the august silver fern report (boulder real estate)
DESCRIPTION
A market analysis of real estate conditions in Boulder, Colorado.TRANSCRIPT
THE SILVER FERN REPORT: BoulderAn analysis of real estate market conditions in
Boulder, Colorado
August, 2011
Phone: 303 586 1241 | www.silverfernhomes.com
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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
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The Team
Osman 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, CRS and SRES. 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, landscaping and home improvement. Dallice is also a keen photographer and student pilot. Email: [email protected] ph: 303.746.6765
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
Silver Fern donates 5% of every commission to local non-profits.
2009Boulder 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
2008Archway 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
2010Boulder 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
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Market ConditionsRegional Overview
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Market Recovery (Maybe Just Less Bad)?
• Inventory is lower and sales volume is now higher in the majority of Boulder area markets.
• Longmont, Boulder AD, and Mountain areas have seen the largest percentage increase in sales activity on a Year over Year (YoY) basis.
• Inventory has fallen the most in Erie (23.3%), Louisville (18.5%), and the Plains (17.5%) YoY.
• Louisville is once again leading the region with over 30% absorption.
Inventory July 2011YoY
% ChgMoM
% Change
Boulder 490 (7.0)% (1.4)%
Boulder AD 486 4.7 % (8.8)%
Broomfield 169 (4.5)% (7.7)%
Erie 138 (23.3)% (4.8)%
Lafayette 158 1.3 % 0.0 %
Longmont 492 (2.6)% (10.1)%
Louisville 88 (18.5)% (8.3)%
Superior 50 (12.3)% (12.3)%
Mountains 432 (10.6)% 1.2 %
Plains 362 (17.5)% (0.5)%
Sales Volume July 2011YoY
% ChgMoM
% Change
Boulder 58 18.4 % (43.1)%
Boulder AD 51 41.7 % (10.5)%
Broomfield 23 4.5 % (48.9)%
Erie 19 (20.8)% (40.6)%
Lafayette 24 14.3 % 4.3 %
Longmont 102 64.5 % (2.9)%
Louisville 29 45.0 % 61.1 %
Superior 12 (14.3)% (29.4)%
Mountains 34 142.9 % 17.2 %
Plains 33 3.1 % (10.8)%
Absorption(Sold/ Inv**) July 2011
YoY % Chg
MoM % Change
Boulder 11.7% 20.7 % (40.5)%
Boulder AD 9.6% 23.1 % (10.7)%
Broomfield 12.6% (5.7)% (47.8)%
Erie 13.1% (2.3)% (40.6)%
Lafayette 15.2% 8.5 % (0.9)%
Longmont 18.6% 50.7 % (7.8)%
Louisville 30.2% 64.6 % 56.1 %
Superior 21.1% (3.8)% (20.7)%
Mountains 8.0% 162.8 % 1.6 %
Plains 9.1% 19.8 % (12.3)%
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Months of Inventory
• Five to six months of available inventory is considered healthy for most real estate markets.
• Many local markets fall below the 6 month threshold, including Broomfield, Erie, Longmont, Louisville, and Superior.
• Superior has the lowest inventory, with less than than four months of supply of available properties.
• Boulder, Boulder AD, and Lafayette show the highest inventory levels of regional markets.
Months of Inventorybased on average sales over a 3 mo. period
0
2
4
6
8
10
Boulder Boulder AD Broomfield Erie Lafayette Longmont Louisville Superior
www.silverfernhomes.com data: BARA
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City of BoulderSingle Family Houses
(detached dwellings)
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Inventory Dips, Now Lower than Average
• There were 490 houses on the market in July.
• After peaking early this year, inventory has dropped below the long-term average.
• As of mid August, 455 houses remain on market, 14% of which are under contract.
• The higher end remains ripe with listings, with 109 available houses valued above $1MM and only 7% under contract.
Boulder Inventory
275
325
375
425
475
525
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average ('04-'09) 2010 2011 Data: BARA© Silver Fern Homes
Make a Smart Real Estate Decision. www.silverfernrealty.com
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Sales Volume Drop, Still Better Than Last Year
• As expected, after a heated June, sales volume was horrid in July.
• There were only 58 closings, which was 18% better than last year but remains 39% below the long term average.
• Still, the market may be recovering; eight out of ten areas covered by the Silver Fern Report saw an increase in sales volume during July compared with last year (see slide #6).
Boulder Sales Volume
0
25
50
75
100
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average ('04-'09) 2010 2011 Data: BARA© Silver Fern Homes
Our Realtors Can Help You Understand The Market and Negotiate A Great Deal
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Sales Volume Still Keeping Pace
• During the last six months, 353 houses sold.
• Market performance has been a far cry from volume achieved during 2005-2007. Yet, given global economic uncertainty, struggling national economy, and other bearish factors - this is not a terrible performance – even suggestive of reaching a proverbial market bottom.
Boulder Home Sales VolumeLast Six Months
0
100
200
300
400
500
600
2005 2006 2007 2008 2009 2010 2011
Sales Volume Data: BARA© Silver Fern Homes
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Absorption Drops, Peak Season Ends• As anticipated,
absorption has begun sliding for the year, typical for the season, as buyers and sellers are withdrawing from the market.
• Absorption fell from 19.6% in June to 11.7% in July, a dramatic drop. The long term average drop during this same period is much smaller, from 21.7% to 19.0%. Note: Absorption is the percentage of inventory sold in a given period of time.
