I just received an email from my investment banker saying that the Dow Jones Industrial rose more than 140 points to snap the 3 day slide in the Dow. This is likely because of great news that home sales earnings actually rose in the last quarter. Good news for us and in Boulder, Colorado lets hope that we see this trend continue. We here at The Bernardi Real Estate Group are doing our best to boost sales in Boulder, Colorado.
I was just talking to a potential seller that called me on the phone today and he asked “Are there any live buyers out there?”. Of course I giggled and said yes there are live buyers out there and there are actually even some realistic buyers as well as qualified buyers.
The thing that’s important to realize is that buyers are cautious and there is so much on the market their perception is that they can keep on looking and looking and looking. In the city limits of Boulder between the price range of $550,000-$750,000 there are 146 homes on the market and 19 of those homes are under contract. Buyers do have quite a selection to choose from. Years ago we would show buyers 5 homes and since that was all they had to choose from they therefore had to choose one. What buyers think now is that they can keep on looking and looking and looking and looking until they find a home the perfect home. The problem is that the perfect home never exists. Live buyers and qualified motivated buyers eventually get real when there is a motivation to move such as the family has grown, they are getting a divorce, they are moving up or down in price, they are relocating into the area or they have had a job promotion and want to take advantage of it (yes, believe it or not, there are actually people getting promoted and getting raises in this market.)
The key is that we are in a price war as well as a beauty contest. Homes, even in beautiful Boulder Colorado, need to be priced correctly in addition to being pretty. Only then will you win the prize of a live buyer buying your home.
What ever happened to the Bird Flu? A year and a half ago all I would hear on the news was stories about the Bird Flu. My 85 year old father was afraid to go out and feed the birds at his retirement complex. Many became fearful that it wasn’t going be safe to eat chicken. Questions were raised such as, “Is it going to cross over?” or “Is it going to mutate?” It was a crisis and when I would flip thru the channels or read the newspaper not a day went by that I didn’t hear about the Bird Flu.
Fast forward to a year plus later and all we hear about is the economic crisis. We are bombarded with messages like –“The crisis…The crisis…The economic crisis!” The media may as well be saying, “The sky is falling…the sky is falling!”
What does this have to do with the luxury real estate market in Boulder, Colorado? Or for that matter buying a home at anytime?
In the words of Teddy Roosevelt, “The only thing we have to fear is fear itself…” With the news media feeding on our fears and us feeding on the fears that are driven by the news media, we have developed an exaggerated fear of the present economy. Just as we had too much confidence in the economy in that we could all expected to continue to see rising real estate prices in Boulder and that we were immune to any logical thought.
There are great buys and opportunities in any luxury real estate market, especially this one. Interest rates are at 5% & below with loans that are still attainable to people with reasonable credit and a good income that substantiates whether they can make their payments on a continuing basis. The times right now call for logic and they should not be driven by fear and paranoia. There are great investments to be made in luxury real estate in Boulder, Colorado as long as we are not driven by fear and greed.
I was just reading in the Boulder County Business Report about all of the different groups investing in Boulder. Steven Tebo, one of the smartest business men in Boulder, is expanding his real estate holdings. Denver-based Griffis Group of Cos. LLC just purchased The Boulders Apartments and Tom Barta, chief financial officer of Griffis, has said that “Boulder has always been an attractive rental market”. The Griffis Group believes that real estate will hold up better than any other asset classes.
It has been my personal experience that my own investments in Boulder County have done much better than my investments in the stock market. I like real estate because I can touch it, hold it and always know where it is. Due to the recent craziness on Wall Street and with the losses I have experienced in my mutual funds that I thought were safe, I sure enjoy owning my little rental properties in Boulder Colorado. I still believe that Boulder Colorado real estate is a fantastic place to put your investment dollars.
How many times have I heard “I wish I would have…”?
When I first started selling real estate in the 1980’s, everyone kept saying to me that I wish I would have bought properties at the beginning of the 1970’s because the 1970’s were such a big run where as the market in the 1980’s was rather flat for appreciation in Boulder and because of that people would continue to say to me “Oh, I wish I had bought in the 70’s.”
Even real estate agents would look at properties in Martin Acres and say that they wish they would have invested in Martin Acres 10 years ago but then the properties were over $100,000 and at the time they thought that was ridiculous. The property values in Martin Acres then went up to the $200,000’s, then they were in the $300,000’s and now they are in the $400,000’s.
The thing that I look at now is what are we going to be saying in 2020? I wish I would have when things in Martin Acres are $1 million? It seems impossible now but I can tell you that the people who were sitting around in the 1980’s wishing that they had bought property in the 1970’s will be saying the same thing in 2020 and 2020 will be here before we know it.
My response would be that I wish I would have invested in real estate in Boulder Colorado in 2009…so invest in real estate now!
I live in the south boulder neighborhood where Mclean and Stevens claimed adverse possession of their neighbors land and it is unfortunate to see a neighbor act in this manner.
While the ultimate resolution might still be a compromise, I think we should all thank the Kirlins for bringing state-wide attention to this issue resulting in important changes in statutary law benefiting the public …
- A new law prohibiting judges from hearing cases involving judges from the same district AND
- Significant changes to Colroado’s adverse possesion laws requiring similar conditions of proof of use that are in place in many other states.
Let’s hope that people can learn to live together better!
Did you read the article in the New York Times last week by Warren Buffett? While the focus was on the stock market, there are clear and obvious parallels with our local real estate market since his article’s focus was about Equity Investment.
Warren’s rule on buying is simple: Be fearful when others are greedy and be greedy when others are fearful. And right now in the Boulder real estate market, most people are fearful! The reality is that over the next 5, 10 and 20 years, there will be noticeable appreciation of property values.
I can’t predict if home prices will increase or decrease from one month to the next or even 6 months (and beware anybody who says they can!) but I do know that home prices in Boulder county will increase as the economy improves.
Over a long period of time, the real estate market has weathered world wars and other military conflicts, the depression, numerous recessions, stock market panics and other national periods of crisis and people how have owned their homes have realized profits upon selling their home.
Warren’s ultimate point is that “Equities will almost certainly outperform cash over the next decade, probably by a substantial degree”.
Real estate is the only equity investment where your money is leveraged and that will to be the topic of another posting!