by Neil Kearney | Dec 9, 2010 | Boulder County Housing Trends
On a consistent basis the number of homes that are added to the MLS as new listings far outnumbers the number of sales. In fact, so
far this year there have been 7,199 new residential listings added to the IRES MLS system in Boulder County. During that same time 3,453 properties have sold.
So what happened to the 3,746 other properties that came on the market but have not yet sold? Ont he chart above this number is represented by the gap between the red and the blue. The most logical answer is that those properties are still on the market. Right now there are 2,269 properties on the market. So at first glance this would account for over half. But remember that we don’t start the year with a blank slate. On January 1, 2010 there were 2,191 listings on the market so actually we have just accounted for 78 of the 3,746 listings. So where did they all go?
Here are the scenarios I can think of:
Withdrawn – Sellers get tired of selling. They realize that their property at the price they want/need is not working so they withdraw it from the market and wait for a better day. So far this year there have been 3,103 properties withdrawn.
Expired – Listing agreements between a Seller and Realtor last a finite amount of time. If the property has not sold by the end of the agreement then the listing automatically is deleted from the system. So far there have been 550 expired listings.
So the math so far:
2,191 starting inventory
+7,199 new listings
-3,453 sold listings
-3,103 withdrawn listings
-550 expired listings
= 2,284 (Actually the exact number of active listings is 2,269.)
I’m a bit surprised. I was expecting this number to be way off and I was going to spend this paragraph talking about why the numbers don’t add up. So on to plan B. Despite the good math (less than 1% error), there is some fuzziness in the numbers. Not every new listing is a “brand new” listing. A Realtor can withdraw their listing and enter it again anew minutes later. In a competitive market this happens, more often than you think. Also, not all sold listings, withdrawn listings and expired listings were listed this year. The numbers are not as straight forward as they seem.
So why am I debunking my numbers after I just proved the math to be accurate to less than 1%? It’s because you need to realize that the numbers don’t always give the full picture. There is more to it than looking at some statistics you have to know what is going on to have the full picture. After selling real estate in Boulder since January 1992 I have developed a sixth sense of how the market is. Right now the numbers don’t seem that great but I see more promise than I did two years ago at this time. Let me know how I can be of service.
by Neil Kearney | Nov 23, 2010 | Boulder County Housing Trends, Statistics
Here we are two days before Thanksgiving, a storm is expected to bring heavy snow to the high country
and before you know it the holiday season will be in full force. Usually this means that the real estate market goes into hibernation, waiting for spring. But this year has been a bit different than past years. Recently I likened the 2010 market to a sharks fin, steady up and then off the cliff. Well since July we have been riding on the back of the shark, just sliding along at a constant pace.
Today I decided to use a couple of statistics to measure how we are doing in terms of activity. I like to use under contract percentage and inventory (other people call it absorption rate) to compare the market activity across time. Here is what I found.
I found that the local Boulder area real estate market is doing fairly well. Right now the percentage of homes under contract in Boulder, Louisville, Lafayette, Longmont, Suburban Mountains and Suburban Plains are all at higher levels then they were back in July, August and September. We have fewer homes on the market right now but still I think this shows some good backbone to the market. Some baseline strength.
Inventory is a measure of how long it would take to sell all active homes on the market given a historic sales rate (past 12 months). Again, this months numbers are lower than any month since the tax credit expired.
The attached presentation shows these statistics graphically.
by Neil Kearney | Nov 15, 2010 | For Sellers, General Real Estate Advice, Real Estate 101
I get calls all the time asking for advice on whether it would be smart to do a particular remodeling project around their home. 
Many times it is tough for me to make the call for them. I look at houses all the time and see what buyers like but in most cases improvements don’t pay off right away. For instance according the Remodeling Magazine’s Cost vs. Value Report 2010-2011 a two story addition in the Denver area will cost $155,903 and give added resale value of $118,301. This means that an owner could expect to get about 76% of the value out of that project. Not exactly a strategy from the pages of Trump – The Way to the Top.
Okay, we have established that you won’t get back all of your money if you do a home project but what if that scares you into paralysis? Say you have owned your home for 15 years and during that time you have done nothing but change the filters in the furnace. This strategy, in my opinion works even worse than improving your home right before closing. In the case of the do-nothings, the value of their home will lag behind the neighborhood in general. Their home will stay on the market longer and in the end sell for a lower price. Again not a way to get rich quick.
