the silver fern report - june 2010

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

Boulder, Colorado

June, 2010

Phone: 303 586 1241 | www.silverfernhomes.com

Boulder, ColoradoPhone: 303 586 1241

www.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 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: 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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City of BoulderSingle Family Houses

(detached dwellings)

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House Inventory

• 494 houses were available for sale in the City of Boulder during May, a drop (2.4%) from the previous month.

• As of June 14, there were 487 homes in inventory. 75 of these homes are currently under contract.

• The inventory drop is unusual for this time of year, likely caused by the deadline for tax credit (see slide #18).

Boulder Home Inventory

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2008 2009 2010 Data: BARA© Silver Fern Homes

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House Sales Volume

• 73 homes sold in the City of Boulder during May, up 46% from last year.

• Title companies and lenders indicate scheduled closings during June will also likely be high as buyers seek to comply with the tax credit deadline of June 30th.

• Over the past six months, 305 units have sold, an increase of 48% from the same period a year ago.

Boulder Home Sales Volume

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House Absorption Rate

• At 14.4%, the absorption rate in the City of Boulder declined slightly from last month.

• Although higher than last year, absorption remains below the longer term average.

• For comparison, consider that absorption was in excess of 20% during May 2004, 2005, 2006, and 2007.

Boulder Home Sales to Inventory

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Half Price Special

1909 Norwood Avenue

Key Statistics: 5 Bed, 7 Bath6,688 SQFT

Sold: 5/05/10Days On Market: 701Sold: $1,100,500Percentage of Original Asking : 55%

Another riches to rags, trophy home to foreclosure story. Wishful thinking asking prices and building without consideration to market value leads to ruin. But, someone got a deal…

Notable Sales

Entry Level Shines

210 S. 39th Street


Sold: 5/18/10Days on Market: 40Sold: $400,000Percentage of Original Asking : 98%

Proving yet again that the entry level is robust, this basic 1950s ranch in Martin Acres went under contract just 13 days after hitting the market.

Land Grab

2345 Panorama Avenue

Key Statistics: 3 Bed, 1 Bath925 SQFT

Sold: 6/09/10Days on Market: (dubious)Sold: $510,000Percentage of Original Asking : 88%

Hopefully the city’s first trash collector didn’t live here and the preservation folks don’t try to save this shack. This transaction sets a good comp for land values in top notch locations (with a view). It’s also $20K less than it traded at in 2007.

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City of BoulderTown Homes and Condos

(attached dwellings)

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Town Home & Condo Inventory

• 464 units were available for sale in May, 33 units less than last month (6.7%). As of June 14, 468 homes were in inventory with 56 of these under contract.

• As with the house market, it’s unusual to see inventory levels decline during May. This is likely driven by tax credit driven buyers (see slide #18).

• Inventory is now considerably below the longer term average.

Boulder Attached Dwelling Inventory

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

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Town Home and Condo Sales Volume

• 79 units sold in May, up 49% from last year.

• Over the past six months, 318 units have sold, 45% more than the same period a year ago.

Boulder Attached Dwelling Sales Volume

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2008 2009 2010 Data: BARA© Silver Fern

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Town Home and Condo Absorption Rate

• The absorption rate was 15.9% last month, a slight decrease from the previous month.

• On average, absorption peaks in June. This year is likely to be the same, perhaps even setting a record.

Boulder Attached Dwelling Sales to Inventory

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Downtown Living

1655 Walnut Street #107


Sold: 5/28/10Days On Market: 1,012Sold: $489,900Percentage of Original Asking : 65%

After 3 rounds of heavy price cuts, the Walnut is once again competitive with other high end downtown condos. Beautiful units, great location, and now priced right. Let the sales roll…

Boulder: Notable Sales

Affordable Housing

3228 Foundry Place #104



Proving the value of affordable housing, this attractive unit was not on the market long. Call us for details on how to qualify for the city’s affordable housing program.

Old is New Again

1201 Balsam Ave. #103



A complete renovation of a mid-century building, six blocks from the Pearl Street Mall. Upgraded everything, built green and energy efficient. 4 units have sold during the past 30 days.

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Research Spotlight: Niwot

• We currently have several active buyers for higher-end homes in Niwot.

• At the this time, Niwot has 106 active listings with a median price of $812,450.

• Over the last twelve months (LTM), 58 homes have sold. At a pace of less than 5 sales per month, listings must be in the top 5% of competitors to attract a buyer.

• 125 listings have failed to attract a buyer over the last twelve months.

• Only 7% of available inventory is currently under contract.

Niwot Listings

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www.silverfernhomes.com data: IRESIS

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• As with nearby Boulder, the market differs by location and price range.

• Above $1MM, negotiated discounts were nearly 8% over the last twelve months (LTM).

• Below $1MM, negotiated discounts were closer to 4%.

• The largest discount was a whopping 26% off asking price (6552 Legend Ridge Trail).

Median Negotiated Discount in Niwot (LTM)

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www.silverfernhomes.com data: IRESIS

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• A visual comparison of active listings vs. sold (LTM) suggests that areas within well established subdivisions of Niwot have held been able to more easily attract buyers.

• In a recent negotiation at Lake Valley Estates, low sales volume resulted in few available comparable listings.

Sold Listings (LTM)

Active Listings

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Research Spotlight: May Inventory Drop

• Inventory levels in most local markets declined substantially in May. On average, inventory rises.

• Strong evidence of “move forward” market activity caused by the home buyer tax credits.

• Suggests the market has reached its seasonal peak early and a lull in activity will follow.

• Chart shows the impact of this across Boulder County with the largest inventory declines occurring in Broomfield and Lafayette.

Monthly Change in Inventory

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Boulder Boulder AD Longmont Erie Lafayette Broomfield Louisville Superior

Average May ('04-'09)

May 2010


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Lessons from the Trenches• This month, representing the buyers, we

successfully negotiated for homes where current market value had fallen below the seller’s original purchase price.

• These are challenging situations because the seller will be losing equity or worse, may be bringing money to closing.

• An Opinion of Value, our detailed analysis, was presented with each offer. This tackles the problem of agents who may not have understood the market or had clients who are reluctant to accept the reality of current conditions.

• It’s critical for our clients to understand market conditions for their specific target property. Knowing the market leads to confidence when making an offer.

• Skillful negotiation usually requires both buyer and sellers make concessions. It’s important to discuss and agree upon strategy before submitting an offer.

• Effective and efficient negotiation also requires a high degree of trust between agent and principal, or we end up negotiating with ourselves.

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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 to 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.