Tuesday, February 21, 2017

Boulder Entry Level Remains Strong, High End At Risk of Correction [Analyze This]

by Osman Parvez
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So your Realtor say the market only goes up in Boulder? Guess again. 

At the most basic level, price is always a function of supply and demand. There is no escape from this law. Market strength depends on price range, location, property type, depth of market, and many other characteristics. As we approach the end of a real estate cycle, smart buyers focus on properties that are more likely to hold their value and sellers dump assets that are at risk of a price correction.  

Take a look at the chart below.  It shows percentage of inventory under contract in Boulder in mid February, segmented into price tranches. Demand is much higher for houses in the $500,000 to $700,000 range compared to higher price points. Meanwhile, only a small fraction of the high-end is under contract.  Does that tell you something?  It should. 

Remember:  If your Realtor waves their hands around and says the market at the high-end is filled with bidding wars and you've got to move fast, remember this chart.  And next time, choose a better Realtor.


Note:   Data for the chart above was compiled from both MLS systems that cover Boulder. Duplicated were carefully removed. Data is also for the mailing address City of Boulder, not conflicting MLS definitions, which includes parts of unincorporated Boulder County, among others.  

Intelligent real estate decisions are based on deep market knowledge.  There is no substitute.

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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. 

2 comments:

  1. I bid on a house at $900K asking in N Boulder that received 7 offers in a matter of days and sold for $956K. I would say that price point is in extremely high demand at this point as well.

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  2. North Boulder, $700 to $1MM is extremely competitive right now. West of Broadway, in particular but the bidding wars are common for anything between Broadway and Folsom, too. Keep in mind that the chart above isn't restricted to Boulder proper. You should know the market stats relative to your specific search criteria (last 6 months of sales, current inventory, and negotiation details on the last handful of bidding wars). Also, be sure to review the revised flood maps. Many properties will find themselves in the 500 year flood zone going forward, a huge factor for future appreciation.

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