Ron Rovtar's Blog

By Ron Rovtar | Agent in Boulder, CO

It is no secret the Boulder County real estate market is changing.

Along with some other locations in the United States, local sellers of low and average priced homes suddenly have much less trouble finding buyers.

Why? Because buyers have returned to the market in larger numbers than we have seen since 2008.

And because a critical dearth of quality listings now exists. Since the beginning of 2012, active inventory has run about 20 percent below 2011 levels.

To make matters worse, an unusually high percentage of active inventory is under contract, effectively removing these homes from the marketplace.

In areas like Superior and Gunbarrel, half of moderately-priced homes listed since New Year's Day have sold or are under contract. We now hear regular reports of bidding wars in some areas.

So far, price increases have remained moderate, probably because lender appraisals influence how much buyers can borrow for any particular dwelling.

But home appraisals are backward looking. They always compare prices currently offered to prices paid for recently sold similar properties.

This tends to moderate price increases in the short term. It does not stop rising prices over longer periods. When quality listings are rare, cash buyers and buyers who can afford larger than minimum down payments can and do spend more for dwellings they buy.

This appears to be happening now.

Our educated guess: negotiated prices for many homes now under contract are above appraisals. And many will close at these elevated levels.

As current deals close during the next six weeks, these homes will become the new "comparable properties" used to determine asking prices for newly-listed homes. They also will influence future lender appraisals.

As a result, many buyers with strict budgets may soon be looking at smaller or less appealing properties.

We rarely counsel a sense of urgency in our buyers. Since 2008, a little patience generally resulted in better real estate deals for buyers.

But, trends change, sometimes very quickly. More aggressive buyers who offer more money and accept a few imperfections may now do better in the long run.

The clock on recession-level home prices may already be ticking.

© Ron Rovtar

Ron Rovtar is a broker associate at Prudential Real Estate of the Rockies in Boulder, CO. He is EcoBroker Certified® and can be reached at 303.981.1617 Please visit Ron's website for more information.

Tags: selling, buying, homes, 2012, sellers market, eal estate, Boulder, Broomfield, Colorado

Boulder Area Home Sales Post Healthy Q1 Gains . . .

First quarter figures released by the Boulder Area Realtors® Association (BARA) show some healthy year-over-year increases in house sales across Boulder and Broomfield counties. Sales of "attached dwellings" like condos and townhouses also expanded.

Especially encouraging was the fact that improvement came against a backdrop of reduced inventory, which may indicate that buyers became less picky when choosing their new homes.

Until recently, a large percentage of buyers snubbed existing homes that were much less than perfect.

On a year-over-year basis, BARA said 622 Boulder and Broomfield county houses changed hands during the first quarter of 2012. This was a 21 percent jump over the same 2011 period when 515 houses sold.

All areas except Louisville and the unincorporated plains showed increases. Louisville was down 20 percent while sales of homes on the plains fell 8 percent.

Boulder City sales increased 46.8 percent from 94 units in 2011 to 138 this year. Broomfield City/County sales jumped 59.1 percent, from 44 last year to 70 this year.

BARA also said house sales were up in Erie (8.7 percent), Lafayette (19.4 percent), Longmont (22.7 percent), Superior (26.7 percent), and in the mountains (9.7 percent).

Median prices were up in every area except the plains where the prices were unchanged. Double digit increase were experienced in Lafayette (28.5 percent), Broomfield (18.4 percent) and Boulder. 12.5 percent. Average prices were down in Boulder (1.8 percent) and the Plains (2.8 percent). Only Louisville experienced a double digit increase in average prices (13.8 percent).

According to figures from the Colorado Association of Realtor's, the number of houses listed in Boulder County at the end of March was 1,437 this year, compared to 1804 last year, a drop of 20 percent.

Inventory of attached dwellings at the end of March fell from 766 last year to 513 this year, a drop of 33.3 percent.

Sales of attached dwellings in Boulder and Broomfield counties were up, but more modestly than houses at 7.9 percent. The biggest increases were in Lafayette (36.4 percent), Broomfield (30.0 percent), and Boulder City (21.1 percent).

© Ron Rovtar

Ron Rovtar is a broker associate at Prudential Real Estate of the Rockies in Boulder, CO. He is EcoBroker Certified® and can be reached at 303.981.1617 Please visit Ron's website for more information.

Tags: selling, buying, homes, 2012, statistics, real estate, Boulder, Boulder County, Broomfield

Make More Money When You Sell . . .

Consider how you buy products. Items appearing new and shiny delight and seem worth higher prices. Those with dirt and smudges usually go back on the shelf. Home buyers are just like you. So, if you want top dollar for you house (and who doesn’t), make it shine. Fix-it-up, clean-it-up, touch-it-up and style-it before you introduce it to buyers.

