Price Range Shakedown – What’s Selling in Boulder County Real Estate

Price Range Shakedown – What’s Selling in Boulder County Real Estate

Right now the broad trends in the Boulder area real estate market are: Sales at a consistent although not spectacular rate.  (Down roughly 5% from last year) Inventory decreasing (normal for this time of year) Prices are fairly stable but with a nudge toward the negative. Buyers market with the average negotiation in Boulder County over the last 12 months at 4.17% off of last list price. Today, I am going to break the market down into smaller silo’s so that you can get a better idea of the market across the different price ranges.  Tomorrow, I will do the same thing but instead of using prices I will use areas.  Here it goes. Under Contract Percentage: This is simply the number of homes currently under contract divided by the number of homes on the market.  The higher the number the stronger the market.  Not surprisingly, the lower price ranges have quite a bit more activity than the higher price ranges.  Usually, there is more stratification between the $750,000 range and the homes listed above $1,500,000 but right now that is not the case.  There are currently 18 homes under contract that are listed above $1,000,000 in Boulder County. $0 – $250k            20% $250k – $500k     20% $500k – $750k     14% $750k – $1MM     7% $1MM – 1.5MM     7% >$1.5MM                7% Absorption Rate: Absorption rate compares the number of homes that sell during an average month (I use 12 months) to the number of homes currently on the market.  For example if on average 10 homes sell per month and there are 120 homes on the market, the absorption...
The Personal Side of Real Estate Negotiation

The Personal Side of Real Estate Negotiation

There are many tactical ideas about real estate negotiation but in my opinion not enough is said about the emotional relationship between a buyer, a seller and an agent.  Buyers and sellers don’t often meet in person.  This can be a very good thing in many ways because the agents take the direct confrontation out of the process.  But the downside of this lack of interaction is that buyers and sellers don’t get a chance to make a personal connection.  They don’t get a chance to like each other.  Their first interaction is the offer for purchase and this can be a very explosive introduction.  “Hello Mr. Seller, nice to meet you.  You don’t know me but I like your house but I think you are stupid to ask that much.  I only think your house is worth $xxx.  Oh, and by the way I want to keep your refrigerator, your window coverings and your grandma’s chandelier.”  This usually doesn’t inspire an invitation to dinner. Stephen Covey’s idea of an emotional bank account in “The 7 Habits of Highly Effective People” can be easily translated to the parties in a real estate transaction.  Watch the video to see what a buyer, seller and agent can do to make friends with the other sides of the transaction.  In doing so, negotiations will go much more smoothly and buyers and sellers won’t mind sitting together at the closing table (this by the way is getting less common). Advice for Home Buyers: Don’t make an unreasonably low offer. Don’t ask for personal items which have been excluded from the sale. Don’t be...
Mobile Phone Home Search – I have an app for that!

Mobile Phone Home Search – I have an app for that!

This is a mobile world.  People don’t want to wait for answers when they are used to getting all of the information they need right now on their phone.  This is especially true when you are curious about a house when you are out driving around.  This is why I am pleased to announce my new home search application for mobile phones!  It works for iPhones and Android phones and is easy to use, up-to-date and uses data that comes directly from my local MLS.  I’d love for you to use it. GPS-based property searches Interactive mapping to view properties for sale in surrounding neighborhoods Create, maintain and share your Favorites Folder Create New Listing Alerts View comparable Sold Homes Share listings with your Friends and Family View my Featured Properties And much more . . . To download the app from the iTunes store click here. To download the app from the Android Marketplace click here. Once downloaded the agent ID to make it work is NEIL. If you are looking for a reliable home search tool for Boulder County use my property search located on this website.  You can save your...
Are Home Warranties Worth The Money?

Are Home Warranties Worth The Money?

Many times you will see “Home Warranty Included!” on a property listing. This sounds good right? But many times prospective buyers who negotiate for home warranties have the wrong idea about what a home warranty is and what it covers. Here are some answers. A home warranty is basically a very limited insurance policy that covers certain home systems and appliances for a fixed time period. Usually when a home warranty is provided as a buyer incentive the warranty is good for one year after the closing. The cost of basic coverage is typically $275 – $400 and covers plumbing, heating, electrical, major appliances and water heater. There are limitations in coverage and plans do not cover preexisting conditions.  Home warranties do not cover mold or structural damage. Once the warranty is in place the new owner would call the warranty company first when an issue that requires a repair person to be called. The warranty company contracts with certain companies and sends them out to diagnose and fix the problem if it is determined to be covered. At the time of repair the owner pays a deductible. The owners share is usually around $50 to $60 per occurrence. So is it worth it? Just like any insurance policy you need to weigh the probability of something happening and the severity of the cost if you didn’t have coverage with the cost of the coverage upfront. If someone else is paying it is definitely a good thing to have. If you are paying $400 year after year it may not pay off in the long run but it is...
Interest Rates Super Low – Affordability High

Interest Rates Super Low – Affordability High

It seems like I have been saying this for years but now would be a fantastic time to buy a property.  As interest rates drop the payment on the mortgage falls.  What is surprising is how much.  Say you have a $300,000 mortgage at 6% right now.  6% used to be a great rate.  Anyway, right now for the same amount of monthly payment you can purchase a home with a $375,000 mortgage.  That is $75,000 of free money!  The effects can even be more dramatic if you have been in your home and have accumulated some equity.  I am working with a buyer now who is purchasing a home $150,000 greater than their old home and their payment will be virtually the same.  Did I say this is a great time to...
Housing Affordability – More Important Than Price

Housing Affordability – More Important Than Price

If you bought a home in 2002 for $400,000 your payment was approximately $2,661 not counting taxes and insurance.   Interest rates were 7%.  Today, in Boulder County if that house appreciated at the average rate that same house can be purchased for $465,000.  Based on today’s interest rates of 4.75%, your new payment would be $2,453.  A savings of roughly 8% per month. When buyers are considering a home purchase, purchase price is fairly arbitrary unless they are paying cash.  Purchase price is the answer to a series of questions about how much a buyer can afford on a monthly basis.  The general rule of thumb for payment  affordability is 33% of gross monthly income.  Say for example a family earns $6,000 per month.  Their total payments towards housing should be around $2,000.  This figure should include principal, interest, taxes, insurance and HOA fees if any.  Assuming no HOA fees and interest rates of 4.75% the qualifying purchase price will be around $335,000. Let’s complicate things a bit by bringing inflation into the mix.  Since 2002, inflation has averaged 2.35% per year.  Since 2002 homes have appreciated in Boulder County on average 1.8% per year.  All things being equal homes today are a better value than they were 9 years ago.  But all things are not equal.  In 2002 interest rates were 7% and now they are 4.75%.  If you put these two factors together the home that sold in 2002 for $400,000 and now is worth $465,000 is 27% more affordable than it was in 2002! Buyers are getting much more bang for their buck now than they...
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