the silver fern report - january 2011

THE SILVER FERN REPORT: BoulderAn analysis of real estate market conditions in

Boulder, Colorado

January, 2011

Phone: 303 586 1241 | www.silverfernhomes.com

2TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011

www.silverfernhomes.com ph: 303 586 1241

Legal

This presentation was prepared exclusively for the benefit and use of the Silver Fern Homes clients in order 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 Silver Fern Homes. This presentation reflects our views of prevailing market conditions on this date, which are subject to change. Silver Fern Homes 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. Silver Fern Homes 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.

Boulder, ColoradoPhone: 303 586 1241

www.silverfernhomes.com

“Our goal is help you get the most value from your unique real estate situation. We offer our clients the latest market information, straight forward advice and the highest standards of service.”

- Osman Parvez, Co-Founder

4TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


The TeamOsman Parvez: Co-Founder and Associate Broker. Osman’s professional experience includes investment analysis, real estate development, and investment banking. He also loves being in the wilderness and has research experience studying the impacts of climate change. Osman holds an MBA in finance and a B.S. in Biology Email: [email protected] ph: 303.746.6896

Dallice Tylee: Co-Founder and Managing Broker. She holds a GRI and CRS. Dallice is also a Certified Negotiation Expert, EcoBroker, and Accredited Staging Professional. A native of New Zealand, Dallice's attention to detail and thorough, disciplined approach comes from previous professional experiences in health sciences. She is passionate about interior design and landscaping. Email: [email protected] ph: 303.746.6765

Crystal Callipari: Associate Broker. Crystal’s experience as a real estate investor and home builder provides unique insight on buying, selling and marketing strategies. Prior to joining Silver Fern, she was a frequent client of the firm, giving her perspective on the quality of service clients should expect from their broker. Crystal has lived in Colorado for over 13 years with her husband. She has two grade school aged children, one of whom is a competitive figure skater and the other a black belt in martial arts. Email: [email protected] ph: 720.841.2701

Robbin Merta: Licensed Assistant. She has a B.F.A. in graphic design and experience owning several small businesses. Her strong interest and experience in home renovation, both personally and professionally, is a practical complement to the Silver Fern team. She is a stained glass artist who also enjoys volleyball, cooking and martial arts. Email: [email protected] ph: 303.993.6139

mailto:[email protected]




Spotlight: Circle of Care

Circle of Care is dedicated to providing accessibility to the arts, education and social/civic opportunities for the homebound elder, senior facility residents and older adults with physical, cognitive and financial challenges. Learn More

Silver Fern donates 5% of every commission to local non-profits.

2009 Recipients: Boulder Shelter for the HomelessColorado Chautauqua AssociationGreenwood Wildlife Rehabilitation SanctuaryBig Brothers Big SistersI Have a Dream FoundationCircle of CareGrowing GardensIntercambio de Comunidades Wildlands RestorationBoulder Emergency SquadBoulder Day NurseryCitizens' Community Television

2008 Recipients:Archway Wildlife RehabilitationAssociation for Community LivingBig Brothers, Big SistersBoulder Humane SocietyBoulder Shelter for the HomelessFront Range Center for Assault PreventionGreenwood Wildlife Rehabilitation CenterI Have a Dream FoundationCircle of CareThe Medicine Horse Program

2010 Recipients: Boulder Community Hospital FoundationCircle of CareBig Brothers, Big Sisters of ColoradoHumane Society of Boulder ValleyMedicine Horse ProgramFront Range Center for Assault PreventionImagine! FoundationGrowing GardensBoulder Day NurseryBoulder Valley Rotary Community FoundationIntercambio de ComunidadesI Have a Dream FoundationBouldeReachBoulder Shelter for the Homeless

http://www.circleofcareproject.org/

6TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


City of BoulderSingle Family Houses

(detached dwellings)

7TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


House Inventory Approaches Normal

• Inventory levels finished the year in relative “normal” territory.

• There were 297 houses on the market in December, a few less than last year.

• As of January 20th, there are 367 houses available of which 41 are under contract (11%).

Boulder Inventory

275

325

375

425

475

525

575

625

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Average ('04-'08) 2010 2009 Data: BARA© Silver Fern Homes

Make a Smart Real Estate Decision. www.silverfernrealty.com

8TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


House Sales Volume Still Anemic

• Volume remains well below the long term average.

