Tuesday, January 27, 2015

Deception by Design or Community Forum? [Aspenization]

by Osman Parvez

Earlier this week, I attended Why Housing Matters - a community form to discuss housing challenges in Boulder.   

Here are my takeaways. 

- It's challenging to conduct a meaningful workshop for an overflowing amount of participants in the span of a couple of hours. eTown Hall could barely contain all of us. Given the size of the audience and the time constraint, the staff did a great job.  


- Several City Council Members were in attendance. 

Michael Pyatok, the keynote speaker, has an agenda. It's called higher density. Recasting it as "coziness" is insulting Orwellian doublespeak. Boulder is one of the smartest cities in the country. We're not fooled. 

- Building height and occupancy limits have a long history and are widely favored in Boulder.   Read: The Sky is Not the Limit. Semi-private courtyards in dense neighborhoods are very out of character for our city. 

- In the past, city staff have spent large sums on consultants to conduct community processes with obvious, foregone conclusions. I'm specifically talking about the sham that resulted in compatible development regulations. I know, I was there. I attended and participated in those workshops. They were designed with an end-goal and final results deviated little after all that public input. I hope we're not seeing that same game played again, one designed to beguile the public into believing their voices have been heard. 



- Pyatok claimed the median sale in Boulder was $1.2 million. He's wrong. If you're going to fly in a speaker to address issues in our housing market, he should know the facts. The median house transaction in Boulder during 2014 was $685,000 and the median attached
dwelling sold for $284,500. There were $1.7BN in transactions in Boulder last year. You'll find a more detailed analysis on market conditions in the House Einstein research report.  

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- The breakout groups were too large and the time given too short to have an authentic discussion. It felt like a game of beat the clock. Writing community concerns and ideas on a large piece of paper doesn't amount to actually listening.  

- Some of the ideas generated by the public were whimsical and fun, clearly out of the box thinking. If only our current regulations would be so creative.   

- This forum only scratched the surface. The over capacity attendance was a surprise to staff and evidence of mounting concern over housing issues in Boulder.

- As a city, we're caught between a lack of housing supply and our desire to make Boulder more affordable without changing the very character of our community. Even if we were to magically increase housing supply, it would be a short term gain at a long term cost to quality of life. The only tangible benefit would be to our tax base, which in turn allows for continued double digit increases in the city budget. Which entity benefits from that?

The city's goals are ambitious and certainly feel good.  Goals: strengthen current commitments, maintain the middle, create diverse housing choices in every neighborhood, create 15-minute neighborhoods, strengthen partnerships, and enable aging in place.  Too bad they're also impractical given the regulations that currently exist and the inescapable reality of limited supply and high demand for housing in Boulder.  

-  Instead of wishful thinking and promoting an agenda to gut density and height regulations, we should be focused on new and higher efficiency public transportation to neighboring communities like Erie, Longmont and Lafayette. Light rail, BRT, and better bicycle paths to these locations would serve the needs of our region better and functionally increase the worker housing supply without eroding what makes Boulder, Boulder. 

- Aspenization continues. In my opinion, it's unstoppable.   

Did you attend? What did you think?

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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

Monday, January 26, 2015

Martin Acres Index Jumps 12.7% [Analyze This]

by Osman Parvez


Planning to buy or sell Boulder real estate? Pay close attention to market conditions if you want to make a smarter real estate decision. 
House Einstein's Martin Acres Index (MAI) is the average sale price for arms length transactions of basic 3 bedroom, 1 bath ranches in Martin Acres. The data is cleaned for duplicates and other common errors and covers 18 years of market activity. 

Pay attention to the MAI - even if you're shopping for other property types, price ranges, or locations. It's the most uniform neighborhood and property type in Boulder.     

Last year, the index jumped 12.7% and crossed $400,000 for the first time, the second largest historical increase.     

Will 2015 show an even stronger increase? You'll find a detailed analysis and our forecast in the upcoming House Einstein Report. Sign up below. 

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As always, your referrals are deeply appreciated.  

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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

Saturday, January 24, 2015

Community Forum To Take On Housing Challenges!

by Osman Parvez



On Thursday January 22nd, the City of Boulder announced that it will be hosting a community forum called Why Housing Matters! to discuss opportunities and ways to address Boulder's housing challenges. This public forum will give residents a chance to engage in constructive conversations regarding how to best achieve our city's housing goals, while simultaneously upholding our community values.

