Thursday, December 01, 2016

To Scrape, or Not to Scrape. That is the Question

by Osman Parvez
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The Grape Street Curse Strikes Again
Earlier this week, I dropped everything and sprinted to see a new listing for one of my relocation buyers. My client is looking for a property that will be a good project to renovate. Adding square footage is expected. They're on the prowl for a home with so called good bones (with or without a basement) in North Boulder. 

This particular property in north central Boulder checked a lot of boxes:  

- Larger than typical lot, allowing more flexibility for expansion
- South facing (better for passive and active solar, plus smaller solar shadows)  
- Low traffic street 
- Well maintained but otherwise unimproved (why pay for renovations that you will gut)
- Mid 1950's construction (which the city is not yet making efforts to preserve)

Unfortunately, the back half of the lot was in the moderate risk flood plain. But by itself, that wasn't the deal killer.  The deal killer were the power lines. 

This particular house not only has the usual backyard distribution lines, it also has the Grape Street Curse: massive towers with looming transmission lines overhead. To make matters worse, a distribution branch for a perpendicular street ran directly next to the house.  In other words, the house was penned in by power lines. 

Distribution branch directly adjacent to the house
Unsightly transmission lines do more than ruin the backyard views and create challenges for expansion, buyers are increasingly concerned with health risks of Electrical and Magnetic Fields (EMF). With my science background, I know that on the scale of things, EMF is a much lower concern than other hazards like mold, lead based paint, and asbestos. The science is not particularly alarming, but if EMF goes the way of other environmental risks, awareness and concern will likely increase. Even if you could stomach the visual impact, the future health impact (real or perceived) should scare you away. Remember, location is one of the only things you can't change. 

Note:  Obviously, this one won't work for my clients.  If you happen to know of a house that might and is not yet on market, please reach out to me. 

Due diligence tips: 
- Flood maps, current and proposed
- Electrical distribution and transmission lines
- Compatible Development regulations


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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. 

4 comments:

  1. Good topic! ...I own a place in a flood plain on a 1/3rd acre lot in SoBo and am currently trying to get some estimates on how much it will cost to raise it 2 feet to get it out of floodplain for future expansion. My understanding is that being in the flood plain, unless you raise it, you're limited to improvements up to 50% of the structure's market value. Luckily, no power lines in the way or anything.

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  2. Just curious - but do you have statistics on the number of sales in Boulder being all-cash offers and how that's changed over time? (I think cash offers were 36% or so in 2015). With the market slowing down (and asking prices higher ), I would guess now that the non-cash buyers may now be better able to compete in a competitive Boulder market since places aren't flying off the shelves in bidding wars within 4-5 days the way they were most of last year and last spring.

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  3. I enjoy your blog, and miss your Fresh Listings!

    How would you quantify the risk with this new listing that backs to the contentious Twin Lakes open area? 4602 Starboard, Boulder, 80301

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  4. I can get the data, but I'm not sure it would help buyers that much. The sample size is small, the majority of multiple-offer scenarios are blind, and each deal is quite different. For example, a slightly larger than typical buildable lot on an interior street could entice a cash buyer (or a buyer willing to waive everything and pay a premium in order to lock it down). A similar house with slightly different characteristics might not draw multiple offers at all. Short answer: Other than scratching curiosity's itch, and maybe generating interesting content for the blog, it won't be actionable information.

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