• 38 houses sold in December, about 24% below the long term average.

• There is little reason to expect volume to rise markedly this year; mortgage rates are above historic lows and underwriting standards remain unreasonably difficult.

Boulder Sales Volume

0

25

50

75

100



Our Realtors Can Help You Understand The Market and Negotiate A Great Deal

9TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


House Sales Volume Mixed Year

• Total volume was higher than the preceding year but most of the gain occurred in the 1st half. The second half of the year was actually down 15% from the same period a year before.

• Sales would need to rise massively to return to 2005-2006 levels.

Boulder Home Sales VolumeLast Twelve Months

0

100

200

300

400

500

600

700

800

900

1000

2005 2006 2007 2008 2009 2010

Sales Volume Data: BARA© Silver Fern Homes

+10.3%

Boulder Home Sales VolumeLast Six Months

0

50

100

150

200

250

300

350

400

450

2005 2006 2007 2008 2009 2010


-14.9%

10TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


House Absorption Rate Still Low and Erratic

• Absorption is the percentage of property that sells from available inventory.

• Last month, absorption was 13.8% and about the same as last year.

• If this year’s pattern is typical, absorption will begin to rise in January and peak in June.

Boulder Inventory Absorption

0%

5%

10%

15%

20%



Expert Advice, No Happy Talk. www.silverfernrealty.com

11TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


Sold vs. Failed Listings

• This chart compares sold listings to those that have expired or were withdrawn by the seller (detached dwellings only).

• Sold is grey, failed is blue, and the ratio between is red.

• The ratio fell steadily since 2005 and bounced up slightly last year.

• Comparing the full year (top chart) to the six month (lower chart), it’s clear that the bounce occurred primarily in the first half of the year.

• An usually large number of listings expired or were withdrawn in the 2nd half of both 2009 and 2010.

Analysis

Sold vs. Failed ListingsFull Year

City of Boulder

0

200

400

600

800

1000

1200

2005 2006 2007 2008 2009 2010

00.20.40.60.811.21.41.61.82

Sold Failed Ratio

Sold vs. Failed Listings Last Six MonthsCity of Boulder

050

100150200250300350400450500

2005 2006 2007 2008 2009 2010

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Sold Failed Ratio

12TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


Market Disruption in Action

• This chart shows the relationship between the first and second halves of the year.

• The green is the 1st half, orange is the 2nd half, and the black line is the ratio.

• There was an unusually large volume of sales during the 2nd half of ‘09 and the first half of ‘10. This period coincides with federal tax incentives to home buyers.

• Typically, the ratio runs just under 1.2, but in 2009 it fell below 0.8 before bouncing back to about 1.3.

Analysis

Sold ListingsCity of Boulder

0

100

200

300

400

500

600

2005 2006 2007 2008 2009 2010

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1st Half 2nd Half Ratio

13TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


Modern and High End

1676 Sunset Blvd

Key Statistics: 4 Bed, 6 Bath6,790 SQFT

Sold: 11/15/10

Days On Market: 727

Sold: $2,785,000

% of Original Asking : 63%

Such a beautiful house, there isn’t space to describe it. Clean, contemporary design and very sophisticated. It must have been painful to construct this gem at the peak of the market, only to partially recover the cost when the market turned.

Notable SalesPowerlines Matter

755 Grape Ave


Sold: 12/07/10

Days on Market: 175

Sold: $538,900


The market for homes on this street are impacted by power lines. What might have seemed like a bargain can become difficult to sell later. This one was purchased in 2006 and resold 4 years later at a substantial loss.

Martin Acres Land Grab

3655 Martin Drive

Key Statistics: - Bed, - Bath4,069 SQFT

Sold: 10/01/10

Days on Market: 194

Sold: $400,000


Used a church, this vacant property sits on two 7,000 SQFT lots. The seller used wishful thinking to set the asking price at $550K. They missed the summer selling season and accepted a much lower offer in the fall.

14TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


City of BoulderTown Homes and Condos

(attached dwellings)

15TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


Town Home & Condo Inventory About Normal

• 345 properties were available for sale in December, about the same as last year.

• Inventory over the year was below the long term average, but this excludes certain developers who do not list full inventory.

• A large amount of mid to upper priced inventory is expected to be available this spring as the Peloton begins marketing 2 unsold buildings.

• As of Jan 20th, there are 374 active listings of which 31 are under contract (8%).

