• 160 town homes and condos were available for purchase during October. This is the lowest monthly inventory level since we began tracking a decade ago.

• Inventory has been running at intensely low levels throughout the year. Peaking in April this year, it’s currently 61% below the long term average for the month.

• Note: developers do not list full inventory on the MLS to give the illusion of limited supply. Accordingly, the chart may not reflect inventory from new developments such as Northfield Commons, The Peloton, One Penn Place, Uptown Broadway, or others.

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Sales Volume

• 40 units closed last month, down 29% from September and 11% fewer than last year.

• There was an unusual lull during June, otherwise this year presented a fairly typical seasonal pattern.

• Sales volume over the last six and twelve months is up 14.4% and 14.2% from the same period a year ago, respectively.

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Absorption

Note: Absorption is the percentage of inventory sold in a given period of time.

• As with traditional single family houses, absorption for attached dwellings has spiked upwards and remains elevated.

• Last month’s absorption was 22.7%, more than double the long term average for October.

• There are no indications of large amounts of new inventory on the horizon. Most new construction in the City of Boulder is designated for rental only.

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Days to Offer

• Deals that closed during October were available on average for 49 days before receiving an acceptable offer.

• This is 51% below the long term average for the month and part of a continuing pattern of rapid market activity.

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Cash is King

5520 Stonewall Pl #16

Key Statistics: 2 Bed, 2 Bath864 SQFT

Sold: 10/22/13


Sold: $225,591


Want a big discount on a fresh

listing? Cash is king. This unit was

super clean and had nice investment

potential. Not a spectacular location

but vacancies are running below 1%

at the moment. Under contract in 21

days. Boom!

19

Ooh La, La

720 Pearl Street #3b


Sold: 10/7/2013

True Days On Market: 1,000+

Sold: $1,506,400

% of Original Asking : NM

Awesome location, steps from the

heart of downtown. Hard to tell what

happened to the builder on this one.

The project was supposed to be

done more than a year ago.

Technically it sold for more than

asking, but likely due to finishes or

changes in design.

Bankruptcy Fire Sale

3000 Redstone Lane

Key Statistics: 2 Bed, 1 Bath832 SQFT

Sold: 10/25/13


Sold: $271,000

% of Original Asking : 100%

Shanahan Ridge is attractive for

proximity to open space and beautiful

view corridors. Most of the units are

horribly inefficient but that can be

improved. The community is excellent.

This was a bankruptcy sale and under

contract in FOUR days.

Notable Condo Sales (Click Picture for Detail)

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Lessons from the Trenches

• The 4th Quarter is usually bargain season. Not this year. Record low inventory is pushing prices upward and fueling intense bidding wars.

• Negotiation Tip: Sellers should allow ample time for all potential buyers to see the property before considering offers. Good listing agents can use bidding wars to not only obtain maximum price but to negotiate away contract contingencies.

• Strong offers are much more than just about the price. There are many ways a contract element can be used to strengthen your offer. A good buyer’s agent can assist you in increasing your chances of getting the house in a competitive marketplace.

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Read Up! Recent Articles From Our Blog

Image: brett l

Psst. Shop My Buyers and Sellers.

Nuisance Patrol [Due Diligence]

Coming Out [Authenticity]

Fresh Listings, Get ‘Em Hot

Sales Roundup – High End

Seriously, Which Floor? [Analysis]

Sales Roundup – Entry and Investment Grade

Louisville Market Analysis

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Get A Great Deal

• Buying and selling real estate is one of life’s largest financial decisions. Not just an important investment, but where families and friends will gather for many years and memories will be made. Make a smarter decision, get a professional adviser.

• At Realty Unique, we strive to add value and earn our commission. Give us a call. We can advise you on current market conditions, help you find your dream home, or get the most value from the sale of your property.

• We work with many buyers – long time residents and those relocating to Boulder. With our unique buyer preview service, we make it easy to track the market from near or far. Call for more details.

boulder real estate market conditions - november 2013

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