I think the best strategy for maximizing the value of your home over time is to make incremental changes over time. Take on a project every six months or 1 year. For example, take a six month period to remove the old wallpaper and repaint. Next, re-do the powder room by removing the wall sized mirror and replace with a framed mirror and replace the lighting. Next re-tile the master bath. After a few years your house will start looking refreshed and will be one of the nicer ones on the block. And when you go to sell it you won’t have much to do to get maximum value. Also, you get to live in a much nicer home. Not just fix it up for someone else. There is value in that!
Here is a sample of the value of Midrange projects and their pay back in the Denver market:(ranked in order of pay back percentage):
- Garage Door Replacement – cost $1,228 – cost recouped 93.1%
- Steel Entry Door Replacement – cost $1,165 – cost recouped 86.1%
- Minor Kitchen Remodel – cost $21,035 – cost recouped 79.6%
- Vinyl Window Replacement – cost $10,330 – cost recouped 77.1%
- Wood Deck Addition – cost $10,721 – cost recouped 75.1%
- Major Kitchen Remodel – cost $53,032 – cost recouped 73.5%
- Master Suite Addition – cost $100,775 – cost recouped 74.5%
- Family Room Addition – cost $79,383 – cost recouped 70.6%
- Basement remodel – cost $62,115 – cost recouped 63.2%
- Roofing Replacement – cost $17,943 – cost recouped 61.8%
For copyright reasons I can’t display the report on my website but if you would like a copy of the full report which includes midrange and upscale projects and defines the scope of each please let me know. I can send you one if you request one to neil@neilkearney.com.
To see the associated web page go here.
For more information this topic see my post on list price vs. condition.
From HGTV a before and after.
by Neil Kearney | Nov 10, 2010 | Boulder County Housing Trends, Statistics
Sales in Boulder County continued the post tax credit trend. We have been recording between 250 and 290 sales each month in Boulder County and this month we posted 249 closed transactions. This represents a 20% drop from October 2009 and an eight unit drop from last month. Usually the seasonality in our market resembles a bell curve but this year it resembles a sharks fin.
It seems that activity is still fairly strong. There are buyers out there looking. We are at about the same level of contract activity now as we were at the end of August. This bodes well for closings staying steady until the end of the year.
Interest rates continue to be very low and some buyers are finding motivated sellers. Although a buyer can expect a fair deal, not every seller is ready to give away the farm.
Inventory usually starts falling this time of year as sellers get tired of having their houses on the market and take their homes off for the holidays.
Home appreciation is hard to track on a monthly basis but if you are looking at median price we are looking strong. The jumps in median price correspond directly to the tax credit expiration so I suspect that we are just selling fewer lower priced homes which makes it look like prices have jumped. In reality prices are holding steady.
by Neil Kearney | Nov 2, 2010 | Boulder County Housing Trends, Real Estate 101
Foreclosures have been in the news for a number of years. It goes in cycles. I bought my first condo in
1992, it was a HUD 
foreclosure. The combination of loans with adjusting interest rates, too easy credit a few years back, overly optimistic buyers, falling values and a deep recession have brought us foreclosures in waves that keep on coming.
The latest in a long line of foreclosure news is the robo signer scandal, and the revelations that foreclosure sales were not processed properly therefore the sales are not valid. I’m not an attorney and I’m not an expert of foreclosure laws or proceedings but it seems to make sense that the basics should still apply. If a homeowner misses payments they are in breach of the agreement they signed at the closing. When in breach of the agreement the bank has the right to take the house back subject to the laws of the state in which the house sits. Those laws should be followed and the correct procedures should be done in the correct order but … Let’s get back to basics, the homeowner agrees to pay, and when they don’t they lose their rights to live in the house. It’s really that simple.
I favor loan modifications which seem to work better for everyone. But it seems that many of the loan modifications haven’t worked. The easy credit prevalent in the mid-decade approved people who can’t or won’t keep to a credit promise, modified or otherwise.
Once the bank has the house back they need to take enough due diligence so that the deed is conveyed correctly. And what if they don’t? Just as they have with the robo signers. I think that to negate sales and muck up the process with minutia is a disservice. Make the corrections that are needed to clear title and move on. Get it right, don’t take another victim by throwing the baby out with the dirty bath water.
far this year there have been 7,199 new residential listings added to the IRES MLS system in Boulder County. During that same time 3,453 properties have sold.
