2336 Spruce Street A [Notable Sale]

NOTABLE SALE: 2336 Spruce Street A | $1.05M   

"Buy now, Boulder real estate only goes up." - Typical Realtor.  

What Makes It Notable?  
It can be challenging to see through the smokescreen of marketing glitz that the Boulder real estate community would like you to believe. The idea that you can't make a mistake in the Boulder real estate market is a myth. It happens all of the time.  

One of the biggest mistakes buyers routinely make is poor property selection. This recent sale illustrates the issue, not just once, but twice. Acquired for $1.7M in the summer of 2013 (by a now dissolved LLC registered by a Boulder wealth advisory firm), 2336 Spruce Unit A was listed for sale in the spring of 2018 for $2.0M. After four months on market, the listing was withdrawn. In January of 2019, the owner brought it back to market at $1.9M. Again, no takers. They kept it on the market for the spring, summer, and into the fall - dropping the price twice before pulling it off the market again in September. Two months after the listing expired, the owner sold it for $1.3M in a private transaction.  

In August of 2020, it was brought back to market by the new owner, this time with two notable differences - a massive price reduction to $1.12M and a brand new listing agent. Why the new owner listed it for nearly $200,000 below their acquisition price is a mystery. Perhaps they were motivated. Or, perhaps they were laundering money. Your guess is as good as mine.  

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Despite the apparent rock bottom price, solid build quality, and a location steps away from the Google campus, there were no takers. It sat on the market from August through April before the seller dropped the price. It was relisted at $1.1M in April of 2021 and sat on market all summer. Finally, at the very end of summer, it went under contract. Last week, the deal closed at $1.05M.  

I suppose the public records could be wrong, or the purchases were bundled with other transactions. Fair enough, but there's no mistaking the historic list prices. In 2018, this property was publicly marketed at $2.0M. In 2019, the price  dropped to $1.8M. By 2021, the list price had fallen to just over $1.1M. Despite the price slashing, it took three years of waiting for the right buyer to come along, and it still sold at a discount. Based on the public record, this asset's investment performance from 2013 to 2021 was negative 5.8% on an annualized basis, ignoring the cost of the "recent remodel."  


What was wrong with it? The property was on the ground floor and very dark. It also had a funky layout and limited outdoor space. In short, this home appeals to only a small subset of the market - buyers looking for lock and leave lifestyle, with zero maintenance, and ground floor living. Buyers who aren't concerned with light and with outdoor living spaces.  

If you're considering buying an oddball, it's smart to ask whether this property will be marketable in the future - and to whom. This is a question we always ask our clients, even if resale is years or decades into the future. If it took months (or years) to sell in the past, you can safely expect it to take that long in the future - no matter who the listing agent might be. Remember: "Buying right" is not just about paying the right price, it's about choosing the right property.  

Note: Not only should you be judicious in your choice of property, but be careful whom you choose to advise on the transaction. There are a lot of good agents out there (here's a few), but be weary of agents who offer little more than platitudes and happy talk about the market. And if you ever hear them say that Boulder real estate only goes up, don't walk, run.  

Note: The Realtors at House Einstein did not represent the buyers or sellers of this property. Our goal is to educate you on market conditions and recent sales to help you make a smarter real estate decision.

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.   

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.