Here are four important styling tips that will help a lot:

Start at the street and work back into the house. The first thing a potential buyer sees is your home's street view. It has been shown that buyers forgive more issues inside a home if the outside makes a good first impression. Make this important episode really count! Take a close and critical look at your home, starting with the street in front. If there is debris in the street gutter, clean it out. Consider your yard -- the grass, the landscaping, the driveway, walkways, the outside of the building itself. Use your best judgment. Ask a friend or neighbor for a second opinion. What would you want the home to look like if you were considering an offer? How could you make it look better?

Hint: lots of colorful flowers make a big difference, especially out front. Think red. Think yellow. Better yet, think red and yellow together.

Give everything a good cleaning, but don't stop there. No offense, but the way you normally clean is not good enough. Buyers see the home with very critical eyes. You may not notice dirt on the threshold between the sliding glass door and screen. Buyers will. You are used to minor children’s hand smudges on wall corners. Buyers are not. When selling a home, evaluate the most minor details. As a general rule clean three times, looking deeper each time.

Hint: people respond to five senses. After you clean, introduce a subtle fresh scent.

Paint-up and fix-up. Touch-up or repaint where finishes appears old, chipped or dirty. Consider redoing some accent walls currently painted with strong or dark colors. Light, neutral colors make rooms seem larger. Create a list of all repairs you have put off. Complete the repairs. All light switches should work, even if you don't use them. Replace all burned out lights. Lubricate squeaky door hinges. Repair chipped woodwork. Make sure drawers move smoothly.

Hint: nothing says “old” like dust and dirt! Clean outside surfaces of the furnace, hot water heater and other mechanical items. (However, be careful doing it or hire a professional.)

Depersonalize, simplify, “declutter.” Buyers visualize a house as it would look with their possessions. The more it looks like your home, the more difficult you make this important mental task. Stow away favored knickknacks (especially large ones) and most family pictures. Clear shelves and counters of most objects. Remove unused clothing from closets to make the closets look roomier. Store one-third (or even half) of your furniture. This makes the home appear larger and more open.

Hint: idealize it. Store those violent electronic games and videos out of sight. Open a cook book to a luscious food photo. Leave out only those family pictures that conjure feelings of fun, warmth and harmony.

© Ron Rovtar

Ron Rovtar is a broker associate at Prudential Real Estate of the Rockies in Boulder, CO. He is EcoBroker Certified® and can be reached at 303.981.1617 Please visit Ron's website for more information.

Tags: staging, styling, money, selling, homes, real estate, Boulder, Boulder County

Boulder County Real Estate In 2012 . . .

As the economy slowly heals, everyone wants to know what to expect from real estate this year.

It is a good question. Residential and commercial real estate helped lead us into the recent recession, and it will be an important part of the recovery.

But the answer will vary by location. Some areas of the United States were hit extremely hard. These areas (such as Las Vegas and parts of Florida and Arizona) have more healing to do. Full recovery will certainly take longer in these places.

Other areas, including our own Boulder County, suffered less. In particular, Boulder City, Louisville, Lafayette, Erie, and Superior saw fewer buyers and fewer sellers in recent years. Conditions balanced economically and home prices fell more modestly or not at all in some neighborhoods. Additionally, there were fewer distressed properties in most areas of Boulder County, which also helped keep home prices stable.

So, understanding that all real estate is local and that predictions always are subject to modification as conditions change, what can we suggest for real estate in Boulder County during 2012?

Here are five prognostications you can probably count on as long as the national recovery continues:

1) More buyers will materialize.

This one is easy. The economy improves. The jobs market grows. Consumers confidence rises. New families formed during the recession. Others have outgrown current homes. Many of these families have not purchased yet, but you can bet they are looking at the real estate websites. At the same time, the dream of home ownership remains a strong motivator, according to several surveys. Social, economic and emotional pressures all point in one direction –– more buyers.

2) Inventory will not match demand.

This is important! Though more Boulder County buyers appeared in 2011, home inventory remained low by recent standards. This will continue throughout 2012 for three reasons. First, many homeowners borrowed too much against their homes. Though prices did not fall dramatically in Boulder County, some owners still cannot sell without bringing money to closing. They won't do it if they can avoid it by waiting. Second, owners have converted many dwellings into rentals because they needed to move and could not sell. Opportunistic investors also purchased and converted homes into rentals. These homes will trickle back onto the market slowly. Some investor-owned dwellings will remain off the market indefinitely while some rented homes owned by former occupants will only come back when leases run out, which could be 2013 or later. Third, many people are shy about adjusting to new realities. Trusting an economic recovery takes time. Some will wait until the recovery solidifies. If you have a good job and you are making house payments, putting food on the table and have enough left over for a few restaurant meals, some other entertainment, an occasional vacation, then waiting can make much sense.