Boulder Inventory Absorption
0%
5%
10%
15%
20%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average ('04-'09) 2010 2011 Data: BARA© Silver Fern Homes
Expert Advice, No Happy Talk. www.silverfernrealty.com
Peak Absorption (Avg.)
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Historic Charm
2242 16th St
Key Statistics: 3 Bed, 3 Bath2,390 SQFT
Sold: 8/5/11
True Days On Market: 421
Sold: $1,020,000
% of Original Asking : 73%
The high-priced tier continues to struggle. The stylish, expert renovations did not protect this property from three attempts to sell with three price reductions over the course of three years.
Notable SalesEntry-Level Potential
908 Quinn St
Key Statistics: 3 Bed, 2 Bath912 SQFT
Sold: 8/15/11
True Days on Market: 94
Sold: $285,000
% of Original Asking : 100%
If you’re willing to do some work, there are some great bargains at the entry-level in Boulder. This current rental in Aurora Terrace backs to Bear Canyon Creek and boasted a rare under $300,000 price tag.
Long-Term Investment
3725 Cayman Pl
Key Statistics: 4 Bed, 3 Bath3,352 SQFT
Sold: 8/2/11
True Days on Market: 256
Sold: $550,000
% of Original Asking : 88%
It’s a good think these owners were in it for the long haul. Purchased for $270,000 in 1997, practically everything has been upgraded. After four price reductions and one failed contract, their investment paid off.
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City of BoulderTown Homes and Condos
(attached dwellings)
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Inventory Up Slightly
• 486 condos and townhomes were on the market in July, a 9% drop from June and in-line with seasonal expectations.
• Inventory in July was about 5% higher than last year.
• 454 units are currently on the market, 16% are under contract.
• Attached dwellings are more affordable. There are 136 units in inventory priced below $200,000, more than half offer at least 2 bedrooms.
Boulder Attached Dwelling Inventory
300
350
400
450
500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average ('04-'09) 2010 2011 Data: BARA© Silver Fern Homes
Note: developers do not list full inventory on the MLS. True inventory is substantially higher.
Serious Negotiation. www.silverfernrealty.com
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Sales Volume Better than Last Year
• 51 units sold in July, down about 11% from June but still representing a 42% increase from last year.
• As of late August, 41 units have closed. We anticipate close to 50 units will sell during the month.
Boulder Attached Dwelling Sales Volume
0
20
40
60
80
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average ('04-'09) 2010 2011 Data: BARA© Silver Fern Homes
It's Your Money. www.silverfernrealty.com
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Absorption Peaked Early, But Stable
• Absorption has been far more stable this year than during 2010, largely due to the lack of artificial market stimulation (incentives).
• On average, absorption rises from January through July. This year, it peaked early and has been declining since May.
• Absorption was 9.6% in July, down from 10.7% in June. Average absorption for July is 18%.
Note: Absorption is the percentage of inventory sold in a given period of time.
Boulder Attached Dwelling Absorption
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average ('04-'09) 2010 2011 Data: BARA© Silver Fern Homes
Silver Fern Realtors Can Help You Understand The Market and Negotiate A Great Deal
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Luxury Spaces
1701 15th St #204
Key Statistics: 3 Bed, 2 Bath2,083 SQFT
Sold: 8/12/11
True Days On Market: 155
Sold: $1,040,000
% of Original Asking : 90%
In 2010, Unit 204 was on the Landmarks of the Future Tour, and recently won a Crystal Award from the Colorado chapter of the American Society of Interior Designers.
Notable SalesVillage at Uptown Broadway
4555 13th Street 2-B
Key Statistics: 1 Bed, 2 Bath957 SQFT
Sold: 8/5/11
True Days on Market: 505
Sold: $265,000
% of Original Asking : 100%
This condo is pretty small, but it
has lots of possibilities if you’re
looking for attached storefront or
studio space in the urban area of
NoBo.
The Scarcity Principle
1850 Yaupon Ave C-4
Key Statistics: 2 Bed, 3 Bath1,216 SQFT
Sold: 8/1/11
True Days on Market: 370
Sold: $336,800
% of Original Asking : 104%
Porchfront Homes advertised this
Greenstones condo as the last 2
bedroom to be built. This cash
deal was over asking price in three
days (closing took place a year
later).
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Lessons from the Trenches
• Sellers should carefully evaluate
offers and consider potential counters. The “no response” option is not usually a good choice, particularly at the higher-end of the market where few properties are under contract.
• Reasonable responses to offers and secondary negotiations over inspection issues are more likely to achieve a favorable response. Given the buyer’s market, newly discovered issues repairable at a reasonable cost should be addressed by sellers.
• Nobody respects a door mat. Buyers and sellers need clear expectations for a normal range for negotiated discounts. Luckily, data does not lie. Consider the median negotiated discount for comparable properties.
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Read Up! Recent Articles From Our Blog
• Back in Da
Club [Peloton Market Update]
• The Jury Will Disregard The Last Statement [Selling It]
• It’s Now Cheaper to Buy [Buy vs. Rent]
• Slash and Burn [Price Drops]
• Notable Sales in Broomfield [Analyze This]
• A Cat On The Lam [The Business]
Image: brett l
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Get A Great Deal
• At Silver Fern, we provide personalized attention and strive to negotiate great deals.
• Buying or selling real estate is one of life’s largest financial decisions. You deserve a professional adviser.
• Silver Fern Realtors add value and strive to earn their commission. Give us a call. We can advise you on current market conditions, help you find the right home, or get the most value from your existing property.
• We work with buyers relocating to Boulder, and with our exclusive buyer preview service, we can facilitate far beyond the traditional process.