Boulder Attached Dwelling Inventory

300

350

400

450

500



Note: developers do not list full inventory on the MLS. True inventory is substantially higher.

Serious Negotiation. www.silverfernrealty.com

16TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


Town Home & Condo Sales Volume Struggling

• 38 properties sold last month, the same as the year before.

• The market cooled dramatically in July and remained flat for the rest of the year. This was likely caused by the “move forward” affect of expired tax credits.

Boulder Attached Dwelling Sales Volume

0

20

40

60

80



It's Your Money. www.silverfernrealty.com

17TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


Town Home & Condo Sales Volume Struggling

• The top chart shows sales volume for the full year going back to 2005. The lower chart is the last six months of the year.

• Over the past six and twelve months, sales have been down 32% and 3%, respectively.

• The dramatically lower 2nd half of 2010 does not bode well for the market going forward.

Boulder AD Sales VolumeLast Twelve Months

0

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010


Down 3.2%

Boulder AD Sales VolumeLast Six Months

0

100

200

300

400

500

2005 2006 2007 2008 2009 2010


Down 32.4%!!

18TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


Town Home & Condo Absorption

• The absorption rate was 9.6% in December, the third straight month of rising levels.

• Last year, absorption peaked in March and April. In the absence of stimulus activity, this is unlikely to occur this year.

• We recommend that sellers have their property listed by March or early April. This avoids testing the market with a too high price and leaves plenty of time to sell into the peak season.

Boulder Attached Dwelling Absorption

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%



Silver Fern Realtors Can Help You Understand The Market and Negotiate A Great Deal

19TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


The High End Is Alive

3120 Corona Trail#301


Sold: 10/29/10

Days On Market: 317

Sold: $152,900


It’s not easy to find a 2 bed, 2 bath condo in Boulder at this price. The location is improving and this should prove a good long term investment. Disclosure: SFH represented the buyer.

Notable SalesOne Penn Plaza

2801 Pennsylvania Ave#204


Sold: 12/15/10

Days on Market: 265

Sold: $550,000


Beautifully finished, solid

construction, and well appointed.

The location is improving but still

challenged, a fact reflected in the

large discount from asking.

Rebuilt but Tough to Sell

1201 Balsam Ave #302

Key Statistics: 1 Bed, 1 Bath749 SQFT

Sold: 11/12/10

Days on Market: 600

Sold: $332,000


These condos were originally built

in the 1950’s and recently

completely remodeled. Nice

location, but fronts a very busy

street.

20TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


High End Inventory Overhang

• This chart shows sold (green) and withdrawn/expired (grey) listings by year. The ratio is the red line. The listings are priced between $1,000,000 and $2,000,000.

• There remains a large number of sellers sitting on the sidelines. The majority of unsold property will, at some point in the near future, return to market.

• This market pattern suggests at least another 12 to 24 months of buying opportunity before the market for higher end property recovers and begins to rise in value.

Price Range Analysis

Sold vs. Withdrawn/Expired ListingsCity of Boulder, $1,000,000 to $2,000,0000

0

50

100

150

200

250

2004 2005 2006 2007 2008 2009 2010

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Sold Withdrawn/Expired Ratio data: Iresis

21TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


Lessons from the Trenches

On Financing:

• Unbelievably, underwriting has gotten more difficult. Even exceptionally qualified buyers are having their patience tested by overzealous loan processors. Sellers should be patient with underwriting driven delays.

On Showings:

• Check for interior condition before removing ones shoes. Dog pee is gross, DAMHIK.

• Student tenants in Boulder have a tendency to be sleeping in the mid-afternoon. It’s awkward and uncomfortable to show an occupied house, and surprising to walk into a bedroom with a sleeping college student. If sellers (or tenants) cannot leave due to medical or other personal reasons, buyers should be forewarned.

22TH

E S

ILV

ER

FER

N R

EPO

RT :

JA

NU

AR

Y 2

011


Get A Great Deal

• Buying or selling a home is one of life’s largest financial decisions. Shouldn’t you have a professional adviser?

• Silver Fern Realtors add value and earn their commission. The sooner we get started, the more we can help.

• Give us a call. We are real estate experts. We can advise you on current market conditions, help you find the right home, and negotiate the best possible deal.

• We work with buyers and sellers throughout Boulder County and beyond, including international relocations.