The August Silver Fern Report (Boulder Real Estate)
THE SILVER FERN REPORT: Boulder An analysis of real estate market conditions in Boulder, Colorado August, 2011 Phone: 303 586 1241 | www.silverfernhomes.com
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, Colorado Phone: 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
The Team <ul><li>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 </li></ul><ul><li>Email: [email_address] ph: 303.746.6896 </li></ul><ul><li>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. </li></ul><ul><li>Email: [email_address] ph: 303.746.6765 </li></ul><ul><li>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. </li></ul><ul><li>Email: [email_address] ph: 303.993.6139 </li></ul>
Silver Fern donates 5% of every commission to local non-profits. 2009 Boulder Shelter for the Homeless Colorado Chautauqua Association Greenwood Wildlife Rehabilitation Sanctuary Big Brothers Big Sisters I Have a Dream Foundation Circle of Care Growing Gardens Intercambio de Comunidades Wildlands Restoration Boulder Emergency Squad Boulder Day Nursery Citizens' Community Television 2008 Archway Wildlife Rehabilitation Association for Community Living Big Brothers, Big Sisters Boulder Humane Society Boulder Shelter for the Homeless Front Range Center for Assault Prevention Greenwood Wildlife Rehabilitation Center I Have a Dream Foundation Circle of Care The Medicine Horse Program 2010 Boulder Community Hospital Foundation Circle of Care Big Brothers, Big Sisters of Colorado Humane Society of Boulder Valley Medicine Horse Program Front Range Center for Assault Prevention Imagine! Foundation Growing Gardens Boulder Day Nursery Boulder Valley Rotary Community Foundation Intercambio de Comunidades I Have a Dream Foundation BouldeReach Boulder Shelter for the Homeless
Market Recovery (Maybe Just Less Bad)? <ul><li>Inventory is lower and sales volume is now higher in the majority of Boulder area markets. </li></ul><ul><li>Longmont, Boulder AD, and Mountain areas have seen the largest percentage increase in sales activity on a Year over Year (YoY) basis. </li></ul><ul><li>Inventory has fallen the most in Erie (23.3%), Louisville (18.5%), and the Plains (17.5%) YoY. </li></ul><ul><li>Louisville is once again leading the region with over 30% absorption. </li></ul>
Months of Inventory <ul><li>Five to six months of available inventory is considered healthy for most real estate markets. </li></ul><ul><li>Many local markets fall below the 6 month threshold, including Broomfield, Erie, Longmont, Louisville, and Superior. </li></ul><ul><li>Superior has the lowest inventory, with less than than four months of supply of available properties. </li></ul><ul><li>Boulder, Boulder AD, and Lafayette show the highest inventory levels of regional markets. </li></ul>
City of Boulder Single Family Houses (detached dwellings)
Inventory Dips, Now Lower than Average <ul><li>There were 490 houses on the market in July. </li></ul><ul><li>After peaking early this year, inventory has dropped below the long-term average. </li></ul><ul><li>As of mid August, 455 houses remain on market, 14% of which are under contract. </li></ul><ul><li>The higher end remains ripe with listings, with 109 available houses valued above $1MM and only 7% under contract. </li></ul>
Sales Volume Drop, Still Better Than Last Year <ul><li>As expected, after a heated June, sales volume was horrid in July. </li></ul><ul><li>There were only 58 closings, which was 18% better than last year but remains 39% below the long term average. </li></ul><ul><li>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). </li></ul>
Sales Volume Still Keeping Pace <ul><li>During the last six months, 353 houses sold. </li></ul><ul><li>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. </li></ul>
Absorption Drops, Peak Season Ends <ul><li>As anticipated, absorption has begun sliding for the year, typical for the season, as buyers and sellers are withdrawing from the market. </li></ul><ul><li>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%. </li></ul>Note: Absorption is the percentage of inventory sold in a given period of time.
Notable Sales Historic Charm 2242 16 th St Key Statistics: 3 Bed, 3 Bath 2,390 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. Entry-Level Potential 908 Quinn St Key Statistics: 3 Bed, 2 Bath 912 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 Bath 3,352 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.
City of Boulder Town Homes and Condos (attached dwellings)
Inventory Up Slightly <ul><li>486 condos and townhomes were on the market in July, a 9% drop from June and in-line with seasonal expectations. </li></ul><ul><li>Inventory in July was about 5% higher than last year. </li></ul><ul><li>454 units are currently on the market, 16% are under contract. </li></ul><ul><li>Attached dwellings are more affordable. There are 136 units in inventory priced below $200,000, more than half offer at least 2 bedrooms. </li></ul>
Sales Volume Better than Last Year <ul><li>51 units sold in July, down about 11% from June but still representing a 42% increase from last year. </li></ul><ul><li>As of late August, 41 units have closed. We anticipate close to 50 units will sell during the month. </li></ul>
Absorption Peaked Early, But Stable <ul><li>Absorption has been far more stable this year than during 2010, largely due to the lack of artificial market stimulation (incentives). </li></ul><ul><li>On average, absorption rises from January through July. This year, it peaked early and has been declining since May. </li></ul><ul><li>Absorption was 9.6% in July, down from 10.7% in June. Average absorption for July is 18%. </li></ul>Note: Absorption is the percentage of inventory sold in a given period of time.
Notable Sales Luxury Spaces 1701 15 th St #204 Key Statistics: 3 Bed, 2 Bath 2,083 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. Village at Uptown Broadway 4555 13 th Street 2-B Key Statistics: 1 Bed, 2 Bath 957 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 Bath 1,216 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).
Lessons from the Trenches <ul><li>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. </li></ul><ul><li>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. </li></ul><ul><li>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. </li></ul>
Read Up! Recent Articles From Our Blog <ul><li>Back in Da Club [Peloton Market Update] </li></ul><ul><li>The Jury Will Disregard The Last Statement [Selling It] </li></ul><ul><li>It’s Now Cheaper to Buy [Buy vs. Rent] </li></ul><ul><li>Slash and Burn [Price Drops] </li></ul><ul><li>Notable Sales in Broomfield [Analyze This] </li></ul><ul><li>A Cat On The Lam [The Business] </li></ul>Image: brett l
Get A Great Deal <ul><li>At Silver Fern, we provide personalized attention and strive to negotiate great deals. </li></ul><ul><li>Buying or selling real estate is one of life’s largest financial decisions. You deserve a professional adviser. </li></ul><ul><li>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. </li></ul><ul><li>We work with buyers relocating to Boulder, and with our exclusive buyer preview service, we can facilitate far beyond the traditional process. </li></ul>