the silver fern report - may 2010

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

Boulder, Colorado

May, 2010

Phone: 303 586 1241 | www.silverfernhomes.com

Real Estate AdvisersBoulder, Colorado

Phone: 303 586 1241www.silverfernhomes.com

Make a Smarter Real Estate Decision

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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.

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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 is 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

Mia DeLong: Associate Broker. Mia loves historic home restoration and a creative eye for home improvement. She has six years of real estate experience and brings expertise from her experience in product management in the service industries. She holds a BBA in Marketing from UW-Wisconsin and her interests include running, biking, cooking, reading and photography. Email: [email protected] ph: 303.717.2241

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: Administrative Assistant. She has a B.F.A. in graphic design, experience owning several small businesses, and is studying for her Realtor's license. 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

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BoulderSingle Family Houses

(detached dwellings)

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Sales Volume

• 66 homes sold in April, up 69% from last year.

• Remains below the historical average.

• Up 59% over the past six months, reversing a 5 year trend.

• Much of the sales volume recovery is attributable to the stimulus of tax credits.

Boulder AD Sales VolumeLast Six Months

10

60

110

160

210

260

310

2005 2006 2007 2008 2009 2010

Sales Volume Data: BARA© Silver Fern Homes

Boulder Attached Dwelling Sales Volume

0

20

40

60

80

100

120

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

Average 04-08

2009

2010

Data: BARA

© Silver Fern Homes

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Inventory

• Continues to track below last year. 506 homes available for purchase in April, 8% lower than the year before.

• Remains well above historical average.

• Selection remains tight below $500,000.

Boulder Inventory

300

350

400

450

500

550

600

650


Average ('04-'08)

2009

2010

Data: BARA© Silver Fern Homes

25% above average

InventoryBoulder Houses

0 10 20 30 40 50 60 70

$300 to 350K

$350 to 400K

$400 to 450K

$450 to 500K

$500 to 600K

$600 to 700K

$700 to 800K

$800 to 900K

$900 to 1MM

$1.0 to 1.5MM

$1.5 to 2.0MM

$2.0 to 2.5MM

$2.5 to 3.0MM

$3MM+

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Percent Under Contract + Months of Inventory

• The top chart (green bars) shows percentage under contract by price range on May 12th.

• The bottom chart (gray bars) shows months of inventory based on 1st quarter sales and inventory on May 12th.

• The entry level remains the tightest segment of the Boulder market. There is a glut of inventory between $800,000 and $900,000, and at prices in excess of $1,000,000.

Percent Under ContractBoulder Houses

0% 10% 20% 30% 40% 50% 60%

$300 to 350K

$350 to 400K

$400 to 450K

$450 to 500K

$500 to 600K

$600 to 700K

$700 to 800K

$800 to 900K

$900 to 1MM

$1.0 to 1.5MM

$1.5 to 2.0MM

$2.0 to 2.5MM

$2.5 to 3.0MM

$3MM+

Months of Inventory Boulder Houses

0 10 20 30 40 50 60 70

$300 to 350K

$350 to 400K

$400 to 450K

$450 to 500K

$500 to 600K

$600 to 700K

$700 to 800K

$800 to 900K

$900 to 1MM

$1.0 to 1.5MM

$1.5 to 2.0MM

$2.0 to 2.5MM

$2.5 to 3.0MM

$3MM+

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Northfield Commons

3159 Ouray Street

Key Statistics: 3 Bed, 3 Bath4,009 SQFT

Sold: 5/05/10Days On Market: 335Sold: $781,400Percentage of Original Asking : 97%

Proof that Boulder buyers like new construction too, this green built luxury home sold at near asking after about a year on market. One of several during the last 30 days at Northfield Commons.

Notable Sales

Dakota Ridge

4967 10th Street


Sold: 4/19/10Days on Market: 84Sold: $515,000Percentage of Original Asking : 99%

The sellers of this house bought in 2007 for $480,000. After finishing the basement they likely did not break even, highlighting a potentially weak market at Dakota Ridge.

Mapleton Hill

437 Pine Street



A stellar location, historic charm, and beautiful remodel couldn’t help this house overcome the big mistake of overpricing. It went through several reductions and a long period on market before finding a buyer.

