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| "Look at that beautiful open space" - your Realtor |
For today's Notable Sale, let's take a look at 455 Erie Drive.
455 Erie Drive | $1.15M
We saw this six bedroom, four bath, two-story home in Frasier Meadows as soon as it hit the market. Featuring about 3,800 F. SQFT, it sits on a large lot, and with some landscaping work, has a potential view corridor to the Flatirons.
Although the home had some weird features (tiny Rapunzel balconies off each bedroom, for example), it was painfully dated and hadn't been updated in decades. A close look revealed it had good bones. With an extensive renovation, we believe the main level could be opened up and the home modernized. Plus, the large lot would likely support an addition or perhaps even a generously sized ADU.
Listed at the end of February for $1.33M, the seller dropped the price to $1.25M just nine days later. On March 8, it went under contract. It closed on April 3 for $1.15M, 13.5% below original asking and 8% below the last asking price.
Was it worth $1.15M?
Short answer: Location and potential.
Some buyers might be able to justify the valuation based on the large lot and existing bones alone, but 455 Erie Drive is also tucked away in a quiet spot. Even better, it backs to the Chancellor's Residence.
Not familiar with that parcel of land? The Chancellor's Residence is an underutilized part of CU Boulder and William's Village. People who live nearby enjoy what looks like open space as an informal social trail. In more normal times, I run laps on it in the summer. Sometimes you'll find students swinging from hammocks along the creek that runs through it. It's a peaceful place.
Don't be fooled. In some ways the Chancellor's Residence is similar to CU South. It is not open space, no matter what your Realtor says.
Will CU build more housing on what is currently used as an outdoor team building facility? A closer look at the flood map shows why development might be challenging. And by challenging, I mean expensive.
The key to understanding the value of the property is in properly gauging the risk of further development. If you look at the map above, you can see that there is only a tiny sliver of land to the west that is not in the flood plain. More likely, future development would occur to the south and east of the Chancellor's residence where it wouldn't require the same level of flood mitigation.
With that said, there is still some risk that development one day blocks the view and hems in this property. Don't think it's possible to develop in the 100 year flood? For an example, look no further than the St. Julien Hotel. This massive four-story hotel includes two levels of underground parking. It required substantial flood mitigation, but all of it sits inside the 100 year flood plain.
Remember: in the end, no investment is risk free. Real estate is no exception. We advise our buyers to always go in with eyes wide open. Even if the risk is low, it should be evaluated and discussed.
In my opinion, the potential for CU to develop the Chancellor's residence is high but due to the engineering required to mitigate flood risk, likely it will occur in ways that don't destroy the privacy and sense of spaciousness that 455 Erie Drive currently enjoys. The lucky new owner gets to find out.
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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.
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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. House Einstein strongly recommends conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. Image: Carlos de Miguel.