Participants in the forum will be asked to choose two Housing Boulder goals to discuss in greater detail with their fellow community members. Additionally, members of the five Housing Boulder working groups will be at the forum to listen to the public and their diverse opinions and ideas.

The forum's keynote speaker is award-winning architect Michael Pyatok. He is the principal of Oakland-based architecture firm PYATOK and a professor at the University of Washington. Pyatok is a nationally recognized leader in neighborhood design and affordable housing. Pyatok will speak from 7:30 to 8 p.m. about the ideas generated from small group discussions, as well as provide knowledge of the best and most effective practices from other locations around the country.

Boulder community members are also invited to go to “Pastries with Pyatok” from 8:30 to 11 a.m. on Tuesday, Jan. 27, in the Alfalfa's Market Community Room, located at 1651 Broadway. This will be a great opportunity to chat with Michael Pyatok in an informal setting about his experience and about the issues that Boulder is seeking to address.


The forum will take place on Monday, Jan 26th @ the eTown Hall, 1535 Spruce St.
from 6 to 8 p.m. 


Join the Why Housing Matters! forum on Jan. 26; review the information at www.HousingBoulder.net; sign up for the Housing Boulder email list; and share your ideas using the Inspire Boulder digital town hall.



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As always, your referrals are deeply appreciated.  

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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

Friday, January 23, 2015

This Week's Fresh Listings [Get 'Em Hot]

by Osman Parvez

Fifteen new listings hit the Boulder market this week but only four are worth your time. Let's take a closer look. 




2153 Grove Circle (Link)

Why: Historic and extensively remodeled. Here's what it looked like in 2006 and in 2012. Here's what it looks like today. It's close to downtown. 

Due Diligence: Between 2006 and today the house magically grew 3 SF, the lot lost 700 SF, and it now has one additional bathroom and a two car detached garage. You definitely want to review builder plans, permits, and any related invoices. Goss Grove also has a high student density and plenty of ugly student rental housing. Be sure to check for the neighbors' recycle bins for red cups. 



3995 Martin Drive (Link)

Why: Available entry level free standing houses are extremely rare in Boulder. Martin Acres and Baseline Neighborhood are a hotbed of remodeling activity. This one is south facing and on a decent size lot. As of this writing, there are four offers on this house and I'm representing one of the potential buyers.  

Due Diligence: Jacks are holding up the kitchen of this house and the electrical system needs work.   

Update:  3995 Martin is now under contract.  All four offers were over asking. 



2031 16th Street (Link)

Why: Downtown commercial space is severely limited. You're looking at a respectable building with decent finishes, 3 offices, bull pen, shower, conference room, filing room, kitchen and storage. It's only a block or so from the Pearl Street Mall. Buy or lease. 

Due Diligence: Historic buildings are fraught with issues and require more extensive inspections. Maintenance and repairs are also more challenging and the city keeps a close watch over remodeling/expansions.  



901 Hawthorne Ave (Link)

Why: West of Broadway, large lot, and relatively recent construction. Large family house with a solid layout.  

Due Diligence Tip: The sellers spent $130K on remodeling but in my opinion, some of the finishes are starting to look a little dated. But it's mostly cosmetic. If you're concerned with EMF, be sure to check the distance to the transmission lines on Grape Street. 


If you'd like to see any of these houses or any other property in Boulder, call me at 303.746.6896.  You can also click HERE to schedule an appointment. 

p.s. Inventory has finally started to rise. It's not even close to "normal" levels but we're seeing the typical seasonal pattern. Buyers can expect more selection and more competition for the most desirable properties. 

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As always, your referrals are deeply appreciated.  

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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

Thursday, January 22, 2015

State of the City | Boulder [Watch It]

by Osman Parvez
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Boulder unveiled it's State of the City video yesterday.   Even if you've lived in Boulder for decades, it's worth watching to get a sense of our accomplishments, initiatives and future trajectory. 



My only comment is that the city seems to put a lot of effort into managing the message on issues such as municipalization and affordable housing.   It's telling. 
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The next Boulder Real Estate Meetup is TONIGHT January 22nd.   Our topic is Best Practices for Bidding Wars.  Learn more and RSVP HERE



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You can also like our Facebook page or follow us on Twitter.

As always, your referrals are deeply appreciated.  