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BoulderTown Homes and Condos

(attached dwellings)

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Sales Volume

• 80 town homes and condos sold in April, up 78% from the year before.

• Sales volume is closely tracking the historical average this year.

• Over the last six months, sales are up 50% from the year before, reversing a 4 year trend.

• Tax credits clearly stimulated the local market. Going forward, unclear if the recovery will be sustainable.

Boulder AD Sales VolumeLast Six Months

10

60

110

160

210

260

310

2005 2006 2007 2008 2009 2010

Sales Volume Data: BARA© Silver Fern Homes

50% Increase

Boulder Attached Dwelling Sales Volume

0

20

40

60

80

100

120


Average 04-08

2009

2010

Data: BARA


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Inventory

• 497 town homes and condos available for purchase in April, 2% below last year.

• Generally in-line with recent seasonal levels and the historical average.

• Selection is higher at the entry level, with big differences between price tranches.

Boulder Attached Dwelling Inventory

300

350

400

450

500

550

600


Average 04-08

2009

2010

Data: BARA


Note: several developers are not listing full inventory on the MLS. True inventory is substantially higher.

InventoryAttached Dwellings

0 10 20 30 40 50 60

$100 to $150K

$150 to $200K

$200 to $250K

$250 to $300K

$300 to $350K

$350 to $400K

$400 to $450K

$450 to $500K

$500 to $550K

$550 to $600K

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Percent Under Contract + Months of Inventory

• The top chart (orange bars) shows percentage under contract by price range on May 12th.

• The bottom chart (blue bars) shows months of inventory based on 1st quarter sales and inventory on May 12th.

• The entry level remains the most active segment of the market, notably between $150,000 and $250,000.

Percent Under ContractAttached Dwellings

0% 10% 20% 30% 40% 50% 60%

$100 to $150K

$150 to $200K

$200 to $250K

$250 to $300K

$300 to $350K

$350 to $400K

$400 to $450K

$450 to $500K

$500 to $550K

$550 to $600K

Months of InventoryAttached Dwellings

0 2 4 6 8 10 12 14 16 18 20

$100 to $150K

$150 to $200K

$200 to $250K

$250 to $300K

$300 to $350K

$350 to $400K

$400 to $450K

$450 to $500K

$500 to $550K

$550 to $600K

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The Arette

1077 Canyon Blvd, #302


Sold: 4/19/10Days On Market: UnknownSold: $2,775,000Percentage of Original Asking : Unknown

At over $1,000 per SQFT, the sale price may set a record. One of two over the last thirty days at The Arette.

Boulder: Notable Sales

Landmark Lofts

2810 E. College Ave, #302


Sold: 4/26/10Days on Market: 1,049Sold: $430,000Percentage of Original Asking : 96%

Originally listed as under contract (during construction), this unit is one of 11 sold at the Landmark Lofts over the past thirty days.

Holiday Neighbr.

1675 Zamia Ave



Purchased for $299,000 in 2005, only cosmetic upgrades. Sets an appreciation benchmark of only 1.1% for comparable units.

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Lessons from the Trenches

• We recently had two deals fall apart due to major undisclosed defects in the property.

• Sellers should disclose all defects on the Seller’s Property Disclosure. Undisclosed problems will likely be discovered by the buyer during inspection and may create distrust and potentially derail the sale.

• It’s a good idea for sellers to have their own property inspection performed. Making this report available to potential buyers demonstrates good-faith and transparency.

• In today’s buyer’s market, sellers must carefully prepare their property for sale. In Boulder, it’s long been the case that listings will sell without addressing even cosmetic defects. This is no longer the case at mid-range and above priced property.

• A detailed analysis of market conditions is now a mandatory prerequisite to setting asking prices. Testing the market with wishful thinking prices results in long marketing periods and eventually, a lower sale price than would have been possible.

Image: Victor B.

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Get A Great Deal

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

• We believe agents should add value and earn their commission. The sooner we get started, the more value we can add.

• Give us a call. The real estate experts at Silver Fern Homes can advise you on current market conditions, help you find the right home, and negotiate the best possible deal. Ph: 303.993.6139.