Flip Into the New Year [Boulder - Fresh Listings]

Who expects new listings to hit the Boulder real estate market during the slowest week of the year? Sadly, like a re-gifted present, most were refreshed listings pretending to be new. 

Only two new listings are worth a look this week. In addition to exploring these properties, let's take a closer look at closings from last week and have a more in-depth discussion on notable sales. 

Are you ready to dive into the world of Boulder real estate? Let's go!

For a private showing and a data driven discussion of valuation, negotiation strategy, and market conditions, call Osman at 303.746.6896.

Our goal is to help you make a smarter real estate decision.

Sold Listings of Note

5235 Old Stage Road | $3.3MM | Details
A stunning property and a case-study on the challenge of marketing homes when working with unrealistic sellers. Let's talk about the house first. 

Built in the 90's, 5235 Old Stage Rd. is a gorgeous luxury home with around 5,000 beautifully finished square feet. From a functional perspective, it has four bedrooms, five baths, and a four car detached garage. Buyers expect grand views from the living and entertaining spaces, both indoor and outdoor, at this price point. The layout is also conducive for entertaining and the 30 acre estate is quite private. It's in close proximity to Boulder proper. From the driveway, you can be sipping wine at Frasca with Bobby in about twelve minutes. 

Now let's talk about the listing history. Some folks like to call this pricing strategy "testing the market." I prefer to call it "wishful thinking."  

5235 Old Stage first hit the market three years ago for $6.5MM. Oddly, the seller slashed the price a massive $2.0MM just two weeks later. What signal does that send to potential buyers? 

A year later the seller pulled it off and sixteen months after that, likely after lots of deliberation, they brought it back. This time they were more determined. The listing now featured better photography and a somewhat more intelligent price - just under $4MM. Too bad they overshot again. Remember kids, if you want to leave a lot of money on the table, grossly overprice your listing. 

Spring turned to summer and the seller cut the price three times. It dropped to $3.5MM. By the middle of July, the seller had enough and they yanked it off the market. Then, just a few short weeks later, it was back. The new listing agent kept the $3.5MM asking price and, after two months on market, it finally sold at a reasonable 5.7% below last asking. 

Take home lesson: Wishful thinking is a poor marketing strategy in Boulder, especially at the high-end. There are few homes worth more than $4MM in Boulder and sales volume is very thin. Buyers at this price point have negotiation leverage and as my old economics professor would say, price elasticity of demand. Starting with a wildly unrealistic asking price followed by drastic price cuts send signals to these highly selective buyers about a property's desirability. 

The best way to price a property is with a deep understanding of market conditions, comparable sales, and active competitors. There is no substitute. Although higher-end homes often take longer to sell, if this listing had originally been priced more intelligently, it would have almost certainly sold for more. 

Unrealistic expectations likely drove this marketing fiasco. Sellers often believe their home is worth more than Mr. Market. It's your listing agent's job to show you what it's really worth, preferably with data analysis, a track record, and a solid understanding of human nature. If they show up with shiny brochures and happy talk, find a better agent.   
505 Geneva Avenue | $3.0MM | Details
A large, early 90's luxury home in an exclusive location at the base of Flagstaff. Six bedrooms, six baths, and an attractive custom design. The new owner will likely complete some updates. They chose a solid platform and location. 

Due diligence: There are a few downsides to consider for this location. One factor is the heavy traffic on Flagstaff which can echo down the mountain to the neighborhood below, especially during the summer when the Harleys come out. It sold for 6.25% below the asking price, two days on market. 

4479 Prado Drive | $1.92MM | Details
We represented the buyer of this exceptional home in Eldorado Springs. One of the strongest selling points: a design which wraps around a very private, oasis like back yard with South Boulder Creek gently flowing through it, backing to 300+ acres of open space. My due diligence uncovered that it's also the largest home in the neighborhood, far exceeding the 125% of median size allowable under current home size restrictions. The existing floor plan and design offered much possibility. We negotiated 12.3% off the last asking price for our buyers. At only $318/SF in this exclusive location, it's a value investment.  
210 Kiowa Place | $1.25MM | Details
A well executed flip. Acquired in late August for $852K, gutted and remodeled in two months, and on the market by early November. The key was the size, layout, and location. It was under contract and sold for full asking last week (note: $50K discount from original ask). 

Here are the before and after photos. Compare the two and you'll see the seller did a good job selecting popular finishes and fixtures for the remodel. Staging and photography were decent. They chose the right property and got the work done fast. Well done. 

Take home lesson: If you're a seller in the flip game, don't be greedy. Price it ahead of the market. If you're a potential buyer considering a flip, pay careful attention to workmanship and the quality of the materials. Don't forget to check permits and the contractor's reputation. 

2037 Mapleton Avenue | $860K | Details

Put a fork in it. This historic Boulder house is done. It shows clear signs of structural failure after decades of neglect. Supposedly, a demo permit was included by the estate and that's how the story will likely go. 

After a visit to the house, my conclusion was that the value of the property was a dirt lot minus the cost of demolition. Back in the day, you could scrape a home into the dumpster but in the City of Boulder, the process today involves deconstruction. Re-usable materials are required to be harvested, which can dramatically escalate the cost.   

We toured this house on behalf of a client and put together a video for them. When they decided to pass, we published it. The listing agent contacted us and we removed the video at the request of the seller. Now that the deal has closed, the video is public once again. I look forward to seeing what the new owner creates. 

Fresh Listings

409 W Cleveland Street | $615K | Details
An affordable three bedroom, two bath flip with a two car garage in Lafayette. The location is solid with walkability to restaurants and shops, plus the photos pop. Compare before and after

Due diligence: In addition to completing an extensive interior renovation, the seller added a bath, vaulted the ceiling, and appears to have increased the square footage of the property. That's a lot of work. The difference between the last purchase and asking, minus commissions is a little over $200K. Check carefully for quality of construction, permits, and contractor reputation. Lafayette is also subject to fracking in certain locations. Cross reference fracking maps and talk to neighbors about the issue. 

For a private showing, call Osman at 303.746.6896. Our goal is to help you make a smarter real estate decision.
3000 Colorado Avenue E-120 | $405K | Details
A rare three bedroom, two bath investment condo at Wimbledon, with interior updates.  These units rent easily to CU students, have reasonable HOA fees, and have been a solid cash-flow investment play for our clients in the past.

Due diligence: A careful analysis of price is a must. See "Osman, How Much Should I Offer?" Also, the listing details are wrong. It has an HOA. 

For a private showing and a data driven discussion of valuation, negotiation strategy, and market conditions, call Osman at 303.746.6896. 

Worth a Second Look
3260 Cripple Creek Trail 3-B | $479K | Details
The photographs do not do it justice. One of our buyers had this property in Shanahan Ridge under contract last week. It shows far better in person. It also has a main floor bedroom and an office that could easily function as a (non-conforming) third bedroom. Of the currently available options in this development, it's the smart play. Compare to the listing at Wimbledon (above). 

Due diligence: Why did our buyer bail? Not due to any issues with the property itself. Call me for details. Also, check into HOA rules to see if they will allow sun-tubes in the living area, which will dramatically improve the interior. A former board member told me she didn't see why it wouldn't be approved, but check the rules anyway. 

For a private showing and a data driven discussion of valuation, negotiation strategy, and market conditions, call Osman at 303.746.6896. 

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Ready to buy or sell? Schedule an appointment or call 303.746.6896. 

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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. 

Cover image: Quino Al

Please Note

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.