How Much Should You Pay? [Analyze This]


--- by Osman Parvez

I posted this chart on our Insta this morning.  After some discussion with Leah over breakfast, it was clear that more explanation was needed.  

So, let's talk about the data set.  You're looking at residential house sales (no attached dwellings) in Boulder since January of this year.  The data is only for Boulder proper.  Gunbarrel and the Foothills are excluded. The data is also verified arms-length transactions on the MLS at all price ranges.  

I put together a similar analysis for a buyer earlier this week. My client level analysis was specific to their particular price range and unique property search.  I also gave them the entire data set, so they can compare individual properties and cross reference listing details to ballpark condition. Why?  Because not every property is worth a bidding war. When there is a bidding war, it's important to have accurate, actionable information to back up their decision.  I don't want them spending a single dollar more than necessary and in Boulder, we're talking about bidding wars that can drive the price up tens of thousands, in some cases hundreds of thousands for luxury homes.  See this week's fresh listings for an example of a buyer who paid $200K over asking. 

Back when I worked on Wall Street, my research team focused on providing actionable information to our clients - institutional traders.  Actionable market information is highly relevant, accurate, and time sensitive. It's no different now and my analysis for real estate clients is prepared in the same way. I'm pulling data manually, from both public and private sources, cleaning the data and then producing a custom analysis for my buyers and sellers.  

About that Analysis
The first column is the percentage of buyers who paid a premium for their home, i.e. more than asking.  The second column of data is the percentage who paid asking.  The third column (in grey) is the percentage of buyers who paid asking or more for their homes, i.e. the cumulative of the first two columns.  The fourth and fifth columns are the median and average premiums paid, when there was a premium. 

What's clear from the data is that as we move from the winter into the spring market, more Boulder buyers paid a premium and they paid a higher premium.  What's also clear?  A substantial percentage of houses do not get a bidding war.  What's that cliche? You've got to know when to hold 'em and when to fold 'em.  

If you're looking for actionable information for your real estate purchase or sale, don't hesitate to reach out. Our goal is to help our clients make a smarter real estate decision.  You can reach me at osman@houseeinstein.com. 

Sing it, Kenny. 



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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. 


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This document contains forward-looking statements. You are strongly cautioned that investment results are subject to business, economic and other uncertainties. There are no guarantees associated with any forecast and the opinions stated here are subject to change at any time. Always consult your financial advisor before making an investment decision.