She Loves Me, She Loves Me Not | 531 Maxwell Avenue [Notable Sales]

Sometimes, people fall in love only to discover that their relationship isn't what they thought it would be. Perhaps their partner didn't have potential. Maybe they were simply too high maintenance. 

Either way, getting out comes at a price. 

Happy Valentines Day, Boulder! No, we're not talking about your old girlfriend or boyfriend. We're talking about Boulder real estate. 

In this recent sale, a mid century home in Boulder has sold multiple times in recent years. Buyer after buyer fell in love, only to dump their partner a short time later.

What happened? 

531 Maxwell Ave| $1.53M | Pics and Details
It's a tasteful home at the center of the Mapleton Hill Historic District. Relatively small in terms of square footage, it features two bedrooms, two baths, and no garage. It's also in a very attractive location - one of my favorite spots in Boulder. 

Attractive as it might be, 531 Maxwell has traded multiple times in recent years. It was acquired by buyer #1 in June of 2018 for $1.5M and then quickly re-listed only a few months later at $1.68M. 

What happened? Clearly it didn't work for their needs. Odds are their agent didn't tell them about the additional development restrictions placed on properties within the District, whether they're historic or not. Maybe they didn't know about compatible development, solar access, height limits, zoning, and green building codes. The rule book is thick here in the People's Republic and it's not for the fickle. My architects tell me that right now, new clients have to wait 18 months for their projects to be completed in Boulder. Your love better be enduring.

In any event, the property didn't sell that fall and was withdrawn in early January. The seller brought it back about a month later at a massive $125K discount to the original asking price. It was then acquired by buyer #2 for just under $1.5M. Although the listing agent probably gave buyer #1 a discount to sell a home they had so recently acquired (we would have), they still likely ate at least half of the typical commissions on the transaction. 

Surprise, Surprise 
It didn't work out for buyer #2 either. 

It took buyer #2 about a year to figure out it wouldn't work for her needs, either. She gave up and listed it with her agent in late January (a far more intelligent time to sell) for $1.55M and quickly found yet another buyer. This time, it sold for $1.52M, or about $30K more than she paid for it a year ago. 

Take Home Lessons 
1. Check out my post for why listing in the off-season is a bad idea.

2. If your investment thesis involves additional square footage or any exterior modifications, have your agent bring their architect in for a consultation prior to the inspection objection deadline. 

If your agent says "we don't do that" or "you need to move fast or you'll miss out," find a better Realtor. There's no excuse for thorough due diligence and there's always another house. Always. 

3. If you don't want to lose money, plan for a minimum three year holding period in normal market conditions. At this late stage of the economic cycle, we advise a five year holding period

Buying and selling at essentially the same value means the owners ate substantial transaction costs. 

Of course, life circumstances change and sometimes an unexpected deal killer is discovered early in a client's ownership period. In these cases, we do everything that we can to help our client avoid losing money, especially if we failed to advise them on something like obvious development restrictions. This includes offering a discounted commission (while maintaining our usual obsessive level of service).  

4. The asking price reflects the seller and listing agent's perception of market value. Recent, relevant sales are the market.

Which one matters more? You already know the answer.  

5. Was this a good investment? No, not in the short-term but in the long-term, it likely would have been. Homes in the Mapleton Hill Historic District have done exceptionally well over long holding periods. 

Are you from the Show Me State?  No problem. As you know, we don't make proclamations about investment performance without backing it up. Here are the numbers:  

Based on a documented sale price of $13,000 in 1962 for this home, this asset has returned ~8.5% on an annualized basis, excluding capital improvements. That's a phenomenal rate of return for an asset you can live inside, borrow against, and has a tax advantage in the form of deductible interest.

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

Osman Parvez  is the Founder and Employing Broker of House Einstein. Originally from the Finger Lakes region of New York, he lives in Boulder with his wife and their Labrador Retriever. He has been a Realtor since 2005.

Osman is the primary author of the House Einstein blog with over 1,200 published articles about Boulder real estate. His work has also appeared in many other blogs about Boulder as well as mainstream newspapers, including the Wall Street Journal and Daily Camera. For more information, click HERE.

Fresh Listings | Our review of the most compelling new listings to hit the Boulder real estate market.| Subscribe

Socials: FacebookTwitterInstagramYouTube

Thinking about buying or selling and want professional advice?  Call us at 303.746.6896. Your referrals are deeply appreciated.  

The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties. House Einstein strongly recommends conducting rigorous due diligence and obtaining professional advice before buying or selling real estate.  

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.