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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

Monday, January 19, 2015

Bidding Wars, Opportunity Cost and Tricky Agency Agreements [Meetup]

by Osman Parvez
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Bidding wars are common in Boulder real estate.   If you've been in the market during the last year or two, you know what I'm talking about.  Priced right, homes in certain locations draw multiple offers and often exceed asking.    

A transparent market benefits the consumer.   Too bad it doesn't exist. In Boulder, you're dealing with an unequal playing field.   Market participants have differing access to information. Realtors have varying skill levels.   

If you're planning to buy or sell this year, you don't want to miss this month's Boulder Real Estate Meetup. It's this Thursday, January 22th at 7pm, RSVP below. 

Best Practices for Bidding Wars is our topic.  This is a high signal to noise event. No sales pitch, no hand waving.  The Boulder Real Estate Meetup is a knowledge and learning opportunity. 

Here's what we'll be discussing. 

  • Offer Packet Components
  • How To Strengthen Your Offer (Legally)
  • Pocket Deals
  • Buyer Opportunity Costs
  • Realtor Exclusive Agency Agreements - What to Watch Out For
  • Buyer And Seller Negotiable Contingencies 
  • Alternative Search Strategies
  • Seller Risks Including Mismanaged Listings
  • How To Properly Run a Bidding War
  • Fair Housing Related Risk
  • The Last Real Estate Cycle
  • ...And Of Course, Market Conditions


Join us! 
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The next Boulder Real Estate Meetup is January 22nd.   Our topic is Best Practices for Bidding Wars.   RSVP HERE



---
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Want to get blog updates via email?  Click HERE.       
Ready to buy or sell?  Schedule an appointment or call 303.746.6896. 
You can also like our Facebook page or follow us on Twitter.

As always, your referrals are deeply appreciated.  

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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

image credit:  joiseyshowaa

Sunday, January 18, 2015

Need a Short Term Rental in Boulder?

by Osman Parvez



So you're moving to Boulder and planning to buy. Want my advice? Make a smarter real estate decision and rent first.     

Renting takes the pressure off. It allows you to get to know neighborhoods and you'll better understand market conditions. Of course, you'll have to deal with a double move. Plus, the rental market is even tighter than the buying market.   It's hard to sift the wheat from the chaff from afar. 

One solution is to rent at a newer development. They're nicely finished, energy efficient, and well designed. All offer shorter term leases (usually 6 months) and have systems to allow you to end the lease early without incurring draconian penalties.   

Here's how current availability shapes up at some of Boulder's newest developments. If you're an investor, you will also want to pay attention to this chart. 

Demand varies dramatically by model and price, so do your homework before you sign the lease. You want the one that is the most easy to turn around when you find the right property to purchase.   

Don't know what's in demand and what's not? We can help. If you're on our research list, you'll get a breakdown of cost and availability by model/type in this month's research report. Use this information to guide you towards choosing the right short term rental.  

Oops - not on our research list? Sign up below. 

Note: At Realty Unique, we don't take a fee from facilitating rentals

Why do we do it? Because it's an independent, unbiased opinion on the condition of the property and allows our relocation clients to feel more confident when renting from afar. It's a taste of our real estate advice and an example of the quality of our work. As a relationship building exercise, it also usually leads to representing the client in the eventual purchase or sale of real estate in Boulder. 


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The next Boulder Real Estate Meetup is January 22nd.   Our topic is Best Practices for Bidding Wars.   RSVP HERE



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You can also like our Facebook page or follow us on Twitter.

As always, your referrals are deeply appreciated.  

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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

Friday, January 16, 2015

The Risk of Municipalization [Due Diligence]

by Osman Parvez

Ever since the movement began to create a municipal electric utility in Boulder, I've received a steady stream of emails from concerned clients. From a real estate investment perspective, the size and activities of local government have become an increased area of risk.   Comprehensive due diligence mandates that you understand the risk before the investment decision. 

After studying the issue for some time, here's my opinion: Municipalization feels good but lacks economic merit. It's a slippery slope. 

My concerns:  

1. Lack of Transparency



It took a lawsuit from a Boulder resident for the City to release their financial projections. The projections show estimated costs per KwH rising by 52% in less than ten years before leveling out. 

Households would certainly feel the increase but a larger burden would fall to the business community. The increased cost is far from insignificant and threatens our economic vibrancy. 