3) Early listers will have an advantage.

But, if you are going to sell in 2012, listing early is probably better than later. If inventory was low during all of 2011, it is abysmal now. According to the Colorado Association of Realtors®, there were just 1,133 houses and 453 "attached dwellings" (condos, townhouses, etc) on the market in Boulder County at the end of December. Compare this to 1,459 houses/609 condos at the end of December 2010 and 1,463 houses/628 attached dwellings at the same time in 2009. Buyers have little to choose from and it is driving them crazy. Does that sound like an opportunity? As noted in #2 above, inventory will probably stay low through most or all of 2012. But inventory will start growing soon due to seasonal trends. As a result, the competition for buyers will get stiffer as the weather warms up. Additionally, interest rates (now in the very low four percent range for a conventional 30-year loan) could rise with increased spring real estate activity, putting some mild downward pressure on house prices. It certainly is NOT now or never, but now is a better business decision.

4) Boulder County will see mild upward price pressure.

If inventory stays low (see #2) and if more buyers materialize (see #1) it is a safe bet there will be more bidding wars and generally more competition for the best homes. We saw some of this during the last six months of 2011 and probably will see even more this year, especially for homes priced under $500,000. To understand why this will create some upward price pressure, one need search no further than one's old Economics 101 textbook. Remember the chapter about the "law of supply and demand?" But don't expect huge jumps in prices yet. Today's mortgage lenders are making it harder to borrow for homes priced above recent comparable sales. This will help control the rate at which prices increase.

5) Buyers will remain picky.

Why will buyers remain fussy? If we are moving from a buyer's market to a seller's market, or at least a neutral market, then buyers should be anxious to buy, right? Not necessarily. For one thing, the buyer's market mentality will lag a bit. Buyers will still come into the market expecting good deals. It is basic psychology. An entrenched attitude changes slowly. And it was a buyer's market for a long time. But, for buyers, there is a practical consideration as well. With the recovery young and progressing slowly, employers still expect longer hours from existing workers, leaving less time for family, less time for leisure and less time to work on a house. Employers will increase hiring this year, taking some pressure off existing workers. But time pressure remains an issue. As long as it does, buyers will demand move-in-ready homes. The result: near-perfect dwellings will sell quickly; fixer-uppers often will stagnate on the market, even at bargain prices.

So there you have it. Generally speaking, the market in Boulder County will remain in transition for most if not all of 2012. At least that is our take. Feel free to rip apart our predictions in the comments section. There's nothing like a thoughtful dialogue!

© Ron Rovtar

Ron Rovtar is a broker associate at Prudential Real Estate of the Rockies in Boulder, CO. He is EcoBroker Certified® and can be reached at 303.981.1617 Please visit Ron's website for more information.

Tags: selling, buying, homes, 2012, predictions, real estate, Boulder, Boulder County

Home Insurance is Serious Business . . .

If you are like most people, you probably pay your home insurance premium, then quickly forget about it, secure in the knowledge that your protected if you need it, but confident you probably won't.

Maybe you ought to think again, suggests Kaye Coates, outreach coordinator for United Policyholders, a San Diego, CA, an insurance consumer group.

Consider this: sixty-four percent of the homes affected by the Fourmile Fire in Boulder County last year were underinsured by an average of about $200,000, according to Coates, who spoke at a United Way-sponsored program at the Boulder County Courthouse.

(continue reading below)

Kaye Coates gestures during her presentation about home insurance at the Boulder County Courthouse. © Ron Rovtar

And a lot of other frustrating problems continue to this day for Fourmile Fire victims.

Contents of many home were also underinsured. Payments for alternative living expenses have teminated for many even though their dwellings have not been rebuilt. (Living expenses typically last for one year.) Thirty-six percent of Fourmile victims have not even reached a settlement with their insurance company. And, one victim said his first insurance adjuster made him feel like a criminal by aggressively questioning the validity of items claimed lost in the fire.

If these experiences do not get your attention, nothing will!

