Monday, August 07, 2006

Location, Location, Location

by Osman Parvez


If you're buying real estate in Boulder (or anywhere else for the matter), there's something you should know.

This isn't exactly a secret.

Some parts of Boulder are more desirable than others. For a variety of reasons, certain areas have cache, others are better for commuting, and some are seen as more desirable simply because they're filled with grand historic homes.

Some of this is captured in "Location, Location, Location." But it turns out the old mantra is only half the story. While it emphasizes the importance of location, it fails to suggest getting a broader understanding of the value of a neighborhood or community before buying.

As my simple little chart shows, there's a straightforward and linear relationship between a home's price and the location. To get the most for your real estate dollar in Boulder, it's both critical to understand how location is perceived and keep in mind the intrinsic value for you and your family may not be the same. To find great properties, you have to go beyond square footage, bedrooms, and bathrooms and understand the context of location.

Let's get back to Boulder. On a larger level, our city has an obvious price premium to surrounding communities. When people buy here, they're paying for the real and perceived value this community offers. As I like to say, "they're not just buying a home, they're buying an opportunity to join the community."

The further you drill down, the more distinctions you'll find in neighborhoods. From the obvious cache neighborhoods (Mapleton Hill) to more subtle differences, it adds up. And while you may not grasp it all before you buy, you will certainly come to know them over the years. So finding out everything you can about a neighborhood now, how it's perceived by the community as well as how it might fit your family's needs, is what smart home shopping is all about.

Time Changes Everything

Interestingly, the way a neighborhood is perceived will change over time. So if you're looking for value, the direction of a neighborhood is key. For example, right now in South Boulder's Martin Acres, recently remodeled "pop tops" are fetching sale prices approaching $600,00. Most move very quickly off the market. Meanwhile the majority of homes in Martin Acres - small 3BR, 1BA ranches built in the 1950's - are priced about $330,000 to $350,000 (they also move quick). Back of the envelope conversations with builders puts the rough cost of doing a fully gutted "pop top" and remodel between $200,000 and $250,000. The math basically adds up (most home improvements struggle to recapture their cost.)

When it comes to intrinsic value, the neighborhood itself is within walking distance of two grocery stores and a variety of shopping. It has bike paths and a great public park. Recent improvements at the Table Mesa shopping plaza, in particular the addition of restaurants like Southern Sun and coffeeshop's like Cafe Sole have rounded things out nicely. Why drive (or take a 15 minute bike ride) downtown? Still, for now many people continue to perceive Martin Acres as a "starter" neighborhood. Given the number of luxurious "pop tops," this could change rapidly.

If you're a buyer, don't underplay the importance of finding out what you know and what you don't know about neighborhoods in Boulder. The true value of a home is based on a combination of factors specific to the property and the value of the community in which it lies. And be sure to consider the importance of direction the neighborhood is moving in to get the most bang for the buck.


Image: Osman Parvez




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4 comments:

  1. Osman,

    Can you post a link that gives an overview of area schools? I have some friends coming to work at Amgen in Longmont and they want to decide where to look. Where do most Amgenites live? What are schools like in Niwot? They have a 5 and 7 year old I think.

    Hal

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  4. Hi Hal,
    Here's what you can do.

    1. Start by searching for property in Niwot. Click HERE for a direct link to my property search page (no registration, etc required).

    2. Now pick a home from the list generated, like this $840,000 5BR, 3BA property (link will expire when house is sold).

    3. You'll come to a listing page with detailed property information. Scroll down to the middle of the page and you'll see a bunch of links. Click on "School Information" That will take you to a page with information on local schools serving the property.

    4. Ok, but parents want to know how the school performs too. Write down the name of the school and visit Colorado's School Accountability website for a report card on the school that you're interested in. You can also access that database from the Daily Camera's School Report Card site.

    Many Amgen employees live in Longmont, Boulder, and Niwot. Others commute from communities further away. Commute time is usually the biggest issue, so go back to the listing page on my site and click on "Map Location" to bring up a Google Map. Now simply add "to 4000 Nelson Rd, Longmont, CO 80503" (Amgen's address) to the end of address displayed in the search box, then click "search maps". You'll get something that looks like this, a map of your likely commute with approximate travel times.

    Last point - remember that Boulder has an open enrollment policy. That means that your child can attend a school other than the one serving her neighborhood, but the parents will have to provide the transportation. There's also a lottery system to determine eligibility. Here's more on open enrollment and a flowchart of the process.

    I thought your question great, so I moved it up to post status.

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