by admin | Jan 15, 2018 | Boulder Real Estate, For Buyers, For Sellers, Statistics
In 2017 in Boulder County, the average negotiation off of list price for all sales was 1.3%. In 2016 it was .36%. However, when you look at it more closely both over time and across price ranges there are some good market insights. The chart below shows the sales in each of the last four quarters separated into three categories; those that sold for below the list price (blue), those that sold for exactly list price (orange), and those that sold for above list price (grey). As an example, let’s look at the second quarter of 2016 which is the second group from the left. During that quarter Boulder County was ranked #1 in the nation for appreciation by FHFA.gov. During the quarter, 30% of the sales went for less than the asking price, 20% went for exactly the list price and 50% of the sales sold for a price in excess of the asking price. This past quarter 56% sold for less than list price, 23% went for exactly asking price and 21% went for above the list price. The overall take away is that buyers have gained some traction in negotiations. There are two trend lines that intersect. The upward trending blue line represents the trend of properties selling below the asking price. The downward trending grey line shows the trend for homes selling at a premium. With the information above we can conclude that the overall market is trending away from a strong sellers market. But in real estate broad generalities are not always accurate. When we look at individual price ranges we find that the...
by admin | Jan 11, 2018 | Boulder Real Estate, For Buyers, For Sellers, General Real Estate Advice, Real Estate 101
The recently passed federal tax bill will definitely have an impact on real estate. In general markets with high taxes and high values will be most affected. Despite the recent increase in local property taxes, Boulder County is considered a low property tax area compared to other parts of the country. However, we are a high value market. Here is a summary of the main points of the tax bill that affect real estate. Also, if your selling your property or house, we buy houses at a good price. Mortgage Interest Cap – This is in regards to how much of the interest paid for mortgages can be used as a deduction. For those whose mortgages balances are less than $750,000 this will not affect anything. Previously the cap was $1 million and it has now been reduced to $750,000. Not many people have loans in excess of $750,000, but in our area where the luxury home market is very robust, we may see fewer buyers able to make those purchases. The interest on the first $750,000 is still deductible. This may dissuade some luxury home purchasers to buy a less expensive home, thereby reducing the demand for the very high end. Local and State Tax Deduction – The Boulder County Treasurer was inundated before the new year with property owners pre-paying their property tax bill in advance. This was in response to the section of the tax bill which caps the deduction for state and local taxes at $10,000. Previously, homeowners were able to deduct from their federal tax return the amounts paid for state income tax, various ownership...
by admin | Dec 6, 2017 | Boulder County Housing Trends, Boulder Real Estate, For Buyers, For Sellers, General Real Estate Advice, Real Estate 101
The Real Estate Cycle Approximately 2500 years ago Heraclitus of Ephesus said “The only thing that is constant is change”. In the moment we sometimes forget that forces larger than we can see are slowly moving culture, markets and people. Everything we see is changing, however the rate of change makes a difference. We notice more readily the melting of an ice cream cone than the erosion of a mountain. It’s normal to only take note of what we can readily see. However, there is wisdom in taking a longer view. Real estate is cyclical. There are many factors involved, but the peaks and valleys of the real estate demand and value have been shown to have a relatively consistent cycle of approximately 18 years. Economist Homer Hoyt made a detailed study of the Chicago real estate market and the broader United States real estate market and found that it has run its course in a steady 18 year rhythm since 1800. There have been exceptions that have disrupted the normal cycle such as The Great Depression, World War II and the post war boom but on average, the business cycle and the real estate cycle have been very consistent including the 18 year cycle than ended in 2008. The infographic above shows the four phases of the real estate cycle. Here is more information on each of the stages of the cycle. Most studies present Recovery as the first phase of the cycle, but since the last recession was so memorable I think it makes a good starting point. Recession Think back to what was in the news...