I'm not impressed a lawsuit was necessary for the city to disclose this information. It makes me wonder what else they're hiding. As always, there are vested and entrenched interest groups within government. If nothing else, more transparency is needed on the real costs and benefits of forming our own utility. Remember, we were promised exit points when we voted for the Municipalization process. Hiding cost data from the public isn't kosher. 

2.  Overvalued Assets

The spreadsheet released by the city contains the heading "Low Cost Option, Deterministic Modeling, Stranded and Acquisition set at $150M" (SIC).    Excel thinks the stranded assets are worth $255M, hence the likelihood a judge will decide the final number.   

What's the real value? Probably far less than $150M. See #3 below. 

3. Obsolete Technology

I'm deeply concerned that we're going to end up paying Tesla prices for technology that predates the Model T. Take a look at the following photos. 












The electric grid in Boulder dates from the 1890s. We're planning to invest in a distribution network that will likely be obsolete in the near future. Read "Why Elon Musk's Batteries Scare the Hell Out of the Electric Company."


4.  Mission Creep


From the Energy Services section of the city's Municipalization website: 
One of the ideas Boulder Energy Future is exploring is changing the traditional utility business model. Currently electric utilities focus on providing and selling energy.

We are considering a shift from this model to an "energy services" model in which a local electric utility would focus on meeting customer needs and wants rather than focusing on selling energy as a commodity. The utility could sell, or facilitate the provision of, the services that electricity provides—health, comfort, safety, and economic vitality—while reducing negative impacts on our natural environment and rapidly transitioning from fossil fuels to clean, renewable energy.

So instead of providing and selling electricity, the city would like to sell me health, comfort, safety, and economic vitality services? I don't even understand what that means. It sounds like mumbo jumbo. And nothing puts a damper on economic vitality like outrageous electricity bills. 

5. No Production Capability or Purchasing Power

I'm not a fan of Xcel, but Boulder seems far less likely to build a green production facility anytime soon - especially when we're blowing $150M to $220M on a obsolete distribution network and seeing our prices rise 52% as a result. It will leave us buying electricity on the spot market and with forward contracts. 

Without the scale of Xcel, how are we going to do so competitively? Keep in mind that regulators have a track record of screwing this up. See the soaring prices in California back in 2000 for an example.

6. Poor Disaster Response

It doesn't take a massive weather event like the fall floods of 2013 for the distribution network to go down. Regular storms regularly take down power lines. Xcel has the capability to pull resources from other areas, which is particularly helpful when we're dealing with large scale events.   

Can the City of Boulder offer the same? Of course not. I predict longer down times ahead.  




7. Demand Control Management

Boulder already owns a water utility and it has a very poor record of containing costs. According to one source, rates have increased 15 times in the past 16 years - and this is for a renewable resource that literally falls from the sky. 


Not too long ago, the city instituted water budgets - a form of demand control management. Here's how the budgets work, direct from the city's website.   

The City of Boulder has a water rate structure that uses "water budgets." Your water budget is the amount of water that you are expected to use during a specific month. Each customer's water budget will be different based on their unique water needs, as well as their past usage levels.

The water budget only applies to water-use charges and does not include other costs such as wastewater, stormwater, other fees, etc.

Water budgets help promote water conservation. If you stay within your budget, you pay less for the water you use. If you exceed your budget, you pay more for the water you use.

Sounds nice, right? Yet rates keep rising. Some business users are looking at a water rate increase of about $1,500 per month this year.

Want to know what your future municipal utility's bill looks like? Just replace "water" with "electric" and prepare not just for rapidly rising costs if you stay within budget but egregious penalties for exceeding your city determined electric budget. Energy conservation is a good thing, but not at the cost of having the city of Boulder micromanaging your home's energy usage.   I'm not a fan of giving big brother permission to enter your private residence.   It leads to bad things.


8.  Budgetary Bloat

The city budget grew 18% in 2015 and we are borrowing $4MM from the general fund for municipalization. Overall, the city plans to spend nearly $7MM on the municipalization process this year. This spending is on top of recent budget growth that is tracking 3.5 times CPI. Read City Budget Swells to Supersize

When it comes to money, here's what the municipalization process is starting to look like.



images credit:  Boulder Public Library
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As always, your referrals are deeply appreciated.  


