Sunday, January 24, 2016

Table Mesa Prices Jump 11.5% [Analysis This]

by Osman Parvez
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A few weeks ago, I updated my annual analysis for Martin Acres. Now let's take a look at an adjacent neighborhood directly to the west: Table Mesa.  

Remember: negotiation expertise is a competitive advantage for both buyers and sellers. Smart real estate decisions are based on a deep understanding of local market conditions. There is no short-cut to deep analysis nor a replacement for skill. Sorry, there's no app for that.     

Table Mesa is a well located neighborhood with a selection of diverse properties. It has the best rated schools in Boulder. The retail mix at the Table Mesa shopping center continues to improve with the recent addition of Sweet Cow, Lucky's and Snarfs are expected to open sometime in the near future. Table Mesa features several beautiful parks and a popular recreation center, not to mention phenomenal hiking/outdoor recreation and many trail heads. Assuming you're not into beer pong slip'n slide, buyers with families are happy to know that Table Mesa doesn't have a high percentage of CU students.   

This analysis looks at single family houses only. Table Mesa also has many attached dwellings on Shanahan Ridge and Devil's Thumb with some rental-only properties lower down. 



House types are evenly distributed in Table Mesa with 1 story ranches taking a slightly higher share.



As a proportion of sales, $1MM+ listings have increased markedly over the past several years — more than tripling since 2013. Note: higher-end listings were also the most volatile in past real estate cycles. Property selection can counter downside risk and help with capital preservation. Talk to your professional real estate adviser.


Sales volume fell last year. 103 houses traded in 2013. Only 90 in 2015. 

Note: this includes only MLS transactions. In any given year, a small percentage of non-arms length transactions occur off the MLS. To prepare this analysis, I reviewed all recorded sales and found a small number of off-MLS transactions. Some of these were well below market price. I suspect these were mostly family transactions. In a few cases, prices were strangely well above market as well — likely private sales to buyers who erroneously thought they were getting a deal. 

Funny story: when I worked in private equity, "dumb money" was what we called investors who overpaid for deals (in snarky contrast to "smart money"). Off-MLS sales likewise can be treacherous waters. Buyers naively think they are getting a deal, but in most cases, they probably aren't. Sellers are inclined to take private deals only if they are confident they are getting a price higher than they would by listing it publicly.



The median sale price in Table Mesa rose from $600,000 in 2013 to $730,000 in 2015, an increase of 21.6% in two years. 2015 showed a stronger appreciation rate (11.5%) than the previous year (9.1%).


Last year, houses in Table Mesa traded at an average premium of 0.6%. Contrast that with an average negotiated discount of 1.9% in 2013.   

If you're interested in comparing Boulder neighborhoods, note that 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. The Martin Acres analysis is HERE.




The chart above shows the average negotiated discount (same as the preceding chart, now shown by the red dot) but adds the min/max negotiated discount or premium paid. It illustrates one important point: pricing and Realtor skill are all over the map.   

Even in this strong seller's market, some homes sold at massive discounts because they were mispriced and badly marketed. Other homes sold at substantial premiums, but that doesn't necessarily mean the seller achieved their maximum possible price. Talk to your real estate adviser about marketing strategies that maximize sale price.   

During the last few years, we've seen so many mangled negotiations and poorly handled bidding wars it's become almost the norm. In one notable case, we directly participated in a deal where the listing agent left a large sum on the table. They told our buyer there were no other bidders and didn't call to negotiate when another offer arose. The seller would have netted at least another $100K if the negotiation had been better handled.  The skill of your Realtor is important. 



This last chart shows the percentage of homes that sold over asking in Table Mesa. The trend is unmistakable; nearly half the homes in Table Mesa sold for more than the asking last year, a sharp increase from 2013 and 2014.   

It reminds me of the old George Carlin joke: "Think of how stupid the average person is, and realize half of them are stupider than that."  

Don't get me wrong. Some homes are clearly worth paying a premium. Others are not. One of the jobs of your real estate adviser is to help you understand which homes are worth jumping into a bidding war. Choose your agent carefully.

Note: My last deal in Table Mesa closed in Early January for nearly 3.5% below the asking price and almost 9% below the original list price. We represented the buyer. 


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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. 

5 comments:

  1. Thanks for the analysis Osman. Super interesting. Is Devil's Thumb included in your Table Mesa data, or is that considered a separate neighborhood? I imagine the challenge with doing an analysis on Devil's Thumb alone would be the limited volume...

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  2. I consider Devil's Thumb a sub-neighborhood within Table Mesa. It's included in the dataset.

    I've also analyzed Devil's Thumb separately in the past for my clients. Views, proximity to the substation, and interior remodeling have a big impact on value.

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  3. Echoing David's thanks for the great analysis. This blog is the best source of Boulder real estate data out there.

    You touched on how interior remodeling impacts value. I'd enjoy seeing more posts on the pros and cons of remodeling v. trading or buying up. One frustration I had when home shopping in Boulder (unfortunately I had not yet discovered this blog) is that many of the houses in neighborhoods like Table Mesa need remodeling. However, houses under 1 million go so quickly that it's hard to get a good, timely estimate of how much it would cost and the time it would take to remodel the house. As a buyer, this made it harder for me to feel confident about what premium to offer for a remodeled house. As a now home-owner, I ask whether (and how much) it makes sense to invest in remodeling or expanding v. justing trading up someday. I think relators could really add value by being conversant on remodeling given the scarcity of turn-key homes at lower price points.

    Thanks again for the great blog!

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  4. Osman, love your blog. Would you do a similar analysis of newlands for 2015? Hopefully it's in the queue. Thanks.

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