Tuesday, October 10, 2006

October Market Updates Available

by Osman Parvez


It's hard to believe that October is already a third gone. How time flies.

Are you ready for my usual monthly market updates? Has Boulder real estate shaken off the summer's slump? What about local inventory levels and sales? How are Days on Market?

This month I thought I'd try something different. I posted a link to the report in our research archive at realtyunique.com. This is the same report I send to my investor clients, friends and colleagues. In that file you'll find summary tables of local real estate conditions, showing both year/year and year to date (ytd). You'll also find my usual charts which illustrate how the real estate market did in Boulder, Broomfield, Erie, Lafayette, Longmont, Louisville, and Superior. Over the next few days, I'll post a few of the charts with my commentary to the blog.

If downloads exceeds my server's bandwidth allocation, I might have to find an alternative. The file is about 500kb. Here's a direct link to the research archive. As always, please call me with questions or comments at 303.746.6896.





----
Like this analysis?    Subscribe to our client research report.     
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.  

--
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. 

8 comments:

  1. As always, very informtative. Thank you for all the hard work that goes into these reports!

    ReplyDelete
  2. Yes, thank you this is informative.

    ReplyDelete
  3. If median home price of Superior falls from 500,000 in January to 300,000 in February, just in 1 month, What does that indicate? Nothing really. All these graphs just indicate that the prices in all these markets have stayed in the same range for the last 3 years and the inventory is reaching all time high. It just indicates price correction will happen sooner than later in all Boulder suburbs. isn't that true?

    ReplyDelete
  4. It indicates that small sample sizes yield large volatilities in median price on a month to month basis. If you see something like that, be sure to check the sales volume charts as well to be sure that the sample size is adequate.

    If you read my write ups over the past few months, you'll see I talk about this on occassion. Ultimately, there's a couple of ways to deal with it. One is to average over a few months. Another is to normalize by looking at $/sqft.

    I should probably drop the median price chart from the series until I develop one that shows more meaningful information. You comment is serving as a good reminder. Thanks.

    Price correction? I think you've confused the Boulder/Denver region with bubble markets. A little over a year ago, the New York Times called Denver an example of a soft landing. Most of the region didn't see the bubble runup because we were dealing with job loses from the telecom collapse.

    ReplyDelete
  5. What is so magical about the Boulder area that allows it's markets to violate fundamental economic realities??

    Sorry, but sometimes realtors 'analysis' of the local market reminds one of a child plugging both ears while screaming "I can't hear you"

    Bubble or not the local market is still overpriced and the potential buyers know it.

    I agree with the previous anonymous poster.

    ReplyDelete
  6. Osman, Thanks for replying.

    But what would you tell now to a serious buyer in Boulder County? Buy now or wait 6 more months for the bottom?

    I have seen a listing in Broomfield change from 219,000 to 209,000 in a month. Another listing in Superior changed from 330,000 to 320,000.

    Though I agree that there was no bubble in Boulder county, I still think 10 to 15 percent correction is due. Bubble markets are looking at numbers like 30 to 40 percent. Smaller the bubble, smaller the correction. Bigger the bubble, bigger the correction will be.

    ReplyDelete
  7. I provide the graphs and charts to help you draw your own conclusions about the real estate market.

    A few weeks ago I gave a talk comparing pricing in the Denver/Boulder region with widely acknowledged bubble markets (like phoenix). I used OFHEO data to develop a series of charts showing just how we differ. It's really quite startling. So if you're a believer that we're in a little bubble, then we really don't have far to fall.

    My opinion is that *if* we see real price declines in Boulder (I don't think we will), it will be a temporary and short lived blip. If it happens it will also be driven by a sympathetic effect from buyers caution after reading article after article about the painful bubble markets.

    Even if you believe that we're set for a massive 10-15% price decline in our region, know that calling the bottom of a bubble is notoriously difficult (just as calling the top).

    Over the last few days, I've been updating my buy vs rent model. Today I added a seperate worksheet that lets you price for variable appreciation so you can do the math on how a potential price decline affects your decision to buy, rent, or sell.

    If you'd like a copy, please email me. You'll need Excel on your computer to run the model.

    If you're interested in this stuff, stay tuned. I'm planning to run a couple of scenario analyses on the blog using the model.

    ReplyDelete
  8. Anon,

    I've updated my model and it's ready for you. I posted an example of how to use it and I included a seperate page that lets you calculate for a "down year," even a drop of 10-15% if you want to play out that scenario.

    Back to your question, would I recommend you wait six months? Probably not, given that the slowest part of season is now through February. This is generally the time when you have the most buying power in any given year. You might be able to scoop up some bargain if you start doing your research now and get ready to pull the trigger. Even in a soft market, the best deals move fast. And using my model, you'll know what the limit to your downside is if the market behaves as you believe it might (even though I don't).

    Drop me a line if you'd like to speak personally. ph: 303.746.6896.

    ReplyDelete