by admin | Sep 9, 2017 | For Buyers, For Sellers
Neil Kearney has once again been recognized as one of the top real estate professionals in the Denver Metro Area. The “Five Star Professional” award in the real estate category is awarded each year based upon independent research and interviews with actual clients from the past year. The Five Star Professional research team applies a vigorous research and evaluation process to identify service professionals who provide quality services to their clients. Professionals do not pay a fee to be considered or placed on the final list of Five Star award winners. Along with outstanding survey results the real estate agents who are considered must obtain a high standard of production. This year the criteria was tightened, and under 750 real estate agents in the Denver Metro Market were recognized as a Five Star Professionals. There are currently over 20,000 licensed real estate agents in the Denver area. Neil feels honored to be once again be designated award winner. This is one of the most credible awards a real estate agent can receive because it is based upon direct feedback from recent clients. Only the highest scoring agents are selected. Here is a description of the research methodology that is used. Five Star Professional follows standard survey practices used by other professional research organizations. The research also includes a regulatory review to provide necessary checks and balances. Five Star Professional conducts research to help consumers with the important decision of selecting a service professional. The Five Star award is presented to wealth managers, real estate agents, mortgage professionals, home/auto insurance professionals and dentists in more than 45 markets in the...
by admin | Jun 27, 2017 | For Buyers, For Sellers, General Real Estate Advice, Real Estate 101
This past May, Zillow, the online real estate search company was sued by a Chicago based home building company who claimed that Zillow’s online Automated Value Model (AVM) is deceiving home buyers with prices below the true value of properties leading to frustrated sellers. Furthermore the suit claims that Zillow’s “Zestimates” are in violation of the legal description of an appraisal, which under Illinois law must be administered by a licensed appraiser. Zillow defends themselves by stating that their Zestimates claim only to be approximations not true appraisals; to which the suit responds stating that whether or not they are technically appraisals homeowners are viewing them as such leading to confusion and irritation. It will be interesting to see over the coming months how this lawsuit plays out. It’s clear that Zillow’s Zestimate and other AVM’s which are becoming common across the internet are being used by consumers to determine the approximate value of their home. But in my experience, many times this approximation isn’t close to the true market value. So just how accurate are Zestimates. In a Nationwide study conducted by Zillow it was found that their Zestimates fall within 5% of the sales price of homes 53.9% of the time, within 10% of the sales price 75.6% of the time and finally within 20% of the sales price 89.7% of the time. Back in 2007 when Zillow was just getting its footing I conducted my own research local to Boulder on the subject and found that on a whole Zillow’s algorithm was 99% accurate. However, when I took a closer look I found that there was...
by admin | Nov 30, 2016 | For Buyers, General Real Estate Advice, Real Estate 101
If you have determined that you are ready to buy a house (click here for more information about determining if you are ready) the next question to ask is how do I do it? What is the smartest way to go about buying a home? What are the first steps in a home search? This article will show how to begin the process of buying a home as well as point out some common pitfalls that can be avoided. Step 1 – Finding a Really Good Realtor It’s easy enough to start browsing houses on the internet or going to the random open house, but at some point you will want to get more serious about looking at homes. The first step towards getting more serious about looking for a home is finding a good Realtor who has been through the process time and time again. Most people end up working with a Realtor, so why not engage one early on in the process? Realtor’s have tools that will save you time and put you on track to finding the right home more quickly. If you are finding air quality experts for your home or business here is the solution. A good Realtor is much more than a person who shows you the houses that you have found online, they serve as an information source, an advocate and a guide through the process. Make sure you are working with a Realtor who is more interested in helping you find a great house for the long term rather than a quick sale for them. It takes patience and persistence to make sure you end up in...
by admin | May 25, 2016 | For Buyers, For Sellers, Real Estate 101
Do you know what PITI is? If you have a loan on your home you probably know that these are the four elements of a mortgage payment. P stands for principal; the first I stands for Interest; T stands for taxes and I stands for insurance. Together they make up the amount you pay for your home on a monthly basis. If your PITI payment is comfortable for you, you will have extra funds available to pay for all of your living expenses, be able to save some money on a monthly basis and have some left over for some fun. But many times as we consider how much of a house we can afford we key in on the price of a home and the interest rate (these go into determining the ‘P” and first ‘I’) without much considering the ‘T’ and the ‘I’. Before I get started talking about Florida Property Management (fpm) taxes I want to make it clear that this is not a comprehensive article on taxation. There are many elements that go into the discussion of total taxation that include income tax, various sales taxes, car registration fees, use fees, transfer taxes, etc., this article just focuses on one element and is therefore not a comprehensive picture. It doesn’t fairly compare apples to apples across states. However, I think it’s an interesting and relevant topic because it comes up often in my discussions when I am showing property. Corelogic recently did a study ranking the median property tax rate across the country. The highest property tax percentage is in Illinois where taxes are 2.67%...