The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

Thursday, January 15, 2015

Case Shiller Deja Vu - Feeling Bubbly

by Osman Parvez

Flippers are back. Rookie real estate agents are entering the business in droves. Inventory is scarce and desperate buyers are bidding up prices. 

Welcome to 2015. It looks a lot like 2005, minus the inventory scarcity.

Take a look at the Case-Shiller index for Denver. 



- Nobody is talking about it, but the index has exceeded the peak level of 2006. 

- It's extremely difficult to predict the top or the bottom of a market cycle. Pay close attention to inventory and sales volume. If you haven't already, subscribe to our research, "like" our Facebook page, and follow our Twitter. Or if you prefer, subscribe to House Einstein by Email.

- Protect yourself from the downside of the cycle by being selective in the real estate assets you acquire. Do not purchase property in unproven locations or property that has limited potential due to strict regulations. Select properties that appeal to the majority of potential buyers and reflect regional tastes. Choose your Realtor carefully. 

- The Denver MSA is not Boulder. The fundamentals of supply and demand in Boulder are closely tied to CU, federal labs, and certain industry sectors however, we are also not immune to regional and macro economic influences. Get the best adviser you can find.  

- The S&P/Case-Shiller Home Price Indices are calculated monthly using a three-month moving average. Index levels are published with a two-month lag and the next data release will be at 9 am EST on Tuesday, January 27. Index performance is based on non-seasonally adjusted data.


The Boulder Real Estate Meetup is scheduled for January 22.  Our topic: Best Practices for Bidding Wars.  Join Us!  Click HERE.




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Like this analysis?    Subscribe to my research.          Ready to buy or sell?  Click HERE to schedule an appointment or call 303.746.6896.

As always, your referrals are deeply appreciated.  


The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

Wednesday, January 14, 2015

Correction

Correction:   The percentage of sales in Boulder during 2014 that were flipped within 365 and 90 days was incorrect in this morning's blog post.   On deeper analysis, most of those "flips" were transfers at nominal value, often into an LLC or trust.  

Incorrect information may have gone out via Twitter and Email.    

The Risk of Limited Exposure - OFF MLS SALES

by Osman Parvez


If you've been paying attention to Boulder real estate, you've seen the "Coming Soon" signs. What's it all about?

Here's how it works. The listing agent and seller agree to a reduced commission if the listing agent procures an unrepresented buyer. In this way, the commission earned by the listing agent is higher than it would be if the buyer was represented. This is a powerful incentive for the listing agent to work hard to find an unrepresented buyer. 

The seller pays less, so it's a win-win, right? Not necessarily. 

Here are the risks. 

The Risk of Limited Exposure Listings

Seller Risk: A listing that is not on the MLS, or available on the MLS for only a short period of time, is not receiving full market exposure. The biggest risk is that you're leaving serious money on the table.  

There could be a buyer out there willing to pay more, close faster, or remove contingencies. No doubt, unwitting sellers are leaving money on the table. 

Off MLS transactions can also make a buyer feel that something is fishy. They're more likely to flake on the deal mid-stream, wasting the seller's valuable marketing time and potentially tainting the listing for future buyers. 

Buyer Risk: Are you really getting a sweet deal or are you overpaying? Have you done your due diligence? Who is guiding you? Who represents your interests? 

Even if the listing agent downgrades their legal status to "Transaction Broker," never forget that they have a pre-existing relationship with the seller. It's extremely difficult for them to be neutral. 

In the old days, Realtors "found the house." Today, everyone has access to listings online and Realtor's jobs have moved upstream. Driving buyers around and opening doors adds no value. A good Buyer's Agent will guide you through property selection, negotiation, and due diligence. We're here to help you make prudent real estate decisions, avoid common mistakes, and advocate for your interests. Agents can't do that if they represent the seller too.  

Buyer's Remorse

Zillow recently conducted a study of regretful buyers. Here's what they found: 

62% wish their homes were bigger or laid out differently. They wish they had bigger kitchens, more storage space or just more space in general.

40% of first-time buyers believe they paid too much or should have put more money down. That's nearly half!

38% were surprised by maintenance costs.

20% wish they had negotiated more on price. That's 1 in 5. 


The Regulator's Position

The Colorado Real Estate Commission is concerned over "Coming Soon" listings being marketed privately (not on the MLS).     