Clearly you cannot guard against all these issues ahead of time. But you can make life after a disaster much easier by taking simple precautions now. Here are Coate's suggestions:

Don't Underestimate Replacement Costs: Many homes are underinsured. Sometimes this results from insurance brokers trying to keep premium costs down, Coates noted. Other times homeowners confuse the market value of homes with replacement costs. "How much you paid for your house is irrelevant," Coates said. For dwellings destroyed in the Fourmile Fire, minimum replacement costs will be $225 per square foot of living area, Coates noted. Many homes will cost consideraly more because of higher quality finishes and other factors. Coates advised against using a "quick quote" process when insuring a home. She suggested talking to local builders for advice about rebuilding costs. And, she recommended two useful websites. She said Accucoverage and Home Facts can help homeowners get a handle on home replacement costs for charges less than $10. A more thorough opinion can be had from Castle Inspeciton Service for $295, Coates said. Insisting your insurance broker visit your home once a year also helps, she added.

Make Sure Your Policy Includes Code Upgrades: What's a "code upgrade?" For clarity, maybe this should be called a "building code upgrade." Local governments keep tweaking building codes. And these new rules usually mean additional building costs. If anything, some Boulder area governments have been on a run with new regulations requiring reduced energy consuption and green building technology. This especially includes Boulder City and Boulder County, which governs construction in unincorporated areas. Coates estimated Boulder County residents spend about 25 percent more to comply with codes when rebuilding. Make sure your policy covers these extra costs.

Inventory Your Possessions: Coates noted that an average two bedroom apartment contains about $20,000 in possessions, which is a good argument for renters' insurance. The figure also offers an idea about the value of possessions in a larger home. After a disaster, you must know exactly what was in the home. "Your insurer gets to keep your money after a loss if you can't remember or describe everything that was destroyed," Coates warned. A little extra work now will help. Keeping a spreadsheet of possessions is a great approach. You can record each item, its description, manufacturer, model, age, price, etc. But, you may fall behind in record-keeping. So, occasionally walk around your home with a video camera. Record general views of each room and make close-ups of individual possessions. Then, make sure you keep copies of all such records and images away from your dwelling. Coates also suggests off-site storage of copies of important documents like your driver's license, marriage license, car title and home insurance papers.

A Few Other Precautions: 1) Don't assume your insurance broker will remember everything said during phone conversations. Write it down and keep dated records with your policy. Better yet, send follow-up letters explaining your understanding of important points discussed. Keep a copy of the letter. 2) Make sure expensive possessions like cameras, jewelry, computers, art, coins, etc. are covered for replacement costs. 3) Consider flood insurance even if you do not live in a flood zone and a sewer backup endorsement to your policy. 4) Also ask about other coverage endorsements that might make sense for you. Coates said there are more than 100 home insurance endorsements available.

And, by the way, the Fourmile Fire victim who complained about his insurance adjuster's approach said victims can demand a new adjuster. He did. He said he is much happier with the second person.

© Ron Rovtar

Ron Rovtar is a broker associate at Prudential Real Estate of the Rockies in Boulder, CO. He is EcoBroker Certified® and can be reached at 303.981.1617 Please visit Ron's website for more information.

Tags: home insurance, disasters, houses

Don't Pull Your Listing for the Holidays . . . !

I posted a question here at Trulia this morning about selling homes during the holiday season.

An article at RealtyTimes had me thinking about this subject. It argued that pulling listings during the holidays may be a poor strategy.

I agreed, but I was curious about what others would say.

My reasoning was simple. Though there may be fewer buyers during the holidays, inventory tends to drop precipitously during the same period. I suggested the best homes in each price range may actually have a very good chance of selling because of low supply during December and early January.

Other agents concurred. As of this writing, all responding real estate agents were in favor of keeping at least the best homes on the market.

The most tepid response came from Tina Lam, of San Jose, CA.

"I agree that top quality homes should remain listed through the holidays, since the supply-demand ratio is very favorable for sellers. For the rest of the homes, the bottom 80%, there probably is little advantage to adding another 45 DOM (days on market) through the holidays," she wrote.

But Julie Reddington of Highlands Ranch, CO, most succinctly expressed the frustrations experienced by buyer's agents and their clients during this time of year.

"I need listings for my buyers! Its as simple as that," Reddington wrote.

And Laura Stuart, also of Highlands Ranch, chimed in that " . . .the buyers who are looking during the holidays tend to be the most valid buyers."

The upshot? If you are thinking of taking your house off the market because you believe it won't sell during the holidays, you probably should think again –– especially if it shines next to the depleted competition.

And, one additional note: at this point you probably will not be moving during the holidays, even if your house sells next week. If the buyers will apply for a loan, you probably will not be able to close until after the first of the year.

Happy Holidays!

© Ron Rovtar

Ron Rovtar is a broker associate at Prudential Real Estate of the Rockies in Boulder, CO. He is EcoBroker Certified® and can be reached at 303.981.1617 Please visit Ron's website for more information.

Tags: selling, homes, holiday, season, strategy

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