by admin | Mar 19, 2016 | Boulder Neighborhoods, Boulder Real Estate, For Buyers, For Sellers, Visiting Boulder
Boulder Neighborhood Guide I realized a few years ago that people coming from out of town were having a hard time characterizing the different neighborhoods within Boulder. In response I created the Boulder Neighborhood Guide. In this report I have split Boulder into eleven different areas and present the lifestyle highlights, schools, shopping districts, local recreation and real estate statistics for each area. If you’re interested in learning more about the different neighborhoods within the City of Boulder this is your guide. Click this link to view and download the report. Boulder Neighborhood Guide 2016 It is recognized that Boulder is a great place to live but the neighborhoods in Boulder are a bit hard to peg. Boulder was developed over time in a piece-meal fashion. The result is that many of the neighborhoods are only a few hundred homes in size. It is common to have two adjacent neighborhoods developed at different times and with completely different price ranges. While this report is not comprehensive, it will give the reader valuable information from which to start understanding the real estate market in Boulder. I will highlight the major neighborhoods in each area. Here are some highlights from within this years report. Last year homes in Boulder County appreciated roughly 13.52%. But the appreciation varied between areas and price ranges. Within Boulder neighborhoods as I have split them in the report gains in median prices ranged between 6.6% to 35% depending upon the area. Here is the list of neighborhoods sorted by median price appreciation last year: Wonderland Lake / Dakota Ridge = 35% North Boulder East = 28%...
by admin | Feb 29, 2016 | Boulder Real Estate, For Buyers, General Real Estate Advice, Real Estate 101
During 2015 43% of all homes sold in the City of Boulder sold for more than asking price (see more context in my year end report) . Presumably most of these homes had multiple buyers making competing offers. So what does it take to be the winner of a multiple bid situation? Here are seven strategies for winning multiple offers. I liken these ideas to a set of arrows in a quiver. Price – The most effective way to win the hearts and minds of a seller is to give them the most money. In theory it’s easy give them more than anyone else. In practice, given limited information, it’s very difficult to know what others who are exactly in your position will do. On average in 2015, those homes that sold for a price over asking price sold for 4% above. The range is from just a few hundred dollars over to 20% over. Now that’s using a sharp and effective arrow! Escalation Clause – This could be a subheading under price but I think it’s worth giving it top billing. An escalation clause is a paragraph inserted in the contract which states; that the buyers agrees that if their offer isn’t high enough their offer will be automatically increased to beat any competing offers by $X,000 up to a cap price. Some sellers and their agents announce that they will not accept escalation clauses because they view them as a hedge (we are willing to go higher but only if we need to). For a buyer an escalation clause is a good way to state your intentions...
by admin | Jun 9, 2015 | Boulder County Housing Trends, For Buyers, For Sellers, Statistics
Hold on and get up to speed! Homebuyer’s in Boulder County are getting a crash course in rejection. The local real estate market is still running on all cylinders and seems to have a full tank of gas. In April and May there were 789 real estate transactions that closed in Boulder County. 270 closed at less than full price, 98 closed at full price and a staggering 421 closed above full price! Two-thirds of the sales in our market during the past two months closed for full price or more. The average transaction closed for 1.2% above list price. I haven’t seen anything like it during the past twenty-five years. Looking more closely at the homes that sold above full price is an interesting analysis. One that could come in handy if you find yourself in a situation where you are competing with multiple offers. The big question is how high do I need to offer? Of course every situation is different but here is the recent data. Sales in Boulder County closing in April and May of 2015 that sold for above asking price: Price Range – $0 – $250k Number of sales = 93 average premium paid = 5.5% Price Range – $250K – $500k Number of sales = 212 average premium paid = 4.5% Price Range – $500k – $750k Number of sales = 74 average premium paid = 5.1% Price Range – $750k – $1 Mil. Number of sales = 23 average premium paid = 4.9% Price Range – > $1 Mil. Number of sales = 19 average premium...