Commission Position #44Motivation for limiting exposure of the property should be carefully considered. Is the property being marketed as “coming soon” because the seller is preparing it for sale or lease? This would be a legitimate use of that particular marketing method. However, if the property is being marketed as “coming soon” in an effort for the listing broker to acquire a buyer and “double end” the transaction, this would be a violation of the license law because the broker is not exercising reasonable skill and care. If the broker is a single agent for the seller or landlord, the broker may be viewed by the Commission as also failing to promote the interests of the seller or landlord with the utmost good faith, loyalty and fidelity. Finally, a broker who places the importance of his commission above his duties, responsibilities or obligations to the consumer who has engaged him is practicing business in a manner that endangers the interest of the public.

Best Practices 

It is possible to do a "coming soon" listing right. Make a smarter real estate decision. Join us on January 22 for the Boulder Real Estate Meetup. Our topic: Best Practices for Bidding Wars. RSVP by clicking HERE

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Like this analysis?    Subscribe to my research.          Ready to buy or sell?  Click HERE to schedule an appointment or call 303.746.6896.

As always, your referrals are deeply appreciated.  


The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

Tuesday, January 13, 2015

Boulder Real Estate's High End Sales Distribution [Analyze This]

by Osman Parvez

If you're planning to acquire property at the higher end of Boulder's real estate market, caution is warranted. This market is getting very bubbly and certain locations have little history of supporting higher valuations. When the market turns (believe me, it will), the weakest locations are likely to see steep declines. This is what happened during the last real estate cycle. 

I regularly provide advice to higher end buyers in Boulder. Asset value preservation tops the list of their concerns. Suitability, their family's needs follows closely. Speculative potential is usually last. If you want to make a smarter real estate decision, my advice is to focus on proven locations.   

What are proven locations for higher-end real estate in Boulder?   

The map below is a starting point for the analysis. It shows a distribution of $1MM+ sales in Boulder over the past two years. Certain pockets of Table Mesa, Newlands, North Boulder, Chautauqua, Rosehill and upper University Hill have had a higher density of transactions. To minimize risk look to depth of market and liquidity. They're your friends. These are your neighborhoods. It's well known that Mapleton Hill also holds its value, of course, but availability is an issue. Locations east of Folsom should be avoided. 

If you wish to have in-depth advise on property selection, negotiation, and due diligence - call me.   ph: 303.746.6896 or schedule an appointment by by clicking HERE

 
Purple is 2014, red represents 2013.    

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The Boulder Real Estate Meetup is scheduled for January 22.  Our topic: Best Practices for Bidding Wars.  Join Us!  Click HERE.
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Like this analysis?    Subscribe to my research.          Ready to buy or sell?  Click HERE to schedule an appointment or call 303.746.6896.

As always, your referrals are deeply appreciated.  


The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

Sunday, January 11, 2015

What's It Worth? FAR LESS Than You Thought

by Osman Parvez

About a month ago, I told you about a 5325 Hickory Avenue. I asked you to play a game: What It's Worth.  

Here are the results.



17 people provided their best estimates of the eventual sale price. Estimates ranged from a low of $549,000 to a high of $698,700, a spread of nearly $150,000. The average estimate was $616,517.     

The house closed on January 8th. The actual sale price? $565,000 or about 6% BELOW the asking price. In a market with record low inventory and intense buyer demand, this is shocking. What happened?

A Couple of Possibilities

1. Structural Issues
As recommended in my original blog post, read the Seller's Property Disclosure. Pay particular attention to Section A: Structural Conditions. The Seller checked YES to 4 of the 9 areas.   

Structural issues tend to scare buyers. Even though the seller provided a reassuring structural engineer's report, most buyers are going to think twice about a house with known structural issues. 

2. Cold Hard Cash
Paying cash removes two key areas of uncertainty for the seller: the buyer's credit risk and the home's appraisal value.  

Paying cash is one way to strengthen an offer in a competitive bidding scenario. As was the case here, even in this crazy market, sellers may even be willing to accept less than asking if a buyer is paying cash.


We'll be discussing this and other techniques for writing winning offers at our meetup this week. The topic: Best Practices for Bidding Wars. Space is limited. Sign up HERE

Back to the Contest 

Jeff H was the winner with a low ball of $549,000.   

Jeff, I owe you beer at the Southern Sun. Let's call it a pitcher, shall we? If you can wait until Stout Month, I'll join you. 

In case you forgot how much you bid, the rest are below.  





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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate.