Musings on Pricing, Sellers and Housing – Boulder and Beyond, Part I

Back in the early 1990’s my husband and I tried to buy our first home in Southern California. That market was experiencing some challenges at the time, and we thought we would be able to swoop in, and snap up a great house with no money down using our VA loan. We made at least 4 low-ball offers without success. One home was offered at $215,000, we offered $185,000 and the seller countered back at … $215,000. His rationale? That was the price he “had” to get in order to make any money on the deal. Ultimately we weren’t successful in purchasing a home in SoCal. Good thing! Within a couple months my husband’s company offered him a transfer to Boulder, CO and we have happily been here ever since, and have indeed been homeowners.

But a few things from that time in our lives have stuck with me. One was an article I saw in the LA Times back then that lambasted sellers who have what they called a “gotta get” mentality. “I have to get $300k for my home, or I can’t buy my replacement home.” Or “I’ve got to get $450k for my home because, if I don’t, after my mortgage and transaction fees I won’t break even.” Or “I have got to get $275k for my home because that is what I paid for it 6 years ago.” Guess what sellers – WHO CARES??? As a buyer I could CARE LESS about your situation, what you owe, what you paid, and what YOU think your home is worth. As the home’s current owner, yours is the most biased opinion possible! What matters to me are MY housing needs, MY budget, and what your home is worth to ME.

Something else that stuck with me was a conversation we had with a friend of my parents, Dr. Alan Kreditor. At the time he was the Dean of the School Urban Planning and Development at the University of Southern California. Very Smart Guy. His wife Marcia was also the real estate agent assisting us in our home search. At a gathering one night we expressed frustrations about our home search – we were very concerned about resale and not paying too much, exasperated by unreasonable sellers, our inability to find the perfect deal. Time for the tough love. He said some things we will never forget.

Here they are, here are your take-aways from this post ... You can’t always look at a home purchase as a money-making venture. This is housing – this is where you will eat, sleep and dwell, with your family, pets, belongings, etc… When you quit looking for what you THINK is the perfect investment and start looking for a place to LIVE, you will find the right home. When you sell this property in the future maybe you will make money on the deal, maybe you won’t. You have to ask yourself … Did we enjoy living here? Was it affordable for us? Did it compliment our lifestyle? Did we feel safe here? Did we create lasting memories in this home? A profit on the deal is the icing on the cake. This is housing. Period.

Stay tuned for Part II and what my company and I are trying to do to ensure that our buyers housing needs are met, and that our sellers come to terms with current market dynamics.

I whole-heartedly welcome ANY and all comments on my musings! (Because of course that is what they are … MY musings. However Alan Kreditor is a really smart guy so take (my recollection of) his words for what they are worth, which is substantial, IMO.)

Pam Metzger
Director of Business Development and Relocation
@pmcolorado
pam@coloradolandmark.com
303-443-3377

Luxury Home Sales in Boulder May be Tough - Colorado Landmark Still Boulder's Luxury Leader, since 1977

While attending the Leading Real Estate Companies of the World conference in Las Vegas last week, I was asked to speak on a panel about The Luxury Portfolio Fine Property Collection, the Luxury marketing division of LeadingRE. I shared the benefits of being a member of this exclusive group - not every Leading RE member company is also a member of Luxury Portfolio.  In fact, Colorado Landmark, Realtors is the only Luxury Portfolio member company on the entrire Colorado Front Range!  This means that Colorado Landmark currently has exclusive access to all of Luxury Portfolio's myriad of marketing tools and resources for your luxury home.  I don't love public speaking - but it was easy to talk about the benefits of this affiliation that I feel so lucky to be a part of.

What this means for you as a seller is that we have complete and exclusive access to an entire incredible world of luxury real estate marketing resources and tactics at our fingertips. Our Luxury Portfolio affiliation is comprised of a network of individual independent real estate firms whose sales over $1M exceed those of every other luxury franchise in the world, including Christie's, Sotheby's, and Regents.

If you choose to list your luxury home with any of the incredible, experienced agents here at Colorado Landmark, Realtors, you are in effect listing your property with an entire worldwide network of independent luxury brokers. Your luxury listing will be placed on the award-winning and beautiful http://www.luxuryportfolio.com/ website which is viewed by users in over 200 countries per month in nine different languages. Your property listing is also automatically added to the Wall Street Journal’s real estate page on http://www.wsj.com/ and HGTV’s http://www.frontdoor.com/ . 

We have always been known as Boulder’s Luxury leader – for the past 35 years, Colorado Landmark has maintained a significant share of the luxury real estate transactions in Boulder and the surrounding areas.  In fact, in 2009 as a company Colorado Landmark sold over $43M in high end (over $800k) and luxury properties.  When compared to realtors at other local Boulder/Broomfield area companies, broker associates at Colorado Landmark sold more luxury properties per agent than any other brokerage in town! 

Let's be honest - the current economy has made things tough for home sellers, especially those with homes to sell in the upper echelons of the price spectrum.  And the tough times don't appear to be going away, and our area may even see a double dip in housing prices, which aren't expected to recover until perhaps 2013-2014.  So in a tough market why take a chance with selling your most important asset, your home?  If ever there was a time and situation to work with a trusted expert, this is it.  No other real estate company is better positioned than Colorado Landmark with the necessary connections, expertise, resources and experience to sell your luxury home.

Jennifer Fly

Broker Associate

Colorado Landmark, Realtors

(303) 443-3377

jenniferfly@coloradolandmark.com

Twitter: @jenflycolorado

Colorado Landmark, Realtors is "Leading the Revolution"

Last week, Colorado Landmark, Realtors sent four of our top agent/managers to "Leading the Revolution" - the 2010 Annual Leading Real Estate Companies of the World convention in Las Vegas. The convention was a wealth of information and education about everything pertaining to the real estate industry today. This included topics like new technology, social media, luxury marketing, risk management, short sales, and relocation, to name just a few.

I participated on a panel regarding Luxury Portfolio, the Luxury property marketing division of LeadingRE (stay tuned for a post about that later this week) and the Director of Business Development and Relocation at Colorado Landmark, Pam Metzger, contributed to a panel about social media.

Colorado Landmark was one of four brokerages in the whole network who hosted a booth on "networking night", and we shared some fabulous "Taste of Boulder" products including Justin's Nut Butter, Bobo's Oat Bars, Madhava Honey & Agave, and Pangea Organics. (Thank you to all those wonderful companies for their contributions!).

Leading Real Estate Companies of the World® is a global network of over 600 premier real estate firms with 5,000 offices and 150,000 sales associates in 35 countries around the world.
Collectively, this group has sold over 1 million homes worth $300 billion in 2008, more than any national real estate brand.

LeadingRE member companies dominate the United States' list of top 500 real estate firms, with more of the Number One market leaders in the top 90 markets than any national brand. All member companies are independently owned, and are the top one or two firms in their marketplace.

Colorado Landmark, Realtors could not be more proud of our affiliation with LeadingRE. If you are thinking about buying or selling a home, or simply have a question about Boulder or the surrounding areas, please give us a call.

Jennifer Fly

Broker Associate

(303) 443-3377

jenniferfly@coloradolandmark.com

Twitter: @jenflycolorado

Part 2 - State of the Real Estate Market in Boulder - Words for Home Sellers in Boulder County

This is Part II of a 3-part series. Stay tuned for Part II!

Part 2 - Mortgages, Prices and Interest Rates

While there is hope that the government's Making Home Affordable Program for loan modifications will help, the current numbers indicate that of the 3 million people that requested help in 2009 only 31,000 received permanent modifications. In short, at this time the program is doing little to stabilize home ownership.

While we don't want our clients and friends to panic and overreact, we do want to make sure that all of our Colorado Landmark listings are priced correctly for today's market. If you want or need to sell your home, waiting out the market is NOT the right strategy. Ken Hotard, senior vice president of the Boulder Area Realtor Association, thinks that the worst is likely over, but home sellers cannot expect a quick recovery. "Jobs are still a problem," he said. "Until we see job growth there will be no significant recover in the housing market." Phyllis Resnick, lead economist for the Center for Colorado's Economic Future, projects that unemployment in Boulder-Broomfield will hit 7.1% this year and "It's going to take us close to five years to recover," to pre-decline levels. Boulder Valley's high-end real estate market (homes priced over $1.0M) will continue to lag behind in 2010.

On January 8, 2010 the Wall Street Journal reported on the Fed's plan to stop buying mortgages by the end of March 2010. The article quoted Ronald Temple, portfolio manager at Lazard Asset Management, who sees mortgage rates rising by a percentage point when the Fed stops buying. A withdrawal of government support, combined with high unemployment and rising mortgage foreclosures, could push home prices down 20% he said. What does that mean for you as a homeowner? If you are waiting for the market to improve, don't hold your breath, unless you can hold it for about 4 years! Price your home to sell now, before home prices slide any further.

All this being said, real estate continues to be one of the best long term investments out performing the Dow, S & P, and the Nasdaq over the past 10 years. We are encouraging our clients to buy now before interest rates spike up, and do so quickly.

Stay tuned for Part III!

Part 1 - State of the Boulder Real Estate Market - Essential Words for Home Sellers in Boulder

This is Part I of a 3-part article. Stay tuned for the sequels!

Part I - INVENTORY

Colorado Landmark, Realtors is proud to approach 33 years in business in Boulder and Broomfield Counties, and we are filled with gratitude for the wonderful clients we have been fortunate to work with throughout the years. While our nation and our community faces many challenges, those of us who are fortunate to live in this area have many blessings to be thankful for.

We hope market conditions will improve over the coming months. Regardless of what happens we must make thoughtful decisions based on the way things are and what can be best projected for the future. If you are selling a home, Colorado Landmark's primary focus is to see that your property is sold in the next 120 days for the highest and best price. Locally in 2009 over 68% of properties in our area sold with a market time of 120 days or less. If your property has been on the market for more than 120 days you need to seriously visit the market activity and reconcile that with your pricing strategy. To wait and "test the market" almost always guarantees a lower sales price, longer time on the market, and fewer dollars in your pocket when you walk away from the closing table.

Inventory in Boulder and Broomfield Counties declined over the last 24 months by 11-20% depending on the area, yet we still have 6-7 months worth of active properties on the market as of today, and that is if NO new listings are added. According to historic trends, a market with 5-6 months of supply is considered a "normal" market where prices hold steady, while markets with 7-8 months of supply experience single digit depreciation. As of today Boulder and Broomfield Counties have 6.7 months of inventory on the market, meaning that our markets will be luck to show any small amount of appreciation this year. Prices will likely stay flat.

The bigger issue looming is the mountain of foreclosed properties that banks have held (7 million units across the US) that will be released to the market starting in the first half of 2010 that will put even more downward pressure on home prices. There is clear evidence of a contagion discount effect on neighborhood pricing trends due to the impact of nearby foreclosures. In Boulder and Broomfield Counties there are many bank-owned properties which have not hit the market yet.

George Feiger, chief executive officer of Contango Capital Advisors, expects housing prices in our area to continue to fall as more foreclosed homes come on the market. Foreclosures also should rise, he said, not only because of unemployment, but from strategic defaults - people walking away from mortgages that are deeply underwater.

Stay tuned later this week for Part II - Foreclosures and Mortgages!