Friday, January 06, 2017

The TOP Boulder Real Estate Sales of 2016

by Osman Parvez

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Ready for some real estate eye candy? 

There were nearly 5,000 sales in Boulder County last year.  By all accounts, it was a strong year - especially for the very high-end of the market.  

Join me on a journey.  Let's take a peek through the looking glass.

Boulder sales by the numbers: 

  • 440 were over $1MM  
  • 78 exceeded $2MM 
  • Just 19 sales were in the lofty $3MM+ category

Here are the top 10 high-end sales of the year, the most luxurious residential real estate that traded hands in Boulder during 2016 - plus the usual snarky commentary, analysis, and deal notes. Let's go.
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Author's note: This is part of a 10 post series which will be published on schedule during the next few weeks.  Check back for more.
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First, a little Q & A: 

Client: Osman, what makes for a smart buy at the high-end in today's market?


Osman:  Real estate assets with built-in downside risk protection.  


In Boulder, property with direct access to open space (preferably private) and protected 180 degree views appreciate faster during upswings and drop less in value during downturns. It's the equivalent of waterfront property (without the risk of climate change). You will invest more for the acquisition but you will also reap the reward years down the line.  


Remember: Real estate is cyclical and we're at least 7 years into a rising market.  As appreciation rates slow and the risk of a downturn increases, capital preservation matters. 

The #10 top real estate sale of 2016 was 1910 Stony Hill Road.    

1910 Stony Hill Road
Details
The seller acquired the home in the spring of '10 for $1.8MM (5% below last asking). During their ownership tenure, they invested in a new PV system, basement re-finish, roof, and a complete kitchen remodel (including a wall removal). From an investment perspective, little of the follow-on capital mattered. The real value of the property was almost entirely the gigantic lot in one of the most exclusive locations in town. Over the seller's ownership period, the investment saw an 11.9% unlevered IRR (assuming $200K of additional investment in year 2). 

The property features direct, semi-private access to open space and arguably the best views in all of Boulder. With nearly 8,000 square feet (5,000 finished) on an extra large 15,350 SQFT lot - the bones of this house are a solid foundation for a trophy remodel by the next owner. The only significant downside is the lack of walkability to dining and other retail for which locations in Mapleton Hill and on the Alpine/Balsalm/Panorama Peninsula have an edge. It's an A+ location. 

Click HERE for listing details and eye candy.

Litmus Test  
A few years ago, I sold a neighboring property on Stony Hill and attended contractor meetings on behalf of my clients. Every single person who walked into that house exclaimed "wow" when they saw the view. For homes valued north of $3MM, that's the reaction that should be expected. For capital preservation as well as your own appreciation, most of the rooms in the home, and especially the living and entertaining areas, should be designed to emphasize the view. 

Deal Notes 
Pocket listings, like this one, carry a significant risk of overpaying. From the seller's perspective, the only reason to accept the private offer is if you are highly confident that you're getting far above market value. 

Back in my Wall Street days, bankers used to call investors who didn't know what they were buying and who happily over-payed "Dumb Money" (in contrast to "Smart Money").  If I were representing the buyer, I'd have insisted we carefully review my analysis of the comps and visit the available alternatives before pulling the trigger. Homes that have a past history of slow sales and multiple discounts, like this one, warrant caution.  If your agent pushes the private sale on you without a discussion of risk, find a better Realtor.
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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.   

image:  Shane Hauser

1 comment:

  1. At $393/sqft. for that location/views, that's a STEAL!...

    ReplyDelete