Monday, January 11, 2016

Boulder's Martin Acres Jumps 22%

by Osman Parvez
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Looking for an affordable house in Boulder? Wonder where prices are headed in 2016? You should be tracking what's happening in the Martin Acres neighborhood.    

As usual, this isn't the typical Realtor happy talk or hand waving. Let's look at the numbers. In particular, let's focus on the Martin Acres Index (MAI).  



25 houses sold in Martin Acres during the past year. Sale prices ranged from $443,000 (150 S. Lashley) to $749,000 (315 S 42nd Street). The average sale price for basic 3 bedroom, 1 bath ranch homes that matched MAI criteria was $492,500. The average price for all homes that sold during 2015 was $560,728.  
Sold volume dropped 34% from the previous year, driven by low inventory and high buyer demand. Only 4 matched the MAI (i.e. basic ranches). Contrast that with 2003 when 83 homes sold of which 22 matched the MAI.

 
2015 Negotiation Statistics 


more than asking   64%


asking price           20%


less than asking     16%


"Clients often ask if it's worth trying to compete in a bidding war when they are not cash buyers. The answer is yes, absolutely. Only 3 deals in Martin Acres were cash last year (9%). The key is to have an agent who knows how to make your offer stand out from the competition.

Here's a story for you. In the last bidding war I managed (as the listing agent), we dismissed two offers right off the bat due to errors and conflicting information. Only one agent picked up the phone to discuss the needs of the seller and negotiate in person. It was shocking. The winning offer was not cash, but was written by an experienced agent. It was the most complete offer packet with reasonable contingencies. The buyer also chose a local, highly reputable lender." -Osman   


This chart shows the average negotiated discount for houses matching the MAI, going back to 1997. Note that historically, homes sold at a discount to asking price. That changed beginning in 2013 and has continued through this year. The trend is likely to accelerate at least through the first quarter, given early market conditions this year. 

Last year, buyers paid an average of 4.3% over asking for MAI index homes and 3.5% over asking for all properties sold in Martin Ares.     



This chart shows annual appreciation (red) and depreciation (green) for MAI index houses going back to 1997. Basic ranches matching the MAI appreciated 15.5% in 2015, this is on top of a 12.6% increase in 2014. The average selling price of all houses in Martin acres increased a massive 21.6 % in 2015. 



About The Index
The Martin Acres Index (MAI) is comprised of the average sale prices for arms length transactions of basic 3 bedroom, 1 bath ranches in Martin Acres covering 19 years of market activity. Duplicates and other bad data have been removed. This results in a small sample size with uniform houses.   

Why An Index For Martin Acres?
Most homes in Martin Acres were constructed in the mid 1950's. The majority were built as 3 bedroom, 1 bath ranches in the era immediately following world war II. These homes represent the "basic house" in Boulder. They are perfect for expansion potential, are in close proximity to CU and the heart of Boulder, and are adaptable for young professionals, families, and aging boomers alike. They also make great income properties. 




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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. 

1 comment:

  1. Osman - Great analysis. Even with the sharp jump in prices in 2015, I still see Martin Acres as a good buy in Boulder. Many of the yards are good sized, nice proximity to 36, and you're not paying the NOBO premium or the West-of-Broadway premium.

    Also, thanks for the call-out to Reputable Lenders.

    Eric S. Peltier, Citywide Home Loans, eric.peltier@chl.cc

    ReplyDelete